Date: 20110621
Docket: T-345-11
Citation: 2011 FC 740
Montréal, Quebec, June 21, 2011
PRESENT: Richard Morneau, Esq.,
Prothonotary
BETWEEN:
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54039 NEWFOUNDLAND AND
LABRADOR LIMITED
T/A
GEORGE
STREET ASSOCIATION
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Applicant
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and
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ST. JOHN’S PORT
AUTHORITY
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Respondent
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REASONS FOR
ORDER AND ORDER
[1]
This application involves a challenge of a decision of the
St. John’s Port Authority (SJPA) to lease federal property located on the
waterfront of the St. John’s Harbour to Harbour Walk Hospitality Inc. (Harbour Walk). The lease was for a
parcel of vacant land to be used by Harbour Walk for the construction and
operation of a restaurant. The subject property is known as Pier 7. The
applicant George Street Association (GSA) is an association of local
restaurants and bars. The SJPA leased the property to Harbour Walk for an
undisclosed rate and term, allegedly without inviting other proposals.
[2]
The GSA asks that the Court set aside the SJPA’s decision
to lease the land on the grounds that the SJPA erred by failing to fully
ascertain the fair market value of the subject property and to lease the land
at its full market value, erred in law and violated the rules of procedural
fairness by failing to allow other parties to submit proposals regarding the
subject property, and erred by providing an existing tenant with a right of
first refusal. The SJPA’s letters patent provide that the SJPA must ensure that
leases not be for less than fair market value.
[3]
According to the GSA, the GSA and its members who own
premises in the vicinity of the subject property are affected by and have an
interest in the lease and the proposed development.
[4]
On March 17, 2011, the SJPA brought this motion to
strike the GSA’s application. On May 3, 2011, I issued an order
upholding the SJPA’s objection to producing material under rule 317 of the
Federal Courts Rules pending the determination of the motion to strike.
[5]
The grounds for this motion are as follows:
a. the SJPA is not a “federal board, commission or other tribunal” subject to
judicial review;
b. the GSA lacks standing to bring the application; and
c. the application is time barred under s. 18.1(2) of the Federal
Courts Act, R.S.C., 1985, c. F‑7.
[6]
Upon reading the materials presented by both sides and hearing
oral submissions on June 1, 2011, I have determined, for the
following reasons, that the SJPA’s motion to strike must be allowed.
Jurisdiction
[7]
Only a “federal board, commission or other tribunal” (for
concision, “federal tribunal”) will be subject to judicial review in the
Federal Court (s. 18.1, Federal Courts Act). It is trite that a
body may be qualified as a federal tribunal for some purposes but not for
others; the key question is whether the body, in making the decision sought to
be reviewed, was acting as a federal tribunal. This is clear from the
definition of federal tribunal provided in s. 2 of the Federal Courts
Act:
“federal board, commission or other tribunal” means any
body, person or persons having, exercising or purporting to exercise
jurisdiction or powers conferred by or under an Act of Parliament or by or
under an order made pursuant to a prerogative of the Crown, other than the Tax
Court of Canada or any of its judges, any such body constituted or established
by or under a law of a province or any such person or persons appointed under
or in accordance with a law of a province or under section 96 of the Constitution
Act, 1867;
[8]
The Court appreciates that motions to strike applications
for judicial review are not to be granted lightly; the application must be “so
clearly improper as to be bereft of any possibility of success”: David Bull
Laboratories (Canada) v Pharmacia, [1995] 1 F.C. 588, at
para. 15. Justice de Montigny provided useful guidance on the
exceptional nature of motions to strike in applications for judicial review in Esgenoôpetitj
(Burnt Church) First Nation v Canada (Human Resources and Skills Development),
2010 FC 1195, where at para. 32 he wrote that:
… a motion to strike is an exceptional remedy, especially
in the context of an application for judicial review. Since such an application
is meant to be dealt with summarily, it is ordinarily more proper to deal with
any objection to the application in the context of the hearing on the merits,
if only because a full grasp of the facts and of the context will often be
necessary to deal with the objection. I agree with the Applicant, therefore,
that a motion to strike will not be granted except in the most obvious and
exceptional circumstances, where a notice of application is so fundamentally
flawed that it has no chance of success: see, inter alia, David Bull
Laboratories (Canada) Inc. v. Pharmacia Inc., [1995] 1 F.C. 588 (C.A.); Moses
v. R., 2002 FCT 1088, at para. 6.
