Committee for Justice and Liberty et al. v. National Energy Board et al.

Committee for Justice and Liberty et al. v. National Energy Board et al.
Collection
Supreme Court Judgments
Date
1976-03-11
Report
[1978] 1 SCR 369
Judges
Laskin, Bora; Martland, Ronald; Judson, Wilfred; Ritchie, Roland Almon; Spence, Wishart Flett; Pigeon, Louis-Philippe; Dickson, Robert George Brian; de Grandpré, Louis-Philippe
On appeal from
Federal Court of Appeal
Subjects
Administrative law
Decision Content
Supreme Court of Canada
Committee for Justice and Liberty et al. v. National Energy Board et al., [1978] 1 S.C.R. 369
Date: 1976-03-11
IN THE MATTER OF the National Energy Board Act;
AND IN THE MATTER OF an application by Canadian Arctic Gas Pipeline Limited for a certificate of public convenience and necessity for the construction and operation of a natural gas pipeline, under File No. 1555-C46-1;
AND IN THE MATTER OF applications by Foothills Pipe Lines Ltd., Westcoast Transmission Company Limited and The Alberta Gas Trunk Line (Canada) Limited for certificates of public convenience and necessity for the construction and operation of certain natural gas pipelines, under File Nos. 1555-F2-3, 1555-W5-49 and 1555-A34-1;
AND IN THE MATTER OF an application by Alberta Natural Gas Company Ltd. for a certificate of public convenience and necessity for the construction and operation of certain extensions to its natural gas pipeline, under File No. 1555-A2-10;
AND IN THE MATTER OF a submission by The Alberta Gas Trunk Line Company Limited, under File No. 1555-A5-2;
AND IN THE MATTER OF an application by the National Energy Board pursuant to section 28(4) of the Federal Court Act.
The Committee for Justice and Liberty, The Consumers’ Association of Canada, Canadian Arctic Resources Committee Appellants;
and
The National Energy Board, Canadian Arctic Gas Pipeline Limited and The Attorney General of Canada et al. Respondents.
1976: March 8, 9 and 10; 1976: March 11.
Present: Laskin C.J. and Martland, Judson, Ritchie, Spence, Pigeon, Dickson and de Grandpré JJ. ON APPEAL FROM THE FEDERAL COURT OF APPEAL
Administrative law—Judicial review—Boards and tribunals—Natural justice—Bias or apprehended bias—Application for certificate of public necessity—National Energy Board Act, R.S.C. 1970, c. N-6, s. 44.
The issue in this appeal arose in connection with the organization of hearings by the National Energy Board to consider competing applications for a Mackenzie Valley pipeline, i.e. applications for a certificate of public convenience and necessity under s. 44 of the National Energy Board Act, R.S.C. 1970, c. N-6. The Board assigned Mr. Crowe, Chairman of the Board, and two other of its members to be the panel to hear the applications. The appellants were recognised by the Board as “interested persons” under s. 45 of the Act. The appellants objected to the participation of Mr. Crowe as a member of the panel because of reasonable apprehension or reasonable likelihood of bias: Mr. Crowe became Chairman and Chief Executive Officer of the National Energy Board on October, 15, 1973. Immediately prior to that date he was president of the Canada Development Corporation, having assumed that position late in 1971 after first having been a provisional director following the enactment of the Canada Development Corporation Act, 1971 (Can.), c. 49. The objects of that Corporation included assisting in business and economic development and investing in shares, securities, ventures, enterprises and property to that end. As Corporation president and as its representative Mr. Crowe was associated with the Gas Arctic-Northwest Project Study Group which considered the physical and economic feasibility of a northern natural gas pipeline to bring natural gas to southern markets. The Agreement setting up the Study Group brought together two groups of companies which merged their efforts and pursuant to the agreement set up two companies of which Canadian Arctic Gas Pipeline Limited was one. Mr. Crowe was an active participant in the Study Group as a member of its Management Committee and a member and subsequently vice-chairman of its Finance, tax and accounting committee and during his period of membership of the Management Committee he participated in the seven meetings held during that time and joined in a unanimous decision of the Committee on June 27, 1973, respecting the ownership and routing of a Mackenzie Valley pipeline. The Canada Development Corporation remained a full participant in the Study Group until long after the applications were made for certificates of public convenience and necessity and until after the hearings had commenced, in effect to the time of the reference of the question of reasonable apprehension of bias in Mr. Crowe to the Federal Court of Appeal. Further, during the period of Mr. Crowe’s association with the Study Group as the representative of the Canada Development Corporation the latter contributed $1,200,000 to the Study Group as its share of expenses. The National Energy Board referred to the Federal Court of Appeal the following question, “Would the Board err in rejecting the objection and in holding that Mr. Crowe was not disqualified from being a member of the panel on grounds of reasonable apprehension or reasonable likelihood of bias?” pursuant to the Federal Court Act, 1970-71-72 (Can.), c. 1, s. 28(4). That Court answered in the negative.
