Date: 20080304
Docket: T-2072-07
Citation: 2008
FC 286
Ottawa, Ontario, March 4, 2008
PRESENT: The Honourable Mr. Justice Martineau
BETWEEN:
SANOFI
PASTEUR LIMITED
Applicant
and
ATTORNEY
GENERAL OF CANADA
Respondent
REASONS FOR ORDER AND ORDER
[1]
The Patented
Medicine Prices Review Board (the Board) monitors and reviews the prices of
patented medicines sold in Canada to ensure that those prices
are not excessive. Sections 79, 83, 86, 91 and 96 of the Patent Act,
R.S.C. 1985, c. P-4, as amended (the Act), govern, inter alia, such
proceedings and the orders that the Board can make.
[2]
If, after
a hearing, the Board finds that a patented medicine has been sold at an
excessive price, it may require the patentee to offset excessive revenues by
reducing the price of that medicine, or some other patented medicine sold in Canada, below the “maximum
non-excessive
price” or, in certain circumstances, by directing that a
payment be made to Her Majesty. In addition, if the Board finds that the
patentee has engaged in a “policy of excessive pricing”, it may direct the
patentee to do one or more of the things listed above so as to offset up to
twice the amount of the excessive revenues earned.
[3]
The applicant,
sanofi pasteur limited, questions today the legality of an interlocutory
decision dated November 26, 2007, which dismissed, prior to the commencement of
such a hearing, the applicant’s motion for an order that Blakes, Cassels &
Graydon LLP (Blakes) be removed as counsel to the Board (the Blakes Motion)
with respect to a proceeding involving the medicines Quadracel and Pentacel
(the Proceeding).
[4]
The
applicant seeks, inter alia, an order quashing or setting aside the
Board’s decision on the Blakes Motion, as well as the Board’s decisions on two
additional motions heard at the same time as the Blakes Motion (defined below
as the Particulars Motion and the Production Motion). More specifically, the
applicant submits that a reasonably informed person would find an appearance of
unfairness, bias and lack of neutrality on the part of the Board both in the
process leading to the Board’s impugned decisions on the three motions and in
the continuous involvement in the Proceeding of Blakes as Board Counsel. This
application has been heard on an expedited basis after parties agreed on
November 29, 2007, to suspend the hearing before the Board which commenced on
November 28, 2007.
[5]
Given that
this judicial review involves issues of procedural fairness and bias, I am of
the opinion that the appropriate standard of review of the Board’s Decision is
correctness: Hoechst Marion Roussel Canada Inc. v. Canada (Attorney General), (2005) 48 C.P.R. (4th) 1 at
para. 61; Leo Pharma Inc. v. Canada (Attorney General), 2007 FC 306, [2007] F.C.J.
No. 425 (QL) at para. 17.
[6]
The
parties agree on the salient facts giving rise to this application for judicial
review.
[7]
The
applicant is a pharmaceutical company that manufactures and sells medicines in Canada, including Quadracel and
Pentacel (the Medicines) which are administered to immunize infants from
diphtheria, tetanus, pertussis, haemophilus influenzae type b and
poliomyelitis. In Canada, these vaccines are sold exclusively
to the Crown. More particularly, the federal department of Public Works and
Government Services Canada (PWGSC) coordinates the
federal/provincial/territorial (F/P/T) Group Purchasing Program for Drugs and
Vaccines in Canada for all provinces, except Quebec where purchases are made directly
by the Government of Quebec.
[8]
Gordon
Cameron and Nancy Brooks are both litigation partners in the Ottawa office of Blakes. Blakes is a
law firm of over 500 lawyers with offices not only in Canada but also in other countries. Blakes has
acted, principally through Gordon Cameron, as Board Counsel to the Board since
1994. Nancy Brooks also acts as Board Counsel. In that capacity, they provide
panels of the Board with legal advice and assistance during the course of
proceedings conducted by the Board.
[9]
In
proceedings before the Board, the actual parties are the company or companies
that are the subject of the proceedings and Board Staff, also represented by an
external counsel. In the Proceeding, the Board Staff is represented by Guy
Pratte of Borden Ladner Gervais, LLP (Borden). The Board’s current panel in the
Proceeding is composed of Dr. Brien Benoît, who is chair of the Board (the
Chairperson), Anne La Forest, who is a lawyer and professor of law, and Tony
Boardman, who is a professor of economics (collectively, the Panel).
