Ocean Port Hotel Ltd. v. British Columbia (General Manager, Liquor Control and Licensing Branch), 2001 SCC 52, [2001] 2 SCR 781

Ocean Port Hotel Ltd. v. British Columbia (General Manager, Liquor Control and Licensing Branch), [2001] 2 S.C.R. 781, 2001 SCC 52

The General Manager, Liquor Control and Licensing Branch                      Appellant

v.

Ocean Port Hotel Limited                                                                             Respondent

and

The Attorney General of Canada, the Attorney General

for Ontario, the Attorney General of Manitoba,

Her Majesty the Queen in right of Alberta and the Minister

of Justice and Attorney General for Alberta                                    Interveners

Indexed as:  Ocean Port Hotel Ltd. v. British Columbia (General Manager, Liquor Control and Licensing Branch)

Neutral citation:  2001 SCC 52.

File No.:  27371.

Hearing and judgment:  March 22, 2001.

Reasons delivered:  September 14, 2001.

Present:  McLachlin C.J. and L’Heureux‑Dubé, Gonthier, Iacobucci, Major, Bastarache, Binnie, Arbour and LeBel JJ.

on appeal from the court of appeal for british columbia

Administrative law -- Tribunals -- Liquor Appeal Board -- Institutional independence -- Liquor Control and Licensing Act providing for appointment of Board members “at the pleasure of the Lieutenant Governor in Council” -- In practice, members are appointed for one-year term and serve on a part-time basis -- Whether Board members sufficiently independent to render decisions on violations of Act and impose penalties provided -- Liquor Control and Licensing Act, R.S.B.C. 1996, c. 267, s. 30.

An initial police investigation and a subsequent investigation by a Senior Inspector with the Liquor Control and Licensing Branch led to allegations that the respondent, which operates a hotel and pub, had committed five infractions of the Liquor Control and Licensing Act and Regulations.  Following a hearing, another Senior Inspector with the Branch concluded that the allegations had been substantiated and imposed a penalty that included a two-day suspension of the respondent’s liquor licence.  The respondent appealed to the Liquor Appeal Board by way of a hearing de novo.  The findings on four of the five allegations were upheld, and the penalty was confirmed.  Pursuant to s. 30(2)(a) of the Act, the chair and members of the Board “serve at the pleasure of the Lieutenant Governor in Council”.  In practice,  members are appointed for a one-year term and serve on a part-time basis.  All members but the chair are paid on a per diem basis.  The chair establishes panels of one or three members to hear matters before the Board “as the chair considers advisable”.  The Court of Appeal concluded that members of the Board lacked the necessary guarantees of independence required of administrative decision makers imposing penalties and set aside the Board’s decision.

Held:  The appeal should be allowed and the matter remitted to the British Columbia Court of Appeal to decide the issues which it did not address.

It is well established  that, absent constitutional constraints, the degree of independence required of a particular government decision maker or tribunal is determined by its enabling statute.  The statute must be construed as a whole to determine the degree of independence the legislature intended.  Confronted with silent or ambiguous legislation, courts generally infer that Parliament or the legislature intended the tribunal’s process to comport with principles of natural justice.  However, like all principles of natural justice, the degree of independence required of tribunal members may be ousted by express statutory language or necessary implication.

There is a fundamental distinction between administrative tribunals and courts.  Superior courts, by virtue of their role as courts of inherent jurisdiction, are constitutionally required to possess objective guarantees of both individual and institutional independence.  The same constitutional imperative applies to the provincial courts.  Administrative tribunals, by contrast, lack this constitutional distinction from the executive.  They are, in fact, created precisely for the purpose of implementing government policy.  Implementation of that policy may require them to make quasi-judicial decisions.  Given their primary policy-making function, however, it is properly the role and responsibility of Parliament and the legislatures to determine the composition and structure required by a tribunal to discharge the responsibilities bestowed upon it.  While tribunals may sometimes attract Charter requirements of independence, as a general rule they do not.

The legislature’s intention that Board members should serve at pleasure is unequivocal.  As such, it does not permit the argument that the statute is ambiguous and hence should be read as imposing a higher degree of independence to meet the requirements of natural justice, if indeed a higher standard is required.  Where the intention of the legislature, as here, is unequivocal, there is no room to import common law doctrines of independence.  Nor is a constitutional guarantee of independence implicated here.  There is no basis upon which to extend the constitutional guarantee of judicial independence that animated the Provincial Court Judges Reference to the Liquor Appeal Board.  The Board is not a court, nor does it approach the constitutional role of the courts.  It is first and foremost a licensing body. The suspension complained of was an incident of the Board’s licensing function.  Licences are granted on condition of compliance with the Act, and can be suspended for non-compliance.  The exercise of power here at issue falls squarely within the executive power of the provincial government.

