Docket: T-454-16
Citation:
2016 FC 1007
[ENGLISH
TRANSLATION]
Montréal, Quebec, September 6, 2016
PRESENT: The Honourable Mr. Justice Locke
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BETWEEN:
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CANADIAN
SHIPOWNERS ASSOCIATION
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Applicant
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and
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LAURENTIAN
PILOTAGE AUTHORITY and CORPORATION
DES PILOTES DU SAINT-LAURENT CENTRAL INC.
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Respondents
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JUDGMENT AND REASONS
[1]
This is a motion by the applicant, the Canadian
Shipowners Association (“the CSA”), appealing a decision rendered by
Prothonotary Richard Morneau, on July 6, 2016, which granted the motion
made by the Corporation des pilotes du Saint-Laurent Central Inc. (“the
Corporation”) to strike the CSA’s application for judicial review in this case.
[2]
For the following reasons, I find that the
CSA’s motion must be dismissed.
I.
Standard of review
[3]
Both parties have submitted that, since the
prothonotary’s discretionary decision addresses issues that are vital to the
outcome of the case, I must exercise my own discretionary power in examining
the case from the beginning (Canada v. Aqua-Gem Investments Ltd., [1993]
2 FCR 425 at p. 463 (CA) [Aqua-Gem]).
[4]
However, on August 31, 2016, the Federal
Court of Appeal issued its decision in Hospira Healthcare Corporation v.
Kennedy Institute of Rheumatology, 2016 FCA 215, overturning Aqua-Gem
and concluding that the standard of review for a prothonotary’s discretionary
decision is that which is explained in the Supreme Court of Canada’s decision
in Housen v. Nikolaisen, 2002 SCC 33: findings of fact are not to be
reversed unless it can be established that the prothonotary made a “palpable
and overriding error”; for questions of law, as well as for questions of mixed
fact and law in which a question of law can be found, the standard of review is
that of correctness.
[5]
Hospira
significantly changes the standard of review for a prothonotary’s discretionary
decision, especially in the context of the facts of the motion at hand; Aqua-Gem
calls for a de novo approach for questions of law and of fact, whereas Hospira
requires deference regarding questions of fact.
[6]
Although the parties have not had the
opportunity to make arguments on Hospira, I have decided not to
request additional submissions, since I am satisfied that my findings in
this decision would remain unchanged, regardless of the applicable standard of
review. Although my analysis below does not indicate any deference to the
prothonotary’s findings of fact, I affirm that I am in agreement with
all of the prothonotary’s findings of fact. My decision has the same result,
regardless of whether I apply Aqua-Gem or Hospira.
II.
Facts
[7]
On March 18, 2016, the CSA tabled a notice
of application for judicial review of an arbitral award made pursuant to
section 15.1 of the Pilotage Act, RSC 1985, c. P-14 (“the Act”).
The arbitral award concerned the contract renewal negotiations between the
Corporation and the Laurentian Pilotage Authority (“the LPA”) and dealt with
certain clauses on which the Corporation and the LPA disagreed. According to
section 15.2 of the Act, the arbitrator receives each party’s final offer
and then chooses one.
III.
Analysis
[8]
The CSA’s concern with the arbitral award is in
regard to the amount of advance notice given to pilots when the CSA requests
their services. Specifically, the CSA submits that under certain circumstances,
the amount of advance notice provided for by the arbitral award exceeds the
amount of advance notice provided for in the Laurentian Pilotage Authority
Regulations, CRC, c. 1268 (“the Regulations”), and therefore the
service expectations held by CSA members based on the Regulations might not be
met.
[9]
The Corporation submits that the arbitral award
is in regard to a contract between the LPA and the Corporation and that the CSA
does not have the standing to file an application for judicial review of the
arbitral award. The CSA does not agree and requests that it be allowed to
pursue its application. Although the LPA has not made written submissions in
this motion, its counsel indicated at the hearing that the LPA is in agreement
with the CSA that it should be allowed to pursue its application.
