Docket: T-348-16
Citation:
2017 FC 496
Ottawa, Ontario, May 12, 2017
PRESENT: The Honourable Madam Justice Strickland
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BETWEEN:
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OCEANEX INC.
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Applicant
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and
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CANADA (MINISTER
OF TRANSPORT) AND MARINE ATLANTIC INC.
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Respondents
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and
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ATTORNEY
GENERAL FOR NEWFOUNDLAND AND LABRADOR
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Intervener
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ORDER AND REASONS
[1]
This is a motion brought by the Applicant,
Oceanex Inc. (“Oceanex”), seeking an Order, pursuant to Rule 312 of the Federal
Courts Rules, SOR/98-106 (“Rules”), granting it leave to serve and file the
Supplementary Affidavit of Captain Sidney J. Hynes, sworn on February 28, 2017
(“Supplementary Affidavit”), with attached exhibits, most significantly, a
report prepared by CPCS for Transport Canada, dated May 1, 2015, and entitled
“Newfoundland Domestic Trade Routes and Competition Assessment” (“CPCS Report”
or “Report”).
[2]
By way of background, on February 26, 2016
Oceanex filed an application for judicial review of a decision of the Minister
of Transport (“Minister”) to approve the 2016-2017 rates proposed for the
provision by Marine Atlantic Inc. (“MAI”) of commercial freight services by
that entity. Oceanex asserted that the Minister’s decision was inconsistent
with allowing competition and market forces to be the prime agents in providing
viable and effective transportation services and had the direct effect of
unduly favouring competing modes of transportation, such as trucking, to and
from the island of Newfoundland, and of reducing the inherent advantages of
water transportation providers, such as Oceanex. Oceanex asserted that there
was an absence of a legal basis for the Minister’s approval of the MAI freight rates
as the Terms of Union (An Act to approve the Terms of Union of Newfoundland
with Canada, SC 1949 (v I), c 1, p 1) do not mandate unduly injurious
freight rate levels. Further, when making the decision the Minister failed to
consider the National Transportation Policy, as set out in the Canada
Transportation Act, SC 1996, c 10 and failed to consider, or acted contrary
to, the Financial Administration Act, RSC 1985, c F-11 and the policy
directives and guidelines issued by the federal Treasury Board. The Minister
thereby erred in law and exceeded his jurisdiction by exercising his discretion
unreasonably, contrary to public policy and failing to take into account all
relevant considerations. In its Notice of Application, Oceanex requested,
pursuant to Rule 317, that the Minister provide a certified record of all
material relevant to the application.
[3]
The Minister did not file a certified record
within the period required by the Rules, being by March 20, 2016. Instead, by
letter of May 3, 2016, counsel for the Minister objected to the request,
pursuant to Rule 318(2), on the basis that the Minister is not a “Board, Commission or Tribunal” in respect of the
issues raised in the application. Further, that the Minister did not make the
decision to approve MAI’s 2016-2017 freight rates, rather, that MAI had the
authority to approve those rates without requiring the Minister’s approval. By
letter of May 12, 2016, counsel for the Minister took the position that because
the Minister did not make the decision under review, there was no record for the
Minister to produce.
[4]
By letter of the same date, MAI took the
position that while a Bilateral Agreement, dated March 31, 1987 between the
Minister and MAI, includes a provision whereby Ministerial approval is required
concerning any proposed change to the rates being charged by MAI, in 2010 those
parties agreed that rate increases would be set by MAI’s Board of Directors to
a maximum of 5% per year. Any higher rate increase must be submitted to the
Minister for approval. Counsel for MAI asserted that the MAI Board of
Director’s had the authority to set the rates. Further, as to Oceanex’s
request that the Prothonotary, as the case management judge, exercise his
discretion to order the Respondents to address the Rule 317 request, counsel
for MAI asserted that until Oceanex amended its Notice of Application and
identified some decision of the MAI Board of Director’s as the decision that it
was seeking to review, there was no authority by which MAI could be ordered to
make such disclosure.
