Canada (Attorney General) v. Assh, 2006 FCA 358

Date: 20061103

Docket: A-528-05

Citation: 2006 FCA 358

 

CORAM:       LINDEN J.A.

                        NADON J.A.

                        EVANS J.A.

 

BETWEEN:

ATTORNEY GENERAL OF CANADA

Appellant

and

DANIEL ISRAEL ASSH

Respondent

 

 

 

 

Heard at Ottawa, Ontario, on September 19, 2006.

Judgment delivered at Ottawa, Ontario, on November 3, 2006.

 

REASONS FOR JUDGMENT BY:                                                                                EVANS J.A.

CONCURRED IN BY:                                                                                                  LINDEN J.A.

 

DISSENTING REASONS BY:                                                                                     NADON J.A.

 

 

Date: 20061103

Docket: A-528-05

Citation: 2006 FCA 358

 

CORAM:       LINDEN J.A.

                        NADON J.A.

                        EVANS J.A.

 

BETWEEN:

ATTORNEY GENERAL OF CANADA

Appellant

and

DANIEL ISRAEL ASSH

Respondent

 

 

 

REASONS FOR JUDGMENT

EVANS J.A.

A.        INTRODUCTION

[1]               Daniel Israel Assh is a lawyer employed by Veterans Affairs Canada as a pensions advocate to assist veterans and their surviving spouses with their pension claims. The question raised by this appeal is whether he may accept a legacy of $5,000 left to him by a former client as a mark of gratitude for having helped her to obtain her pensions.

 

[2]               The Department says that acceptance of the legacy would be contrary to the Conflict of Interest and Post-Employment Code for the Public Service (Ottawa: Minister of Supply and Services Canada, 1985, rev. 1987) (“Conflict of Interest Code” or “Code”) issued by the Treasury Board.

 

[3]               Mr Assh disagrees, saying that no reasonable person, who was informed of the unusual circumstances of this case, would think that accepting the legacy would place him in a position where he might advance his own personal interest at the expense of his duty to his client. He argues that accepting the legacy cannot give rise to even an apparent conflict of interest and duty, since a legacy does not take effect until the death of the donor, after which he could render the client-donor no further professional services.

 

[4]               Mr Assh sought judicial review of Veterans Affairs’ direction to him to refuse or return the legacy in accordance with the Code. A Judge of the Federal Court allowed the application and set aside the final level grievance upholding the original decision: Assh v. Canada (Attorney General) (2005), 39 Admin. L.R. (4^th) 137, 2005 FC 1411. In my respectful opinion, the Judge erred in his conclusion. I would allow the appeal, dismiss the application for judicial review, and restore the decision made at the final level grievance.

 

B.        FACTUAL BACKGROUND

[5]               Mr Assh is the Edmonton District Pensions Advocate for the Bureau of Pensions Advocates, Veterans Affairs Canada. From 1993 to 1996, he successfully assisted Maria Adrienne Orn, a veteran and the widow of a veteran, to obtain her pension benefits. In July 2001, when Ms Orn was very ill in hospital, she changed her will, with the help of her lawyer, James Odishaw, and included the legacy to Mr Assh. She left specific legacies totalling more than $100,000 and divided the residue of her estate among various named persons and a charity. Three weeks later, she died.

 

[6]               In August 2001, Mr Assh received a voice mail message from Mr Odishaw’s secretar, informing him that Ms Orn had left him a legacy of $5,000. Mr Assh immediately told his supervisor, Evan Elkin, of the bequest, saying that he had had no previous knowledge of Ms Orn’s will and that his acceptance of the legacy could not give rise to a conflict of interest because she was obviously not expecting further services from him. Further, since Ms Orn died leaving no children, she could not have left him the legacy in the expectation that he would give them special assistance. Consequently, he intended to accept the legacy. Mr Elkin responded that Mr Assh should “hold off” accepting it, “until it has been cleared through the appropriate departmental channels”.

 

[7]               In September 2001, Mr Assh filed a confidential report with Mr Fenety, the Director General of Human Resources, Veterans Affairs, describing both the legacy, which he stated that he intended to accept, and the circumstances in which he had represented Ms Orn.

 

[8]               Mr Assh said that he had never suggested, encouraged or requested Ms Orn to transfer any economic benefit to him, either during her lifetime or on her death, and that he had had no knowledge of the legacy prior to the telephone call from Mr Odishaw’s office in August 2001. In addition, he stated that he had not acted for Ms Orn since 1996.

 

[9]               In a two-page letter dated January 11, 2002, Mr Fenety explained to Mr Assh that acceptance of Ms Orn’s legacy would contravene the Conflict of Interest Code, and directed him to decline it or, if he had already accepted it, to repay the sum to the estate.

 

[10]           On February 11, 2002, Mr Odishaw sent Mr Assh a cheque for $5,000, having formally notified him of the legacy in a letter dated December 21, 2001. On February 15, 2002, Mr Assh returned an uncashed cheque for $5,000 to Mr Odishaw, who agreed to hold the funds for him, pending the resolution of his dispute with Veterans Affairs over the legacy.

