T-502-90
Lihuen Kwan (Applicant)
v.
Her Majesty the Queen as represented by the
Canadian Security Intelligence Service, the
Director of Canadian Security Intelligence Service
(Respondent)
INDEXED AS: KWAN V. CANADA (CANADIAN SECURITY
INTELLIGENCE SERVICE) (TD.)
Trial Division, Joyal J.—Ottawa, May 28 and 30,
1991.
Security intelligence — Applicant's security clearance
revoked — Dismissed from position at CSIS — Security Intelli
gence Review Committee recommending clearance be restored
— Whether Committee's decision binding — F.C.A. having
held "recommendation" binding in Thomson v. Canada —
Decision under appeal to S.C.C. — Applicant seeking rein
statement in employment — Reinstatement different issue from
clearance — Return of security clearance not of itself threat to
national security — Status quo to be maintained pending
Supreme Court decision in Thomson.
This was a motion for a stay of an order that the respondent
reinstate the applicant's top secret security clearance.
The applicant was employed as a translator, with a top secret
security clearance. In August 1988, the applicant was sus
pended from his duties. After an internal investigation, the
respondent revoked the applicant's security clearance and, on
November 10, 1988, dismissed him. Applicant applied to the
Security Intelligence Review Committee for a review, and the
Committee recommended, on October 23, 1989, that his secur
ity clearance be restored. On November 17, the Director of
CSIS communicated to the applicant his refusal to act on that
recommendation. In the meantime, on November 3, 1989, the
applicant had initiated a Federal Court action claiming dam
ages for wrongful dismissal. Upon learning of the Director's
decision, the applicant filed an application under section 18 of
the Federal Court Act for a review of that decision. On Octo-
ber 4, 1990, Joyal J. ordered the restoration of the applicant's
top secret clearance. Acting thereon, the applicant reported for
work but was turned away. On January 16, 1991, applicant
filed a grievance with the Public Service Staff Relations Board
seeking reinstatement. Initially, CSIS took the position that the
Board lacked jurisdiction. Later, it appeared that CSIS was
willing to argue the jurisdictional issue and a date for the
Board hearing was set. But on May 23, 1991 the Crown
moved, on short notice, before Joyal J., for an order staying
execution of His Lordship's October 4, 1990 order. The hear-
ing had already begun and the Board ruled that it had jurisdic
tion to hear the grievance, and adjourned the proceedings sine
die, to allow for security clearance to be obtained for appli
cant's counsel.
Held, the original order should be suspended nunc pro tunc
but costs awarded to the unsuccessful party.
The issue before the Court is identical to that in Thomson v.
Canada (Deputy Minister of Agriculture). In that case, the Fed
eral Court of Appeal ruled that the "recommendation" of the
Security, Intelligence Review Committee was binding. That
judgment is currently under appeal to the Supreme Court of
Canada. The Court, in that case, ordered, on consent, that the
operation of its judgment to restore Thomson's clearance be
suspended pending the outcome of the appeal.
The situation had changed due to applicant's using his
restored security clearance to seek reinstatement in his
employment. No longer was the issue confined to the appli
cant's security clearance, which of itself does not prejudice
national security. Now, the clearance has become the founda
tion for a demand for reinstatement, an issue currently before
the Supreme Court of Canada. To analogize to injunctive pro
ceedings, the balance of convenience between private rights
and the public interest has shifted. The status quo should be
maintained.
Because the Crown's motion was untimely, and put appli
cant to considerable expense, costs should be awarded to him.
CASES JUDICIALLY CONSIDERED
CONSIDERED:
Thomson v. Canada, [1988] 3 F.C. 108; (1988), 50 D.L.R.
(4th) 454; 31 Admin. L.R. 14; 84 N.R. 169 (C.A.); Thom-
son v. Canada (Deputy Minister of Agriculture), [1990] 2
F.C. 820; (1990), 43 Admin. L.R. 40 (C.A.); Algonquin
Mercantile Corporation v. Dart Industries Canada Lim
ited, [ 1985] I F.C. 908; (1984), 79 C.P.R. (2d) 260 (T.D.).
COUNSEL:
Ian C. Hay for applicant.
Mylène Bouzigon for respondent.
SOLICITORS:
Joe, Chen, fang, Leung & Barbour, Vancouver,
for applicant.
Deputy Attorney General of Canada for respon
dent.
The following are the reasons for order rendered in
English by
JOYAL J.: In these proceedings, the respondent
Crown prays for a stay of proceedings in giving
effect to an order I issued on October 4, 1990 with
respect to the applicant's security clearance at the top
secret level.