[10]
Glaxo
Smith Kline (GSK) also sells vaccines in Canada. Indeed, it is the sole competitor of
the applicant in Canada for the vaccines at issue in
the Proceeding. From time to time, Blakes acts for GSK in corporate
transactional matters. It has a retainer. It provides legal services associated
with GSK’s purchase and sale of various corporate interests. Blakes does not
act for GSK in any regulatory proceedings including those before the Board. In
the Proceeding, Torys LLP (Torys) represented GSK on its unsuccessful
application for intervener status while Blakes has continued to act as Board
Counsel throughout the Proceeding, as will be explained below.
[11]
On March
15, 2007, Board Staff issued through Borden a Statement of Allegations claiming
the applicant charged excessive prices for the Medicines from 2002-2006 and
engaged in a policy of excessive pricing. On March 27, 2007, the Board issued through
Sylvie Dupont, Secretary of the Board, a Notice of Hearing regarding these
allegations. Blakes was retained as Board Counsel in the Proceeding. The applicant
delivered its Response and Amended Response to the allegations on April 18,
2007 and October 15, 2007 respectively. Board Staff’s Reply was delivered on
May 9, 2007. In the meantime, GSK filed a Notice of Motion on April 25, 2007, seeking
leave to intervene in the Proceeding. GSK advocated the position that if the
applicant is found to have charged excessive prices, it should be precluded
from offsetting excessive revenues through lower prices since such a remedy
would adversely affect GSK. As will be subsequently explained, GSK’s motion to
intervene was denied by the Board on July 26, 2007.
[12]
I pause
here to mention that the Notice of Hearing, dated March 27, 2007, contains an
invitation to any person who claims an interest in the subject matter of the
Proceeding to make a motion for leave to intervene, on or before April 25,
2007. While there is no affidavit from Board Counsel, I am ready to accept that
Blakes played no role in GSK’s motion to intervene.
[13]
This
leaves unanswered the question of when GSK was made aware that Blakes was also acting
as Board Counsel in the Proceeding. I note that GSK’s motion to intervene dated
April 25, 2007 is addressed to Ogilvy Renault LLP (Ogilvy) as counsel for sanofi
pasteur, to Borden as counsel for the Board and to Sylvie Dupont as Secretary
of the Board. GSK’s reply representations dated June 12, 2007 are no longer
addressed to Ogilvy but to Davies Ward Phillips & Vineberg LLP (Davies) as
counsel for sanofi pasteur. Again, GSK’s reply is addressed to Borden as
counsel for the Board and to Sylvie Dupont as Secretary of the Board. There is
no reference whatsoever in the documents prepared by Torys on behalf of GSK to
Blakes as Board Counsel.
[14]
Board
Staff did not take a position with respect to GSK’s motion for leave to
intervene. However, as Board Counsel, Blakes would likely be involved at some
point in the drafting and/or the review of decisions made by the Board,
including the decision relating to GSK’s motion for leave to intervene. At page
3 of the Board’s decision of July 26, 2007 which dismissed GSK’s motion, signed
on behalf of the Board by its Secretary, I note that Gordon Cameron appears as
Board Counsel. That being said, I have no way of ascertaining whether or not
Gordon Cameron was present during and/or participated in any way in the Board’s
deliberations.
[15]
There are
multiple references in the Board’s decision related to various legal provisions
and concepts flowing from the Act and the caselaw. The Board specifically
mentions that it “is aware of the impact of each of its decisions, on persons
other than those appearing before it in any given proceeding, and takes the
interests of those persons into account whether or not they are independently represented
in a proceeding” (para. 14) (my underlining). It also notes that “[t]he
panel was able to reach its decision on GSK’s application without reliance on
the submissions of sanofi pasteur concerning the motives of GSK in seeking
intervener status in this proceeding” (para. 21). These passages, more
particularly the first one, clearly suggest that if the Board finds that the
allegations of excessive pricing are substantiated, it will consider at that
time the adverse impact a certain remedy may have on competitors of the
applicant (such as GSK). Thus, the position taken by the applicant that the continuous
participation of Blakes as Board Counsel in the Proceeding raises a reasonable
apprehension of bias and deprives the applicant of a fair hearing.
[16]
Before the
motion made by GSK was decided by the Board, the applicant, having learned that
Blakes is counsel to GSK on corporate matters, raised concerns on May 23, 2007 with
Board Counsel arguing, inter alia, that Blakes’ current relationship
with GSK and the Board might give rise to a reasonable apprehension of bias and
this, notwithstanding the fact that Blakes had not yet obtained the requisite
waivers from its respective clients. Between June and October of that year,
the applicant made repeated requests to Blakes to remove itself as Board
Counsel.
