Docket: T-192-15
T-196-15
Citation:
2015 FC 520
Ottawa, Ontario, April 22, 2015
PRESENT: The
Honourable Mr. Justice Barnes
|
T-192-15
|
|
BETWEEN:
|
|
GOODRICH TRANSPORT LTD. AND
ROYAL TEAM CANADA TRANSPORT LTD.
|
|
Applicants
|
|
and
|
|
VANCOUVER FRASER PORT AUTHORITY
(OPERATING AS PORT METRO VANCOUVER)
|
|
Respondent
|
|
T-196-15
|
|
AND BETWEEN:
|
|
ATL TRUCKING LTD., A-CAN TRANSPORT LTD.,
AMK CARRIER INC., COAST PACIFIC CARRIER INC., FORWARD TRANSPORT
LTD., GPX EXPRESS INC., GREENLIGHT COURIER LTD., GRL FREIGHTWAYS INC., H
RATTAN TRUCKING LTD.,
HUTCHISON CARGO TERMINAL INC.,
INTER CANADIAN TRUCKING LTD.,
JEEVAN CHOHAN TRANSPORT LTD.,
K D TRUCKLINE LTD., NILAM TRUCKING LTD.,
ORCA CANADIAN TRANSPORT LTD.,
PRO LINE TRUCKING CORP., RAJA ROAD RAIL SERVICES LTD., ROADSTAR
TRANSPORT COMPANY LTD.,
SAHIR TRUCKING LTD., SAFEWAY TRUCKING LTD.,
SALH TRUCKING 2001 LTD., SIDHU SERVICES LTD.,
SUPER SONIC TRANSPORT LTD., SUPER STAR TRUCKING LTD., TRASBC
FREIGHT LTD., TRANSBC FREIGHTWAYS (2007) LTD.,
VILLAGER TRANSPORT LTD.
|
|
Applicants
|
|
and
|
|
VANCOUVER FRASER PORT AUTHORITY
|
|
Respondent
|
JUDGMENT AND REASONS
[1]
The Applicants are 28 businesses engaged in the
transportation of shipping containers by truck in and around the Lower Mainland
of British Columbia. Until recently much of this business had involved the
movement of containers to and from four container piers managed by the
Vancouver Fraser Port Authority [otherwise known as Port Metro Vancouver and
hereafter referred to as PMV]. This form of trucking is known in the shipping
industry as drayage.
[2]
As of January 23, 2015 all of the Applicants have
been denied licenses to access PMV facilities. In the result, the Applicants
have lost the part of their business which involves the local transport of
containers to and from PMV facilities. In some cases the resultant loss of
business will undoubtedly be significant and may not be replaceable by other
forms of cargo hauling.
[3]
The Applicants contend that PMV’s processing of
their license applications was unlawful and procedurally unfair. In the result,
they seek to have the license-refusal decisions quashed. They also ask that
their applications for licenses be remitted to the PMV for reconsideration in
accordance with directions from the Court sufficient to cure or correct the
jurisdictional and procedural shortcomings they assert.
I.
Background
[4]
For several years PMV has been plagued by labour
issues connected to the drayage sector. Work stoppages in 1999, 2005 and 2014
have caused significant delays in the movement of containers and led to
millions of dollars in losses to the local and national economies. These work
stoppages by truck drivers were precipitated by poor remuneration, increased
operating costs, undercutting of wages and operational inefficiencies. Initial
efforts to address the labour stability issues proved to be ineffective. In an
effort to resolve the 2014 work stoppage, the Minister of Transport appointed Mr. Vince
Ready to carry out an independent review of the underlying causes of driver dissatisfaction
with a view to recommending appropriate changes.
[5]
Mr. Ready, assisted by Ms. Corinn
Bell, consulted with stakeholders over a period of several months and, in
September 2014, they released a Recommendation Report [the Ready Report]. The
Ready Report found there to be an oversupply of trucks licensed to access PMV facilities
and this factor had led to a widespread practice of rate undercutting. Among a
number of recommendations, Mr. Ready proposed reforms to the Truck Licensing
System [TLS] under which truck access to the port was authorized. The
justification and broad parameters of TLS reform were described by
Mr. Ready in the following way:
It is universally felt that because of the
low barrier to entry in the drayage industry, there is an oversupply of trucks,
even with the current decline in owner operators. With approximately 2,000
truck and licences/permits in the system, it is felt by many that there is an
enormous oversupply of trucks. Prior to the recent work stoppage, the trip rate
drivers worked longer hours and were paid less than hourly rated drivers.
However, it is clear to us that with increased fluidity at the ports/terminals,
the drivers on trip rates have a greater opportunity to enhance their income
providing the congestion at the ports is cleared up. As stated above, the
feeling is that there needs to be a significant reduction in the number of
trucking companies and trucks. One way of achieving this goal is to impose
requirements on TLS participants; such as security deposits or performance bonds
as well as implementing reasonable and legitimate truck performance standards
and efficiency goals. Another way of achieving this reality is through service
level agreements (“SLA”) which can work in tandem with any TLS reform and which
we will outline as a concept below as a final recommendation.
[6]
In October 2014, the PMV released a Fleet Size
Analysis Report projecting an annual trip volume of 1,176,750 to and from port
facilities. Based on a target of 6 trips per day per truck, the optimal number
of authorized trucks was determined to be 1388. This fleet size was said to
require a reduction in the number of licensed trucks by about 610.
[7]
In mid-October 2014, PMV publically announced
its plan to move forward with TLS reform. The stated goals of a new licensing
system were said to include improvements in service quality, efficiency, safety
and operating standards, all intended to enhance market stability and to
address environmental issues. The goal of reducing the number of licensed
trucks was also clearly stated. Further consultation with stakeholders was
proposed.