 

[11]           In response to correspondence from Mr Assh, Mr Odishaw advised him in March 2002 that he had not been mentioned in Ms Orn’s will before the will was amended three weeks before her death. Mr Odishaw also stated that Ms Orn had told him that she was leaving the bequest to Mr Assh because he had been so helpful to her in obtaining her pension.

 

[12]           Mr Assh grieved Mr Fenety’s decision through the first and final levels of the internal grievance process, pursuant to section 91 of the Public Service Staff Relations Act, R.S.C. 1985, c. P-35 (“PSSRA”). At both levels, Mr Fenety’s decision was upheld and the grievance dismissed. Mr Assh applied for judicial review of the decision of the final level grievance board.

 

C.        REGULATORY FRAMEWORK

[13]           There is no legislation governing a federal public servant’s right to accept a legacy from a client. The Conflict of Interest Code in force at the relevant time is a Treasury Board Directive, which was tabled by the Prime Minister in the House of Commons on September 8, 1985. Federal public servants are required by section 7 of the Code to comply with its provisions as a condition of their employment.

 

[14]           The first part of the Code is entitled “Principles and Administration”; the provisions most relevant to this appeal are as follows.

 

[15]           Part II is entitled “Conflict of Interest Compliance Measures” and, as relevant to this appeal, provides as follows.

 

[16]           Section 11 of the Conflict of Interest Code authorizes the deputy head of a department to augment the compliance measures contained in Part II of the Code. Veterans Affairs has issued a supplementary Directive to employees respecting wills and estates. The Directive emphasises that many of Veterans Affairs’ clients are elderly and sometimes vulnerable, and may feel particularly grateful to those who have assisted them, and

the need to reward excellent service through the offer of a gift, bequest or special trust through the Department. Such gifts or bequests, although offered with the best intentions, may be perceived as serving the interests of employees or the Department over those of the client or their families.

 

 

[17]           The Directive provides that employees must carry out their official duties and responsibilities with “integrity, objectivity and impartiality”, and not engage in conduct which may be perceived

to permit gain for the employees (i.e. using their position with the department to ingratiate themselves to a client for personal benefit).

 

 

 

[18]           In addition, the Directive forbids employees from soliciting bequests of money for themselves. Otherwise, it does not address the circumstances in which employees may accept bequests. However, it does provide that, when an employee has been named as the beneficiary in a client’s will, the employee must report the matter to the “designated official” stipulated in the Conflict of Interest Code, and “The appropriate Conflict of Interest process will be followed.” Mr Assh complied with this provision by notifying Mr Elkin in August 2001, as soon as he learned of the legacy.

 

D.        ADMINISTRATIVE DECISION UNDER REVIEW

[19]           The decision under review is the final level grievance decision. However, since this and the first level grievance decision were made by employees of Veterans Affairs, and concurred with the original decision by Mr Fenety, it is appropriate to consider the reasons given at all three levels in order to obtain a complete picture of the basis of the decision under review.

 

[20]           In addition, a fourth administrative decision was rendered in this case by an Adjudicator of the Public Service Staff Relations Board (as it then was), pursuant to section 92 of the PSSRA. After receiving the final level grievance decision, Mr Assh grieved to the Board the Department’s refusal to permit him to accept the legacy. Unlike the first and final levels of the grievance process, the Adjudicator is independent of the employer. The Adjudicator allowed the grievance and set aside Veterans Affairs’ refusal to permit him to accept the legacy: Assh v. Treasury Board (Veterans Affairs), [2004] C.P.S.S.R.B. No. 100, 2004 PSSRB 111.

 

[21]           However, the Adjudicator’s decision was in turn set aside by Strayer D.J. of the Federal Court on an application for judicial review, on the ground that, since Veterans Affairs’ decision was not disciplinary in nature, it was not within the jurisdiction conferred on Adjudicators by section 92: Canada (Attorney General) v. Assh (2005), 272 F.T.R. 314, 2005 FC 734.  Strayer D.J. said (at para. 11) that it was not sufficient for this purpose that Mr Assh could potentially be disciplined for breach of his contract of employment if he accepted the legacy in defiance of Mr Fenety’s decision. However, the Judge made no comment on the merits of the Adjudicator’s decision and its supporting reasons.

 

(i) Mr Fenety’s decision

[22]           After referring to paragraphs 6(a) and (b) of the Conflict of Interest Code, Mr Fenety stated in his letter of decision:

In light of these provisions, if the public becomes aware that a bequest was accepted, public perception for the integrity of the Public Service may be tarnished and its confidence in the Public Service diminished. Consequently, employees must not only, in fact, act with integrity, the public perception must be that they acted with integrity.

 

 

 

[23]           He noted that paragraph 6(e) prohibits the acceptance of gifts of more than nominal value, such as Ms Orn’s legacy of $5,000. He relied also on paragraphs 28(b) and (c) for the following conclusions:

Accepting a bequest of $5000 cannot reasonably be considered as a normal expression of courtesy. Acceptance by Public Servants of gifts or bequests from clients may raise some suspicion and result in the public view that preferential services may be available for a price, thus compromising the integrity of the Government. The public must accept that a Public Servant will provide equal services to all.

