A‑620‑05
2007 FCA 6
Attorney General of Canada (Appellant)
v.
Jean Pelletier (Respondent)
Indexed as: Pelletier v. Canada (Attorney General) (F.C.A.)
Federal Court of Appeal, Décary, Nadon and Pelletier JJ.A.—Ottawa, December 19, 2006; January 11, 2007.
Administrative Law — Judicial Review — Grounds of Review — Procedural fairness — Appeal from Federal Court decision respondent was owed more robust duty of procedural fairness than duty proposed by appellant, that duty not satisfied — Respondent appointed at pleasure for five‑year term by Order in Council as Chairman of Board of Directors of VIA Rail Canada Inc. — Appointment terminated after publication of newspaper article quoting inappropriate comments respondent made about former employee identifying wrongdoing at VIA Rail — Given no notice of termination, reasons therefor — Procedural fairness requiring actual knowledge of pending threat, reasons therefor; constructive knowledge (i.e. person ought to know) not sufficient — Federal Court not committing any palpable, overriding error when limiting itself to facts, not speculating as to respondent’s state of mind regarding risk of removal from position — Government terminating appointment at pleasure on basis of misconduct, having duty of procedural fairness, where person not knowing position in jeopardy, to inform person of possibility of removal, reasons therefor — Person must also be given opportunity to be heard — Appeal dismissed.
Practice — Burden of proof — Appeal from Federal Court decision respondent was owed more robust duty of procedural fairness than duty proposed by appellant, that duty not satisfied — Federal Court not reversing onus of proof by requiring appellant to show respondent not knowing about precariousness of position since onus self‑imposed.
This was an appeal from a Federal Court decision finding that the respondent was owed a more robust duty of procedural fairness than that proposed by the appellant and that this duty had not been satisfied. On July 31, 2001, the respondent was appointed by the government as Chairman of the Board of Directors of VIA Rail Canada Inc. to serve at pleasure for a term of five years. However, his appointment was terminated on March 1, 2004. At the time of the appointment, Myriam Bédard, a former Olympic athlete, was an employee of VIA Rail. In February 2004, she wrote to Prime Minister Martin claiming to be a victim of the sponsorship scandal and alleged that she had been forced to resign in a set‑up involving the respondent. Shortly thereafter, a Montréal daily, La Presse published an article which reported that the respondent had said that Ms. Bédard was lying shamelessly and was attempting to take advantage of the sponsorship scandal for her personal advantage. In response to questions from senior officials from the Privy Council, the respondent denied any involvement in the incidents referred to by Ms. Bédard. In a subsequent press release, the respondent publicly apologized to Ms. Bédard for his inappropriate comments. Three days later, the Minister of Transport informed the respondent that a decision would be taken later that day regarding his appointment. Although the respondent inquired about the nature of the decision and the reasons therefor, no further information was given. Later that day, the respondent was informed that his appointment was terminated and he received the Order in Council confirming this. That same day, the government issued a press release announcing the respondent’s departure from VIA Rail while the respondent filed his notice of application to set aside the Order in Council.
The Federal Court found that the government owed the respondent a minimal duty of procedural fairness which had not been met. The government was required to advise the respondent that his position was at risk and to inform him of the reasons for its dissatisfaction with him. The Court found that the respondent was unaware of his precarious position and the grounds for the government’s dissatisfaction until he read the government’s press release. The respondent was also never given an opportunity to respond to those grounds. The issue was what the content of the duty of procedural fairness was in those circumstances and whether, on the facts, that duty had been satisfied.
Held, the appeal should be dismissed.
The duty of procedural fairness, whatever its content, deals only with the process by which the government exercises its right to terminate his appointment and not with the substance of the decision itself. The right to be given reasons and the right to be heard do not create, by implication or otherwise, a right to be removed from office only for reasons which meet some standard of rationality. Furthermore, because the respondent’s revocation was clearly based upon an allegation of misconduct, that decision was subject to a higher standard of procedural fairness than a purely political decision. The duty of fairness is variable according to the circumstances. The appellant’s argument that, given the political nature of the respondent’s appointment, the duty of fairness was satisfied if the respondent knew or ought to have known that his office was at risk and why, was rejected. The person in a position of the respondent with actual knowledge is in a position to make appropriate representations to the decision maker. The person who has only constructive knowledge, i.e. the person who ought to know, is not in a position to be heard because that person has no present knowledge that he or she is at risk or why, even if, objectively, they ought to know. Procedural fairness requires actual knowledge of the pending threat and of the reasons for it; constructive knowledge will not do. The Federal Court correctly inferred from the evidence that the respondent was not aware that he was at risk of removal and the reasons therefor and did not commit any palpable and overriding error in doing so.
