Canada (Director of Investigation and Research) v. Southam Inc.

Canada (Director of Investigation and Research) v. Southam Inc.
Collection
Supreme Court Judgments
Date
1997-03-20
Report
[1997] 1 SCR 748
Case number
24915
Judges
Lamer, Antonio; La Forest, Gérard V.; L'Heureux-Dubé, Claire; Sopinka, John; Gonthier, Charles Doherty; Cory, Peter deCarteret; McLachlin, Beverley; Iacobucci, Frank; Major, John C.
On appeal from
Federal Court of Appeal
Subjects
Administrative law
Competition law
Notes
SCC Case Information: 24915
Decision Content
Canada (Director of Investigation and Research) v. Southam Inc., [1997] 1 S.C.R. 748
Southam Inc.,
Lower Mainland Publishing Ltd.,
RIM Publishing Inc.,
Yellow Cedar Properties Ltd.,
North Shore Free Press Ltd.,
Specialty Publishers Inc.,
and Elty Publications Ltd. Appellants
v.
Director of Investigation and Research Respondent
Indexed as: Canada (Director of Investigation and Research) v. Southam Inc.
File No.: 24915.
Hearing and judgment as to appeal on the remedy: November 25, 1996.
Reasons and judgment as to appeal on the merits: March 20, 1997.
Present: Lamer C.J. and La Forest, L’Heureux‑Dubé, Sopinka, Gonthier, Cory, McLachlin, Iacobucci and Major JJ.
on appeal from the federal court of appeal
Administrative law ‑‑ Statutory appeals ‑‑ Tribunal composed of economic, commercial and legal experts -- Tribunal’s decision not protected by privative clause ‑‑ Standard of appellate review -- Competition Act, R.S.C., 1985, c. C-34, s. 92(1) -- Competition Tribunal Act, R.S.C., 1985, c. 19 (2nd Supp .), ss. 12 , 13 .
Competition law -- Remedy -- Tribunal investigating substantial lessening of competition -- Tribunal ordering divestment of one business at owner’s option -- Whether remedial order should be set aside -- Competition Act, R.S.C., 1985, c. C-34, s. 92(1) -- Competition Tribunal Act, R.S.C., 1985, c. 19 (2nd Supp .), ss. 12 , 13 .
Vancouver’s two daily newspapers (owned by Southam Inc.) were less successful, when compared with daily newspapers in other regions of Canada, relative to the many smaller community newspapers circulating in their distribution area. The community newspapers differed from the dailies in that they served a smaller area, were distributed free of charge, and were printed from one to three times a week. In 1989, Southam Inc. began to acquire community and specialized newspapers in the area, and one year later had obtained a controlling interest in 13 community newspapers (including the two strongest ones, the North Shore News and the Vancouver Courier), a real estate advertising publication, three distribution services and two printing concerns. Southam Inc. also established a local supplement to one of its dailies but eventually discontinued it.
The respondent applied for an order requiring Southam to divest itself of the North Shore News, the Vancouver Courier, and the Real Estate Weekly, alleging that the concentration of these properties in the hands of one publisher was likely to lessen competition substantially in the retail print advertising and real estate print advertising markets in the Lower Mainland. The Competition Tribunal found a substantial lessening in competition in the real estate print advertising market in the North Shore. It ordered Southam to divest itself, at its option, of either the North Shore News or the Real Estate Weekly. It rejected Southam’s proposal that it sell the real estate section of the North Shore News. The Director of Investigation and Research appealed the Tribunal’s decision on the merits and Southam appealed the Tribunal’s decision on the remedy. The Federal Court of Appeal allowed the first appeal and dismissed the second.
This appeal raises two issues. The first is whether the Federal Court of Appeal erred in concluding that it owed no deference to the Tribunal’s finding about the dimensions of the relevant market and in subsequently substituting for that finding one of its own. The second is whether the Federal Court of Appeal erred in refusing to set aside the Tribunal’s remedial order.
Held: The appeal on the merits should be allowed; the appeal on the remedy should be dismissed.
