Judgments

[2001] 3 F.C. 247

T-547-00

2001 FCT 134

University of Saskatchewan (Applicant)

v.

Valerie Sisson, as Commissioner of the Plant Breeders’ Rights Office (Respondent)

Indexed as: University of Saskatchewan v. Canada (Commissioner of the Plant Breeders’ Rights Office) (T.D.)

Trial Division, Muldoon J.—Winnipeg, November 16, 2000; Ottawa, March 1, 2001.

Agriculture — Applicant registering variety of malting barley under denomination TR133 — Variety’s denomination changed with Variety Registration Office from TR133 to CDC Kendall — Change not registered at Plant Breeders’ Rights Office as applicant mistakenly assumed it would be communicated thereto — Whether Commissioner erred in invoking lack of statutory authority to change denomination — Nature, purpose of Plant Breeders’ Rights Act examined — Commissioner having statutory authority to determine what circumstances justify denomination change under Plant Breeders’ Rights Regulations, s. 23(2)(b) — Failed to consider goals of legislation, to provide adequate reasons.

Administrative law — Judicial review — Certiorari — Commissioner of Plant Breeders’ Rights Office rejecting applicant’s request to change denomination of barley variety — Applicant mistakenly assuming change would be communicated to Plant Breeders’ Rights Office — Commissioner’s discretionary decision to be examined under approach adopted by S.C.C. in Baker case — Commissioner committing jurisdictional error reviewable on correctness standard if decision not in conformity with Plant Breeders’ Rights Act — Commissioner’s interpretation of Plant Breeders’ Rights Regulations, s. 23(2)(b) too restrictive — Appropriate standard of review for Commissioner’s decision reasonableness simpliciter — Commissioner failing to take into account relevant considerations in making decision — Reasons provided inadequate, constituting denial of procedural fairness.

This was an application for judicial review of a decision of the Commissioner of the Plant Breeders’ Rights Office rejecting the applicant’s request under subsection 14(5) of the Plant Breeders’ Rights Act and paragraph 23(2)(b) of the Plant Breeders’ Rights Regulations to change the denomination of a barley variety from TR133 to CDC Kendall. In June 1995, the applicant registered a variety of two-rowed malting barley under the denomination TR133 with the Variety Registration Office. In March 1997, it was granted plant breeders’ rights under the Plant Breeders’ Rights Act for a barley variety with the same denomination TR133. Later that year, the applicant changed the variety’s denomination from TR133 to CDC Lager. However, the denomination change was never registered with the Plant Breeders’ Rights Office as the applicant mistakenly assumed that the change would be communicated to that Office. In March 1999, the applicant sought to change the denomination to CDC Kendall but, once again, the denomination change was not registered with the Plant Breeders’ Rights Office as the applicant made the same mistaken assumption. The Commissioner of the Plant Breeders’ Rights Office notified the applicant that the variety known as TR133 was registered under the Plant Breeders’ Rights Act, but that the variety known as CDC Kendall denomination was not. She rejected the applicant’s request for a denomination change on the ground that the additional information provided by the applicant did not constitute valid reasons to justify a change of denomination from TR133 to CDC Kendall. Three main issues were raised: (1) whether the Commissioner misinterpreted the provisions of paragraph 23(2)(b) of the Plant Breeders’ Rights Regulations in concluding that she did not have statutory authority to change the denomination, (2) assuming she had such statutory authority, whether the Commissioner properly exercised her discretion, and (3) whether the applicant was entitled to written reasons regarding the rejection of its application.

Held, the application should be allowed.

(1) The Supreme Court of Canada decision in Baker v. Canada (Minister of Citizenship and Immigration) outlined the framework which must be adopted in reviewing the Commissioner’s discretionary decision. First, the decision must conform with the law, and second, the Commissioner must have exercised her discretion according to the appropriate standard of review. Although discretionary decisions will be given respect, the discretion must be exercised within the boundaries imposed by the statute, by the principles of the rule of law and by the principles of administrative law. Therefore, if the Commissioner’s decision did not comport with the Plant Breeders’ Rights Act, her error is jurisdictional and reviewable on a correctness standard. Subsection 23(2) of the Plant Breeders’ Rights Regulations prescribes the circumstances in which a denomination may be changed. The Commissioner has the statutory authority to determine what circumstances justify a denomination change under that provision. It is for the Commissioner on rational grounds to determine what additional information justifies a change of denomination. There is nothing in the wording of the provision to suggest that the legislative scheme does not permit the Commissioner to correct any type of mistake. On the contrary, the Commissioner has discretion to do so by virtue of that provision. The complete ban on denomination changes urged by the respondent goes too far. The Commissioner’s interpretation of paragraph 23(2)(b) was too restrictive. She committed an error of law by refusing the applicant’s request on that ground.

(2) Courts are directed to evaluate discretionary decisions according to the applicable standard of review. There are a number of factors to be taken into account in determining the standard of review, namely the absence or presence of a privative clause, the expertise of the decision maker, the purpose of the Act and the nature of the problem: a question of law or fact. Since there is no privative clause in the Plant Breeders’ Rights Act, lower deference is owed to the Commissioner’s decision. However, the Commissioner has more expertise than the courts in the issuance of plant breeders’ rights, particularly when deciding whether a denomination should be approved; this factor militates towards more deference to the Commissioner’s exercise of discretion. As to the purpose of the Plant Breeders’ Rights Act, it intends to stimulate plant breeding in Canada, to provide Canadian producers with better access to foreign varieties and to facilitate the protection of Canadian varieties in other countries. Such purpose is conceived primarily in terms of establishing entitlements to parties, and not as a delicate balancing between different constituencies. This factor militates towards less deference to the Commissioner’s decision. All things considered, the appropriate standard of review for the decisions of the Commissioner is reasonableness simpliciter. The Commissioner failed to take into account relevant considerations in her decisions. The letter of February 15, 2000 did not address the applicant’s principal argument, namely, that a costly mistake was made with severe consequences to the applicant. This failure was unreasonable in the circumstances of this case, and especially so when rectification could be seen to be generally beneficial and inexpensive. By refusing or failing to advert to the problems caused by the mistake, the Commissioner did not consider the relevant goals of the legislation, namely, to protect Canadian rights and to promote plant breeding in Canada and abroad. The Commissioner’s decision affected the rights and interests of the applicant. Although the latter caused the mistake, it was within the Commissioner’s statutory authority to determine when the consequences of such a mistake justify a change of denomination. Moreover, the Commissioner is not limited to the grounds submitted in a written application for a denomination change, but may consider a multitude of factors, some of which may not have been mentioned by an applicant.