[5]
On July 20, 2016 Oceanex amended its Notice of
Application to challenge, on an alternative basis, that: the Minister failed to
approve the 2016-2017 rates proposed by MAI; the decision of the Minister to
pre-authorize the increase in the rates proposed by MAI, to allow MAI to
approve the 2016-2017 rates, to allow MAI to approve those rates; and, the decision
of MAI to approve the subject rates.
[6]
On July 19, 2016 the Attorney General for
Newfoundland and Labrador was granted leave to intervene in the application.
[7]
On May 19, 2016, following a case management
conference, a redacted version of a document entitled “Implementation
of Budget 2010 Decision – Guidance for Corporate Plan of 2010/2011-2014/15”
(“2010 Budget Decision”), the alleged 2010 agreement, was provided to Oceanex
by counsel for MAI. In response, by letter dated May 26, 2016, Oceanex pointed
out that the document did not appear, on its face, to be an agreement as it was
not signed and that it only applied to 2014-2015. By email of June 1, 2016,
counsel for MAI advised that MAI was not aware of any other documents exchanged
between MAI and the Minister which constituted the alleged 2010 agreement. On
August 9, 2016, this Court ordered that the Minister serve and file an
affidavit enclosing as an exhibit the 2010 Budget Decision, this was done on
September 29, 2016.
[8]
By letter of August 8, 2016 the Minister
continued to object to Oceanex’s Rule 317 request on the basis that the
Minister did not make a decision with respect to the approval of MAI’s
2016-2017 commercial shipping rates. And, although Oceanex had amended its
Notice of Application, by letter of August 9, 2016 MAI objected to the request
on the basis that it was not a “tribunal” as defined in the Rules and,
therefore, that Rule 317 had no application to it. By correspondence of August
19, 2016, Oceanex advised that it reserved its right to challenge MAI’s
position and sought clarification from counsel for the Minister with respect to
his response. By letter of August 24, 2016, counsel for the Minister refused
to provide clarification on the basis that the Minister had complied with his
obligations under the Rules. By correspondence of September 2, 2016, Oceanex
advised that it reserved its right to challenge the Minister’s position.
[9]
On March 22, 2017 the Minister brought a motion
seeking an order, pursuant to Rule 94(2), providing relief from the requirement
to produce certain documents and materials as contained in the Direction to
Attend of Ms. Michèle Bergevin, Director, Portfolio Management, within the
Crown Corporation and Portfolio Governance Directorate in Transport Canada,
sworn on December 7, 2016 (“December Bergevin Affidavit”). Among other things,
in his Order of May 5, 2017 issued in response to that motion, the Prothonotary
required that Ms. Bergevin bring with her to the cross-examination the
documents that she viewed and relied upon in Transport Canada’s file to make
the statements in her affidavit. As to other documents sought, including
studies, these were only generically referred to in the December Bergevin
Affidavit. The Prothonotary noted that this could simply be a function of Ms.
Bergevin’s general knowledge and understanding of the way in which Transport
Canada operates. But this did not mean that the documents were not relevant as
on cross-examination the issue would likely be explored and she may identify
specific studies that she had seen when she made the statements that she did.
They would become producible if that were the case. As to the specific study
that Oceanex sought (the CPCS Report), the Prothonotary noted that this was the
subject of a motion before the hearings judge to determine its relevance and
admissibility.
[10]
In that regard, the Supplementary Affidavit sets
out the background to the CPCS Report, which was commissioned by Transport
Canada. Oceanex participated in the study, at Transport Canada’s request, but
was not provided with a copy of the Report. As a result of a July 2016 Access
to Information Act, RS 1985, c A 1 (“ATIP”) request made by Oceanex, and
two follow up complaints to the Information Commissioner, Transport Canada was
compelled to and provided a redacted copy of the CPCS Report to Oceanex on
February 22, 2017. By its motion of February 28, 2017, Oceanex sought to
submit the Report by way of the filing of the Supplemental Affidavit.
