A-1118-87
Yri-York Limited, Norman B. Katzman, L. F.
Newberry, John M. White, Leon Robidoux, Pitt
Steel Limited, James Arthur Jobin, Lorne Gilbert
Coons, Bruce Scott Moore, William Alexander
Mowat, Newman Steel Ltd., Peter R. Sheppard,
Zenon P. Zarcz, Namasco Limited, Charles Ian
McKay, P. J. Peckham, Westeel-Rosco Limited,
Marshall Steel Limited, AMCA International
Limited, J. B. Phelan, Samuel, Son & Co. Lim
ited, W. Grant Brayley and Harold Irvine (Appel-
lants) (Applicants)
v.
Attorney General of Canada, Restrictive Trade
Practices Commission, Director of Investigation
and Research appointed under the Combines
Investigation Act and J. H. Cleveland (Respond-
ents) (Respondents)
INDEXED AS: YRI-YORK LTD. v. CANADA (ATTORNEY
GENERAL) (CA.)
Court of Appeal, Heald, Stone and MacGuigan
JJ.—Ottawa, December 9, 1987 and January 19,
1988.
Federal Court jurisdiction — Trial Division — Appeal from
dismissal of motion under s. 18 Federal Court Act for order of
prohibition restraining hearing of proceedings before Restric
tive Trade Practices Commission — Jurisdiction of Court
under ss. 18 and 50 of Act — Applicant seeking in effect
interlocutory injunction or stay of proceedings — Inquiries
under s. 17 Combines Investigation Act `proceedings" —
Appeal allowed.
Judicial review — Equitable remedies — Injunctions —
Motion under s. 18 Federal Court Act for order of prohibition
restraining proceedings before Restrictive Trade Practices
Commission until constitutionality of s. 17 Combines Investi
gation Act determined by Supreme Court of Canada — Relief
sought injunctive — Stay and interlocutory injunction reme
dies of same nature — Application of tripartite test in Ameri-
can Cyanamid — Serious issue test sufficient in constitutional
cases where public interest weighted together with interests of
private litigants in determining balance of convenience —
Irreparable harm — Combines Investigation Act, s. 20 protec
tion not extending to documentary evidence obtained in s. 17
inquiry — Appeal from dismissal of motion allowed.
Combines — Appeal from denial of order prohibiting pro
ceedings before Restrictive Trade Practices Commission until
constitutionality of s. 17 Combines investigation Act deter
mined by Supreme Court of Canada in another case — Alle
gation s. 17 contravening ss. 7 and 8 Charter — Failure by
Trial Judge to apply American Cyanamid tripartite test
Irreparable harm as Act, s. 20 protection not extending to
documentary evidence obtained in s. 17 inquiry — Balance of
convenience determination to take into account public interest.
Practice — Commencement of proceedings — S. 18 Federal
Court Act motion for order of prohibition restraining Restric
tive Trade Practices Commission proceedings — Propriety of
proceeding by notice of motion under R. 319 — Injunctive
relief not sought against Attorney General.
This is an appeal from an order of the Trial Division
dismissing a motion under section 18 of the Federal Court Act
for an order by way of prohibition restraining the hearing of
any proceedings pending before the Restrictive Trade Practices
Commission until the constitutionality of section 17 of the
Combines Investigation Act (the Act) has been determined by
the Supreme Court of Canada in the case of Thomson News
papers Ltd. et al. v. Director of Investigation & Research et al.
Section 17 deals with the examination of witnesses and the
production of documents. The appellants herein have received
various notices and orders issued under that provision with
respect to an investigation into their activities in the steel
industry during the years 1975, 1976 and 1977. They submit,
as do the appellants in the Thompson Newspapers case, that
section 17 contravenes sections 7 and 8 of the Charter.
The Motions Judge dismissed the section 18 motion on the
ground that the tripartite test in American Cyanamid did not
apply in the case of an attack under section 18 on the exercise
of statutory authority by an administrative tribunal. The issues
are whether this Court has jurisdiction to grant the relief
sought and whether the Motions Judge erred by not applying
the test prescribed by the Supreme Court of Canada in
Manitoba (Attorney General) v. Metropolitan Stores Ltd.,
[1987] 1 S.C.R. 110.
Held, the appeal should be allowed.
The Federal Court has jurisdiction under both sections 18
and 50 of the Federal Court Act to grant the relief sought. The
respondents' submission that the subject motion is in reality an
application for a stay, a relief not covered by section 18, fails.
The seeking of "an order by way of prohibition restraining the
hearing of any proceedings" is clearly a request for injunctive
relief. Paragraph 18(a) of the Federal Court Act confers on the
Court jurisdiction to deal with injunctions and writs of prohibi
tion. Paragraph 18(b) gives the Court jurisdiction to entertain
applications in the nature of the relief contemplated by para—
graph (a). As stated by Beetz J. in the Metropolitan Stores
case, "a stay of proceedings and an interlocutory injunction are
remedies of the same nature". Paragraph 18(b) therefore oper
ates so as to confer on the Court jurisdiction to entertain an
application for a stay which is how the subject motion can be
accurately described.
Since the appellants did not seek injunctive relief against the
Attorney General, their decision to proceed under section 18 by
way of a notice of motion pursuant to Rule 319 in contradis
tinction to proceeding by way of action in accordance with Rule
400, is permissible in the circumstances of this case.
The Court also has jurisdiction under section 50 of the
Federal Court Act. Subsection 50(1) provides that the Court
may "stay proceedings in any cause or matter" on the ground
that the claim is being proceeded with in another court or
jurisdiction or if it is in the interest of justice to do so. That
provision encompasses a proceeding such as the section 17 oral
examination authorized by subsection 17(1) of the Act. It is
clear from the scheme of the Act and the wording of section 27
thereof that the "inquiries" under section 17 are "proceedings"
before the Commission.
The case law relied on by the respondents did not support the
Motions Judge's conclusion that the American Cyanamid test
should not be applied in a case such as that at bar. The Motions
Judge erred in failing to apply the tripartite test in American
Cyanamid as approved and adapted in the Metropolitan Stores
case. In that case, the Supreme Court indicated that the
"serious issue" test formulation in American Cyanamid was
"sufficient in a constitutional case where the public interest is
taken into consideration in the balance of convenience". Beetz
J., for the Court, approved of the other two tests in American
Cyanamid: (1) irreparable harm not compensable in damages
and (2) balance of convenience and the public interest. The fact
that the Supreme Court of Canada has granted leave to appeal
in Thomson Newspapers, where the issue to be resolved is
identical to that in the instant case, shows that there is a serious
issue to be tried.
The irreparable harm test has been met. The protection
afforded to section 17 witnesses against self-incrimination by
section 20 of the Act does not extend to derivative or documen
tary evidence obtained in the course of a section 17 examina
tion. A witness' answer in a section 17 inquiry as to the
whereabouts of certain documents could lead an investigator to
the premises of a "participant" as defined in subsection 45(1)
of the Act. Under paragraph 45(1)(c), those documents could
be admitted as evidence against the witness and constitute
prima facie proof of the truth of their contents against that
witness at a subsequent trial. It is far from certain that
subsection 24(2) of the Charter would protect a section 17
witness.
Where the constitutional validity of a law is challenged, no
interlocutory injunction should be granted unless public interest
is taken into consideration in evaluating the balance of conve
nience and weighted together with the private interests of the
litigants. Here, the balance of convenience and the public
interest require that an interlocutory stay of proceedings be
granted. This is an exemption case, not a suspension case as
those words are defined in the Metropolitan Stores case.
Section 17 of the Act applies only to those corporations or
individuals involved in inquiries commenced pursuant to the
former Act. (now replaced by the Competition Act, S.C. 1986,
c. 26) and which have been continued under a "grandfathering
provision". There is no risk of provoking a "cascade of exemp
tions" since there are no other litigants in essentially the same
situation as the appellants except those in the Thomson News
papers and Stelco cases. Furthermore, the fact that this exemp
tion case has no precedential value or exemplary effect also
militates in favour of granting the interlocutory injunction
sought.
