A-276-05
IN THE MATTER OF the Competition Act, R.S.C. 1985, c. C-34, as amended; and ss. 3 and 49 of the Competition Tribunal Rules, Can.Reg. SOR/94-290;
AND IN THE MATTER OF the acquisition by West Fraser Timber Co. Ltd. of Weldwood of Canada Limited;
AND IN THE MATTER OF an application under Section 106(2) of the Competition Act by Burns Lake Native Development Corporation, Lake Babine Nation, Burns Lake Band, Nee Tahi Buhn Indian Band to rescind or vary the Consent Agreement between the Commissioner of Competition and West Fraser Timber Co. Ltd. and West Fraser Mills Ltd. filed and registered with the Competition Tribunal on December 7, 2004, under s. 105 of the Competition Act.
BETWEEN:
BURNS LAKE NATIVE DEVELOPMENT CORPORATION, COUNCIL OF LAKE BABINE NATION AND EMMA PALMANTIER, ON HER OWN BEHALF AND ON BEHALF OF ALL MEMBERS OF LAKE BABINE NATION, COUNCIL OF BURNS LAKE BAND AND ROBERT CHARLIE, ON HIS OWN BEHALF AND ON BEHALF OF ALL MEMBERS OF BURNS LAKE BAND and COUNCIL OF NEE TAHI BUHN INDIAN BAND AND RAY MORRIS, ON HIS OWN BEHALF AND ON BEHALF OF ALL MEMBERS OF NEE TAHI BUHN INDIAN BAND
and
COMMISSIONER OF COMPETITION, WEST FRASER TIMBER CO. LTD.
and WEST FRASER MILLS LTD.
Heard at Toronto, Ontario, on March 6, 2006.
Judgment delivered at Toronto, Ontario, on March 7, 2006.
REASONS FOR JUDGMENT BY: EVANS J.A.
CONCURRED IN BY: SHARLOW J.A.
MALONE J.A.
Dockets: A-189-05
A-276-05
Citation: 2006 FCA 97
CORAM: EVANS J.A.
SHARLOW J.A.
MALONE J.A.
IN THE MATTER OF the Competition Act, R.S.C. 1985, c. C-34, as amended; and ss. 3 and 49 of the Competition Tribunal Rules, Can.Reg. SOR/94-290;
AND IN THE MATTER OF the acquisition by West Fraser Timber Co. Ltd. of Weldwood of Canada Limited;
AND IN THE MATTER OF an application under Section 106(2) of the Competition Act by Burns Lake Native Development Corporation, Lake Babine Nation, Burns Lake Band, Nee Tahi Buhn Indian Band to rescind or vary the Consent Agreement between the Commissioner of Competition and West Fraser Timber Co. Ltd. and West Fraser Mills Ltd. filed and registered with the Competition Tribunal on December 7, 2004, under s. 105 of the Competition Act.
BETWEEN:
BURNS LAKE NATIVE DEVELOPMENT CORPORATION, COUNCIL OF LAKE BABINE NATION AND EMMA PALMANTIER, ON HER OWN BEHALF AND ON BEHALF OF ALL MEMBERS OF LAKE BABINE NATION, COUNCIL OF BURNS LAKE BAND AND ROBERT CHARLIE, ON HIS OWN BEHALF AND ON BEHALF OF ALL MEMBERS OF BURNS LAKE BAND and COUNCIL OF NEE TAHI BUHN INDIAN BAND AND RAY MORRIS, ON HIS OWN BEHALF AND ON BEHALF OF ALL MEMBERS OF NEE TAHI BUHN INDIAN BAND
Appellants
and
COMMISSIONER OF COMPETITION, WEST FRASER TIMBER CO. LTD.
and WEST FRASER MILLS LTD.
Respondents
REASONS FOR JUDGMENT
[1] In these consolidated appeals the Burns Lake Native Development Corporation and others ("the appellants") appeal from orders of the Competition Tribunal, dated April 13, 2005, and June 1, 2005. The appellants say that the Competition Tribunal erred in making orders upholding the procedural propriety of a reference to the Tribunal by the Commissioner of Competition, and ordering that Question 1 of the reference proceed to hearing.
[2] The reference by the Commissioner asks the judicial member of the Tribunal to determine questions pertaining to the interpretation of the words "directly affected" in subsection 106(2) of the Competition Act, R.S.C. 1985, c. C-34 ("the Act"), and their application to particular facts.
[3] Subsection 106(2) provides:
| (2) A person directly affected by a consent agreement, other than a party to that agreement, may apply to the Tribunal within 60 days after the registration of the agreement to have one or more of its terms rescinded or varied. The Tribunal may grant the application if it finds that the person has established that the terms could not be the subject of an order of the Tribunal.