Oceanex’s Position
[11]
Oceanex submits that the Supplementary Affidavit
meets the requirements for filing additional affidavits under Rule 312. As to
admissibility, the CPCS Report was in the Minister’s possession before the
2016-2017 freight rates were approved and, therefore, should have been
considered by him if he made or, in any event, was obligated at law to make the
freight rate decision. Alternatively, it should have been considered by MAI if
somehow the Minister was in law entitled to delegate the making of the decision
to MAI.
[12]
Oceanex also submits that the CPCS Report is
relevant to an issue properly before the Court. First, the presence of the CPCS
Report in the Minister’s file at a time when he claims he was not the federal
decision-maker will be relevant to determining who in fact and/or law was, or
should be, the decision-maker. The fact that the Minister commissioned the
Report suggests that the Minister was or should have been, directly or
indirectly involved in the setting of MAI’s rates. Second, the CPCS Report is
relevant to the question of whether the decision-maker considered that MAI’s
commercial freight rates are distorting the market and have an unduly injurious
effect on Oceanex in contravention of the National Transportation Policy and
the Canada Transportation Act. Third, the Report is sufficiently
probative that it could affect the result, in the sense that the Minister,
having specifically commissioned it, was obligated to consider it prior to
approving the rates or allowing MAI to approve the rates on his behalf. The
Report was also commissioned by Transport Canada in response to the concerns
raised by Oceanex over the years, it will therefore ensure that the Court has a
complete record with all the necessary evidence to consider the issues raised.
[13]
Having established the two preliminary grounds,
Oceanex submits that the Court should exercise discretion and grant leave. In
that regard, despite its requests, the Report was not available to Oceanex
until February 22, 2017 by way of the ATIP request. The Minister also withheld
the information on the basis that he is not the decision-maker, however, that
position has yet to be determined by the Court. Moreover, even if MAI was
entitled to and did make the decision, the Report is crucial to ascertain what
information MAI should have considered. Oceanex also submits that the Report
will assist the Court in that it is highly responsive to the very issues to be
determined in the amended application. Further, the filing of the CPCS Report
will not cause prejudice to the other parties. Any prejudice that exists is
that suffered by Oceanex which only obtained a copy of the Report in February
2017 after having filed its evidence in chief and reply evidence.
The Minister’s Position
[14]
The Minister submits that the CPCS Report is not
relevant or admissible evidence for the purposes of the judicial review as
there is no evidence to suggest that it was before the decision-maker, MAI, and
evidence on judicial review is limited to the record that was before the
decision-maker. Further, even if the relevancy of the Report is viewed from
the perspective of the Applicant’s challenge to MAI’s authority to set rates
without the Minister’s approval, the CPCS Report is dated May 1, 2015 thereby
post-dating the 2007 and 2010 events that led to MAI’s assumption of that
responsibility.
[15]
The Minister further submits that the Report is
not admissible under the limited exceptions to the general rule that evidence
not before the decision-maker is inadmissible, including the general background
exception. This is because the Report goes beyond providing background
information on the questions raised by the application. The Applicant’s own
statement in its written argument that the Report addresses the very basis upon
which Oceanex claims in this proceeding to be injured by government action
violates the principle that extrinsic evidence that goes to the merits of the
decision cannot be admitted on judicial review.
[16]
The Minister also submits that admitting the
evidence which was not before the decision-maker would seriously prejudice the
Respondents as it would invite the Court to examine issues that are far beyond
those raised in the application. In seeking to enter the Report as evidence,
the Applicant invites the Court to use the Report for an entirely different purpose
than that for which it was commissioned.