(3) Written reasons are necessary when the decision is important for the individual, when there is a statutory right of appeal, or in other appropriate circumstances. In the circumstances of this case, the Commissioner had a duty to provide adequate reasons which illustrate the basis for refusing the denomination change. The impact on the rights-holder was self-evident. Moreover, providing reasons will illustrate the basis for the Commissioner’s decision and help in evaluating the reasonableness of the decision on judicial review. The reasons provided herein were inadequate and constituted a denial of procedural fairness to the applicant. In view of section 48 of the Plant Breeders’ Rights Act, no costs were awarded to either party.

STATUTES AND REGULATIONS JUDICIALLY CONSIDERED

Federal Court Act, R.S.C., 1985, c. F-7, s. 18.1 (as enacted by S.C. 1990, c. 8, s. 5).

Federal Court Rules, 1998, SOR/98-106, r. 400(1).

International Convention for the Protection of New Varieties of Plants of December 2, 1961 as revised at Geneva on November 10, 1972, on October 23, 1978, and on March 19, 1991, [1991] Can. T.S. No. 5.

Plant Breeders’ Rights Act, S.C. 1990, c. 20, s. 2(1) “propagating material”, 14(5), 48, 56(2) (as am. by S.C. 1997, c. 6, s. 78), (4) (as am. idem).

Plant Breeders’ Rights Regulations, SOR/91-594, s. 23 (as am. by SOR/94-750, s. 9), Sch. II, Item 7.

Seeds Act, R.S.C., 1985, c. S-8.

Seeds Regulations, C.R.C., c. 1400.

CASES JUDICIALLY CONSIDERED

FOLLOWED:

Baker v. Canada (Minister of Citizenship and Immigration), [1999] 2 S.C.R. 817; (1999), 174 D.L.R. (4th) 193; 14 Admin. L.R. (3d) 173; 1 Imm. L.R. (3d) 1; 243 N.R. 22.

APPLIED:

Pushpanathan v. Canada (Minister of Citizenship and Immigration), [1998] 1 S.C.R. 982; (1998), 160 D.L.R. (4th) 193; 11 Admin. L.R. (3d) 1; 43 Imm. L.R. (2d) 117; 226 N.R. 201; amended reasons [1998] 1 S.C.R. 1222; (1998), 11 Admin. L.R. (3d) 130.

REFERRED TO:

Oakwood Development Ltd. v. Rural Municipality of St. François Xavier, [1985] 2 S.C.R. 164; (1985), 20 D.L.R. (4th) 641; [1985] 6 W.W.R. 147; 36 Man.R. (2d) 215; 18 Admin. L.R. 59; 32 M.P.L.R. 1; 61 N.R. 321; 37 R.P.R. 101; Performing Rights Organization of Canada Ltd. v. Canadian Broadcasting Corporation (1986), 7 C.P.R. (3d) 433; 64 N.R. 330 (F.C.A.); Kershaw v. Canada, [1992] 1 C.T.C. 301; (1992), 92 DTC 6240; 140 N.R. 382 (F.C.A.).

APPLICATION for judicial review of a decision of the Commissioner of the Plant Breeders’ Rights Office, rejecting the applicant’s request under subsection 14(5) of the Plant Breeders’ Rights Act and paragraph 23(2)(b) of the Plant Breeders’ Rights Regulations to change the denomination of a barley variety. Application allowed.

APPEARANCES:

Catherine A. Sloan for applicant.

James M. Gunvaldsen-Klaassen for respondent.

SOLICITORS OF RECORD:

McKercher McKercher & Whitmore, Saskatoon, Saskatchewan, for applicant.

Deputy Attorney General of Canada for respondent.

The following are the reasons for order and order rendered in English by

Muldoon J.:

1.         Introduction

[1]        This is an application for judicial review of the decision of Valerie Sisson, Commissioner of the Plant Breeders’ Rights Office, dated February 15, 2000, rejecting the applicant’s request under subsection 14(5) of the Plant Breeders’ Rights Act[1] and under paragraph 23(2)(b) of the Plant Breeders’ Rights Regulations[2] to change the denomination of a barley variety from TR133 to CDC Kendall. The matter came on for hearing in Winnipeg, Manitoba.

2.         Statement of Facts

a.    Parties

[2]        The applicant is the University of Saskatchewan and the respondent is the Commissioner of the Plant Breeders’ Rights Office, as appointed under subsection 56(2) [as am. by S.C. 1997, c. 6, s. 78] of the Plant Breeders’ Rights Act. The respondent administers the statutory scheme which governs the intellectual property rights under the Plant Breeders’ Rights Act and its associated Regulations. The respondent’s office forms part of the Canadian Food Inspection Agency.

b.    Plant Breeders’ Rights Act

[3]        Plant breeders’ rights are a form of intellectual property right under the Plant Breeders’ Rights Act. The holder of the plant breeders’ rights has the exclusive right to sell and produce the protected variety in Canada, to sell the variety’s propagating material, to use the variety in commercially producing another variety, to use the variety in producing ornamental plants or cut flowers, and to license a third party to use the variety.

[4]        A proponent of a new seed variety may apply to the Commissioner of the Plant Breeders’ Rights Office for plant breeders’ rights. Once the rights are granted, the selected denomination must be used when selling propagating materials. Subsection 2(1) of the Plant Breeders’ Rights Act defines “propagating material” as “any reproductive or vegetative material for propagation, whether by sexual or other means, of a plant variety, and includes seeds for sowing and any whole plant or part thereof that may be used for propagation.”

[5]        When a particular variety’s applicant has been granted plant breeders’ rights, it is an offence under the Plant Breeders’ Rights Act to sell propagating material of that variety under a different denomination.