A serious objection was raised against granting the interlocu
tory injunction. The objection concerned the duration of the
interlocutory stay or injunction and the Court's inability to
exercise the kind of control which usually accompanies relief of
that nature. The circumstances enumerated supra, in favour of
an order granting an interlocutory stay of proceedings, more
than offset that objection, on the condition that the order
provide for reasonable time constraints and for the continued
supervision and control of the Court. Such an order should
enable the Court to protect the public interest by protecting the
rights and freedoms entrenched in the Constitution. It will also
ensure minimal interference in the maintenance of the demo
cratic process through the enforcement of democratically enact
ed laws.
STATUTES AND REGULATIONS JUDICIALLY
CONSIDERED
Canadian Charter of Rights and Freedoms, being Part I
of the Constitution Act, 1982, Schedule B, Canada Act
1982, 1982, c. 11 (U.K.), ss. 7, 8, 24.
Combines Investigation Act, R.S.C. 1970, c. C-23, ss. 17,
20 (as am. by S.C. 1974-75-76, c. 76, s. 8), 27 (as am.
idem, s. 9), 45 (as am. idem, s. 21).
Competition Act, R.S.C. 1970, c. C-23 (as am. by S.C.
1986, c. 26, s. 19).
Federal Court Act, R.S.C. 1970 (2nd Supp.), c. 10, ss. 2,
18, 50.
Federal Court Rules, C.R.C., c. 663, RR. 319, 400, 603.
CASES JUDICIALLY CONSIDERED
APPLIED:
Manitoba (Attorney General) v. Metropolitan Stores
Ltd., [1987] 1 S.C.R. 110; New Brunswick Electric
Power Commission v. Maritime Electric Company Lim-
ited, [ 1985] 2 F.C. 13 (C.A.); Law Society of Alberta v.
Black et al. (1983), 8 D.L.R. (4th) 346 (Alta. C.A.);
American Cyanamid Co. v. Ethicon Ltd., [1975] A.C.
396 (H.L.).
NOT FOLLOWED:
McFetridge v. Nova Scotia Barristers' Society (1981),
123 D.L.R. (3d) 475 (N.S.S.C.).
DISTINGUISHED:
Lodge v. Minister of Employment and Immigration,
[1979] 1 F.C. 775 (C.A.), reversing [1978] 2 F.C. 458
(T.D.); Attorney General of Canada v. Gould, [1984] 1
F.C. 1133 (C.A.), affirmed [1984] 2 S.C.R. 124.
CONSIDERED:
Canada (Procureur général) c. Alex Couture Inc., [1987]
R.J.Q. 1971 (C.A.); Irvine v. Canada (Restrictive Trade
Practices Commission), [1987] 1 S.C.R. 181; (1987), 74
N.R. 33; R. L. Crain Inc. et al. v. Couture and Restric
tive Trade Practices Commission et al. (1983), 10 C.C.C.
(3d) 119 (Sask. Q.B.); R. v. Collins, [1987] 1 S.C.R.
265; 38 D.L.R. (4th) 508.
REFERRED TO:
Thomson Newspapers Ltd. et al. v. Director of Investiga
tion & Research et al. (1986), 57 O.R. (2d) 257 (C.A.);
Stelco Inc. v. Canada (Attorney General), Federal Court,
Appeal Division, A-728-87, judgment dated October 22,
1987, not yet reported; R. v. Dahlem (1983), 25 Sask. R.
10 (Q.B.); R. v. Jahelka; R. v. Stagnitta (1987), 79 A.R.
44 (C.A.); Rio Hotel Ltd. v. Liquor Licensing Board,
[1986] 2 S.C.R. ix.
COUNSEL:
F. J. C. Newbould, Q.C. for appellants (appli-
cants) Yri-York Limited, Norman B. Katz-
man, L. F. Newberry, John M. White, Leon
Robidoux, Newman Steel Ltd., Peter R.
Sheppard and Zenon P. Zarcz.
Peter R. Jervis for appellants (applicants) Pitt
Steel Limited, James Arthur Jobin, Lorne
Gilbert Coons, Bruce Scott Moore, William
Alexander Mowat and Marshall Steel Lim
ited.
T. B. O. McKeag, Q.C. for appellants (appli-
cants) Namasco Limited, Charles Ian McKay
and P. J. Peckham.
Neil Finkelstein for appellants (applicants)
Westeel-Rosco Limited.
James A. Robb, Q.C. for appellants (appli-
cants) AMCA International Limited and J.
B. Phelan.
David F. Bell for appellants (applicants)
Samuel, Son & Co. Limited and W. Grant
Brayley.
Peter A. Vita, Q.C. for respondents (respond-
ents).
SOLICITORS:
Tilley, Carson & Findlay, Toronto, for appel
lants (applicants) Yri-York Limited, Norman
B. Katzman, L. F. Newberry, John M. White
and Leon Robidoux.
Stikeman, Elliott, Toronto, for appellants
(applicants) Pitt Steel Limited, James Arthur
Jobin, Lorne Gilbert Coons, Bruce Scott
Moore, William Alexander Mowat and Mar-
shall Steel Limited.
Phillips & Vineberg, Montréal, for appellants
(applicants) Newman Steel Ltd., Peter R.
Sheppard and Zenon P. Zarcz.
Campbell, Godfrey and Lewtas, Toronto, for
appellants (applicants) Namasco Limited,
Charles Ian McKay and P. J. Peckham.
Blake, Cassels & Graydon, Toronto, for
appellant (applicant) Westeel-Rosco Limited.
Stikeman, Elliott, Montréal, for appellants
(applicants) AMCA International Limited
and J. B. Phelan.
Smith, Lyons, Torrance, Stevenson & Mayer,
Toronto, for appellants (applicants) Samuel,
Son & Co. Limited and W. Grant Brayley.
Osler, Hoskin & Harcourt, Toronto, for
appellant (applicant) Harold Irvine.
Deputy Attorney General of Canada, for
respondents (respondents).
The following are the reasons for judgment
rendered in English by
HEALD J.: This is an appeal from an order of
the Trial Division [[1988] 2 F.C. 537] dismissing
an originating notice of motion dated September
23, 1987 brought pursuant to section 18 of the
Federal Court Act [R.S.C. 1970 (2nd Supp.), c.
10]. That originating notice of motion asked, inter
alla, for an order by way of prohibition restraining
the hearing of any proceedings pending before the
Restrictive Trade Practices Commission
(R.T.P.C.) pursuant to section 17 of the Combines
Investigation Act, R.S.C. 1970, c. C-23 (CIA) and
relating to the production, manufacture, purchase,
sale and supply of certain types of steel products,
until such time as the Supreme Court of Canada
has rendered a decision in the appeal of Thomson
Newspapers Ltd. et al. v. Director of Investigation
& Research et al. Leave to appeal the decision of
the Ontario Court of Appeal in that case' has been
granted [[1987] 1 S.C.R. xiv] and the Supreme
Court of Canada has stated the following question
to be resolved on that appeal:
Is section 17 of the Combines Investigation Act inconsistent
with the provisions of sections 7 and 8 of the Canadian Charter
of Rights and Freedoms and therefore of no force and effect.
The appellants are all corporations or individu
als who have received various notices or orders
under the CIA with respect to an investigation
being conducted by the Director of Investigation
and Research appointed under that Act (the
Director). As noted supra, the investigation relates
to the activities of the appellants in the steel
industry during the years 1975, 1976 and 1977.
On a date between January 27 and February 2,
1981, the Chairman of the R.T.P.C. made an
order pursuant to subsection 17(1) of the CIA
requiring some twenty-nine individuals to attend
"to give evidence upon oath in connection with" an
inquiry relating to the production, manufacture,
purchase, sale and supply of flat rolled steel, plate
steel, bar and structural steel and related products.
Hearings were conducted before Mr. H. H.
Griffin (the hearing officer appointed to conduct
the inquiry) on February 25, March 2, 3, 4, 5, 6, 9
and 12, 1981. The inquiry was then adjourned sine
die pending the hearing of various applications in
the Federal Court of Canada concerning the valid
ity of the inquiry. The culmination of those pro
ceedings was the decision of the Supreme Court of
' Thomson Newspapers Ltd. et al. v. Director of Investiga
tion & Research et al. (1986), 57 O.R. (2d) 257 (C.A.).
