Date: 20050114
Docket: A-120-04
Citation: 2005 FCA 9
CORAM: DESJARDINS J.A.
BETWEEN:
SANDER HOLDINGS LTD., DONALD PATENAUDE,
and MATHEW NAGYL on their own behalf and on behalf of all
persons who have been Producers, shipping grain through
Canadian Wheat Board, as defined under The Canadian Wheat
Board Act, and who reside or have resided in Canada between
1994 and the date of the decision
APPELLANTS
and
THE ATTORNEY GENERAL OF CANADA representing
The Minister of Agriculture of Canada
RESPONDENT
Heard at Saskatoon, Saskatchewan, on November 8, 2004.
Judgment delivered at Ottawa, Ontario, on January 14, 2005.
REASONS FOR JUDGMENT BY: DESJARDINS J.A.
CONCURRED IN BY: EVANS J.A.
PELLETIER J.A.
Date: 20050114
Docket: A-120-04
Citation: 2005 FCA 9
CORAM: DESJARDINS J.A.
BETWEEN:
SANDER HOLDINGS LTD., DONALD PATENAUDE,
and MATHEW NAGYL on their own behalf and on behalf of all
persons who have been Producers, shipping grain through
Canadian Wheat Board, as defined under The Canadian Wheat
Board Act, and who reside or have resided in Canada between
1994 and the date of the decision
APPELLANTS
and
THE ATTORNEY GENERAL OF CANADA representing
The Minister of Agriculture of Canada
RESPONDENT
REASONS FOR JUDGMENT
[1] The appellants appeal a decision of a motions judge (von Finckenstein J.) who granted the respondent's motion for summary judgment on the ground that the appellants' statement of claim failed to disclose a reasonable cause of action, or a genuine issue for trial or judicial review. The motions judge's reasons for judgment are reported at (2004) 247 F.T.R. 123.
[2] The appellants are agricultural producers. They brought an action on their own behalf and on behalf of all other producers who have shipped grain through the Canadian Wheat Board. They are proceeding by way of a class action under rules 299.1 et seq. of the Federal Court Rules, 1998, SOR/98-106. Certification has been sought, but has not been obtained yet.
[3] Each appellant is a participant in an agricultural income stabilization program entitled "the Federal/Provincial Agreement Establishing the Net Income Stabilization Account Program" (the "Agreement", the "NISA Program", or the "Program"), established under the authority of the Farm Income Protection Act, S.C. 1991, c. 22 (the "Act"). The NISA Program has now been replaced by the "Canadian Agriculture Income Stabilization Program" ("CAIS"), effective April 1, 2003. The appellants' claim relates to contributions made prior to the coming into existence of CAIS.
[4] The objective of the Program is to stabilize the incomes of primary agricultural producers by establishing individual accounts for each participant which are meant to be used as a saving vehicle in good years so that funds are available to producers in lean years.
[5] The Program operates by allowing a producer to make both matchable and non-matchable deposits to the Program. A producer can deposit up to three percent (3%) of his or her eligible net sales and receive matching contributions cost-shared between the federal and participating provincial governments. A producer can also make additional deposits of up to twenty percent (20%) of his or her eligible net sales, although these deposits are not matched by the governments. All deposits earn a three percent (3%) interest bonus.
[6] While participation in the Program is voluntary, enrollment is high. In 2002, approximately 157,000 farmers were participating in the NISA Program.
I. INTRODUCTION
[7] According to the appellants, in 1995, after the repeal of the Western Grain Transportation Act, R.S.C. 1985, c. W-8, which had for a number of years subsidized the transportation costs from elevator to port through the "CROW" rate, the value of grain at the elevators decreased as the transportation costs of the elevator to get the grain to port increased. The repeal of that statute, they say, had important repercussions on the grain trade.
[8] The appellants complain that following what they allege were changes to the Point of Sales Guidelines in 1994, they are now forced by the NISA Administration to deduct transportation and elevation costs from their gross sales when calculating their eligible commodity sales.
[9] Each year, participants in the NISA Program are asked to complete a form which details income and expenses in various categories. The forms must be completed in accordance with a handbook entitled "Individual Instrument Guide". These instructions include guidelines, referred to as Point of Sales Guidelines (the "Guidelines"), designed to assist participants in determining their net sales for the purpose of the NISA Program.