[9]
Even in light of the high threshold to be met on a motion
to strike an application for judicial review, based on the following analysis,
this application must be struck because it is clear that the SJPA was not
acting as a federal tribunal in its leasing of the subject property. Any
additional facts or context that might come to light upon a full hearing could
not change this conclusion. This is because Justice Mactavish’s decision in DRL
Vacations Ltd v Halifax Port Authority, 2005 FC 860, [2006] 3
F.C.R., (DRL Vacations) is dispositive of the issue of whether the SJPA
was acting as a federal tribunal. DRL Vacations is precisely the kind of
decision the Federal Court of Appeal was referring when it described the
exceptional circumstances necessary to justify a motion to strike in the
context of an application for judicial review in LJP Sales Agency v Canada
(National Revenue), 2007 FCA 114, at para. 8 (LJP Sales):
… the presence of an authority which is directly contrary
to the position on which an application is based can be such an exceptional
circumstance, when no further development of the factual record is required.
[10]
Throughout its submissions and at the oral hearing of this
motion, the SJPA maintained that DRL Vacations is materially
indistinguishable from the case at hand. I agree. In DRL Vacations,
the applicant DRL challenged the decision of the respondent Halifax Port
Authority to lease property, described as a souvenir shop, market, or retail
outlet, to another party. DRL sought to judicially review the Port Authority’s
decision on the grounds that the tender process adopted was flawed. Justice
Mactavish provided a comprehensive review of the relevant authorities. Her key
finding was as follows, as para. 55:
In my view, such a souvenir shop is a purely commercial
enterprise, one which is incidental to the HPA's main responsibility for
managing port activities relating to shipping, navigation, transportation of
goods and passengers and the storage of goods. As such, I find that the HPA was
not acting as a "federal board, commission or other tribunal" when it
made the decision under review in this case.
[11]
For its part, the GSA attempts to analogize the situation
in the case at bar to the case of Halterm Ltd v Halifax Port Authority
(2000), 184 FTR 16 (TD) (Halterm), where the Court found that the
Halifax Port Authority was acting as a federal tribunal in negotiating for the
lease of a container port terminal. However, as noted by the SJPA, Justice
Mactavish specifically rejected the reasoning in Halterm at
para. 61 of DRL Vacations, where she concluded that “to the extent
that Halterm is not distinguishable from the present case, I must
respectfully decline to follow it.” Even if Justice Mactavish had not rejected
the Court’s findings in Halterm, I find that a restaurant (as in
this case) and a souvenir shop (as in DRL Vacations) are of a different
nature than the rental of a container port terminal, which is more intimately
connected to a port authority’s core functions, as described in the Canada
Marine Act, S.C. 1998, c. 10.
[12]
Paragraph 28(2)(a) of the Canada Marine Act
provides that the power of a port authority to operate a port is limited to the
power to engage in “port activities related to shipping, navigation,
transportation of passengers and goods, handling of goods and storage of
goods.” These are the core powers and functions of a port authority such as the
SJPA. The leasing of land unrelated to shipping, navigation, transportation,
and handling and storage are not public powers, but rather constitute part of
the private powers exercisable by a private corporation. These private powers
are incidental to the SJPA’s core public functions.
[13]
The GSA places great emphasis on Article 8.3 of the
SJPA’s Letters Patent, which requires the SJPA not to lease property for less
than fair market value. However, this fair market value requirement is somewhat
of a red herring given that the lease of the subject property is not a public
power as contemplated by the Canada Marine Act. Article 8.3 of the
Letters Patent is not helpful in determining whether the SJPA is exercising a
public power and it does not change the nature, character, or source of the
power exercised by the SJPA.
[14]
In my view, all of the above determinations are supported
by Justice Mactavish’s findings at paras. 55‑62 of DRL Vacations,
which I read as confirming the SJPA’s position. Justice Mactavish’s
comments warrant reproduction here. She wrote that:
[55] In my view, such a souvenir shop is a purely
commercial enterprise, one which is incidental to the HPA's main responsibility
for managing port activities relating to shipping, navigation, transportation
of goods and passengers and the storage of goods. As such, I find that the HPA
was not acting as a "federal board, commission or other tribunal"
when it made the decision under review in this case.
[56] As a consequence, I am satisfied that the
Court does not have jurisdiction to deal with this application for judicial
review.