 

 

 

[24]           Consequently, he concluded, Mr Assh was unable to accept or retain the legacy. Mr Fenety ended his decision letter by commending Mr Assh for his “honesty, integrity and professionalism for reporting this bequest to me.”

 

(ii) first level grievance decision

[25]           Mr Elkin, the Regional Director Pensions Advocacy for the Western Region, heard Mr Assh’s first level grievance. Mr Elkin found that the legacy came within paragraph 6(e) of the Code on the following grounds: the only relationship between Mr Assh and Ms Orn was that of solicitor and client; the legacy was intended as a token of her appreciation for his efforts in securing her pension; it was “substantial” in value; and it was not excluded from paragraph 6(e) as “an enforceable contract or property right of the employee”.

 

[26]           Turning to the other provisions of the Conflict of Interest Code, Mr Elkin stated that section 27 requires the refusal of gifts which could influence employees in their performance of official duties. Section 28 only permits a public servant to accept a gift which is “within the bounds of propriety, a normal expression of courtesy or within the normal standards of hospitality”. A legacy of $5,000 is none of these.

 

[27]           Like Mr Fenety, Mr Elkin complimented Mr Assh on the “high level of integrity” that he had shown in reporting the legacy to him at the earliest opportunity. Nonetheless, in his decision of August 19, 2002, he “regrettably” concurred with Mr Fenety’s decision and dismissed the grievance.

 

(iii) final level grievance decision

[28]           At the final level grievance, Mr Assh was represented by a lawyer with the Professional Institute of the Public Service of Canada, Mr Assh’s union. The focus of Mr Assh’s submissions was that the relevant provisions in the Conflict of Interest Code apply only to gifts by living persons, not to bequests, since a bequest cannot influence a public servant’s performance of his or her duties for the donor.

 

[29]           In his reasons for decision, dated November 6, 2002, Mr Macleod, the Chief Pensions Advocate, stated that he regarded Mr Assh’s reading of section 27 as unduly narrow and with no regard for its context. In his opinion,

[T]he intent of the various provisions of the Code is to prevent and to avoid a real or potential conflict of interest in the eyes of the public resulting from your official duties and responsibilities in respect to other present and future clients.

 

 

 

[30]           Whether a benefit takes the form of a testamentary or inter vivos gift is not determinative. While supporting the decision that Mr Assh could not accept the legacy since it exceeded the value described in paragraph 6(e) and section 28 of the Conflict of Interest Code, Mr MacLeod also commended Mr Assh on his integrity in promptly disclosing the legacy.

 

 

E.        DECISION OF THE FEDERAL COURT

[31]           After reviewing the history of this matter, the relevant provisions in the Conflict of Interest Code, and some pertinent jurisprudence, the Applications Judge stated (at para. 21) his approach as follows:

The application of this Code should be made in an informed and purposive manner, the decision maker should be apprised of and take into account all the relevant facts and not come to a superficial decision. The approach should be guided by the test set out by the Federal Court of Appeal in Threader [v. Canada (Treasury Board), [1987] 1 F.C. 41 (C.A.) at 57] at paragraph 27:

 

Would an informed person, viewing the matter realistically and practically and having thought the matter through, think it more likely than not that the public servant, whether consciously or unconsciously, will be influenced in the performance of his official duties by considerations having to do with his private interests?

 

 

 

[32]           The Applications Judge concluded that the question in dispute in the final level grievance involved the application to the facts of the Conflict of Interest Code and was reviewable on the reasonableness simpliciter standard.

 

[33]           He stated (at para. 23) that the reasons for decision of the final level grievance stopped at a “superficial level” and that the case “required a more probing analysis”.  The Applications Judge regarded the Adjudicator’s analysis as “more probing” (at para. 24), accepted and adopted her findings that these facts gave rise to no conflict of interest, either actual or apparent, and set aside the decision of the final level grievance.

 

 

 

 

F.        ISSUES AND ANALYSIS

Issue 1: Standard of review

(i) presence of a privative clause or a right of appeal

[34]           Mr Assh grieved, under section 91 the PSSRA, Mr Fenety’s decision that the Conflict of Interest Code precluded his accepting Ms Orn’s legacy. Paragraph 96(3) of that Act provided:

[35]           This is a relatively weak privative clause, suggesting only that the decision-maker is to be afforded some deference: see Vaughan v. Canada, [2003] 3 F.C. 645 (C.A.), 2003 FCA 76 at paras. 125-30.

 

(ii) the question in dispute

[36]           There are no findings of primary fact or factual inferences in dispute in this appeal. The disputed questions involve the interpretation and application of aspects of the Conflict of Interest Code to the facts as found.

 

[37]           Courts generally tend to be deferential to administrative agencies’ application of law to facts, but are more apt to regard the interpretation of the law as a question on which they are at least as expert as the tribunal under review.