[10] Until 1994, the Point of Sales Guidelines read as follows:
The point of sale occurs when one of the following point is met:
- you no longer have full ownership of the commodity; or
- you no longer have full managerial control of the commodity to make decisions on transportation, cleaning, packaging, marking etc.; or
- you are no longer fully responsible for the loss of the commodity; or
- your sales invoice does not clearly show the actual sale value of the commodity.
[11] In October 1994, the NISA Committee recommended that the Point of Sales Guidelines be changed to read as follows:
Participants may report for NISA the gross revenues of qualifying commodities and the applicable expenses recognized in the calculation of farming income for income tax purposes providing:
- The commodities were produced on their farm;
- They can demonstrate ownership of the product through identity preservation and bear full direct ownership of the commodity; and
- They have separate billing or accounting transactions clearly showing the commodity sales value and any deductions from the commodity sales value.
[12] The effect of the change in the Guidelines appears to be in the treatment of the figures which, in the form, come under the heading "Miscellaneous Deductions". These deductions may include expenses such as freight and elevation costs, terminal cleaning and administration fees (see exhibit A of the affidavit of Mr. Barry Jolly, income tax consultant and the NISA preparer for the appellants, A.B. p. 100 at 107). Prior to the change in the Guidelines those deductions were not applied to eligible net sales. The alleged change has the effect of reducing eligible net sales by the amount of the miscellaneous deductions. This reduction, in turn, affects the contributions the agricultural producers are entitled to receive.
[13] This result, the appellants say, creates an inequity because identical farming operations will attract varying government NISA contributions depending upon proximity to port. The Guidelines are therefore a hardship to producers, such as those located in Saskatchewan, Alberta and Manitoba, who are located at great distances from port.
[14] In an earlier case which reached the Court, Boyko v. Canada (Minister of Agriculture), (2000) 191 F.T.R. 6 ("Boyko"), a number of producers completed their 1996 annual application package for the NISA Program but did not include the cost of grain transportation to port as part of their revenue. They, however, included that amount in their 1997 application. As a result of an audit conducted by the NISA Administration, their accounts were reassessed and their eligible net sales for the year 1997 were reduced.
[15] The producers asked the Appeals Sub-Committee to reverse the decision of the NISA Administration, which had reduced their eligible net sales. The Appeals Sub-Committee found that the Guidelines had been correctly applied by the NISA Administration. It recommended that the producers' appeals be rejected.
[16] The producers sought review of that decision before Rouleau J. of the Federal Court, Trial Division (as it then was), on the ground that the Appeals Sub-Committee erred in fact and in law in its interpretation of the Agreement as it related to deducting freight and elevator expenses in determining eligible net sales.
[17] Rouleau J. held, at para. 13 of his reasons, that administrative bodies frequently develop a coherent set of guidelines to assist in the exercise of their discretionary statutory powers. He stated that policies allowed a public body to develop guidelines which bridged the gap between a general discretionary statutory power and its specific application to a particular case. The content of the policy had, however, to be within the scope of the power bestowed by the enabling legislation. Moreover, it could not be formulated or applied in bad faith or with regard to irrelevant considerations or purposes extraneous to the intent of the legislation.
[18] He was satisfied that the 1994 Guidelines met the above tests. There was, in his view (see para. 15 of his reasons), no evidence of bad faith or reliance upon irrelevant or extraneous
considerations in the development of the Guidelines. He stated that, although the application before him was couched in terms of a direct attack on the recommendations of the Appeal Sub-Committee, the real essence of the applicants' complaint was with the policy itself. The applicants, he wrote, were taking exception to the fact that the phrase "eligible net sales" did not include grain transportation costs to port and were arguing that the Guidelines in some way constituted an unlawful amendment to the Agreement. He noted that all the evidence before him clearly established that "eligible net sales" had never, since the inception of the Program, included grain transportation cost to port nor had the Agreement ever been formally amended to reflect any change of that nature.
[19] The producers appealed to this Court, which took the view that the producers were, for all practical purposes, seeking a declaration that the Point of Sales Guidelines adopted in 1994 by NISA were ultra vires the Act. Décary J.A., for the Court, held that the matter was not raised at trial, 2001 FCA. 22. He said, starting at para. 2:
This was not the issue raised in the Trial Division. The issue, there, which was raised through a judicial review proceeding, was whether the Appeals Sub-Committee of the NISA Committee had erred in finding that the Point of Sale Guidelines had been properly applied by the NISA Administration.