Held (Martland, Judson and de Grandpré JJ. dissenting): The appeal should be allowed.
Per Laskin C.J. and Ritchie, Spence, Pigeon and Dickson JJ.: In dealing with applications under s. 44 of the National Energy Board Act, the function of the Board is quasi‑judicial, or, at least, is a function which the Board must discharge in accordance with the rules of natural justice: and if not necessarily the full range of such rules as would apply to a Court (though the Board is a court of record under s. 10 of the Act) certainly to a degree that would reflect integrity of its proceedings and impartiality in the conduct of those proceedings. A reasonable apprehension of bias arises where there exists a reasonable probability that the judge might not act in an entirely impartial manner. The issue in this situation was not one of actual bias. Thus the facts that Mr. Crowe had nothing to gain or lose either through his participation in the Study Group or in making decisions as chairman of the National Energy Board and that his participation in the Study Group was in a representative capacity became irrelevant. The participation of Mr. Crowe in the discussions and decisions leading to the application by Canadian Arctic Gas Pipeline Limited for a certificate did however give rise to a reasonable apprehension, which reasonably well-informed persons could properly have, of a biased appraisal and judgment of the issues to be determined. The test of probability or reasoned suspicion of bias, unintended though the bias may be, is grounded in the concern that there be no lack of public confidence in the impartiality of adjudicative agencies, and emphasis is added to this concern in this case by the fact that the Board is to have regard for the public interest.
Per Martland, Judson and de Grandpré JJ. dissenting: The proper test to be applied was correctly expressed by the Court of Appeal. The apprehension of bias must be a reasonable one, held by reasonable and right minded persons, applying themselves to the question and obtaining thereon the required information, the test of “what would an informed person, viewing the matter realistically and practically—conclude?” There is no real difference between the expression found in the decided cases “reasonable apprehension of bias”, “reasonable suspicion of bias” or “real likelihood of bias” but the grounds for the apprehension must be substantial. The question of bias in a member of a court of justice cannot be examined in the same light as that in a member of an administrative tribunal entrusted with an administrative discretion. While the basic principle that natural justice must be rendered is the same its application must take into account the special circumstances of the tribunal. By its nature the National Energy Board must be staffed with persons of experience and expertise. The considerations which underlie its operations are policy oriented. The basic principle in matters of bias must be applied in the light of the circumstances of the case at bar. The Board is not a court nor is it a quasi-judicial body. In hearing the objection of interested parties and in performing its statutory function the Board has the duty to establish a balance between the administration of policies which they are duty bound to apply and the protection of the various interests spelled out in s. 44 of the Act. In reaching its decision the Board draws upon its experience, upon that of its own experts and upon that of all agencies of the Government of Canada. The Board is not and cannot be limited to deciding the matter on the sole basis of the representations made before it. In the circumstances of the case the Court of Appeal rightly concluded that no reasonable apprehension of bias by reasonable, right minded and informed persons exists.
[Ghirardosi v. Minister of Highways for British Columbia, [1966] S.C.R. 367; Blanchette v. C.I.S. Ltd., [1973] S.C.R. 833; Szilard v. Szasz, [1955] S.C.R. 3 referred to.]