[10]
The CSA raised as a preliminary argument that
the motion to strike is premature and that the question of standing should be
decided at the hearing on the merits of the application.
[11]
As Mr. Justice Harrington said in Canadian
Generic Pharmaceutical Association v. Canada (Governor in Council), 2007 FC
154 at paragraph 25:
An application for judicial review is
supposed to be decided in a summary way. The Court discourages interlocutory
motions in applications for judicial review. Nevertheless, applications for
judicial review have been dismissed at the outset if bereft of any chance of
success.
[12]
Questions of standing are treated a bit
differently. The Federal Court of Appeal said the following in Apotex Inc.
v. Canada (Governor in Council), 2007 FCA 374 at paragraph 13:
[13] It is not always appropriate for
motions to strike to be the context to make a binding decision on a question of
standing, especially when the motion is to strike out an application for
judicial review. Rather, a judge should exercise her discretion as to whether
it would be appropriate in the circumstances to render a decision on standing,
or whether a final disposition of the question should be heard with the merits
of the case. Evans J. (as he then was) briefly discussed the considerations a
judge should take in exercising her discretion in Sierra Club of Canada v.
Canada (Minister of Finance), [1999] 2 F.C. 211 (T.D.) (“Sierra Club”) at
paragraph 25 (emphasis added):
In my view, a court should be
prepared to terminate an application for judicial review on a preliminary
motion to strike for lack of standing only in very clear cases. At this
stage of the proceeding, the court may not have all the relevant facts before
it, or the benefit of full legal argument on the statutory framework within
which the administrative action in question was taken. To the extent that
the strength of the applicant’s case, and other factors, are relevant to the
ground of discretionary standing, the Court may not be in a position to make a
fully informed decision that would justify a denial of standing.
I agree with Evans J. that this discretion
should be exercised sparingly. This is affirmed by the principle that
applications for judicial review are supposed to be decided summarily, and that
interlocutory motions are to be avoided. This, indeed, as will be discussed
below, explains why the test for the motion to strike on an application for
judicial review is that the Application would be “bereft of success.”
[Emphasis in the original.]
[13]
Section 18.1 of the Federal Courts Act,
RSC 1985, c. F-7 indicates that an application for judicial review can be made
by anyone directly affected by the matter in respect of which relief is sought.
A second way in which a party can have standing in an application for judicial
review is when the circumstances are appropriate for public interest standing.
A.
Directly affected
[14]
A party is directly affected by the matter in
respect of which relief is sought “when its legal
rights are affected, legal obligations are imposed upon it, or it is prejudicially
affected in some direct way”: Forest Ethics Advocacy Association v.
Canada (National Energy Board), 2013 FCA 236 at paragraph 20.
[15]
The CSA has two arguments in support of its
position that it is directly affected by the matter in respect of which relief
is sought. First, it notes that its members will suffer the effects of the
arbitral award and the CSA must be entitled to represent its members. Second,
the CSA submits that it is entitled to take part in any changes made to the
Regulations and that the arbitral award has the effect of changing the
Regulations without its participation and, therefore, is inappropriate.
[16]
In support of its first argument, the CSA cites
the case law to the effect that an association can have standing on behalf of
its members. The major flaw in this argument is that it cannot help the CSA
unless its members will be directly affected by the subject of this
application. In my opinion, the impacts of the arbitral award will affect the
CSA’s members in an indirect way, rather than directly. It follows that the CSA
is also affected only indirectly.
[17]
Regarding the CSA’s second argument in support
of its position that it is directly affected by the subject of the application
(the arbitral award has the effect of changing the Regulations), the parties
focused on three decisions that are discussed below.
[18]
In Pilotes du Saint-Laurent Central Inc. v.
Laurentian Pilotage Authority, 2002 FCT 846, the conflict pertained to
whether a second pilot would be required on a vessel in a particular situation.
An arbitral award was made in favour of the Corporation. The Corporation sought
to have the Federal Court’s decision homologated. The prothonotary granted the
homologation and the LPA appealed the prothonotary’s decision, arguing that the
arbitral award was inappropriate since it conflicted with the Regulations.