Canada dated March 26, 1987 which upheld the
validity of that adjourned inquiry (Irvine v.
Canada (Restrictive Trade Practices Commis
sion), [1987] 1 S.C.R. 181; (1987), 74 N.R. 33).
By registered letters dated August 24, 1987, the
appellants were notified by the Director that the
adjourned hearings would resume on September
29, 1987 before hearing officer J. H. Cleveland.
The September 29 resumption was adjourned,
through the agreement of counsel, pending the
result of subject application to the Trial Division.
On October 6, 1987, the Chairman of the
R.T.P.C. made an order vacating the original
orders for examination of witnesses (January
27-February 2, 1981) and, on the same date,
issued a new order compelling the witnesses to
attend to be examined in Mississauga on Novem-
ber 30, 1987. With the Director's consent, those
examinations and hearings have been adjourned
pending a decision on this appeal.
The appellants submit that the orders and
notices issued pursuant to section 17 of the CIA,
contravene the provisions of sections 7 and 8 of the
Charter [Canadian Charter of Rights and Free
doms, being Part I of the Constitution Act, 1982,
Schedule B, Canada Act 1982, 1982, e. 11
(U.K.)]. The constitutional validity of section 17 is
presently under consideration in at least two other
cases, the one being the Thomson Newspapers
case supra, and the other being the case of Stelco
Inc. v. Canada (Attorney General) where leave to
appeal to the Supreme Court of Canada is being
sought. 2 The Director has not proceeded with in
quiries in either of those cases pending the out
come of the appeals. It is the submission of the
appellants that the ultimate outcome of their sec
tion 18 application depends upon the disposition of
the appeals in the Thomson Newspapers and
Stelco cases supra. Their position before the
learned Motions Judge was that until the Charter
issues raised in those cases have been resolved, the
2 The decision of the Federal Court of Appeal in the Stelco
case is dated October 22, 1987, File No. A-728-87, not yet
reported. [Editor's note: leave to appeal to the Supreme Court
of Canada was granted January 25, 1988.]
Director should not be allowed to proceed with this
inquiry under section 17.
The Decision of the Trial Division
The learned Motions Judge dismissed the sec
tion 18 application. He stated the issue as follows
(at pages 511-512):
The question at issue is whether this is an appropriate case
for the granting of a stay of administrative and investigative
process, whether by prohibition or injunction or otherwise, until
the Supreme Court of Canada has pronounced on the constitu
tional question raised in the Thomson Newspapers appeal.
In determining the answer to this question, the
Motions Judge considered, in some detail, the
decision of the Supreme Court of Canada in the
case of Manitoba (Attorney General) v. Met
ropolitan Stores Ltd., [1987] 1 S.C.R. 110 as well
as the Quebec Court of Appeal decision in Canada
(Procureur général) c. Alex Couture Inc., [1987]
R.J.Q. 1971. He entered upon this analysis, after
noting that counsel for the applicants "placed a
great deal of reliance" on those decisions. At pages
519-520, the Motions Judge decided the issue in
question in the following way:
Does the tripartite test of American Cyanamid ... apply at
all in the case of an attack under section 18 of the Federal
Court Act on the exercise of statutory authority by an adminis
trative tribunal? In my opinion, it does not ....
In so concluding, he adopted the reasoning of the
Appeal Division of the Supreme Court of Nova
Scotia in the case of McFetridge v. Nova Scotia
Barristers' Society (1981), 123 D.L.R. (3d) 475,
at page 476. The reasoning in McFetridge is to the
effect that the American Cyanamid [American
Cyanamid Co. v. Ethicon Ltd., [1975] A.C. 396
(H.L.)] test has "little relevancy" in cases where a
declaration and permanent injunction are being
sought to prevent a quasi-judicial tribunal from
exercising its prima facie statutory powers and
duties.
The Motions Judge also relied upon the decision
of this Court in Lodge v. Minister of Employment
and Immigration, [1979] 1 F.C. 775.
The Jurisdictional Issue
The respondents assert that the Federal Court
does not have jurisdiction to grant the relief sought
by the appellants in this motion. The appellants,
on the other hand, submit that the Trial Division
of the Court has jurisdiction to grant the relief
sought on three different and alternative bases:
(a) Pursuant to section 18 of the Federal Court
Act;
(b) Pursuant to section 50 of the Federal Court
Act; or
(c) Pursuant to section 24 of the Charter.
(a) Section 18 of the Federal Court Act
Counsel for the respondents submits that since
the Federal Court of Canada is a statutory Court,
it possesses no inherent jurisdiction. Accordingly,
in his view, the jurisdiction of the Court in a
particular matter, must be conferred, explicitly or
implicitly by the provisions of its establishing stat
ute or by other federal statutes conferring jurisdic
tion upon it in other specific areas.
Since paragraph 18(a) of the Federal Court Act
restricts the Court's jurisdiction to injunctions,
writs of certiorari, writs of prohibition, writs of
mandamus, writs of quo warranto or declaratory
relief and since paragraph 18(b) enlarges that
jurisdiction only to include "relief in the nature of
relief contemplated by paragraph (a)", it is the
submission of counsel that the originating notice of
motion herein is not covered by the provisions of
section 18. He feels justified in making this argu
ment because, in his view of the matter, subject
motion is, in reality, an application for a stay and
stays are not specifically included in section 18.
I do not find this submission persuasive. The
notice of motion (A.C. page 28) requests, inter
alia, in subparagraph (1) thereof "an order by way
of prohibition restraining the hearing of any pro
ceedings" pending before the R.T.P.C. under sec
tion 17 of the CIA There is no indication that the
jurisdictional arguments advanced before us were
raised before the Motions Judge. In any event, he
appears to have assumed jurisdiction pursuant to
section 18. At page 509 of the decision, he charac
terizes the proceedings as an application under
section 18 "for an order by way of prohibition to
stay inquiry proceedings". (Emphasis added.) At
page 509 he states that "The whole thrust of the
case ... is directed to enjoining the RTPC from
proceeding". (Emphasis added.) Again, at page
519, he refers to "an interlocutory injunction or
stay of proceedings" while at page 522 he refers to
"an interim injunction or stay of proceedings".
From the above references to the nature of the
proceedings herein, I think it clear that the learned
Motions Judge was satisfied that he had jurisdic
tion to deal with this motion pursuant to section 18
of the Federal Court Act. I agree with him. The
notice of motion asks for "an order by way of
prohibition restraining". This is clearly a request
for injunctive relief. The Federal Court has juris
diction, pursuant to paragraph 18(a), to grant
both injunctions and writs of prohibition. Pursuant
to paragraph 18(b), it has jurisdiction to entertain
applications in the nature of the relief contemplat
ed by paragraph (a). Section 2 of the Federal
Court Act defines "relief" as follows:
2....
"relief' includes every species of relief whether by way of
damages, payment of money, injunction, declaration, restitu
tion of an incorporeal right, return of land or chattels or
otherwise;
Thus, the jurisdiction conferred upon the Court
pursuant to paragraph 18(a) is broadened by the
provisions of paragraph 18(b). Accordingly, in my
view, the Trial Division of this Court has been
given jurisdiction to deal with an application of
this nature pursuant to section 18 of the Federal
Court Act. Even if counsel for the respondents is
accurate in characterizing the motion as an
application for a stay, I think this Court would still
have jurisdiction under section 18. In the Met
ropolitan Stores case supra, Beetz J. stated at
page 127:
A stay of proceedings and an interlocutory injunction are
remedies of the same nature. In the absence of a different test
prescribed by statute, they have sufficient characteristics in
common to be governed by the same rules and the courts have
rightly tended to apply to the granting of interlocutory stay the
principles which they follow with respect to interlocutory
injunctions ....
Based on that view of the matter, since the two
proceedings are of the same nature, paragraph (b)
of section 18 would operate so as to confer juris
diction on the Court.