[17]
On June
15, 2007, Blakes provided the applicant with a letter from the Chairperson
advising that the Board had no difficulty with Blakes being Board Counsel in
the Proceeding. Thereafter, Blakes informed the applicant that GSK had not
provided a waiver. At the same time, Blakes advised that if the applicant was
uncomfortable with Blakes continuing as Board Counsel, Blakes would recommend
that it be replaced by new counsel.
[18]
In the
meantime, as required by the schedule for the Proceeding, during August and
September 2007, Board Staff and the applicant exchanged the documents, will
says of lay witnesses and expert evidence that they intended to rely on at the
hearing. The schedule provided that the pre-hearing conference would take place
on October 31, 2007 and the first three days of the hearing would be held on
November 28, 29 and 30, 2007.
[19]
Ultimately,
in September 2007, two months before the commencement of the hearing, the
applicant asked Blakes to step down as Board Counsel in the Proceeding. Blakes
confirmed that it would recommend to the Board that it be replaced. Indeed, on
October 10, 2007, Blakes advised the applicant that it had recommended to the
Board that it step down as Board Counsel in the Proceeding, but that the Board
had refused to accept this recommendation.
[20]
In
response to this news, the applicant wrote to Blakes on October 18, 2007,
outlining the history of the issue, setting out the applicant’s concerns and
reasons for its request that Blakes step down as Board Counsel and requesting
that a copy of the letter be provided to the Board. By letter dated October 26,
2007 signed by its Secretary, the Board responded directly to the applicant.
The Board expressed its disagreement with the Applicant’s concerns, suggested
that the applicant reconsider its position, and stressed its considerable
reliance on Blakes’ services, which were described as “invaluable”. The Board
advised that if the applicant wished to pursue the matter, it should file a
motion to be heard at the pre-hearing conference scheduled for October 31,
2007.
[21]
The Board also
stressed that Blakes had undertaken the role as Board Counsel for over a decade
and during that time had acted with independence, irrespective of any
relationship it may have had with pharmaceutical companies. The Board also assured
the applicant that “if the Panel makes a finding of excessive pricing, the
Panel will not seek advice from Mr. Cameron on how the excess revenues should
be offset, or any related remedies issue”.
[22]
On October
30, 2007, the applicant filed a motion for an order that Blakes be removed as
Board Counsel with respect to the Proceeding. The Board convened a pre-hearing
conference on October 31, 2007 to hear the Blakes Motion. At that time, the
Board also heard the applicant’s motion for particulars (the Particulars Motion)
and Board staff’s motion for production (the Production Motion).
[23]
At the
outset of the pre-hearing conference, the Board Chairperson advised that the Board
wished to hear the Blakes Motion last, so that the Board could have the
assistance of Blakes on the legal issues associated with the Particulars and
Production Motions.
[24]
In
response, applicant’s counsel confirmed her position that the involvement of
Blakes in the Proceeding raises an appearance of unfairness. Accordingly, in
her submission, the appropriate way to proceed was to either deal first with
the Blakes Motion, or to proceed in the order the Board preferred on the
understanding that it was without prejudice to the applicant’s position and
that the applicant may rely on Blakes’ involvement in the Particulars and
Production Motions in support of its argument of an appearance of unfairness.
The Board proceeded to deal with the motions in the order the Board Chairperson
had proposed.
[25]
The
Particulars Motion was heard first. In that motion, the applicant sought an order
requiring Board Staff to provide particulars of the allegation that the
applicant engaged in a policy of excessive pricing and, in the alternative, an
order striking out the allegation. The Board dismissed the Particulars Motion.
Blakes was present at the hearing of the Particulars Motion and assisted the
Board with respect to it.
[26]
The
Production Motion was heard next. In this motion, Board Staff sought an order
requiring the applicant to disclose the 2007 contracts negotiated and entered
into by the applicant with PWGSC and the Government of Quebec. In its response
to the Production Motion, the applicant agreed to provide the 2007 contracts to
Board Staff on certain terms, including confidentiality terms. In its reply,
Board Staff sought new relief and asked the Board to make a finding at the
pre-hearing conference that the 2007 contracts were relevant and admissible for
the purposes of the hearing. The Board granted the Production Motion and
ordered that the 2007 contracts be admitted into evidence at the hearing.
Blakes was present at the hearing of the Production Motion, and assisted the
Board with respect to it.
[27]
The third
and final motion heard by the Board at the pre-hearing conference was the
Blakes Motion. At this point, the Chairperson made this pronouncement:
Because of the nature of the third motion
that is going to be heard today, we asked counsel from Blakes, Gordon Cameron
and Nancy Brooks, to recuse themselves, which they have done, so that we could
hear Ms. Forbes’ argument in an unobstructed environment, let’s say.
