A-561-84
A-562-84
Energy Probe (Appellant)
v.
Atomic Energy Control Board and Ontario Hydro
(Respondents)
and
Attorney General of Canada (Intervener)
Court of Appeal, Heald, Marceau and Stone JJ.—
Toronto, September 13, 14; Ottawa, October 29,
1984.
Judicial review — Prerogative writs — Energy — Certiorari
— Atomic Energy Control Board licensing decision attacked
for pecuniary bias of Board member Latter president of
company doing business with licence applicant — Trial Judge
not in error in finding no direct pecuniary bias — Too late to
raise issue of reasonable apprehension of bias as issue not
raised at trial No requirement on Trial Judge to put matter
in issue if parties did not — Administrative Tribunal not
necessarily losing jurisdiction where ground of challenge
reasonable apprehension of bias.
Judicial review — Equitable remedies — Declarations —
Trial Judge erred in dismissing action for declaration as
proceeding before Court only motion for preliminary determi
nation of question of law — Federal Court Rules, C.R.C., c.
663, R. 474.
Energy — Validity of licensing decision of Atomic Energy
Control Board where Board member president of company
supplying radiation-resistant cables for nuclear reactors to
licence applicant — Allegation of pecuniary bias — Remote
ness of interest — Belated raising of issue of reasonable
apprehension of bias — Atomic Energy Control Regulations,
C.R.C., c. 365, ss. 8, 9, 10.
Practice — Parties — Attorney General of Canada entitled
to intervene where Atomic Energy Control Board licensing
decision attacked for pecuniary bias of Board member as
president of company doing business with licence applicant —
Issue one of general public importance Case relating to
executive acts authorized by Parliament as matter in issue way
in which executive utilized powers conferred on it by
Parliament.
On September 20, 1983, the Atomic Energy Control Board
confirmed its June 27 decision to issue licences for two units of
Ontario Hydro's Pickering "B" Nuclear Generating Station.
Mr. Olsen, a part-time member of the Board who participated
in the licensing decision was also, at that time, president of a
company selling radiation-resistant cables to Ontario Hydro.
The appellant attacked that decision by means of a motion for
writ of certiorari and a motion for preliminary determination of
a question of law, specifically whether the Board erred in law in
permitting Mr. Olsen to participate in its licensing decision.
The motions were based on an allegation of pecuniary bias on
the part of Mr. Olsen. The Attorney General of Canada then
brought a motion to be added as an intervener in the action.
The Trial Judge granted the Attorney General's application
but dismissed the application for certiorari on the ground that
Mr. Olsen did not have a pecuniary interest sufficient to
constitute bias. While the Trial Judge did mention that there
might have been a reasonable apprehension of bias, she
abstained from making a finding on that question because the
parties did not put it in issue. On the motion for a preliminary
determination of a question of law, the Trial Judge dismissed
"the action for a declaratory judgment".
These are two appeals, one (A-562-84) from the order
adding the Attorney General as intervener, the other
(A-561-84) from the order dismissing the appellant's motion
for a writ of certiorari and its action, in the alternative, for a
declaratory judgment.
With respect to appeal A-561-84, the appellant now argues
that the Trial Judge erred in law in finding that there was no
pecuniary bias. In the alternative, it argues that the Trial Judge
erred in law in concluding that reasonable apprehension of bias
was the real issue and in not calling for argument on the issue
before making her decision.
Held, appeal A-561-84 should be allowed in part and appeal
A-562-84 should be dismissed.
Per Heald J. (Stone J. concurring): Appeal A-561-84: The
Trial Judge correctly dismissed the motion for a writ of certio-
rari. There was no direct pecuniary bias. Mr. Olsen's interest
was indirect and uncertain and too remote to constitute either
direct pecuniary interest or bias. And while it is possible that
this was a case of reasonable apprehension of bias, the question
was not in issue before the Trial Judge. On this basis, there was
no requirement for the Trial Judge to put the matter in issue
where the parties had not done so. Since the validity of
administrative proceedings depends on the circumstances of
each case, it cannot be said that an administrative tribunal
loses jurisdiction where the ground of challenge is merely
reasonable apprehension of bias. The argument that the Trial
Judge should have examined the issue of reasonable apprehen
sion of bias therefore fails. With respect to the alternative
remedy sought in the same appeal, the judge should not have
dismissed the action for a declaration upon a motion to deter
mine a question of law. The order is therefore amended to
provide that the preliminary question of law is answered in the
negative.
Appeal A-562-84: Since the matter in issue is the way in
which the executive has utilized the powers conferred on it by
Parliament, the facts of this case relate to "executive acts
authorized by Parliament" and the Attorney General of
Canada is entitled to intervene.
Per Marceau J.: The appeals should be disposed of as
suggested by Heald and Stone JJ. but for different reasons.
There is no reason to draw a strict distinction between direct
and indirect or certain and uncertain as regards the monetary
benefit the adjudicator could expect from his determination.
The only rational requirements are that the benefit come from
the decision itself and that it is likely enough to "colour" the
case in his eyes. In any event, the mere possibility that a profit
could be realized in the future out of other contracts awarded
in the course of construction of other units was no doubt too
alien, contingent and remote to constitute pecuniary bias with
respect to the decision to be made at that time.
There was no reasonable apprehension of bias "since it
applies only to non-pecuniary interests and since no interest
other than pecuniary was alleged or even alluded to". But if the
evidence had revealed a non-pecuniary interest capable of being
influential and sufficient to raise a real likelihood of bias, even
if counsel had inadequately presented his case, the Trial Judge
would not have been precluded from dealing with it.
There seems to be so far no authority for the proposition that
the law of bias has to be applied to a purely administrative
forum like the Board which does not deal with private rights,
has no adjudicative powers in the proper sense and bears no
resemblance whatever to a court of justice. It is obvious that
there is a requirement for an unbiased decision-maker, but
according to the rules of fairness, not those of natural justice.