Before leaving this discussion pertaining to sec
tion 18, I would like to comment briefly on the
propriety of proceeding under section 18 by way of
notice of motion pursuant to Rule 319 et seq. in
contradistinction to proceeding by way of an
action commenced by statement of claim in
accordance with Rule 400. In my view, Rule 603
permits a Rule 319 proceeding in the circum
stances at bar. That Rule provides:
Rule 603. Proceedings under section 18 of the Act for any of
the relief described therein, other than a proceeding against the
Attorney General of Canada or a proceeding for declaratory
relief, may be brought either
(a) by way of an action under Rule 400; or
(b) by way of an application to the Court under Rules 319 et
seq.
In Federal Court Practice, 1988, Sgayias, Kin-
near, Rennie, Saunders, the following comments
are made with respect to Rule 603 at page 507:
Rule 603 governs the procedure applicable to the bringing of
proceedings under section 18 of the Act. That section confers
on the Trial Division jurisdiction to issue writs of certiorari,
prohibition, mandamus and quo warranto and to grant injunc-
tive and declaratory relief against federal boards, commissions
and other tribunals. All the forms of relief available under
section 18 may be sought by way of an action commenced by
statement of claim in accordance with rule 400. In certain
cases, relief may be sought by way of an application com
menced by notice of motion in accordance with rules 319 and
following.
The authors proceed to express the view (also at
page 507) that injunctive relief may be obtained
either by a Rule 400 action or an "application
under Rule 319 et seq. (except where sought
against Attorney General)". Since the relief
sought does not include a request for injunctive
relief against the Attorney General of Canada, I
conclude the appellants' decision to proceed by
way of Rule 319 et seq. is permissible in the
circumstances of this case.
(b) Section 50 of the Federal Court Act
Since I have concluded that the Court has juris
diction to deal with subject motion pursuant to
section 18 of the Federal Court Act, it is, perhaps,
unnecessary to deal with the two other alternative
sources of jurisdiction asserted by the appellants.
However, in the event that my conclusions in
respect of section 18, supra, are in error, I would
like to express the view that this Court would also
have jurisdiction to deal with subject motion pur
suant to the provisions of section 50 of the Federal
Court Act. 3 Counsel for the respondents submitted
that what is being done, at this juncture, is not a
proceeding or a cause but merely an inquiry, and
that, accordingly, section 50 would not apply so as
to give the Court jurisdiction to grant a stay. I. am
unable to agree with this submission.
In order to explain my reasons for so deciding, I
think it necessary to consider briefly the scheme of
the Combines Investigation Act. Mr. Justice Estey
reviews the Act extensively in the Irvine case. 4
Part I of the Act carries the sub-title INVESTIGA
TION AND RESEARCH and contains sections 5 to
15 inclusive. Part II of the Act is entitled CON
SIDERATION AND REPORT and contains sections
16 to 22 inclusive. Part I establishes the office of
Director of Investigation and Research. Part II
establishes the Restrictive Trade Practices Com
mission. Pursuant to section 17, the Commission
has the power to authorize the examination of
witnesses under oath by the Director or a nominee
3 Subsection 50(1) reads as follows:
50. (1) The Court may, in its discretion, stay proceedings
in any cause or matter,
(a) on the ground that the claim is being proceeded with
in another court or jurisdiction; or
(b) where for any other reason it is in the interest of
justice that the proceedings be stayed.
4 Irvine v. Canada (Restrictive Trade Practices Commission),
[1987] 1 S.C.R. 181, at p. 193 et seq.; (1987), 74 N.R. 33, at p.
44 et seq.
and to order the production of documents by such
witnesses. 5 Part III of the Act is entitled GENERAL
and contains sections 23 to 27 inclusive. Section 27
[rep. and sub. by S.C. 1974-75-76, c. 76, s. 9]
reads as follows:
27. (1) All inquiries under this Act shall be conducted in
private, except that the Chairman of the Commission may
order that all or any portion of such an inquiry that is held
before the Commission or any member thereof be conducted in
public.
(2) All proceedings before the Commission, other than pro
ceedings in relation to an inquiry, shall be conducted in public,
except that the Chairman of the Commission may order that all
or any portion of such proceedings be conducted in private.
Subsection 27(2) thus refers to "All proceedings
before the Commission, other than proceedings in
relation to an inquiry". (Emphasis added.) In my
view, it is quite clear from the scheme of the
statute and the language employed in section 27
that Parliament clearly contemplated that the
"inquiries" under section 17 are just as much
"proceedings" before the Commission as any sub
sequent proceedings which may ensue pursuant to
the section 17 inquiry. Estey J. commented on the
meanings of subsections 27 (1) and (2) of the Act
at pages 199-200 S.C.R.; 51-52 N.R. of the
Reasons:
I digress to point out that by s. 27(1) (a provision found in
another Part of the Act) "All inquiries under this Act shall be
5 Subsections 17(1) and 17(2) read as follows:
17. (1) On ex parte application of the Director, or on his
own motion, a member of the Commission may order that
any person resident or present in Canada be examined upon
oath before, or make production of books, papers, records or
other documents to such member or before or to any other
person named for the purpose by the order of such member
and may make such orders as seem to him to be proper for
securing the attendance of such witness and his examination,
and the production by him of books, papers, records or other
documents and may otherwise exercise, for the enforcement
of such orders or punishment for disobedience thereof, all
powers that are exercised by any superior court in Canada
for the enforcement of subpoenas to witnesses or punishment
of disobedience thereof.
(2) Any person summoned under subsection (1) is com
petent and may be compelled to give evidence as a witness.
conducted in private". The section goes on to state, however:
"except that the Chairman of the Commission may order that
all or any portion of such an inquiry that is held before the
Commission or any member thereof be conducted in public". It
is not clear whether this includes the taking of evidence by the
person designated by a Commissioner under s. 17. In this
appeal that was the Hearing Officer. By subsection (2) the rule
is reversed with respect to all proceedings before the Commis
sion "other than proceedings in relation to an inquiry". Com
mission proceedings shall be in public unless the Chairman of
the Commission orders that they be held in private. Proceedings
before the Commission relating to an inquiry shall nevertheless
be in private. When subsections (1) and (2) are read together,
it would appear that an order of the Chairman would be
required for the proceeding before the Hearing Officer to be in
public and no such order appears on the record.
It is clear, in my view, that Mr. Justice Estey
considered that the inquiry before the Hearing
Officer pursuant to section 17 was a "proceeding"
as that term is used in the statute.
Since I think, for the reasons expressed supra,
that the section 17 procedure herein constitutes a
proceeding, it seems to me that the dicta articulat
ed by Stone J. in the case of New Brunswick
Electric Power Commission v. Maritime Electric
Company Limited 6 would apply to the situation at
bar. At page 24 of the reasons, Mr. Justice Stone
said:
Subsection 50(1) of the Act is not on its face limited to
proceedings "before the Court". The inclusion of those words
or words of like effect would, I think, have removed any doubt
as to the intention of Parliament. Omission of them from
subsection 50(1) lends some support to an argument that by
"proceedings" Parliament intended to confer power, in appro
priate circumstances, to stay proceedings in addition to those
pending in the Court itself.
I find that view of the matter to be persuasive
indeed. Accordingly, I think that the language
used by Parliament in subsection 50(1) supra,
encompasses a proceeding such as the section 17
oral examination authorized by subsection 17(1)
of the CIA.
(c) Section 24 of the Charter
I am not able to accept the submissions of the
appellants that their Charter rights were violated
when the order of the R.T.P.C. issued requiring
them to give evidence pursuant to section 17.
Subsection 24(1) of the Charter entitles anyone
6 [1985] 2 F.C. 13 (C.A.).
whose Charter rights "have been infringed or
denied" (emphasis added) to apply to a court of
competent jurisdiction for an appropriate remedy.
In the case at bar, the appellants' rights have not
actually been infringed at this juncture. Accord
ingly, in my view, an application under section 24
is premature since no infringement or denial of
Charter rights has as yet occurred.'
To summarize, then, my consideration of the
question of the Court's jurisdiction to entertain the
within section 18 application, I am satisfied for the
reasons expressed supra, that the Trial Division
has jurisdiction to deal with this matter either
under section 18 or subsection 50(1) of the Feder
al Court Act.
