A-49-05
A-50-05
BETWEEN: A-48-05
GRK FASTENERS
and
LELAND INDUSTRIES INC., INFASCO DIVISION OF IFASTGROUP AND COMPANY LP, ARROW FASTENERS LTD., CANADIAN FASTENERS IMPORTERS COALITION, SHANGHAI BEN YUAN METAL PRODUCTS CO., LTD., STAR STAINLESS SCREW CO., BOMBARDIER RECREATIONAL PRODUCTS INC., ITW CONSTRUCTION PRODUCTS, CANADIAN TIRE CORPORATION, LIMITED, FLEETWOOD CANADA LTD., THE GOVERNMENT OF THE PEOPLE'S REPUBLIC OF CHINA, GOVERNMENT OF TAIWAN, VELAN INC., DIRECT FASTENERS, WESTLAND STEEL PRODUCTS LTD., TONG HWEI ENTERPRISE CO., LTD., FULLER METRIC PARTS LTD., ENDRIES INTERNATIONAL OF CANADA INC., NATIONAL SOCKET SCREW, HILTI (CANADA) CORPORATION, VISQUÉ INC.
TONG HWEI ENTERPRISE CO., LTD.
Applicant
and
LELAND INDUSTRIES INC., INFASCO DIVISION OF IFASTGROUP AND COMPANY LP, ARROW FASTENERS LTD., CANADIAN FASTENERS IMPORTERS COALITION,
SHANGHAI BEN YUAN METAL PRODUCTS CO., LTD., STAR STAINLESS SCREW CO., BOMBARDIER RECREATIONAL PRODUCTS INC., ITW CONSTRUCTION PRODUCTS, CANADIAN TIRE CORPORATION, LIMITED, FLEETWOOD CANADA LTD., THE GOVERNMENT OF THE PEOPLE'S REPUBLIC OF CHINA, GOVERNMENT OF TAIWAN, VELAN INC., DIRECT FASTENERS, WESTLAND STEEL PRODUCTS LTD., FULLER METRIC PARTS LTD., ENDRIES INTERNATIONAL OF CANADA INC., NATIONAL SOCKET SCREW, HILTI (CANADA) CORPORATION, VISQUÉ INC.
Respondents
BETWEEN: A-50-05
STAR STAINLESS SCREW CO.
Applicant
and
LELAND INDUSTRIES INC., INFASCO DIVISION OF IFASTGROUP AND COMPANY LP, ARROW FASTENERS LTD., CANADIAN FASTENERS IMPORTERS COALITION, SHANGHAI BEN YUAN METAL PRODUCTS CO., LTD., BOMBARDIER RECREATIONAL PRODUCTS INC., ITW CONSTRUCTION PRODUCTS, CANADIAN TIRE CORPORATION, LIMITED, FLEETWOOD CANADA LTD., THE GOVERNMENT OF THE PEOPLE'S REPUBLIC OF CHINA, GOVERNMENT OF TAIWAN, VELAN INC., DIRECT FASTENERS, WESTLAND STEEL PRODUCTS LTD., TONG HWEI ENTERPRISE CO., LTD., FULLER METRIC PARTS LTD., ENDRIES INTERNATIONAL OF CANADA INC., NATIONAL SOCKET SCREW, HILTI (CANADA) CORPORATION, VISQUÉ INC.
Respondents
Heard at Toronto, Ontario, on February 22, 2006.
Judgment delivered at Ottawa, Ontario, on March 21, 2006.
| REASONS FOR JUDGMENT BY: |
MALONE J.A. |
| CONCURRED IN BY: |
SHARLOW J.A. PELLETIER J.A. |
Date: 20060321
Docket: A-48-05
Citation: 2006 FCA 118
CORAM: SHARLOW J.A.
PELLETIER J.A.
MALONE J.A.
BETWEEN:
GRK FASTENERS
Applicant
and
LELAND INDUSTRIES INC., INFASCO DIVISION OF IFASTGROUP AND COMPANY LP, ARROW FASTENERS LTD., CANADIAN FASTENERS IMPORTERS COALITION, SHANGHAI BEN YUAN METAL PRODUCTS CO., LTD., STAR STAINLESS SCREW CO., BOMBARDIER RECREATIONAL PRODUCTS INC., ITW CONSTRUCTION PRODUCTS, CANADIAN TIRE CORPORATION, LIMITED, FLEETWOOD CANADA LTD., THE GOVERNMENT OF THE PEOPLE'S REPUBLIC OF CHINA, GOVERNMENT OF TAIWAN, VELAN INC., DIRECT FASTENERS, WESTLAND STEEL PRODUCTS LTD., TONG HWEI ENTERPRISE CO., LTD., FULLER METRIC PARTS LTD., ENDRIES INTERNATIONAL OF CANADA INC., NATIONAL SOCKET SCREW, HILTI (CANADA) CORPORATION, VISQUÉ INC.