And while the rules of fairness do establish safeguards against
bias and are applicable to the Board, the standard to be
achieved does not have to be as high as that required of an
adjudicative tribunal and the rules applicable should therefore
be less strict.
With respect to appeal A-562-84, while there is no basis for
the proposition that the Attorney General of Canada has a
general right of intervention in a legal proceeding between third
parties wherever a question of public policy arises, the Court
has the power to permit such intervention: Alberta Government
Telephones v. Canadian Radio-television and Telecommuni
cations Commission, [1983] 2 F.C. 443 (T.D.), affirmed
[1983] 2 F.C. 839 (C.A.). And the Trial Judge did not err in
relying on the principles in Adams v Adams, [1970] 3 All E.R.
572 (P.D.A.).
CASES JUDICIALLY CONSIDERED
APPLIED:
Metropolitan Properties Co. (F.G.C.) Ltd. v. Lannon,
[1969] 1 Q.B. 577 (Eng. C.A.); Adams v Adams, [1970]
3 All E.R. 572 (P.D.A.).
CONSIDERED:
British Airways Board v Laker Airways Ltd, [1983] 3
All E.R. 375 (Eng. C.A.).
REFERRED TO:
Rex v. Sussex Justices, Ex parte McCarthy, [ 1924] 1
K.B. 256; Nicholson v. Haldimand-Norfolk Regional
Board of Commissioners of Police, [1979] 1 S.C.R. 311;
Re Gooliah and Minister of Citizenship and Immigration
(1967), 63 D.L.R. (2d) 224 (Man. C.A.); Alberta Gov
ernment Telephones v. Canadian Radio-television and
Telecommunications Commission, [1983] 2 F.C. 443
(T.D.), affirmed [1983] 2 F.C. 839 (C.A.).
COUNSEL:
A. J. Roman and D. Poch for appellant.
I. A. Blue and J. S. de Pencier for respondent,
Ontario Hydro.
J. E. Thompson for respondent, Atomic
Energy Control Board and for intervener
Attorney General of Canada.
SOLICITORS:
The Public Interest Advocacy Centre,
Toronto, for appellant.
Cassels, Brock & Blackwell, Toronto, for
respondent Ontario Hydro.
Deputy Attorney General of Canada for
respondent Atomic Energy Control Board and
on his own behalf.
The following are the reasons for judgment
rendered in English by
HEALD J.: These two appeals were heard to
gether pursuant to the agreement of counsel and
are appeals from two orders of the Trial Division,
both dated April 9, 1984. Appeal A-561-84
appeals the order [[1984] 2 F.C. 227] dismissing
the appellant's motion for a writ of certiorari, and
its action, in the alternative, for a declaratory
judgment. Appeal A-562-84 appeals the order
[[1984] 2 F.C. 138] adding the Attorney General
of Canada as an intervener in the action.
Pursuant to the provisions of the Atomic Energy
Control Act, R.S.C. 1970, c. A-19 and the regula
tions promulgated thereunder (see Atomic Energy
Control Regulations, C.R.C., c. 365, sections 8, 9
and 10), the operator of a nuclear facility in
Canada must either have a licence issued by the
respondent, Atomic Energy Control Board
(A.E.C.B.) or an exemption from the licence
requirement, also to be issued by the A.E.C.B.
The respondent, Ontario Hydro, is the owner
and operator of the Pickering Nuclear Generating
Station, located at Pickering, Ontario, and has
made a practice of seeking and obtaining licences
for its reactors rather than exemptions. The Pick-
ering nuclear complex consists of two stations
known as Pickering "A" and "B". Each station
consists of four reactor units. Units 1 to 4 consti
tute Pickering "A" while Units 5 to 8 constitute
Pickering "B".
On June 27, 1983, the A.E.C.B. approved in
principle, subject to ratification at its meeting to
be held in September, 1983, the renewal of the
operating licence for Pickering "B", Unit 5 and
the issuance of a new licence to start Unit 6. The
appellant requested an appearance before the
A.E.C.B. at its scheduled September meeting, stat
ing that it was concerned about the recent tube
ruptures at Pickering "A" station. It also asked the
A.E.C.B. to suspend its previous decision approv
ing in principle the licensing of Units 5 and 6 on
the basis that a part-time member of the A.E.C.B.,
Mr. J. L. Olsen, who was present at the meeting
where the decision in principle was made, had a
conflict of interest. The A.E.C.B. refused the
appellant's suspension request, concluding that
there was no substance to the charge and con
firmed its decision to license Pickering Units 5 and
6 on September 20, 1983.
All of the parties agreed that Mr. Olsen is, and
has been for eight years, a part-time member of
the A.E.C.B. He is President of Phillips Cables
Ltd. (Phillips Cables), a Canadian company doing
some 200 million dollars worth of business annual
ly. He is also currently Chairman of the Electrical
and Electronic Manufacturers Association of
Canada (E.E.M.A.C.). From May of 1981 until
March of 1983, Phillips Cables sold quantities of
radiation-resistant cables for nuclear reactors to
Ontario Hydro including substantial amounts of
cables for Units 5 and 6 of Pickering "B". This
business was obtained by Phillips Cables through
the competitive tender process. There was uncon-
tradicted evidence to the effect that as of March
19, 1981, Mr. Olsen was, in addition to being
President of Phillips Cables, also a director and
beneficial owner of 2,000 shares of the corpora
tion. There is no direct evidence as to Mr. Olsen's
shareholdings or whether he was still a director as
of June 27, 1983 when the A.E.C.B. made its
decision to approve in principle Ontario Hydro's
licensing applications in respect of Units 5 and 6.
APPEAL A-561-84
This appeal is from the order [[1984] 2 F.C.