The Metropolitan Stores Test
The appellants submit that the learned Motions
Judge erred by failing to apply properly, or at all,
the test prescribed by the Supreme Court of
Canada in the Metropolitan Stores case supra,
governing the stay of administrative proceedings
pending an attack on those proceedings under the
Charter.
The respondents, on the other hand, in support
ing the conclusion of the Motions Judge, submit
that the relief sought by the appellants herein is in
the nature of a permanent injunction or prohibi
tion and, accordingly, the tripartite test employed
in American Cyanamid has limited relevancy. In
support of this proposition they rely on the McFe-
tridge case supra, the Lodge case supra, and the
Gould case. 8 I propose to examine this trilogy of
cases, commencing with the Lodge decision in this
Court.
7 For a similar view—see: R. v. Dahlem (1983), 25 Sask. R.
10 (Q.B.), at pp. 19 and 20, per Maher J. See also: R. v.
Jahelka; R. v. Stagnitta (1987), 79 A.R. 44 (C.A.), at pp. 51
and 52, per Kerans J.A.
8 Attorney General of Canada v. Gould, [1984] 1 F.C. 1133
(C.A.), at p. 1140; affirmed [1984] 2 S.C.R. 124.
In Lodge the appellants had applied to the Trial
Division for an injunction to restrain the respond
ent Minister from executing deportation orders
against the appellants pending the disposition of
complaints made by the appellants under the
Canadian Human Rights Act [S.C. 1976-77, c.
33] that the deportation proceedings amounted to
a discriminatory practice prohibited by that Act.
The Trial Division dismissed the application
[[1978] 2 F.C. 458] on the ground that, even
assuming the allegations of the complaint to be
true, they would not amount to a discriminatory
practice as defined in the Act.
The appeal was dismissed in this Court. Le Dain
J. (as he then was) in writing the reasons for a
unanimous panel stated at pages 782 and 783:
The position adopted by the appellants is based essentially on
the view that the injunction sought is in the nature of an
interlocutory injunction. From this it was argued that the test
which should have been applied by the Trial Judge was that
laid down by American Cyanamid Co. v. Ethicon Ltd. [1975]
A.C. 396 for the issue of an interlocutory injunction—whether
there is a serious question to be tried. In my opinion that is a
mistaken view of the nature of the proceeding in this case.
Although the purpose of the injunction sought is in a sense
similar to that served by an interlocutory injunction—to pre
serve the status quo pending a decision on the merits of a
claim—the application in the present case is not in fact an
application for an interlocutory injunction. It is an application
by originating notice of motion invoking the jurisdiction of the
Trial Division under section 18 of the Federal Court Act,
R.S.C. 1970 (2nd Supp.), c. 10. It is not made in an action
pending in the Federal Court. It involves a final and not an
interlocutory judgment upon the claim for an injunction. The
application is for an injunction that is in the nature of a
permanent injunction, albeit one that would presumably be
limited in time. It would be wrong in my opinion to assimilate
the injunction that is sought in this case to an interlocutory
injunction, merely because of its particular object, and to apply
the principles which govern the exercise of the discretion as to
whether or not to grant an interlocutory injunction.
The principles which must be applied are those which deter
mine whether a permanent injunction should be granted to
restrain a Minister of the Crown from performing a statutory
duty. Section 30(1) of the former Immigration Act provides
that a deportation order shall be executed "as soon as practi
cable". Section 50 of the Immigration Act, 1976, S.C. 1976-77,
c. 52, provides similarly that a removal order, which includes
by definition a deportation order made under the former Act,
shall be executed "as soon as reasonably practicable". These
provisions create a statutory duty which rests in the final
analysis upon the Minister responsible for the administration of
the Act.
And at page 784:
So long as the validity of the deportation orders in the
appellants' case has not been successfully challenged it cannot
be said that the Minister would be exceeding his statutory
authority or otherwise acting contrary to law in executing
them.
In order to assess the relevance and applicability
of the Lodge decision to the situation at bar, it is
necessary, in my view, to have regard to the statu
tory schemes in each case. As noted supra, Estey
J. dealt exhaustively with the scheme of the CIA
in the Irvine case (pages 193-204 inclusive S.C.R.;
44-57 N.R.). At pages 204-206 inclusive S.C.R.;
56-59 N.R., he provides an "overall view" of "the
regulatory pattern established" by the CIA. At
pages 205 S.C.R.; 57 N.R., he summarizes the
functions of the Director as follows:
In all these functions, the Director makes no decisions in the
sense of a final determination of a right or an interest. He
makes recommendations and allegations and forms opinions for
consideration by others and sometimes only gathers facts and
information for consideration by Ministers or by the
Commission.
Thus, in the case at bar, the activity sought to be
enjoined or stayed is a preliminary or early step in
a series of steps which may result in a final
determination of rights or interests. On the other
hand, in Lodge, an Adjudicator under the Immi
gration Act [R.S.C. 1970, c. I-2] had issued a
deportation order pursuant to the terms of that
Act. What was sought to be restrained was the
execution of that deportation order by the removal
from Canada of the persons concerned. The clear
difference in Lodge was that the deportation order
there was a final determination of the rights of the
persons being deported. Accordingly, it was cor
rect to conclude that the injunction being sought in
that case was "in the nature of a permanent
injunction" since it sought to restrain the execu
tion of a permanent order, the validity of which
had not been successfully challenged.
In the case at bar, the attack is upon a prelim
inary step in a series of steps in a complex and
detailed procedure at the conclusion of which, a
final decision will be made. In my opinion, the
relief being asked for here is a classic example of
interlocutory relief. An interlocutory injunction is
one that preserves the status quo until a final
decision has been made. I therefore conclude that
what was said in Lodge does not assist the
respondents here, given the very significant differ
ences in the two statutory schemes and the impor
tant differences between the stage of the proceed
ings in the respective causes.
I turn now to the Gould case. In that case, an
inmate of a penitentiary who was prohibited from
voting in elections pursuant to the provisions of
paragraph 14(4)(e) of the Canada Elections Act
[R.S.C. 1970 (1st Supp.), c. 14], commenced an
action in the Trial Division of this Court for a
declaration that paragraph 14(4)(e) was invalid
since it was contrary to the provisions of section 3
of the Charter. Section 3 provides that every citi
zen of Canada has the right to vote in federal or
provincial elections. With a general election about
to be held, the inmate was granted a mandatory
injunction allowing him to vote by proxy. On
appeal to this Court, the mandatory injunction
granted by the Trial Division was set aside. At
page 1140, Mr. Justice Mahoney, writing for the
majority of the panel stated:
The order made authorizes the respondent to conduct himself
and requires him to be treated as though the law he seeks to
have declared invalid were now invalid notwithstanding that it
remains in full force and effect and will so remain unless and
until, after trial, the declaration sought is made. That went far
beyond a determination that there is a serious issue to be tried.
It required more than the usual determination, in disposing of
an application for an interlocutory injunction, that the balance
of convenience dictated that the status quo be maintained or
the status quo ante be restored pending disposition of the
action after trial. It was a determination that the respondent,
without having had his action tried, is entitled to act and be
treated as though he had already won. The order implies and is
based on a finding that the respondent has, in fact, the right he
claims and that paragraph 14(4)(e) is invalid to the extent
claimed. That is an interim declaration of right and with
respect, is not a declaration that can properly be made before
trial. The defendant in an action is as entitled to a full and fair
trial as is the plaintiff and that is equally so when the issue is
constitutional. The proper purpose of an interlocutory injunc-
tion is to preserve or restore the status quo, not to give the
plaintiff his remedy, until trial.
I agree with that reasoning and in the conclu
sion that the grant of the mandatory injunction
was in error because the effect of it was to give the
plaintiff his remedy, until trial. However, as in
Lodge, the situation in Gould was quite different
than in the case at bar. The effect of the grant of
an interlocutory injunction in this case will not
give the appellants their remedy until the trial of
an action. There is no action here. There is simply
an originating notice of motion for the preserva
tion of the status quo until the Supreme Court of
Canada has decided whether section 17 of the CIA
can survive the Charter challenge which it faces in
the Thomson Newspapers and Stelco cases. If
those cases result in section 17 being declared of
no force and effect then the appellants' rights
which would have been violated by a continuation
of the section 17 examinations, have been pre
served and protected. Thereafter, to protect them
selves, the ultimate or permanent remedy open to
the appellants might well be an application for a
permanent order of prohibition. If, on the other
hand, section 17 is declared to be of full force and
effect because it is not inconsistent with sections 7
and 8 of the Charter, then the Director and the
Commission are in a position to proceed with the
section 17 examination. All that the injunction has
accomplished is the preservation of the status quo.