The Federal Court also did not reverse the onus of proof by requiring the appellant to show that the respondent did not know or was not confused as to the precariousness of his position after the newspaper article was published. The only burden of proof the appellant had to discharge was the one which he assumed, i.e. that the respondent either knew or ought to have known that his appointment was at risk.
Where the government, in the exercise of its statutory power to terminate the appointment of persons named to office at pleasure, proposes to act on the basis of a person’s misconduct, the duty of procedural fairness requires that, where that person does not know that his or her position is in jeopardy by reason of that misconduct, the person be informed of the possibility of removal and of the reasons for that removal and be given an opportunity to be heard.
statutes and regulations judicially
considered
Federal Courts Rules, SOR/98‑106, rr. 1 (as am. by SOR/2004‑283, s. 2), Tariff B (as am. idem, ss. 30, 31, 32), Column III.
Financial Administration Act, R.S.C., 1985, c. F‑11, ss. 104.1 (as am. by S.C. 2004, c. 16, s. 7), 105(5) (as am. by R.S.C., 1985 (4th Supp.), c. 1, s. 44, Sch. II, item 14(E)), (6).
Interpretation Act, R.S.C., 1985, c. I‑21, s. 24(1).
Order in Council P.C. 2001‑1294.
cases judicially considered
applied:
Knight v. Indian Head School Division No. 19, [1990] 1 S.C.R. 653; (1990), 69 D.L.R. (4th) 489; [1990] 3 W.W.R. 289; 83 Sask. R. 81; 43 Admin. L.R. 157; 30 c.c.e.l. 237; 90 CLLC 14,010; 106 N.R. 17; 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; Housen v. Nikolaisen, [2002] 2 S.C.R. 235; (2002), 211 D.L.R. (4th) 577; [2002] 7 W.W.R. 1; 219 Sask. R. 1; 10 C.C.L.T. (3d) 157; 30 M.P.L.R. (3d) 1; 286 N.R. 1; 2002 SCC 33.
referred to:
Moreau‑Bérubé v. New Brunswick (Judicial Council), [2002] 1 S.C.R. 249; (2002), 245 N.B.R. (2d) 201; 209 D.L.R. (4th) 1; 36 Admin. L.R. (3d) 1; 281 N.R. 201; 2002 SCC 11; State of South Australia (The) v. O’Shea (1987), 163 C.L.R. 378 (H.C. Aust.).
APPEAL from a Federal Court decision ((2005), 41 Admin. L.R. (4th) 247; 275 F.T.R. 108) that the respondent was owed a more robust duty of procedural fairness than proposed by the appellant and that this duty had not been satisfied. Appeal dismissed.
appearances:
Jacques Jeansonne and Alberto Martinez for appellant.
Suzanne Côté and Patrick Girard for respondent.
solicitors of record:
Deslauriers, Jeansonne s.e.n.c., Montréal, for appellant.
Stikeman Elliott LLP, Montréal, for respondent.
The following are the reasons for judgment rendered in English by
Pelletier J.A. :
INTRODUCTION
[1]On July 31, 2001, in the exercise of its power to appoint its candidates directly to high office, the government of the day appointed Jean Pelletier to the office of Chairman of the Board of Directors of VIA Rail Canada Inc., to serve at pleasure, (à titre amovible). On March 1, 2004, the government of the day, differently constituted, in the exercise of its right to remove him from office, terminated Mr. Pelletier’s appointment.
[2]Mr. Pelletier challenged the government’s termination of his appointment in Federal Court, where he met with success. The Attorney General conceded before Mr. Justice Simon Noël, the application Judge, that Mr. Pelletier was owed a duty of procedural fairness but contended that this duty was minimal and that it had been satisfied. In a decision reported at (2005), 41 Admin. L.R. (4th) 247, the application Judge found that Mr. Pelletier was owed a more robust duty of procedural fairness than proposed by the Attorney General, and that this duty had not been satisfied. The Attorney General now appeals from that decision.