227] of the Trial Division which dismissed the
appellant's motion for a writ of certiorari and
purported, as well, to dismiss the appellant's action
for a declaratory judgment. The motion for certio-
rari was to quash the licensing decision of the
A.E.C.B. referred to supra on the basis "... that
the decision was biased in that the Board permit
ted J. L. (Roy) Olsen to participate in the making
of the decision when he had a pecuniary interest in
the outcome of the licence applications." (A.B.,
p. 6.) However, the motion in respect of the action
for declaratory relief was not a motion to dismiss
the action but was rather for an order pursuant to
Rule 474 [Federal Court Rules, C.R.C., c. 663]
that a preliminary question of law be heard and
determined, namely, that the A.E.C.B. erred in
law in permitting Mr. Olsen to participate in its
licensing decision of September 20, 1983 supra. In
his argument before us, counsel for the appellant
made the point that the learned Trial Judge should
not have dismissed the appellant's action for a
declaration since the motion before her was only a
motion to determine a question of law. I think
appellant's counsel is technically correct and the
portion of the order which relates to the declarato-
ry action requires amendment.
The appellant attacks the decision of the Trial
Division on a twofold basis. Initially, counsel sub
mits that the learned Trial Judge erred in law in
holding that there was no pecuniary bias. In the
alternative, the appellant submits that the Trial
Judge erred in law in concluding that reasonable
apprehension of bias was the real issue and that, in
those circumstances, she should have disclosed her
conclusion and called for argument on the issue
before making her decision. I will consider, firstly,
counsel's submissions of error by the Trial Judge
in failing to find pecuniary bias. The matter of
pecuniary bias is considered by the Trial Judge at
pages 235 and 236 where she stated:
In this case the pecuniary interest of Mr. Olsen was alleged
to arise because of his course of business dealings with Ontario
Hydro. He had in the past sold radioactive-resistant cables to
Ontario Hydro. It is clear he could expect to do so again in the
future. But, I can find no direct pecuniary interest, as that
concept has been defined in the jurisprudence, held by Mr.
Olsen at the date of the hearings in question: June 27, 1983 and
September 12, 1983. There was no contract conditionally in
effect pending the outcome of the new licences to Ontario
Hydro. There was no certainty that Mr. Olsen would sell
additional cables to Ontario Hydro for the Pickering units,
during the life of the new licence. Also, it was admitted by
counsel for the applicant that the purchase of such cables by
Ontario Hydro was through a tendering process. The most that
could be said of Mr. Olsen as of the date of the hearing was
that he could entertain a reasonable expectation of pecuniary
gain as a result of approval of the licences.
1 was not referred to any case, nor was I able to find any,
which has held that this kind of contingent expectation consti
tutes direct pecuniary bias. All of the jurisprudence respecting
pecuniary bias that I have seen involves individuals who at the
date of the hearing held some sort of direct relationship with
the beneficiary of the decision such that pecuniary benefit
might with certainty arise even though that benefit might be
miniscule, eg.: as a rate payer, as an estate agent for the
transaction in question, as a shareholder. The classic decisions
in this regard are: In the Matter of Hopkins (1858), El. B1. &
El. 100, 120 E.R. 445 (K.B. Div.) and Reg. v. Hammond et al.
(1863), 9 L.T. Rep. N.S. 423 (Bail Ct.), where magistrates
who were shareholders in a railway company were disqualified
from hearing charges against persons charged with travelling
on the railway without tickets; and The Queen v. Gaisford,
[1892] 1 Q.B. 381 where a justice was disqualified because he
was a ratepayer in the municipality which would benefit from
the decision. See also The King v. Hendon Rural District
Council, [1933] 2 K.B. 696; Beer v. Rural Municipality of Fort
Garry (1958), 66 Man. R. 385 (C.A.); Regina v. Barnsley
Licensing Justices, [1960] 2 Q.B. 167; Ladies of the Sacred
Heart of Jesus (Convent of the Sacred Heart) v. Armstrong's
Point Association et al. (1961), 29 D.L.R. (2d) 373 (Man.
C.A.); Reg. v. Hain and others, Licensing Justices (1896), 12
T.L.R. 323 (Q.B. Div.).
Mr. Olsen, however, did not stand in a direct and certain
relationship with Ontario Hydro at the date of the licensing
decisions. The interest of Mr. Olsen would clearly seem to be of
the kind which falls within the jurisprudence dealing with
"reasonable apprehension of bias." Yet Mr. Roman, counsel for
the applicant, in both written and oral argument, asserted
"reasonable apprehension of bias ... is not issue here."
From the above passage, it seems that the Trial
Judge made the following findings of fact:
1. Mr. Olsen had in the past sold radioactive
resistant cables to Ontario Hydro and could expect
to do so again in the future;
2. There was no contract conditionally in effect,
as of June 27, 1983 and September, 1983, pending
the outcome of the new licences to Ontario Hydro
nor was there any certainty that Mr. Olsen would
sell additional cables to Ontario Hydro for the
Pickering units during the life of the new licence;
3. As of the date of the hearing when Mr. Olsen
was present, he could entertain a reasonable expec
tation of pecuniary gain as a result of approval of
the licences; and
4. Mr. Olsen did not stand in a direct and
certain relationship with Ontario Hydro at the
date of the licensing decisions.
Based on these facts and her appreciation of the
relevant jurisprudence which she reviewed in some
detail, her conclusion was that the "contingent
expectation" accruing to Mr. Olsen on these facts
did not constitute direct pecuniary bias. I agree
with that view of the matter. In considering this
issue the decision of the Court of Appeal in Eng-
land in the case of Metropolitan Properties Co.
(F.G.C.) Ltd. v. Lannon, [1969] 1 Q.B. 577 is
relevant. In that case, a Rent Assessment Commit
tee was required to rule on a landlord's application
for rent increases in a block of flats. The Chair
man of that Committee was a solicitor living with
his father who was a tenant in another apartment
building owned by the same group of landlords.