[6]        Although the intellectual property rights associated with breeding plants are created under the Plant Breeders’ Rights Act, the import, export, advertising and sale of plant varieties fall under the Seeds Act[3] and its associated Regulations.[4] The administration of the Seeds Act is the responsibility of a different body from the Plant Breeders’ Rights Office within the Canadian Food Inspection Agency: the Variety Registration Office. Although the Variety Registration Office and the Plant Breeders’ Rights Office are separate entities, both form part of the same federal agency, and both are physically located in the same building.

c.    Development Process for a New Plant Variety

[7]        The uncontradicted affidavit evidence in this case describes how a new barley variety is developed.[5] The plant breeder must first develop a potential malt barley variety. The plant breeder assigns a number to the variety based on the plant breeder’s own internal system.

[8]        If the malt barley variety exhibits exceptional merit, the plant breeder then enters it into wide-scale co-operative trials to determine its agronomic characteristics such as yield, maturity, lodging, and disease resistance. These trials are conducted by an association of plant breeders, universities, private organizations and Agriculture Canada. Typically, the co-operative trials take three years to complete.

[9]        During the co-operative trials, the variety is assigned a number by the test co-ordinator. Using a designation system which has been in use for more than twenty years, the varieties are designated “TR” for two-row varieties and “BT” for six-row varieties. The digits following the first two letters are numbers which are later recycled in unrelated trials.

[10]      After three years of agronomic evaluation and two years of small-scale malting and brewing quality testing, the variety may be registered under the Seeds Act and testing occurs on a larger scale. The practice in Canada is to register the malting barley variety initially under the Seeds Act using the numerical code from the co-operative tests as the denomination. This is a critical stage of the commercialization process. Before this large-scale testing, the amount of seed is limited, and brewing and malting facilities have not tested the variety in commercial quantities. The malting and brewing industry in Canada generally requires a minimum of two years of commercial plant testing before including a new variety in its ingredient list.

[11]      The large-scale testing requires more seed, and some seed must therefore be sold to seed growers. Because the Plant Breeders’ Rights Act prohibits any sale of seed before the application for plant breeders’ rights, the rights are obtained at this stage.

[12]      Generally, a plant breeder will assign the variety a permanent name only after at least two years of large-scale testing and only after commercial acceptance of the variety. The malt, grain and seed marketers can then develop brand recognition. For example, in the case at bar, the designation TR133 was renamed CDC Kendall after three years of testing. Under the Seeds Act, this name change is relatively routine. Typically, the designations also include an institution identifier which signals the plant breeder who developed the seed.

d.    The Case at Bar

[13]      On June 21, 1995, the applicant registered a variety of two-rowed malting barley under the denomination TR133 with the Variety Registration Office pursuant to the Seeds Act.

[14]      On March 17, 1997, the applicant was granted plant breeders’ rights under the Plant Breeders’ Rights Act for a barley variety with the same denomination TR133.

[15]      On November 28, 1997, the applicant changed the variety’s denomination with the Variety Registration Office from TR133 to CDC Lager. The applicant mistakenly assumed that the Variety Registration Office would advise the Plant Breeders’ Rights Office of the change because they are in the same building and are both part of the Canadian Food Inspection Agency. However, each office operates independently, and the denomination change was never registered with the Plant Breeders’ Rights Office.

[16]      The denomination was changed to CDC Kendall after several Japanese customers objected to the CDC Lager denomination because it was closely associated with Kirin Breweries, a Japanese brewing company, whose major brand is Kirin Lager beer. The CDC Kendall denomination refers to Dr. Norman Kendall, a former managing director of the Brewing and Malting Barley Research Institute, whose name is recognized in the malt and brewing industry in Canada and abroad. The CDC prefix denotes that the variety originated from the Crop Development Center at the University of Saskatchewan which is known internationally for developing superior malting barleys.

[17]      On March 17, 1999, the applicant applied to change the denomination to CDC Kendall with the Variety Registration Office. Once again, the applicant mistakenly assumed that the change would be communicated to the Plant Breeders’ Rights Office. Once again, the denomination change was not registered with the Plant Breeders’ Rights Office.

[18]      In 1998 and 1999, the applicant paid the annual registration fee to the respondent under the denomination TR133 pursuant to the Plant Breeders’ Rights Act.

[19]      In January 2000, the respondent discovered that the applicant was selling TR133 under the denomination CDC Kendall. On January 27, 2000, Valerie Sisson, Commissioner of the Plant Breeders’ Rights Office, wrote to Dr. Bryan Harvey, the vice-president of research at the University of Saskatchewan, and notified him that the variety known as TR133 was registered under the Plant Breeders’ Rights Act, but that the variety known as CDC Kendall denomination was not:

This letter is further to our phone conversation concerning the above noted variety. On January 24, 2000 it came to our attention that propagating material of the barley variety ‘TR133’, granted protection under the Plant Breeders’ Rights (PBR) Act, is being sold under another denomination, ‘CDC Kendall’.

PBR was granted on March 17, 1997 to the University of Saskatchewan for the barley variety designated ‘TR133’. At that time, the variety had had Interim Registration under the Seeds Act under that name since June 21, 1995. We have also learned that, since the grant of rights under the PBR Act, the variety has had two name changes under the Variety Registration system under the Seeds Regulations. The PBR office has twice sent out notices forth an annual fee for maintenance of PBR, referring to the variety as ‘TR133’. There has never been any request to the PBR Office to change the variety name and PBR office was not aware, until January 24, 2000 that other names were being used when selling the variety.

After the grant of PBR no other denomination may be used when selling propagating material of the variety, whether before or after the expiration of the term of the grant of rights (Section 15 of the PBR Act). Variety denominations may only be changed under circumstances prescribed in the Regulations (Subsection 14(5) PBR Act).

The circumstances that allow for a name change are where the approved denomination is not the denomination proposed by the holder or where additional information becomes available after the grant of PBR that justifies a change of denomination e.g. prior rights (Subsections 23(2)(a) and (b) of the PBR Regulations).

It is an offence to wilfully designate any propagating material of a variety for the purpose of selling it by using a denomination different from the denomination approved by the Commissioner (Subsection 53(2) of the PBR Act). A corporation that commits such an offence is liable on summary conviction to a fine of up to twenty-five thousand dollars or on conviction on indictment to a fine the amount of which is in the discretion of the court (Subsection 53(5) of the PBR Act).

