Docket: T-1447-14
Citation:
2015 FC 1105
Ottawa, Ontario, September 22, 2015
PRESENT: The
Honourable Mr. Justice O'Keefe
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BETWEEN:
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DR. GARY SMITH,
ANDRÉE STOW, PETRONELLA SMID,
ELIZABETH
PUNNETT, LAURA HANSEN, PAUL CHRISTENSEN, KAREN LARSON, AND MATHIAS HENNIG
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Applicants
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and
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ATTORNEY
GENERAL OF CANADA and TRANS MOUNTAIN PIPELINE ULC
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Respondents
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REASONS FOR JUDGMENT AND JUDGMENT
[1]
Pursuant to section 18.1 of the Federal
Courts Act, RSC 1985, c F-7, the applicants filed an application for judicial
review in respect of decisions issued by the Funding Review Committee and the
Chief Operating Officer [Funding Decider] of the National Energy Board [NEB]
dated May 7, 2014, wherein the applicants’ requests for participant funding
relating to the Trans Mountain Expansion Project Regulatory Review was denied.
[2]
The applicants seek the following order or
orders:
1.
Declaring that the Funding Decider erred by
making the decision under the National Energy Board Act, RSC, 1985, c
N-7 [the Act] and the Guide to the National Energy Board Participant Funding
Program under the Act [the Guide] unreasonably and further or alternatively,
without observing procedural fairness;
2.
Quashing or setting aside the decision;
3.
Directing that the Funding Decider issue the
applicants funding in an amount equal or comparable to sums received by other
directly affected landowners, or in the amount of $67,600 with an additional
$2,500 for travel expenses for two representatives;
4.
Further or alternatively, referring the matter
back to the Funding Decider for a new determination in accordance with such
directions the Court considers appropriate;
5.
For costs of and incidental to this application;
and
6.
That the applicants shall not be required to pay
costs to the respondents of this application, pursuant to Rule 400 of the Federal
Courts Rules, SOR/98-106, in the event that this application is dismissed.
I.
Background
[3]
The NEB is responsible for conducting regulatory
reviews of energy projects which cross provincial or international borders.
This responsibility is established by the Act.
[4]
The Act administers the NEB Participant Funding
Program [PFP]. This program supports public participation by helping to pay for
certain costs for people or groups intervening in NEB hearings.
[5]
The Guide, available on the NEB website,
outlines the PFP and provides information on how to apply and where to obtain
more information. It states that the NEB establishes a Funding Review Committee
[the Committee] for each proposed project for which funding is made available.
[6]
The Committee prepares a report recommending how
to distribute the funds and the NEB Chief Operating Officer considers the
report and makes the final decision.
[7]
On July 22, 2013, the NEB announced funding
would be available for participation in the NEB’s regulatory process regarding
the Trans Mountain Expansion Project.
[8]
The NEB received applications for PFP funding
from the applicants in February and March 2014.
[9]
The Committee held meetings on February 19 and
March 4, 2014. On March 20, 2014, another committee meeting was held to discuss
the applications. The Committee asked Melissa Trono, a coordinator of the PFP
at the NEB to inform the applicants about its concerns of the applications’
inadequacies and to request that a single common application be submitted.
[10]
On March 21, 2014, Ms. Trono emailed the
applicants’ counsel, writing the following:
The Funding Review Committee finds that
these nine applications are very similar to each other in many aspects;
The Funding Review Committee sees limited
value in these applications being made separately;
The Funding Committee is not inclined to
fund the activities proposed in a piecemeal fashion.
Therefore, the Funding Review Committee
strongly encourages your clients to work together, to appoint a single
accountable representative, and to submit a single common application.
The email refers to nine applications but
there were only eight applications. This was corrected in later correspondence.
[11]
On March 28, 2014, the applicants’ counsel
emailed Ms. Trono advising that the Committee could consider the eight
applications as one single common application and Dr. Gary Smith will act as
the applicants’ single accountable representative. The applicants did not
however submit a new single common application.
[12]
On April 2, 2014, Ms. Trono emailed the
applicants’ counsel suggesting a new application with a project description
that would support the dollar amounts allocated for activities and expenses, with
a signature from Dr. Smith.