APPEAL from a judgment of the Federal Court of Appeal[1] which answered in the negative a question referred to it by the National Energy Board. Appeal allowed, Martland, Judson, and de Grandpré JJ. dissenting. Ian Binnie, and R.J. Sharpe, for the appellants.
Hyman Soloway, Q.C., and R.D. McGregor, for the National Energy Board.
G.W. Ainslie, Q.C., for the Attorney General of Canada.
D.M.M. Goldie, Q.C., for Canadian Arctic Gas Pipeline Ltd.
R.J. Gibbs, Q.C., and G.J. Gorman, Q.C., for Foothills Pipe Lines Ltd.
John Hopwood, Q.C., for Alberta Gas Trunk Line Co. Ltd.
W.G. Burke-Robertson, Q.C., for Alberta Gas Trunk Line (Canada) Ltd.
B.A. Crane, for Trans-Canada Pipelines Ltd.
J.R. Smith, Q.C., for Alberta Natural Gas Co. Ltd.
The judgment of Laskin C.J. and Ritchie, Spence, Pigeon and Dickson JJ. was delivered by
THE CHIEF JUSTICE—On March 11, 1976, this Court gave judgment in an appeal from a decision of the Federal Court of Appeal which answered in the negative a question referred to it by the National Energy Board pursuant to s. 28(4) of the Federal Court Act, 1970-71-72 (Can.), c. 1. The question so referred was as follows:
Would the Board err in rejecting the objections and in holding that Mr. [Marshall] Crowe was not disqualified from being a member of the panel on grounds of reasonable apprehension or reasonable likelihood of bias?
This Court allowed the appeal, set aside the decision of the Federal Court of Appeal and declared that the question should be answered in the affirmative. It stated in its formal judgment on March 11, 1976 that reasons of the majority and dissenting judges would be delivered later. The reasons of the majority now follow.
The issue referred to the Federal Court of Appeal and which came by leave to this Court arose in connection with the organization of hearings by the National Energy Board to consider competing applications for a Mackenzie Valley pipeline, that is, applications for a certificate of public convenience and necessity under s. 44 of the National Energy Board Act, R.S.C. 1970, c. N-6. One of the applications, filed on March 21, 1974 by Canadian Arctic Gas Pipeline Limited was in respect of a proposed natural gas pipeline and associated works to move natural gas in an area of the Northwest Territories (the Mackenzie River Delta and Beaufort Basin) to markets in southern Canada and also to move natural gas in Alaska to markets in other states of the United States. This application was supplemented by other material filed on January 23, 1975, on March 10, 1975 and on May 8, 1975. The competing application, filed in March, 1975 by Foothills Pipe Lines Ltd., was for a natural gas pipeline to move natural gas only from the area in the Northwest Territories, mentioned above, to southern Canada markets and not from Alaska as well.
On April 17, 1975, the National Energy Board assigned Mr. Crowe, Chairman of the Board and two other members (of the eight members in all who then constituted the Board) to be the panel, with Mr. Crowe presiding, to hear the applications, beginning on October 27, 1975. Under s. 45 of its governing statute the Board was empowered to give standing at its s. 44 hearings to “interested persons”, and it was then obliged to hear their objections to the granting of a certificate of public convenience and necessity. The three appellants in this case, The Committee for Justice and Liberty Foundation, The Consumers’ Association of Canada and the Canadian Arctic Resources Committee were recognized by the Board as “interested persons” as were other organizations and individuals. In all, some 88 parties were represented at the commencement of the hearings, and of these 80 indicated that they had no objection to Mr. Crowe continuing as a member and presiding over the hearings. One of the non-objectors was Canadian Arctic Gas Pipeline Limited, one of the applicants for a certificate. It was its counsel who raised on July 9, 1975 the question of reasonable apprehension of bias on Mr. Crowe’s part in favour of his client by reason of Mr. Crowe’s association with a Study Group out of whose deliberations and decisions the applicant was born.