Assuming, for the sake of discussion, that the Appeals Sub-Committee has jurisdiction to decide whether guidelines are ultra vires, the issue was not put to it and we are in no position to rule on it.
While there may be some merit in the views expressed by counsel, the proper avenue, it seems to us, -- apart, of course, from attempting to reach a consensus through the administrative process already in place -- would be to start afresh with a new proceeding seeking the proper remedy from the proper authority
(my emphasis)
[20] Hence the present class action.
[21] The respondent moved for summary judgment.
II. THE DECISION BELOW
[22] Von Finckenstein J. granted the Motion for summary judgment. He stated that the facts regarding the change were not in dispute (para. 20 and 22 of his reasons). He agreed with Rouleau J. in Boyko, that the process by which the change was made to the Guidelines was unexceptionable and that the 1994 Guidelines' treatment of freight and storage costs did not amount to an amendment of the Agreement (para. 25 of his reasons). He treated Rouleau J's decision as a final determination. He never addressed his mind to Décary J.A.'s reasons for judgment, where, at the end, the Court invited the parties to "start afresh with a new proceeding seeking the proper remedy from the proper authority". Von Finckenstein J. mentioned the citation to the decision of the Federal Court of Appeal, but no more.
[23] Von Finckenstein J. further held that the Guidelines were not legal norms within the meaning of Pereira v. Canada (Minister of Citizenship and Immigration) (1994) 86 F.T.R. 43 ("Pereira") and, for that reason, they could not be ultra vires the Act or its Regulations, neither could they be contrary to the Agreement (para. 26 of his reasons). He concluded that there was no genuine issue for trial or judicial review and that the appellants' further contentions that a cause of action existed based on negligence or on a breach of fiduciary duty were unfounded.
III. RELEVANT STATUTORY PROVISIONS
[24] The Farm Income Protection Act defines the words "agricultural product" thus:
|
2. In this Act,
...
"agricultural product" means
(a) an animal, a plant or an animal or plant product, or
(b) a product, including any food or drink, that is wholly or partly derived from an animal or a plant;
... |
2. Les définitions qui suivent s'appliquent à la présente loi.
...
« produit agricole » Tout produit végétal ou animal -- ou d'origine végétale ou animale --, y compris les aliments et boissons qui en proviennent en tout ou en partie.
.... |
It provides, in section 4, that the Governor in Council may authorize the Minister of Agriculture and Agri-Food to enter into an agreement with one or more provinces to provide for the establishment of, inter alia, a net income stabilization account program.
[25] Paragraph 5(1)(c) of the Act stipulates that an agreement shall provide:
|
(c) The manner of determining the income of producers and the manner of determining the value of the eligible agricultural products produced by them. |
c) le mode de détermination du revenu des producteurs et de la valeur de leurs produits agricoles admissibles. |
[26] Paragraph 5(3)(a) of the Act provides for the establishment of one or more national committees representing the parties to the Agreement and the producers, and such technical experts as may be considered appropriate. Paragraph 8(1)(a) declares that an agreement that provides for the establishment of a net income stabilization account program shall, in addition, provide for:
|
(a) the eligible net sales, eligible production costs, gross margin and maximum eligible net sales, or the method of determining the sales, costs and margin that enable a producer to participate in the program.
|
a) le mode de détermination et le niveau des coûts de production et des marges brutes à partir duquel un producteur est admissible, ainsi que, dans le cas des ventes nettes, le seuil et le plafond; |
[27] The Act also provides, in section 15, for the establishment of a net income stabilization account.
IV. THE AGREEMENT
[28] Under the Agreement which came into force in 1991, Canada is responsible for the administration of the NISA Program. The Agreement contemplates the establishment of the National NISA Committee (the "Committee") as advisory to Canada. The Committee is composed of representatives from the federal and provincial governments and producers. Article 6.8 of the Agreement provides that:
This agreement between Canada and any one Province shall take effect on the date that the signatories for that Province add their signatures to that of the Minister ...
[29] Under Article 2 of Schedule C to the Agreement, the Committee is to have a minimum of six and a maximum of ten producers appointed by the Minister to represent commodity groups
and regions of Canada. Each participating province is entitled to name one member to the Committee, while Canada is entitled to name four members to the Committee. Canada names the chairperson of the Committee who is responsible for referring matters of significant financial impact to the parties to the Agreement for approval. Article 2.5 of Schedule C to the Agreement stipulates the following:
Canada shall name the chairperson of the Committee from those individuals appointed above. The chairperson shall be responsible to refer matters of significant financial impact to the parties to this Agreement for approval.