[57] In coming to this conclusion [that the Halifax
Port Authority was not acting as a federal tribunal], I am also influenced by
the fact that in enacting the Canada Marine Act and in creating the HPA,
Parliament clearly intended to ensure that the Port of Halifax is run in a
commercially viable fashion. Entitling parties to judicially review every
decision made in relation to federally-owned Port property, however incidental
that decision may be to the operation of the Port itself would, in my view, be
the sort of absurd and very inconvenient result contemplated by Justice Thurlow
in Wilcox, and, moreover, would be antithetical to the achievement of
Parliament's intent in creating the HPA.
[58] The fact that the space in question is on federal
land is not determinative of the issue, in my view. A number of the cases
referred to above dealt with decisions relating to the expenditure or management
of public property - that is tax dollars. These monies are monies to which
ordinary private companies would not have access. Nevertheless, in cases such
as Wilcox, Cairns and Toronto Independent Dance Enterprises, the
Courts have found that the institutions in question were not acting as federal
boards, commissions or other tribunals in making the decisions under review.
[59] In Halterm, the Court was dealing with the
lease of real property for a container port terminal, whereas in this case,
what is in issue is the licencing of space to be used for a souvenir shop.
[60] Halterm is, therefore, arguably
distinguishable from the present situation in that the transaction in question
in that case was much more directly related to the business of the HPA as a
port. In my view, the provision of a souvenir shop for the passengers and crew
of cruise ships is considerably more incidental to the business of the Port of Halifax.
[61] However, for the reasons given, to the extent
that Halterm is not distinguishable from the present case, I must
respectfully decline to follow it.
[62] Before closing, I should note that my decision
should not be interpreted to mean that the HPA could never be considered to be
a "federal board, commission or other tribunal" as contemplated by
the Federal Courts Act. It is clear that the question of whether an
institution is acting as a "federal board, commission or other
tribunal" in a given set of circumstances is one that has to be resolved
on a case-by-case basis, having regard to both the status of the organization
in question and the nature of the power being exercised in the case itself.
[Emphasis added.]
[15]
There are certain differences between the facts of DRL
Vacations and the case at hand. First, in DRL Vacations some
tendering process was undertaken. Second, in DRL Vacations the property
at issue was to be used as a souvenir shop, not a restaurant. Third, as urged
by the GSA at the hearing, the subject property here is the last remaining
vacant lot on the waterfront and the construction cost will be substantial.
However, none of these differences is sufficient to distinguish DRL
Vacations from the case at hand with respect to the main question here:
whether a port authority, in leasing a property for purposes unrelated to
navigation, shipping, or other maritime activity, is acting as a “federal
board, commission or other tribunal.” DRL Vacations provides an
unequivocal answer to this question, and the decision is accordingly, mutatis
mutandis, sufficient authority to allow the SJPA’s motion to strike. As in LJP
Sales, supra, no further development of the factual record is
required to answer the question of this Court’s jurisdiction.
[16]
I would note that DRL Vacations was cited with
strong approval in Devil's Gap Cottagers (1982) Ltd v Rat Portage Band No. 38B, 2008 FC 812, at para. 31.
[17]
In Anisman v Canada (Border Services Agency), 2010 FCA 52 (Anisman),
the Federal Court of Appeal indicated, at para. 29, that:
… a two-step enquiry must be made in order to determine
whether a body or person is a "federal board, commission or other
tribunal". First, it must be determined what jurisdiction or power the
body or person seeks to exercise. Second, it must be determined what is the
source or the origin of the jurisdiction or power which the body or person
seeks to exercise.
Anisman does not change the holding in DRL
Vacations insofar as it relates to the SJPA here. Justice Mactavish clearly
found that the souvenir shop was a commercial enterprise and that the lease was
incidental to the Halifax Port Authority’s main responsibility of managing port
activities relating to shipping. DRL Vacations, at para. 12, as
well as Justice Hughes’ decision in Air Canada v Toronto Port Authority, 2010 FC 774, at paras. 54‑56,
both make it clear private powers exercisable by an ordinary corporation
created under a federal statute which are merely incidents of its legal
personality, general powers of management, or powers relating to ordinary
commercial activity are not reviewable in the Federal Court. Applying the
two-step inquiry from Anisman, the power the SJPA is exercising is the
power to lease a property for use as a restaurant, the type of private power
described in DRL Vacations and Air Canada. Moving to the second
step of the Anisman inquiry, the source of this power is the SJPA’s
existence as a natural person and its concomitant general powers of management.
The SJPA does not derive this power from a federal statute or order, and
accordingly its exercise is not subject to judicial review.
[18]
In making the decision sought to be reviewed, the SJPA was
not acting as a federal board, commission or other tribunal. Therefore, this
Court does not have jurisdiction over the matter and the SJPA’s motion to
strike could be granted on this ground alone.