[8]
On October 29, 2014, PMV announced a Transition
Support Program available to any TLS independent operator license holders who
were displaced by TLS reform. Compensation of up to $15,000.00 was made
available.
[9]
Between November 4 and 17, 2014, PMV engaged in
a second phase of stakeholder consultation supported by a Participant
Discussion Guide. The Guide proposed a new licensing model that would include
or take account of the following factors:
a.
Fleet age;
b.
Performance bonds;
c.
Damage deposits;
d.
A commitment to remunerate drivers at regulated
rates;
e.
A new Provincial Commissioner’s Officer to audit
performance; and
f.
A scorecard approach to be used to evaluate new
license applications and to maintain ongoing licensing.
[10]
With respect to the evaluation of license
applications, it was also proposed that new licenses would be available only to
currently licensed businesses operating a minimum of five trucks. The suggested
evaluation criteria included adherence to environmental, safety and past
performance standards.
[11]
In December 2014, PMV issued a TLS Handbook [Handbook]
setting out the finalized terms of its new licensing system intended to take
effect on February 1, 2015. The stated goal of the new system was to achieve a
balance between the number of licensed trucks and the amount of available cargo
thereby improving the stability of port operations. The Handbook described an
application assessment process to commence on December 10,, 2014
with a possible completion date of January 16, 2015. Existing TLS licenses
were to expire on January 31, 2015 and thereafter only newly licensed trucks
would have access to PMV facilities.
[12]
The Handbook informed readers that only current
license holders would be permitted to apply and only to the limit of their
previously authorized fleet size. Additional advice to applicants included the
following:
Because Port Metro Vancouver will process
applications on a weekly basis, we encourage companies to submit complete and
compliant applications as soon as possible. Port Metro Vancouver is committed
to ensuring the selection process is consistent, fair and transparent, while
meeting the TLS reform objectives.
[13]
Mandatory entry criteria included a minimum
fleet size of five trucks (achievable by a joint application), a damage deposit,
sufficient insurance, an ability to secure a compliance bond, a Fleet Safety
Plan, evidence of a DOC retrofit on trucks older that the 2006 model year, a
fully completed application and evidence of a demonstrated need for service. The
Handbook also advised that applications would be further assessed against
several non-mandatory criteria including an applicant’s past TLS history, a Certificate
of Recognition (Safety), an annual WorkSafeBC statement indicative of current
safety status, registration with Natural Resources Canada regarding
environmental standards, proof of participation (or a letter of intent to
participate) in the ICBC Safety and Hazard Management Assessment Program, and
one’s National Safety Code standing. The Handbook informed applicants that
preference would be given to companies with newer and larger fleets and to
single over joint applications.
[14]
Additional detailed information helpful to the
completion of an application was also provided including checklists of required
documentation and a reminder that the assessment of completed applications
would proceed in order of one’s application intake number in weekly batches.
The assessment process was also to be carried out in accordance with the
following standards:
Port Metro Vancouver aims to the fullest
extent possible to select only those carriers that meet the outlined minimum
entry standards outlined during the TLS reform process. Given the current
state, Port Metro Vancouver anticipates the number of applications received
that meet the minimum standards will exceed the targeted number of truck tags,
and in that case additional considerations as outlined earlier in the User
Guide will also be taken into account, and will contribute towards the ranking
and selection process.
Port Metro Vancouver is committed to
ensuring the selection process is consistent, fair and transparent, while
ensuring the objectives of the TLS reform are met and the integrity of the
process maintained/preserved.
[15]
Although the Handbook informed applicants the
assessment of compliant applications involved a ranking or a scoring of the
evidence submitted, nowhere did it precisely describe how the relevant criteria
would be weighed. At the same time, it is apparent from the record that none
of the Applicants to this proceeding made an effort to enquire about these
details.
[16]
On December 9, 2014, PMV informed existing
license holders that it would then begin accepting applications for new TLS
licenses to take effect on February 1, 2015. Careful review of the TLS Handbook
was strongly recommended.
[17]
On December 23, 2014, PMV issued a public notice
confirming the approval of six applications under its new TLS program. The
notice advised that applications would continue to be processed until the end
of January 2015 or when the target number of truck tags had been reached. It
further stated:
We are processing and approving applications
on a weekly basis, and encourage interested trucking companies to submit their
compliant applications as early as possible, to maximize your opportunity to [sic]
being accepted.
Similar notices continued to be issued
through the first two weeks of January including one dated January 14, 2015
advising that 49 companies had been conditionally approved for licenses
representing about 1237 trucks.
[18]
On January 16, PMV advised its licensees that
the number of pending applications exceeded the number of available truck tags
and no further applications would be accepted. On January 23, PMV gave notice of
the completion of the process with the conditional approval of 68 companies
operating approximately 1450 trucks. Unsuccessful applicants were told a debriefing
meeting was available to discuss why their applications were not approved. PMV
also sent letters to the unsuccessful applicants explaining the process of
evaluation in the following way:
All applicants that met the minimum
requirements were then reviewed in the context of other applicants to determine
which applicants best met Port Metro Vancouver’s dual objectives, using
additional entry criteria and recommended documents as outlined in the TLS
Handbook, The primary objective was ensuring that the Pacific Gateway is served
by container trucks, drivers and companies that reflect the highest standards
of efficiency, sustainability, (both economic and environmental), and safety.
The secondary objective was the timely approval of a sufficient number of
applicants to ensure continuous, uninterrupted movement of containers during
this period of TLS reform.