[3]The issue in the appeal is therefore very circumscribed. It is not whether Mr. Pelletier was owed a duty of fairness at all, since that point was conceded. It is the content of that duty and whether, on the facts, the duty was satisfied. For the reasons which follow, I would dismiss the appeal.
THE FACTS
[4]Mr. Pelletier is the former Chief of Staff to former Prime Minister Chrétien. After his departure from political life, he was appointed, by Order in Council P.C. 2001‑1294, to the office of Chairman of the Board of Directors of VIA Rail. The appointment was at pleasure, for a term of five years commencing September 1, 2001. At that time, Ms. Myriam Bédard, once best known as an Olympic athlete, was an employee of VIA Rail, and had been so since January 2001. On February 13, 2004, she wrote to Prime Minister Martin, claiming to be a victim of the sponsorship scandal. In her letter, Ms. Bédard said that she had been forced to resign from VIA Rail in January 2002 after she submitted to management, at the request of Mr. Pelletier, a proposal which she had developed by which she claimed she could increase VIA Rail’s publicity by 35% while reducing its marketing budget from $12 million to $7 million. This is how she described her experience (appeal book, Vol. 1, page 81; translation contained in the Report of the independent inquiry officer—Michel G. Picher):
In a set up, they asked me to open my own business to run the project, then they sent me to Groupaction as a trainee and from there, on January 11, 2002, the heads of VIA Rail Canada forced me to hand in my resignation.
[5]Long after the events which gave rise to the termination of Mr. Pelletier’s appointment, Mr. Michel G. Picher, an independent inquiry officer, investigated Ms. Bédard’s allegations. On April 8, 2004, he concluded as follows (appeal book, Vol. 2, page 200) [reasons for judgment, at paragraph 8]:
The case at hand represents a tragedy of enormous proportions. Mr. Pelletier was a respected public figure, who was accused by Ms. Bédard in February of 2004 of being an instrument in her alleged forced resignation two years earlier, in January of 2002. This report must conclude that Mr. Pelletier had no involvement in Ms. Bédard’s departure from VIA Rail.
[6]On February 26, 2004, the allegations which Ms. Bédard made in her letter to Prime Minister Martin came to the attention of François Cardinal, a reporter for the Montréal daily newspaper, La Presse. He interviewed Ms. Bédard, who repeated her allegations and added others. Mr. Cardinal then requested an interview with Mr. Pelletier, who agreed to meet with him.
[7]In the course of the interview, as reported in Mr. Cardinal’s article which appeared the following day, February 27, 2004, Mr. Pelletier said that Ms. Bédard was lying shamelessly and that she was attempting to take advantage of the sponsorship scandal for her personal advantage. He was quoted as saying [translation] “I do not want to be mean. This is a poor girl who deserves pity, who doesn’t have a spouse, as far as I know. She is struggling as a single mother with economic responsibilities. I pity her, in the end.” See the application Judge’s reasons, at paragraph 13. The transcript of Mr. Pelletier’s interview was filed with the Court. (A.B., Vol. II, at page 302.)
[8]The government’s reaction was not long in coming. That same day, February 27, 2004, at 3:15 p.m., Mr. Alexander Himelfarb, the Clerk of the Privy Council, instructed Mr. Yves Côté and Mr. Wayne McCutcheon to telephone Mr. Pelletier for his comments about the Cardinal article. Mr. Côté is counsel to the Clerk of the Privy Council and Associate Secretary to the Cabinet, while Mr. McCutcheon is a senior official in the Privy Council Office. They called Mr. Pelletier’s office at approximately 3:45 p.m. Mr. Pelletier was not available to take their call but his assistant assured them that he would return their call promptly.
[9]At approximately 3:50 p.m., Mr. Pelletier called Mr. Côté and Mr. McCutcheon. Mr. Coté explained that they had called to get his explanation or comments with respect to the Cardinal article. Mr. Pelletier responded by making a number of points. He stated that he was not involved in any of the incidents referred to by Ms. Bédard involving VIA Rail. He indicated that the file was being reviewed and that senior VIA Rail officials, the Vice-President Marketing and the Chief Strategy Officer, would respond to Ms. Bédard’s allegations. According to Mr. Pelletier, a VIA Rail press release would be issued on Monday, March 1.
