Canada (Commissioner of Competition) v. Canada Tax Reviews Inc.

Canada (Commissioner of Competition) v. Canada Tax Reviews Inc.
Court (s) Database
Federal Court Decisions
Date
2021-09-07
Neutral citation
2021 FC 921
File numbers
T-999-21
Notes
Reported Decision
Decision Content
Date: 20210907
Docket: T-999-21
Citation: 2021 FC 921
Ottawa, Ontario, September 7, 2021
PRESENT: THE CHIEF JUSTICE
BETWEEN:
THE COMMISSIONER OF COMPETITION
Applicant
(Responding party on Motion)
and
CANADA TAX REVIEWS INC.
Respondent
(Moving party on Motion)
ORDER AND REASONS
I. Introduction
[1] This motion to set aside and vary raises important issues pertaining to Orders issued ex parte, pursuant to section 11 of the Competition Act, RSC 1985, c C-34 [the Act]. Those issues include the Commissioner’s duty of disclosure to the Court, the nature of the Commissioner’s pre-application dialogue with respondents to such Orders, and the test for setting aside or varying an Order under Rule 399(1)(a) of the Federal Courts Rules, SOR/98-106 [the Rules] in relation to an Order issued under section 11.
[2] In the section 11 context, the elevated duty of disclosure that applies is often satisfied by a combination of written representations and affidavit evidence. Such evidence may include a copy of any written submissions, including in email or other exchanges, sent by the respondent to the Commissioner. Where such written materials do not fully disclose the nature of any concerns expressed by the respondent, the Commissioner’s duty can be satisfied by including notes of any meetings or other discussions that may have taken place, so long as those notes convey the essence of the respondent’s concerns and do not materially mislead the Court. In the present proceeding, the combination of such notes, copies of written submissions from the respondent, written representations from the Commissioner and direct evidence from the Commissioner’s affiant collectively satisfied the Commissioner’s duty of disclosure.
[3] The nature and scope of the Commissioner’s process of pre-application dialogue with respondents are matters that are entirely for the Commissioner to determine. Indeed, the Commissioner is under no legal obligation to engage in any such dialogue. However, where the Commissioner does not provide a respondent with a meaningful opportunity to provide feedback on a draft Order, including in relation to the relevance of all or some specifications in the draft Order, there may be increased scope for the Order to be set aside or varied in a subsequent motion under Rule 397 or Rule 399.
[4] The general test for having an Order set aside or varied on a motion under Rule 399(1)(a) is whether the respondent discloses a prima facie case why the Order should not have been made. For Orders issued under section 11 of the Act, this can be achieved by providing sufficient facts and law to justify one of the following conclusions, in the absence of a response from the Commissioner: (i) that the Commissioner did not satisfy the elevated duty of disclosure that applies in section 11 proceedings, (ii) that the Commissioner has not initiated a bona fide inquiry under section 10 of the Act, (iii) that some or all of the information that was ordered to be produced is irrelevant to the Commissioner’s inquiry, or (iv) that some or all of such information would be excessive, disproportionate or unnecessarily burdensome. Even where a respondent demonstrates one or more of these things, the Court will afford the Commissioner an opportunity to be heard and will retain the discretion to dismiss the respondent’s motion.
[5] For the reasons set forth below, I have concluded that, with some limited exceptions, the respondent, Canada Tax Reviews Inc. [CTR], has not satisfied the test under Rule 399(1)(a). Accordingly, this motion will be largely dismissed.
II. The parties
[6] The Commissioner is appointed under section 7 of the Act and is responsible for the enforcement and administration of the Act.
[7] CTR describes itself as a tax recovery specialist firm that advocates on behalf of its clients to the Canada Revenue Agency.
III. Background
[8] On June 17, 2021, the Commissioner filed an application pursuant to paragraphs 11(1)(b) and (c) of the Act for an Order requiring CTR to produce records and provide written returns of information. In that application, the Commissioner explained that an inquiry had been commenced under section 10 of the Act concerning certain of CTR’s marketing practices.