This Court’s conclusion affirming the independence of the Board makes it necessary to remit the case to the Court of Appeal for consideration of the issues it expressly refrained from addressing.  Many of these issues directly relate to the validity of the decision at first instance.  Since the Court of Appeal will have the benefit of full argument on the nature of the initial hearing and the relevant provisions of the Act, the Court also remits for its consideration the issue of whether this hearing gave rise to a reasonable apprehension of bias and, if so, whether this apprehension was cured by the de novo proceedings before the Board.

Cases Cited

Distinguished:  2747-3174 Québec Inc. v. Quebec (Régie des permis d’alcool), [1996] 3 S.C.R. 919;  referred to:  Canadian Pacific Ltd. v. Matsqui Indian Band, [1995] 1 S.C.R. 3; Minister of National Revenue v. Coopers and Lybrand, [1979] 1 S.C.R. 495; Law Society of Upper Canada v. French, [1975] 2 S.C.R. 767; Katz v. Vancouver Stock Exchange, [1996] 3 S.C.R. 405; Innisfil (Corporation of the Township of) v. Corporation of the Township of Vespra, [1981] 2 S.C.R. 145; Brosseau v. Alberta Securities Commission, [1989] 1 S.C.R. 301; Ringrose v. College of Physicians and Surgeons (Alberta), [1977] 1 S.C.R. 814; Kane v. Board of Governors of the University of British Columbia, [1980] 1 S.C.R. 1105; Reference re Remuneration of Judges of the Provincial Court of Prince Edward Island, [1997] 3 S.C.R. 3; Beauregard v. Canada, [1986] 2 S.C.R. 56; Preston v. British Columbia (1994), 92 B.C.L.R. (2d) 298; Re W.  D. Latimer Co. and Bray (1974), 6 O.R. (2d) 129; Attorney-General for Ontario v. Attorney-General for Canada, [1947] A.C. 127; Newfoundland Telephone Co. v. Newfoundland (Board of Commissioners of Public Utilities), [1992] 1 S.C.R. 623; R. v. Silveira, [1995] 2 S.C.R. 297; M. v. H., [1999] 2 S.C.R. 3.

Statutes and Regulations Cited

Canadian Charter of Rights and Freedoms, ss. 7 , 11 (d).

Charter of Human Rights and Freedoms, R.S.Q., c. C-12, s. 23.

Constitution Act, 1867 , preamble.

Evidence Act, R.S.B.C. 1996, c. 124, s. 10(3).

Liquor Control and Licensing Act, R.S.B.C. 1979, c. 237 [now R.S.B.C. 1996, c. 267], ss. 2, 3, 20, 30, 37, 38(1)(a) [am. 1986, c. 5, s. 11], 45(2) [am. 1988, c. 43, s. 21], 48.

Liquor Control and Licensing Regulations, B.C. Reg. 608/76, s. 11(3).

APPEAL from a judgment of the British Columbia Court of Appeal (1999), 68 B.C.L.R. (3d) 82, 174 D.L.R. (4th) 498, 15 Admin. L.R. (3d) 13, 125 B.C.A.C. 82, 204 W.A.C. 82, [1999] B.C.J. No. 1112 (QL), 1999 BCCA 317, allowing the respondent’s appeal from a decision of the Liquor Appeal Board upholding a two-day suspension of the respondent’s liquor licence.  Appeal allowed.

George H. Copley, Q.C., and Neena Sharma, for the appellant.

Howard Rubin and Peter L. Rubin, for the respondent.

Donald J. Rennie and Anne M. Turley, for the intervener the Attorney General of Canada.

Dennis W. Brown, Q.C., and Lucy McSweeney, for the intervener the Attorney General for Ontario.

Shawn Greenberg and Rodney G. Garson, for the intervener the Attorney General of Manitoba.

Timothy Hurlburt and Sean McDonough, for the interveners Her Majesty the Queen in right of Alberta and the Minister of Justice and Attorney General for Alberta.

The judgment of the Court was delivered by

1                                  The Chief Justice – This appeal raises a critical but largely unexplored issue of administrative law: the degree of independence required of members sitting on administrative tribunals empowered to impose penalties.  As the intervening Attorneys General emphasize, this is an issue that implicates the structures of administrative bodies across the nation.

2                                   The Court allowed the appeal at the conclusion of the hearing, with reasons to follow.  These are the reasons for judgment.

I.  The Background

3                                  Ocean Port Hotel Ltd. operates a hotel and pub in Squamish, British Columbia.  The RCMP investigated a number of incidents in and around the Ocean Port Hotel and reported that the establishment had not been operating in compliance with the Liquor Control and Licensing Act, R.S.B.C. 1979, c. 237 (now R.S.B.C. 1996, c. 267) (the “Act”), the Regulations, and the terms of its liquor licence.  Mel Tait, a Senior Inspector with the Liquor Control and Licensing Branch, conducted an investigation into these incidents.  This investigation culminated in a hearing, pursuant to s. 20 of the Act, before Peter Jones, another Senior Inspector with the Branch. 