We have all of the exchange of
correspondence, beginning in the spring, up until just recently, so, Ms.
Forbes, go ahead.
(Transcript of pre-hearing conference,
page 289 of the applicant’s record)
[28]
The
Chairperson omits to mention at this point that, in addition to the material
provided by the applicant, a memorandum dated October 30, 2007, from Gordon
Cameron and Nancy Brooks, of four pages, had been prepared. The latter
providing Blakes’ views with respect to the bias issues raised by the applicant
and legal reasoning and analysis which would permit the Board to distinguish
cases cited by the applicant and to conclude, on the facts of this case, that a
well-informed person, having thought the matter through, would not conclude
that there is an apprehension of bias (Memorandum of October 30, 2007,
applicant’s record, 486-489).
[29]
Had the
memorandum of Blakes of October 30, 2007 not been referred to by Professor
Emeritus David Mullan in the opinion he prepared (described below), the
applicant would have been kept ignorant of the fact that Blakes was advising
the Board on the very issue, bias, upon which the Panel had “asked counsel from
Blakes, Gordon Cameron and Nancy Brooks, to recuse themselves […] so that [the
Panel] could hear [the applicant’s counsel’s] argument in an unobstructed
environment.” At this point, one may reasonably asks itself why a document
which was not part of the Board’s public record on October 31, 2007 was sent in
the first place to Professor Mullan, unless the Panel intended to rely on it in
making its decision dismissing the Blakes Motion.
[30]
Without
any advance notice to the applicant, before rendering its decision regarding
the motion for removal, the Board sought an opinion from Professor Mullan.
Professor Mullan in his opinion dated November 18, 2007 concluded that the
involvement of Blakes as Board Counsel did not give rise to a reasonable
apprehension of bias as there was no connection between the matters on which
Blakes had represented GSK in the past and the Proceedings. Professor Mullan
found that this is not a case where Blakes had confidential information
pertaining to GSK that could impact on the Proceeding. Similarly, the
Proceeding was not a matter in which GSK had a direct interest.
[31]
On November
20, 2007, the applicant was first advised of Professor Mullan’s involvement and
given an opportunity to respond to his opinion. Upon reviewing Professor
Mullan’s opinion, the applicant became aware that Professor Mullan had access
to material that it did not possess. The applicant sought and received copies
of this additional material, which included the memorandum from Blakes dated
October 30, 2007, the day before the pre-hearing conference, with respect to the
merits of the applicant’s motion for its removal. The applicant provided further
submissions to the Board in response to Professor Mullan’s opinion.
[32]
In its Decision
dated November 26, 2007, the Board dismissed the applicant’s motion for the removal
of Blakes as Board Counsel. The Board stated that it had “considered the
written and oral submissions of the [applicant] on October 20, 2007, the
written report of Professor Emeritus David Mullan which was disclosed to the [applicant]
along with all underlying documents and correspondence, and the response of the
[applicant] to that material dated November 23, 2007 […].” The Board summarized
the applicant’s concerns that the continued involvement of Blakes as Board
Counsel results in an appearance of bias, lack of neutrality and unfairness as
Blakes currently represents GSK, the applicant’s competitor with respect to the
Medicines and an attempted intervener in this matter. The Board noted that GSK
in its intervener motion materials advocated for a remedy in the Proceeding that
is adverse to the applicant’s interest. The Board also acknowledged that the
duty to act fairly includes the right to an impartial and independent decision
and that the process should not give rise to a reasonable apprehension that the
Board or Board Counsel is biased.
[33]
Nevertheless,
in dismissing the applicant’s motion, the Board stated as follows:
The [Board] is entitled to have counsel
assist it in the course of its hearings provided that the role of counsel is
confined within limits that are consistent with the principles of fairness and
natural justice. Blakes was not retained by GSK in its application to
intervene and does not represent GSK in any regulatory proceedings and is
restricted to corporate transactional matters. As such, Blakes does not owe a
duty of loyalty to GSK in these proceedings. Blakes thus has no conflicting
duty of loyalty to GSK and to the Board. Furthermore the [Board] is obliged to
make its own independent decision in matters coming before it. Given this,
there is no reasonable apprehension of bias, nor a lack of neutrality, not is
there any unfairness.
[34]
The
applicant filed a Notice of Application on November 28, 2007 seeking to have
the Decision judicially reviewed. After the filing of a motion to obtain an
order to stay the proceeding, the parties agreed on November 29, 2007 the Proceeding
would be adjourned pending the determination of this judicial review, on the
basis that an expedited hearing date could be obtained with the assistance of
the Court. The hearing was scheduled for February 4, 2008.