(my emphasis)
[30] The Agreement contains a special amendment clause. Article 6.9 provides that an amendment must be approved by Canada and at least two-thirds of the participating provinces, where these provinces represent at least 50% of the eligible net sales reported to the Program in the previous year. The wording of the amendment clause is the following:
Except as provided in Section 5 of Schedule B, this Agreement may be amended from time to time by the agreement of Canada and at least two-thirds of the participating Provinces where these Provinces represent at least fifty (50) percent of the eligible net sales reported to the Program in the previous year. A Province which does not wish to comply with an amendment respecting significant financial implications, may elect, by written notice to Canada, to withdraw from the Agreement as of the end of the next calendar year and the amendments will not apply to that Province for this period.
[31] Schedule B of the Agreement contains the following provisions:
1. All agricultural products are eligible for Program purposes.
2. Initially, only the revenue derived from the sale of the following commodities or classes of commodities produced in Canada is eligible for contribution to the Program:
2.1 All cereal grains.
2.2 All oilseed grains.
...
V. THE CONTENTION OF THE PARTIES
[32] The appellants claim that they are concerned, not with the policy behind the 1994 Guidelines, as held by Rouleau J., but with the fact that changes were made to the Guidelines in 1994. They contend that these changes constitute an amendment to the Agreement and the Act, and were made without regard to the amending formula provided in the Agreement.
[33] Contrary to von Finckenstein J.'s statement that the facts regarding the change made to the Guidelines in 1994 were not in dispute, the appellants claim that there is conflicting evidence concerning the changes and the circumstances surrounding the adoption of the 1994 Guidelines.
[34] They further explain that, according to a letter written by Mr. Nawolsky of the NISA administration, dated December 23, 1998, the Guidelines were adopted following a vote by Program signatories and that the chairperson of the Committee, in accordance with section 2.5 of Schedule C of the NISA Federal/Provincial Agreement, properly recognized that the Guidelines were a matter of significant financial impact.
[35] They add that, once a matter of significant financial impact has been identified, the amendment procedure of article 6.9 of the Agreement is engaged since the requisite majority is necessary to adopt a change that would impact upon the funding requirements of the participatory authorities to the Program.
[36] They further add that, in the case at bar, the proper procedure was not followed. They say that when a vote was taken (which body took the vote remains unclear), Canada, Manitoba, Ontario, Quebec, Nova Scotia and Newfoundland supported the motion to amend. British Columbia, Alberta, Saskatchewan, Prince Edward Island and New Brunswick did not support the motion. A majority of two-thirds of the participating provinces, they say, is therefore lacking. They add that Quebec participated in the vote but was not entitled to, because article 6.8 of the Agreement states that the agreement takes effect between Canada and any province that adds its signature to that of the Minister. Quebec, they say, did not add its signature.
[37] The respondent, on the other hand, submits that the elimination of the "CROW" rate did not alter or directly affect the NISA Program, which is an income stabilization program and not a grain transportation program. He says that, from the inception of the Program to the time that this case was filed, the meaning of "eligible net sales" has never included grain transportation costs to port, nor has the Agreement ever been formally amended to reflect any change of that nature.
[38] The respondent further submits that the appellants have no legal cause of action considering that guidelines or policy directives, "whether made pursuant to regulatory authority or general administrative capacity, are no more than directions and are unenforceable by members of the public" (Mohammad v. Canada (Minister of Employment and Immigration), [1989] 2 F.C. 363 (CA) at para. 14). The respondent adds that the motions judge correctly decided that the Guidelines were not part of the Agreement, but existed merely to facilitate its administration.
[39] The respondent claims that the appellants are really seeking a Court order that governments ought to have changed their policy, which would have resulted in governments paying more money to farmers for income support than the governments had intended under the NISA Program.
VI. ANALYSIS
[40] There are three issues in this appeal:
(i) whether the Guidelines are ultra vires the Act and the Agreement;
(ii) whether there is a reasonable cause of action based on negligence; and
(iii) whether the respondents owe a fiduciary duty to the NISA participants.
(i) The validity of the Guidelines
[41] On this key point, the issues are whether there was a change to the Guidelines in 1994 and whether, if a change occurred, that change amended the Agreement, in which case the proper procedure, it would appear, was not followed.