[19]
Further details of the evaluation process
adopted by PMV are set out in several affidavits of its Manager (Supply Chain
Performance), Mr. Dale Thulin. Mr. Thulin confirmed that TLS
applications were processed in batches. Completed applications were assigned
an intake number once all of the mandatory minimum criteria documentation had
been submitted. Completed applications were then ranked in batches with
reference to the additional evaluation criteria described in the Handbook. Up to
two points were available based on an applicant’s average fleet age. One point
was available for each of the remaining criteria. Half points could be
assigned for joint applications where only one of the companies fulfilled any
of the additional criteria.
[20]
Mr. Thulin’s first affidavit confirmed the
batch evaluation of applications created the possibility of early applications
being approved with lower scores than the scores assigned to successful
applications considered in subsequent batches. For most of the Applicants in
this proceeding, the applications were completed late in the overall process
and many of those were incomplete when first submitted.
[21]
Mr. Thulin’s second affidavit offered more
detail about the scoring system employed by PMV. The process involved an
Application Review Committee [Committee] that included PMV’s Director of Land (Operations),
Mr. Greg Rogge. Scores were assigned by the Committee on the basis of the
information submitted by applicants. Committee recommendations for conditional
approvals were then submitted for final decision to either Mr. Rogge or to
PMV’s Vice-President, Mr. Peter Xotta. Mr. Thulin’s description
of why PMV adopted batch scoring bears repeating:
WHY WERE TLS APPLICATIONS CONSIDERED IN
BATCHES?
37. I understand that the applicants
in these proceedings assert that PMV should have considered all applications
for New TLS Agreements at one time, rather than considering the applications in
batches.
38. I was directly involved in the
determination of the mandatory entry criteria, additional criteria and other
matters referred to in the TLS Handbook, including the decision that
applications for new TLS Agreements should be considered by PMV in batches.
Discussions on this subject involved Mr. Rogge, Mr. Xotta and possibly other
PMV representatives. PMV also consulted with the Governments of British
Columbia and Canada on this issue prior to concluding that assessment in
batches was the most appropriate process to follow.
39. PMV considered various possibilities
in terms of the process for assessment of applications for New TLS Agreements.
Specifically, PMV considered: (a) a process in which the applications would be
considered and approved in phases; (b) a process in which the applications
would be considered in batches; (c) a process in which all applications would
be considered at one time; and (d) a process in which applications would be
considered on a purely “first come-first served” basis.
40. PMV concluded that, of the various
methods of assessment considered, review in batches was the only feasible
option that was consistent with PMV’s mandate to manage the Port in a safe,
efficient, environmentally sustainable and cost-effective manner.
41. We recognized that PMV had to be
in a position to begin granting conditional approvals for New TLS Agreements
early during the review and assessment period. If PMV waited for all
applications to be received, and deficiencies corrected before granting
conditional approval to any trucking companies, this would have serious
negative consequences.
42. Specifically, adopting such a
process would have resulted in a lengthy period of uncertainty for all trucking
companies (approximately 100 applicant companies) and all of their respective
drivers, (approximately 2000) regarding who would have access after the January
31, 2015 expiry of the old licences. PMV was concerned that such prolonged and wide-spread
uncertainty could cause unnecessary unrest and destabilize the local drayage
sector.
43. PMV was also concerned that waiting
for all applications before commencing processing and approval might result in
a period of time in which there were either no, or not enough trucking
companies to provide needed container drayage services. PMV recognized the
importance of being able to begin reassuring both the successful trucking
companies and their drivers who would have New TLS Agreements, and to be able
to give that assurance within a reasonable period of time after the
applications received from those companies were complete.
44. In addition to being very
important in terms of avoiding uncertainty, we considered that early advice to
successful applicants was important in terms of fairness to those who applied
early in the process.
45. We also took into account the fact
that any process which would involve consideration of all applications at one
time would require a very short application period. As explained in affidavits
previously filed by PMV in this proceeding, the timing of the issuance of the
final Ready and Bell report, the appropriate period of consultation, and the
time necessary for final selection of the criteria and preparation of the TLS
Handbook, meant that the process of accepting applications for New TLS
Agreements could not begin until December, 2014. It was necessary that the New
TLS Agreements be in place by February 1, 2015. This is explained in more
detail below.
46. If all applications were received
and considered at once, a period of some weeks would be necessary for
consideration of applications, and correction of any errors or provision of
missing information. As noted above, cumulatively, the applications reflected
over 160 trucking companies with almost 2,000 identified trucks and 2,000
specific drivers (whether employee drivers or sponsored owner-operators).
47. We were aware that it would take
some period of time following the grant of conditional approval to have all of
the matters necessary in connection with the New TLS Agreements complete. These
matters included obtaining compliance bonds and/or letters of credit, making of
various payments, and execution of statutory declarations.
48. For that reason, we recognized
that, were PMV to consider all of the applications together, this would require
an extremely short period during which applications could be received. This
period could not be more than approximately one week. We concluded that was too
short a period.
49. PMV considered processing
applications in three phases. Under the “phased” approach the first phase would
be restricted to large companies, the second phase would be restricted to
medium sized companies, and the third phase would be open to small companies
(assuming any tags remained available after phases 1 and 2). PMV considered
this approach because company size was one of the factors PMV considered
relevant in terms of improving the quality of the drayage sector. PMV concluded
that, on the whole, larger companies are more stable and stronger than smaller
companies.
50. We rejected this pure form of a
“phased” approach as it appeared to give too much weight to company size. We
recognized that, while company size was a relevant factor, it should not be
considered to the exclusion of all other factors. Adopting the phased approach
created a risk that only large companies would be in a position to succeed in
obtaining New TLS Agreements.
51. PMV considered processing
applications strictly on a “first come-first served” basis. PMV rejected this
approach. Adopting a pure “first in time” approach did not reflect PMV’s
mandate to develop a strong and stable drayage sector. As explained elsewhere,
TLS reform was intended to give additional consideration to companies better
able to meet PMV’s higher standards in terms of environmentally sound, safe and
efficient operations. A first-come-first serve approach would not accomplish
this, as it would give no scope for consideration of the additional criteria.