Respondents
BETWEEN: A-49-05
TONG HWEI ENTERPRISE CO., LTD.
Applicant
and
LELAND INDUSTRIES INC., INFASCO DIVISION OF IFASTGROUP AND COMPANY LP, ARROW FASTENERS LTD., CANADIAN FASTENERS IMPORTERS COALITION, SHANGHAI BEN YUAN METAL PRODUCTS CO., LTD., STAR STAINLESS SCREW CO., BOMBARDIER RECREATIONAL PRODUCTS INC., ITW CONSTRUCTION
PRODUCTS, CANADIAN TIRE CORPORATION, LIMITED, FLEETWOOD CANADA LTD., THE GOVERNMENT OF THE PEOPLE'S REPUBLIC OF CHINA, GOVERNMENT OF TAIWAN, VELAN INC., DIRECT FASTENERS, WESTLAND STEEL PRODUCTS LTD., FULLER METRIC PARTS LTD., ENDRIES INTERNATIONAL OF CANADA INC., NATIONAL SOCKET SCREW, HILTI (CANADA) CORPORATION, VISQUÉ INC.
Respondents
BETWEEN: A-50-05
STAR STAINLESS SCREW CO.
Applicant
and
LELAND INDUSTRIES INC., INFASCO DIVISION OF IFASTGROUP AND COMPANY LP, ARROW FASTENERS LTD., CANADIAN FASTENERS IMPORTERS COALITION, SHANGHAI BEN YUAN METAL PRODUCTS CO., LTD., BOMBARDIER RECREATIONAL PRODUCTS INC., ITW CONSTRUCTION PRODUCTS, CANADIAN TIRE CORPORATION, LIMITED, FLEETWOOD CANADA LTD., THE GOVERNMENT OF THE PEOPLE'S REPUBLIC OF CHINA, GOVERNMENT OF TAIWAN, VELAN INC., DIRECT FASTENERS, WESTLAND STEEL PRODUCTS LTD., TONG HWEI ENTERPRISE CO., LTD., FULLER METRIC PARTS LTD., ENDRIES INTERNATIONAL OF CANADA INC., NATIONAL SOCKET SCREW, HILTI (CANADA) CORPORATION, VISQUÉ INC.
Respondents
REASONS FOR JUDGMENT
MALONE J.A.
I. Introduction
[1] These three applications for judicial review concern allegations of a denial of procedural fairness as well as a breach of natural justice arising out of a Canadian International Trade Tribunal (the Tribunal) injury inquiry in late 2004 (reported as Dumping and Subsidizing - Findings and Reasons - Inquiry No. NQ-2004-005 - Certain Fasteners). The grounds for the three applications are substantially the same, and they were heard together.
[2] The respondent Leland Industries Inc. (Leland) filed a complaint on March 4, 2004, and a preliminary determination was issued on September 10, 2004. The Tribunal then proceeded under a 120 day statutory deadline within which it was required to issue its findings (see subsection 43(1) of Special Import Measures Act,R.S.C. 1985, c. S-15 (SIMA)). The findings of the Tribunal inquiry were issued on January 7, 2005, with reasons issued January 21, 2005.
[3] The Tribunal conducted its inquiry pursuant to section 42 of SIMA to determine whether the dumping in Canada of steel fasteners from China and Taipei, as well as the possible subsidization of such products, had caused or threatened injury to the domestic market from January 2001 to June 2004.
[4] The Tribunal's inquiry process principally involved a questionnaire on whether and how to subdivide the various types of fasteners into separate categories, the exemption of certain fasteners from the inquiry, and a seven day hearing involving nineteen participants and twenty-nine witnesses on the question of material injury. The inquiry record encompasses some sixty-eight volumes of evidence and another thirty thousand pages dealing with over twenty thousand exclusion requests and related documents.
[5] According to the applicants, the enormity of the task and time constraints led the Tribunal to deviate from its standard procedures. These deviations give rise to their procedural fairness and natural justice arguments. The applicants also assert that the Tribunal's breaches of natural justice gives rise to patently unreasonable findings of fact regarding both material injury and its refusal to grant any exclusion requests that were not consented to by domestic producers. GRK asserts that the decision of the Tribunal not to grant an exclusion to its product is patently unreasonable.