Merits
The standard of review is a function of many factors and may fall between correctness, at the more exacting end of the spectrum, and patently unreasonable, at the more deferential end. In the absence of a privative clause, the reviewing court may review decisions taken by the tribunal even within its own jurisdiction. Accordingly, the task for the reviewing court in a statutory appeal is more akin to appellate review than to judicial review. Nevertheless, the reviewing court must look to several factors to determine what limits it should observe in exercising its statutorily mandated appellate function. Among the factors to be considered are the nature of the problem before the tribunal, the applicable law properly interpreted in the light of its purpose and the area of the tribunal’s expertise.
The problem before the Tribunal in this case was a problem of mixed law and fact. Questions of law are questions about what the correct legal test is; questions of fact are questions about what actually took place between the parties; and questions of mixed law and fact are questions about whether the facts satisfy the legal tests. The distinction between questions of law and questions of mixed law and fact will sometimes be difficult to make. In theoretical terms, the rule is that as the level of generality of the challenged proposition approaches complete particularity, the matter approaches unqualified application of law and draws away from the forging of new law, and hence draws nigh to being an unqualified question of mixed law and fact.
The Tribunal did not fail to consider relevant items of evidence and so did not err in law by failing to consider them. To suggest that it erred in law by failing to accord adequate weight to certain factors is inimical to the very notion of a balancing test, which is a kind of legal rule whose application should be subtle and flexible, but not mechanical. As a matter of law, the Tribunal should consider each factor, but the according of weight to the factors should be left, at least initially, to the Tribunal. The Tribunal forged no new legal principle and so any error it might have made can only have been one of mixed law and fact. This suggests that some measure of deference accordingly is owed to the Tribunal’s decision. Appellate courts should be reluctant to venture into a re‑examination of the conclusions of the Tribunal on questions of mixed law and fact.
The absence of a privative clause counsels a less deferential posture for appellate courts than would be appropriate if a privative clause were present. The Tribunal, however, has been recognized as being especially well‑suited to overseeing a complex statutory scheme whose objectives are peculiarly economic. Because an appellate court is likely to encounter difficulties in understanding the economic and commercial ramifications of the Tribunal’s decisions and consequently to be less able to secure the fulfilment of the purpose of the Competition Act , the purpose of the Act is better served by appellate deference to the Tribunal’s decisions.
Expertise, which in this case overlaps with the purpose of the statute that the Tribunal administers, is the most important of the factors that a court must consider in settling on a standard of review. The Tribunal’s expertise lies in economics and in commerce, and these are matters concerning which the members of the Tribunal are likely to be far more knowledgeable than the typical judge will be. The particular dispute in this case is one that falls squarely within the area of the Tribunal’s expertise.
A standard more deferential than correctness but less deferential than “not patently unreasonable” is required. Because several considerations, including particularly the expertise of the Tribunal, counsel deference while others suggest a more exacting form of review, the proper standard of review falls somewhere between the ends of the spectrum.
The need for a third standard of review is especially clear in cases, like this one, in which appeal from a tribunal’s decision lies by statutory right. The presence of the statutory right of appeal obviates the need to find a jurisdictional error. Because the standard of patent unreasonableness is principally a test for determining whether a tribunal has exceeded its jurisdiction, it will rarely be the appropriate standard of review in statutory appeals. However, because tribunals typically enjoy some expertise and deal with problems of a difficult and intricate nature, a standard more deferential than correctness is needed. This third standard should be whether the decision of the Tribunal is unreasonable. This test is to be distinguished from the most deferential standard of review, which requires courts to consider whether a tribunal’s decision is patently unreasonable. An unreasonable decision is one that, in the main, is not supported by any reasons that can stand up to a somewhat probing examination. The difference between “unreasonable” and “patently unreasonable” lies in the immediacy or obviousness of the defect. If the defect is apparent on the face of the tribunal’s reasons, then the tribunal’s decision is patently unreasonable. But if it takes some significant searching or testing to find the defect, then the decision is unreasonable but not patently unreasonable.
The “clearly wrong” test is close to the standard of reasonableness simpliciter. Many things are wrong that are not unreasonable, but when “clearly” is added to “wrong”, the meaning is brought much nearer to that of “unreasonable”. Consequently, the clearly wrong test represents a striking out from the correctness test in the direction of deference. But the clearly wrong test does not go so far as the standard of patent unreasonableness. The clearly wrong test, because of its familiarity to Canadian judges, may serve as a guide in applying the standard of reasonableness simpliciter.