[9] In a supporting affidavit affirmed by Antonio Perluzzo [the Perluzzo Affidavit], a Competition Law Officer with the Competition Bureau [the Bureau], the impugned marketing practices were described as being representations made by CTR to the public to promote its business of applying for financial relief benefits on behalf of consumers in the context of the global COVID-19 pandemic, including the Canada Emergency Response Benefit and the Canada Recovery Benefit [collectively, the Covid Relief Benefits].
[10] The Perluzzo Affidavit states that based on an assessment of the records and information gathered to date, the Commissioner has reason to believe that:
CTR has engaged in, and continues to engage in, deceptive marketing practices by making materially false or misleading representations to the public regarding its role in the administration of the Covid Relief Benefits, in the context of the COVID-19 pandemic, as well as regarding the fees it charges to Canadians;
CTR’s representations create the false or misleading general impression that:
Canadians are applying directly for Covid Relief Benefits from the government entity administering such relief programs, when in fact they are dealing with CTR; and
Covid Relief Benefits obtained through CTR are free of charge, when in fact CTR charges an 8% fee with respect to the Canada Emergency Response Benefit and a 10% fee with respect to the Canada Recovery Benefit, once benefits have been received; and
CTR’s representations are material to consumers, as evidenced by information provided by complainants to the effect that they would not have used CTR’s the services had they known that CTR is a third party company rather than the government entity administering the relief programs, and that CTR charges a fee for its services.
[11] Having regard to the foregoing, the Perluzzo Affidavit stated that the Commissioner has reason to believe that grounds exist for the making of an order under Part VII.1 of the Act, specifically paragraph 74.01(1)(a) and subsection 74.011(1).
[12] The Perluzzo Affidavit summarized the information being sought in the Court’s Order [as amended, the Disputed Order] as relating to the following matters under inquiry:
What are the representations made by CTR;
Where, when, why, and to whom the representations were made;
Who is the target audience for the representations;
The context in which the representations were made;
What is the nature of the services that are promoted via the representations;
The effects of the representations;
The truth or falsity of the representations;
Who makes the representations, who makes decisions about the representations, and how those decisions are made;
When changes are made to the representations, what changes are made, and why; and
What knowledge CTR has that the representations are potentially false or misleading and what actions, if any, does it take in response to that knowledge.
[13] As is now customary in proceedings under section 11 of the Act, the Perluzzo Affidavit provided information pertaining to the communications that took place between the Bureau’s case team and CTR in relation to to what ultimately became the Disputed Order. Those communications followed exchanges that took place in July and August 2020. After an unexplained lapse of approximately seven months, counsel to the Commissioner informed CTR that the Commissioner had commenced the inquiry described above. A few days later, on March 9, 2021, CTR was informed that that the Commissioner would be seeking an Order under section 11. In that same communication, CTR was invited to participate in “pre-issuance dialogue,” which was initially scheduled for March 18, 2021. Two days prior to that scheduled date, the Commissioner sent an initial draft of the Disputed Order to CTR.
[14] Ultimately, four meetings took place between the Bureau’s case team and representatives of CTR. As a result of those meetings, substantial changes were made to the draft Order. Indeed, it appears to be common ground between the parties that the second version of the draft Order reflected a complete overhaul of the initial version. The third version, which was virtually identical to the version filed with the Court, also reflected fairly significant changes from the second version.
[15] The Perluzzo Affidavit provided a detailed description of the exchanges that took place at the four meetings between the case team and representatives of CTR. It also included, as exhibits, extensive notes of those meetings and copies of the written communications that had taken place between the Bureau’s case team and representatives of CTR.
[16] A fair reading of those materials reflects a good faith effort by the case team to address the concerns raised by CTR, except in relation to the relevance of some of the specifications in the schedules to the Disputed Order. It does not reflect much of an effort on CTR’s part to provide the Bureau with helpful information or to otherwise be of assistance. The distinct sense with which I was left was that CTR was focused primarily on whittling down the draft Order and forestalling its issuance, while conceding very little and adopting a very aggressive posture. To this date, approximately five months after the first pre-issuance dialogue meeting, CTR has provided very little cooperation. It is reasonable to infer that this has impeded the Commissioner’s ability to investigate whether CTR has made false and misleading representations in relation to the Covid Relief Benefits. In the meantime, the pandemic has continued to evolve.