Procedural Fairness and Natural Justice
[6] Generally, questions of procedural fairness are questions of law, and the standard of review is correctness (see Ellis-Don Ltd. v. Ontario(Labour Relations Board), [2001] 1 S.C.R. 221 at paragraph 65). Procedural fairness questions are not subject to a pragmatic and functional analysis (see Canadian Union of Public Employees (C.U.P.E.) v. Ontario(Minister of Labour),[2003] 1 S.C.R. 539 at paragraph 100; and AGC v. Fetherston, 2005 FCA 111 at paragraph 16).
[7] The content of the duty of fairness varies with the context. This application involves subsection 43(1) of SIMA which gives the Tribunal, an expert body in determining material injury, the discretion to decide what particular goods, within the definition of "subject goods", have been injured and which products, if any, should be excluded from its findings (see Hetex Garn A.G. v. Anti-Dumping Tribunal, (1978) 2 FC 507).
[8] The Tribunal is a court of record with established procedural rules (Canadian International Trade Tribunal Act, R.S.C 1985, c.47 (CITT Act) at subsection 17(1)). Its decisions under section 42 of SIMA are without an automatic right of appeal and can only be challenged by judicial review (SIMA at section 76). Subsection 17(2) of the CITT Act gives the Tribunal all of the powers, rights and privileges of a superior court of record regarding matters necessary or proper for the due exercise of its jurisdiction. In turn, its rules (Canadian International Trade Tribunal Rules, SOR/91-499) provide further direction as to how that statutory discretion will be exercised. Rule 5 provides that where a question of procedure arises to which the rules do not provide an answer, the issue may be disposed of in such a manner as the Tribunal directs. Rule 6 allows the Tribunal to dispense with, vary or supplement any of the rules to provide for a more expeditious or informal process as the circumstances and considerations of process permit.
[9] The applicants' principal complaint is that, due to the pre-hearing procedures chosen by the Tribunal, participants were unsure of the scope of the products subject to inquiry until late in the process when meaningful representations were impossible. This is really a complaint about the manner in which the Tribunal exercised its residual discretion to manage the particular proceeding arising from Leland's complaint.
[10] This Court will normally respect the choice of procedures made by a specialized tribunal in order to carry out its mandate (see Genex Communications Inc. v. AGC and CRTC (2005) FCA 283 at paragraph 165), provided the appropriate degree of procedural fairness is afforded the parties. Procedural fairness in this case required the Tribunal to devise a procedure that gave the parties enough notice of the case to be met to enable them to make meaningful representations (see Baker v. Canada (Minister of Citizenship and Immigration), [1999] 2 S.C.R. 817 at paragraphs 23-26).
[11] Upon a careful review of the record, I reject the applicants' procedural fairness complaints, for the following reasons.
[12] In its statement of reasons, for its preliminary determination on September 10, 2004, the Canada Border Services Agency (CBSA) defined the subject goods and provided other information including technical specifications, product application and tariff specifications. The definition of the goods in the preliminary determination governs the Tribunal's inquiry under subsection 38(1) of SIMA and the Tribunal's initial notice of inquiry and subsequent notice of December 1, 2004, made this clear.
[13] Furthermore, the Tribunal consulted with the parties in advance of the preliminary determination and agreed with counsel for the applicant to divide the goods for purposes of the questionnaires into four discreet categories for data analysis. In addition to defining the goods, the Tribunal also provided information on the procedures for making exclusion requests in its September 10, 2004, notice advising that the Tribunal intended to proceed by way of written submissions.
[14] On September 24, 2004, a conference call took place among the Tribunal's research staff and the participants. The purpose of the call was to discuss the management of the exclusion request process. At that time, Leland unilaterally offered to clarify the scope of the goods considered to be the focus of their injury complaint. Pursuant to this offer, Leland sent its list to the Tribunal on October 4, 2004, with three covering letters explaining how that list was to be read. The list was circulated to all parties by the Tribunal on October 8, 2004, approximately two months before the commencement of the oral hearing.
[15] Supplementary instructions were also issued by the Tribunal on October 19, 22, 25 and November 3, 2004. These instructions were related to managing the exclusion process in light of the unprecedented volume of documentation involved. While the large number of individual items placed considerable burden on both the participants and the Tribunal, in my analysis, the Tribunal's transparent procedures at every stage were conducted in accordance with appropriate procedural fairness and natural justice standards and in accordance with its discretionary power. None of these procedures interfered with the appellants' right to know the case it was required to meet.