In the final result, the standard of reasonableness simply instructs reviewing courts to accord considerable weight to the views of tribunals about matters with respect to which they have significant expertise. While it is convenient to put the matter in terms of a standard of review, at bottom the issue is the weight that should be accorded to expert opinions.
The Tribunal did not act unreasonably when it decided that Southam’s daily newspapers and community newspapers are in different product markets.
That the Tribunal discounted evidence of functional interchangeability between the dailies and the community newspapers was reasonable on the facts and was not without foundation or logical coherence. It is reasonable, if only reasonable, to suppose that advertisers are sufficiently discerning about the media they employ that they are unlikely to respond to changes in the relative prices of the two kinds of newspapers by taking their business from the one to the other.
The Tribunal also discounted evidence that Southam regarded the community newspapers as competitors for its dailies. This discounting is perhaps unusual given that Southam’s expert identified this competition with community newspapers as the source of the dailies’ difficulties. The Tribunal’s findings, however, were not unreasonable and they did not need to be correct. Judicial restraint is needed if a cohesive, rational and sensible system of judicial review is to be fashioned.
Remedy
Because the Competition Act addresses the problem of substantial lessening of competition, the appropriate remedy is to restore competition to the point at which it can no longer be said to be substantially less than it was before the merger. The test that the Tribunal has applied in consent cases should be applied in all cases.
The Tribunal’s choice of remedy is a matter of mixed law and fact and the standard of review is one of reasonableness.
Southam’s proposed remedy of selling the real estate section of the North Shore News fails because it would not likely be effective in eliminating the substantial lessening of competition. This decision was not unreasonable and should be allowed to stand. The remedy chosen by the Tribunal is not punitive, because the Tribunal found that it was the only effective remedy. If the choice is between a remedy that goes farther than is strictly necessary to restore competition to an acceptable level and a remedy that does not go far enough even to reach the acceptable level, then surely the former option must be preferred. The Tribunal did not wrongly require the appellants to demonstrate the effectiveness of their proposed remedy; the person who asserts should prove.
Cases Cited
Considered: Pezim v. British Columbia (Superintendent of Brokers), [1994] 2 S.C.R. 557; referred to: R. v. Nova Scotia Pharmaceutical Society, [1992] 2 S.C.R. 606; Bell Canada v. Canada (Canadian Radio‑Television and Telecommunications Commission), [1989] 1 S.C.R. 1722; Chrysler Canada Ltd. v. Canada (Competition Tribunal), [1992] 2 S.C.R. 394; United Brotherhood of Carpenters and Joiners of America, Local 579 v. Bradco Construction Ltd., [1993] 2 S.C.R. 316; Canadian Union of Public Employees, Local 963 v. New Brunswick Liquor Corp., [1979] 2 S.C.R. 227; Canada (Attorney General) v. Public Service Alliance of Canada, [1993] 1 S.C.R. 941; National Corn Growers Assn. v. Canada (Import Tribunal), [1990] 2 S.C.R. 1324; Toronto (City) Board of Education v. O.S.S.T.F., District 15, [1997] 1 S.C.R. 487; Stein v. “Kathy K” (The Ship), [1976] 2 S.C.R. 802; The Queen v. J. W. Mills & Son Ltd., [1968] 2 Ex. C.R. 275; Canada (Director of Investigation & Research) v. Air Canada (1989), 27 C.P.R. (3d) 476.
Statutes and Regulations Cited
Competition Act, R.S.C., 1985, c. C‑34, ss. 1.1 [ad. R.S.C., 1985, c. 19 (2nd Supp .), s. 19 ], 92(1) [rep. & sub. R.S.C., 1985, c. 19 (2nd Supp .), s. 45 ].
Competition Tribunal Act, R.S.C., 1985, c. 19 (2nd Supp .), ss. 3(2) , (3) , 4(1) , 8(1) , 10(1) , (2) , 12(1) , (2) , 13(1) , (2) .
Authors Cited
Kerans, R. P. Standards of Review Employed by Appellate Courts. Edmonton: Juriliber, 1994.