[17] Late in the day on June 28, 2021, CTR sent a notice of motion together with an accompanying motion record to the Court. That motion requested various types of relief, including (i) an order adjourning the hearing of the application pending the determination of CTR’s motion for directions granting it the right to make written and oral submissions on the application, and, in the alternative, (ii) an order permitting CTR to make oral submissions at the hearing that had previously been scheduled to take place the following day. I will pause to observe that, at paragraph 54 of that document, CTR acknowledged that it had not begun to gather information in response to the draft Order, ostensibly because so many changes had been made to it and CTR intended to challenge many of the specifications that remained.
[18] At the outset of the hearing of the Commissioner’s application on June 29th, I informed counsel to CTR that I would not hear that motion. My refusal to hear the motion and my decision not to accept it for filing [1] were based on several considerations. These included the following:
my brief review of the motion record the prior evening did not disclose any good reason for departing from the ex parte process explicitly provided for by Parliament;
the motion record was submitted on June 28th, and therefore was not in compliance with the Rules, did not provide the Commissioner adequate time to respond, and did not permit the Court to give it proper consideration; and
the hearing was scheduled for June 29th after counsel to CTR requested, in a letter dated June 10, 2021, that the Commissioner’s application not be scheduled prior to June 25th “in order to allow CTR necessary time to provide its position in writing regarding the Application to the Bureau so that it can be included with the Application material to be filed with the Court” (emphasis added).
[19] As reflected in CTR’s June 10th letter, CTR was very well aware that “given the practice in respect of section 11 orders, it may be that the only opportunity afforded to CTR to have its views placed before the Court [at the hearing of the Commissioner’s application] will be in the form of correspondence to the Bureau outlining CTR’s position” (emphasis added).
[20] I will pause to observe in passing that the June 10th letter itself was seven pages, which is longer than most letters provided by respondents for the purposes of bringing their views to the attention of the Court.
[21] Notwithstanding the foregoing, I considered a number of CTR’s objections to the Commissioner’s draft Order (as set forth in the Commissioner’s Application Record) to be legitimate. Accordingly, during the hearing of the Commissioner’s application, I expressed concerns with respect to certain of the specifications that were included in Schedules I and II to the draft Order. After the Commissioner submitted a revised draft Order which addressed my concerns, I issued the Disputed Order on July 2, 2021.
[22] On August 6, 2021, CTR filed this Motion to Set Aside and Vary portions of the Disputed Order. In addition to requesting that various provisions in the Disputed Order either be set aside or varied, CTR requested that the Court grant a temporary stay pending the determination of this motion.
[23] At the outset of the hearing of the motion on August 18, 2021, CTR withdrew its request for a stay of the Disputed Order on the basis that the Commissioner had agreed to extend the deadline for compliance with that Order until October 8, 2021.
IV. Relevant Legislation
[24] This motion has been brought by CTR under Rule 399(1)(a). Rules 399(1) and (2) provide as follows:
Setting aside or variance
Annulation sur preuve prima facie
399 (1) On motion, the Court may set aside or vary an order that was made
399 (1) La Cour peut, sur requête, annuler ou modifier l’une des ordonnances suivantes, si la partie contre laquelle elle a été rendue présente une preuve prima facie démontrant pourquoi elle n’aurait pas dû être rendue :
(a) ex parte; or
a) toute ordonnance rendue sur requête ex parte;
(b) in the absence of a party who failed to appear by accident or mistake or by reason of insufficient notice of the proceeding,
b) toute ordonnance rendue en l’absence d’une partie qui n’a pas comparu par suite d’un événement fortuit ou d’une erreur ou à cause d’un avis insuffisant de l’instance.
if the party against whom the order is made discloses a prima facie case why the order should not have been made.