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(2) Toute personne directement touchée par le consentement - à l'exclusion d'une partie à celui-ci - peut, dans les soixante jours suivant l'enregistrement, demander au Tribunal d'en annuler ou d'en modifier une ou plusieurs modalités. Le Tribunal peut accueillir la demande s'il conclut que la personne a établi que les modalités ne pourraient faire l'objet d'une ordonnance du Tribunal.
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[4] The Commissioner made this reference in response to an application by the appellants under subsection 106(2) requesting the Tribunal to rescind or vary certain terms in a consent agreement entered into by the Commissioner and two companies ("West Fraser"), following West Fraser's acquisition of Weldwood of Canada Co. Ltd.. The consent agreement was registered by the Tribunal in accordance with section 105 of the Act. The appellants named the Commissioner and West Fraser as respondents to their application.
[5] The appellants allege, among other things, that they will be injured by a provision in the consent agreement requiring West Fraser to divest itself of certain timber mill interests and harvesting rights. They say also that the consent agreement is invalid because there was no evidence that the acquisition would lessen competition substantially, and it was entered into in breach of the Commissioner's duties to First Nations peoples of Burns Lake.
[6] The Commissioner made her reference to the Tribunal pursuant to subsection 124.2(2) of the Act, which provides:
| (2) The Commissioner may, at any time, refer to the Tribunal for determination a question of law, jurisdiction, practice or procedure, in relation to the application or interpretation of Parts VII.1 to IX.
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(2) Le commissaire peut, en tout temps, soumettre au Tribunal toute question de droit, de compétence, de pratique ou de procédure liée à l'application ou l'interprétation des parties VII.1 à IX.
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[7] The propriety of Question 1 of the reference is still in dispute. It is as follows:
1. (a) What is the nature and scope of the interest sufficient to satisfy the "directly
affected" requirement for standing in subsection 106(2) of the Act?
(b) In particular, must an applicant under subsection 106(2) be "affected":
(i) in relation to competition; and
(ii) in relation to its substantive rights and/or pecuniary interests?
(c) In particular, must an applicant under subsection 106(2) be affected "directly" in that the alleged effect must be:
(i) suffered (or threatened to be suffered) by the applicant exclusively as a consequences of the Consent Agreement, and not as a result of other factors, influences, or circumstances; and
(ii) imminent and real, and not hypothetical or speculative?
(d) As to the application of subsection 106(2), have the Applicants, as grouped below, disclosed in their Notice of Application herein facts which, if proved, establish that they are "directly affected" for the purposes of subsection 106(2):
(i) Burns Lake Native Development Corporation, a body corporate established in 1974 (the "Corporation");
(ii) Council of Burns Lake Band, Council of Lake Babine Nation, Council of Nee Tahi Buhn Indian Band (the "Bands"); and
(iii) Robert Charlie, Emma Palmantier and Ray Morris (the "Chiefs")?
[8] The Commissioner referred this question in the interests of settling legal questions likely to recur relating to the standing of parties to make a subsection 106(2) application, and to determine, on the basis of the relevant legal tests, if the appellants had standing to make their application as persons "directly affected". If the Tribunal were to answer the questions (and especially Question 1(d)) in the manner advocated by the Commissioner, it would probably not be necessary for the Tribunal to enter into the merits of the appellants' application. Delay in determining the subsection 106(2) application may also prejudice the interests of West Fraser.
[9] The judicial member of the Tribunal, acting as the case management judge of the subsection 106(2) application, made two orders respecting the reference which are the subject of these appeals. First, she held that the reference was not procedurally improper as having been brought by the Commissioner after the appellants had filed their subsection 106(2) proceeding. This is the subject of the appeal in Court File No. A-189-05.
[10] Second, she held that Question 1 was not substantively improper on the ground that the Tribunal was being asked to decide abstract or hypothetical questions, or questions that were of mixed fact and law. The Commissioner is only authorized by subsection 124.2(2) to refer to the Tribunal questions of law, jurisdiction or procedure.
[11] I should add that the Tribunal has now held a two-and-a-half-day hearing on the question of whether the appellants are "directly affected" by the consent agreement. Its decision is under reserve. In an attempt to obtain a ruling from the Tribunal that would obviate the need for a possibly lengthy hearing on the merits of the subsection 106(2) application, the Commissioner accepted that the "plain and obvious" standard applicable to motions to strike should also apply to the determination of the reference.
[12] Having described the background to the appeals, I shall discuss each separately.
The A-189-05 appeal
[13] I am not persuaded that the Tribunal erred in holding that the Commissioner's power to make a reference under subsection 124.2(2) "at any time" enables the Commissioner to refer a question arising in the course of a proceeding before the Tribunal instituted under the Act to which the Commissioner is party.