APPEAL from a judgment of the Federal Court of Appeal allowing an appeal on the merits [1995] 3 F.C. 557, (1995), 127 D.L.R. (4th) 263, 185 N.R. 321, 63 C.P.R. (3d) 1, 21 B.L.R. (2d) 1, from a judgment of the Competition Tribunal (1992), 43 C.P.R. (3d) 161, with additional reasons (1993), 48 C.P.R. (3d) 224, and from a judgment of the Federal Court of Appeal (1995), 127 D.L.R. (4th) 329, 185 N.R. 291, 63 C.P.R. (3d) 67, 21 B.L.R. (2d) 68, dismissing an appeal as to remedy from a judgment of the Competition Tribunal (1992), 47 C.P.R. (3d) 240. Appeal on the merits allowed; appeal on the remedy dismissed.
Neil Finkelstein, Glenn Leslie and Mark Katz, for the appellants.
Stanley Wong, André Brantz and J. Kevin Wright, for the respondent.
//Iacobucci J.//
The judgment of the Court was delivered by
1 Iacobucci J. -- The principal question raised by this appeal is whether a decision of the Competition Tribunal (the “Tribunal”) is entitled to curial deference. Following the approach outlined by this Court in its recent jurisprudence, I conclude that the particular decision of the Tribunal here at issue is entitled to deference.
1. Facts
2 Two daily newspapers serve the region in and around Vancouver. They are the Vancouver Sun and the Vancouver Province. The appellant Southam Inc., through its subsidiary Pacific Press Limited, owns both.
3 In addition to the two dailies, many smaller community newspapers circulate in the Lower Mainland of British Columbia. These community newspapers differ from the daily newspapers in a few respects: they serve smaller regions, they are distributed free of charge to all households in the regions they serve, and they are published only once, twice, or at most three times weekly. Community newspapers have been more successful in the Lower Mainland than in any other comparable region of Canada. Daily newspapers, by contrast, have been less successful in Vancouver than in other major Canadian cities.
4 In 1986, Southam consulted Dr. Christine Urban, an American expert, about the problems its Vancouver dailies were facing. Dr. Urban identified Vancouver’s strong community newspapers as the cause of the dailies’ malaise. She advised Southam to act to stem the growing power of the community newspapers.
5 In September, 1986, Southam introduced a flyer delivery service to the Lower Mainland. Known as Flyer Force, the new service offered delivery of flyers to even the households that did not receive a Southam newspaper. In 1988, several community newspapers, whose business included the delivery of flyers, joined to form a group whose geographic reach would rival Flyer Force’s. This group was initially called the MetroVan Group. Later in 1988, the MetroVan Group expanded and changed its name to MetroGroup.
6 In September, 1988, Southam began to publish the North Shore Extra. This was a bi-weekly publication whose editorial focus was on the North Shore district of the Lower Mainland. The Extra was inserted as a supplement into copies of the Vancouver Sun bound for households in the North Shore. Additionally, the Extra was delivered to North Shore households that did not receive the Sun.
7 In January, 1989, Southam began to acquire community and specialized newspapers in the Lower Mainland. By May, 1990, the company had acquired a controlling interest in 13 community newspapers, a real estate advertising publication, three distribution services, and two printing concerns. Among its acquisitions were the Lower Mainland’s two strongest community newspapers, the North Shore News and the Vancouver Courier, as well as the Real Estate Weekly.
8 In April, 1990, Southam discontinued the North Shore Extra.
9 On November 20, 1990, the respondent, the Director of Investigation and Research, applied for an order requiring Southam to divest itself of the North Shore News, the Vancouver Courier, and the Real Estate Weekly. The Director’s reason for taking this step was that Southam’s acquisition of these publications was likely to lessen competition substantially in the retail print advertising and real estate print advertising markets in the Lower Mainland.