 

[38]           The legal status of the Conflict of Interest Code is not clear-cut. It lacks the quality of “law” in that it is neither contained in legislation, issued pursuant to a discrete statutory power, nor promulgated as an order in council. On the other hand, many of its provisions impose quite specific obligations on employees and compliance is a condition of their employment.

 

[39]           Further, section 91 of the PSSRA permits an employee to grieve a decision of the employer involving the interpretation or application of an instrument issued by the employer dealing with the terms and conditions of employment. A party may make an application for judicial review of an internal grievance board decision under section 18.1 of the Federal Courts Act, R.S.C. 1985, c. F-7, for, among other things, error of law: Vaughan at para. 136.

 

[40]           In these circumstances, it is appropriate for standard of review purposes to treat the Conflict of Interest Code as if it were a law. Thus, in Endicott v. Canada (Treasury Board) (2005), 270 F.T.R. 220, 2005 FC 253 at para. 9, Strayer D.J. agreed with counsel for both parties that the grievance board’s interpretation of the words “formal notification” in a Treasury Board Policy was reviewable on the correctness standard. On the legal status of the Code, see further, Peet v. Canada (Attorney General), [1994] 3 F.C. 128 (T.D.) at 133-37.

 

[41]           The test for determining whether a public servant’s conduct gives rise to an apparent conflict of interest is somewhat analogous to that for a reasonable apprehension of bias: see Threader at paragraph 31 of these reasons. Courts do not defer to tribunals on questions of procedural fairness. The courts are also familiar with the concept of conflict of interest and duty in the context of fiduciaries. The similarity between the Code and related common law concepts suggests that correctness may be the appropriate standard for reviewing the application of this aspect of the Code to the facts.

 

(iii) relative expertise of the decision-maker and the Court

[42]           Here, the question is whether the Court is as well equipped as the administrative decision-maker to decide the questions raised by the application for judicial review. The questions in dispute in this appeal concern the interpretation and application of the relevant aspects of the Conflict of Interest Code.

 

[43]           Counsel for the Crown acknowledged that the decision under review is, as a matter of form, the final grievance level, an adjudicative decision. However, he argued that the substantive decision, namely that acceptance of the legacy would give rise to an apparent conflict of interest, is an institutional decision of Veterans Affairs. The decision is informed by the Department’s knowledge of the vulnerability and feelings of gratitude of its clients, and its appreciation of the relationship of trust between the clients and the employees serving them. For standard of review purposes, it is argued, this institutional understanding should be factored into an assessment of the relevant administrative expertise. Hence, the Court should defer to the Department’s view of whether Mr Assh’s acceptance of the legacy would give rise to an apparent conflict of interest.

 

[44]           I do not entirely agree. I said in Vaughan (at para. 139) that the informal nature of the grievance process under section 91, and the fact that it is not independent of the employer, suggest that a court should not afford much deference to internal grievance boards’ decisions on questions that are not purely factual in nature. As already noted, Mr Assh had no right to refer his grievance to an independent Adjudicator under section 92.

 

[45]           On the other hand, it is appropriate, in my opinion, for the Court to give due consideration to the Department’s factual assessment of the characteristics of their clientele and the nature of the relationship that they have with Veterans Affairs’ employees.

 

[46]           On balance, this factor suggests that correctness is the appropriate standard of review on the interpretation of the Code’s apparent conflict of interest provisions and, subject to the point made in the previous paragraph, their application to the facts of a particular case.

 

(iv) purpose of the Code

[47]           The Conflict of Interest Code, including the provisions in dispute in this appeal, are designed to maintain the highest professional standards in the federal public service, the integrity of government, and the public’s confidence in the objectivity and even-handedness of the public servants on whom they rely. For this latter reason, public perceptions of conflicts of interest and duty in federal civil servants are of great importance. The Code seeks to achieve these objects through a series of principles, and measures to implement them in particular contexts.

 

[48]           By putting these provisions in the Code, rather than in a collective agreement, the employer must be taken to have intended that disputes arising from them should be determined informally and on the basis of the Department’s knowledge, without the need to resort to an external, independent Adjudicator.

[49]           On balance, these considerations suggest that judicial deference to administrative decisions respecting the application and interpretation of the Code may be appropriate.

 

(v) conclusion

[50]           On the basis of the pragmatic and functional considerations discussed above, I am of the opinion that correctness is the appropriate standard for reviewing the final level grievance decision respecting the interpretation of the relevant sections of the Code, and the application of the provision respecting possible influence.

 

[51]           In reaching this conclusion, I have attached particular weight to two factors. First, and more important, the Code is effectively incorporated into Mr Assh’s contract of employment, and the administrative decision-makers responsible for its interpretation and application are not independent of the employer. In my opinion, Parliament should not be taken to have intended that, subject only to judicial review for unreasonableness, the employer may determine unilaterally whether, by accepting this legacy, an employee would be in breach of contract.