The Chairman's law firm had acted for other
tenants in similar rental dispute matters and the
Chairman himself had made representations on
behalf of his father with respect to rentals. At page
598 of the report, Lord Denning M.R. said:
A man may be disqualified from sitting in a judicial capacity
on one of two grounds. First, a "direct pecuniary interest" in
the subject-matter. Second, "bias" in favour of one side or
against the other.
So far as "pecuniary interest" is concerned, I agree with the
Divisional Court that there is no evidence that Mr. John
Lannon had any direct pecuniary interest in the suit. He had no
interest in any of the flats in Oakwood Court. The only possible
interest was his father's interest in having the rent of 55
Regency Lodge reduced. It was put in this way: if the commit
tee reduced the rents of Oakwood Court, those rents would be
use as "comparable" for Regency Lodge, and might influence
their being put lower than they otherwise would be. Even if we
identify the son's interest with the father's, I think this is too
remote. It is neither direct nor certain. It is indirect and
uncertain.
So far as bias is concerned, it was acknowledged that there was
no actual bias on the part of Mr. Lannon, and no want of good
faith.
I think a similar conclusion should be drawn on
the facts of this case. In my view, Mr. Olsen's
interest was indirect and uncertain and too remote
to constitute either direct pecuniary interest or
bias. For these reasons, I conclude that the learned
Trial Judge was not in error in finding an absence
of direct pecuniary bias.
I come now to the appellant's alternative sub
mission of error which relates to the expressed
view of the learned Trial Judge [at page 236] that:
"The interest of Mr. Olsen would clearly seem to
be of the kind which falls within the jurisprudence
dealing with `reasonable apprehension of bias'."
In the Lannon case supra Lord Denning, after
disposing of the question of actual bias as quoted
supra discussed the question of reasonable appre
hension of bias in the following manner at pages
599 and 600 of the report:
There must be circumstances from which a reasonable man
would think it likely or probable that the justice, or chairman,
as the case may be, would, or did, favour one side unfairly at
the expense of the other. The court will not enquire whether he
did, in fact, favour one side unfairly. Suffice it that reasonable
people might think he did. The reason is plain enough. Justice
must be rooted in confidence; and confidence is destroyed when
right-minded people go away thinking: "The judge was biased."
Applying these principles, I ask myself: Ought Mr. John
Lannon to have sat? I think not. If he was himself a tenant in
difference with his landlord about the rent of his flat, he clearly
ought not to sit on a case against the selfsame landlord, also
about the rent of a flat, albeit another flat. In this case he was
not a tenant, but the son of a tenant: But that makes no
difference. No reasonable man would draw any distinction
between him and his father, seeing he was living with him and
assisting him with his case.
Test it quite simply: if Mr. John Lannon were to have asked
any of his friends: "I have been asked to preside in a case about
the rents charged by the Freshwater Group of Companies at
Oakwood Court. But I am already assisting my father in his
case against them, about the rent of his flat in Regency Lodge,
where I am living with him. Do you think I can properly sit?"
The answer of any of his good friends would surely have been:
"No, you should not sit. You are already acting, or as good as
acting against them. You should not, at the same time, sit in
judgment on them."
No man can be an advocate for or against a party in one
proceeding, and at the same time sit as a judge of that party in
another proceeding. Everyone would agree that a judge, or a
barrister or solicitor (when he sits ad hoc as a member of a
tribunal) should not sit on a case to which a near relative or a
close friend is a party. So also a barrister or solicitor should not
sit on a case to which one of his clients is a party. Nor on a case
where he is already acting against one of the parties. Inevitably
people would think he would be biased.
I hold, therefore, that Mr. John Lannon ought not to have
sat on this rent assessment committee. The decision is voidable
on that account and should be avoided.
Although we are differing from the Divisional Court, I would
like to say that we have had a good deal more information than
that court had. In particular, we have seen a letter of January
13, 1967, and other things not before them when they gave
their ruling. Otherwise I would not have thought it right to
interfere.
I would allow the appeal and remit the case to another rent
assessment committee. Let it be heard again as soon as may be.
The same principle was succinctly stated by
Hewart C.J. in Rex v. Sussex Justices, Ex parte
McCarthy, [1924] 1 K.B. 256 at page 259, as
follows:
... it is not merely of some importance but is of fundamental
importance that justice should not only be done, but should
manifestly and undoubtedly be seen to be done.
L.J. Edmund Davies, also a member of the Court
in the Lannon case said at pape 606:
... the circumstances already adverted to by my Lords are such
that I regard it as most unfortunate that this particular chair
man sat to try these appeals.
Because of the finding of the Trial Judge that, at
the date of the hearing in question Mr. Olsen
could entertain a reasonable expectation of pecuni
ary gain as a result of the approval of subject
licences, the factual situation in this case might
well have established a case of reasonable appre
hension of bias had that matter been in issue
before the Trial Judge. However, as noted by the
Trial Judge and, as conceded by appellant's coun
sel in his memorandum of fact and law, his posi
tion in the Trial Division was "that the facts of the
case fitted the characteristics of pecuniary bias
and that, therefore, reasonable apprehension of
bias was not the issue." He now takes the position
on appeal that if the Trial Judge had already
concluded that counsel had incorrectly character
ized the nature of the bias, she should have so
advised him and invited submissions on the ques
tion of reasonable apprehension of bias from coun
sel for all the other parties either while the hearing
was in progress or at a later date before judgment.