At all relevant times, the applicant was on staff
with the Canadian Security Intelligence Service
(CSIS). He was engaged as a translator. Security
clearance at his level was a condition of his employ
ment.
In August 1988, on the basis of information
received by the Director of CSIS, the applicant was
suspended from his duties. This was followed by an
internal investigation. In November 1988, as a result
of this investigation, the Director of CSIS ordered
that the applicant's security clearance be revoked. It
followed that steps were immediately taken to have
the applicant released from employment with CSIS as
of November 10, 1988.
The applicant applied to the Security Intelligence
Review Committee (SIRC) for a review of the case.
Hearings before the SIRC were held March 8 to
March 11, 1989. On October 23, 1989, SIRC decided
to recommend that the applicant be reinstated in his
security clearance. On November 3, 1989, the appli
cant launched an action in Federal Court claiming
damages for unlawful termination of employment.
On November 17, 1989, the Director informed the
applicant that he was refusing to act on the SIRC's
recommendation.
In the meantime, however, the case of Thomson v.
Canada, [ 1988] 3 F.C. 108 (C.A.) and confirmed in
[Thomson v. Canada (Deputy Minister of Agricul
ture)] [ 1990] 2 F.C. 820 (C.A.), was wending its way
through the Federal Court. As in the case before me,
the applicant, who had been refused security clear
ance with respect to a particular position in Agricul
ture Canada, had referred the matter to the SIRC
which, in turn, had recommended that the required
clearance be issued. The Director had refused to act
on this recommendation. On appeal to the Federal
Court of Appeal, the Court found that on a proper
construction of the legislative scheme respecting the
review powers of SIRC, a decision from this review
committee, though couched in the term of "recom-
mendation" was a binding decision. The Crown
immediately applied for leave to appeal to the
Supreme Court of Canada. Leave was granted and the
issue is to be heard before that Court in the fall of this
year [1991]. Pending appeal and on consent of the
parties, the Federal Court of Appeal ordered that the
operation of its judgment be suspended.
Concurrently, the case before me was not lying
dormant. On February 20, 1990, the applicant filed a
section 18 application before this Court for reinstate
ment of his security clearance. The Crown pleaded
for a stay of proceedings pending the Supreme Court
ruling in the Thomson case (supra). Both issues came
on to be heard before me in Vancouver on October 1,
1990.
On October 4, 1990, I ordered that the applicant be
reinstated in his security clearance. It will be clear on
reading the reasons I issued at that time that my deci
sion was predicated on the fact that reinstatement of
the applicant's security clearance, in principle, could
not be prejudicial to CSIS or to national security
interests. The applicant was no longer employed by
CSIS and his only claim before the Court was for
damages.
Finally, I pointed out in both my order and my rea
sons therefor that my decision was without prejudice
to the Crown's right to reapply for a stay if the cir
cumstances should change. The Crown has appealed
my order of October 4, 1990 but the appeal has not
yet been set down for hearing.
Since that time, I am now informed, there has been
a change in circumstances. On the strength of the
Director of CSIS complying with my order and rein
stating the applicant in his security clearance, the
applicant appeared at the CSIS Regional Office in
British Columbia to be reinstated in his position with
CSIS. He was summarily refused. On January 16,
1991, he filed a grievance to the Public Service Staff
Relations Board (the Board) for referral to an Adjudi
cator. The grievance, of course, was in respect of that
refusal and the remedy sought was of an order for
reinstatement in his former position.
What followed between January 16, 1991 and May
24, 1991 is a whole series of correspondence between
the Board, counsel for the applicant and counsel for
CSIS. The position taken by CSIS in its first letter to
the Board on January 31, 1991, was that the Board
was without jurisdiction to proceed to adjudication.
The applicant, said CSIS, was excluded from any
adjudicative process under the terms of personnel
policy in CSIS. This position was restated on April
24, 1991, when it was explained that although CSIS
policy permitted a consensual approach to adjudica
tion in certain cases, i.e., in disciplinary action result
ing in suspension without pay or discharge, CSIS had
no intention of extending it to grievances which did
not come within the parameters set by that policy.
The issue took on a more material aspect when the
applicant's counsel, in his letter to the Board on April
11, 1991, applied for the release of all information in
the possession of CSIS relating to the applicant and
going back to the events in 1988 leading to the appli
cant's loss of his security clearance. In a further letter
to the Board on May 10, 1991, counsel for the appli
cant stated that it was his position that reinstatement
was the central issue and that of necessity, the Board
would be referred to events which occurred in 1988.