 

[52]           It is true that breaches of the Code may be punished by the employer through discipline, more serious disciplinary measures may ultimately be referred to an Adjudicator under paragraphs 92(1)(b) or (c) of the PSSRA, and Adjudicators’ decisions on such matters are normally reviewable for patent unreasonableness. However, this is not true of all disciplinary action. Moreover, in my view, federal public service employees should be able to obtain an independent determination of the scope of their contractual obligations without first having to expose themselves to disciplinary action by disregarding a grievance board’s decision.

[53]           Second, the test for determining the existence of an apparent conflict of interest is somewhat similar to common law concepts: the reasonable apprehension of bias applied to decision-makers subject to the duty of fairness, and the strict principle that fiduciaries may normally not retain benefits obtained in circumstances where there is any potential conflict between their private interests and their legal duties as fiduciaries.

 

Issue 2: Interpretation of the Code

[54]           I shall deal with a number of discrete interpretative issues under this broad umbrella; all are subject to review for correctness.

 

(i) paragraph 6(e)

[55]           For ease of reference, I set out below the section of the Code prescribing the principle most relevant to this appeal.

 

[56]           Two interpretative questions about this provision arise from the present facts.

 

[57]           First, Mr Assh says that paragraph 6(e) does not extend to testamentary gifts, because it excludes a transfer “pursuant to a property right of the employee”. He submits that he was entitled to receive, and retain, the $5,000 bequest by virtue of his right, as a beneficiary of Ms Orn’s will, to require the executor to administer her estate in accordance with the terms of the will.

[58]           I disagree. The phrase “transfers of economic benefit” is very broad. The exclusion of economic benefits transferred “pursuant to an enforceable contract or property right of the employee” is, in my opinion, better interpreted as permitting benefits acquired as a result of a right that is unrelated to the employee’s performance of official duties. For example, if the employee and the client are lessor and lessee respectively of an apartment, rent paid to the employee by the client would be the transfer of an economic benefit pursuant to the employee’s property and contract rights as lessor. Section 6(e) is not otherwise limited to benefits transferred in connection with a public servant’s performance of official duties.

 

[59]           In contrast, Mr Assh’s interpretation elevates form over substance by splitting the receipt of a legacy from the legatee’s legal right to compel the executor to administer the estate in accordance with the will. If he were right, an inter vivos gift made by a client by declaring herself trustee of a sum of money for the employee would also be excluded from section 6(e), since the employee would be paid the money pursuant to his or her equitable rights as the beneficiary of a trust. In my opinion, such technical distinctions have no place in the interpretation of what is intended to be a general principle to guide employee conduct.

 

[60]           Counsel for the Crown submitted that, once the transfer of a benefit is found to fall within section 6(e), it is unnecessary to consider other provisions of the Code: accepting a benefit in breach of section 6(e) is itself a proscribed conflict of interest. Thus, he argued, Ms Orn’s legacy was not a benefit of nominal value, and section 6(e) applies equally to testamentary and inter vivos gifts given to an employee by a former client as a token of appreciation for professional services rendered.

 

[61]           I disagree. Section 6(e) is in the Part of the Code dealing with principles. Its provisions must be read with those setting out more specific measures designed to ensure compliance with the principles. Sections 27 and 28 perform this function with respect to “Gifts, Hospitality and Other Benefits”. Hence, whether Mr Assh may accept the benefit in question in this case cannot be decided solely on the basis of the general principle in section 6(e), without regard to the provisions implementing it.

 

[62]           If the Crown’s view were right, much of sections 27 and 28 would be redundant. However, without these provisions, the broad wording of section 6(e) would catch gifts made for reasons unconnected with the performance of official duties: birthday presents to federal public service employees’ from their family and friends, for example.

 

(ii) section 27

[63]           For ease of reference, I reproduce the sentence in section 27 relevant to this appeal.

 

[64]           Whether gifts could influence employees in the performance of official duties is to be determined from the standpoint of the reasonable person who is informed of the facts and has thought the matter through in a practical manner. In the context of the Code and its objects, the perspective of the reasonable, informed client of Veterans Affairs is particularly pertinent.

 

[65]           Mr Assh argues that section 27 cannot apply to the facts of this case. The legacy could not influence the performance of his duties because he only received a benefit on the death of Ms Orn, after which he could render her no services, and she left no dependants whom he could be asked to assist,. In my view, this is too narrow a view of the harm at which section 27 is aimed.

 

[66]           Section 27 is not limited to benefits which could influence the manner in which employees perform their official duties to the person providing the disputed gift. Section 27 also requires consideration of whether a reasonable person would think that, if pensions advocates were permitted to accept a legacy left to them in circumstances similar to those in which Ms Orn made a bequest to Mr Assh, this could influence the performance of their official duties to other clients.

 

[67]           For example, if pensions advocates were permitted to accept a legacy of $5,000 left to them by a client in circumstances similar to those in this case, might they suggest or hint to clients that, if they wanted first-class service, they should leave their pensions advocate a legacy? Or, might they assess whether a client was likely to leave a legacy and reserve their best efforts for those whom they thought might benefit them in their will?  In other words, could the possibility of receiving a legacy conflict with the duty of a pensions advocate to do their best to assist all their clients with their pension claims? As a matter of interpretation, whether a reasonable person might have these concerns is, in my opinion, within the scope of section 27.