[35]
In the
meantime, on December 10, 2007, the applicant was provided with a copy of a
letter from GSK to Blakes, dated November 28, 2007, in which GSK advised that
it had no objection to Blakes acting as Board Counsel in the Proceeding.
[36]
The
applicant does not contest the right of the Board to retain counsel. Instead,
the applicant argues that a reasonably informed person would find an appearance
of unfairness, bias and lack of neutrality in the Proceeding as a result of the
fact that Board Counsel also owes a duty of loyalty to a party that has urged
the Board to accept a position that is adverse to the applicant. The applicant
argues the following factors heighten the reasonable apprehension of bias
arising from Blakes’ involvement in the Proceeding: Blakes’ current client will
be harmed if a certain remedy is imposed by the Board; Blakes’ role in the
Proceeding is significant; Blakes participated in the decision-making process
of the Blakes Motion (and did so in a manner not disclosed to the applicant until
after the motion was argued); and, the Board, in stating that it wished to
continue to use Blakes as Board Counsel, placed itself in an adversarial
position to the applicant. The Board erroneously relied on an analysis normally
undertaken to determine whether a lawyer is in a conflict of interest which is
not applicable in the current situation: a reasonable apprehension of bias or
unfairness can exist in the absence of a finding of a legal conflict of
interest. Further, the fact that the Board has an obligation to independently
reach a decision is not a sufficient answer the concerns raised by the
applicant. If it were, an allegation of bias would never succeed. Finally,
the applicant submits that since the Board erred with respect to the Decision, the
Board’s other two decisions with respect to the Particulars Motion and the Production
Motion should also be set aside.
[37]
In Baker
v. Canada (Minister of Citizenship and Immigration), [1999] 2 S.C.R. 817
(Baker), the Supreme Court of Canada stated that procedural fairness requires
that decisions be made by an impartial decision-maker and free from any
reasonable apprehension of bias. The parties do not contest the fact that the
Board owes a duty of fairness to the applicant and that this duty requires that
any decision in the Proceedings be made by an impartial decision maker and free
from a reasonable apprehension of bias. Likewise, in Baker, above, the
Supreme Court of Canada recognized that the duty of procedural fairness is
flexible and depends upon an appreciation of the context of the particular
statute and the rights affected. Again, the parties readily acknowledge this
fact. The parties are in further agreement that the test to determine a
reasonable apprehension of bias was set out by de Grandpré J. writing in
dissent, in Committee for Justice and Liberty v. Canada (National Energy Board), [1978] 1 S.C.R. 369 at page
394, as follows:
... As already seen by the quotation
above, the apprehension of bias must be a reasonable one held by reasonable and
right minded persons, applying themselves to the question and obtaining thereon
the required information ... [t]hat test is “what would an informed person,
viewing the matter realistically and practically -- and having thought the
matter through -- conclude. Would he think that it is more likely than not that
[the decision maker], whether consciously or unconsciously, would not decide
fairly.”
Finally, the parties agree that an administrative tribunal
such as the Board may retain counsel provided that Board counsel’s presence
does not give rise to a reasonable apprehension of bias or other procedural
fairness and natural justice concerns.
[38]
As the
parties are in agreement regarding the state of the law with respect to
reasonable apprehension of bias, the issue on the merits would be whether, based
on the facts as they arise in this particular case, a reasonably informed
person would find an appearance of unfairness, bias and lack of neutrality in
the Proceeding as a result of the fact that Board Counsel also represents GSK,
the applicant’s competitor, in corporate matters. But there is a preliminary
issue that must first be addressed.
[39]
Following the
hearing on the merits, the Court noted that the application for judicial review
of the interlocutory decisions rendered with respect to the Blakes Motion, as
well as the other two procedural decision of the Board (regarding the Particulars
Motion and the Production Motion), may have been premature. Indeed, this is the
very position advocated by the Attorney General of Canada in another case
decided today by the Court where the applicant is seeking to judicially review
an interlocutory decision rendered by a delegate of the Superintendent of
Bankruptcy, which rejected the applicant’s motion for the delegate’s recusal: Sztern
v. Deslongchamps et al, 2008 FC 285 (Sztern). By directions of the
Court, the parties filed supplemental written representations addressing the
issue of prematurity in both cases.
[40]
Both the
applicant and the respondent in this case (and in Sztern) agree that in
accordance with Szczecka v. Canada (Minister of Employment and Immigration) (1993), 116 D.L.R. (4th) 333,
[1993] F.C.J. No. 934 (QL) (Szczecka), a judicial review application of
an interlocutory judgment should not be entertained absent special
circumstances.