I cannot accept this submission. It is clear and
beyond dispute that the question of reasonable
apprehension of bias was not in issue before the
Trial Judge. On this basis, there was no require
ment for the Trial Judge to put a matter in issue
that had not been put in issue by any of the
parties. Likewise, to deal with the matter on
appeal, when it was not in issue in the Trial
Division, would severely prejudice the other parties
as was pointed out by counsel for the Attorney
General of Canada and the A.E.C.B. He made the
point that had the matter of reasonable apprehen
sion of bias been in issue in the Trial Division, he
might well have considered it advisable to
introduce evidence directed toward that issue
which, in his view, was a separate and distinct
issue from the sole issue below, namely, pecuniary
bias. It must be remembered that the finding of
fact by the Trial Judge that Mr. Olsen could
entertain a reasonable expectation of pecuniary
gain, was a collateral finding in respect of a matter
that was not in issue before her, and in respect of
which all of the parties were not given an opportu
nity to adduce evidence.
Appellant's counsel submits, however, that the
normal legal consequence of a finding of bias
because of interest sufficient to disqualify is that
the decision will be quashed because a biased
decision is made without jurisdiction. He submit
ted that this is the case whether the bias was
actual, pecuniary, or where there was a reasonable
apprehension of bias. On this basis, it was his view
that his failure initially to raise the issue of reason
able apprehension of bias could not create jurisdic
tion where the tribunal had lost or exceeded its
jurisdiction. I do not agree that the jurisprudence
goes so far as to hold that an administrative
tribunal loses jurisdiction where the ground of
challenge is not pecuniary interest but rather,
reasonable apprehension of bias. In the Fourth
Edition of de Smith's Judicial Review of Adminis
trative Action, this matter is discussed at page 273
where it is stated:
EFFECT OF DECISION BY TRIBUNAL WHERE DISQUALIFYING
INTEREST OR BIAS IS PRESENT
In magisterial law the courts have consistently held that the
decision of the bench must be set aside if any individual justice
has a pecuniary interest in the result. They have declined to
"conduct a poll of the bench" [R. v. Cheltenham Commission
ers (1841) 1 Q.B. 467, 480.] or to "enter into a discussion as to
the extent of influence exercised by the interested party." [R. v.
Herts JJ. (1845) 6 Q.B. 753, 758.] The same principle seems to
prevail where the ground of challenge is not pecuniary interest
but likelihood of bias. [R. v. Meyer (1876) 1 Q.B.D. 173; R. v.
Huggins [1895] 1 Q.B. 563. And see R. v. Barnsley Licensing
JJ. [1960] 2 Q.B. 167, 181, 186 (where the question of
pecuniary interest overlapped the question of likelihood of
bias).] The attitude towards the proceedings of administrative
and local government bodies exercising judicial functions may
conceivably differ according as the ground of challenge is
pecuniary interest or likelihood of bias; the pecuniary interest
of a single member will affect the validity of the proceedings,
but perhaps the likelihood of bias on his part may not, [See R.
v. Hendon R.D.C., ex p. Chorley [1933] 2 K.B. 696 (pecuniary
interest); and cf. dicta in R. v. L.C.C., ex p. Empire Theatre
(1894) 71 L.T. 638, 640 and R. v. Huggins [1895] 1 Q.B. 563,
565, 566-567; the size of the body concerned may be a material
factor. See, however, R. v. L.C.C., ex p. Akkersdyk [1892] 1
Q.B. 190, and pp. 267, 272, ante.] unless he plays a prominent
part in the proceedings. [Cf. Taylor v. National Union of
Seamen [1967] 1 W.L.R. 532 (a trade union case).]
From the above it seems clear that the validity of
administrative proceedings will depend on the par
ticular circumstances of each case. In any event, in
the case at bar, since the matter of reasonable
apprehension of bias was not in issue in the Trial
Division, there was no such finding by the Trial
Judge. The matter was not addressed and the
parties were not given an opportunity to lead
evidence on the question because it was not in
issue. Accordingly, absent a finding of either
actual or pecuniary bias or a finding of reasonable
apprehension of bias, the Court did not lose
jurisdiction.
For the above reasons I have concluded that the
appellant cannot succeed in respect of Appeal
A-561-84 except in respect of that portion of the
order Which purported to dismiss the appellant's
action for a declaration.
APPEAL A-562-84
This appeal is directed against the decision
[[1984] 2 F.C. 138] of the Trial Judge to add the
Attorney General of Canada as an intervener in
the action. In support of her view that the Attor
ney General was entitled to be added as an interv-
ener, the learned Trial Judge said [at page 142]:
I have no doubt that this is an appropriate case in which the
Attorney General should be given permission to be added as a
party. The Attorney General has a direct interest in the out
come of this case. It is alleged that one of the members of the
A.E.C.B. has a pecuniary bias in the decisions of the Board
because he is president and director of a company which sells
significant quantities of radiation-resistant cables for nuclear
reactors to Ontario Hydro. It is not a case of bias being alleged
with respect to one isolated transaction but because of a
continuing business activity. If bias exists in this case then the
Board member will be an ineffective member for many deci
sions which the Board makes. Thus the issue raised challenges
the practice of the Governor in Council in appointing as
part-time A.E.C.B. members persons having interests in the
industry of the nature described above. The issue relates to the
choosing of persons for appointment to the Board and to the
requirements that would have to be placed upon them (e.g.,
divestiture of interests) to make them effective members of the
Board.
I cannot accept Energy Probe's argument that the issue here
is merely confined to Mr. Olsen's alleged bias and is a "one-
shot affair". The ramifications are much broader. They do
involve as noted above questions relating to the composition of
the Board, and perhaps other boards similarly constituted; they
do involve, as counsel for Energy Probe was bound to argue on
the main motion, questions relating to the general public
confidence in boards of this nature.
She concluded by observing [at page 146], inter
alia, that the issue before the Court is one of
general public importance and of such a nature
"... that the Court deems it beneficial to hear
argument of the Attorney General on the issue in
order to ensure that all arguments are adequately
canvassed." In support of this view, the Trial
Judge relied on the case of Adams y Adams,
[1970] 3 All E.R. 572 (P.D.A.), where Sir Jocelyn
Simon P. said at page 577:
I think that the Attorney-General also has the right of
intervention at the invitation or with the permission of the court
where the suit raises any question of public policy on which the
executive may have a view which it may desire to bring to the
notice of the court.