52. After considering these options,
PMV concluded that batching of review and approvals was the preferable
approach. This approach would allow for a hybrid of a full merit based approach
and an approach which would give additional consideration to timely
applications. Under the approach adopted, applicants would be graded on merit,
but only against other trucking companies in their batch.
53. An additional consideration in
favour of this approach was the effect that PMV expected granting of
conditional approvals to have. PMV expected that ongoing conditional approval
announcements, coupled with repeated urging by PMV that trucking companies needed
to apply early as tractor tags were being granted and there were a finite
number of tags available, would create impetus on trucking companies to apply
in a timely manner.
54. PMV had been managing TLS, in its
various forms, for nine years as of late 2014. From PMV’s experience with TLS,
PMV has observed that many trucking companies wait until the very last minute
to commence required administrative work. TLS reform could not accommodate
procrastination of that type, as had occurred in the past. This was an
additional reason why PMV designed and communicated a selection process that
would award timely submission of applications.
[22]
Mr. Thulin’s affidavit further disclosed
that PMV expected a very large number of companies to meet the minimum
requirements, meaning that, in the vast majority of cases, license approvals
would be based on the evaluation of the additional criteria on a 10-point
scale. Evaluating applications in batches ensured license approvals would be
made on a rolling and timely basis. At the same time, PMV wanted to ensure a
reasonable number of truck tags would remain available for later batches of
applications Its approach to this allocation conflict involved the adoption of
a variable scoring benchmark for approval.
[23]
For the first two batches considered by PMV
between December 23,2014 and January 9, 2015, the threshold for approval was
set at 4 points. The number of applications conditionally approved with scores
of 4 or higher in the two initial batches was 21 involving 691 truck tags. At
this point almost half of the available tags had been issued and notification
to successful applicants had been given.
[24]
Between January 12 and 15, 2015 a third batch of
applications was considered by the Committee. At that point the benchmark for
approval was raised to 5 points and 25 applications were approved involving 619
truck tags. At this stage of the process, tags for 1310 trucks had been
conditionally authorized leaving less than 200 for distribution.
[25]
After January 15, 2015, three additional batches
were considered. For those batches, the benchmark for approval was raised to 6
points. The total number of applications approved for those batches was 14
involving 130 truck tags.
[26]
On January 23, 2015, a final application was
approved for 24 additional truck tags. This application was approved with a
score of 5 points. According to Mr. Thulin, this applicant had been
excluded from consideration because of a mistake by PMV. On that basis the
application was considered against the scoring benchmark that, but for the
mistake, would have applied. Since that time an additional application has
been received and approved on similar grounds.
[27]
Mr. Thulin’s affidavit does not clearly
explain why PMV thought it advisable to apply a more onerous scoring benchmark
to later batches of applications beyond the following paragraph:
63. The TLS Application Review
Committee was not aware, at the outset of the review process, that a higher
additional criteria score would necessarily be required later in the process.
We did recognize that this was a possibility. The fact that a higher score was
required later in the process is consistent with the hybrid approach adopted by
PMV in connection with the new TLS Agreements, in which there would be
consideration for merit of the trucking company, and consideration for early
application.
[28]
At the end of the process, 33 applications for
TLS licenses involving requests for slightly more than 400 truck tags were
denied by PMV. The Applicants constitute most of that group. The combined
total of their requested truck tags appears to be slightly more than 250.
[29]
In a third affidavit sworn by Mr. Thulin,
additional details were provided explaining how applications were handled
including their allocation to specific batches. He stated that the
administrative burden associated with the receipt and review of large volumes
of documents was considerable. However, in the case of the Applicants, the
turn-around time was usually within 24 hours. In other words, those applications
would be rapidly updated and incorporated within the next batch of pending
applications. On some occasions, supplementary materials received on one day
were included within batches considered for approval on the following day. At
the same time, the difference of a point between one day and the next was, in
some cases, fatal for an application (e.g. between the batch approved on
January 15 at 5 points and the batch approved on January 16 at 6 points as per
the affidavit of Heather Watson at paragraphs 16 and 17 and affidavit No. 3 of
Dale Thulin at paragraph 13). In the case of Goodrich Transport Ltd. [Goodrich],
additional insurance information was sent to PMV on January 16, 2015 – one day
after an application batch was assessed against an approval benchmark of 5
points. Goodrich was then placed in the succeeding batch where the benchmark
was 6 points. The Goodrich application was rejected with a score of 5 points.
[30]
It is clear PMV did not advise any of the
Applicants that it was employing a variable scoring benchmark to license
applications based on the date of filing.
II.
Analysis
[31]
The Applicants raise two primary challenges to
the decisions taken by the Respondent. They argue that the impugned decisions
were made without lawful authority in the sense that PMV fettered its statutory
discretion by adopting an inflexible evaluation model. They also contend that
the process of evaluating their applications was procedurally flawed. This
argument is based on PMV’s failure to notify them of its intended scoring
model, most particularly, in relation to its use of an increasingly onerous
scoring benchmark.
[32]
I need not deal at length with the fettering
issue because I have concluded that PMV’s evaluation model was procedurally
deficient and profoundly unfair. The legal standard for assessing the fairness
issue is correctness.
[33]
I am satisfied that PMV owed a duty of fairness
to the Applicants at common law and by virtue of its explicit representations to
them. That duty of fairness was breached when PMV applied an increasingly
onerous approval benchmark to the Applicants’ perfected applications without
informing them of that approach. I do not believe that any fair-minded person examining
the history of what took place behind PMV’s closed doors would find this practice
to be fair or acceptable.