[13]
On the same day, the applicants’ counsel replied
that “[a]ny one application will have the same
information and therefore will not garner any further information.” Ms.
Trono wrote back on the same day reiterating the Committee’s strong
encouragement for a unique, common application with a modification to the
activities and costs.
[14]
On April 7, 2014, the applicants’ counsel
emailed Ms. Trono stating the applicants would not submit a new single
application and advised the Committee to proceed in assessing the applications
individually.
[15]
In the emailed letter, the applicants’ counsel
clarified that fees quoted in each application were not duplicated and listed
the following “collective amounts”:
1. Legal fees - $120,000
2. Business valuator - $160,000
3. Fisheries Expert - $20,000
4. Land valuator - $80,000
5. Agrologist- $ 20,000
6. Hydrologist - $12,000
7. Equine Behaviorist - $3,500
[16]
On April 15, 2014, the Committee held a meeting
and decided to have Ms. Trono again advise the applicants to submit a single
common application with reasonable costs. On the same day, Ms. Trono emailed
the applicants’ counsel and Dr. Smith, writing that the Committee remained
committed to treating the applicants as a group and reviewing only a common
application that clearly distinguishes activities and costs and avoids a
piecemeal approach. She highlighted the following:
The deadline the FRC has established to
receive an application from Dr. Smith is April 30, 2014. If an application
is not received by that date, unfortunately there will be no funding awarded
to a group that should be supported in their contribution as intervenors to the
hearing process.
[Emphasis in original]
[17]
On April 16, 2014, Byron Smith, son of the
applicant Dr. Smith, emailed Ms. Trono for clarification and subsequently
exchanged email correspondence with Mathieu Fecteau, Ms. Trono’s supervisor.
[18]
On April 29, 2014, Mathieu Fecteau, Manager of
the Participant Funding Project for the Trans Mountain Expansion Project at the
NEB, received an email from the articling student of the applicants’ counsel.
The email attached the April 7, 2014 letter and reiterated that the Committee
should consider the applications individually.
II.
Decision Under Review
[19]
On April 30, 2014, Bram Noble from the University
of Saskatchewan emailed Melissa Trono and wrote the following:
[. . .] We are not saying that each
application doesn’t identify each landowner’s identified cost, as they see it.
We are saying that the costs identified are
not realistic given that the work to be undertaken, and the individuals to be
hired to do it, is quite similar - for the most part identical.
There are obvious economies of scale here,
and we are not willing to use the funds in such an inefficient manner.
[20]
On May 1, 2014, the Committee assessed the
applications individually and rejected them due to the extensive duplication of
costs, the unreasonable amounts requested and the refusal to share costs.
[21]
Subsequently, the NEB mailed the rejection
letters dated May 7, 2014 to all eight applicants. No reasons were provided in
the letters.
III.
Issues
[22]
The applicants raise the following issues:
1.
Whether the Funding Decider made its decision
denying the applicants funds based on erroneous findings of fact that it made
in a perverse or capricious manner or without regard for the material before
it.
2.
Whether the Funding Decider made its decision
without considering all relevant factors or by considering irrelevant or
improper factors.
3.
Whether the Funding Decider, without observing
procedural fairness by providing no rationale or requirement for why existing
applications were inadequate to which the applicants could respond and by failing
to provide reasons.
[23]
The respondents raise the following issues:
1.
What is the standard of review in this case?
2.
Was the Funding Decider’s decision reasonable?
3.
Was the Funding Decider required to provide reasons?
4.
Did the Funding Decider breach its duty of
procedural fairness?
5.
If the applicants are successful, what remedy
can be ordered?
[24]
I would rephrase the issues as follows:
A.
What is the standard of review?
B.
Was the Funding Decider’s decision reasonable?
C.
Did the Funding Decider breach procedural
fairness?
IV.
Applicants’ Written Submissions
[25]
The applicants are at issue with the tribunal
disclosure arguing the document at tab 37, indicating the thirteenth round of
recommendations for project funding, does not provide disclosure of related
funding documents or records of previous funding recommendations.