We would also recommend that you advise your affected licence holders that all sales, including advertising, of propagating material of the variety must cease immediately under any other denomination except ‘TR133’. As the variety is registered under the Seeds Act as “CDC Kendall”, it may not be sold as ‘TR133’ until the variety name is changed under the Seeds Regulations. As requested I am attaching the relevant sections of the PBR Act and Regulations for your information. [Applicant’s record, at pp. 13-14.]

[20]      On February 2, 2000, Dr. Harvey responded in writing and requested that the denomination be changed from TR133 to CDC Kendall pursuant to section 23 of the Plant Breeders’ Rights Regulations:

Thank you for bringing the situation with CDC Kendall, TR133 barley to our attention. Thank you also for your understanding and assistance in attempting to find a solution to this dilemma. We were under the mistaken impression that the Variety Registration Office would apprise your office of the denomination changes for this line. Clearly that was not the case and we did not carry through on this obligation.

Plant Breeder’s [sic] Rights must be applied for before seed multiplication can commence. Therefore, application for PBR and Interim Registration was made under its coop test number TR133, as was the custom at that time. The Variety Registration Office approved the “permanent” name CDC Lager for the variety in July of 1998. It was subsequently changed by that office at our request because of the objections of key Japanese customers and granted the name CDC Kendall in March of 1999.

The variety has performed very well in commercial acceptance tests and the industry sees it as one of the replacements for Harrington, the long-time standard for this class. It is widely known and promoted, in Canada and abroad, as CDC Kendal. Plans are in place for over 100,000 acres of contract production in 2000. The Canadian Wheat Board, Canadian Seed Grower’s Association, Canadian Malting Industry Association and provincial variety recommendation pamphlets all refer to it by that name. A great deal of confusion would result if we were to change this name. TR133 is a test entry number for the Two-Rowed Barley Cooperative Preregistration Test. These numbers are recycled every 100 entries from an institution. Thus in a few years there will be another TR133 making this an unacceptable permanent denomination.

We request, therefore, that the name be changed by the PBR Office to CDC Kendall. We trust that this additional information indicating that coop test numbers are acceptable only as temporary names and that this variety, which has the potential to occupy millions of acres, is widely known in the industry as CDC Kendall, will permit you to authorize a change in denomination under Subsection 23(2)(b) of the PBR Regulations. [Applicant’s record, at p. 20.]

[21]      On February 15, 2000, the Commissioner rejected the applicant’s request for a denomination change:

Thank you for your letter of February 2, 2000, concerning the registration of the denomination ‘TR133’ with the Plant Breeders’ Rights Office. In your response, additional information was provided in an effort to substantiate your request to change the denomination to ‘CDC Kendall’.

The reasons stated in your response for changing the denomination from ‘TR133’ to `CDC Kendall’ have been considered and it has been determined that the information does not provide valid reasons to justify a change of denomination from ‘TR133’ to ‘CDC Kendall’ in accordance with Subsection 23(2) of the PBR Regulations. The claim that key Japanese clients objected to the use of the name ‘CDC Lager’ is not relevant to this case as the denomination ‘CDC Lager’ was never registered by our office. The claim that it is not possible to use the experimental designation ‘TR133’ due to problems in recycling numbers is also not acceptable. Furthermore, the University of Saskatchewan failed to comply with the PBR Act in not requesting a change of denomination in accordance with that Act. Additionally, two notifications from the PBR office requesting the annual renewal fee for `TR133’ were sent to your office and were paid.

As a result, evidence is requested to be submitted to our office, within 30 days, to show that you have advised your affected licence holders including the Canadian Wheat Board and CSGA of this situation. As the variety is registered under the Seeds Act and Regulations (Part III) as ‘CDC Kendall’, it may not be sold as ‘TR133’ until a request has been made to the Variety Registration Office for a name change back to TR133 and the name is changed under the Seeds Regulations.

Section 15 of the PBR Act states that after the grant of rights no other denomination may be used when selling propagating material of the variety, whether before or after the expiration of the term of the grant of rights. As stated in my previous letter of January 27, 2000, it is an offence to wilfully designate any propagating material of a variety for the purpose of selling it by using a denomination different from the denomination approved by the Commissioner (Subsection 53(2) of the PBR Act). A corporation that commits such an offence is liable on summary conviction to a fine of up to twenty-five thousand dollars or on conviction on indictment to fine the amount of which is in the discretion of the court (Subsection 53(5) of the PBR Act). [Applicant’s record, at pp. 21-22.]

[22]      The applicant seeks judicial review of the Commissioner’s refusal to change the denomination from TR133 to CDC Kendall.

3.    Issues

a. Did the Commissioner misinterpret the provisions of paragraph 23(2)(b) of the Plant Breeders’ Rights Regulations by contending that she did not have the statutory authority to change the denomination;

b. If the Commissioner had the statutory authority to change the denomination, did she properly exercise her discretion in the circumstances of this case;

c. Was the applicant entitled to written reasons regarding the rejection of the application; and

d. Is the Commissioner immune from the costs of this application?

4.         Baker v. Canada (Minister of Citizenship and Immigration) and the Exercise of Discretion

[23]      In Baker v. Canada (Minister of Citizenship and Immigration)[6], Madam Justice L’Heureux-Dubé delineates the approach which Courts must use to review discretionary decisions at pages 852-855 (paragraphs 52-56):

The concept of discretion refers to decisions where the law does not dictate a specific outcome, or where the decision-maker is given a choice of options within a statutorily imposed set of boundaries. As K. C. Davis wrote in Discretionary Justice (1969), at p. 4:

A public officer has discretion whenever the effective limits on his power leave him free to make a choice among possible courses of action or inaction.

It is necessary in this case to consider the approach to judicial review of administrative discretion, taking into account the “pragmatic and functional” approach to judicial review that was first articulated in U.E.S., Local 298 v. Bibeault, [1988] 2 S.C.R. 1048, and has been applied in subsequent cases including Canada (Attorney General) v. Mossop, [1993] 1 S.C.R. 554, at pp. 601-7, per L’Heureux-Dubé J., dissenting, but not on this issue; Pezim v. British Columbia (Superintendent of Brokers), [1994] 2 S.C.R. 557; Canada (Director of Investigation and Research) v. Southam Inc., [1997] 1 S.C.R. 748; and Pushpanathan, supra.