A.
Was the Process Adopted by PMV Procedurally
Fair?
[34]
There is no doubt a duty of fairness applies to
the evaluation process undertaken by PMV and PMV does not contend otherwise.
The duty to comply with the rules of natural justice extends to all
administrative decision-makers acting under statutory mandates where the
rights, privileges or interests of an individual are at stake: see Moreau-Bérubé
v New Brunswick, [2002] 1 S.C.R. 249, 2002 SCC 11 at para 75 and Baker v
Canada, [1999] 2 S.C.R. 817, [1999] SCJ No 39 at para 30. An
entitlement to a fair process is triggered when an administrative decision is
taken that precludes a party’s access to a certain commercial market: see 2300246
Ontario Ltd. v Ontario, 2014 ONSC 6958, 123 OR (3d) 513 at para 92.
[35]
PMV accepts that the duty of fairness applies
but it says that the content of that duty falls at the lower end of the range
of participatory possibilities. It describes the impugned decisions as largely
contractual in nature where enhanced procedures are inapt. It relies on Mavi
v Canada, 2011 SCC 30, [2011] 2 S.C.R. 504, where the Supreme Court held that
the content of procedural fairness will typically be minimal in the context of
a largely contractual relationship. Nevertheless, in that case it was
incumbent on the decision-maker to give notice of an intention to take action,
to afford the affected party an opportunity to explain, to consider the
relevant circumstances, and to give notice of the final decision. The Court
expressly distinguished the decision-making context of a debt collection from
one involving access to “a government benefits or
licensing program” where greater participatory rights would typically be
expected [para 41].
[36]
In this case the applicable legislation did not
impose procedural limitations over PMV’s issuance of TLS licenses. PMV was
thus afforded considerable leeway to design the process. However, the decisions
here were of considerable economic importance to the Applicants and PMV
promised them a “consistent, fair and transparent” process.
Furthermore, the Applicants had no right to a reconsideration or appeal. In
this context, the Applicants were entitled to a fair, impartial and open
process and one that afforded them meaningful rights of participation: see Baker,
above, at para 28.
[37]
At the foundation of procedural fairness is the
right to effective notice. The opportunity to participate is only truly
available to those who know how a decision will be made. This point was made
by Justice Mary Gleason in the following passage from Fisher v Canada,
2012 FC 720, 219 ACWS (3d) 590 at para 25:
[25] In my view, in the circumstances
of this case, the requirements of procedural fairness did require that the
Committee disclose that it was considering downgrading the Professional
Responsibility factor and did require that it afford the parties the
opportunity to make submissions on the potential downgrade prior to rendering
its decision. While it is certainly true that the content of the duty of fairness,
in the context of classification grievances in the federal public service,
falls “somewhere in the lower zone of the spectrum” (Chong II at para
12), in my view, even the minimal requirements of procedural fairness were not
respected here. Mr. Fischer is not seeking the right to call viva voce
evidence, cross-examine witnesses or other trappings of a full-blown
adversarial hearing; rather, he is seeking the minimal right to be aware of and
be afforded an opportunity to make arguments regarding the determinative issue
in his grievance. As Justice Evans noted at para 10 in Bulat, which
dealt both with a failure to disclose an unanticipated point being an issue and
a failure to disclose evidence the classification grievance committee collected
in respect of that point:
[…] this case does not turn on the
precise location on the procedural spectrum of the content of the duty that the
Committee owed to the appellant. An elementary incident of the duty of fairness
is that the individual adversely affected should have an adequate opportunity
to address an issue that the Committee regarded as central to the disposition
of the grievance, but which the grievor did not realise was in dispute and
therefore could not have been reasonably expected to anticipate, and to address.
Also see Wong v Canada, 141 FTR 62, 76 ACWS (3d) 1157 at paras 26-27.
[38]
Here the Applicants were told their applications
would be assessed against identified criteria. It was at least implicit from
the Handbook that an evaluation protocol had been adopted by PMV and a ranking
or scoring method of some description would be used. The application forms
were also clear and comprehensive. The scoring model adopted by PMV was blunt
but it did have the advantages of simplicity and objectivity. I do not agree
with the Applicants that they were entitled to know in advance precisely how
the criteria would be weighed. While that information might have been helpful,
all of the Applicants were aware that they would lose ground to others if they
failed to address any of the identified criteria. Furthermore, it was open to
any of the Applicants to seek further information. From the record before me,
no one asked PMV how the criteria would be applied.
[39]
The Handbook also indicated that the anticipated
number of applications would likely exceed the number of available licenses and
that applications would be considered weekly and issued in batches. Applicants
were also forewarned that, by January 16, 2015, the process could be completed.
Accordingly, if a later applicant lost out because the supply of truck tags had
been exhausted, there would be no cause for complaint. Many of the Applicants,
though, submitted their applications well within the projected completion date
for the issuance of licenses and most of them would have been successful with
an approval benchmark of 4.
[40]
The Applicants were entitled to know that the
actual risk of delay of a day or two could be the difference between success
and failure. Here, fairness demanded the disclosure of the more onerous
scoring system applied to later applications. This failure is particularly
surprising given Mr. Thulin’s acknowledgement that the possibility of this
approach had been contemplated by PMV apparently from the outset. If this was,
indeed, contemplated, one is left to wonder why this obviously deficient model
was chosen over one that was fair to everyone.
[41]
I agree with Mr. Badh that PMV’s decision
to raise the benchmark was likely done on an ad hoc basis with little,
if any, regard to fairness. PMV effectively trapped itself by initially
adopting a low benchmark. Once it began to issue conditional licenses, PMV was
left with only two options: it could continue to issue licenses to applicants
who obtained a score of 4 or higher at the cost of too many licenses or it
could raise the benchmark for subsequent batches to get to the desired number
but at the cost of even-handedness. As a general rule, the desire for administrative
convenience gives way to the requirement for fairness: see Singh v Canada,
[1985] 1 S.C.R. 177, [1985] SCJ No 11 at para 70.