4                                   At this hearing, Senior Inspector Tait presented information to support the following five allegations of non-compliance: 

1.                May 12, 1996: An intoxicated person was found within Ocean Port contrary to s. 45(2)(a) and (b) of the Act.

2.                May 12, 1996: The intoxicated patron attempted to start a fight contrary to s. 38(1)(a) of the Act.

3.                October 4, 1996: Ocean Port failed to comply with s. 37 of the Act by permitting minors to enter and remain within the establishment.

4.                October 26, 1996: Ocean Port permitted a patron to become intoxicated contrary to s. 45(2)(a) of the Act.

5.                October 26, 1996: Two patrons were observed carrying liquor from Ocean Port contrary to s. 11(3) of the Liquor Control and Licensing Regulations, B.C. Reg. 608/76.

5                                  Senior Inspector Jones concluded that the allegations had been substantiated on a balance of probabilities and imposed a two-day suspension of Ocean Port’s liquor licence to be served on a prescribed Friday and Saturday.  He also ordered that a sign notifying the public of the suspension be posted in a prominent location.  He advised Ocean Port of his decision by letter.

6                                  Ocean Port appealed this decision to the Liquor Appeal Board by way of a hearing de novo.  At this hearing, the Board heard evidence on the charges from three RCMP officers and two witnesses for Ocean Port.  The Board accepted the evidence of the police officers over that of Ocean Port’s witnesses where the evidence differed, finding the officers’ evidence more credible and consistent.  The Board issued written reasons affirming Senior Inspector Jones’ decision with regard to the first, second, third and fifth allegations.  It held that the actions of the doorman relied on by Ocean Port did not constitute due diligence.  It confirmed the two-day, Friday and Saturday suspension as an appropriate penalty.  The panel acknowledged that control of the premises had improved since the appointment of a new general manager, but noted that two of the infractions occurred after his appointment.

7                                  Ocean Port sought and obtained leave to appeal to the British Columbia Court of Appeal under s. 30(9) of the Act.  The Chief Justice of British Columbia stayed the licence suspension pending the resolution of this appeal.

8                                  Before the Court of Appeal ((1999), 68 B.C.L.R. (3d) 82, 1999 BCCA 317), Ocean Port argued for the first time that the Board lacked sufficient independence to make the ruling and impose the penalty it had, and that as a result the decision must be set aside.  It also objected to the order on the grounds that: (1) the Board relied on hearsay, irrelevant evidence and insufficient evidence to support the allegations against Ocean Port, in contravention of the principles of natural justice and its duty of fairness; (2) the Board erred in law in its application of s. 10(3) of the Evidence Act, R.S.B.C. 1996, c. 124, and (3) the jurisdiction of the General Manager under the Act was limited to matters of compliance and could not ground a decision on an “offence”, a power reserved to the courts.   

9                                   The Court of Appeal, per Huddart J.A., held that appointees to the Board lacked the security of tenure necessary to ensure their independence.  Huddart J.A. started her analysis by noting the agreement of the parties that the court must be guided by the relevant principles articulated by Gonthier J. in 2747-3174 Québec Inc. v. Quebec (Régie des permis d’alcool), [1996] 3 S.C.R. 919.  Although Gonthier J. articulated these principles in relation to s. 23 of the Quebec Charter of Human Rights and Freedoms, R.S.Q., c. C-12, he looked to the common law rules of natural justice and fairness to guide his interpretation of this provision’s guarantees of independence and impartiality.  Huddart J.A. identified two principles affirmed in Régie: (1) governmental decision makers imposing penalties must comply with the requirements of impartiality and independence; and (2) the content of these requirements depends on all of the circumstances, “in particular on the language of the statute under which the agency acts, the nature of the task it performs and the type of decision it is required to make” (Régie, at para. 39).    

10                              Huddart J.A. concluded that the decision to suspend a licence for violation of the Act closely resembles a judicial decision.  It is a penalty with serious, albeit purely economic, consequences.  In these circumstances, she concluded, the content of the procedural fairness rules, including the requirement of independence, must approach the standards required of a court at common law. 

11                              Huddart J.A. summarized Ocean Port’s complaint about fairness as involving two key issues: the fusion of the General Manager’s prosecutorial and adjudicative roles in the senior inspectors and the reliance at both hearings on hearsay evidence.  She noted that, had the alleged infractions been prosecuted as criminal offences under s. 48 of the Act, the procedural safeguards available in the Provincial Court may well have resulted in different findings of fact.  Further, the maximum fine of $10 000 for conviction of an offence under s. 48 might be less costly than the two-day suspension imposed by the Board.  She also noted that this Court, in Régie, held that the overlapping duties of senior inspectors gave rise to a reasonable apprehension of bias.  However, she concluded that it was unnecessary to resolve the arguments surrounding the decision of Senior Inspector Jones to suspend the licence, since the General Manager had conceded that this initial decision could stand only if the appeal process was valid.