[26]
The applicants state the Funding Decider’s
jurisdiction arises from section 16.3 of the Act.
[27]
Second, the applicants submit questions
regarding an administrative decision maker’s findings of fact should be
assessed on a standard of reasonableness (Canada (Citizenship and
Immigration) v Khosa, 2009 SCC 12 at paragraph 46, [2009] 1 S.C.R. 339 [Khosa]).
They argue a decision cannot be based on personal choice rather than based on
the powers granted to the decision maker (Roncarelli v Duplessis, [1959]
SCR 121). As for matters of procedural fairness, they are reviewed on the
standard of correctness.
[28]
Third, the applicants submit the Funding Decider
made the decision without regard to the foundational information before it and
hence, its decision was unreasonable (Nistor v Canada (Minister of
Citizenship and Immigration), [2005] FCJ No 1805, 283 FTR 15). They argue
they were never provided with reasons for the denial of funding, nor were
reasons disclosed in the tribunal disclosure. However, the applicants argue the
reasons for the denial can be inferred from the correspondence: i) perceived
duplication of requested costs among applicants; and ii) the applicants’
failure to provide a single common application with modified funding amounts.
They submit these reasons were arbitrary because the legal and expert costs on
each application were apportioned a fraction of the total cost of all eight
funding applications. The applicants argue the Funding Decider failed to take
into account this relevant consideration and made an error.
[29]
Further, the applicants argue there was another
fact that the Funding Decider erroneously decided; it was Ms. Mancinelli’s
application, an intervenor residing in another municipality.
[30]
The applicants also argue Ms. Trono’s April 15,
2014 email contained words confirming that the applicants “should be supported in their contribution as intervenors to
the hearing process.”
[31]
Here, the Funding Decider demanded the modified
applications contain reduced amounts; but if it determined the amounts
requested were too high, it had the power and authority to provide partial
funding. The applicants argue they were denied funding on the basis that they
failed to provide a single common application and failed to arbitrarily reduce
the requested amount. They submit these requirements were not formal
requirements and were only applied to them but not to other funding applicants.
[32]
Fourth, the applicants submit the Funding
Decider breached procedural fairness. They state this project presents
potential for significant impact to the applicants. They argue given the
significant size and complicated procedure employed during the regulatory
review, their only opportunity to meaningfully participate in the project’s
review is with legal and expert support. They argue they do not have a budget
to retain legal and expert support without some financial assistance. Here, the
applicants were not given any information about procedural requirements that
overrode the Guide or about a crucial request cut-off amount the Funding
Decider would use to influence its decision. Further, the Funding Decider
failed to provide reasons.
[33]
Lastly, the applicants submit that the Court has
the option of ordering a particular decision. Here, the Committee demonstrated
unfitness to reconsider and there is not an alternative decision maker. They
argue that they are similar to land owners of the CGLAP group and request the
Court to grant them $67,600 with an additional $2,500 for travel expenses for
two representatives.
V.
Respondents’ Written Submissions
[34]
First, the respondents submit the Funding
Decider’s decision and the adequacy of the reasons provided should be reviewed
on a reasonableness standard and issues of procedural fairness should be
reviewed on a correctness standard.
[35]
Second, the respondents submit the Funding
Decider’s decision was reasonable. It argues the applicants requested costs in
a manner that was not cohesive, demonstrated a duplication of costs, requested
unreasonable amounts and demonstrated a refusal to share costs.
[36]
Here, the Funding Decider considered relevant
factors: i) similarities between the individual applications amounting to
reasonable concerns for duplication of costs and a refusal to share cost; ii)
the Guide encouraged coordination amongst applicants and emphasized the
importance of avoiding duplication; and iii) inconsistencies in the information
provided by the applicants where the collective amount did not equal to and
cover the same categories of costs compared to the individual applications
added together.
[37]
Also, other decisions are not relevant when
considering whether a decision of an administrative tribunal is reasonable.