[42]
The adoption of a batching approach to the
applications could have worked fairly had PMV applied a higher approval
benchmark from the outset. If too few applications got through at that level,
the benchmark could be safely lowered provided that any earlier unapproved
application was reconsidered. By proceeding as it did, PMV issued licenses to
applicants whose scores were lower than the scores of some rejected
applications perfected later in the process. This was unfair because the
scoring system was intended to be and was promoted as merit-based. The
Handbook told the interested parties their applications would be assessed on
the basis of merit-based criteria with a goal of enhancing the stability of
port operations. In the face of this advice, it was unfair to secretly
subordinate the consideration of merit to that of timing.
B.
Did PMV Fetter Its Discretion?
[43]
I am satisfied that PMV’s grant of authority to
establish a licensing scheme to control truck access to its marine facilities
is very broad. PMV is entitled, as a matter of policy, to identify and apply
as it sees fit the criteria for issuing licenses. The only constraint that
would apply to this aspect of PMV’s discretion is where bad faith or unfairness
can be shown or where undue reliance has been placed on clearly irrelevant
considerations extraneous to the broad underlying statutory purpose.
[44]
In Carpenter Fishing Corp. v Canada, [1997] FCJ No 1811, [1998] 2 FC 548 (FCA), the Court considered a Ministerial
authority to create a quota policy and to develop and apply guidelines for
issuing commercial fishing licenses. The Court’s discussion concerning the
permissible grounds of judicial review in this area bears repeating:
28 The imposition of a quota policy
(as opposed to the granting of a specific licence) is a discretionary decision
in the nature of policy or legislative action. Policy guidelines outlining the
general requirements for the granting of licences are not regulations; nor do
they have the force of law. It flows from the decision of the Supreme Court of
Canada in Maple Lodge Farms v. Government of Canada and from the decision of
this Court in Canadian Assn. of Regulated Importers v. Canada (Attorney
General), that the Minister, provided he does not fetter his discretion to
grant a licence by treating the guidelines as binding upon him, may validly and
properly indicate the kind of considerations by which he will be guided as a
general rule when allocating quotas. These discretionary policy guidelines are
not subject to judicial review, save according to the three exceptions set out
in Maple Lodge Farms: bad faith, non-conformity with the principles of natural
justice where their application is required by statute and reliance placed upon
considerations that are irrelevant or extraneous to the statutory purpose.
29 Once the Minister, through his
Department, has defined policy guidelines, what is requested from him when
granting a licence is to direct his attention to the applicant and to satisfy
himself that the general guidelines may be fairly applied to that applicant. To
the extent that the policy is developed by the Minister in the exercise of his
general duties under the Fisheries Act4 and that it is not blindly applied by
him in the later exercise of his discretion when granting a specific licence,
the act of granting the licence, however administrative in nature and otherwise
subject to ordinary judicial review as it may be, cannot be challenged under
the general rules applicable to administrative actions in so far as its policy
component, i.e. the implementation of the quota policy by the Minister is
concerned. When examining an attack on an administrative action -- the granting
of the licence -- a component of which is a legislative action -- the
establishment of a quota policy -- reviewing courts should be careful not to
apply to the legislative component the standard of review applicable to
administrative functions. The line may be a fine one to draw but whenever an
indirect attack on a quota policy is made through a direct attack on the
granting of a licence, courts should isolate the former and apply to it the
standards applicable to the review of legislative action as defined in Maple
Lodge Farms.
[…]
37 It follows that when examining the
exercise by the Minister of his powers, duties, functions and discretion in
relation to the establishment and implementation of a fishing quota policy,
courts should recognize, and give effect to, the avowed intent of Parliament
and of the Governor in Council to confer to the Minister the widest possible
freedom to manoeuvre. It is only when actions of the Ministry otherwise
authorized by the Fisheries Act are clearly beyond the broad purposes permitted
under the Act that courts should intervene.
38 Assuming for the sake of the
discussion that the purpose of the Department's officers can be imputed to the
Minister -- there is no evidence as to why the Minister endorsed the policy
suggested by his officers --, and that one can isolate a segment of a formula
in looking for the purpose of the whole formula, the Trial Judge's finding does
not withstand scrutiny.
39 Quotas invariably and inescapably
carry with them some element of arbitrariness and unfairness. Some fishermen
may win, others may lose, some may win or lose more than others, most if not
all will find themselves with less catches than before. It is at best in that
sense, and not in the legal sense, that one can speak, in cases such as the
present one, in terms of discrimination. If this were found to be
discrimination, then it would be discrimination authorized by statute. The need
for objective standards in regulating an industry that was until then
self-governed requires tough decisions to be made that will hurt some less than
others. Seldom, if ever, is the imposition of quotas a win-win situation.
40 Considering the wide ambit of the
permissible purposes under the Fisheries Act, considering the factors retained
by the Minister in the present case, considering that the Department was
searching for a consensus in order to experiment a totally new approach in
licensing the halibut fishery, and keeping in mind the observations and
recommendations made by Commissioner Pearce in his Report, can it reasonably be
said that a compromise which attracted the support of the halibut industry,
which was centred on the personal fishing experience of the licence holders,
which allowed for new entrants to participate in the quotas on the basis of the
personal fishing experience of their immediate predecessor and which preserved
the right of dissatisfied licence holders to challenge the quotas attributed to
them under the chosen formula, is based on considerations irrelevant or
extraneous to the statutory purpose of the Fisheries Act? Of course not.