(a) Did a change to the Guidelines occur?
[42] The appellants claim that, whatever their technical legal status, the Guidelines were used by the NISA Administration to determine producers' eligible net sales and, hence, their contribution base. They argue that, since the Agreement only requires producers to deduct "agricultural input" (seeds, feed, for example), from the value of the commodity (see article 2.3 of the Agreement), in order to determine their eligible net sales on which their contribution
was based, it was inconsistent with the Agreement for the NISA Administration to require the producers to deduct from the value of the commodity the cost of post-sale freight and storage.
[43] Whether the Guidelines were inconsistent with the Agreement is not readily apparent from the record. There appears to be a conflict in the evidence as to whether freight and elevation costs have always been deducted from the calculation of the value of net sales or whether they only occurred after the adoption of the 1994 Guidelines. It is a reasonable, but not necessarily correct, inference from the 1998 instructions addressed to the producers (see exhibit I of the affidavit of Barry Jolly, A.B. p. 100 at 103 and 128 and 129) that, whereas post-sale freight and storage charges had previously been treated as expenses for the purpose of calculating producers' income, they were not taken off net sales so as to reduce the producers' contribution base. Finally, the fact that the chairperson of the NISA Committee regarded the 1994 Guidelines as having a significant financial impact suggests that they may well have involved more than the minor tinkering with the definition of the point of sale alleged by the respondent.
[44] Considering that the respondent pleads that no change occurred, I conclude that the facts are in dispute.
(b) Whether the change constitutes an amendment to the Agreement
[45] It is not correct to state, as the motions judge seems to say, that non-statutory guidelines or other policy documents, used by program administrators, are not legal norms. This is far too broad a proposition. When they determine individuals' legal rights, they can be the subject of a declaration of invalidity.
[46] Von Finckenstein J. found that the Guidelines were not part of the Agreement, but rather existed to facilitate its administration, on the basis of the case of Pereira, where MacKay J. wrote at para. 10 and 11:
It is urged that the tribunal erred by failing to consider not just "unusual" hardship, but also whether the applicant faced 'undeserved or disproportionate hardship'.
In my view, this argument implies the guidelines have the status of legal norm, which they do not. They are not more than guidance, for officers, with the intent of seeking a reasonable measure of consistency in the exercise of discretion. That does not establish the guidelines as equivalent to law; it does not require that the officers consider particular qualities or tests or measures, for that would fetter discretion, in a manner disapproved of in Yhap.
(my emphasis)
[47] Pereira is a case where a refugee claimant claimed that the officers erred by not considering all of the elements of the guidelines dealing with the exercise of discretion based on humanitarian and compassionate grounds. The applicant argued that the guidelines should always be followed. The Judge disagreed with her and found that the particular guidelines in question did not have the status of law and therefore did not have to be applied in every case. It is difficult to see how this decision is on point here.
[48] In deciding whether the Guidelines were invalid, the more relevant decision is Ainsley Financial Corp. v. Ontario Securities Commission (1994), 21 O.R. (3d) 104 (Ont. C.A.) ("Ainsley"). Ainsley dealt with the difference between guidelines not requiring statutory authorization and those that amount to mandatory statements of law which require statutory authorization.
[49] Doherty J.A., for the Ontario Court of Appeal, recognized the authority of a regulator to use non-statutory instruments, like guidelines, to fulfil its mandate in a fairer, more open and more efficient manner. He acknowledged, however, that there were limits on the use of these instruments.
[50] He identified, at p. 109, three situations where guidelines issued without statutory authorization (the status of law) are impermissible:
Having recognized the Commission's authority to use non-statutory instruments to fulfil its mandate, the limits on the use of those instruments must also be acknowledged. A non-statutory instrument can have no effect in the face of contradictory statutory provision or regulation: Capital Cities Communications Inc., supra, at p. 629; H. Janisch, Reregulating the Regulator: Administrative Structure of Securities Commissions and Ministerial Responsibility in Special Lectures of the Law Society of Upper Canada: Securities Law in the Modern Financial Marketplace (1989), at p. 107. Nor can a non-statutory instrument pre-empt the exercise of a regulator's discretion in a particular case: Hopedale Developments Ltd., supra, at p. 263. Most importantly, for present purposes, a non-statutory instrument cannot impose mandatory requirements enforceable by sanction; that is, the regulator cannot issue de facto laws disguised as guidelines. Iacobucci J. put it this way in Pezim at p. 596:
However, it is important to note that the Commission's policy-making role is limited. By that I mean that their policies cannot be elevated to the status of law; they are not to be treated as legal pronouncements absent legal authority mandating such treatment.