[38]
Third, the respondents submit the Funding
Decider was not required to provide reasons but nonetheless, it provided
sufficient reasons. There is no general rule that reasons are required to be
provided for administrative decisions (Baker v Canada (Minister of
Citizenship and Immigration), [1999] 2 S.C.R. 817 at paragraph 37, [1999] SCJ
No 39). It argues if reasons were required, the Funding Decider provided
sufficient reasons. The respondents submit the correspondence between the NEB
employees and the applicants’ counsel constituted sufficient reasons for the decision.
In the correspondence, NEB employees clearly articulated the problems with the
individual applications.
[39]
Fourth, the respondents submit the Funding
Decider did not breach its duty of procedural fairness. The NEB can control its
own process as an administrative tribunal. Procedures are subject to statutory
limitations on their power. Here, the Act allows the NEB to establish a PFP
pursuant to section 16.3, but does not impose further requirements on how the
PFP should be carried out. Therefore, the Act gives the NEB discretion in
establishing the PFP. The Guide was created to provide information, not to
present as a complete code. It was open to the NEB to control its own procedures
by requesting that the applicants submit a single common application. Further,
the request for a single common application did not contradict any information
provided in the Guide and in fact, aligned with several points regarding the
encouragement of coordination of efforts to avoid duplication. Here, contrary
to what the applicants allege, the Funding Decider clearly informed the
applicants on multiple occasions that it sought a single common application.
[40]
Fifth, the respondents submit if the applicants
are successful in their arguments, this Court cannot award damages. The
applicants’ request to issue a specific amount of funding constitutes an award
of damages. This is an application for judicial review and the Courts have
determined no damage can be awarded in judicial review proceedings under Al-Mhamad
v Canadian Radio-Television and Telecommunications Commission, 2003 FCA 45
at paragraph 3, [2003] FCJ No 145 [Al-Mhamad].
VI.
Analysis and Decision
A.
Issue 1 - What is the standard of review?
[41]
I agree with the parties’ submissions on the
standard of review.
[42]
Questions regarding the administrative decision
maker’s findings of fact should be afforded deference and hence, they are
assessed on a standard of reasonableness (Khosa at paragraph 46). This
means that I should not intervene if the decision is transparent, justifiable,
intelligible and within the range of acceptable outcomes (see Dunsmuir v New
Brunswick, 2008 SCC 9 at paragraph 47, [2008] 1 S.C.R. 190). As the Supreme
Court held in Khosa at paragraphs 59 and 61, a court reviewing for
reasonableness cannot substitute its own view of a preferable outcome, nor can
it reweigh the evidence.
[43]
The issue of procedural fairness and natural
justice is a question of law. A review on a question of law typically triggers
the standard of correctness (Khosa at paragraph 43). The Court must
determine whether the process followed by the decision maker satisfied the
level of fairness required in all of the circumstances (Khosa at
paragraph 43).
[44]
The applicants requested that I grant leave to
file the affidavit of Julia Hincks #2 in this matter. Ms. Hincks is a lawyer in
the office of the applicants’ counsel. Upon a review of the affidavit and
considering the remarks of counsel, I am prepared to grant leave to file the
affidavit.
B.
Issue 2 - Was the Funding Decider’s decision
reasonable?
[45]
The authority to set up participant funding
programs is contained in subsection 16.3 of the Act which states:
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16.3 For the
purposes of this Act, the Board may establish a participant funding program
to facilitate the participation of the public in hearings that are held under
section 24.
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16.3
L’Office peut, pour l’application de la présente loi, créer un programme
d’aide financière visant à faciliter la participation du public aux audiences
publiques tenues au titre de l’article 24.
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The Guide provides for a Funding Review
Committee to be set up which prepares a report recommending how to distribute
the funds. The NEB chief operating officer, sometimes called the Funding
Decider, considers the report and makes the final decision.
[46]
The NEB has also published a Participant Funding
Program Guide which explains the purpose of the Participant Funding Program,
how to apply for funding and where to get more information.
[47]
There were submissions concerning the
disclosures by the respondents however, the non-disclosure concerned other
funding applications which would not appear to have a bearing on the decision
with respect to the current applications.