Administrative law has traditionally approached the review of decisions classified as discretionary separately from those seen as involving the interpretation of rules of law. The rule has been that decisions classified as discretionary may only be reviewed on limited grounds such as the bad faith of decision-makers, the exercise of discretion for an improper purpose, and the use of irrelevant considerations: see, for example, Maple Lodge Farms Ltd. v. Government of Canada, [1982] 2 S.C.R. 2, at pp. 7-8; Shell Canada Products Ltd. v. Vancouver (City), [1994] 1 S.C.R. 231. A general doctrine of “unreasonableness” has also sometimes been applied to discretionary decisions: Associated Provincial Picture Houses, Ltd. v. Wednesbury Corporation, [1948] 1 K.B. 223 (C.A.). In my opinion, these doctrines incorporate two central ideas—that discretionary decisions, like all other administrative decisions, must be made within the bounds of the jurisdiction conferred by the statute, but that considerable deference will be given to decision-makers by courts in reviewing the exercise of that discretion and determining the scope of the decision-maker’s jurisdiction. These doctrines recognize that it is the intention of a legislature, when using statutory language that confers broad choices on administrative agencies, that courts should not lightly interfere with such decisions, and should give considerable respect to decision-makers when reviewing the manner in which discretion was exercised. However, discretion must still be exercised in a manner that is within a reasonable interpretation of the margin of manoeuvre contemplated by the legislature, in accordance with the principles of the rule of law (Roncarelli v. Duplessis, [1959] S.C.R. 121), in line with general principles of administrative law governing the exercise of discretion, and consistent with the Canadian Charter of Rights and Freedoms (Slaight Communications Inc. v. Davidson, [1989] 1 S.C.R. 1038).

It is, however, inaccurate to speak of a rigid dichotomy of “discretionary” or “non-discretionary” decisions. Most administrative decisions involve the exercise of implicit discretion in relation to many aspects of decision making. To give just one example, decision-makers may have considerable discretion as to the remedies they order. In addition, there is no easy distinction to be made between interpretation and the exercise of discretion; interpreting legal rules involves considerable discretion to clarify, fill in legislative gaps, and make choices among various options. As stated by Brown and Evans, supra, at p. 14-47:

The degree of discretion in a grant of power can range from one where the decision-maker is constrained only by the purposes and objects of the legislation, to one where it is so specific that there is almost no discretion involved. In between, of course, there may be any number of limitations placed on the decision-maker’s freedom of choice, sometimes referred to as “structured” discretion.

The “pragmatic and functional” approach recognizes that standards of review for errors of law are appropriately seen as a spectrum, with certain decisions being entitled to more deference, and others entitled to less: Pezim, supra, at pp. 589-90; Southam, supra, at para. 30; Pushpanathan, supra, at para. 27. Three standards of review have been defined: patent unreasonableness, reasonableness simpliciter, and correctness: Southam, at paras. 54-56. In my opinion the standard of review of the substantive aspects of discretionary decisions is best approached within this framework, especially given the difficulty in making rigid classifications between discretionary and non-discretionary decisions. The pragmatic and functional approach takes into account considerations such as the expertise of the tribunal, the nature of the decision being made, and the language of the provision and the surrounding legislation. It includes factors such as whether a decision is “polycentric” and the intention revealed by the statutory language. The amount of choice left by Parliament to the administrative decision-maker and the nature of the decision being made are also important considerations in the analysis. The spectrum of standards of review can incorporate the principle that, in certain cases, the legislature has demonstrated its intention to leave greater choices to decision-makers than in others, but that a court must intervene where such a decision is outside the scope of the power accorded by Parliament. Finally, I would note that this Court has already applied this framework to statutory provisions that confer significant choices on administrative bodies, for example, in reviewing the exercise of the remedial powers conferred by the statute at issue in Southam, supra.

Incorporating judicial review of decisions that involve considerable discretion into the pragmatic and functional analysis for errors of law should not be seen as reducing the level of deference given to decisions of a highly discretionary nature. In fact, deferential standards of review may give substantial leeway to the discretionary decision-maker in determining the “proper purposes” or “relevant considerations” involved in making a given determination. The pragmatic and functional approach can take into account the fact that the more discretion that is left to a decision-maker, the more reluctant courts should be to interfere with the manner in which decision-makers have made choices among various options. However, though discretionary decisions will generally be given considerable respect, that discretion must be exercised in accordance with the boundaries imposed in the statute, the principles of the rule of law, the principles of administrative law, the fundamental values of Canadian society, and the principles of the Charter.

[24]      Baker outlines the framework which this Court must adopt in reviewing the Commissioner’s discretionary decision. There are two dimensions to examine in reviewing this decision: firstly, the decision must conform with the law, and secondly, the Commissioner must have exercised her discretion according to the appropriate standard of review.

5.         Conformity with the Law: The Scope of Authority to Change Denominations

a.    Analytical Framework

[25]      In Baker, Madam Justice L’Heureux-Dubé reiterated the familiar legal principle that although discretionary decisions will be given respect, the discretion must be exercised within the boundaries imposed by the statute, by the principles of the rule of law, and by the principles of administrative law. Therefore, if the Commissioner’s decision did not comport with the Plant Breeders’ Rights Act, her error is jurisdictional and is reviewable on a correctness standard.

b.    Plant Breeders’ Rights Act

[26]      Subsection 14(5) of the Plant Breeders’ Rights Act states:

14. …

(5) A denomination approved by the Commissioner pursuant to this section may be changed with the Commissioner’s approval in the prescribed circumstances and manner.

[27]      Subsection 23(2) of the Plant Breeders’ Rights Regulations prescribes the circumstances in which a denomination may be changed:

23. (1) …

(2) The Commissioner may approve a change of denomination pursuant to subsection 14(5) of the Act in the following circumstances, namely,

(a) where the denomination approved by the Commissioner is not, owing to error, the denomination proposed by the holder;

(b) where additional information that becomes available after the grant of plant breeders’ rights justifies a change of denomination; or

(c) where an objection has been filed pursuant to subsection 25(2).