[EN BLANC/IN BLANK]
Setting aside or variance
Annulation
(2) On motion, the Court may set aside or vary an order
(2) La Cour peut, sur requête, annuler ou modifier une ordonnance dans l’un ou l’autre des cas suivants :
(a) by reason of a matter that arose or was discovered subsequent to the making of the order; or
a) des faits nouveaux sont survenus ou ont été découverts après que l’ordonnance a été rendue;
(b) where the order was obtained by fraud.
b) l’ordonnance a été obtenue par fraude.
Effect of order
Effet de l’ordonnance
(3) Unless the Court orders otherwise, the setting aside or variance of an order under subsection (1) or (2) does not affect the validity or character of anything done or not done before the order was set aside or varied.
(3) Sauf ordonnance contraire de la Cour, l’annulation ou la modification d’une ordonnance en vertu des paragraphes (1) ou (2) ne porte pas atteinte à la validité ou à la nature des actes ou omissions antérieurs à cette annulation ou modification.
[25] Pursuant to paragraph 10(1)(b) of the Act, the Commissioner may cause an inquiry to be made into all such matters as the Commissioner considers necessary to inquire into with the view of determining the facts, whenever the Commissioner has reason to believe that grounds exist for the making of an order under Part VII.1 or Part VIII of the Act. Part VII.1 deals with deceptive marketing practices, including those that are the focus of the Commissioner’s inquiry in the present matter. Part VIII is not relevant to this proceeding.
[26] Once an inquiry has been commenced, the formal investigative powers set forth in the Act may be exercised by the Commissioner, subject to judicial oversight. Those powers include the power to obtain, pursuant to paragraph 11(1)(b), an order for the production of “a record, a copy of a record certified by affidavit to be a true copy, or any other thing, specified in the order.” They also include the power to obtain, pursuant to paragraph 11(1)(c), an order for the making and delivery of “a written return under oath or solemn affirmation showing in detail such information as is by the order required.” The “chapeau” language at the outset of subsection 11(1) provides the Court with the discretion to issue such orders on the ex parte application of the Commissioner, upon being satisfied by information on oath or solemn affirmation of two things: first, that an inquiry is being made; and second, that the respondent has or is likely to have information that is relevant to the inquiry. The full text of subsection 11(1) of the Act is provided in Appendix 1 to these reasons.
[27] In the current proceeding, the Commissioner’s inquiry is focused on paragraph 74.01(1)(a) and subsection 74.011(1). Those provisions provide as follows:
Misrepresentations to public
Indications trompeuses
74.01 (1) A person engages in reviewable conduct who, for the purpose of promoting, directly or indirectly, the supply or use of a product or for the purpose of promoting, directly or indirectly, any business interest, by any means whatever,
74.01 (1) Est susceptible d’examen le comportement de quiconque donne au public, de quelque manière que ce soit, aux fins de promouvoir directement ou indirectement soit la fourniture ou l’usage d’un produit, soit des intérêts commerciaux quelconques :
(a) makes a representation to the public that is false or misleading in a material respect;
a) ou bien des indications fausses ou trompeuses sur un point important;
…
[…]
False or misleading representation — sender or subject matter information
Indications fausses ou trompeuses dans les renseignements sur l’expéditeur ou dans l’objet
74.011 (1) A person engages in reviewable conduct who, for the purpose of promoting, directly or indirectly, any business interest or the supply or use of a product, sends or causes to be sent a false or misleading representation in the sender information or subject matter information of an electronic message.
74.011 (1) Est susceptible d’examen le comportement de quiconque envoie ou fait envoyer des indications fausses ou trompeuses dans les renseignements sur l’expéditeur ou dans l’objet d’un message électronique aux fins de promouvoir, directement ou indirectement, soit la fourniture ou l’usage d’un produit, soit des intérêts commerciaux quelconques.
V. Issue
[28] Given that CTR is not requesting that the Disputed Order be set aside in its entirety, the sole issue on this motion is whether the Disputed Order should be varied.
[29] This will require assessing the basis for the various amendments sought by CTR.