[17]
Finally, the Minister submits that it is
incorrect for the Applicant to suggest that the Minister improperly withheld
the Report when responding to the Rule 317 requests or improperly failed to
include the Report as an exhibit to one of the affidavits of Ms. Bergevin. The
Minister did not make the decision that is under review and properly objected
to the Rule 317 requests on this basis. Further, it is improper for the
Applicant to attempt by way of this motion to launch an indirect challenge to
the Minister’s Rule 317 objections, given that it has not brought a formal
motion in this regard. Outside of Rule 317, there is no obligation on the
Minister to produce any document in the context of an application for judicial
review.
MAI’s Position
[18]
MAI submits that the CPCS Report is hearsay and
contains opinion evidence which is not made admissible by attaching it to the
Supplemental Affidavit. MAI submits that Oceanex is seeking to file the Report
as an expert report without having to comply with the Rules pertaining to
expert witnesses. Further, that Oceanex seeks to rely on the contents of the
CPCS Report for the truth of its contents and for the opinions expressed by its
authors, it is therefore hearsay and inadmissible. Additionally, the
Respondents would suffer substantial and serious prejudice by placing in the
record what is purportedly expert opinion evidence that will be immune from
effective cross-examination.
The Attorney General for
Newfoundland and Labrador
[19]
The Attorney General for Newfoundland and
Labrador, the Intervener, takes no position but submits that had the CPCS
Report been available in September when Captain Hynes filed his original
affidavit, or if it were otherwise part of the record, then it would have had
its expert, Dennis Bruce, consider it and address it. Further, while Oceanex
submits that the Report is admissible as it provides context, the Intervener
has serious reservations about the content of the Report. The Intervener also requests
that if the Report is admitted, then that it be given an opportunity to respond
to it.
Reasons
[20]
Rule 312 states that with leave of the Court, a
party may (a) file affidavits additional to those provided for in rules 306 and
307; (b) conduct cross-examinations on affidavits additional to those provided
for in rule 308; or (c) file a supplementary record.
[21]
The requirements that must be satisfied to
obtain an Order under Rule 312 were articulated by Justice Stratas of the
Federal Court of Appeal in Forest Ethics Advocacy Association v National
Energy Board, 2014 FCA 88:
4 At the outset,
in order to obtain an order under Rule 312 the applicants must satisfy two
preliminary requirements:
(1) The evidence must be admissible on the application for
judicial review. As is well known, normally the record before the reviewing
court consists of the material that was before the decision-maker. There are
exceptions to this. See Gitxsan Treaty Society v. Hospital Employees' Union,
at pages 144-45 (C.A.); Association of Universities and Colleges of Canada
v. Canadian Copyright Licensing Agency (Access Copyright).
(2) The evidence must be relevant to an issue that is properly
before the reviewing court. For example, certain issues may not be able to be
raised for the first time on judicial review: Alberta (Information and
Privacy Commissioner) v. Alberta Teachers' Association, (CanLII).
5 Assuming the
applicants establish these two preliminary requirements, they must convince the
Court that it should exercise its discretion in favour of granting the order
under Rule 312. The Court exercises its discretion on the basis of the evidence
before it and proper principles.
6 In Holy
Alpha and Amega Church of Toronto v. Canada (Attorney General), at
paragraph 2, this Court set out the principles that guide its discretion under
Rule 312. It set out certain questions relevant to whether the granting of an
order under Rule 312 is in the interests of justice:
(a) Was the evidence sought to be adduced available when the party
filed its affidavits under Rule 306 or 308, as the case may be, or could it
have been available with the exercise of due diligence?
(b) Will the evidence assist the Court, in the sense that it is
relevant to an issue to be determined and sufficiently probative that it could
affect the result?
(c) Will the evidence cause substantial or serious prejudice to
the other party?