12                              This brought her to the focal point of the appeal: Ocean Port’s concerns relating to the independence of the Board.  Relying on Canadian Pacific Ltd. v. Matsqui Indian Band, [1995] 1 S.C.R. 3, Huddart J.A. noted that institutional independence consists of three core components: security of tenure, financial security and administrative control.  Only the first component, security of tenure, was at issue in the present case.  She found, upon reviewing the Act and the evidence, that the Board functioned through part-time, fixed-term appointments.  Members of the Board could be removed at pleasure, but were entitled to payment for the term of their appointment.  The essential question was whether such appointments provided sufficient security of tenure.

13                               Reviewing this Court’s decision in Régie, Huddart J.A. reasoned that “at pleasure” appointments to administrative agencies such as the Quebec Régie des permis d’alcool and the Liquor Appeal Board, which impose sanctions for violations of statutes, cannot satisfy the requirement of security of tenure.  She concluded that the part-time, fixed-term appointments to the Board were indistinguishable from  full-time appointments “at pleasure”, since a member can in effect be removed (or not assigned to hearings) at the will of the government.  As a result, the Board lacked the necessary degree of independence, and its decision was set aside.  Since the validity of the decision at first instance hinged on a fair hearing before the Board, that decision was set aside as well.  In view of this conclusion, Huddart J.A. did not consider Ocean Port’s other grounds of appeal.

14                               The Court of Appeal, per Ryan J.A., subsequently granted an order staying the execution of the judgment until this Court refused to grant leave to appeal or, alternatively, granted leave and rendered a decision on the appeal: (1999), 128 B.C.A.C. 130.  Leave to appeal was granted by this Court ([2000] 1 S.C.R. xii), and the stay remained in force until the appeal was allowed on March 22, 2001.

II.  Legislation

15                               The relevant provisions of the Liquor Control and Licensing Act, R.S.B.C. 1996, c. 267, provide as follows:

          2       (1)   The Liquor Control and Licensing Branch, as established in the ministry of the minister, is continued.

(2)   The branch may grant licences and permits to purchase liquor from the Liquor Distribution Branch for resale and reuse in accordance with this Act and the Liquor Distribution Act.

          3       (1)   The minister, under the Public Service Act, must appoint a general manager of the branch and set his or her remuneration.

(2)   The general manager must, subject to orders and direction of the minister on matters of general policy,

(a)       administer this Act, and

(b)       supervise all licensed establishments and manufacturers of liquor.

         20      (1)   In addition to any other powers the general manager has under this Act, the general manager may, on the general manager’s own motion or on receiving a complaint, take action against a licensee for any of the following reasons:

(a)       the licensee’s failure to comply with a requirement of this Act, the regulations or a term or condition of a licence;

(b)       the conviction of the licensee of an offence under the laws of Canada or British Columbia or under the bylaws of a municipality or regional district, if the offence relates to the licensed establishment or the conduct of it;

(c)       the persistent failure to keep the licensed establishment in a clean and orderly fashion;

(d)       the existence of a circumstance that, under section 16, would prevent the issue of a licence;

(e)       the suspension or cancellation of a municipally, regionally, provincially or federally granted licence, permit or certificate that the licensee is required to hold in order to operate the licensed establishment.

(2)   If the general manager has the right under subsection (1) to take action against a licensee, the general manager may do any one or more of the following, with or without a hearing:

(a)       issue a warning to the licensee;

(b)       impose terms and conditions on the licensee’s licence or rescind or amend existing terms and conditions on the licence;

(c)       impose a fine on the licensee within the limits prescribed;

(d)       suspend or cancel the licensee’s licence, in whole or in part.

(3)   Despite subsection (2)(d), the general manager must suspend or cancel a licence held by a person who

(a)       has been convicted of an offence against prescribed laws of Canada or British Columbia, or

(b)       has been convicted of an offence against this Act, if the person committed the offence within 3 years after being convicted of a previous offence against this Act.

         30      (1)   The Liquor Appeal Board is continued consisting of a chair and other members the Lieutenant Governor in Council may appoint.

(2)   The chair and the members of the appeal board

(a)       serve at the pleasure of the Lieutenant Governor in Council, and

(b)       are entitled to

(i)    receive the remuneration set by the Lieutenant Governor in Council, and

(ii) be paid reasonable expenses incurred in carrying out their duties as members of the appeal board.

(3)   The chair of the appeal board may designate one member as vice chair.

(4)   Subject to section 31(6) and (8), the appeal board must hear and determine any matter appealed under section 31.