 

(iii) section 28

[68]           Section 28 provides as follows:

 

[69]           The linking word “Notwithstanding”/“Cedependant” indicates that section 28 is intended to modify section 27. However, a significant difference between the English and French versions of the text obscures the extent of the modification.

 

[70]           According to the English version of section 28, a public servant may accept “incidental gifts, hospitality or other benefits” arising from the performance of official duties, if the conditions set out in paragraphs (a), (b) and (c) are satisfied. However, the French version limits the application of section 28 to gifts, hospitality and other benefits “d’une valeur peu importante”. Thus, according to the French text, section 28 only permits public servants to accept benefits in the circumstances described in paragraphs (a), (b) and (c) that are of insignificant value. No such limitation is found in the English text.

 

[71]           In my opinion, the French text is to be preferred. Not only does it represent the common meaning, but also, by removing small gifts that meet certain criteria from the broad sweep of section 27, it makes structural sense and avoids confusing duplication and inconsistencies between the two sections. In addition, in the corresponding provision in the current code, Values and Ethics Code for the Public Service (Ottawa: Minister of Supply and Services Canada, 2003), the English version, like the French (“la valeur est minime”), now makes it clear that it does not apply to gifts of more than “minimal value”: chapter 2, subheading “Gifts, Hospitality and Other Benefits”.

 

[72]           Consequently, since a legacy of $5,000 is of more than insignificant value, section 28 does not apply to the present case.

 

Issue 3: Could the legacy influence the performance of a pensions advocate’s official duties?

[73]           As already indicated, the relevant legal test is whether a reasonable person, who was informed of the facts of a given case, and had thought the matter through in a practical manner, would think that a pensions advocate’s acceptance of a legacy could influence the advocate to give preferential treatment to clients whom she or he believed might leave a legacy as a reward for professional services rendered.

 

[74]           The application of the “perception of conflict” test to particular facts is a question of mixed fact and law. It involves a factual assessment, which can only be made on the basis of practical judgments and inferences, rather than direct evidence. The application of a legal test also includes a normative element involving striking an appropriate balance. In the present case, the factors to be balanced are, on the one hand, permitting a pensions advocate like other legatees, to benefit from a client’s desire to make a gift, and, on the other, enhancing public confidence in the integrity and even-handedness of the public service by removing inducements from civil servants to take into account, whether deliberately or subconsciously, their own interests when performing official duties.

[75]           Fanciful speculation about the influence that acceptance of the legacy could theoretically have on employees’ conduct is not sufficient to engage section 27. However, since the section speaks of the influence that a gift could, not would have, a balance of probability is too high a standard. In this respect, the test is different from that for a reasonable apprehension of bias, where the question is whether a reasonable person would think it more likely than not that, consciously or unconsciously, the decision-maker would be biased: Committee for Justice and Liberty v. National Energy Board, [1978] 1 S.C.R. 369 at 394.

 

[76]           In my opinion, the relevant question to ask under section 27 in this case is whether a reasonable person would think that there was a realistic possibility that acceptance of the legacy could influence the employee’s future performance of official duties. A relatively low standard of proof is also consistent with the context from which the issue arises: a solicitor-client relationship. As a fiduciary, a pensions advocate is in a position of confidence and influence. There will rarely be independent evidence of what passed between them, or of the dynamics of the particular relationship.

 

[77]           Counsel correctly submitted that there is no suggestion in this case that Mr Assh in any way attempted to influence Ms Orn to name him in her will, or otherwise acted improperly in his professional relationship with her. That Ms Orn only included Mr Assh in her will five years after he had assisted her tends to support this.

 

[78]           In my view, however, the five-year lapse of time is not determinative of whether acceptance of the legacy would create a perception of conflict. It is not sufficient to prevent future clients of Veterans Affairs from reasonably believing that, if permitted to accept a legacy in these circumstances, a pensions advocate could be influenced in the performance of professional duties on the basis of whether he thought that a legacy might be forthcoming in gratitude for services rendered.

 

[79]           It is also appropriate to have regard to the factual assessment of senior officials in Veterans Affairs respecting the characteristics of their clientele. Of particular importance are clients’ often advanced age, the vulnerability of some, and their feelings of gratitude and indebtedness to those who assist them, often in difficult circumstances, such as the recent death of a spouse. Pensions advocates may also acquire knowledge of their clients’ financial circumstances. In view of these considerations, it is immaterial that, once the services are rendered, there is nothing to compel a client to include a pensions advocate in her will, or to prevent her from altering her will to exclude him or her from it.