(also see Connolly
v Canada (Attorney General), 2014 FCA 294 at para 6 (“Connolly”))
[22]
In Association of Universities and Colleges
of Canada v Canadian Copyright Licensing Agency (Access Copyright), 2012
FCA 22 (“Access Copyright”), Justice Stratas pointed out that, in
determining the admissibility of an affidavit in support of an application for
judicial review, the differing roles played by the Court and the administrative
decision-maker must be kept in mind. Parliament gave the administrative
decision-maker, and not the Court, jurisdiction to determine certain matters on
their merits. Because of this demarcation of roles, the Court cannot allow itself
to become a forum for fact-finding on the merits of the matter. Accordingly,
as a general rule, the evidentiary record before a reviewing Court on judicial
review is restricted to the evidentiary record that was before the
decision-maker. Evidence that was not before the decision-maker and that goes
to the merits of the matter is, with certain limited exceptions, not
admissible. Justice Stratas listed three such exceptions and noted that the
list may not be closed. The exceptions are an affidavit that provides: general
background in circumstances where that information might assist the Court in
understanding the issues relevant to the judicial review; brings to the
attention of the judicial review Court procedural defects that cannot be found
in the evidentiary record of the administrative decision-maker, so that the
judicial review Court can fulfil its role of reviewing for procedural
unfairness; and, highlighting the complete absence of evidence before the
administrative decision-maker when it made a particular finding (at paras
19-20).
[23]
Justice Stratas revisited the general rule in Bernard
v Canada (Revenue Agency), 2015 FCA 263 (leave to appeal to the Supreme
Court of Canada refused in 2016 CarswellNat 2153 (WL)), referencing the Federal
Court of Appeal’s prior decisions in Access Copyright, Connolly and
Delios v Canada (Attorney General), 2015 FCA 117 (at paras 41-46) and
elaborated on the three recognized exceptions (at paras 23 -28).
[24]
In my view, in this case, the problem that
arises with respect to assessing the admissibility and relevance of the
Supplemental Affidavit in the context of Rule 312 is that the question of who
was the decision-maker, as regards to the setting of the 2016-2017 MAI freight
rates, is very much in dispute.
[25]
In this regard, counsel for the Minister asserts
that because there was no challenge by Oceanex to the Minister’s objection to
the Rule 317 request, and given the affidavit evidence of Ms. Bergevin that the
Minister was not directly involved in the decision setting the 2016-2017 rates,
this Court is compelled to accept the uncontradicted fact that the Minister was
not the decision-maker. Therefore, there was no record to produce and,
accordingly, the CPCS Report was not before the Minister and is not
admissible. The Minister suggests that Oceanex is casting dispersions on Rule
317 by not contesting it. For its part, Oceanex submits that it is not an accepted
nor an uncontested fact that the Minister was not the decision-maker. Further,
that if the failure to contest the Minister’s Rule 317 refusal bound the Court to
a certain conclusion then it is difficult to see why the Minister felt it
necessary to subsequently file the December Bergevin Affidavit, which puts the
fact of the Minister’s role in issue and upon which she will be cross-examined.
Further, it was not possible to cleanly carve out the Rule 317 issue without
having the Court also decide the issues on the merits in the judicial review,
which would be premature. Accordingly, Oceanex sought to submit the Report by
way of the Supplemental Affidavit while reserving its right to take issue with
the Minister’s position that he was not the decision-maker.
[26]
There is a certain paradox in this situation in
that, on the one hand, the Minister asserts that because Oceanex did not
challenge the Rule 317 refusal, it is compelled to accept that the Minister is
not the decision-maker (and therefore need not produce a certified record),
while on the other hand MAI asserts that it is not a federal board, commission
or tribunal and is therefore not subject to the Court’s jurisdiction (and
therefore need not produce a certified record), yet MAI has not brought a
challenge to the jurisdiction of the Court but asserts that the Court should
exercise that jurisdiction and refuse Oceanex’s motion.
[27]
Regardless, the only issue before me in this
motion is whether Oceanex should be permitted to now serve and file the
Supplementary Affidavit. This issue is complicated by the fact that it must be
determined in a circumstance where it is not agreed who the decision-maker was,
or should have been, with respect to the setting of the 2016-2017 MAI freight
rates and where it appears that this question will not be resolved until the
hearing of the application for judicial review, at which time the record will
be closed and cross-examination of affiants on their affidavits will be
complete.