As noted supra, that has always been recognized
and accepted as the dominant characteristic of an
interlocutory injunction. For these reasons then, I
do not find that the Gould case assists the
respondents.
Turning now to the McFetridge case, where it
was held that the American Cyanamid test does
not apply when the attack is upon the use of
statutory authority, I do not find this case persua
sive. I much prefer the approach adopted by the
Alberta Court of Appeal in the Black case. 9 In
that case, Kerans J.A., in delivering the judgment
of the Court, dealt with the issue of the applicabili
ty of the American Cyanamid test. He stated at
page 349:
It is argued for the Law Society that this test does not apply
in the case of an attack on the exercise of statutory authority:
see McFetridge v. Nova Scotia Barristers' Society (1981), 123
D.L.R. (3d) 475, 45 N.S.R. (2d) 319 (N.S.S.C. A.D.). The
argument runs that an application for an interim injunction
against a tribunal exercising a statutory power is tantamount to
a writ of prohibition, and such a writ requires the finding of
actual reviewable error and not just an arguable case. With
respect, the analogy is not persuasive. The better analogy would
be to the situation pending the hearing of a prohibition order. It
is a surprise to us to hear that, between the time a motion for
prohibition is brought and the making of the order, a statutory
tribunal is under no constraint.
It is correct, however, that the fact that the injunction is
sought against a public authority exercising a statutory power
is a matter to be considered when one comes to the balance of
convenience. However, we do not agree that the Cyanamid test
simply disappears in such a case.
Since I have not been persuaded that the trilogy
of cases discussed supra, entitled the Motions
Judge to conclude, as he did, that the American
Cyanamid test should not be applied in these
circumstances, there remains for consideration the
Metropolitan Stores case itself.
In that case, the Manitoba Labour Relations
Act [C.C.S.M., c. L10] empowered the Manitoba
Labour Board to impose a first collective agree
ment upon the employer and the union in circum
stances where bargaining for a first contract had
not been fruitful. When the union applied to have
the Board impose a first contract, the employer
commenced proceedings in the Manitoba Court of
Queen's Bench to have that power declared invalid
as contravening the Charter. Within the frame
work of that action, the employer applied by way
of motion in the Queen's Bench for an order
staying the Labour Board from exercising that
power until the issue of the validity of the legisla
tion had been heard. The motion was denied.
9 Law Society of Alberta v. Black et al. (1983), 8 D.L.R.
(4th) 346 (Alta. C.A.).
Unfettered by any stay order, the Board indicated
that it would use that power and impose a collec
tive agreement if the parties failed to reach an
agreement amongst themselves. The Manitoba
Court of Appeal allowed the appeal and granted a
stay. The Supreme Court of Canada allowed the
appeal and set aside the stay of proceedings
ordered by the Manitoba Court of Appeal.
Mr. Justice Beetz delivered the judgment of the
Supreme Court of Canada. At the outset, the
learned Justice made it very clear that the appeal
was not being allowed on the basis of a so-called
presumption of constitutional validity. At page 122
of the Report, he stated, in this regard:
... the innovative and evolutive character of the Canadian
Charter of Rights and Freedoms conflicts with the idea that a
legislative provision can be presumed to be consistent with the
Charter.
Then at page 126 et seq., he proceeds to a con
sideration of the principles governing the granting
of a stay of proceedings while the constitutionality
of a legislative provision is challenged in court.
After making the comments set out earlier herein
in respect of the similarities implicit in the reme
dies of a stay of proceedings and an interlocutory
injunction (page 127), the learned Justice proceeds
to discuss the issue as to whether the "serious
issue" test of American Cyanamid should prevail
over the traditional test which required the appli
cant to make out a prima fade case. At page 128
he said:
In my view, however, the American Cyanamid "serious ques
tion" test formulation is sufficient in a constitutional case
where, as indicated below in these reasons, the public interest is
taken into consideration in the balance of convenience.
Mr. Justice Beetz then proceeds to affirm and
adopt the other two main tests set out in American
Cyanamid in deciding whether it is just and equi
table to grant an interlocutory injunction. I refer,
of course, to the irreparable harm not compensable
in damages test and the balance of convenience
and the public interest test.
Since the Metropolitan Stores decision is the
most recent pronouncement by the Supreme Court
of Canada on the proper principles to be applied in
circumstances such as those present in this appeal,
and since the Motions Judge clearly decided that
those principles should not be applied in the
instant case (supra, page 194), I have concluded
that he erred in failing to apply the tripartite test
of American Cyanamid as approved and adapted
in the Metropolitan Stores decision.
This error on the part of the Motions Judge does
not, however, automatically result in the appeal
being successful and in the relief sought in the
originating notice of motion being granted to the
appellants. In a case of this kind, I think that this
Court is in just as good a position as was the
Motions Judge to give the judgment which the
Trial Division should have given. I so conclude
since the record before the Trial Division consisted
entirely of documentary evidence. On this premise,
I now proceed to a consideration of the various
components of the proper test to be applied in this
case.
The Serious Issue Test
In my view, this test need not be discussed in
detail in view of the fact that the Supreme Court
of Canada has granted leave to appeal in the
Thomson Newspapers case, a case which raises
precisely the same issue as the case at bar, namely,
the constitutional validity of section 17 of the CIA.
Furthermore, as pointed out by counsel for the
appellants, the important and fundamental ques
tion as to whether section 7 of the Charter protects
against self-incrimination has been the subject of
conflicting decisions in the lower courts. Accord
ingly, I 'have no difficulty in concluding that the
"serious issue" component has been met in the
circumstances of this case.
The Irreparable Harm Not Compensable in Dam
ages Test
The appellants submit that irreparable harm
will result, in two important respects, if a stay of
the section 17 examination is not granted. Firstly,
a point is made about the irrevocable nature of
oral testimony once given.
The respondents reply that section 20 of the
CIA [as am. by S.C. 1974-75-76, c. 76, s. 81 10
provides protection against the abuse of the broad
investigative powers conferred by section 17. The
appellants, however, make the very valid point that
even though section 20 would prevent the use of
oral testimony given under section 17 in the event
criminal charges were proferred against the
section 17 witnesses, that protection does not
extend to any derivative or documentary evidence
obtained in the section 17 examination.
Counsel for Westeel-Rosco Limited put the sub
mission in the following way (memorandum of fact
and law, paragraph 8):
While the witness' answers themselves may not be used against
him, pursuant to s. 45 any documents which he is required to
lead the investigators to which are on the premises of any
participant are:
(i) admissible against the witness and
(ii) prima facie proof of the truth of their contents against that
witness at a subsequent trial. This is so unless the documents
contain hearsay.
Section 45 of the CIA [as am. by S.C. 1974-75-76,
c. 76, s. 21], at all relevant times, read as follows:
45. (1) In this section
"agent of a participant" means a person who by a document
admitted in evidence under this section appears to be or is
otherwise proven to be an officer, agent, servant, employee or
representative of a participant;
"document" includes any document appearing to be a carbon,
photographic or other copy of a document;
10 Subsections 20(1) and (2) read as follows:
20. (1) A member of the Commission may allow any
person whose conduct is being inquired into and shall permit
any person who is being himself examined under oath to be
represented by counsel.
(2) No person shall be excused from attending and giving
evidence and producing books, papers, records or other docu
ments, in obedience to the order of a member of the Commis
sion, on the ground that the oral evidence or documents
required of him may tend to criminate him or subject him to
any proceeding or penalty, but no oral evidence so required
shall be used or receivable against such person in any crimi
nal proceedings thereafter instituted against him, other than
a prosecution for perjury in giving such evidence or a pros
ecution under section 122 or 124 of the Criminal Code in
respect of such evidence.