[10]As for the comments attributed to him in the Cardinal article, Mr. Pelletier admitted that they were inappropriate and that his personal press release to that effect would be issued imminently.
[11]Mr. Côté then asked Mr. Pelletier if he had anything to add. Mr. Pelletier responded that his press release would speak for itself and that he had nothing to add. On that note, the conversation ended.
[12]At approximately the same time, VIA Rail issued a press release in which Mr. Pelletier publicly apologized to Ms. Bédard. He acknowledged that his comments were inappropriate and he expressed his sincere regrets.
[13]Three days later, on Monday, March 1, at approximately 8:50 a.m., Mr. Pelletier received a telephone call from Mr. Tony Valeri, the Minister of Transport, and therefore the Minister responsible for VIA Rail. Mr. Valeri informed Mr. Pelletier that a decision would be taken later that day with respect to his appointment. Mr. Pelletier asked about the nature of the decision to be taken and the reasons for it, but Mr. Valeri would only say that he could say nothing more about it. At approximately 11:50 a.m., Mr. Valeri called again, this time to say that his appointment was to be terminated and that an Order in Council to that effect was being prepared. Later that same day, one Mark Reynolds from the Prime Minister’s office telephoned Mr. Pelletier twice. The first time, around noon, he informed Mr. Pelletier that he had been suspended until March 5 then, correcting himself, until March 15. He called back ten minutes later to inform Mr. Pelletier that the situation had evolved and he was no longer suspended, but terminated. At 3:00 p.m., Mr. Pelletier received a fax copy of a letter from Mr. Valeri to which was attached a copy of the Order in Council terminating his appointment.
[14]Later the same day, the government issued a press release announcing Mr. Pelletier’s departure from VIA Rail. The press release is reproduced below:
GOVERNMENT OF CANADA TERMINATES APPOINTMENT OF VIA CHAIRMAN
OTTAWA—On behalf of the Government of Canada, Transport Minister Tony Valeri today announced the termination of the appointment of Jean Pelletier as Chairman of the Board of Directors of VIA Rail Canada Inc.
The termination of the appointment of Mr. Pelletier is effective immediately.
“The comments made last week by Mr. Pelletier regarding Myriam Bédard were totally unacceptable,” said Prime Minister Paul Martin. “I asked people who had knowledge about possible wrongdoings to come forward. And when they do, I expect them to be treated fairly. This was clearly not the case. My government came to office with a commitment to change the way things work. The actions we are taking today reflect that commitment.”
Transport Minister Valeri said: “Last week I stated that the government would review the comments of the VIA Chairman and would take appropriate action. It is completely inappropriate for the chairman of a Crown corporation to make comments of this nature about someone identifying wrongdoing in the workplace.”
VIA Rail Canada Inc. is a federal Crown corporation wholly owned by the Government of Canada.
[15]I pause to note that this review of the facts, which are uncontested, is taken from Mr. Pelletier’s affidavit, filed by the respondent, and Mr. McCutcheon’s affidavit, filed by the appellant. Neither deponent was cross‑examined. Further, the Attorney General did not think it useful to file affidavits sworn by Messrs. Valeri, Himelfarb, Côté and Reynolds, nor did he provide any explanation as to the latter’s role in the Prime Minister’s Office.
[16]On March 1, 2004, Mr. Pelletier filed his notice of application to set aside the Order in Council terminating his appointment.
THE DECISION UNDER APPEAL
[17]The application Judge found that the government was bound to afford Mr. Pelletier a measure of procedural fairness. He found that the government was required to advise Mr. Pelletier that his position was at risk and to inform him of the reasons for its dissatisfaction with him. The application Judge concluded that the government did not meet this standard. Mr. Pelletier was unaware of his precarious position and of the grounds for the government’s dissatisfaction until he read the government’s March 1 press release. He was never given the opportunity to respond to those grounds. As a result, the application Judge set aside the Order in Council terminating Mr. Pelletier’s appointment and remitted the matter to the Governor in Council for reconsideration.
[18]The application Judge noted the Attorney General’s concession that Mr. Pelletier was entitled to procedural fairness. He then examined the jurisprudence in order to determine the content of that duty of fairness. He relied particularly on the decision of the Supreme Court in Knight v. Indian Head School Division No. 19, [1990] 1 S.C.R. 653 from which he concluded that the duty of fairness in the case of the dismissal of persons holding office at pleasure was minimal: the employer must tell the employee the reasons underlying the termination and give the latter an opportunity to be heard.