(5)   The chair of the appeal board may establish one or more panels of the appeal board, each consisting of one or 3 members of the appeal board, as the chair considers advisable, to hear any matter that is before the appeal board, and when a panel is established,

(a)       the chair must appoint one of the members of the panel to preside at meetings of the panel, and

(b)       the panel has the jurisdiction of the appeal board with respect to matters under this Act that come before the appeal board. . . 

16                               The preamble to the Constitution Act, 1867  provides, in part:

     Whereas the Provinces of Canada, Nova Scotia, and New Brunswick have expressed their Desire to be federally united into One Dominion under the Crown of the United Kingdom of Great Britain and Ireland, with a Constitution similar in Principle to that of the United Kingdom . . . .

III.  Issue

17                               The issue is whether members of the Liquor Appeal Board are sufficiently independent to render decisions on violations of the Act and impose the penalties it provides.  The other grounds raised by the respondent against the validity of the Senior Inspector’s initial decision to impose a penalty are not before the Court.

IV.  Discussion

18                              This appeal concerns the independence of the Liquor Appeal Board.  The Court of Appeal concluded that members of the Board lacked the necessary guarantees of independence required of administrative decision makers imposing penalties.  More specifically, it held that the tenure enjoyed by Board members – appointed “at the pleasure” of the executive to serve on a part-time basis – was insufficiently secure to preserve the appearance of their independence.  As a consequence, it set aside the Board’s decision in the present case. 

19                               The appellant, with the support of the intervening Attorneys General, argues that this reasoning disregards a fundamental principle of law: absent a constitutional challenge, a statutory regime prevails over common law principles of natural justice.  The Act expressly provides for the appointment of Board members at the pleasure of the Lieutenant Governor in Council.  The decision of the Court of Appeal, the appellant contends, effectively struck down this validly enacted provision without reference to constitutional principle or authority.  In essence, the Court of Appeal elevated a principle of natural justice to constitutional status.  In so doing, it committed a clear error of law. 

20                              This conclusion, in my view, is inescapable.  It is well established  that, absent constitutional constraints, the degree of independence required of a particular government decision maker or tribunal is determined by its enabling statute.  It is the legislature or Parliament that determines the degree of independence required of tribunal members.  The statute must be construed as a whole to determine the degree of independence the legislature intended.

21                              Confronted with silent or ambiguous legislation, courts generally infer that Parliament or the legislature intended the tribunal’s process to comport with principles of natural justice: Minister of National Revenue v. Coopers and Lybrand, [1979] 1 S.C.R. 495, at p. 503; Law Society of Upper Canada v. French, [1975] 2 S.C.R. 767, at pp. 783-84.  In such circumstances, administrative tribunals may be bound by the requirement of an independent and impartial decision maker, one of the fundamental principles of natural justice: Matsqui, supra (per Lamer C.J. and Sopinka J.); Régie, supra, at para. 39; Katz v. Vancouver Stock Exchange, [1996] 3 S.C.R. 405.   Indeed, courts will not lightly assume that legislators intended to enact procedures that run contrary to this principle, although the precise standard of independence required will depend “on all the circumstances, and in particular on the language of the statute under which the agency acts, the nature of the task it performs and the type of decision it is required to make”: Régie, at para. 39.

22                              However, like all principles of natural justice, the degree of independence required of tribunal members may be ousted by express statutory language or necessary implication.  See generally: Innisfil (Corporation of the Township of) v. Corporation of the Township of Vespra, [1981] 2 S.C.R. 145; Brosseau v. Alberta Securities Commission, [1989] 1 S.C.R. 301; Ringrose v. College of Physicians and Surgeons (Alberta), [1977] 1 S.C.R. 814; Kane v. Board of Governors of the University of British Columbia, [1980] 1 S.C.R. 1105.  Ultimately, it is Parliament or the legislature that determines the nature of a tribunal’s relationship to the executive.  It is not open to a court to apply a common law rule in the face of clear statutory direction.  Courts engaged in judicial review of administrative decisions must defer to the legislator’s intention in assessing the degree of independence required of the tribunal in question.

23                              This principle reflects the fundamental distinction between administrative tribunals and courts.  Superior courts, by virtue of their role as courts of inherent jurisdiction, are constitutionally required to possess objective guarantees of both individual and institutional independence.  The same constitutional imperative applies to the provincial courts:  Reference re Remuneration of Judges of the Provincial Court of Prince Edward Island, [1997] 3 S.C.R. 3 (the “Provincial Court Judges Reference”).  Historically, the requirement of judicial independence developed to demarcate the fundamental division between the judiciary and the executive.  It protected, and continues to protect, the impartiality of judges – both in fact and perception – by insulating them from external influence, most notably the influence of the executive: Beauregard v. Canada, [1986] 2 S.C.R. 56, at p. 69; Régie, at para. 61. 