[16] The applicants also say that they only learned of the three letters Leland sent to the Tribunal on October 4, 2004, after the Tribunal's findings and reasons were issued. It now complains that the Tribunal unwittingly allowed Leland to set the terms of product scope and exclusion requests, without input from all participants. In sum, it argues CITT breached its duty of procedural fairness by receiving ex parte communications.
[17] In my view, the applicants mischaracterize the communications from Leland. In conveying the list to the Tribunal, Leland's initial letter explained how the list was to be read. The two subsequent communications that same day provided clarification and conveyed generic and trade descriptions to accompany the list. The Tribunal's notice of October 8, 2004, forwarded the list to all parties noting that it was prepared by Leland and setting out those items that Leland claimed were made or capable of being made by the domestic industries. The substance of all of Leland's letters was conveyed in a timely manner to all participants, including the applicants. Nothing in that notice pre-empted or usurped the eventual decision by the Tribunal on the substance of the case, the scope of the product coverage or the matter of product exclusions as the applicant now asserts. I see no breach of procedural fairness in the manner in which the Tribunal proceeded.
[18] I also reject the assertion that the applicants' right to make meaningful representations was not respected by the Tribunal. As examples of representations sought by the Tribunal from the applicant, I note that the Tribunal sought and received its views in the pre-inquiry phase in designing the questionnaires and in respect of adjustments to the process and timing of exclusion requests. It also made submissions in respect of Leland's request to file exclusion responses on a category-wide basis, in respect of the categories of like goods to be covered in the inquiry as well as exclusion responses filed by the domestic industry. These were in addition to the extensive written submissions and witness statements made by the applicants during the oral stage of the inquiry.
[19] The applicants' final complaint with regard to the Tribunal's process concerns Leland's failure to respond to the November 22, 2004, directive requiring all participants to respond to Requests for Information from other parties. At the opening of the hearing, thee applicants sought directions from the hearing panel because Leland had failed to complete a chart generated by the Canadian Fasteners Importer Coalition (CFIC) with regard to the age of its machinery. Leland's response was that its filings were much more detailed than the CFIC chart had required but if the panel directed that the chart be completed, Leland would do so on the protected record. The panel accepted this response, directing that CFIC's counsel cross-examine using the documents filed in the exclusion process, as well as the chart model, noting that the matter could be reviewed again at the time of cross-examination. The record ends there. In my analysis, this was a proper exercise of the discretion of the panel and falls far short of a breach of procedural fairness.
Alleged Substantive Errors in Tribunal Decision
[20] All parties acknowledge that the standard of review of the Tribunal's substantive findings is patent unreasonableness in accordance with Pushpanathn v. Canada(Minister of Citizenship and Immigration), [1998] 1 S.C.R. 982. Patent unreasonableness is a strict test which is met where a decision is clearly irrational and not in accordance with reasons (see Canada Attorney General) v. Public Service Alliance of Canada, [1993] 1 S.C.R. 941 at pages 963-964; and Law Society of New Brunswick v. Ryan [2003] 1 S.C.R. 247).
[21] GRK submits that the Tribunal made a palpable and overriding error when it denied an exclusion for GRK's patented products. The only part of the Tribunal's reasons that address this point is found at paragraph 221, which reads as follows:
The Tribunal also considered a number of requests that involved some form of proprietary design or drawing. In most cases, the Tribunal was unable to determine who owned the rights to the design, drawing or patent. Where it was able to do so, such as in the case of a number of domestic producers, it rejected the requests in light of the fact that the domestic producers were producing the goods domestically in small quantities and had decided to have them produced in larger quantities offshore, particularly in the subject countries, in competition with the domestic industry. Those domestic producers were not prepared to dedicate their equipment to the production of large quantities of these goods, nor were they prepared to have the domestic industry produce those goods under licence. The Tribunal was thus of the view that this approach by some of the domestic producers opposing the complaint should not benefit from the granting of an exclusion, as it was tantamount to those domestic producers stepping into the shoes of the subject country producers that are competing against the domestic industry.
[22] GRK submits the Tribunal ignored evidence and requests that the decision be quashed with respect to the GRK exclusions; a remedy which this Court has jurisdiction to grant pursuant to paragraph 18.1(4)(d) of the Federal Courts Act, R.S.C., 1985, c. F-7.