10 In early 1991, Southam shut down Flyer Force.
2. Relevant Statutory Provisions
11 Section 92 of the Competition Act, R.S.C., 1985, c. C-34 addresses the problem of mergers that are likely to lessen competition substantially:
92. (1) Where, on application by the Director, the Tribunal finds that a merger or proposed merger prevents or lessens, or is likely to prevent or lessen, competition substantially
(a) in a trade, industry or profession,
(b) among the sources from which a trade, industry or profession obtains a product,
(c) among the outlets through which a trade, industry or profession disposes of a product, or
(d) otherwise than as described in paragraphs (a) to (c),
the Tribunal may, subject to sections 94 to 96,
(e) in the case of a completed merger, order any party to the merger or any other person
(i) to dissolve the merger in such manner as the Tribunal directs,
(ii) to dispose of assets or shares designated by the Tribunal in such manner as the Tribunal directs, or
(iii) in addition to or in lieu of the action referred to in subparagraph (i) or (ii), with the consent of the person against whom the order is directed and the Director, to take any other action, . . .
12 Various sections of the Competition Tribunal Act, R.S.C., 1985, c. 19 (2nd Supp .), create and provide for the constitution of the Tribunal:
3. . . .
(2) The Tribunal shall consist of
(a) not more than four members to be appointed from among the judges of the Federal Court -- Trial Division by the Governor in Council on the recommendation of the Minister of Justice; and
(b) not more than eight other members to be appointed by the Governor in Council on the recommendation of the Minister.
(3) The Governor in Council may establish an advisory council to advise the Minister with respect to appointments of lay members, which council is to be composed of not more than ten members who are knowledgeable in economics, industry, commerce or public affairs and may include, without restricting the generality of the foregoing, individuals chosen from business communities, the legal community, consumer groups and labour.
. . .
4. (1) The Governor in Council shall designate one of the judicial members to be Chairman of the Tribunal.
. . .
10. (1) Subject to section 11, every application to the Tribunal shall be heard before not less than three or more than five members sitting together, at least one of whom is a judicial member and at least one of whom is a lay member.
(2) The Chairman shall designate a judicial member to preside at any hearing or, if the Chairman is present at a hearing, may preside himself.
13 Sections 12 and 13 divide questions before the Tribunal into questions of law, questions of fact, and questions of mixed law and fact, and assign responsibility for resolving those questions, both in the first instance and on appeal:
12. (1) In any proceedings before the Tribunal,
(a) questions of law shall be determined only by the judicial members sitting in those proceedings; and
(b) questions of fact or mixed law and fact shall be determined by all the members sitting in those proceedings.
(2) In any proceedings before the Tribunal,
(a) in the event of a difference of opinion among the members determining any question, the opinion of the majority shall prevail; and
(b) in the event of an equally divided opinion among the members determining any question, the presiding member may determine the question.
. . .
13. (1) Subject to subsection (2), an appeal lies to the Federal Court of Appeal from any decision or order, whether final, interlocutory or interim, of the Tribunal as if it were a judgment of the Federal Court ‑- Trial Division.
(2) An appeal on a question of fact lies under subsection (1) only with the leave of the Federal Court of Appeal.
3. Judgments in Appeal
A. Competition Tribunal
(i) On the merits (1992), 43 C.P.R. (3d) 161, with additional reasons (1993), 48 C.P.R. (3d) 224
14 Following 40 days of hearings, the Tribunal found that the acquisition by Southam of the community newspapers and affiliated businesses did not substantially lessen competition in the market for retail print advertising in the Lower Mainland. The Tribunal did find, however, that Southam’s purchases had substantially lessened competition in the market for real estate print advertising in the North Shore region. After hearing argument on the issue of remedies, the Tribunal ordered Southam to divest itself, at its option, of either the North Shore News or the Real Estate Weekly. The Tribunal rejected Southam’s proposed remedy, which was to sell the real estate section of the North Shore News.
15 During the hearing, the Tribunal heard from 50 witnesses and received literally volumes of documents in evidence. That the Tribunal paid heed to this prodigious body of evidence is clear from its written reasons, which occupy some 147 pages in a law report. Fortunately, it is not necessary for purposes of this appeal to reproduce the Tribunal’s reasons in any detail.