[19]
The Corporation notes that the Act makes
provision for the contract between it and the LPA and makes no provision for
limits to the conditions that may be negotiated between the parties or for the
participation of third parties in negotiations. However, another section of the
Act addresses the Regulations as well as the active participation of third
parties before its implementation. The Corporation submits that the Act
carefully separates the creation of the Regulations from the negotiation of the
contract between the LPA and the pilots. Referring to the Court’s decision, the
Corporation submits that the Regulations continue to apply regardless of the
content of the contract between the Corporation and the LPA.
[20]
For its part, the CSA attempts to set this
decision apart by the fact that the Court found no conflict between the
arbitral award and the Regulations.
[21]
The second of the three decisions discussed by
the parties on this topic, Pilotes du St-Laurent Central Inc. v. Laurentian
Pilotage Authority, 2004 FC 1325, deals with a conflict over pilots’ fees
during the third year of the contract between the parties. As in the
above-mentioned decision, (i) an arbitral award was made in favour of the
Corporation, (ii) the Corporation tried to have it homologated before the
Federal Court, (iii) the prothonotary granted the homologation, and (iv) the
LPA appealed the prothonotary’s decision. One of the LPA’s arguments was that
the arbitral award breached public order since the increase in pilots’ fees was
greater than what the LPA could absorb. Regarding this argument, the Court said
the following at paragraph 18:
I cannot see how this can be affected in the
circumstances by the setting of a fee percentage. The LPA negotiated a contract
which contains an arbitration clause giving the arbitrator jurisdiction to
determine the amount of the PSLC fee increase scheduled for July 1, 2002.
It has to be assumed that the LPA negotiated the terms of this contract in good
faith. It is not justified in then arguing that it does not have the means to
pay, that the effect of the arbitration award was to force the hands of public
agencies and that there was accordingly a breach of public order. First, the
arbitrator concluded that the LPA was able to pay, and as I have already said,
it is not for this Court to review the validity of that conclusion by examining
the merits of the dispute. Then, it is important to avoid widespread recourse
to public order in the field of the arbitration system, so as to preserve the
decision-making independence of arbitration. The fact that the outcome of the
dispute may have an impact on third parties, in any case, is not a factor that
can be a basis for denying homologation.
[22]
Here, the Court made reference to the Supreme
Court of Canada’s decision in Desputeaux v. Éditions Chouette (1987) inc.,
[2003] 1 S.C.R. 178. At paragraph 62 of that decision, the Court declared:
The arbitration proceeding in this case was
between two private parties involved in a dispute as to the proper
interpretation of a contract. The arbitrator ruled as to the ownership of the
copyright in order to decide as to the rights and obligations of the parties to
the contract. The arbitral decision is authority between the parties, but is
not binding on third parties who were not involved in the proceeding.
[23]
The CSA attempts to set apart these two
decisions on the same basis as the first decision discussed above: the Court
found that there was no conflict between the contract (the arbitral award) and
the legal provisions. The CSA submits that this is not the case with the
application at hand.
[24]
In my opinion, the Supreme Court’s statement
that a contract between private parties does not bind third parties who were
not involved in the proceeding applies to the application at hand. The Court’s
reasoning does not seem to depend on an absence of conflict between the
contract (the arbitral award) and the legal provisions.