24                              Administrative tribunals, by contrast, lack this constitutional distinction from the executive.  They are, in fact, created precisely for the purpose of implementing government policy.  Implementation of that policy may require them to make quasi-judicial decisions. They thus may be seen as spanning the constitutional divide between the executive and judicial branches of government.  However, given their primary policy-making function, it is properly the role and responsibility of Parliament and the legislatures to determine the composition and structure required by a tribunal to discharge the responsibilities bestowed upon it.  While tribunals may sometimes attract Charter requirements of independence, as a general rule they do not.  Thus, the degree of independence required of a particular tribunal is a matter of discerning the intention of Parliament or the legislature and, absent constitutional constraints, this choice must be respected. 

25                              In the present case, the legislature of British Columbia spoke directly to the nature of appointments to the Liquor Appeal Board.  Pursuant to s. 30(2)(a) of the Act, the chair and members of the Board “serve at the pleasure of the Lieutenant Governor in Council”.  In practice,  members are appointed for a one-year term (pursuant to an Order-in-Council), and serve on a part-time basis.  All members but the chair are paid on a per diem basis.  The chair establishes panels of one or three members to hear matters before the Board “as the chair considers advisable”: s. 30(5). 

26                               The Court of Appeal, per Huddart J.A. concluded that this appointment scheme effectively deprived Board members of security of tenure, an essential safeguard of their independence.  Relying on Preston v. British Columbia (1994), 92 B.C.L.R. (2d) 298, she held that Board members could be removed at pleasure, although they would be entitled to payment for the fixed term of their appointment.  In her view, however, the additional protection offered by the fixed term of employment was illusory.  Since the chair has an absolute discretion over the composition of hearing panels, it is possible that members might not be assigned to any cases, thus depriving them of work and remuneration.  Thus part-time, fixed term appointments to the Board are indistinguishable from appointments “at pleasure”.  Both raise a reasonable apprehension that Board members may be unduly influenced by the threat of removal should they render unsatisfactory decisions in the eyes of the executive.  

27                              In my view, the legislature’s intention that Board members should serve at pleasure, as expressed through s. 30(2)(a) of the Act, is unequivocal.  As such, it does not permit the argument that the statute is ambiguous and hence should be read as imposing a higher degree of independence to meet the requirements of natural justice, if indeed a higher standard is required.  It is easy to imagine more exacting safeguards of independence – longer, fixed-term appointments; full-time appointments; a panel selection process for appointing members to panels instead of the Chair’s discretion.  However, in each case one must face the question: “Is this what the legislature intended?”  Given the legislature’s willingness to countenance “at pleasure” appointments with full knowledge of the processes and penalties involved, it is impossible to answer this question in the affirmative.  Huddart J.A. concluded that the tenure enjoyed by Board members was “no better than an appointment at pleasure”   (para. 27).  However, this is precisely the standard of independence required by the Act.  Where the intention of the legislature, as here, is unequivocal, there is no room to import common law doctrines of independence, “however inviting it may be for a Court to do so”: Re W. D. Latimer Co. and Bray (1974), 6 O.R. (2d) 129 (C.A.), at    p. 137.

28                               Part of the problem in this case may be attributable to the Board’s apparent concession before the Court of Appeal (at para. 9) that “the court must be guided in its consideration of this appeal by the discussion of the applicable principles” in Régie.  The Court of Appeal, on this basis, appears to have treated the standards of independence articulated in Régie as binding.  This overlooks the fact that the requirements of independence in Régie emanated from the Quebec Charter of Human Rights and Freedoms, a quasi-constitutional statute.  Section 23 of the Quebec Charter entrenches the right to a “full and equal, public and fair hearing by an independent and impartial tribunal” (emphasis added).  No equivalent guarantee of independence constrains the legislature of British Columbia.  The Court of Appeal consequently erred in treating the standard articulated in Régie – rather than the will of the legislature – as determinative of the degree of independence required of Board members. 

29                               Nor is a constitutional guarantee of independence implicated in the present case.  The respondent does not argue that the proceedings before the Board engage a right to an independent tribunal under ss. 7  or 11 (d) of the Canadian Charter of Rights  and Freedoms .  Instead, it contends that the preamble to the Constitution Act, 1867  mandates a minimum degree of independence for at least some administrative tribunals.  In support, the respondent  invokes Lamer C.J.’s discussion of judicial independence in the Provincial Court Judges Reference.  In that case, Lamer C.J., writing for the majority, concluded that “judicial independence is at root an unwritten constitutional principle . . . recognized and affirmed by the preamble to the Constitution Act, 1867 ” (para. 83 (emphasis in original)).  The respondent argues that the same principle binds administrative tribunals exercising adjudicative functions.   

30                               With respect, I find no support for this proposition in the Provincial Court Judges Reference.  The language and reasoning of the decision are confined to the superior and provincial courts.  Lamer C.J. addressed the issue of judicial independence; that is, the independence of the courts of law comprising the judicial branch of government.  Nowhere in his reasons does he extend his comments to tribunals other than courts of law. 