"participant" means any person against whom proceedings
have been instituted under this Act and in the case of a
prosecution means any accused and any person who,
although not accused, is alleged in the charge or indictment
to have been a co-conspirator or otherwise party or privy to
the offence charged.
(2) In any proceedings before the Commission or in any
prosecution or proceedings before a court under or pursuant to
this Act,
(a) anything done, said or agreed upon by an agent of a
participant shall prima facie be deemed to have been done,
said or agreed upon, as the case may be, with the authority of
that participant;
(b) a document written or received by an agent of a partici
pant shall prima facie be deemed to have been written or
received, as the case may be, with the authority of that
participant; and
(c) a document proved to have been in the possession of a
participant or on premises used or occupied by a participant
or in the possession of an agent of a participant shall be
admitted in evidence without further proof thereof and is
prima facie proof
(i) that the participant had knowledge of the document
and its contents,
(ii) that anything recorded in or by the document as
having been done, said or agreed upon by any participant
or by an agent of a participant was done, said or agreed
upon as recorded and, where anything is recorded in or by
the document as having been done, said or agreed upon by
an agent of a participant, that it was done, said or agreed
upon with the authority of that participant,
(iii) that the document, where it appears to have been
written by any participant or by an agent of a participant,
was so written and, where it appears to have been written
by an agent of a participant, that it was written with the
authority of that participant.
Thus, in an inquiry under section 17, a witness
could be asked, for example, as to the whereabouts
of certain documents. Based on the witness'
answer, the investigator could then proceed to the
premises identified by the witness. In cases where
those premises are premises of a "participant" as
defined in subsection 45(1), the documents found
might well be determined to be admissible against
the witness and prima fade proof of the truth of
their contents against that witness at a subsequent
trial. As noted by Scheibel J. in the Crain case:"
" R. L. Crain Inc. et al. v. Couture and Restrictive Trade
Practices Commission et al. (1983), 10 C.C.C. (3d) 119 (Sask.
Q.B.), at p. 155.
s. 17 may be an integral step in an eventual criminal
prosecution of a suspected person. The immediate result of the
inquiry is either a referral of evidence to the Attorney-General
of Canada under s. 15(1) or a report to the Minister under s.
19(1). In either case the evidence gathered may form the basis
for a subsequent criminal prosecution.
In such a situation, the damage resulting from the
section 17 process would be irreparable and not
compensable in damages. A further possible con
sideration is the possibility that the section 17
examination can be held in public by order of the
Chairman of the Commission as noted by Mr.
Justice Estey at pages 199-200 S.C.R.; 51-52 N.R.
of the Irvine decision supra. This would further
exacerbate the potential for irreparable harm
which would also not be compensable in damages.
Counsel for the respondents suggested that sub
section 24(2) of the Charter would protect a sec
tion 17 witness and, as a result, irreparable harm
would not result to that witness. 12 In my view, it is
quite possible that subsection 24(2) could not be
employed to assist an accused witness to exclude
the evidence in issue since subsection (2) can only
be engaged where "having regard to all the cir
cumstances, the admission of it in the proceedings
would bring the administration of justice into
disrepute". As noted in the Collins case: 13 "In
determining whether the admission of evidence
would bring the administration of justice into
disrepute, the judge is directed by s. 24(2) to
consider 'all the circumstances' " and "Real evi-
12 Section 24 of the Charter reads as follows:
24. (1) Anyone whose rights or freedoms, as guaranteed
by this Charter, have been infringed or denied may apply to
a court of competent jurisdiction to obtain such remedy as
the court considers appropriate and just in the circumstances.
(2) Where, in proceedings under subsection (1), a court
concludes that evidence was obtained in a manner that
infringed or denied any rights or freedoms guaranteed by this
Charter, the evidence shall be excluded if it is established
that, having regard to all the circumstances, the admission of
it in the proceedings would bring the administration of
justice into disrepute.
13 R. v. Collins, [1987] 1 S.C.R. 265, at pp. 283-284; 38
D.L.R. (4th) 508, at pp. 525-526, per Lamer J.
dence that was obtained in a manner that violated
the Charter will rarely operate unfairly for that
reason alone. The real evidence existed irrespective
of the violation of the Charter and its use does not
render the trial unfair." Accordingly, I think it far
from certain that the Charter protection afforded
by subsection 24(2) would protect the section 17
witnesses in the circumstances of this case.
For the above reasons, then, I have concluded,
on these facts, that the appellants have satisfied
the second component of the tripartite American
Cyanamid test.
The Balance of Convenience and the Public Inter
est Test
Mr. Justice Beetz begins his consideration of
this test in the Metropolitan Stores case at pages
129-130 of the Report as follows:
(2) The Balance of Convenience and the Public Interest
A review of the case law indicates that, when the constitu
tional validity of a legislative provision is challenged, the courts
consider that they ought not to be restricted to the application
of traditional criteria which govern the granting or refusal of
interlocutory injunctive relief in ordinary private or civil law
cases. Unless the public interest is also taken into consideration
in evaluating the balance of convenience, they very often
express their disinclination to grant injunctive relief before
constitutional invalidity has been finally decided on the merits.
The reasons for this disinclination become readily under
standable when one contrasts the uncertainty in which a court
finds itself with respect to the merits at the interlocutory stage,
with the sometimes far-reaching albeit temporary practical
consequences of a stay of proceedings, not only for the parties
to the litigation but also for the public at large.
At page 133, the learned Justice proceeds to exam
ine the consequences of granting a stay in constitu
tional cases. At pages 134, 135 and 136, he states:
Although constitutional cases are often the result of a lis
between private litigants, they sometimes involve some public
authority interposed between the litigants, such as the Board in
the case at bar. In other constitutional cases, the controversy or
the lis, if it can be called a lis, will arise directly between a
private litigant and the State represented by some public
authority: Morgentaler v. Ackroyd (1983), 42 O.R. 659.
In both sorts of cases, the granting of a stay requested by the
private litigants or by one of them is usually aimed at the
public authority, law enforcement agency, administrative
board, public official or minister responsible for the implemeta-
tion or administration of the impugned legislation and generally
works in one of two ways. Either the law enforcement agency is
enjoined from enforcing the impugned provisions in all respects
until the question of their validity has been finally determined,
or the law enforcement agency is enjoined from enforcing the
impugned provisions with respect to the specific litigant or
litigants who request the granting of a stay. In the first branch
of the alternative, the operation of the impugned provisions is
temporarily suspended for all practical purposes. Instances of
this type can perhaps be referred to as suspended cases. In the
second branch of the alternative, the litigant who is granted a
stay is in fact exempted from the impugned legislation which,
in the meanwhile, continues to operate with respect to others.
Instances of this other type, I will call exemption cases.
Whether or not they are ultimately held to be constitutional,
the laws which litigants seek to suspend or from which they
seek to be exempted by way of interlocutory injunctive relief
have been enacted by democratically-elected legislatures and
are generally passed for the common good, for instance: the
providing and financing of public services such as educational
services, or of public utilities such as electricity, the protection
of public health, natural resources and the environment, the
repression of what is considered to be criminal activity, the
controlling of economic activity such as the containing of
inflation, the regulation of labour relations, etc. It seems axi
omatic that the granting of interlocutory injunctive relief in
most suspension cases and, up to a point, as will be seen later,
in quite a few exemption cases, is susceptible temporarily to
frustrate the pursuit of the common good.
While respect for the Constitution must remain paramount,
the question then arises whether it is equitable and just to
deprive the public, or important sectors thereof, from the
protection and advantages of impugned legislation, the invalidi
ty of which is merely uncertain, unless the public interest is
taken into consideration in the balance of convenience and is
given the weight it deserves. As could be expected, the courts
have generally answered this question in the negative. In look
ing at the balance of convenience, they have found it necessary
to rise above the interests of private litigants up to the level of
the public interest, and, in cases involving interlocutory injunc
tions directed at statutory authorities, they have correctly held
it is erroneous to deal with these authorities as if they have any
interest distinct from that of the public to which they owe the
duties imposed upon them by statute.