[my emphasis]
[51] Doherty J.A. recognized there was no bright line which always separates a guideline from a mandatory provision having the effect of law. At p. 110 of Ainsley he stated:
At the centre of the regulatory continuum one shades into the other. Nor is the language of the particular instrument determinative. There is no magic to the use of the word "guidelines", just as no definitive conclusion can be drawn from the use of the word "regulate". An examination of the language of the instrument is but a part, albeit an important part, of the characterization process. In analyzing the langauge[sic] of the instrument, the focus must be on the thrust of the language considered in its entirety and not on isolated words or passages.
[52] He found two factors to be particularly significant to the case: the fact that Policy Statement 1.10, at issue, was setting a code of conduct, and that it was made mandatory through the threat of sanctions which gave them a coercive effect.
[53] It has also been held that policy guidelines that are in conflict with the primary legislation are impermissible (Independent contractors & Business Assn. (British Columbia) v. British Columbia (1995), 6 B.C.L.R. (3d) 177 (B.C.S.C.)).
[54] It cannot be said, in the case at bar, that the validity of the Guidelines was conclusively decided in Boyko. Although Rouleau J. seems to have found that there was nothing legally wrong with the Guidelines, this Court was of the view that the only issue before Rouleau J. was whether the Appeals Sub-Committee of the NISA Committee had applied them properly. Since the validity of the Guidelines was not in issue, this Court held it could not pronounce on it. The appellants were invited to "start afresh with a new proceeding seeking the proper remedy from the proper authority."
[55] The Guidelines therefore must be properly characterized in order to determine whether they amount to a mandatory statement of conduct and if so, whether they were authorized in accordance with the Agreement and the Act.
(c) Conclusion
[56] The two issues discussed in (a) and (b) raise questions of fact and law of sufficient complexity and uncertainty that the motions judge erred in dismissing the appellants' statement of claim on the basis of a summary motion.
[57] There is a genuine issue for trial or judicial review. If the appellants' claim is well-founded, they will be entitled to a declaration, a conclusion which is already found in their prayer for relief (para. 21 of their statement of claim, A.B. p. 33).
[58] In view of my conclusion, it is not necessary to comment on the other bases of the appellants' attack on the validity of the 1994 Guidelines.
(ii) The actions in negligence
[59] The motions judge, at para. 36 of his reasons, stated that, while the appellants did not allege negligence, they asserted that the alleged breach of the amendment provisions of the Agreement entitled them to damages. He dismissed their contention on the authority of the Anns/Kamloops test (see the cases of Anns v. Merton London Borough Council, [1978] A.C. 728 and City of Kamloops v. Neilson, [1984] 2 S.C.R. 2 succinctly summarized by Hugessen J. in A.O. Farms Inc. v. Sander, (2000), 28 Admin. L.R. (3d) 315 (T.D.) at para. 10-12.
[60] Since that negligence was not pleaded by the appellants, I conclude that this issue should go no further.
(iii) The breach of a fiduciary duty
[61] The appellants submit that the categories of fiduciary relationships are not closed, even when dealing with public law duties. They claim that the breach of fiduciary duty is apparent if the Guidelines are ultra vires. They say that the farmers' NISA accounts were in the care of the Minister of Agriculture. Under the Agreement, the Minister of Agriculture was obliged to set up separate NISA accounts for each producer similar to bank accounts. He was, in effect, given the control of those bank accounts. The appellants further argue that, if the Minister, through the NISA Administration, in effect dipped into the NISA "bank" accounts of prairie farmers by applying unlawful and regional prejudicial Guidelines, a clear breach of trust arose.
[62] In doing so, they rely on a line of cases, which they characterize as the "pension commission cases", namely Re Collins and Ontario Pension Commission; Re Batchelor and Ontario Pension Commission (1986), 56 O.R. (2d) 274 (Div. Ct.) and Retirement Income Plan for Salaried Employees of Weavexx Corp. v. Ontario (Superintendent of Pensions) (2000), 58 O.R. (3d) 380.
[63] Theses cases are not determinative of the law and are not binding on me.