31                              Nor does the rationale for locating a constitutional guarantee of independence in the preamble to the Constitution Act, 1867  extend, as a matter of principle, to administrative tribunals.  Lamer C.J.’s reasoning rests on the preamble’s reference to a constitutional system “similar in Principle to that of the United Kingdom”.  Applied to the modern Canadian context, this guarantee extends to provincial courts (at para. 106):

     The historical origins of the protection of judicial independence in the United Kingdom, and thus in the Canadian Constitution, can be traced to the Act of Settlement of 1701. As we said in Valente, supra, at p. 693, that Act was the “historical inspiration” for the judicature provisions of the Constitution Act, 1867 .  Admittedly, the Act only extends protection to judges of the English superior courts.  However . . . judicial independence [has] grown into a principle that now extends to all courts, not just the superior courts of this country.   

These comments circumscribe the requirement of independence, as a constitutional imperative emanating from the preamble, to the provincial and superior courts.

32                   Lamer C.J. also supported his conclusion with reference to the traditional division between the executive, the legislature and the judiciary.  The preservation of this tripartite constitutional structure, he argued, requires a constitutional guarantee of an independent judiciary.  The classical division between court and state does not, however, compel the same conclusion in relation to the independence of administrative tribunals.  As discussed, such tribunals span the constitutional divide between the judiciary and the executive.  While they may possess adjudicative functions, they ultimately operate as part of the executive branch of government, under the mandate of the legislature.  They are not courts, and do not occupy the same constitutional role as courts. 

33                              The Constitution is an organic instrument, and must be interpreted flexibly to reflect changing circumstances: Attorney-General for Ontario v. Attorney-General for Canada, [1947] A.C. 127 (P.C.).  Indeed, in the Provincial Court Judges Reference, Lamer C.J. relied on this principle to extend the tradition of independent superior courts (derived from the constitution of the United Kingdom) to all courts, stating that “our Constitution has evolved over time” (para. 106).  However, I can find no basis upon which to extend the constitutional guarantee of judicial independence that animated the Provincial Court Judges Reference to the Liquor Appeal Board. The Board is not a court, nor does it approach the constitutional role of the courts.  It is first and foremost a licensing body. The suspension complained of was an incident of the Board’s licensing function.  Licences are granted on condition of compliance with the Act, and can be suspended for non-compliance. The exercise of power here at issue falls squarely within the executive power of the provincial government.

34                              The respondent argues in the alternative that the Court of Appeal correctly found a reasonable apprehension of bias arising from the initial hearing before Senior Inspector Jones.  The real issue before the Court of Appeal, in its view, was whether the appeal proceedings were sufficiently fair to “cure” this defect in the initial hearing.  In order to “cure” the apprehension of bias arising from the initial stage, it contends, the Board must be sufficiently independent to provide a fair hearing.  In the respondent’s submission, a fair hearing can only occur if it comports with the principles of natural justice, even if the tribunal’s enabling statute contemplates less stringent guarantees of independence.

35                              The complaint against the initial hearing before Senior Inspector Jones was framed as follows by the Court of Appeal (at para. 15):

The appellant [Ocean Port Hotel Ltd.] sees in the delegation of some of the functions of the general manager to senior inspectors a breach of the principle of natural justice requiring impartiality of the decision maker.  The overlap in their functions as investigator, prosecutor, and decision maker, offends the rule that no one should be the judge in his own cause.

36                              The respondent contends that the last sentence of this paragraph amounts to a finding of bias by the Court of Appeal.   Read in context, however, this statement was not a finding of bias, but merely a summary of the respondent’s argument.  In fact, the Court of Appeal declined to decide this issue.  Huddart J.A. stated (at para. 18): 

       Because the respondent [the General Manager, Liquor Control and Licensing Branch] conceded the decision at first instance could only be upheld if the appeal process was valid, I do not find it necessary to analyse the arguments surrounding the initial decision to suspend.  This brings me to the focal point of this appeal, namely the institutional independence of the Liquor Appeal Board. [Emphasis added.]

37                              Upon determining that the Board lacked the necessary guarantees of independence, Huddart J.A. concluded as follows (at para. 38):

The consequence of the absence of independence in the Board is that its decision must be set aside.  Because the validity of the decision of Senior Inspector Jones was dependent on a fair hearing review before the Board, that decision too must be set aside.  Having reached this conclusion, I need not consider whether the hearings before the Senior Inspector and the Board were unfair because of the lack of evidence to support their findings of fact or their inappropriate reliance on hearsay evidence.  Nor need I consider the two discrete issues on which leave was also granted.

38                               The Court of Appeal clearly declined to address any of the issues before it except the issue of the Board’s independence.  Although it set aside the decision of the Senior Inspector, it did so on the strength of a concession attributed to the appellant, rather than a determination that the initial hearing in fact contravened the rule against bias.  This concession, as framed by Huddart J.A., was to the effect that “the decision at first instance could only be upheld if the appeal process was valid”  (para. 18).  It was on this basis, rather than an analysis of the applicable facts and law, that the initial decision was set aside. 