16 The principal underlying question for the Tribunal was whether Southam’s daily newspapers and its newly acquired community newspapers are in the same market. Its approach to this problem was to ask whether the two kinds of products are close substitutes for one another. The traditional economic measure of substitutability is cross-elasticity of demand, which is the extent to which consumers will switch from one product to another in response to slight changes in their relative prices. However, the Tribunal recognized that direct statistical evidence of cross-elasticity of demand will rarely be available. Accordingly, the members determined that recourse should be had to “indirect evidence” of substitutability. Indirect indicia of substitutability include (at p. 179) “the physical characteristics of the products, the uses to which the products are put, and whatever evidence there is about the behaviour of buyers that casts light on their willingness to switch from one product to another in response to changes in relative prices”. Also relevant are “[t]he views of industry participants about what products and which firms they regard as actual and prospective competitors”.
17 Almost 100 pages of the Tribunal’s decision are taken up with a painstaking review and evaluation of the evidence. On the strength of this, the Tribunal concluded that daily newspapers and community newspapers, though remarkably similar at first glance, serve different retail print advertising markets. Daily newspapers, which circulate widely but reach only a relatively small percentage of households, appeal to the advertising needs of large national firms that serve customers throughout a metropolitan region. Community newspapers, by contrast, circulate only within small communities but typically reach all of the households within those communities. These newspapers appeal to local advertisers whose customers live only within a certain district. In support of this conclusion, the Tribunal presented an informal survey of the behaviour of selected advertisers in the Lower Mainland.
18 The Tribunal also cited considerable evidence to suggest that Southam regarded the community newspapers as its chief competitors. In one document, Dr. Christine Urban, an American newspaper consultant retained by Southam, identified strong community newspapers as the root of Southam’s problems in the Lower Mainland. In another document quoted in the Tribunal’s decision at p. 195, an official of Southam warned against the danger of conceding forever to the community newspapers “a substantial portion of what is normally daily newspaper business”. However, the members did not regard this evidence of what they called “inter-industry competition” as decisive. In their view, it showed that Southam believed that it was competing with the community newspapers. But simply to state that something is believed does not guarantee that it is so, and in this case the Tribunal found that Southam’s belief was unfounded. “With their present product configurations”, concluded the Tribunal at p. 277, “the dailies and community newspapers are at best weak substitutes for some advertisers”.
19 Because the two kinds of newspapers were at best only weak substitutes, the Tribunal concluded that they were not in the same relevant product market and therefore that the acquisition by Southam of several community newspapers and affiliated businesses did not substantially lessen competition in the market for retail print advertising in the Lower Mainland.
20 However, the Tribunal did find that the acquisition by Southam of both the North Shore News, with its weekly real estate supplement, and the Real Estate Weekly, with its North Shore edition, gave Southam monopoly power over the market for real estate print advertising on the North Shore. The result was to lessen competition substantially in that market. The Tribunal ordered the parties to appear at a later date to consider the question of the remedy.
(ii) As to remedy (1992), 47 C.P.R. (3d) 240
21 Having heard argument on the question, the Tribunal found that the test of a proposed remedy in contested proceedings is whether it will restore the competitive situation as it existed before the merger and is not, as Southam submitted, whether it will eliminate any substantial lessening of competition that the merger may have produced. However, the Tribunal found that, even accepting Southam’s proposed test, Southam’s proposed remedy of selling the weekly real estate supplement to the North Shore News still would not be effective. The Tribunal thought it likely that the real estate supplement would founder on its own; certainly it would not be as substantial a presence in the North Shore as a stand-alone publication as it had been as part of the North Shore News. The Tribunal noted that Southam had offered to reach an accommodation with any prospective buyer concerning the continuation of the supplement’s association with the North Shore News. The Tribunal members concluded, however, that they lacked the jurisdiction to order Southam to reach an accommodation. And in any event, the Tribunal doubted whether such a negotiated association would be conducive to the fostering of a competitive environment. Accordingly, the Tribunal ordered Southam to divest itself, at its option, of either the North Shore News or the Real Estate Weekly.
B. Federal Court of Appeal
(i) On the merits, [1995] 3 F.C. 557
22 The Director of Investigation and Research appealed the Tribunal’s decision on the merits and Southam appealed the Tribunal’s decision on the remedy. The Federal Court of Appeal allowed the first appeal and dismissed the second.