[41]
The
applicant notes that special (or exceptional) circumstances warranting
immediate judicial review of a tribunal's interlocutory decision have been
found to exist where the jurisdiction of the tribunal was in issue. (Zündel v.
Canada (Human Rights Commission) (2000), 256 N.R. 125, [2000]
F.C.J. No. 678 (QL)(Zündel); Pfeiffer v. Canada (Superintendent of
Bankruptcy) (T.D.), [1996] 3 F.C. 584; and Canada (Minister of Public
Safety and Emergency Preparedness) v. Chrichlow, 2007 FC 122, [2007] F.C.J.
No. 210 (QL)). Indeed, in Zündel, the Federal Court of Appeal indicated
that matters like bias may well go to the very jurisdiction of a tribunal and
therefore constitute special circumstances that warrant immediate judicial
review of a tribunal's interlocutory decision. It would be unfair to refuse to
intervene when the underlying decision denies a party the benefit of a fair
hearing, discloses grounds for an apprehension of bias, or curtails a party's
substantive rights: Fairmont Hotels Inc. v. Director Corporations Canada,
2007 FC 95, [2007] F.C.J. No. 133 (QL).
[42]
Applying
these principles, the applicant submits that special circumstances exist which
justify judicial review of the Board’s decision on the Blakes Motion at this
juncture. The Blakes Motion is premised on an allegation of a reasonable
apprehension of bias (which was evident from the outset of the pre-hearing
conference) and which, if not remedied, amounts to a potentially fatal flaw
that goes to the very legality of the Board and its jurisdiction. The applicant
argues that part of the rationale for refusing applications for judicial review
of an interlocutory ruling is that it may ultimately be totally unnecessary: a
complaining party may be successful in the end result, making the application
for judicial review of no value. This is not the situation with the Blakes
Motion. Regardless of what decision the Board makes on the merits of the
Proceeding, the fundamental flaw in the fairness will remain.
[43]
Likewise, the
applicant submits that there will be no unnecessary delays, expenses or
fragmentation of cases in this situation as the Proceeding has not progressed
past opening statements and has been stayed pending the determination of this
judicial review. The applicant submits that it could not have proceeded more
diligently and that any inconvenience that may be associated with this judicial
review application is outweighed by the value of a prompt review of the decision
on the Blakes Motion. In short, if a fair hearing is denied because of a
reasonable apprehension of bias, this fatal flaw cannot be cured by the Board’s
final decision on the merits.
[44]
Finally, the
applicant submits that Ipsco Inc. v. Sollac, Aciers d'Usinor (1999), 246
N.R. 197, [1999] F.C.J. No. 910 (QL) (Ipsco) is distinguishable from the facts
as they arise in this case. In Ipsco, the Federal Court of Appeal
refused to judicially review a decision by the Canadian International Trade
Tribunal (CITT) disqualifying the applicant's counsel from participating in the
hearing as his appearance was found to create a reasonable apprehension of
bias. The Federal Court of Appeal concluded that the matter was interlocutory
in nature (since its determination does not go to the merits of the issue in
dispute before the CITT), and, therefore, there were no special circumstances
warranting the Court’s intervention at that juncture. According to the
applicant, in Ipsco, the tribunal had removed the fatal flaw from the
proceeding and therefore rendered unnecessary any need for the Court to intervene
at that stage.
[45]
Turning to
the issue as to whether special circumstances exist that justify the judicial
review of the Board’s other interlocutory decisions on the Particulars Motion
and the Production Motion, the applicant is of the view that these two motions
stand or fall depending on whether this Court find a reasonable apprehension of
bias. The setting aside of these other two decisions necessarily flows from a
successful judicial review application concerning the Blakes Motion because of
the law of bias.
[46]
Interestingly,
the respondent (represented by the Attorney General of Canada), for the most
part, agrees with the submissions of the Applicant. Having conducted a cursory
examination of the relevant jurisprudence, the respondent states that for
matters concerning the very jurisdiction of the Board (including allegations of
bias), the Court can conduct an immediate judicial review of the interlocutory
decision at issue. Beyond the cases already cited by the applicant, the respondent
relies on Roulette v. Sandy Bay Ojibway First Nation, 2006 FC 98, [2006]
F.C.J. No. 377 (QL) (Roulette). In Roulette, this Court considered whether
an application for judicial review of an interlocutory decision taken by an
adjudicator acting pursuant to Part III of the Canada Labour Code, R.S.C.