When the hearings opened on October 27, 1975 as scheduled, Mr. Crowe read a statement detailing his involvement with the Study Group. Objections were then invited. In the result, the question mentioned at the beginning of the reasons was referred to the Federal Court of Appeal on October 29, 1975. I turn now to deal with the facts upon which the issue of reasonable apprehension of bias is raised.
Mr. Marshall Crowe became Chairman of the National Energy Board and its Chief Executive Officer on October 15, 1973. Immediately prior to that date he was president of the Canada Development Corporation, assuming that position late in 1971, after first being a provisional director following the enactment of the Canada Development Corporation Act by 1971 (Can.), c. 49. The principal objects of this corporation, then wholly-owned by the Government of Canada, are set out in s. 6(1) of its constituent Act which reads as follows:
6. (1) The objects of the company are:
(a) to assist in the creation or development of businesses, resources, properties and industries of Canada;
(b) to expand, widen and develop opportunities for Canadians to participate in the economic development of Canada through the application of their skills and capital;
(c) to invest in the shares or securities of any corporation owning property or carrying on business related to the economic interests of Canada; and
(d) to invest in ventures or enterprises, including the acquisition of property, likely to benefit Canada;
and shall be carried out in anticipation of profit and in the best interests of the shareholders as a whole.
As president of the Canada Development Corporation and as its representative, Mr. Crowe became associated with the Gas Arctic-Northwest Project Study Group which, pursuant to an agree- ment of June 1, 1972 (hereinafter referred to as the Study Group Agreement) embarked on a consideration of the physical and economic feasibility of a northern natural gas pipeline to bring natural gas to southern markets.
The Study Group Agreement brought together two groups of companies which had previously been exploring separately the feasibility of a natural gas pipeline. The participating companies merged their efforts and resources to that end, and pursuant to the Study Group Agreement they set up two companies, Canadian Arctic Gas Study Limited and Canadian Arctic Gas Pipeline Limited. The first-mentioned company was the vehicle for seeing to the various studies involved in carrying out the pre-construction purposes of the Study Group, and the second company, which was incorporated on November 3, 1972, was to be the operating vehicle which would apply for permission to build the pipeline in implementation of the project. Article 1, s. 2 of the Study Group Agreement set out the purposes of the association of the participating companies as follows:
2. The principal purpose of the Study Group shall be: (a) the conduct of research, experimental and feasibility studies, testing and planning to determine whether the construction and operation of a gas pipeline from Northern Alaska and Northwestern Canada to locations on the border between Canada and the lower 48 states of the United States (hereinafter referred to as the Project) are feasible and desirable in light of relevant physical, environmental and economic data, terms and conditions of available financing, applicable legal requirements and governmental considerations; and if so, (b) the preparation and completion of such studies, exhibits and other data as may be required for the filing of applications with government agencies in Canada and the United States for authority to construct and operate the Project; and (c) the filing and prosecution of such applications. These activities are hereinafter referred to as the Pre‑construction Activities.
In connection with the foregoing the Study Group shall study and consider all reasonably feasible gas pipeline configurations, routes and facilities and methods of ownership of any thereof, including (i) those serving eastern, central and western market areas, (ii) various routes and facilities appropriate to such purpose, including wholly new facilities and the utilization of the whole or any portion of any presently existing system as it may now be or as it may be expanded or otherwise adapted for such purpose and (iii) ownership of such facilities and the various portions thereof, whether by one or more entities to be established at the instance of the Participants or at the instance of others or by the present owner of any portion thereof which is now in existence or by any combination of the foregoing, it being acknowledged by the Participants that in connection with each such determination as to such ownership the effect thereof upon financing and future decision-making ability, upon the effective operation of the overall pipeline system and upon regulatory matters will be relevant but that at the date hereof the Participants have made no judgment as to the nature, extent or significance of such effect.