It would appear nevertheless that CSIS was pre
pared to appear before the Board to argue the juris
dictional issue and the Board set the dates of May 23
— May 28, 1991, for the hearing. It is also noted in
comment made by CSIS counsel to the Board on
April 24, 1991, that, upon reviewing the applicant's
service records to determine what information
needed to be released by the Service in order to
answer the applicant's grievance as presently worded,
CSIS could meet the case without the disclosure of
any information classified for reasons of national
security. This, at first blush, seems to infer some kind
of consent to the Board hearing the case or to attorn-
ment to the Board's jurisdiction. A full reading of
that April 24 letter certainly leads to some ambiguity
if not outright conflict in the CSIS approach.
In any event, on May 23, 1991, the Crown moved
on short notice for an order staying the execution of
my order of October 4, 1990. The motion was heard
the next day by teleconference with counsel for both
parties participating. Counsel for the applicant stren
uously objected to the procedure followed. He had
had but a couple of hours to review the material sub
mitted by the Crown and it was a vexatious last min
ute attempt to abort the Board proceedings. As far as
he was concerned, it was oppressive of the Crown to
apply at this time when the Crown had already indi
cated that it was consenting to the Board hearing the
case. The hearing had already started, the Adjudica
tor had ruled that he had jurisdiction to hear the case
and, as it was expected that the hearing would be
adjourned sine die on May 27 or May 28, in order for
security clearance for counsel to be obtained, there
was no longer any urgency.
After hearing the parties, I informed them that, in
my opinion, the proceedings taken by the applicant
subsequent to my order of October 4, 1990, threw
some new and important considerations on the issue.
In fact, the matter of such proceedings had been spe
cifically mentioned in my reasons for order. It was
also my view that the issue bearing on the case was
not whether the applicant be reinstated in his posi
tion, but the more basic issue of whether the SIRC
recommendation on the applicant's security clearance
was or was not binding on the Director, the very
issue now pending before the Supreme Court of
Canada.
Nevertheless, I adjourned the hearing and advised
counsel that no order would issue until counsel for
the applicant had secured additional information or
instructions and had been permitted to submit further
argument and representations to the Court.
The hearing reconvened, again by conference call,
on May 28, 1991. The issues addressed covered the
ruling that the Board had jurisdiction to hear the case,
that the Crown was in the process of perfecting its
appeal against my original order and that the continu
ation of the hearings before the Adjudicator required
that both the applicant and his counsel have security
clearance. The issue of the timeliness of the Crown's
application asking the Court to intervene was also
addressed.
The crux of the matter is that it is the applicant's
own security status which is a matter of a Crown
appeal from my order of October 4, 1990. It is the
very issue to which I have earlier referred and which
is to he finally determined by the Supreme Court of
Canada in the Thomson case (supra).
It appears clear to me that in using a reinstated
security clearance in order to advance a claim for
reinstatement in employment, the rules of the game
have changed. It is no more a case of a security sta
tus, in principle, which causes no prejudice to the
respondent nor risk to the national security and to
public interest. It is now a case where the security
status of the applicant, without which no claim for
reinstatement in his employment may be made, is the
subject not only of an appeal from my original order
of October 4, 1990, but involves an issue to be finally
decided by the Supreme Court of Canada next fall. I
should find that it is a case where some kind of status
quo should be maintained. It is to say that as in the
case of injunctive relief, the balance of convenience
between the private interests and rights of the appli
cant and the public interest and duties of the respon
dent has shifted and now favours the latter.
In the circumstances, I should find that it would be
proper to suspend nunc pro tunc the operation of my
original order. In this regard, I rely on the decision of
my colleague, Madam Justice Reed in the case of
Algonquin Mercantile Corporation v. Dart Industries
Canada Limited, [1985] 1 F.C. 908 (T.D.). The effect
of this order will be to authorize the Director of CSIS
to revoke or otherwise suspend the applicant's secur
ity clearance pending the appeal from my original
order or until otherwise further ordered by the Court.
An order will go accordingly.
As regards costs, I am satisfied that the Crown's
decision to apply for this order of suspension was
untimely. The delays set off a chain of proceedings
which I have described and involved considerable
time and effort by applicant's counsel and which, I
find, an earlier application by the Crown would have
avoided.
This finding is not intended to cast criticism on the
conduct of Crown counsel but simply to recognize
the equities which favour the applicant.
I therefore award costs to the applicant which I
hereby fix at a lump sum of three thousand dollars
($3,000).
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.