1985, c. L-2 was premature. Counsel for the First Nation Band attempted to
prevent the law firm in question from acting as counsel for the applicant (in
respect of a proceeding involving complaints brought by the applicant against
the Band for unjust dismissal) on the basis of a conflict of interest. The firm
had acted as general counsel for the Band for seven years prior to the
termination of its general retainer by the Band. The adjudicator dismissed the
objection. In obiter, Justice Strayer stated that if it were necessary
for him to decide whether there were exceptional circumstances justifying
judicial review of the interlocutory decision in question, he “would be
inclined to say there are special circumstances in this case.”
[47]
In spite
of the fact that the respondent agrees with the applicant’s supplementary
written representations regarding the appropriateness of judicially reviewing
the decision on the Blakes Motion, the respondent is of the view that the two
procedural decisions of the Board dealing with the Particulars Motion and the Production
Motion are matters that “would normally wait for the final decision of the
board before they are subject to review by this court.”
[48]
Despite
the arguments raised by counsel for both parties, I do not find that there are
special circumstances in this case which warrant the immediate judicial review
of the interlocutory decision on the Blakes Motion, nor are there special
circumstances which would allow me to review the interlocutory decisions with
respect to the Particulars and Production Motions. As I stated in Sztern,
above:
The starting point of my analysis, per Szczecka,
is that unless there are special circumstances there should not be an
immediate judicial review of an interlocutory judgement. As I found in MiningWatch
Canada v. Canada (Minister of Fisheries and
Oceans), 2007
FC 955, [2007] F.C.J. No. 1249 (QL) at para. 148: “The rationale for this is
that applications for judicial review of an interlocutory ruling may ultimately
be totally unnecessary: a complaining party may be successful in the end
result, making the applications for judicial review of no value. Also, the
unnecessary delays and expenses associated with such applications can bring the
administration of justice into disrepute.”
[49]
The
parties have failed to convince me that there are such “special circumstances”
in this case. This is not a case of “systemic” bias going to the jurisdiction
of the Board. To the contrary, as I concluded in Sztern, I am of the
view that a determination of bias at the interlocutory stage in the present
case runs the risk of proliferating litigation unduly.
[50]
I note
that the respondent is not ready to concede that this judicial review should be
granted and may appeal at this stage any favourable decision on the bias issue.
On the other hand, there is nothing to prevent the applicant from
re-ascertaining its objections if the panel decides to hear the case and
continues to retain Blakes after an unfavourable decision on the bias issue
raised in this judicial review. In the latter scenario, if the applicant is
appealing an unfavourable decision of the Court on the merits of the bias
issue, the proceedings before the Board may or may not be stayed pending the
appeal. If such appeal is unsuccessful, and a stay is granted in the meantime
by a judge of the Federal Court of Appeal, this means that the hearing before
the Board will have been unduly delayed for a number of months (possibly more
than a year). Moreover, if a stay is not granted and the hearing proceeds
before the Board, the appeal before the Federal Court of Appeal may become moot
in the meantime. As can be seen, a favourable or unfavourable decision of the
Court on the merits of the bias issue raised in this proceeding will
proliferate litigation unduly.
[51]
I am also persuaded
by the reasoning of Justice Evans in Lorenz v. Air Canada, [2000] 1 F.C.
494, [1999] F.C.J. No. 1383 (QL) (Air Canada) who states: “I find no authority
for the proposition that an allegation of bias ipso facto constitutes “exceptional
circumstances” justifying judicial review before the tribunal has rendered its
final decision.” In Air Canada (as in Sztern and this case),
Justice Evans (and this Court) had the benefit of hearing the case in its
entirety before rendering his decision on prematurity. This provides a valuable
context within which to consider the exercise of the Court’s discretion over
the grant of relief.
[52]
In the
case at bar, having weighed factors such as hardship to the applicant, waste of
judicial resources, delay and fragmentation, I am in agreement with Justice
Evans’ conclusion in Air Canada: “A non-frivolous allegation of
bias that falls short of a cast-iron case does not per se constitute
“exceptional circumstances”, even when the hearing before the tribunal is still
some way from completion, and there is no broad right of appeal from the
tribunal. Nor is it to be equated with a constitutional attack on the “very
existence of a tribunal” considered in Pfeiffer v. Canada (Superintendent of
Bankruptcy), above.”
Accordingly, this application for judicial review must be dismissed.