Article IV, ss. 1 and 2 dealt with implementation as follows:
1. The Participants may, upon authorization by the Management Committee, cause one or more corporations to be organized or utilized for the purpose of implementing the Project, including the filing of applications for requisite governmental authorizations in the United States and Canada and constructing, owning and operating Project pipeline facilities following the issuance of satisfactory authorizations. Application for the incorporation of a Canadian pipeline corporation shall be filed promptly after the date hereof. Pending formulation of a practicable overall permanent financing plan, the initial issued and outstanding shares and other securities of each such corporation shall be beneficially owned by the Participants in equal undivided interests as provided relative to the Service Company in Section 4 of Article II and shall be held by the minimum required number of directors as nominees of the Study Group, until and to the extent that the Management Committee shall otherwise determine.
2. It is recognized that, inasmuch as financing plans for the Project are still in the development stage and the total capital requirements of the Project depend upon various contingencies, the question of ultimate ownership of any corporation referred to in Section 1 of this Article IV cannot be decided at this time. However, it is agreed that in the determination of such ownership the following principles will apply. It is agreed that in recognition of the substantial expenditure of funds, employee time and effort, and initiative by the Participants, and their knowledge of and interest in the Project, it is desirable and appropriate that the Participants have some reasonable opportunity to acquire ownership interests in each such corporation. In addition, shares and other securities shall be offered to investors who are not Participants….
The Study Group Agreement provided for the establishment of a Management Committee, consisting of one representative from each of the participating companies, and it was charged with the steering or direction of the activities of the Study Group and of the companies incorporated pursuant to the Study Group Agreement. There was also an executive committee of the Management Committee, consisting of three representatives of each of the three participant groups into which the participating companies were classified; and although it discharged certain functions by delegation from the Management Committee, the latter was the main directing force of the Study Group. The three Participant groups were as follows:
Participant Group A: United States Companies other than producers
Participant Group B: Canadian Companies other than producers
Participant Group C: Canadian and United States producers
Section 5 of art. III charged the Management Committee to seek additional participants “who have an interest in the Project and whose participation may contribute to the objectives of the Project, as stated herein, and who have the ability to and agree to carry out the obligations under this Agreement”.
Participants could withdraw upon notice being given and, indeed, the participating companies varied between fifteen and twenty-seven. So long as they remained participants, the companies were subject to the terms of the Study Group Agreement under which they were to be responsible for an equal share of obligations, including the expenses of carrying out the activities of the Study Group and of the companies incorporated under the Study Group Agreement. The Agreement contained provisions for its termination which had in view the likelihood of approval of a pipeline, but overriding power was reserved to the Management Committee to fix a termination date.
The Canada Development Corporation became a member of the Study Group on November 30, 1972. Mr. Crowe was its designated representative and, as such, became, on December 7, 1972, a member of the Management Committee. He had attended a meeting of the executive committee as an observer on October 25, 1972 when the participation of the Canada Development Corporation was being worked out, but he did not later become a member of that Committee, although he attended two other meetings thereof. In addition to being a member of the powerful Management Committee, Mr. Crowe became also a member of its finance, tax and accounting committee, and was elected vice-chairman thereof on January 25, 1973. During the period of his membership of the Management Committee, from December 7, 1972 until October 15, 1973 he participated in the seven meetings that it held in that span of time and joined in a unanimous decision of that Committee on June 27, 1973 respecting the ownership and routing of a Mackenzie Valley pipeline.
The decision of June 27, 1973 came about as a result of the establishment by the Management Committee of an Ad Hoc Committee on May 30, 1973 to look into ownership and routing and to report to the Management Committee at its next meeting, fixed for June 18, 1973. On June 11, 1973, the Ad Hoc Committee approved a report (with one dissent) which was presented to the Management Committee at its meeting of June 18, 1973. The report contained the following paragraphs:
On the understanding that this Project will be filed at the earliest possible date the Ad Hoc Committee supports the concept of single ownership for the Project, subject to the following provisions:
1. The routing of the Project will follow existing corridors and gas pipeline routes of AGTL, Alberta Natural and TCPL.
2. A policy of incremental expansion and common use of existing pipeline facilities will be followed wherever it is economically sound to do so. This means that until complete through lines are constructed, whenever the economics of the situation warrant, and engineering conditions permit, incremental looping (under single ownership) will be used.