Standing
[19]
Even if I am mistaken that the SJPA was not acting as
a federal tribunal in leasing the subject property, I find that this
motion to strike must be allowed on the alternative ground that the GSA lacks
standing because it is not directly affected by the impugned decision. Section
18.1(1) of the Federal Courts Act, supra, limits standing
to bring a judicial review application to “the Attorney General of Canada or …
anyone directly affected by the matter in respect of which relief is sought.”
[20]
My comments above regarding the exceptional nature of a
motion to strike an application for judicial review apply equally here;
however, I would note that in Canwest Mediaworks v Canada
(Minister of Health), 2007 FC 752, aff’d 2008 FCA 207, Justice
Snider held, at para. 10, that a lack of standing to bring the application
is one of the exceptions to the general rule against dismissing a judicial
review application on a preliminary motion.
[21]
The question of an association’s standing to bring an
application for judicial review on behalf of its members was effectively
resolved in Independent Contractors and Business Assn v Canada
(Minister of Labour), [1998] FCJ No 352 (Independent Contractors),
where the Federal Court of Appeal held, at para. 31, that:
It is true that from the outset the Association has sought
to have the decision reviewed in its own right. Its interests in doing so,
however, are obviously that of the members it serves including the Contractors.
To borrow the words of Marceau J.A. in Canadian Transit Co. v. Canada (Public
Service Staff Relations Board), [1989] 3 F.C. 611 (C.A.), at
page 614, the Association's interest in the litigation is "merely
indirect or contingent". …
The same can be said here. It is the members of the GSA, and not the GSA
itself, who will be directly affected by the leasing of the subject property.
Applying the Independent Contractors case to the case at hand, the GSA
is not a proper vehicle through which to bring this application. I am
further supported in this conclusion by Justice Snider’s finding at
para. 13 of Canwest, supra, that:
It is generally accepted in the jurisprudence that, for an
applicant to be considered "directly affected", the matter at issue
must be one which adversely affects its legal rights, impose legal obligations
on it, or prejudicially affect it directly … [references omitted]
Here, the GSA is not directly affected. It is, at best, indirectly
affected by the hypothetical impact of the decision to lease the property on
some of its members.
[22]
GSA has also sought public interest standing. Given that
any claim of public interest standing would essentially involve the same
interest upon which it sought direct standing, that is, its commercial interest
and concerns regarding competition, the comments of the Federal Court of Appeal
in dismissing an appeal from Justice Snider’s decision in Canwest, at
para. 15, are directly on point:
In this case, the Motions Judge concluded that CanWest was
not "directly affected" because the harm that it alleged that the
respondents' failure to enforce the law has caused to its commercial interests
was too speculative and indirect. CanWest surely cannot rely on the same
interest that did not qualify it for "private interest standing" to
establish that it has a "genuine interest" for the purpose of public
interest standing.
[Emphasis added]
[23]
Moreover, I agree with the SJPA that the GSA has failed to
demonstrate the “genuine or direct interest in the outcome of the litigation”
required for public interest standing, as per League for Human Rights of
B'Nai Brith Canada v Canada, 2010 FCA 307, at para. 59,
citing Canadian Council of Churches v Canada (Minister of Employment and Immigration),
[1992] 1 SCR 236. Here, the Court is lead to understand that not all
of the 23 members of the GSA have an interest in the outcome of the
litigation given that only a handful of the members are in the food service
business, with the remainder operating bars. The subject property is not being
leased for the purpose of operating a bar.
[24]
I would also note, as stressed by the SJPA, that
although the GSA suggests that no other party directly affected by the SJPA’s
decision to lease land will challenge the decision, the GSA has failed to
identify any other party that might be directly affected by the decision.
Furthermore, this submission that no other party directly affected will
challenge the decision is at odds with the GSA’s own submission that granting
the GSA standing would avoid a multiplicity of proceedings.
[25]
Based on the above, I find that the GSA’s lack of
standing is an alternative ground for allowing the SJPA’s motion to strike this
application.
[26]
Given my findings with respect jurisdiction and standing,
it is unnecessary for me to deal with the SJPA’s argument that this application
is time barred.
[27]
For the reasons noted above, the SJPA’s motion to strike
this application will be allowed, the whole with costs in accordance with the
mid-column of Tariff B.
ORDER
The SJPA’s motion to strike is allowed, the whole with
costs in accordance with the mid-column of Tariff B.
“Richard Morneau”
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