Counsel for the appellant submitted however that
the decision in the Adams case has been consider
ably narrowed by the English Court of Appeal in
the case of British Airways Board y Laker Air
ways Ltd, [1983] 3 All E.R. 375. I am not per
suaded that the decision of the Court of Appeal in
that case expresses any view that would disentitle
the Attorney General of Canada to intervener
status in this case. At page 403 of the report, Sir
John Donaldson M. R. said:
It is a matter of considerable constitutional importance that
the courts should be wholly independent of the executive, and
they are. Thus, while the judges, as private citizens, will be
aware of the "policy" of the government of the day, in the sense
of its political purpose, aspirations and programme, these are
not matters which are in any way relevant to the courts'
decisions and are wholly ignored. In matters of home policy, the
courts have regard only to the will of Parliament as expressed
in the statutes, in subordinate legislation and in executive acts
authorised by Parliament. [Emphasis added.]
In my view, the facts of this case relate to
"executive acts authorised by Parliament" since
the matter in issue here is the way in which the
executive has utilized the powers conferred on it
by Parliament.
The learned Trial Judge gave other reasons for
allowing the intervention of the Attorney General.
In view of my conclusion supra, it is unnecessary
to examine those additional reasons.
Accordingly, and for the reasons expressed
supra I would dismiss Appeal A-562-84.
To summarize the disposition which I propose in
these appeals: I would dismiss Appeal A-562-84
with costs. In respect of Appeal A-561-84, I would
allow the appeal and amend the order of the Trial
Division to read as follows: "THIS COURT DOTH
ORDER AND ADJUDGE that the applicant's motion
for a writ of certiorari be dismissed and it is
determined that the preliminary question of law,
namely whether the A.E.C.B. erred in law in
permitting Mr. J. L. Olsen to participate in its
licensing decision of September 20, 1983, be
answered in the negative, all without costs." In so
far as costs are concerned relating to Appeal
A-561-84, since the respondents and the intervener
have been substantially successful, I think they are
also entitled to their costs in that appeal.
STONE J. concurred.
* * *
The following are the reasons for judgment
rendered in English by
MARCEAU J.: I would dispose of the two appeals
now before the Court as suggested by my brothers
Heald and Stone JJ., i..e. by affirming the orders
under attack, but my reasons for doing so would
not be those of my colleagues, so I feel I should
explain, with respect, my own view of the matter.
The nature of the proceedings and the facts that
gave rise thereto are clearly set out in the reasons
for judgment prepared by Mr. Justice Heald. It
would serve no purpose to go through it again. As
to the proceedings, it will be sufficient to recall
that if they appear, at first glance, to be somewhat
involved with no less than five different procedural
requests pending before the Motion Judge (an
action for declaratory relief, a motion for disposi
tion of the question of law raised by that action, an
application for an order in the nature of certiorari,
a motion to quash that application for lack of
standing of the applicant, and finally, a motion to
intervene), they in effect come to something rather
simple. What they contain is: primarily an attack
against the validity of a decision of the Atomic
Energy Control Board, on the ground that one
member of the panel called upon to make the
decision was biased (Appeal A-561-84); and inci
dentally a request by the Attorney General of
Canada to be given the status of a party in the
controversy (Appeal A-562-84). As to the facts,
only those pértaining to the subject matter of the
impugned decision and to the substance of the
allegation of bias are really basic, and these can be
recalled very quickly. The subject matter of the
decision was the renewal of the existing licence
covering the operation of Unit 5 of Ontario
Hydro's Pickering "B" Nuclear Generating Sta
tion, and the issuing of a new licence to start Unit
6. The licences had nothing to do with the con
struction of the units; what was involved in effect
was the establishment of conditions of operation
with a view to achieving better security. The objec
tion to the participation in the making of the
decision of one J. L. (Roy) Olsen, a part-time
member of the Board, was based on the fact that
the company of which Mr. Olsen was president,
Phillips Cables Limited, had business relations
with Ontario Hydro. Indeed, Phillips Cables had
in the past bid for and been awarded contracts for
the supply of cables and related material required
in the construction of reactors and it was no doubt
interested in bidding again for new contracts when
other units would be constructed. The interest was
present, it was said, even if the granting of the
licences in itself could in no way benefit immedi
ately Mr. Olsen or his company or even be the
source of new possibilities of contracts.
I don't see what more need be highlighted at
this introductory stage and I, at once, come to the
consideration of the issues raised in the order
suggested by the judgment of first instance.
APPEAL A-561-84
This is the appeal directed against the conclu
sion of the learned Motion Judge, Mme Justice
Reed, rejecting the allegations of bias [in [1984] 2
F.C. 227] .
In dealing with the basic features of the
common law rules against bias so as to apply them
to the facts of the case, the learned Motion Judge,
in her reasons, seems to be drawing a straight
opposition between "pecuniary bias" and "reason-
able apprehension of bias" and stands firm to the
idea that only a "direct" and "certain"—as strictly
opposed to an indirect or uncertain—pecuniary
interest may constitute "pecuniary bias". In fact,
her whole reasoning is supported by these two
distinctions. It is indeed on the basis of the second
one that Mme Justice Reed could form the opinion
that even if "... Mr. Olsen as of the date of the
hearing ... could entertain a reasonable expecta
tion of pecuniary gain as a result of approval of the
licences", such a gain would be coming to him
indirectly, not directly, and therefore could not
legally constitute "pecuniary bias"; and it is on the
basis of the first opposition that she could decide
that while the case made against Mr. Olsen could
well be one of reasonable apprehension of bias
(pages 236 and 245), the Court could not examine
the situation in that perspective, counsel having
limited his allegation to "pecuniary bias". These
legal propositions upon which the learned Motion
Judge built her reasoning and founded her findings
do not appear to me in complete harmony with the
teachings of the jurisprudence, as I read it, and I
must, with respect, express my disagreement with
them.