3. As a policy CAGSL will not apply for expansion of its system whenever adequate long term unused capacity is economically available in the Alberta Gas Trunk, Alberta Natural, and/or TC systems.
4. As a policy the tariffs for transmission across Alberta will be calculated on a “one zone” basis beginning and ending at the Alberta borders.
The report was discussed at the meeting of June 18, 1973 as was a counter-proposal presented by the dissenting member of the Ad Hoc Committee on behalf of United States pipeline members of the Study Group. It was decided that an engineering study of the two southerly legs of the proposed route would be made and a report would be made to the Ad Hoc Committee “of the optimum manner of moving the contemplated gas volume south of Caroline”. The study and report were considered by the Management Committee at a meeting on June 27, 1973. The chairman of the Ad Hoc Committee (according to the minutes of the June 27 meeting) “confirmed that the committee intended the proposal to be not only a basis for the filing of regulatory applications but also to embody the fundamental concept for completion of the project—although the Study Group should retain sufficient flexibility of approach in order to be able, through appropriate future resolutions of the Management Committee, to react to changes in facts and circumstances”. The Ad Hoc Committee’s revised report was then unanimously approved. Its provisions were as follows:
The Ad Hoc Committee on Ownership and Routing respectfully recommends to the Management Committee that it request the CAGSL management to proceed forthwith with the preparation and submission of all necessary applications covering the Arctic Gas Pipeline on the following bases:
OWNERSHIP
1. All new Arctic Gas Pipeline facilities in Canada will be owned by a single entity.
SIZE AND ROUTING
1. From Prudhoe Bay and the Mackenzie Delta to the 60th Parallel the line will be 48″ and will follow the routes previously agreed. 2. From the 60th Parallel to Caroline, Alberta the line will be 48″ and will follow the existing route of AGTL.
3. From Caroline to Kingsgate the line will be 42″ and will follow the routes of AGTL and ANG.
4. From Caroline to Empress the line will be 42″ and will follow route of AGTL.
5. From Empress to the U.S. border the line will be 42″ and will follow a direct route.
POLICY GUIDELINES
1. As noted above, the routing of the project through Alberta will follow the existing gas pipeline routes of AGTL and ANG whenever technically feasible.
2. Within the basic concept of single ownership of a complete, integral pipeline system to be constructed within a reasonable period of time advantage will be taken over the short term of surplus capacity in existing systems provided any significant engineering, operating, financing, and legal problems inherent in the utilization of such capacity can be overcome.
3. After completion of the initial Arctic Gas system full consideration will be given to the use of any long-term unused capacity if economically available in the AGTL or ANG systems as a preferred alternate to direct expansion provided undue engineering or operating problems are not thereby introduced.
4. Tariffs for transmission across Alberta will be calculated on a “one zone” basis beginning and ending at the Alberta borders.
5. Gas destined for Canadian markets East of Alberta will be delivered to TransCanada at Empress, Alberta.
In his statement at the opening of the Mackenzie Valley Pipeline hearing on October 27, 1973 Mr. Crowe referred to his involvement in the Study Group and in the decisions of the Management Committee thereof in the following terms:
Pursuant to the terms of the Study Group Agreement, each of the Participant companies owned equal shares in the Study Group assets which consisted mainly of studies and reports on the feasibility of the Arctic Gas Project. Subject to the provisions of the Study Group Agreement a participant could on notice withdraw from the Study Group.
During the period I represented the CDC in the Study Group, I attended seven monthly meetings of the Management Committee, and in the months when the Management Committee did not meet, the three meetings of the Executive Committee to which I previously referred.
At the September 26th, 1973 meeting of the Management Committee, I moved the resolution appointing the Project’s Banking Advisors. Also I was on a Steering Committee which recommended the Project Financial Advisors and Accounting Advisors and in the meetings of the Executive Committee which I attended, the appointment of these consultants was approved.