[25]
The third decision discussed by the parties, Corporation
des pilotes du bas Saint-Laurent v. Administration de pilotage des Laurentides,
[1999] Q.J. No. 5368 (QL), 1999 CanLII 10920 (QC CS), comes from a different
court and involves a different pilots’ corporation. The conflict this time
involves the end date of the [translation]
“winter navigation” period and the pilots’
argument that the LPA had failed to fulfil its duty to consult them in this
regard. The arbitrator ruled in favour of the pilots and the pilots went before
the Court (here, the Superior Court of the Province of Quebec) to request that
the arbitral decision be homologated. Among its arguments against homologation,
the LPA submitted that the arbitral award breached public order by imposing a
standard that contravened the Act and its Regulations. In granting the
homologation motion, the Court stated the following at paragraph 29:
[translation]
The arbitral decision does not further change the Regulations on pilotage. It
simply finds that the Authority failed to comply with them in one particular
instance. If third parties suffer consequences as a result of the award, they
cannot be due to the award itself, but to the impact of laws, regulations or
agreements involving these third parties and the Authority. If third
parties—shipowners, for example—are aggrieved by the impact of the decision, it
is not the decision that they must challenge, but rather the originator of the
illegal act.
[26]
Again, the CSA sets apart this decision on the
basis that the Court found that there was no conflict between the arbitral award
and the Act.
[27]
In my opinion, the above-mentioned decisions
clearly indicate that an arbitral award, regardless of its content, cannot
change a regulation. For this reason, I am of the opinion that the CSA’s
argument to the effect that the arbitral award at hand changed the Regulations
such that the CSA had the right to participate, has no chance of being
accepted. Furthermore, any harm that the CSA or its members might suffer in
this regard would constitute indirect harm, not direct harm. It follows that
the CSA’s second argument in support of its position, according to which it is
directly affected by the matter in respect of which relief is sought, cannot
succeed.
[28]
Therefore, I find that the CSA is not directly
affected by the matter in respect of which relief is sought.
B.
Public interest
[29]
The parties agree, and I concur, that the most
notable authority on public interest standing is the Supreme Court of Canada’s
decision in Canada (Attorney General) v. Downtown Eastside Sex Workers
United Against Violence Society, 2012 SCC 45. The Supreme Court indicates
that the courts have taken a flexible, discretionary approach to public
interest standing: see paragraph 1. The Court identifies three factors
that courts must take into consideration when exercising the discretionary
power to allow public interest standing or not:
1)
Does the case raise a serious justiciable issue?
2)
Does the party bringing the action have a real
stake or a genuine interest in the outcome of this issue?
3)
Having regard to a number of factors, is the
proposed suit a reasonable and effective means to bring the case to court? (See
paragraphs 2 and 37.)
[30]
The Court also indicates that these factors must
be applied with a flexible, discretionary and purposive approach: see
paragraph 44.
[31]
I weigh each of these factors in the following
paragraphs.
(1)
Serious justiciable issue
[32]
To constitute a serious issue, the question
raised must be a substantial constitutional issue or an important question. The
claim must be far from frivolous: see paragraph 42. This factor also
reflects the need to screen out the mere busybody: see paragraph 41.
[33]
The CSA submits that it is not acting as a mere
busybody and that the question of whether an arbitral award might be in
conflict with a regulation is important and far from being frivolous. The
Corporation argues that the question is specific to this case and that it is
not important.
[34]
In my opinion, the threshold of importance for
determining what is a serious issue is not very high. I am of the opinion that
a serious justiciable issue is raised in this application.
(2)
Real stake or genuine interest
[35]
Here as well, I am of the opinion that the
threshold is not very high. I am satisfied that the CSA has a genuine interest
in this application, since wait times for pilot services for its members may be
affected by the arbitral award.
(3)
Reasonable and effective means
[36]
The Court indicates that this factor must not be
applied rigidly. Rather, it indicates that the applicable principles should be
interpreted “in a liberal and generous manner”:
see paragraph 48. It is not necessary for the CSA to establish that there
is no other reasonable and effective means to bring the issue before the Court.
[37]
The Court also indicates that this factor must
be applied purposively in order to ensure full and complete adversarial
presentation and to conserve judicial resources: see paragraph 49.
[38]
In addition, the Court indicates that a flexible
approach is required in assessing this factor. There is no binary, yes or no,
analysis possible: whether a means of proceeding is reasonable, whether it is
effective and whether it will serve to reinforce the principle of legality are
matters of degree and must be considered in light of realistic alternatives in
all of the circumstances: see paragraph 50.