The principle of natural justice involved in all
matters of bias is, of course, that a tribunal called
upon to settle disputes between individuals ought
to be independent, disinterested and impartial and
it is trite to say that the most obvious and most
easily perceived practical application of that prin
ciple is that no one should be permitted to be judge
in his own cause. It was soon "discovered",—it is
taught in all the textbooks—that the common law,
like the Roman law and the Canon law long before
it, did not permit a judge to determine a matter in
which he had a pecuniary or proprietary interest
(see de Smith's Judicial Review of Administrative
Action, (4th Ed. 1980), page 248). From that
early moment on, the law in that respect has
evolved, as I understand it, on the strength of two
ideas. One is that there are many interests other
than pecuniary which may affect the impartiality
of a decision-maker, emotional type interests one
might say (see: Pépin and Ouellette, Principes de
contentieux administratif (2nd Ed.) page 253),
such as kinship, friendship, partisanship, particular
professional or business relationship with one of
the parties, animosity towards someone interested,
predetermined mind as to the issue involved, etc.
The other, which has since become a sort of legal
axiom, is that it "is of fundamental importance
that justice should not only be done but should
manifestly and undoubtedly be seen to be done".
The result of the evolution of the law on the basis
of these two ideas is that a distinction is today well
recognized and acknowledged between situations
where the decision-maker has a pecuniary interest
in the outcome of the decision, and situations
where his interest is of another type. In the first
case, since the maxim nemo judex in causa sua is
readily applicable, the decision-maker is peremp
torily disqualified from adjudicating regardless of
the importance of the interest, provided however
that it is an interest linked and tied to the decision
itself and not too remote or too contingent to be
devoid of any possible influence. In the second
case, the decision-maker is disqualified from
adjudicating if the interest is such that it would
leave, in the mind of a reasonable man apprised of
the facts, a reasonable apprehension of bias. (See
on those propositions: de Smith's op. cit. at page
250; 1 Halsbury's Laws of England (4th Ed.
1973) page 67 et seq.; Pépin and Ouellette, op. cit.
page 252 et seq.)
It is clear that this view I take of the law of bias
as it is now applied by the common law courts does
not permit me to subscribe to the learned Trial
Judge's reasoning, and if on the two essential
points I have just referred to I agree with her
conclusions, it is for completely different reasons.
a) I do not think that the word "direct", when
used by the judges and the textbooks to qualify the
interest required to constitute the peremptorily
disqualifying pecuniary bias, should be given such
a strict and narrow interpretation that any indirect
or uncertain advantage would not have to be con
sidered; the word, in my view, is used in the sense
of not too remote or too contingent or too specula
tive. Having regard to the purpose of the rule, i.e.
that no one charged with the power and the duty
to adjudicate upon the rights of opposing parties
should be allowed to exercise his jurisdiction for
his own profit and material interest, there is no
reason to draw a strict distinction between direct
and indirect or certain and uncertain as regards
the monetary benefit the adjudicator could expect
from his determination. The only rational require
ments are that the benefit come from the decision
itself and that it be a likely enough effect to
"colour" the case in his eyes. It would appear to
me that the presence of an immediate possibility,
not to say probability, of gain to be coming to him
directly or indirectly as a result of his decision
would be enough to render someone unfit to make
it.
If I were to accept literally the statement of the
learned Judge referred to above, to the effect that
.. Mr. Olsen ... could entertain a reasonable
expectation of pecuniary gain as a result of
approval of the licences", I would definitely be
inclined to conclude that pecuniary bias was here
present. I don't think however that the statement
was meant to express a clear finding of fact and, in
any event, it is not supported by the evidence. As
recalled above, the licences were only operating
licences and Mr. Olsen's company could expect no
extra business and obviously no gain as a result of
their approval. The mere possibility that a profit
could be realized in the future out of other con
tracts awarded in the course of construction of
other units was no doubt too alien, contingent and
remote to constitute pecuniary bias with respect to
the decision to be made at that time.
b) I do not see "pecuniary bias" and "reason-
able apprehension of bias" as being two sub-
categories of bias. Such a distinction would appear
to me somewhat difficult to defend logically since
it would present no basis for comparison, one
group being identified by the nature of the inter
est, the other by the possible reaction the presence
thereof may inspire in the mind of the public. The
distinction to me, as I said earlier, is between
pecuniary and non-pecuniary interests, and if I
agree with the learned Judge that reasonable
apprehension of bias was not an issue here, it is not
because of the presentation of counsel, but simply
because no interest other than a pecuniary one was
alleged and even alluded to. If the evidence had
revealed a non-pecuniary interest capable of being
influential and sufficient to raise a real likelihood
of bias, I would have thought that even if counsel
had improperly presented his case, the learned
Judge would not have been precluded from dealing
with it. There is no question, of course, that, in a
system of accusatory justice like ours, a court of
law must take the facts as disclosed by the sole
evidence submitted by the parties and it cannot
substitute a new cause of action for the one on the
basis of which the plaintiff or applicant has
required its intervention. But it seems to me that a
court of law must fully apply the law to the facts
established before it, regardless of the ignorance or
the failures of the counsel who come as officers of
the court (subsection 11(3) of the Federal Court
Act [R.S.C. 1970 (2nd Supp.), c. 10]) to represent
the parties, although it is clear that in so doing, the
Court must always respect the right of all the
litigants to be heard completely. This appears to
me particularly true in a case like the one at bar
where the very validity of a decision of an
adjudicative body is involved. It is indeed difficult
to accept that a superior court called upon to
exercise its supervisory power over a tribunal
would uphold a decision which, on the basis of the
evidence, was legally biased on the sole ground
that counsel charged with the case would have
failed to properly define the situation in law. But
again, this, in my opinion, is not the situation here.