VI. Assessment
A. Applicable legal principles
(1) The test under Rule 399(1)(a) in proceedings under section 11 of the Act
[30] The general test for having an Order set aside or varied on a motion under Rule 399(1)(a) is whether the respondent has disclosed a prima facie case why the Order should not have been made. This requires the respondent to provide sufficient facts and law to justify a conclusion in its favour, in the absence of a response from the applicant: Ont. Human Rights Commission v Simpsons-Sears Limited, [1985] 2 SCR 536 at 558. For Orders issued under section 11 of the Act, this can be achieved by providing sufficient facts and law to justify one of the following conclusions: (i) that the Commissioner did not satisfy the elevated duty of disclosure that applies in such proceedings, (ii) that the Commissioner has not initiated a bona fide inquiry under section 10 of the Act, (iii) that some or all of the information that was ordered to be produced is irrelevant to the Commissioner’s inquiry, or (iv) that some or all of that information would be excessive, disproportionate or unnecessarily burdensome.
[31] Even where a respondent demonstrates one or more of these things, the Court will afford the Commissioner an opportunity to be heard and will retain the discretion to dismiss the respondent’s motion. For example, the respondent may disclose a prima facie case that the Commissioner did not meet the elevated duty of disclosure. However, after having considered any additional information provided by the Commissioner, the Court may remain satisfied that the information described in the Order is still relevant and is not excessive, disproportionate or unnecessarily burdensome. In such circumstances, the Court may exercise its discretion to deny the relief sought by the respondent.
(2) The Commissioner’s duty of disclosure
[32] In ex parte applications under section 11 of the Act, the Commissioner is subject to a heavy burden to make full and frank disclosure of all of the relevant facts and circumstances surrounding the application: Commissioner of Competition v Labatt Brewing Company Limited, 2008 FC 59 at paras 22-23 [Labatt]; Canada (National Revenue) v RBC Life Insurance Company, 2013 FCA 50 at para 26 [RBC]. This burden is intended to achieve two fundamental things:
…The first is ensuring that the Court is informed of “any points of fact or law known to it which favour the other side” (United States of America v Friedland, [1996] OJ No 4399, at para 27 (Ct J (Gen Div)) [Friedland]; Labatt, above, at paras 25-26; Ruby v Canada (Solicitor General), 2002 SCC 75, [2002] 4 SCR 3, at para 27). The second is ensuring that the Court is able to detect and redress abuses of its own processes (RBC, above, at paras 31-36).
The Commissioner of Competition v Pearson Canada Inc., 2014 FC 376 at para 44 [Pearson].
[33] In essence, this elevated duty of candour assists the Court to properly balance the competing interests at play in ex parte applications. To this end, it requires the Commissioner to ensure that the Court is not misled, whether through non-disclosure or misinformation, as to the potential relevance of the information for the inquiry in question. In addition:
… the Commissioner is obliged to disclose the general nature and extent of any information already obtained from the respondent in the course of the inquiry and in the investigation leading up to the inquiry. If the respondent has provided significant information to the Commissioner in other contexts, such as a recent merger review, the Commissioner should also provide a general description of that information, together with an explanation of how that information differs from the information being sought in the section 11 application.
Pearson, above, at para 45.
[34] However, the Court ordinarily will not conclude that the Commissioner has failed to meet the duty of full and frank disclosure on the basis of a failure to disclose relatively inconsequential facts or due to other imperfections in the application record: Friedland, above, at para 31. Instead, “the defects complained of must be relevant and material to the discretion to be exercised by the Court”: Labatt, above, at para 27. Stated differently, those defects must be such that they may well have led the issuing judge, had he or she known of them, to refuse to grant the order or certain of the specifications therein: Labatt, above, at para 35; Canada (Commissioner of Competition) v Air Canada, [2001] 1 FC 219, at para 13 [Air Canada].
[35] CTR maintains that the Commissioner’s duty of full and frank disclosure is not discharged merely by including information in one of many exhibits to an affidavit. In support of this position, it relies on Friedland, above, which involved a motion for an ex parte Mareva injunction brought by the United States of America. However, the facts in that case are distinguishable from those in the present proceeding. There, the court observed that the inclusion of a proxy circular in one of a large number of exhibits to an affidavit could not be considered to have discharged the plaintiff’s duty to disclose an important term in a share acquisition agreement: Friedland, above, at paras 166-167.