[39]
The Court notes that it should be considered
whether the case is of public interest in the sense that it transcends the
interests of those most directly affected by the challenged law or action: see
paragraph 51.
[40]
The Court also suggests that it should be
determined whether there are realistic alternative means which would favour a
more efficient and effective use of judicial resources and would present a
context more suitable for adversarial determination. The Court explains at
paragraph 51:
The existence of other potential plaintiffs,
particularly those who would have standing as of right, is relevant, but the
practical prospects of their bringing the matter to court at all or by equally
or more reasonable and effective means should be considered in light of the
practical realities, not theoretical possibilities. Where there are other
actual plaintiffs in the sense that other proceedings in relation to the matter
are under way, the court should assess from a practical perspective what, if
anything, is to be gained by having parallel proceedings and whether the other
proceedings will resolve the issues in an equally or more reasonable and
effective manner. In doing so, the court should consider not only the
particular legal issues or issues raised, but whether the plaintiff brings any
particularly useful or distinctive perspective to the resolution of those
issues.
[41]
Lastly, the Court indicates that the potential
impact of the proceedings on the rights of others who are equally or more
directly affected should be taken into account.
[42]
The Corporation submits that the CSA should not
have public interest standing since the LPA already brought an application for
judicial review of the arbitral award. The Corporation notes that the LPA
raises the same arguments as the CSA.
[43]
In response, the CSA submits that its interests
are not the same as those of the LPA. The Act provides that the CSA has the
right to pilots’ services, while the LPA has the duty to provide these
services. The CSA also fears that a settlement might be reached regarding the
LPA’s application.
[44]
As indicated above, the LPA agrees that the CSA
has standing in this application.
[45]
In my opinion, public interest does not require
the CSA to have standing in the application at hand. I arrive at this
conclusion because the same issues have already been raised before this Court
in the application made by the LPA, which is a party to the contract with the
Corporation and therefore directly affected by the matter in respect of which
relief is sought. The LPA’s dispute is a true adversarial contest.
[46]
Although the LPA’s and CSA’s interests are not
exactly the same, I am not convinced that the arguments of the latter would be
significantly different from those of the former. The CSA did not identify any
argument it would make that the LPA would not make. In my opinion, the Court’s
decision in Sunshine Village Corp v. Canada (Directeur du Parc national
Banff) (1994), [1995] 1 FC 420 (T.D.), affirmed in [1996] FCJ No. 1118 (QL)
(CA), is different in that there is no indication that the LPA ever changed its
position.
[47]
Although the question in the application at hand
is important enough to satisfy the first of the criteria for public interest
standing, I am not convinced that it is important enough to transcend the
interests of those most directly affected by the challenged law or action. I do
not view involving the CSA in the LPA’s application (assuming that the
application at hand is merged with that of the LPA) as a more efficient and
effective use of judicial resources than leaving the LPA application by itself.
[48]
Now I must consider the CSA’s argument that,
even if I am of the opinion that it does not have standing, I must not strike
its application so that the Corporation can establish that it has no chance of
being allowed. I am satisfied that the CSA cannot possibly establish that it is
directly affected by the matter in respect of which relief is sought. As
for public interest standing, it is hard to establish that there is no chance
of success, since the test is so subjective. Nevertheless, I do not see how the
CSA can overcome the fact that it would not contribute anything to the case
that the LPA could not contribute. Even the evidence of CSA witnesses could
have been submitted in the context of the LPA application. Since effectiveness
is a consideration that must be applied with flexibility and since there would
be a significant loss of effectiveness if the CSA were allowed to pursue its
application for judicial review until the hearing on the merits, I am of the
opinion that the CSA’s application is not a reasonable and effective means of
bringing the matter before the Court. In my opinion, the CSA does not have
public interest standing.
IV.
Conclusion
[49]
For these reasons, I agree with Prothonotary
Morneau that the CSA does not have standing in this application and that the
present motion appealing Prothonotary Morneau’s decision must be dismissed.
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