Between December 7th, 1972, and June 27th, 1973, the Study Group considered a number of possible routing alternatives for that portion of the pipeline south of the 60°N parallel. One issue forming part of this decision was whether the Arctic Gas Project would construct new facilities in Alberta as opposed to using existing facilities owned by Trunk Line and expanding those facilities as needed to carry volumes of gas from the Mackenzie-Beaufort Area and Prudhoe Bay. This question was the subject matter of technical analysis by Arctic Gas Financial and Engineering Advisors and was reviewed and discussed in six meetings of the Management Committee.
The final decision was that the facilities in Alberta would be owned by Arctic Gas and that the route would parallel the existing Trunk Line system on a separate right-of-way.
In addition to the foregoing the Management Committee dealt with routine matters such as the Chairman’s Report, Management Reports, and other Consultant Appointments.
Although Mr. Crowe resigned from the presidency of the Canada Development Corporation as of October 15, 1973 when he became chairman and chief executive officer of the National Energy Board, the Canada Development Corporation continued as a full participant in the Study Group until October 31, 1975, becoming an associate member as of November 1, 1975 pursuant to a resolution of the Management Committee. As such, it had the following rights (as stated by counsel for the Canadian Arctic Gas Pipeline Limited to the Federal Court of Appeal on December 8, 1975): 1. For so long as an Equity Commitment Letter dated April 22, 1975 remains in effect CDC will be entitled to receive notice of, and attend, through a non-voting representative all meetings of all Committees of the Study Group except the Executive Committee of the Management Committee.
2. To receive all materials that a full participant would be from time to time entitled to receive.
In turn the CDC agrees to be bound by the confidentiality rules binding all participants.
This relationship may after 31 December, 1975, be terminated by either party.
The equity commitment letter of April 22, 1975 indicates a provisional interest in subscribing for $100 million of [equity] in the capital of CAGPL subject to the terms and conditions set out in that letter.
In brief, the Canada Development Corporation remained a full participant long after the applications were made for certificates of public convenience and necessity and after the hearings thereon commenced, and, in effect, until the National Energy Board referred to the Federal Court of Appeal the question concerning reasonable apprehension of bias in Mr. Crowe. During the period of Mr. Crowe’s association with the Study Group as the representative of the Canada Development Corporation the latter contributed a total of 1.2 million dollars to the activities of the Study Group as its share of expenses.
Section 44 of the National Energy Board Act, the central provision respecting certificates of public convenience and necessity, reads as follows:
44. The Board may, subject to the approval of the Governor in Council, issue a certificate in respect of a pipeline or an international power line if the Board is satisfied that the line is and will be required by the present and future public convenience and necessity, and, in considering an application for a certificate, the Board shall take into account all such matters as to it appear to be relevant, and without limiting the generality of the foregoing, the Board may have regard to the following:
(a) the availability of oil or gas to the pipeline, or power to the international power line, as the case may be;
(b) the existence of markets, actual or potential; (c) the economic feasibility of the pipeline or international power line;
(d) the financial responsibility and financial structure of the applicant, the methods of financing the line and the extent to which Canadians will have an opportunity of participating in the financing, engineering and construction of the line; and
(e) any public interest that in the Board’s opinion may be affected by the granting or the refusing of the application.
It was contended by counsel supporting the judgment of the Federal Court of Appeal that Mr. Crowe’s involvement in the Study Group and in the work and decisions of the Management Committee did not touch all the considerations expressly delineated in items (a) to (e) of s. 44. Indeed, the position urged was that on a question of reasonable apprehension of bias the character and degree of involvement must be considered and, if it was minimal or did not touch the major elements of concern under s. 44, then a different conclusion would have to be reached than would be the case if, so to speak, all the bases were touched. It was also contended, and of this there can be no doubt, that the National Energy Board has a variety of functions which interlock; for example, it has broad advisory functions under s. 22 of its Act, as well as the more specifically directed function under s. 44. It is said, and properly so, that the Board cannot compartmentalize its knowledge, acquired through studies which it commissions or through experience of its members or otherwise, and relate that knowledge only to the particular function out of which it has emerged.