41 Perhaps the formula adopted is not
the best one, or the wisest one, or the most logical one, but the Minister is
not bound to pick the best, the wisest or the most logical one and it is
certainly not the function of the courts to question his judgment as to whether
a quota policy is good or bad. Perhaps the factors considered by the Minister
are not of equal relevance, but as Linden J.A. observed in Canadian Assn. of
Regulated Importers10:
It is not
fatal to a policy decision that some irrelevant factors be taken into account;
it is only when such a decision is based entirely or predominantly on
irrelevant factors that it is impeachable [...]
[Footnotes
omitted]
[45]
In Baker, above, the Court also discussed
in broad terms the need for judicial deference in evaluating the exercise of
discretion by administrative decision-makers. Where Parliament has left it to
the decision-maker to make choices among an array of polycentric
considerations, judicial deference is clearly owed. On my reading, Baker,
above, stands for the proposition that so-called fettering of
administrative discretion is not a standalone ground of judicial review but,
rather, a concern properly addressed in a context of reasonableness review.
This, I think, is evident from the following passage in the decision:
53 Administrative law has
traditionally approached the review of decisions classified as discretionary
separately from those seen as involving the interpretation of rules of law.
The rule has been that decisions classified as discretionary may only be
reviewed on limited grounds such as the bad faith of decision-makers, the
exercise of discretion for an improper purpose, and the use of irrelevant
considerations: see, for example, Maple Lodge Farms Ltd. v. Government of
Canada, [1982] 2 S.C.R. 2, at pp. 7-8; Shell Canada Products Ltd. v.
Vancouver (City), [1994] 1 S.C.R. 231. A general doctrine of
“unreasonableness” has also sometimes been applied to discretionary decisions: Associated
Provincial Picture Houses, Ltd. v. Wednesbury Corporation, [1948] 1 K.B.
223 (C.A.). In my opinion, these doctrines incorporate two central ideas --
that discretionary decisions, like all other administrative decisions, must be
made within the bounds of the jurisdiction conferred by the statute, but that
considerable deference will be given to decision-makers by courts in reviewing
the exercise of that discretion and determining the scope of the
decision-maker’s jurisdiction. These doctrines recognize that it is the
intention of a legislature, when using statutory language that confers broad
choices on administrative agencies, that courts should not lightly interfere
with such decisions, and should give considerable respect to decision-makers
when reviewing the manner in which discretion was exercised. However, discretion
must still be exercised in a manner that is within a reasonable interpretation
of the margin of manoeuvre contemplated by the legislature, in accordance with
the principles of the rule of law (Roncarelli v. Duplessis, [1959]
S.C.R. 121), in line with general principles of administrative law governing
the exercise of discretion, and consistent with the Canadian Charter of
Rights and Freedoms (Slaight Communications Inc. v. Davidson, [1989]
1 S.C.R. 1038).
54 It is, however, inaccurate to
speak of a rigid dichotomy of “discretionary” or “non-discretionary”
decisions. Most administrative decisions involve the exercise of implicit
discretion in relation to many aspects of decision making. To give just one
example, decision-makers may have considerable discretion as to the remedies
they order. In addition, there is no easy distinction to be made between
interpretation and the exercise of discretion; interpreting legal rules
involves considerable discretion to clarify, fill in legislative gaps, and make
choices among various options. As stated by Brown and Evans, supra, at
p. 14-47:
The degree of discretion in a grant
of power can range from one where the decision-maker is constrained only by the
purposes and objects of the legislation, to one where it is so specific that
there is almost no discretion involved. In between, of course, there may be
any number of limitations placed on the decision-maker’s freedom of choice,
sometimes referred to as “structured” discretion.
55 The “pragmatic and functional”
approach recognizes that standards of review for errors of law are
appropriately seen as a spectrum, with certain decisions being entitled to more
deference, and others entitled to less: Pezim, supra, at pp.
589-90; Southam, supra, at para. 30; Pushpanathan, supra,
at para. 27. Three standards of review have been defined: patent
unreasonableness, reasonableness simpliciter, and correctness: Southam,
at paras. 54-56. In my opinion the standard of review of the substantive
aspects of discretionary decisions is best approached within this framework,
especially given the difficulty in making rigid classifications between
discretionary and non-discretionary decisions. The pragmatic and functional
approach takes into account considerations such as the expertise of the
tribunal, the nature of the decision being made, and the language of the
provision and the surrounding legislation. It includes factors such as whether
a decision is “polycentric” and the intention revealed by the statutory
language. The amount of choice left by Parliament to the administrative
decision-maker and the nature of the decision being made are also important
considerations in the analysis. The spectrum of standards of review can
incorporate the principle that, in certain cases, the legislature has
demonstrated its intention to leave greater choices to decision-makers than in
others, but that a court must intervene where such a decision is outside the
scope of the power accorded by Parliament. Finally, I would note that this Court
has already applied this framework to statutory provisions that confer
significant choices on administrative bodies, for example, in reviewing the
exercise of the remedial powers conferred by the statute at issue in Southam,
supra.
56 Incorporating judicial review of
decisions that involve considerable discretion into the pragmatic and
functional analysis for errors of law should not be seen as reducing the level
of deference given to decisions of a highly discretionary nature. In fact,
deferential standards of review may give substantial leeway to the
discretionary decision-maker in determining the “proper purposes” or “relevant
considerations” involved in making a given determination. The pragmatic and
functional approach can take into account the fact that the more discretion
that is left to a decision-maker, the more reluctant courts should be to
interfere with the manner in which decision-makers have made choices among
various options. However, though discretionary decisions will generally be given
considerable respect, that discretion must be exercised in accordance with the
boundaries imposed in the statute, the principles of the rule of law, the
principles of administrative law, the fundamental values of Canadian society,
and the principles of the Charter.