[23] In this argument GRK alleges that the foregoing procedural deviations led to unsupportable factual findings on the part of the Tribunal. These alleged errors of fact are said to include the denial of its request for exclusion of certain patented stainless steel and carbon steel screws and its finding of a threat of injury to domestic industry because of dumped stainless steel screws.
[24] In advancing these arguments, GRK must establish that the Tribunal based its decision on an erroneous finding of fact, that the error was made in a perverse or capricious manner, or without regard for the material before it (see paragraph 18.1(4)(d) of the Federal Courts Act). Previous decisions of this Court direct that our review of alleged factual errors are conducted under the patently unreasonable standard (see Stelco v. British Steel Canada Inc., et al., [2000] 3 F.C. 282 at paragraph 17-20, and Defasco v. Macsteel International (Canada) Ltd. et al., [2002] FCA 419 at paragraph 6). A patently unreasonable decision includes one that contains a defect on the face of the reasons (Canada (Director of Investigation and Research) v. Southam,[1997] 1 S.C.R 748).
[25] With respect to GRK's patented products, the evidence showed unequivocally who owned the patents upon which GRK's claim for an exclusion was based. Attached to GRK's product exclusion request, dated October 18, 2004, are three patent certificates indicating that Uli Walther, the GRK Fastener contact or representative, is the owner of the patents. From the documents submitted by GRK, it appears to be an unincorporated entity that consented to the exclusion of these patented products.
[26] GRK argues that the Tribunal acted unreasonably in failing to grant an exclusion for its patented products because there is no evidence on the record that the domestic industry would have the capability or the right to produce GRK's fasteners. Since GRK has the patent for the product and nobody else can manufacture it, it is difficult to see how its importation could adversely affect the domestic industry.
[27] It would appear that under time pressure and voluminous exclusion requests, the Tribunal failed to adequately consider the material before it relating to GRK's exclusion request and did not address GRK's argument that no one in Canada has the rights to manufacture their product. The conclusion with regard to GRK's exclusion requests was not in accordance with reason, was patently unreasonable and should be quashed.
[28] The applicants' also argued that the Tribunal's finding that the dumping of stainless steel screws from Taipei threatened material injury in Canada is patently unreasonable because there was no data upon which this finding could be made. However, this argument must fail based on the evidence contained in the staff reports and questionnaire responses. Such evidence properly grounds the Tribunal's conclusion that imports of stainless steel screws from Taipei would pose a threat to the domestic industry in the short term.
[29] The applications of Tong Hwei Enterprise Co., Ltd. and Star Stainless Screw Co. should be dismissed. The application of JRK Fasteners should be allowed in part, the decision of the Tribunal relative to GRK's exclusion request for certain patented stainless steel screws should be set aside and the matter remitted to the Tribunal for redetermination with the existing record. I would make no order as to costs in any of the applications.
"B. Malone"
J.A.
"I agree
K. Sharlow J.A."
"I agree
J.D.Denis Pelletier J.A."
FEDERAL COURT OF APPEAL
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: A-48-05/A-49-05/A-50-05
STYLE OF CAUSE: A-48-05
GRK FASTENERS and
LELAND INDUSTRIES INC. et al
A-49-05
TONG HWEI ENTERPRISE CO., LTD and
LELAND INDUSTRIES INC. et al
A-50-05
STAR STAINLESS SCREW CO. and
LELAND INDUSTRIES INC. et al
PLACE OF HEARING: Toronto, Ontario
DATE OF HEARING: February 22, 2006
REASONS FOR JUDGMENT BY: Malone J.A.
Pelletier J.A.
DATED: March 21, 2006
APPEARANCES:
| FOR THE APPLICANTS |
|
|
|
FOR THE RESPONDENT - LELAND INDUSTRIES INC. |
SOLICITORS OF RECORD:
|
Toronto, Ontario |
FOR THE APPLICANTS
|
|
Herman & Company Toronto, Ontario |
FOR THE RESPONDENT -LELAND INDUSTRIES INC.
|
| Heenan Blaikie LLP Toronto, Ontario |
FOR THE RESPONDENTS ACCURATE FASTERNERS LTD., CANADIAN FASTENERS IMPORTERS COALITION AND EVOLUTION FASTENERS
|
| Gottlieb & Pearson Toronto, Ontario |
FOR THE RESPONDENTS UNCAN FASTENING PRODUCTS, USCAN INDUSTRAIL FASTENERS LTD. |