 

[80]           The application of the law to particular facts inevitably requires consideration of its purposes. Accordingly, the application of section 27 must take account of the Code’s object of enhancing the public’s confidence in the integrity of the public service (section 4) and should be relatively risk-averse in this respect. In my opinion, non-trivial personal rewards for services rendered simply have no place in the professional relationship between public servants and those they serve. To conclude that a reasonable person would think that there was a realistic possibility that a pensions advocate’s acceptance of a $5,000 legacy could influence the performance of her or his duties to other clients is also consistent with the broad principle in paragraph 6(e) of the Code.

 

[81]           The duty of employees under the Veterans Affairs’ Directive to report legacies enables management to decide whether, in all the circumstances, including the value of the legacy and its connection to the employee’s performance of official duties, acceptance may give rise to a perception that it could influence the future performance of the employee’s duties to clients. By providing that employees must “act in a manner that will bear the closest public scrutiny” (paragraph 6(b)), the Code also makes it clear that being subject to a rigorous conflict of interest standard is a condition of public service.

 

[82]           In contrast, the narrowly focused approach advanced by Mr Assh runs the risk of compromising the vitally important object of bolstering and maintaining public confidence in the impartiality of public servants in the performance of their official duties.

 

[83]           Counsel for Mr Assh conceded that it would be improper for a pensions advocate to suggest to a client that she could leave him a legacy. However, the problem with this concession is that the nature of the relationship between advocate and client is such that, generally speaking, the only person who could contradict a pensions advocate’s assertion that he or she made no such suggestion is the client. Since the question of whether an employee may accept a legacy only arises after the client’s death, there will often be no independent evidence of the employee’s conduct.

 

[84]           The absence from the Code and from the Veterans Affairs’ Directive of a blanket rule comprehensively and specifically dealing with the acceptance of legacies is not, in my view, determinative. Codes of conduct are inevitably non-exhaustive works in progress, emphasizing broad principles (including, in this case, a prohibition of the transfer of economic benefits of more than nominal value), and responding primarily to problems already encountered. They should be interpreted and applied accordingly.

 

[85]           Given the difficulty of defining more precisely and fully the circumstances in which it would be improper for an employee to accept a legacy, it is not surprising that the Code does not do so. Nor is it my intention to attempt such a definition. Relationships between an employee and a present or past client may extend beyond the professional and into the personal; it may be difficult to disentangle them. At what point it becomes inappropriate for an employee to accept a gift cannot be defined comprehensively, but will depend on an assessment of all the circumstances of a given case, guided by the general principle in section 27. Veterans Affairs requires its employees to report legacies left to them by clients precisely to enable such as assessment to be made.

 

[86]           In this case, the uncontradicted evidence of Mr Assh was that his only relationship with Ms Orn was professional. The bequest of an obviously non-trivial sum was made, according to Mr Odishaw, as a reward for his professional services. There is no evidence in the record of any other motive. In these circumstances, I am satisfied that a reasonable person would think that there was a realistic possibility that acceptance of this legacy by a pensions advocate could influence the future performance of official duties by that person, and weaken clients’ confidence in the impartiality of the employees of Veterans Affairs on whom they rely.

 

[87]           Nor can it be said that to deny Mr Assh the legacy imposes a great hardship on him. He has, after all, been remunerated for his services from public funds. Precluding him from accepting the legacy does not adversely impact his constitutional rights, reputation or career. Indeed, I would endorse the opinion of the grievance boards that Mr Assh’s conduct in dealing with the issue has been exemplary and reflects very well on him.

 

[88]           As for Ms Orn’s testamentary freedom, it is true that her intention to reward Mr Assh will not be given effect if he is unable to accept the legacy. However, the acknowledgment of her gratitude to him for assisting her is effectively communicated to him, and to others.

 

G.        CONCLUSIONS

[89]           For these reasons, I would allow the appeal, set aside the order of the Federal Court, and dismiss the application for judicial review. In view of Mr Assh’s conduct in this matter and the general importance, novelty, and difficulty of the issues that he has raised, I would not award costs here or below.

 

 

“John M. Evans”

“I agree

            A.M. Linden J.A.”

NADON J.A. (dissenting)

[90]           I cannot agree with my colleague Evans J.A. that the Applications Judge erred in setting aside the final level grievance decision upholding the decision of Veterans Affairs that the acceptance of a $5,000 legacy by the appellant would be contrary to the Conflict of Interest and Post-Employment Code for the Public Service (the “Code”).

 

[91]           Before setting out my reasons, I wish to make it clear that I agree with Evans J.A. that the applicable standard of review is that of correctness, that section 6(e) of the Code must be read with those sections of the Code which set out specific measures to ensure compliance with its guiding principles, that section 28 of the Code has no application to the present matter and that section 27 of the Code requires consideration not only of a public servant’s performance of his official duties to the person making the legacy, but also consideration of his duties to present and future clients. For ease of reference, I reproduce section 27 of the Code:

 

[92]           The test for determining whether a public servant’s conduct gives rise to an apparent conflict of interest is analogous, as Evans J.A. finds, to that for a reasonable apprehension of bias.  In Threader v. Canada (Treasury Board), [1987] 1 F.C. 41 (C.A.) paragraph 27, this Court said: 

Would an informed person, viewing the matter realistically and practically, and having thought the matter through, think it more likely than not that the public servant, whether consciously or unconsciously, will be influenced in the performance of his official duties by considerations having to do with his private interests.