[28]
I do not agree with the Minister’s view that the
Court is forced to accept, at this stage, that the Minister was not the
decision-maker. The identity and authority of the decision-maker was brought
into issue by the Minister and MAI. Oceanex responded by amending its Notice
of Application to address that issue in the alternative. While the December
Bergevin Affidavit does state that the Minister did not approve the rate change
and had no role in MAI’s decision to set the rates of 2016-2017, this must be
viewed in the context of her other evidence, including that the 2010 Budget
Decision, sent to MAI by email, communicated the intent of Canada and MAI to
amend the terms and conditions of the Bilateral Agreement regarding the
approval of rate increases but that the Bilateral Agreement has not yet been
rescinded. Ms. Bergevin has yet to be cross-examined on her affidavit and, no
doubt, the issue of the role of the Minister, MAI and the authority to delegate
rate changes will be explored by Oceanex at that time, including the question
of why the Minister commissioned the CPCS Report if the Minister was not
directly or indirectly involved in the decision-making.
[29]
If the Minister was the decision-maker, there is
no evidence that the Minister was not aware of the CPCS Report. The affidavit
of Karen Snook, Oceanex Chief Financial Analyst, sworn on March 8, 2017 and
filed by Oceanex in support of this motion, deposes that over the years Oceanex
has made ongoing efforts to raise its concerns about the detrimental impact of
increasing federal subsidization of MAI to the attention of the Minister.
Attached as Exhibit B of her affidavit is a presentation made by Patrick Gosselin
of Transport Canada to Oceanex in May of 2015. This indicates that since 2011
Oceanex has raised concerns about MAI having an unfair advantage due to federal
subsidies and has called upon the federal government to “level the playing field”. Further, since Oceanex’s
complaint had been raised Transport Canada’s approach had been narrow,
examining commercial traffic trends and pricing, and that a broader analysis on
the issue was required. Accordingly, that a consultant was to undertake a
broad study to understand the full breadth of competition in Newfoundland’s
freight transportation services market. The objectives of the study were
stated and also that the results would further improve understanding around competition
in the Newfoundland market and would contribute to ongoing internal analysis
and future policy developments.
[30]
Exhibit F of the Snook Affidavit is an email
dated May 2, 2016 from the Minister in response to a letter from Oceanex
regarding the impact of the subsidies MAI receives. The email states that “I have noted your concerns related to the level of subsidies
that MAI receives. As you will recall, Transport Canada commissioned an
external consultant study in 2015 that assessed, among other elements, the
fright transportation market in Newfoundland. The department appreciated
Oceanex Inc.’s contribution to this study, and internal analysis is being
finalized”.
[31]
The CPCS Report states in its background section
that Transport Canada had retained CPCS to assess the degree of distortion in
the Newfoundland-Mainland freight market attributable to Government of Canada
support to MAI and possible solutions in terms of revised fare structures. Further,
that the research and analysis developed from the study would contribute to
internal analysis and future policy developments. It also explicitly refers to
Oceanex.
[32]
Thus, if the Minister was the decision-maker, it
is reasonable to infer that he was aware of the background to and of the CPCS
Report, which was commissioned by Transport Canada, and that it was available
to him. Accordingly, the Report would be admissible and potentially relevant
to the extent that it may establish the existence of a relevant consideration
in the determination of the 2016-2017 freight rates. Viewed otherwise, if the
Minister was, or should have been, the decision-maker, then the CPCS Report was
likely part of the record before him when he made that decision and would have
to be produced in response to the Rule 317 request. Further, as noted by the
Prothonotary in his May 5, 2017 Order, if on cross-examination Ms. Bergevin
deposes that her generic reference in her affidavit to studies that she viewed
when reviewing the Transport Canada file included the CPCS Report, then it may
be compellable as a relevant document on that basis.