[36] By contrast, in applications under section 11 of the Act, the Commissioner’s affiant generally provides a description of the principal concerns raised by the respondent, and then refers the Court to the correspondence in which those and other concerns have been raised. In this case, the Commissioner’s affiant also provided an overview of the points discussed during each of the four “pre-issuance dialogue” meetings, and then referred the Court to the affiant’s extensive notes of those meetings. A review of those notes and the copies of written communications between the Bureau’s case team and respondents in section 11 applications are generally an important part of the Court’s focus in considering such applications. While each case will necessarily have to be determined on its particular facts, this manner of proceeding ordinarily will suffice to discharge the Commissioner’s burden, provided that the essence of a respondent’s concerns has been conveyed to the Court and the Court has not been materially misled. As discussed in part VI.B.(1) below, that was achieved by the Commissioner’s disclosure in this proceeding.
(3) The relevance of the information sought
[37] Pursuant to subsection 10(1) of the Act, the Commissioner may cause an inquiry to be made into all such matters as the Commissioner considers necessary to inquire into with the view of determining the facts.
[38] Applications under section 11 of the Act are generally brought at the “fact gathering” stage of the Commissioner’s inquiry. At that stage, a certain degree of latitude will ordinarily be warranted in recognition of the fact that the Commissioner may well need sufficient information to be able to fully understand the context in which the impugned conduct has taken place, the nature and extent of that conduct, its underlying purpose, its actual or likely impact, and whether it may raise issues under additional sections of the Act.
[39] Stated differently: “Courts must, in the exercise of [their] discretion, remain alert to the danger of unduly burdening and complicating the law enforcement investigative process. Where that process is in embryonic form engaged in the gathering of the raw material for further consideration, the inclination of the Courts is away from intervention”: Irvine v Canada (Restrictive Trade Practices Commission), [1987] 1 SCR 181 at 235.
[40] Accordingly, and subject to the comments immediately below, it is appropriate in proceedings under s. 11 of the Act to adopt a flexible and liberal approach to the determination of what is relevant to the Commissioner’s inquiry.
(4) The scope of the information sought
[41] An important part of the Court’s role in section 11 proceedings is to ensure that the information being sought by the Commissioner is not excessive, disproportionate or unnecessarily burdensome: Pearson, above, at para 42. In making this determination, the Court will have regard to information that the respondent may have already provided to the Commissioner: Labatt, above, at para 97; Pearson, above, at paras 46 and 68.
[42] The Court’s assessment of whether a particular specification in a draft Order, or indeed the Order as a whole, is excessive, disproportionate or unnecessarily burdensome will generally need to have regard to the particular factual matrix of the case at hand. What may be excessive, disproportionate or unnecessarily burdensome in one set of circumstances may not be so in a different set of circumstances.
[43] However, it bears underscoring that the fact a draft Order, or a particular specification therein, may impose a significant burden on the respondent will not, on that ground alone, suffice to refuse the Commissioner’s request: Labatt, above, at para 92. The Court ordinarily will not refuse the Commissioner’s request unless it is unnecessarily burdensome, in the sense of imposing a burden on the respondent that is disproportionate to the potential value of the information in question to the Commissioner: Canada (Commissioner of Competition) v Bell Mobility Inc. , 2015 FC 990 at paras 53-56 [Bell].
[44] In exercising its supervisory role and attempting to fairly balance the competing interests of the parties, the Court will be alert, alive and sensitive to whether certain information sought by the Commissioner may not be relevant unless and until certain initial determinations have been made. When information falls into this category, the Court may well exercise its discretion to refuse to grant the Commissioner’s request to obtain such information until those initial determinations have been made. In other words, the Court may refuse to order the production of the information in question, while signalling its willingness to revisit the issue of the relevance of the information at a later point in time. Some of the amendments that were made to the Disputed Order following the hearing of the Commissioner’s application in this proceeding fell into this category. These included the deletion of requirements in two specifications to provide information regarding revenues and profits, and the deletion of another specification that required all records relating to CTR’s corporate compliance policy.