23 Robertson J.A., writing for the court, concluded that the Tribunal, though it had stated the correct formula, had nonetheless applied the wrong legal test. He accepted the Tribunal’s account of the kinds of evidence that it had to consider, but stated that the Tribunal had failed to consider all of these. He found, in particular, that the Tribunal had not considered evidence that daily newspapers and community newspapers are functionally interchangeable and evidence that the owners of the daily newspapers considered themselves to be in competition against the community newspapers. Failure to consider relevant factors, he said, is an error of law. And to his mind, the Tribunal is entitled to no deference on a question of law.
24 By way of buttressing this conclusion, he emphasized that the Competition Tribunal Act mandates an unusual division of labour among the members of the Tribunal. Each panel of the Tribunal, he observed, must have at least one judicial member and the judicial members of any panel are entirely responsible for the settling of such legal questions as may arise in the course of a proceeding. Section 12 of the Act provides:
12. (1) In any proceedings before the Tribunal,
(a) questions of law shall be determined only by the judicial members sitting in those proceedings; and
(b) questions of fact or mixed law and fact shall be determined by all the members sitting in those proceedings.
Consequently, an appeal from the Tribunal on a question of law is akin to an appeal from the Trial Division of the Federal Court. What is more, an appeal lies from any decision of the Tribunal on a question of law, and no privative clause protects the Tribunal’s decisions. The Competition Tribunal Act provides:
13. (1) Subject to subsection (2), an appeal lies to the Federal Court of Appeal from any decision or order, whether final, interlocutory or interim, of the Tribunal as if it were a judgment of the Federal Court ‑- Trial Division.
Robertson J.A. further stressed that the judicial members of the Tribunal are not more expert in matters of law than are judges of the Federal Court of Appeal.
25 Invoking the power of the Federal Court of Appeal to substitute its own findings for those of a tribunal, Robertson J.A. held that the evidence before the Tribunal of the functional interchangeability of daily and community newspapers and of inter-industry competition was more than sufficient to show that the two kinds of newspapers are in the same market. Accordingly, he remitted the matter back to the Tribunal with instructions that it should inquire whether the acquisition of the North Shore News, the Vancouver Courier, and the Real Estate Weekly had resulted in a substantial lessening of competition in the market for retail print advertising in the Lower Mainland of British Columbia.
(ii) As to remedy (1992), 47 C.P.R. (3d) 240
26 Turning to Southam’s appeal of the remedy, Robertson J.A. declined to decide what the appropriate test for a remedy is, because Southam’s proposed remedy failed regardless of the test applied. In answer to Southam’s protest that the Tribunal had imposed a penalty on it, Robertson J.A. observed that the Tribunal had sought only to impose an effective remedy. To his mind, this way of proceeding could not be objectionable. Against the complaint that the Tribunal had wrongly placed the burden of proving the effectiveness of its proposed remedy on Southam, Robertson J.A. invoked the maxim that he who asserts must prove. To Southam’s argument that the Tribunal had wrongly dismissed its proposed remedy as ineffective, he said that curial deference was due to the Tribunal on this, a finding of mixed law and fact.
4. Issues
27 This appeal raises two issues. The first is whether the Federal Court of Appeal erred in concluding that it owed no deference to the Tribunal’s finding about the dimensions of the relevant market and in subsequently substituting for that finding one of its own. The second is whether the Federal Court of Appeal erred in refusing to set aside the Tribunal’s remedial order.
5. Analysis
28 The principal question in this appeal concerns the limits that an appellate court should observe in deciding a statutory appeal from a decision like the one that the Tribunal reached in this case. Ultimately, this comes down to a question about the standard of review that an appellate court should apply in a case such as this one. In the reasons that follow, the answer given is that the Tribunal should be held to the standard of reasonableness simpliciter. In other words, a court, in reviewing the Tribunal’s decision, must inquire whether that decision was reasonable. If it was, then the decision should stand. Otherwise, it must fall.
29 The secondary question is whether the Tribunal chose an appropriate remedy. My conclusion is that, even though the Tribunal imposed too strict a test, its chosen remedy is appropriate.
A. Statutory Right of Appeal
30 In Pezim v. British Columbia (Superintendent of Brokers), [1994] 2 S.C.R. 557, a decision which, like this one, concerned a decision of an expert tribunal that was subject to a statutory right of appeal, the Court declared that the standard of review is a function of many factors. Depending on how the factors play out in a particular instance, the standard may fall somewhere between correctness, at the more exacting end of the spectrum, and patently unreasonable, at the more deferential end. See pp. 589-90.