[64] Historically, fiduciary relationships were identified by whether or not they fit within specific "categories". For example, fiduciary relationships were found to arise between doctors and their patients, directors and a corporation, and solicitors and their clients. More recently,
the law of fiduciary relationships has moved away from the notion of "categories" to an approach which requires the analysis of the particular characteristics of the relationship in question (Guerin v. The Queen, [1984] 2 S.C.R. 335).
[65] The relationship between the appellants and the respondent in this case must therefore be considered, in all of its context, in order to determine whether it can properly be characterized as fiduciary. While the analysis must be contextual and situation-specific, relationships that have been held to be fiduciary in nature have usually had the following three characteristics:
(1) the fiduciary has scope for the exercise of some discretion or power;
(2) the fiduciary can unilaterally exercise that power or discretion so as to affect the beneficiary's legal or practical interests;
(3) the beneficiary is peculiarly vulnerable to or at the mercy of the fiduciary holding the discretion or power.
[66] These characteristics were first enunciated by Wilson J. in dissent in Frame v. Smith, [1987] 2 S.C.R. 99. La Forest J. noted in Lac Minerals Ltd. v. International Corona Resources Ltd., [1989] 2 S.C.R. 574 at para. 145, that, while the majority in Frame disagreed with the result, they had not disapproved of the statement listing the three characteristics.
[67] It follows that the presence of vulnerability is an essential element to a finding of fiduciary obligations. In Lac Minerals Ltd.v. International Corona Resources Ltd., [1989] 2 S.C.R. 574,
Sopinka J. quoted with approval, at para. 34 of his reasons, the following paragraph from Hospital Products Ltd. v. United States Surgical Corp. (1984), 55 A.L.R. 417:
There is, however, the notion underlying all the cases of fiduciary obligation that inherent in the nature of the relationship itself is a position of disadvantage or vulnerability on the part of one of the parties which causes him to place reliance upon the other and requires the protection of equity acting upon the conscience of that other¼"
[68] Von Finckenstein J. found that the relationship between the appellants and the respondent could not be considered a fiduciary one. Specifically, he found that the appellants were not at the mercy of the Minister's discretion, given that the Program was voluntary, and hence were not vulnerable to the Minister.
[69] I agree. The relationship between the Minister and the appellants in the context of the NISA Program is not fiduciary in nature. The appellants are clearly not at the mercy of the Minister. The Program is a voluntary one.
VII. CONCLUSION
[70] For these reasons, I would allow this appeal, I would set aside the decision of the motions judge and I would grant the respondent Minister's motion except insofar as the appellants claim a declaration that the Guidelines are invalid.
[71] Finally, I wish to emphasise the limited nature of the issue that I have decided in concluding that the motions judge erred in granting the respondent Minister's motion for summary judgment and in dismissing the appellants' claim for a declaration that the Guidelines are invalid. In particular, I should not be taken as deciding whether an action, rather than an application for judicial review, is the appropriate procedural form in which the issue should be brought before the Court; whether there are any discretionary bars to the grant of declaratory relief; or whether, if awarded a declaration of invalidity, the appellants are entitled to any consequential relief. These are all issues to be decided when and if the matter comes before the Federal Court for determination.
[72] Since success is divided, no costs should be awarded.
(s) "Alice Desjardins"
J.A.
"I agree.
John M. Evans J.A."
"I agree.
J.D. Denis Pelletier J.A."
FEDERAL COURT OF APPEAL
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: A-120-04
STYLE OF CAUSE: SANDER HOLDINGS LTD. ET AL v. THE ATTORNEY GENERAL OF CANADA ET AL
PLACE OF HEARING: SASKATOON, SASKATCHEWAN
DATE OF HEARING: NOVEMBER 8, 2004
REASONS FOR JUDGMENT : DESJARDINS, J.A.
CONCURRED IN BY: EVANS, J.A.
PELLETIER, J.A.
DATED: JANUARY 14, 2005
APPEARANCES:
Mr. Terry Zakreski
Ms. Cathleen Edwards FOR THE APPELLANTS
Mr. Brian Hay FOR THE RESPONDENT
SOLICITORS OF RECORD:
Priel, Stevenson, Hood & Thornton
Saskatoon, Saskatchewan FOR THE APPELLANTS
John H. Sims, Q.C.
Deputy Attorney General of Canada FOR THE RESPONDENT