[48]
On one hand, the applicants are of the view that
the Funding Decider failed to take into consideration relevant facts and
erroneously included irrelevant considerations in making its decision. The
applicants are at issue with the decisions due to the following: i) the Funding
Decider did not consider each application contained cost apportioned amounts as
a fraction of the total cost of all eight applications; ii) it demanded one
single application; iii) it failed to exercise its power to grant partial
funding; and iv) it considered an unrelated application. On the other hand, the
respondent submits the Funding Decider’s decision was reasonable and lists the
following relevant factors: i) reasonable concerns for duplication of costs and
a refusal to share costs; ii) the Guide encouraged coordination amongst
applicants; and iii) inconsistencies in the information provided by the
applicants.
[49]
The following is a list of criteria listed under
the Guide:
The Committee will consider:
• your eligibility for participant funding
• your interest in the proposed project
• the potential for the proposed project to impact you
• how you propose to contribute to the regulatory process
• how you would play an important and distinct role in the regulatory
process
• whether you have demonstrated that you will provide value-added
information* relevant to the regulatory process
• how important your participation will likely be to the Hearing
(priority is provided to expenses associated with supporting the participation
of local parties)
• whether anyone else has previously completed or is likely to do the
same work
• the reasonableness of your requested costs
• whether you have funding from other sources
[50]
First, I find the Funding Decider did consider
each application individually with apportioned costs. The content in Bram Noble’s
April 30, 2014 email demonstrates that the concern was with the amount
requested being unreasonable in light of part identical work among all the
applicants. I find the Funding Decider was not unreasonable to consider the principle
of economies of scale.
[51]
Second, I find the Funding Decider was not
unreasonable to request that a single common application be submitted with
readjusted amounts. The correspondence showed the lack of a single common
application was not the sole basis for refusing the applications. Here, the
Funding Decider was not satisfied that the applicants had worked together to
request a reasonable amount to show coordination.
[52]
Third, I find the Funding Decider did not make a
reviewable error in failing to partially grant the applicants’ application. The
elements that contribute to granting a funding application are not prescribed
by statute; hence, the NEB and the Committee have discretion in allocating
funds. Also, reasonableness of the requested funds is one of the considerations
listed under the Guide. Here, the Funding Decider found the requested costs
were not reasonable.
[53]
Fourth, I find although the Funding Decider made
an error in including an application that was not geographically close to the
land owned by the applicants, it did subsequently acknowledge this error and separated
this application.
[54]
Having considered the above, I find the Funding
Decider was not unreasonable to refuse the applications.
C.
Issue 3 - Did the Funding Decider breach
procedural fairness?
[55]
The applicants state that the Funding Decider
breached the duty of procedural fairness because:
- The applicants
were not given any information about procedural requirements that overrode
the Guide or about cut-off amounts.
- The Funding
Provider did not provide reasons.
[56]
To begin with, I would note that section 16.3 of
the Act does not set out any particular process to be followed. Thus, it would
appear that the NEB can set its own process and procedures which of course,
must be fair.
[57]
It should also be noted that the purpose of the
Guide is stated “to provide information on the National
Energy Board’s (NEB or Board) Participant Funding Program.”
[58]
I see nothing unreasonable about the committee
asking for a single application for all of the applicants. In fact, the Guide
lists as criteria that the committee consider whether anyone else has
previously completed or is likely to do the same work and the reasonableness of
the requested costs. The committee, on a number of occasions, made the
applicants aware of the need for a single application and its concern about the
reasonableness of the proposed costs. There is no conflict with the Guide.
[59]
With respect to reasons, I find that sufficient
reasons for the denial were provided. A review of the correspondence between
the NEB and the applicants shows that the committee made numerous requests for
a single common application with a more reasonable amount to be submitted.
There was ample time to comply with the request.
[60]
I am of the opinion that the Funding Decider
acted fairly and did not breach procedural fairness.
[61]
As a result, the application for judicial review
is dismissed.
[62]
There shall be no order as to costs due to the
factual background of the case and the novel nature of the issues.
[63]
Because of my decision above, I need not
deal with the issue of the payment of the sums of $67,600 and $2,500.
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