31 An appellate court must consider the factors with a view to determining the approach that it should take as a court sitting in appeal of the decision of the tribunal. There is no privative clause, and so jurisdiction is not at issue. The tribunal enjoys jurisdiction by virtue of its constating statute and the appellate court enjoys jurisdiction by virtue of a statutory right of appeal. The legislative intent is clear. The question is what limits an appellate court should observe in the exercise of its statutorily mandated appellate function.
32 I wish to emphasize that in cases like the instant appeal no question arises about the extent of the tribunal’s jurisdiction. Where the statute confers a right of appeal, an appellate court need not look to see whether the tribunal has exceeded its jurisdiction by breaching the rules of natural justice or by rendering a decision that is patently unreasonable. The manner and standard of review will be determined in the way that appellate courts generally determine the posture they will take with respect to the decisions of courts below. In particular, appellate courts must have regard to the nature of the problem, to the applicable law properly interpreted in the light of its purpose, and to the expertise of the tribunal.
33 I propose to consider each of the relevant factors in turn.
B. The Nature of the Problem Before the Tribunal
34 The parties vigorously dispute the nature of the problem before the Tribunal. The appellants say that the problem is one of fact. The respondent insists that the problem is one of law. In my view, the problem is one of mixed law and fact.
35 Section 12(1) of the Competition Tribunal Act contemplates a tripartite classification of questions before the Tribunal into questions of law, questions of fact, and questions of mixed law and fact. Briefly stated, questions of law are questions about what the correct legal test is; questions of fact are questions about what actually took place between the parties; and questions of mixed law and fact are questions about whether the facts satisfy the legal tests. A simple example will illustrate these concepts. In the law of tort, the question what “negligence” means is a question of law. The question whether the defendant did this or that is a question of fact. And, once it has been decided that the applicable standard is one of negligence, the question whether the defendant satisfied the appropriate standard of care is a question of mixed law and fact. I recognize, however, that the distinction between law on the one hand and mixed law and fact on the other is difficult. On occasion, what appears to be mixed law and fact turns out to be law, or vice versa.
36 For example, the majority of the British Columbia Court of Appeal in Pezim, supra, concluded that it was an error of law to regard newly acquired information on the value of assets as a “material change” in the affairs of a company. It was common ground in that case that the proper test was whether the information constituted a material change; the argument was about whether the acquisition of information of a certain kind qualified as such a change. To some extent, then, the question resembled one of mixed law and fact. But the question was one of law, in part because the words in question were present in a statutory provision and questions of statutory interpretation are generally questions of law, but also because the point in controversy was one that might potentially arise in many cases in the future: the argument was about kinds of information and not merely about the particular information that was at issue in that case. The rule on which the British Columbia Securities Commission seemed to rely -- that newly acquired information about the value of assets can constitute a material change -- was a matter of law, because it had the potential to apply widely to many cases.
37 By contrast, the matrices of facts at issue in some cases are so particular, indeed so unique, that decisions about whether they satisfy legal tests do not have any great precedential value. If a court were to decide that driving at a certain speed on a certain road under certain conditions was negligent, its decision would not have any great value as a precedent. In short, as the level of generality of the challenged proposition approaches utter particularity, the matter approaches pure application, and hence draws nigh to being an unqualified question of mixed law and fact. See R. P. Kerans, Standards of Review Employed by Appellate Courts (1994), at pp. 103-108. Of course, it is not easy to say precisely where the line should be drawn; though in most cases it should be sufficiently clear whether the dispute is over a general proposition that might qualify as a principle of law or over a very particular set of circumstances that is not apt to be of much interest to judges and lawyers in the future.
38 Part of the confusion in this case arises from the fact that the parties are arguing about two different questions. On the surface, it appears that the parties agree about the law: both say that, in determining the dimensions of the relevant market, the Tribunal must consider indirect evidence of cross-elasticity of demand. No one quarrels with the Tribunal’s understanding of the kinds of indirect evidence it should consider.
39 However, the respondent says that, having informed itself correctly on the law, the Tribunal proceeded nevertheless to ign