39                               The appellant does not make the same concession before this Court.  Instead, he contends that no reasonable apprehension of bias arose from the initial hearing.  Even assuming the initial hearing might otherwise have offended the rule against bias, he argues, the overlapping of duties performed by senior inspectors was authorized by statute, and consequently cannot be attacked on this basis.  Finally, he contends that a finding of bias in the initial hearing would not be fatal in any event, since it was cured by the subsequent de novo hearing before the Board. 

40                              In my view, there is considerable merit to the appellant’s submissions.  The mere fact that senior inspectors functioned both as investigators and as decision makers does not automatically establish a reasonable apprehension of bias.  The respondent relies on Régie, where the Court held that an apprehension of bias arose from the plurality of functions performed by the Régie’s lawyers and directors.  Régie, however, is clearly distinguishable from the case at bar.  The apprehension of bias in Régie resulted from the possibility of a single officer participating at each stage of the process, from the investigation of a complaint through to the decision ultimately rendered.  The central concern in Régie, succinctly stated by Gonthier J., was that “prosecuting counsel must in no circumstances be in a position to participate in the adjudication process” (para. 56; see also paras. 54 and 60).

41                              The respondent makes no similar allegations in the present case.  Its concern hinges solely on the fact that the Branch’s hearing officers were employed by the same authority as its prosecuting officers.  However, as Gonthier J. cautioned in Régie, “a plurality of functions in a single administrative agency is not necessarily problematic” (para. 47).  The overlapping of investigative, prosecutorial and adjudicative functions in a single agency is frequently necessary for a tribunal to effectively perform its intended role: Newfoundland Telephone Co. v. Newfoundland (Board of Commissioners of Public Utilities), [1992] 1 S.C.R. 623.  Without deciding the issue, I would note that such flexibility may be appropriate in a licensing scheme involving purely economic interests.

42                              Further, absent constitutional constraints, it is always open to the legislature to authorize an overlapping of functions that would otherwise contravene the rule against bias.  Gonthier J. alluded to this possibility in Régie, at para. 47, quoting from the opinion of L’Heureux-Dubé J. in Brosseau, supra, at pp. 309-10:

As with most principles, there are exceptions.  One exception to the “nemo judex” principle is where the overlap of functions which occurs has been authorized by statute, assuming the constitutionality of the statute is not in issue.

. . .

In some cases, the legislator will determine that it is desirable, in achieving the ends of the statute, to allow for an overlap of functions which in normal judicial proceedings would be kept separate. . . . If a certain degree of overlapping of functions is authorized by statute, then, to the extent that it is authorized, it will not generally be subject to the doctrine of “reasonable apprehension of bias” per se.

43                              Thus, even assuming the plurality of functions performed by senior inspectors would otherwise offend the rule against bias, it may well be that this structure was authorized by the Act at the relevant time.   

44                              Given the apparent merit of the appellant’s submissions, I am reluctant to find the initial decision invalid solely on the basis of a concession that is now denied by the appellant, or at least recanted.  This Court, of course, is not bound by concessions on questions of law: R. v. Silveira, [1995] 2 S.C.R. 297; M. v. H., [1999] 2 S.C.R. 3.  However, in the circumstances, I have concluded that it is best to refrain from embarking on an extensive inquiry into the validity of the initial decision, especially in the absence of a considered decision on this issue in the court below.  This Court’s conclusion affirming the independence of the Board makes it necessary to remit the case to the Court of Appeal for consideration of the issues it expressly refrained from addressing.  Many of these issues directly relate to the validity of the decision at first instance.  Since the Court of Appeal will have the benefit of full argument on the nature of the initial hearing and the relevant provisions of the Act, I would also remit for its consideration the issue of whether this hearing gave rise to a reasonable apprehension of bias and, if so, whether this apprehension was cured by the de novo proceedings before the Board.

V.  Conclusion

45                               The appeal is allowed with costs, the order of the British Columbia Court of Appeal is set aside, and the matter is remitted to the British Columbia Court of Appeal to decide the issues which it did not address.

Appeal allowed with costs.

Solicitor for the appellant:  The Ministry of the Attorney General, Vancouver.

Solicitor for the respondent:  Howard Rubin, Vancouver.

Solicitor for the intervener the Attorney General of Canada:  The Department of Justice, Ottawa.

Solicitor for the intervener the Attorney General for Ontario:  The Ministry of the Attorney General, Toronto.

Solicitor for the intervener the Attorney General of Manitoba:  The Department of Justice, Winnipeg.

Solicitor for the interveners Her Majesty the Queen in right of Alberta and the Minister of Justice and Attorney General for Alberta:  Alberta Justice, Edmonton.