[28]      Finally, item 7 of Schedule II to the Plant Breeders’ Rights Regulations indicates that a fee of $100 will be charged to a rights-holder to process a request for a change of an approved denomination under subsection 14(5) of the Plant Breeders’ Rights Act.

c.    Respondent’s Submissions

[29]      The respondent submits that the ordinary meaning of the legislation demonstrates Parliament’s intent to restrict the ability of a rights-holder to change a denomination. The rights-holders must carefully choose a marketable denomination in the first instance because the rights-holder cannot rectify a mistake after a denomination has been approved. In other words, temporary denominations are not permitted under the Plant Breeders’ Rights Act.

[30]      The Plant Breeders’ Rights Act involves a highly formalized application process to register a plant variety, including a period of publication of a proposed denomination to provide notice to those who may be affected by the grant of rights. The system avoids confusion and provides certainty to the industry. The Commissioner must apply her discretion only to maintain the certainty and reliability of the register, and she may rectify problems only under limited circumstances.

[31]      Paragraph 23(2)(b) of the Regulations allows a denomination change when additional information becomes available after the grant of plant breeders’ rights. The respondent submits that the only circumstance to justify a denomination change is the Commissioner’s becoming aware of previous rights under the same denomination. Therefore, approving the denomination change in this case, it is argued, would be ultra vires of the Commissioner’s statutory powers.

d.    Conclusion

[32]      This Court holds that the Commissioner has the statutory authority to determine what circumstances justify a denomination change under paragraph 23(2)(b) of the Plant Breeders’ Rights Regulations. It is for the Commissioner on rational grounds to determine what additional information justifies a change of denomination. However, the Commissioner’s interpretation of paragraph 23(2)(b) is too restrictive. There is nothing in the wording of the provision to suggest that the legislative scheme does not permit the Commissioner to correct other or any types of mistakes. On the contrary, this provision specifically gives the Commissioner the discretion to do so. Although it may not be so easy to change a denomination under the Plant Breeders’ Rights Act as it is under the Seeds Act, the complete ban on denomination changes which is urged by the respondent goes too far.

[33]      The $100 fee in Schedule II of the Regulations supports this finding. If no circumstances exist to justify a denomination change other than the mistake of the Commissioner in granting plant breeders’ rights under a previously registered denomination, then charging a fee to the innocent rights-holder is absurd. The Commissioner’s mistake, if any, is not a processing cost which should be passed on to an innocent party. Therefore, there must be circumstances under which a denomination change can be initiated by the rights-holder, otherwise item 7 of Schedule II is superfluous.

[34]      The Commissioner’s interpretation of paragraph 23(2)(b) is too restrictive. She committed an error of law by refusing the applicant’s request on these grounds.

[35]      However, this does not end the matter. In oral argument before this Court, the respondent limited her submissions to the ultra vires issue. However, this argument does not accord with the evidence in this case. The Commissioner did in fact consider some of the applicant’s explanations and rejected them as being insufficient to justify a denomination change. For example, in the letter dated February 15, 2000, the Commissioner rejected the applicant’s explanation that confusion would result because of the recycling of designation numbers in the pre-registration tests. The Commissioner also rejected the arguments regarding the objections by Japanese clients. Finally, the Commissioner stated that the applicant failed to comply with the Plant Breeders’ Rights Act by not requesting a change in denomination according to the Act. However, before this Court, the Commissioner asserted that she never had the authority to consider a denomination change in the first place, regardless of the nature of the applicant’s request. Given these inconsistencies in argument and in fact, this Court will analyse whether the Commissioner’s discretion was properly exercised in this case, if only to provide direction for future decisions by the Commissioner.

6.         The Manner in Which the Commissioner’s Discretion was Exercised

a.    Applicant’s Submissions

[36]      The applicant submits that the primary purpose of the Plant Breeders’ Rights Act is to confer exclusive rights to sell, produce and propagate plant varieties to plant variety developers. Therefore, the legislation strives to encourage the research and development of new plant varieties. Other purposes include protecting the rights of developers by granting civil remedies against infringers.

[37]      The primary purpose of a denomination is to ensure a variety’s brand recognition and to protect the interests of the rights-holder. The denomination notifies grain farmers, purchasers and other developers that the rights-holder has developed a variety of plants with specific traits.

[38]      The applicant submits that the Commissioner erred in law by not considering all of its submissions. Moreover, the applicant urges that the Commissioner cannot rely on factors which were not raised by the applicant in its written request for a denomination change. By considering other factors, the Commissioner misinterpreted the legislation and committed a reviewable error of law.

[39]      The applicant submits that the Commissioner did not consider all of the information which it submitted in reaching her decision. For example, the respondent did not consider that many agencies use the denomination CDC Kendall in referring to the barley variety. Nor did she consider that the variety was widely known and promoted as CDC Kendall in Canada and abroad. Further, the Commissioner did not advert to the applicant’s submission that 100,000 acres of land was reserved to produce the variety during the year-2000 growing season. Finally, the Commissioner did not acknowledge that the applicant had misunderstood the registration process.

[40]      The applicant also submits that the Commissioner relied upon extraneous matters in making her decision. In particular, the Commissioner refers to the applicant having paid an annual fee two years in a row under the denomination TR133. The legislation does not state that a denomination change is to be denied if the applicant had paid the renewal fee. Nor does it authorize the Commissioner to inflict a punitive iron estoppel on the applicant who has paid such fee.

[41]      The applicant submits that the Commissioner’s decision is unreasonable. No prejudice exists to anybody except to the applicant and to its licence holders. The harm inflicted is irreparable because the resources expended to establish CDC Kendall denomination in the market will be lost. The commercial viability of the variety will be damaged by the TR133 denomination because it is associated with experimental seed development.

b.    Respondent’s Submissions

[42]      The respondent submits that mistakes are insufficient to justify a denomination change because the system will be thrown in disarray. Moreover, the renewals demonstrate that the applicant knew or ought to have known that the denomination under the Plant Breeders’ Rights Act had not changed when it was changed with the Variety Registration Office under the Seeds Act. Moreover, as of January 2000, the applicant’s licensees had the opportunity to use and to promote the denomination CDC Kendall for just over nine months.

c.    Analysis

[43]      As discussed in Baker, Courts are directed to evaluate discretionary decisions according to the applicable standard of review. The procedure to evaluate the standard of review applied in Baker was first discussed by Mr. Justice Bastarache in Pushpanathan v. Canada (Minister of Citizenship and Immigration)[7], at pages 1005-1010; paragraphs 29, 30, 32, 36, 37:

(1) Factors to Be Taken into Account

The factors to be taken into account in determining the standard of review have been canvassed in a number of recent decisions of this Court, and may be divided into four categories.