[45] I recognize that this type of two-stage approach may not be appropriate in time sensitive investigations, including the Commissioner’s reviews of mergers. However, it is not uncommon for the Commissioner to inform the Court in an application under section 11 of the Act that subsequent applications pertaining to the inquiry, including in relation to the same respondent, may be made. Indeed, the Commissioner conveyed this to the Court in this proceeding, at paragraph 69 of his written representations.
(5) The role of respondents in section 11 proceedings
[46] The role of respondents in section 11 proceedings was described in Pearson, above, as follows:
[92] Pursuant to the express terms of section 11, applications are to be made on an ex parte basis. Accordingly, parties other than the Commissioner have no right to participate in the hearing, file evidence or cross-examine on the Commissioner’s affidavit (Celanese Canada Inc v Murray Demolition Corp, 2006 SCC 36, [2006] 2 SCR 189, at para 36); Canada (Commissioner of Competition) v Toshiba of Canada Ltd, 2010 ONSC 659, 100 OR (3d) 535, at paras 34-36; Raimondo v Canada (Competition Act, Director of Investigation and Research), 61 CPR (3d) 142, 1995 CanLII 7316, at paras 12, 15 (Ont Sup Ct)).
[93] However, the Court may in certain circumstances require that notice be given to the party or parties named in the order being sought by the Commissioner, to provide an opportunity for the party or parties to seek leave to make written or oral submissions. The Court may provide a similar opportunity where, as in this application, the parties in question are aware of and attend the hearing.
[94] Given that Parliament can be taken to have deliberately decided that section 11 applications should ordinarily proceed on an ex parte basis, it should not be expected that requests for leave to make written or oral submissions will be routinely granted by the Court (R v B (SA), 2001 ABCA 235, at para 61 (CanLII)). The more appropriate manner in which a respondent’s concerns regarding the scope or potentially duplicative nature of the draft Order should be brought to the Court’s attention is through the Commissioner, pursuant to the Commissioner’s duty of full and frank disclosure (Labatt, above, at paras 100-107).
[95] In this regard, the Court generally will want to know whether one or more drafts of the order that is being sought have been discussed with representatives of the party or parties named in the order. Where such dialogue has taken place, the Court should be provided with a sense of the nature of any concerns that have been expressed by the party or parties in question, the basis for those concerns and whether the draft order was modified to reflect any of those concerns. In the current application, this was achieved by including the Respondents’ prior correspondence with the Commissioner in the appendices to the initial affidavit that was filed on behalf of the Commissioner. The Commissioner’s written submissions then explained how, if at all, the Respondents’ concerns were addressed in subsequent drafts of the Order.
[47] CTR submits that it ought to have been provided an opportunity to make submissions during the hearing of the Commissioner’s application because I asked the Commissioner’s counsel about CTR’s position in relation to several of the specifications in Schedules I and II to the Disputed Order. CTR’s counsel asserted that where a representative of the respondent is present at the hearing, the Court should make its enquiries directly to that individual, rather than to the Commissioner’s counsel. CTR’s counsel further suggested that respondents ought to be given the opportunity to be heard whenever they take the time to make written submissions to the Court, particularly where there is no indication that the application is urgent.
[48] I disagree. In brief, if these were the tests, it is reasonable to anticipate that respondents would routinely send a representative to the hearing of the application, as was the case several years ago. The same is true with respect to the making of written submissions to the Court. Granting respondents the right to make oral submissions whenever they send a representative to the hearing, or whenever they make written submissions to the Court, would frustrate Parliament’s deliberate decision that applications under section 11 of the Act be made on an ex parte basis. In light of that clear expression of parliamentary intent, respondents should not expect to be granted leave to make written or oral representations during the hearing in the absence of exceptional or special circumstances. Examples of such circumstances may include (i) the failure of the Commissioner to meet the duty of full and frank disclosure, and (ii) where important issues of law are raised. However, even where such circumstances exist, the Court will retain its discretion to deny a request by a respondent to make written or oral submissions. In considering whether to exercise its discretion, the Court will consider the equities at play. That was certainly a factor in denying CTR’s request to make submissions at the hearing of the Commissioner’s application.