 

[93]           As my colleague points out, Veterans Affairs, in conformity with section 11 of the Code, issued a supplementary directive to its employees pertaining to wills and estates. Although I need not reproduce the directive, I wish to emphasize that the Department has not prohibited the acceptance of unsolicited bequests, but has directed its employees to report the matter, so that “[T]he appropriate conflict of interest process will be followed”.

 

[94]           Although my colleague purports to apply the test of the informed person, he does not, in my respectful view, truly apply the test. Rather, he proceeds to enunciate a principle which, in effect, constitutes a directive prohibiting public servants employed by Veterans Affairs from accepting legacies made in their favour by former clients of the Department in appreciation of services rendered in connection with their application for a pension. Since Veterans Affairs has not yet prohibited its employees from accepting such legacies, I do not see on what basis we can conclude that a “relatively risk-averse” approach to the application of section 27 (paragraph 80 of Evans J.A.’s reasons) is warranted.

 

[95]           The question is therefore whether the informed person, having thought the matter through, would think that in accepting Mrs. Orn’s legacy of $5,000, the respondent could be influenced in the performance of his official duties. In other words, would the informed person believe that the respondent’s dealings with his present and future clients could be affected in such a way as to give rise to concerns that he might favour some clients over others because of the possibility that they might leave him a legacy.

 

[96]           In answering that question, the informed person would consider the fact that the respondent represented Mrs. Orn, a veteran’s widow and also a veteran of World War II, between 1993 and 1996 with respect to her application for a widow’s pension and a disability pension. The informed person would also take note of the fact that in 2001, i.e. five years later, Mrs. Orn amended her will, while in the hospital, to provide, inter alia, a $5,000 bequest to the respondent as a token of her appreciation for his assistance in obtaining her pensions. Finally, the informed person would consider the fact that Mrs. Orn passed away approximately one month after changing her will and that between 1996 and the time of her death, she had no contact whatsoever with the respondent.

 

[97]           Although there is no denying the possibility that the appellant could be influenced by the legacy, that is not, in my view, what the test calls for. The informed person is asked to take a hard look at the facts and direct his mind to whether, on those facts, the appellant could be influenced in his judgment and in the performance of his duties. I am satisfied that, on the facts of the case, the informed person would answer the question in the negative.

 

[98]           In my view, if the legacy has any influence upon the respondent, the likelihood is that it will create an incentive for him to perform excellent work for all of his clients. I cannot see how the informed person can conclude that the legacy could lead the respondent to give preferential treatment to some of his clients, in the expectation of a legacy.

 

[99]           This case, although relatively straightforward on its facts and on the law, is made difficult by unusual and, in my view, exceptional circumstances. I say this on the assumption that if legacies by former clients of Veterans Affairs to Department lawyers were made on a frequent or infrequent basis, proof of that fact would surely have been adduced.

 

[100]       The evidence is to the effect that Mrs. Orn made a legacy in favour of the respondent because of her appreciation for the services that he rendered to her in connection with her attempt to obtain a pension. Whether or not that is the sole reason for the legacy, I cannot say. I would venture to add, however, that there may well have been more to it than that. The likelihood is that the respondent treated Mrs. Orn with kindness, respect and consideration throughout their dealings. Thus, when Mrs. Orn decided to change her will, all of these considerations were in her mind and she acted accordingly.

 

[101]       Before concluding, I must add that Evans J.A. may well be right that the better solution is for a total edict preventing public servants from accepting legacies in circumstances similar to those in this case. However, that solution has yet to be adopted by Veterans Affairs and, as a result, we must decide the issue on the basis of the Code and the facts before us.

 

[102]       For these reasons, I would dismiss the appeal with costs.

 

 

“M. Nadon”

FEDERAL COURT OF APPEAL

 

NAMES OF COUNSEL AND SOLICITORS OF RECORD

 

 

 

DOCKET:                                                                              A-528-05

 

 

STYLE OF CAUSE:                                                              ATTORNEY GENERAL OF CANADA v. DANIEL ISRAEL ASSH

 

PLACE OF HEARING:                                                        OTTAWA

 

DATE OF HEARING:                                                          SEPTEMBER 19, 2006

 

REASONS FOR JUDGMENT BY:                                     EVANS J.A.

CONCURRED IN BY:                                                         LINDEN J.A.

DISSENTING REASONS BY:                                            NADON J.A.

 

DATED:                                                                                 NOVEMBER 3, 2006

 

 

 

APPEARANCES:

 

Michel LeFrançois	FOR THE APPELLANT
Steven Welchner	FOR THE RESPONDENT

 

SOLICITORS OF RECORD:

 

John H. Sims, Q.C. Deputy Attorney General of Canada	FOR THE APPELLANT
Welchner Law Office Ottawa, Ontario	FOR THE RESPONDENT