(i) Privative Clauses

The absence of a privative clause does not imply a high standard of scrutiny, where other factors bespeak a low standard. However, the presence of a “full” privative clause is compelling evidence that the court ought to show deference to the tribunal’s decision, unless other factors strongly indicate the contrary as regards the particular determination in question ….

…

(ii) Expertise

Described by Iacobucci J. in Southam, supra, at para. 50, as “the most important of the factors that a court must consider in settling on a standard of review”, this category includes several considerations. If a tribunal has been constituted with a particular expertise with respect to achieving the aims of an Act, whether because of the specialized knowledge of its decision-makers, special procedure, or non-judicial means of implementing the Act, then a greater degree of deference will be accorded. In Southam, the Court considered of strong importance the special make-up and knowledge of the Competition Act tribunal relative to a court of law in determining questions concerning competitiveness in general, and the definition of the relevant product market in particular.

…

(iii) Purpose of the Act as a Whole, and the Provision in Particular

As Iacobucci J. noted in Southam, supra, at para. 50, purpose and expertise often overlap. The purpose of a statute is often indicated by the specialized nature of the legislative structure and dispute-settlement mechanism, and the need for expertise is often manifested as much by the requirements of the statute as by the specific qualifications of its members. Where the purposes of the statute and of the decision-maker are conceived not primarily in terms of establishing rights as between parties, or as entitlements, but rather as a delicate balancing between different constituencies, then the appropriateness of court supervision diminishes …. These considerations are all specific articulations of the broad principle of “polycentricity” well known to academic commentators who suggest that it provides the best rationale for judicial deference to non-judicial agencies.  A “polycentric issue is one which involves a large number of interlocking and interacting interests and considerations” (P. Cane, An Introduction to Administrative Law (3rd ed. 1996), at p. 35). While judicial procedure is premised on a bipolar opposition of parties, interests, and factual discovery, some problems require the consideration of numerous interests simultaneously, and the promulgation of solutions which concurrently balance benefits and costs for many different parties. Where an administrative structure more closely resembles this model, courts will exercise restraint.  The polycentricity principle is a helpful way of understanding the variety of criteria developed under the rubric of the “statutory purpose”.

(iv) The “Nature of the Problem”: A Question of Law or Fact?

As mentioned above, even pure questions of law may be granted a wide degree of deference where other factors of the pragmatic and functional analysis suggest that such deference is the legislative intention, as this Court found to be the case in Pasiechnyk, supra. Where, however, other factors leave that intention ambiguous, courts should be less deferential of decisions which are pure determinations of law. The justification for this position relates to the question of relative expertise mentioned previously. There is no clear line to be drawn between questions of law and questions of fact, and, in any event, many determinations involve questions of mixed law and fact. An appropriate litmus test was set out in Southam, supra, at para. 37, by Iacobucci J., who stated:

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.

Privative Clause

[44]      There is no privative clause in the Plant Breeders’ Rights Act. Therefore, lower deference to the Commissioner’s decision is warranted.

Expertise of the Decision Maker

[45]      The Commissioner is designated by the President of the Canadian Food Inspection Agency. The Commissioner receives all applications, fees, documents and materials submitted to obtain plant breeders’ rights and must do everything necessary to grant plant breeders’ rights and to exercise all other powers. The Commissioner also has charge and custody of the register and of the Plant Breeders’ Rights Office.[8]

[46]      The Commissioner has more expertise than the Courts in the issuance of plant breeders’ rights, particularly when deciding whether a denomination should be approved. This militates towards more deference to the Commissioner’s exercise of discretion.

Purpose of the Act

[47]      The Plant Breeders’ Rights Act allows plant breeders legally to protect new varieties of plants. Plant varieties may be covered under the legislation for a period of up to 18 years. All plant species, except algae, bacteria and fungi, are eligible for protection. The owner of a new variety who receives a grant of rights has exclusive rights over the use of the variety, and can protect the new variety from exploitation by others. The intent of the legislation is to stimulate plant breeding in Canada, to provide Canadian producers with better access to foreign varieties and to facilitate the protection of Canadian varieties in other countries.[9]

[48]      The holder of plant breeders’ rights has the exclusive right to sell and produce a variety in Canada, to sell its propagating material, to use the variety in commercially producing another variety, to use the variety in producing ornamental plants or cut flowers, and to license a third party to use the variety.

[49]      The purpose of the Plant Breeders’ Rights Act is conceived primarily in terms of establishing entitlements to parties, and not as a delicate balancing between different constituencies. Although there is an international aspect to plant breeders’ rights because Canada is a signatory to the International Convention for the Protection of New Varieties of Plants,[10] the legislation contemplates protecting Canadian plant breeding interests at home and abroad. Therefore, the appropriateness of court supervision is not diminished. This factor militates towards less deference to the Commissioner’s decision.

Question of Law or Fact

[50]      The decision of the Commissioner to change a denomination involves an appreciation of the facts of a given case, and it is not one which involves the application of or interpretation of definitive legal rules. Given the discretionary and fact-based nature of this decision, this is a factor militating in favour of deference.

Summary: Standard of Review

[51]      In balancing these factors to arrive at the appropriate standard of review, some deference should be accorded to the Commissioner’s decisions because of her expertise, and because of the fact-based nature of changing a denomination. However, the absence of a privative clause and the purpose of the legislation warrants less deference towards the Commissioner’s decisions. This Court concludes that the appropriate standard of review for decisions of the Commissioner is reasonableness simpliciter.

d.    Conclusion

[52]      The applicant submitted three cases that stood for the familiar legal maxim that a decision maker errs in law by failing to account for relevant considerations, and by accounting for irrelevant ones in making a decision.[11] However, since Baker, this jurisprudence must be revisited in light of the appropriate standard of review. This Court must assess the manner in which the decision was made in terms the reasonableness simpliciter standard of review.