It was pointed out in this connection that the Board conducted a public inquiry, with Mr. Crowe presiding over the three-member panel, into the supply and requirements for natural gas, pursuant to powers which it has under s. 14(2) of the National Energy Board Act to inquire, of its own motion, into matters within its jurisdiction. The inquiry began in November, 1974 and a report was published in April, 1975, following which the panel was constituted for the Mackenzie Valley Pipeline hearing, with two members thereof (Mr. Crowe and Mr. Farmer) having been on the panel for the public inquiry. Nothing, in my opinion, can be drawn from the report of this inquiry that would blunt the effect of Mr. Crowe’s participation in decisions leading to the Canadian Arctic Gas Pipeline Limited application for a certificate filed on March 21, 1974. The fact that the report indicated there were problems in estimating supply, that more information was needed, and that other matters as well that would be relevant on a s. 44 application were in an uncertain state, does not go any farther than it would if these problems and matters had been raised initially before the Board and it considered them for the first time at the pipeline hearing. That the holding of the inquiry may have prepared Mr. Crowe for the pipeline hearings does not provide support for his participation in those hearings.
What must be kept in mind here is that we are concerned with a s. 44 application in respect of which, in my opinion, the Board’s function is quasi-judicial or, at least, is a function which it must discharge in accordance with rules of natural justice, not necessarily the full range of such rules that would apply to a Court (although I note that the Board is a court of record under s. 10 of its Act) but certainly to a degree that would reflect integrity of its proceedings and impartiality in the conduct of those proceedings. This is not, however, a prescription that would govern an inquiry under ss. 14(2) and 22.
I am of the opinion that the only issue here is whether the principle of reasonable apprehension or reasonable likelihood of bias applies to the Board in respect of hearings under s. 44. If it does apply—and this was accepted by all the respondents—then, on the facts herein, I can see no answer to the position of the appellants.
Before setting out the basis of this conclusion I wish to reiterate what was said in the Federal Court of Appeal and freely conceded by the appellants, namely, that no question of personal or financial or proprietary interest, such as to give rise to an allegation of actual bias, is raised against Mr. Crowe. The Federal Court of Appeal founded its conclusion against disqualification on the following statement of principle:
It is true that all of the circumstances of the case, including the decisions in which Mr. Crowe participated as a member of the study group, might give rise in a very sensitive or scrupulous conscience to the uneasy suspicion that he might be unconsciously biased, and therefore should not serve. But that is not, we think, the test to apply in this case. It is, rather, what would an informed person, viewing the matter realistically and practically—and having thought the matter through—conclude. Would he think that it is more likely than not that Mr. Crowe, whether consciously or unconsciously, would not decide fairly.
This was followed by an encompassing factual conclusion which was as follows:
On the totality of the facts, which have been described only in skeletal form, we are all of the opinion that they should not cause reasonable and right minded persons to have a reasonable apprehension of bias on the part of Mr. Crowe, either on the question of whether present or future public convenience and necessity require a pipeline or the question of which, if any, of the several applicants should be granted a certificate.
The Federal Court of Appeal supported this factual conclusion by emphasizing that Mr. Crowe participated in the Study Group as merely a representative, that he had nothing to gain or lose by his participation or by any decision he might reach in the course of his duties as chairman of the National Energy Board in connection with the applications that were before it. I do not think that Mr. Crowe’s representative capacity is a material consideration on the issue in question here, any more than representative capacity would be a material consideration if the president or chairman of one of the other participants in the Study Group had been appointed chairman of the National Energy Board and had then proceeded to sit on an application which he had a hand in fashioning, albeit he was divorced from the Study Group at the time the application was filed. Mr. Crowe was not a mere cipher, carrying messages from the board of directors of the Canada Development Corporation and having no initiative or flexibility in the manner and degree of his participation in the work of the Study Group. Nowhere in the Study Group Agreement nor in the minutes of proceedings of the Management Committee is there any indication that the representatives came to the meetings with fixed instructions from which they could not depart without a reference back. The nature of the exercise carried on under the Study Group Agreement required the representatives to apply their own judgment and their own talents to the joint project, with of course concern for the interests of the companies that they represented