[33]
As to MAI, it has not provided any sworn or
other evidence to confirm that the CPCS Report was not before it when it
purports to have made the decision setting the 2016-2017 freight rates. Thus,
there is a live question as to whether MAI was the decision-maker, as it
asserts, and, if so, then whether the CPCS Report was or should have been
before it when it made the subject decision. Of course, if MAI was the
authorized decision-maker and if this Court does not, as MAI asserts, have jurisdiction,
then the admissibility of the CPCS Report will be moot. If MAI was the
authorized decision-maker and if this Court does have jurisdiction and if the
CPCS Report was not and should not have been before MAI, then the Report would
not form a part of the record and would likely not be admissible or relevant.
[34]
In my view, in these circumstances it is also of
note that the parties to this matter have submitted a significant body of
affidavit evidence in support of and in response to Oceanex’s application for judicial
review. As summarized by the Minister in his submissions, these are:
Oceanex
i)
Affidavit of
Captain Sidney J. Hynes, Oceanex CEO, sworn on September 8, 2016, providing
background information on the Newfoundland commercial freight market and short
sea shipping; a history and description of Oceanex’s current operations; his
evidence regarding MAI and its relationship with the federal government,
including MIA’s operations, subsidies and the alleged 2010 agreement;
communications between Oceanex and the Minister with respect to its concerns
over the federal government’s treatment of MAI; and, his evidence concerning
the detrimental impact on Oceanex;
ii)
Expert affidavit
of David Gillen, an economist, sworn on September 8, 2016 providing opinion
evidence on the role of competition in achieving the policy objectives set out
in the Canada Transportation Act; how economically efficient prices are
set in transportation markets; and, what markets MAI serves and the
consequences for Oceanex of the subsidization of MAI;
iii)
Expert affidavit
of Peter Neary, historian, sworn on August 18, 2016, providing opinion evidence
on the origin and meaning of Term 32 of the Terms of Union;
Minister
iv)
Affidavit of Michèle
Bergevin, Director, Portfolio Management within the Crown Corporation and
Portfolio Governance Directorate in Transport Canada, sworn on September 8,
2016 attaching a copy of the 2010 Budget Decision;
v)
A second affidavit
of Michèle Bergevin sworn on December 7, 2016 providing information concerning
the setting of MAI’s rates including an overview of Canada’s obligation under
the Terms of Union to provide a ferry route between North Sydney and Port au
Basques (the “constitutional
ferry route”); a brief
history of the constitutional ferry route; an overview of MAI, its corporate
governance and structure; an explanation of how MAI sets it rates and how this
has changed over time; and, information on Transport Canada’s relationship with
the marine industry and Transport Canada’s role as the regulator;
MAI
vi)
Affidavit of Shawn
Leamon, a Vice President at MAI, sworn on December 7, 2016 providing background
on MAI; his evidence on the importance of the ferry services to Newfoundland
and Labrador; an overview of MAI’s operations; and, information concerning MAIs
governance and its ability to set its rates;
vii)
Expert affidavit
of Geoffrey Church an economist, sworn on December 7, 2016 responding to the
economic evidence of David Gillen;
Attorney General for Newfoundland
and Labrador
viii)
Affidavit of Raymond
Blake, historian, sworn on November 30, 2016 providing opinion evidence on the
intention of the parties to the Terms of Union with respect to Term 32; whether
this was a commitment to simply operate a steamship between two points or
something more; and, was it to be a subsidized service for the benefit of
Newfoundland;
ix)
Affidavit of
Dennis Bruce, economist, sworn on December 5, 2016 responding to the opinion
evidence of Captain Hynes and David Gillen and providing his opinion on whether
Oceanex’s evidence established that MAI’s pricing has had a detrimental impact
on Oceanex’s service offerings and, if MAI was no longer subsidized, what the
impact on Newfoundland and Labrador’s economy would be;
Reply and Surreply Affidavits
Oceanex
x)
Reply Affidavit of
Captain Sidney J. Hynes sworn on January 19, 2017;
xi)
Reply Affidavit of
David Gillen, sworn on January 19, 2017;
Attorney General for
Newfoundland and Labrador
xii)
Reply Affidavit of
Dennis Bruce, sworn on March 1, 2017.