[14] In view of the plain meaning of the words "at any time", it is not justifiable to limit their scope by reading in words to the effect that no question may be referred in connection with a proceeding which had already been initiated before the Tribunal and to which the Commissioner was party. That the Commissioner, like the appellants, may raise an issue by way of a motion to strike is irrelevant. The fact that there may be an overlap between subsection 124.2(2), as interpreted by the Tribunal, and subsection 124.2(1) is not a reason for imposing implied limits on the words "at any time".
[15] Counsel for the appellants submitted that the words "at any time" must be construed in their context. He argued that, since subsection 124.2(2) was located in the Competition Act, not the Competition Tribunal Act, R.S.C. 1985, c. 19 (2nd Supp.), it should not be regarded merely as a rule of procedure applicable to proceedings before the Tribunal.
[16] I do not agree. Section 7 of the Competition Act creates the office of Commissioner. Since subsection 124.2(2) confers a power on the Commissioner it is not surprising to find it included in the Competition Act, rather than the Competition Tribunal Act. It is not a provision governing the procedure of the Tribunal, but a power exercisable by the Commissioner in the administration of the Act.
[17] Nor am I persuaded that the appellants were denied a fair hearing when the Tribunal rendered its decision on the basis of a case management telephone conference. The propriety of the use of the reference procedure once a proceeding had commenced was fully argued before the Tribunal, both in writing and orally. In these circumstances, fairness did not require the Tribunal to permit the appellants to bring a formal motion to strike the reference.
The A-276-05 appeal
[18] In the alternative, the appellants advance two grounds for saying that the Tribunal erred in denying their motion to strike Question 1 from the reference.
[19] First, they argue that the Commissioner may refer a question under subsection 124.2(2) only if it has a factual foundation. They allege that parts (a), (b), and (c) of Question 1 are academic, hypothetical or advisory in nature. They rely on jurisprudence of this Court dealing with questions referred by administrative tribunals under the similarly worded section 18.3 of the Federal Courts Act, R.S.C. 1985, c. F-7.
[20] I do not accept this argument. An application may be made under subsection 124.2(2) outside the context of a specific proceeding, while a federal tribunal may refer a question to the Federal Court under section 18.3(1) "at any stage of its proceedings". Consequently, the case law under section 18.3 does not, in my view, help the appellants.
[21] As for part (d) of Question 1, the appellants rely on Canada (Director of Research & Investigation) v. Southam Inc., [1997] 1 S.C.R, 748, to argue that the application to the stated facts of the statutory words "directly affected" is a question of mixed fact and law, not a question of law alone, and is thus not authorized by subsection 124.2(2). The appellants submit that a reference question must be based on undisputed facts and that Question 1(d) was not, since many of the facts that they asserted in the statement of grounds in their subsection 106(2) notice of application are disputed by the Commissioner.
[22] The Tribunal held that Question 1(d) would be answered on the assumption that the facts set out by the appellants in their subsection 106(2) application, and reply, were true. In these circumstances, I do not agree that the facts were in dispute for the purpose of the reference.
[23] The appellants concede that whether they have standing as persons "directly affected" to make a section 106(2) application would have been a question of law if the facts on which the reference was based were not in dispute. However, for reasons already given, I agree with the Tribunal that the facts were not in dispute.
[24] The Commissioner also points out that subsection 124.2(2) states that a question about the interpretation or application of the Act may be referred to the Tribunal, and that Parliament therefore must have contemplated that some questions of statutory application were questions of law.
Conclusion
[25] For these reasons, I would dismiss both appeals with costs payable to the Commissioner by the appellants. Costs were not requested by counsel for West Fraser.
"John M. Evans"
J.A.
"I agree
K. Sharlow"
"I agree
B. Malone"
NAME OF COUNSEL AND SOLICITORS OF RECORD
DOCKETS: A-189-05
A-276-05
STYLE OF CAUSE: BURNS LAKE NATIVE DEVELOPMENT CORPORATION ET AL.
Appellants
and
COMMISSIONER OF COMPETITION
ET AL.
Respondents
PLACE OF HEARING: TORONTO, ONTARIO
DATE OF HEARING: MARCH 6, 2006
REASONS FOR JUDGMENT BY: EVANS J.A.
APPEARANCES:
Orestes Pasparakis
D. Michael Brown FOR APPELLANTS
Derek Bell FOR RESPONDENT, COMMISSIONER OF COMPETITION
James Musgrove FOR RESPONDENT, WEST FRASER TIMBER CO. LTD. ET AL.
SOLICITORS OF RECORD:
Ogilvy Renault LLP
Barristers & Solicitors
Toronto, Ontario FOR APPELLANTS
John H. Sims, Q.C.
Deputy Attorney General of Canada FOR RESPONDENTS, COMMISSIONER OF COMPETITION
Lang Michener LLP
Toronto, Ontario FOR RESPONDENTS, WEST FRASER TIMBER CO. LTD ET AL.