Then, at page 146, he draws certain conclusions
from his analysis of this subject:
It has been seen from what preceeds [sic] that suspension
cases and exemption cases are governed by the same basic rule
according to which, in constitutional litigation, an interlocutory
stay of proceedings ought not to be granted unless the public
interest is taken into consideration in the balance of conve
nience and weighted together with the interest of private
litigants.
The reason why exemption cases are assimilated to suspen
sion cases is the precedential value and exemplary effect of
exemption cases. Depending on the nature of the cases, to grant
an exemption in the form of a stay to one litigant is often to
make it difficult to refuse the same remedy to other litigants
who find themselves in essentially the same situation, and to
risk provoking a cascade of stays and exemptions, the sum of
which make them tantamount - to a suspension case.
and at page 149 he states:
In short, I conclude that in a case where the authority of a
law enforcement agency is constitutionally challenged, no inter
locutory injunction or stay should issue to restrain that author
ity from performing its duties to the public unless, in the
balance of convenience, the public interest is taken into con
sideration and given the weight it should carry. Such is the rule
where the case against the authority of the law enforcement
agency is serious, for if it were not, the question of granting
interlocutory relief should not even arise. But that is the rule
also even where there is a prima fade case against the enforce
ment agency, such as one which would require the coming into
play of s. 1 of the Canadian Charter of Rights and Freedoms.
Based on the conclusions of Beetz J. supra, I
propose now to examine this component of the
American Cyanamid test, keeping in mind that an
interlocutory injunction should not be granted
unless the public interest is taken into consider
ation in the balance of convenience and weighted
together with the private interests of the litigants
in a particular cause.
What, then, are the factors in the instant case
which must be taken into consideration having
regard to the balance of convenience and the
public interest? I list hereunder the factors which,
in my view, can be said to weigh in favour of
granting the relief requested and, as well, an
important circumstance which militates against
the grant of such relief:
The Factors Supporting the Grant of an
Interlocutory Injunction
1. This is not a suspension case but is rather an
exemption case as those two terms are discussed
and defined in the Metropolitan Stores case supra.
The circumstances at bar are unusual in that
section 17 is a section in the former Combines
Investigation Act which Act has been repealed and
replaced by the new Competition Act (S.C. 1986,
c. 26). Section 17 applies only to those corpora
tions or individuals involved in inquiries com
menced pursuant to the CIA and which have been
continued under a "grandfathering provision". If
the Court were to order an interlocutory injunction
or stay of proceedings, such an order would not
affect any inquiry continued under the new Com
petition Act nor would it prevent the commence
ment of a fresh inquiry under that Act. It might,
however, "make it difficult to refuse the same
remedy to other litigants who find themselves in
essentially the same situation" as noted by Beetz J.
supra. However, in this case, none of the counsel
at the hearing of the appeal were able to refer to
any other cases in a parallel situation other than
the Thomson and Stelco cases supra. Accordingly,
in my view, the "floodgate" or "cascade of exemp
tions" argument does not apply in the present
situation.
I think that Beetz J. in the Metropolitan Stores
case supra, was expressing a consistent view when
he pointed out at page 152 that: "each case,
including a fortiori an exemption case, turns on its
own particular facts". He also said that: "the
motion judge was not only entitled to but required
to weigh the precedential value and exemplary
effect of granting a stay of proceedings before the
Board". For the reasons expressed supra, I think
the factual situation at bar is quite different from
that in the Metropolitan Stores case. Accordingly,
since the "precedential value" and "exemplary
effect" factors are not present in this case, I
consider this circumstance to constitute an impor
tant factor in favour of granting the interlocutory
injunction sought herein.
2. The Commission has, with the consent of the
Director, adjourned the section 17 proceedings in
the Thomson Newspapers and Stelco cases, which
are proceeding on appeal and leave to appeal to
the Supreme Court of Canada respectively. Coun
sel for the appellants submitted that it seems
somewhat unfair that the Thomson and Stelco
proceedings under section 17 should be kept in
abeyance whereas the section 17 proceedings at
bar should be allowed to proceed forthwith.
3. There is a public interest in enabling the Court
to protect Charter rights which will, perhaps, be
irreparably destroyed if these proceedings are not
stayed until the results of the pending constitution
al review are known.
An Important Circumstance in Favour of a Denial
of an Interlocutory Injunction
The stay or interlocutory injunction being
sought must of necessity be for a lengthy time
period and since the duration of the stay depends
on proceedings in another Court, this Court is
unable to exercise the normal kind of control
which usually accompanies interlocutory stays or
injunctions of this nature.
In my view, this a very serious objection to any
grant of the relief sought. Counsel for the respond
ents points out that in the Rio Hotel case' where
a stay of proceedings before the Liquor Licensing
Board of New Brunswick was granted by the
Supreme Court of Canada pending the determina
tion of the appeal, the stay was granted subject to
compliance with an expedited schedule for filing
the materials and for hearing the appeal. In the
Couture case, 15 the stay granted was only for a
very short period of time (approximately two
weeks) since, as pointed out by the Motions Judge
[at page 518], the hearing on the constitutionality
of the proceedings before the Competition Tri
bunal on the merits, was set for September 29, 30
and October 1, 1987.
This objection is, in my view, the only cogent
objection to the grant of the relief sought herein.
However, after careful consideration, I have
reached the conclusion that the balance of conve
nience and the public interest require that an
interlocutory stay of proceedings be granted in this
14 Rio Hotel Ltd. v. Liquor Licensing Board, [1986] 2 S.C.R.
ix.
15 Canada (Procureur général) c. Alex Couture Inc., [1987]
R.J.Q. 1971 (C.A.).
case. In my view, the circumstances enumerated
supra, in favour of such an order more than offset
the one serious objection set forth supra provided
that an order can be designed which provides for
reasonable time constraints and which also pro
vides for the continued supervision and control of
the Court.
Remedy
As noted by Beetz J. in Metropolitan Stores,
supra, the character of the Charter is "innovative
and evolutive". In my view, the circumstances of
this case call for the fashioning of a remedy which
possesses both of those characteristics. According
ly, I would allow the appeal with costs both here
and in the Trial Division. I would make an order
restraining the hearing of any proceedings before
the Restrictive Trade Practices Commission or
Hearing Officer, J. H. Cleveland, in respect of the
inquiry of the Director relating to the production,
manufacture, purchase, sale and supply of flat-
rolled steel, plate steel, bar and structural steel and
related products until the decision of the Supreme
Court of Canada has been rendered in the case of
Thomson Newspapers Ltd. et al. v. Director of
Investigation & Research et al. 16 or until January
15, 1989, whichever date is the earlier. In the
event that the Thomson Newspapers decision has
not been rendered by December 15, 1988, leave is
hereby granted to the appellants to apply, upon
notice to the respondents, to a panel of the Court
not necessarily as presently constituted, for an
order extending the restraining order herein.
16 The order sought by the appellants also contained a refer
ence to the timing of the appeal in respect of which leave is
being sought in the Ste(co case. I think that reference is
unnecessary and undesirable because:
(a) the Stelco leave application has not yet been heard by
the Supreme Court of Canada [see Editor's Note, supra, fn. 2,
at p. 193]; and
(b) since leave has already been granted in Thomson News
papers it is likely that appeal will be ready for hearing,
certainly not later than the Stelco appeal, even assuming the
Court grants leave therein.
In my view, such an order will adequately pro
tect the public interest from the perspective of
supporting the Constitution and the Charter rights
and freedoms entrenched therein. It will also
ensure that any interference with the maintenance
of the democratic process through the enforcement
of democratically enacted laws will be minimized
since the duration of the interlocutory stay or
injunction is restricted and made subject to the
scrutiny and supervision of the Court. Further
more it was never suggested nor does this record
establish that any significant harm to the public
generally would ensue if this relief is granted to
the appellants. The temporary exemption from the
provisions of section 17, a procedure which has
now been repealed and replaced by a quite differ
ent procedure, does not outweigh the beneficial
effect of affording paramountcy to the protection
and preservation of an important Charter right, in
my view. Accordingly, I conclude that the remedy
detailed supra, represents a practical application
of the principles enunciated in Metropolitan
Stores supra.
STONE J.: I agree.
MACGUIGAN J.: I agree.
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.