[46]
The same point was more recently made by Justice
David Stratas in Canada (National Revenue) v JP Morgan Asset
Management (Canada) Inc., 2013 FCA 250, [2013] FCJ No 1155 at para 74:
[74] At one time, the taking into
account of irrelevant considerations and the failure to take into account
relevant considerations were nominate grounds of review – if they happened, an
abuse of discretion automatically was present. However, over time, calls arose
for decision-makers to be given some leeway to determine whether or not a
consideration is relevant: see, e.g., Baker, supra at
paragraph 55; Dr. Q. v. College of Physicians and Surgeons of British
Columbia, 2003 SCC 19, [2003] 1 S.C.R. 226 at paragraph 24. Today, the
evolution is complete: courts must defer to decision-makers’ interpretations of
statutes they commonly use, including a decision-maker’s assessment of what is
relevant or irrelevant under those statutes: Dunsmuir, supra at
paragraph 54; Alberta Teachers’ Association, supra at paragraph
34. Accordingly, the current view is that these are not nominate categories of
review, but rather matters falling for consideration under Dunsmuir
reasonableness review: see Antrim Truck Centre Ltd. v. Ontario
(Transportation), 2013 SCC 13 at paragraphs 53-54.
Also see Stemijon Investment Ltd. v
Canada, 2011 FCA 299, [2011] FCJ No 1503 at paras 20-25.
[47]
In the absence of statutory confinement, a
decision-maker does not act unreasonably or fetter its discretion by developing
and applying firm rules to the evaluation of license applications. So long as
the rules it adopts are relevant to the exercise of its proper discretion, it
is open to a decision-maker, acting fairly, to apply them strictly and without
regard to other arguably relevant factors. In short, neither an interested
party nor the Court can impose upon the decision-maker their own standards of
relevance. This is not to say that such matters are always beyond the scope of
judicial review. Administrative decisions of this sort are reviewable where
there has been an abuse of discretion or procedural unfairness. Even so-called
policy choices may be overturned on the reasonableness standard where a
decision-maker clearly deviates from applicable legislative requirements or
standards.
[48]
In this case it was not unreasonable or unlawful
for PMV to adopt the criteria set out in the Handbook or to assign scores
solely on the basis of binary choices. Indeed, the suggestion by the
Applicants that the system ought to have left room for the exercise of some
residual discretion would have invited a host of problems not the least of
which would be uncertainty or the appearance of favouritism or some other form
of unequal treatment. The system adopted here lacked nuance but it was based
on relevant considerations that fell well within the scope of PMV’s authority.
It is not the role of the Court to interfere with that discretion on this
record.
C.
Claim to Relief
[49]
PMV argues that even in the face of a breach of
procedural fairness, the relief requested by the Applicants ought not to be
granted. This approach is said to be consistent with the decision in Mining
Watch Canada v Canada, 2010 SCC 2, [2010] SCJ No 2, where the discretion to
deny prerogative relief was justified on balance of convenience grounds.
[50]
In my view, the outcome in Mining Watch
is not something to be routinely applied in breach of fairness cases. In that case
the applicant did not participate in the impugned environmental assessment and
only got involved at the stage of judicial review. It had no direct interest
in the outcome of the case and brought the challenge as a test case of the
federal government’s statutory obligations. Because the applicant’s interests
as a public interest litigant were met by the Court’s declaratory ruling, it
was considered to be disproportionate to require the environmental assessment to
be done over. The Court noted, however, that the discretion to deny procedural
relief has the potential to make inroads upon the rule of law and, for that
reason, had to be exercised with the greatest of care [see para 52].
[51]
This case is very different. These Applicants
have a substantial pecuniary interest in the outcome of PMV’s licensing
decisions and were directly harmed by that process. Even if I was obliged to
consider the balance of convenience between the parties, substantive relief
favouring the Applicants is readily justified. At most PMV will be required to
reopen the licensing process and it will lose some of the fleet-size advantage
it had hoped to obtain – at least until the expiry of existing licenses in
slightly more than a year. At that point the process can be redone fairly with
a further reduction in licenses if appropriate. I specifically reject
Mr. Xotta’s opinion that this temporary retrenchment of positions will create
a “strong likelihood” of serious labour problems,
“chaos” and “disorder”
at PMV or a serious destabilization of the drayage sector. If anything, the
denial of relief to deserving parties is more likely to create such a risk.
[52]
Furthermore, the successful applicants will most
likely be mindful of the consequences of unlawful labour action bearing in mind
that a later assessment of their conduct and that of their drivers can be carried
out when licenses are again up for renewal next year. It is also worth
remembering that the Applicants will still be required to comply with all of
the new conditions of TLS licensing, many of which were created to mitigate or
eliminate the causes of previous labour disruptions at PMV. Those conditions
can still be enforced and any violations could result in the cancellation of
licenses. In short, I have no doubt that any potential problems associated
with the issuance of licenses to a number of these Applicants can be managed by
PMV without any ensuing chaos.
[53]
The only practical means of overcoming the
breach of fairness in this situation without unduly interfering with the
interests of third parties, is to order PMV to reconsider the Applicants’
applications on the basis of the least onerous approval benchmark applied to
any of the successful applications. Some of the Applicants may not obtain
licenses under this process but they are no worse off in the result: their
applications would have failed in any event.
[54]
The decisions made by PMV denying licenses to
the Applicants are, accordingly, set aside. They are to be reconsidered on the
merits and in accordance with the most favourable approval benchmark applied to
any of the successful licensing applications. Licenses are ordered to be
issued to any qualified Applicant whose application meets that benchmark for
approval.
[55]
Costs are payable to the Applicants in each of
these proceedings to be assessed in separate Bills of Costs.
Email this Content