[53]
Given that
I am dealing with sophisticated parties who have the benefit of experienced
counsel, I will not, as I did in Sztern, consider subsidiarily, in obiter,
whether or not a reasonably informed person would find an appearance of bias in
the case at bar. Contrary to Sztern, above, I must also stress that I am
not in a position today to make an “informed decision” on the issues of
conflict of interest and bias which led to the applicant’s request to Blakes
(and followed by a formal motion to the Board), that Blakes be removed as
counsel to the Board in the Proceeding.
[54]
Allegations
of personal bias and/or conflict of interest are very serious matters. The
Court is asked to make a decision that may affect the reputation and/or
livelihood of some of the individuals concerned in the Proceeding including
Board Counsel and the members of the Panel. I note here that there has been no
affidavit from the respondent (a party that admits it has not received any
instructions from the Board) setting out the proper contextual background to
the hiring of Gordon Cameron and Nancy Brooks as Board Counsel; the conditions
of their engagement; their particular role and involvement in the Proceeding (including,
but not limited to, their access to confidential information; their presence
during the Board’s deliberations; and, the extent of their participation in the
decision making process, if any). Nor does this Court have a thorough
understanding of the work Blakes performs for GSK in corporate transactional
matters; the number of past or present files with respect of same; their
conditions of engagement by GSK, financial or otherwise; the importance of this
account; and, all other relevant information which would permit this Court to
make an informed decision on the allegations of reasonable apprehension of bias
based on the perceived or actual independence and/or impartiality (or lack
thereof) of Blakes, as Board Counsel, in the Proceeding. Indeed, there are no
affidavits from Blakes or from GSK on these very important and possibly very
litigious matters.
[55]
I also
stress that the applicant has taken care to craft its attack exclusively on the
three unfavourable interlocutory decisions rendered by the Board following the
pre-hearing conference of October 31, 2007. But Blakes also acted as Board
Counsel in the process which ultimately led to the dismissal on July 26, 2007
of the intervention application made on April 25, 2007 by Torys on behalf of
GSK. Therefore, if this Court were to treat the alleged bias of Board Counsel
as some kind of fatal flaw or jurisdictional impediment (as suggested by the
applicant and the respondent), this would naturally affect the legality of all
interlocutory decisions of the Board, including the decision to dismiss GSK’s
application to intervene in the Proceeding. This would mean the entire process would
have to start afresh, adding costs to all parties as the hearing on the merits
in the Proceeding was about to begin and actually began on November 28, 2007
(but was later delayed by consent pending the present proceeding).
[56]
That being
said, there is no allegation of conflict of interest or of personal bias in the
Proceeding on the part of any of the Panel members, including the Chairman, who
are the individuals designated to hear and decide the case. Indeed, there has
been no specific request by the applicant that the members of the Board recuse
themselves and I see the Blakes Motion, as well as the Particulars Motions and
the Production Motion, purely as matters of procedure within the sole
jurisdiction of the Board. Therefore, I have great trouble in this case to
qualify the bias matter raised by the applicant as “jurisdictional” and I think
both parties have overstated the extent to which the general comments made by
the Federal Court of Appeal in Zündel actually apply to the present fact
situation.
[57]
That being
said, a party against whom an interlocutory order has been made is not under an
obligation to immediately appeal or make a judicial review application in order
to preserve his rights. Indeed, the time period prescribed in subsection
18.1(2) of the Federal Courts Act, R.S.C. 1985, c. F-7, as amended, does
not begin to run until the final decision has been rendered (Zündel,
above). The applicant has done what a litigant is required to do in cases where
issues of natural justice, including bias, pose a legitimate concern to that
litigant. It has made its concerns or objections known to the Board and nothing
prevents the applicant from re-asserting same subsequently in the process.
[58]
I note at
this point that the Board already assured the applicant that “if the Panel
makes a finding of excessive pricing, the Panel will not seek advice from Mr.
Cameron on how the excess revenues should be offset, or any related remedies
issue.” At this point, it is impossible to predict how the case will ultimately
be decided and what, if any, remedies will be ordered by the Board. However, if
the Board finds in favour of the applicant, the issue of bias becomes moot.
Furthermore, it is difficult to decide in advance and without proper contextual
evidence (that should have been collected from the Board by the respondent) whether
the assurances described above would be sufficient or not, to alleviate any
legitimate concerns of reasonable apprehension of bias with respect to Blakes’
participation as Board Counsel.
[59]
For these
reasons, the applicant’s application for judicial review is denied. No costs are
ordered in view of the particular reasons of the Court to dismiss same and
further considering the position taken in this case by the Attorney General of
Canada with respect to the issue of prematurity.
ORDER
THIS COURT ORDERS:
The application for judicial review is dismissed
without costs.
“Luc
Martineau”
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