[35]
The parties are relying on the affidavits to
bring out the background to and impact of the impugned decision. It is also
likely that further detail will arise from the intended cross-examination of
the affiants concerning, among other things, the identity and authority of the
decision-maker as regards to the 2016-2017 freight rates. I note that, in its
written submissions concerning this motion, the Minister states that he
reserves the right to challenge the relevancy and admissibility of portions of
this evidence at the hearing of the application for judicial review, if
necessary.
[36]
In these somewhat unusual circumstances, I have
concluded that it is just and expeditious to exercise my discretion and permit
the Supplementary Affidavit to be filed and served at this time. Although the
identity of the decision-maker is at issue, the Supplementary Affidavit is
admissible on the basis that if the decision-maker was the Minister then the
CPCS Report would likely have formed part of the record before him and, if MAI
was an authorized decision-maker and this Court has jurisdiction, then it is arguable
that the Report should have been before it when it made its decision. The issue
of the identity of the decision-maker will, in all probability, be fleshed out
during the course of cross-examinations. And, unless the case management judge
or the parties decide that it should be dealt with as a preliminary matter, it
will ultimately be determined by me at the hearing of the judicial review.
[37]
It is also noteworthy that Oceanex made its
ATIP request seeking the CPCS Report in on July 22, 2016, however, it did not receive
the Report until seven months later, on February 22, 2017. In the result, it
was not available to Oceanex when it was required to file its affidavit evidence,
on or before September 9, 2016, in support of its application for judicial review.
Had it been, it would in all probability have been attached as an exhibit to
one of the Oceanex affidavits, avoiding the need for the Supplementary
Affidavit. And, even if the admissibility of the Report had then been
challenged, it is questionable as to whether the Court would have been
receptive to making an advance ruling on admissibility (Access Copyright
at para 11).
[38]
As to relevance, I find that the CPCS Report is
relevant to the issue of the identity of the decision-maker and to the question
of whether the decision-maker, whoever it may have been, took into account all
relevant considerations when making its decision, both of which issues are
raised by the Amended Notice of Application. I do not agree with MAI’s
submission that the CPCS Report is an expert report. However, that said and as
Oceanex concedes, nor can it be relied upon for the proof of the truth of its
contents.
[39]
It is also important to recognize that the
relevance and weight, if any, of the CPCS Report will be fully determined as a
part of the judicial review decision. It may be that the Minister, if he was
the decision-maker, considered and rejected the Report. Or that MAI, if it was
the decision-maker, was never informed of the existence of the Report. These
matters, and others, will be addressed in the context of the judicial review.
[40]
In these circumstances and despite the diligence
of Oceanex, the CPCS Report was not available to Oceanex when it filed its
supporting affidavits; the Supplemental Affidavit may assist the Court as it
may be relevant to the question of whether the distortion of the freight rates
attributable to the subsidization of MAI was or should have been a relevant
consideration of the decision-maker, or, simply to provide a more complete
appreciation of the ongoing freight rate issue; and, in my view, the Respondents
are not substantially or seriously prejudiced by the admission of the
Supplemental Affidavit.
[41]
Viewed in whole, in these particular
circumstances, the filing of the Supplemental Affidavit at this time facilitates
the just and most expeditious determination of the matter. Overall it is
preferable and in the interests of justice to permit the filing of the
Supplemental Affidavit now, and to restrict its utilization, as may be
necessary, based on relevancy and weight at the judicial review, rather than to
exclude it.
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