[49] During the hearing of this motion, CTR submitted that the process of “pre-issuance dialogue,” also known as “pre-application dialogue,” is flawed in many ways. These include the fact that the Commissioner unilaterally decides when to initiate the process, what to do with the feedback that has been provided by respondents, what can and cannot be discussed, and when sufficient dialogue has occurred. CTR emphasized that this results in serious procedural deficiencies, including the fact that respondents routinely are informed that the Bureau’s case team is not prepared to discuss the relevance of the specifications in the schedules to the draft Order, and they often are not provided with sufficient time to provide meaningful input. CTR added that this is not in keeping with the spirit of a report by Mr. Brian Gover entitled Review of s. 11 of the Competition Act (August 12, 2008), available online at https://www.competitionbureau.gc.ca/eic/site/cb-bc.nsf/eng/02709.html [the Gover Report]. That report was commissioned after this Court’s decision in Labatt, above.
[50] I agree that the Commissioner’s failure to discuss the relevance of the specifications attached to a draft Order is not consistent with the spirit of the recommendations made in the Gover Report. The same would be true if the Commissioner did not provide respondents with sufficient time in which to provide a meaningful response. In my view, a response period of less than a week might well fall into this category.
[51] Nevertheless, as acknowledged by CTR, the Gover Report has no legal status. It simply served to make findings and recommendations regarding the process followed by the Competition Bureau in seeking orders under section 11 of the Act. To this end, it recommended, among other things, that the Bureau should engage in both pre-application [2] and post-service “collaborative” dialogue with respondents to section 11 orders: Gover Report, at 3 and 35. It also recommended that the material facts disclosed to the Court by the Commissioner should include “[f]acts that may explain the respondent’s position regarding the scope of the order and the relevance of the material sought, if known to the Commissioner”: Gover Report, at 16. While recognizing that “there are strong incentives to timely cooperation” by respondents, it further recommended that where “the respondent proves uncooperative or recalcitrant, the Bureau should apply for the s. 11 order or, if one has already been granted, should seek to enforce the order”: Gover Report, at 36.
[52] The Court has generally welcomed the Commissioner’s reporting on feedback received from respondents during the process of pre-application dialogue: see e.g., Pearson, above, at paras 94-95; Bell, above, at para 23. The Court has also found written submissions sent to the Commissioner after the filing of a draft Order to have been very helpful. However, such submissions can be far less helpful where they are filed within 48 hours of the hearing. This is because the assigned judge may have already prepared for the hearing by that time and may have to deal with other pressing matters immediately prior to the hearing. Such submissions are also less helpful when they simply add to multiple prior written submissions, without assisting the Court to determine which specific issues remain in contention.
[53] The Commissioner’s reporting on feedback received from respondents has greatly assisted the Court in conducting its supervisory function in section 11 proceedings. To ensure that respondents have the opportunity to understand that their concerns have been brought to the Court’s attention, the Court has made a practice of ordering transcripts of its hearings and making them available to respondents. In turn, this appears to have had the salutary effect of significantly reducing the potential for respondents to bring a motion to vary or a motion to reconsider, as such motions are very rare. Overall, this has resulted in a process that is less time consuming and less costly for all concerned, relative to that which existed prior to Labatt, above.
[54] Notwithstanding the foregoing, the Court cannot direct the Commissioner to follow any particular process when engaging in pre-application dialogue. Indeed, the Court cannot direct the Commissioner to participate in pre-application dialogue at all. In my view, this is a necessary implication of Parliament’s express decision to create an ex parte process in section 11 of the Act, and thereby override whatever procedural fairness rights respondents may otherwise have had at the pre-application stage of that process: IWA v Consolidated-Bathurst Packaging Ltd., [1990] 1 SCR 282, at 323-324, quoting Kane v Board of Governors of the University of British Columbia, [1980] 1 SCR 1105, at 1113. (See also, Johnny v Adams Lake Indian Band, 2017 FCA 146 at para 31, applying the same principle to another aspect of natural justice.)
[55] Consequently, I can simply observe that if respondents are not provided with a meaningful opportunity to provide feedback on a draft Order, including in relation to the relevance of schedules to the draft Order, th