No "non-pecuniary interest" (interest "of an emo
tional type" as referred to above) was involved.
The only interest alleged and the only one alluded
to in the evidence, let it be repeated, was of a
pecuniary nature. An interest of that nature, in my
view, does not raise a question of apprehension of
bias.
If I have chosen to approach the matter and set
forth my view thereof on the assumed basis that
the common law rules against bias, as they have
evolved in the jurisprudence, were fully applicable
to an administrative body like the respondent, it is
because of the position to that effect adopted by
my brother judges in their reasons for judgment.
But, in fact, I think that a difficult problem lies
behind such an assumption and the learned Judge
of first instance was, in my opinion, perfectly right
in considering that the first issue she had to deter
mine was whether or not it was justified. The law
of bias was developed with regard to the excercise
of all sorts of judicial or quasi-judicial functions,
so that, in the process, it was easily extended from
courts to tribunals and to all other bodies called
upon to determine questions affecting the civil
rights of individuals. But there seems to be so far
no authority for the proposition that it has to be
applied to a purely administrative forum like the
Board which does not deal with private rights, has
no adjudicative powers in the proper sense and has
no resemblance whatever with a court of justice.
To determine that the law of bias was indeed
governing, the learned Judge of first instance start
ed with the proposition that the doctrine of fair
ness as enunciated by the Supreme Court in
Nicholson v. Haldimand-Norfolk Regional Board
of Commissioners of Police, [1979] 1 S.C.R. 311,
was clearly applicable to the Board's licensing
decisions, and from there, she went on to say (at
pages 234-235):
I have no doubt that the duty to act fairly as enunciated by the
Supreme Court in the Nicholson case must include a require
ment for an unbiased decision maker. Any other conclusion
would undercut the whole concept of the requirement of a duty
of fairness.
It would indeed be anomalous that there exist a requirement
that rules of procedural fairness be followed in making an
administrative decision but not a requirement for an unbiased
decision-maker. A biased tribunal would be a much more
serious lack of fairness than non-compliance with procedural
requirements.
Of course, no one would ever think of taking
exception to those propositions. The point is, how
ever, that I think, with respect, that they do not
settle the issue. It is obvious that there is indeed "a
requirement for an unbiased decision-maker". It
cannot be doubted that the law imposes a duty on
anyone called upon to decide anything under a
statute to act in good faith and with an open mind
(see: David J. Mullan, Administrative Law, Title
3, Vol. 1 C.E.D. (Ontario), 3rd Ed., 1979, para. 50
and the cases referred to therein); actual bias in a
decision, if demonstrated, will always give rise to
some remedy (see for instance, Re Gooliah and
Minister of Citizenship and Immigration (1967),
63 D.L.R. (2d) 224 (Man. C.A.)). But the rules
referred to in the so-called law of bias go much
further since, having been developed with a view to
preventing all possibilities of bias and making sure
that even reasonable apprehension thereof will be
eliminated, they never require that actual bias be
established. The issue is therefore not resolved by
remarks to the effect that fairness would be incom
patible with bias.
In a preceding paragraph of her reasons, after
having quoted long passages of the reasons for
judgment given by Chief Justice Laskin (as he
then was) in the Nicholson case, Mme Justice
Reed had observed that it was clear from the
remarks of the Chief Justice that ". .. the require
ments of fairness may be different from and less
than those required by the rules of natural jus
tice." There, I think, lies the solution. It seems to
me quite normal that the rules of fairness cover the
two aspects of those of natural justice from which
they derive so as to establish safeguards not only
against arbitrariness and despotism but also
against bias. I am even quite prepared to concede
that, in order to assure the complete confidence of
the public in the decisions of those advisory and
regulatory bodies, it is necessary that there be
rules aimed at protecting their objectivity. But I
would be of the view that the standard to be
achieved does not have to be as high as that
required of an adjudicative tribunal and the rules
applicable should therefore be less strict. As I see
it in practice, to operate disqualification, the
pecuniary interest ought to be more immediate
and certain and the non-pecuniary interest must
give rise to very substantial grounds for
apprehending lack of objectivity. All this may give
rise to difficult problems of application in real life
but the idea is of course valid. As stated by Reid,
Administrative Law and Practice, 1971, at page
220:
... "tribunals" is a basket word embracing many kinds and
sorts. It is quickly obvious that a standard appropriate to one
may be inappropriate to another. Hence, facts which may
constitute bias in one may not amount to bias in another.
This view that the rules of the law of bias cannot
be applied with all their rigidity to a board like the
respondent reinforces (if need be) my conviction in
this case that the pecuniary interest Mr. Olsen is
said to have had in the decision was far too remote
and uncertain to have been a cause for his
disqualification.
I do not hesitate therefore to conclude with my
brother judges that Appeal A-561-84 must be
dismissed.
APPEAL A-562-84
This is the appeal directed against the order
[[1984] 2 F.C. 138] of the learned Motion Judge
to add the Attorney General of Canada as an
Intervener. My reasons for denying it can be stated
very briefly.
While I see no basis for the proposition that the
Attorney General of Canada has a general right of
intervention in a legal proceeding between third
parties wherever a question of public policy arises,
I am of the view that the Court has the power to
permit such intervention (see Alberta Government
Telephones v. Canadian Radio-television and
Telecommunications Commission, [1983] 2 F.C.
443 (T.D.) May 2, 1983, affirmed [1983] 2 F.C.
839 (C.A.) November 10, 1983) and the learned
Judge of first instance, in making her discretionary
decision to exercise that power, was right in rely
ing on the principles enunciated in the case of
Adams v Adams, [1970] 3 All E.R. 572 (P.D.A.).
I see no reason to interfere with the order.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.