[53]      This Court agrees with the applicant’s submissions that the Commissioner failed to take into account relevant considerations in her decisions. The letter of February 15, 2000, did not address the applicant’s principal argument, namely, that a costly mistake was made with severe consequences to the applicant. This failure was unreasonable in the circumstances of this case, and especially so when rectification could be seen to be generally beneficial and inexpensive.

[54]      The Plant Breeders’ Rights Act strives to stimulate plant breeding in Canada, to provide Canadian producers with better access to foreign varieties and to facilitate the protection of Canadian varieties in other countries. In light of these goals, the Commissioner’s decision is unreasonable based on the reasons which are stated in the letter dated February 15, 2000. By refusing or failing to advert to the problems caused by the mistake, the Commissioner did not consider the relevant goals of the legislation, namely, to protect Canadian rights and to promote plant breeding in Canada and abroad.

[55]      The Commissioner’s decision affects the rights and the interests of the applicant. The applicant and its licensees have expended significant resources to develop CDC Kendall. The uncontradicted affidavit evidence of Dr. Bryan Harvey, co-ordinator of Agricultural Research with the University of Saskatchewan, is that malting barley varieties are marketed by name on the global market instead of by numerical designation. Moreover, Michael Brophy, the senior program manager of Barley Market Development at the Canadian Wheat Board, stated by uncontradicted affidavit that the malting industry in Canada and overseas recognizes that the TR designation is temporary, and that a variety with a TR designation is experimental and not commercially acceptable.

[56]      It is difficult to see how the purposes of the Act are furthered by refusing to acknowledge the marketing realities of the brewing industry. Federal, provincial and private resources have been expended to promote the CDC Kendall variety. Although the applicant caused the mistake, the Commissioner has the statutory authority to determine when the consequences of such a mistake justify a change of denomination.

[57]      Although the Commissioner has statutory authority to change a denomination, she is not limited solely to the grounds which are submitted in the applicant’s written application for a denomination change. The additional information justifying a change of denomination may involve a multitude of factors, some of which may not be adverted to by the applicant.

7.         Provision of Reasons

[58]      Madam Justice L’Heureux-Dubé discussed the duty to provide reasons in Baker, at pages 845-846, 848 (paragraphs 38-39, 43):

Courts and commentators have, however, often emphasized the usefulness of reasons in ensuring fair and transparent decision-making. Though Northwestern Utilities dealt with a statutory obligation to give reasons, Estey J. held as follows, at p. 706, referring to the desirability of a common law reasons requirement:

This obligation is a salutary one. It reduces to a considerable degree the chances of arbitrary or capricious decisions, reinforces public confidence in the judgment and fairness of administrative tribunals, and affords parties to administrative proceedings an opportunity to assess the question of appeal ….

…

Reasons, it has been argued, foster better decision making by ensuring that issues and reasoning are well articulated and, therefore, more carefully thought out. The process of writing reasons for decision by itself may be a guarantee of a better decision. Reasons also allow parties to see that the applicable issues have been carefully considered, and are invaluable if a decision is to be appealed, questioned, or considered on judicial review: …. Those affected may be more likely to feel they were treated fairly and appropriately if reasons are given …. I agree that these are significant benefits of written reasons.

…

In my opinion, it is now appropriate to recognize that, in certain circumstances, the duty of procedural fairness will require the provision of a written explanation for a decision. The strong arguments demonstrating the advantages of written reasons suggest that, in cases such as this where the decision has important significance for the individual, when there is a statutory right of appeal, or in other circumstances, some form of reasons should be required. This requirement has been developing in the common law elsewhere. The circumstances of the case at bar, in my opinion, constitute one of the situations where reasons are necessary. The profound importance of an H& C [Humanitarian and Compassionate] decision to those affected, as with those at issue in Orlowski, Cunningham, and Doody, militates in favour of a requirement that reasons be provided. It would be unfair for a person subject to a decision such as this one which is so critical to their future not to be told why the result was reached.

[59]      Written reasons are necessary when the decision has important significance for the individual, when there is a statutory right of appeal, or in other appropriate circumstances. This Court holds that in the circumstances of this case, the Commissioner had a duty to provide adequate reasons which illustrate the basis for refusing the denomination change. The impact on the rights-holder here is self-evident. Moreover, providing reasons will illustrate the basis for the Commissioner’s decision and help to evaluate the reasonableness of the decision on judicial review.

[60]      The reasons provided in this case were inadequate, and constituted a denial of procedural fairness to the applicant.

8.         Costs

[61]      Section 48 of the Plant Breeders’ Rights Act allows costs to be awarded against all parties except the Commissioner:

48. The costs of the Commissioner in proceedings before any court under this Act are in the discretion of the court but the Commissioner shall not be ordered to pay the costs of any other of the parties.

[62]      Part 11 of the Federal Court Rules, 1998 [SOR/98-106] discusses the costs between parties:

400. (1) The Court shall have full discretionary power over the amount and allocation of costs and the determination of by whom they are to be paid.

[63]      Because this application to review the decision of the Commissioner is a judicial review brought under section 18.1 of the Federal Court Act [R.S.C., 1985, c. F-7 (as enacted by S.C. 1990, c. 8, s. 5)], it could be argued that the provisions under the Plant Breeders’ Rights Act regarding costs do not apply, in deference to rule 400. Of course, deference is owed to clear pertinent enactments of Parliament such as section 48 of the last-mentioned Act. The apt instrument of interpretation in this instance is the maxim: generalia specialibus non derogant—general things (rule 400) do not derogate from special things (section 48) of the Plant Breeders’ Rights Act. So, a specific Act of Parliament overrides a rule of Court.

9.         Decision

[64]      This Court quashes the decision of the respondent dated February 15, 2000, and sends back this litigation matter for redetermination by the respondent or by her next authorized deputy with the appropriate jurisdiction according to the principles discussed herein. The respondent shall not be liable to pay the applicant’s costs of this application, in accordance with section 48 of the Plant Breeders’ Rights Act.

ORDER

For the reasons expressed herein, above,

THIS COURT ORDERS that judicial review is granted and the respondent’s impugned decision dated February 15, 2000 is quashed, and the matter in litigation herein is referred back to the respondent, or to her next empowered deputy, if any, for redetermination according to principles and reasons discussed and enunciated herein; no costs are awarded to either party.

---