[19]The application Judge then considered whether, on the facts, this minimal duty of fairness had been satisfied. He found that Mr. Pelletier was not specifically told that disciplinary measures were pending until Mr. Valeri first called him on March 1, 2004. Then he took note of the Attorney General’s argument that no express notice was required—it was sufficient that Mr. Pelletier knew or ought to have known that his office was at risk. The application Judge then reviewed each of the authorities relied upon by the Attorney General and distinguished them from the case before him.
[20]The application Judge concluded that nothing in the evidence led to the conclusion that Mr. Pelletier knew that his office was at risk. Counsel for the Attorney General attempted to explain Mr. Côté’s failure to put Mr. Pelletier on notice by noting that the Governor in Council was the ultimate decision maker so that, at the time of his telephone conversation with Mr. Pelletier, Mr. Côté did not know what the Governor in Council would decide. This led the application Judge to ask how Mr. Pelletier could or should have known what the future held for him if Mr. Côté himself did not know.
[21]As for the right to be heard, the application Judge found that Mr. Pelletier had not been provided with the opportunity to be heard. The diffuse nature of his conversation with Messrs. Côté and McCutcheon as well as the absence of any comment to the effect that disciplinary measures were pending did not suggest that further explanations were required. The laconic nature of Mr. Valeri’s first intervention did not provide any opportunity for any kind of exculpatory narrative since there was no indication as to the nature of the decision under consideration nor of the reasons underlying it. As for Mr. Valeri’s second intervention, it was to announce that the decision had been taken so that the time for making representations had passed.
[22]In the end result, the application Judge concluded that while Mr. Pelletier was only entitled to the minimum standard of procedural fairness, he was not afforded even that meagre measure of fair play.
[23]Each of the parties raised, at the last minute, an argument which was not contained in their memorandum. The application Judge declined to deal with either of these arguments since, in each case, the opposite party was caught short by the new argument.
[24]Mr. Pelletier argued that since subsection 105(6) of the Financial Administration Act, R.S.C., 1985, c. F‑11 required the Governor in Council to consult with the Board of Directors of VIA Rail before appointing him to the office of Chairman of the Board, it followed that the Board must also be consulted before he was removed. Since this was not done, he said, his termination was unlawful and of no effect. Having regard to the conclusion to which I have come on the issue of procedural fairness, it is not necessary for me to deal with this argument.
[25]The Attorney General, on the other hand, argued that Mr. Pelletier could not be advised of the reasons for which action was taken or to be taken against him because Mr. Valeri was bound by Cabinet confidentiality. He was therefore not in a position to say more to Mr. Pelletier than he did. I will deal with this argument later in these reasons.
ANALYSIS
The Attorney General’s arguments
[26]The Attorney General’s attack on the application Judge’s decision can be summarized as follows.
[27]The Attorney General’s primary argument is that Mr. Pelletier is owed a lesser duty of procedural fairness than that set out in Knight, the standard which was accepted by the application Judge. The Attorney General accepts that Knight requires him to concede that Mr. Pelletier is owed a degree of procedural fairness because the power to remove Mr. Pelletier from office is a statutory power: see Knight, at page 675. That statutory power is found in the combination of subsection 105(5) [as am. by R.S.C., 1985 (4th Supp.), c. 1, s. 44, Sch. II, item 14(E)] of the Financial Administration Act, and subsection 24(1) of the Interpretation Act [R.S.C., 1985, c. I-21] both of which are reproduced below.
Financial Administration Act [s. 104.1 (as am. by S.C. 2004, c. 15, s. 7)]
104.1 In this Division, “officer‑director”, in respect of a parent Crown corporation, means the chairperson and the chief executive officer of the corporation, by whatever name called.
. . .
105. . . .
(5) Each officer‑director of a parent Crown corporation shall be appointed by the Governor in Council to hold office during pleasure for such term as the Governor in Council considers appropriate.
Interpretation Act
24. (1) Words authorizing the appointment of a public officer to hold office during pleasure include, in the discretion of the authority in whom the power of appointment is vested, the power to
(a) terminate the appointment or remove or suspend the public officer;
(b) re‑appoint or reinstate the public officer; and
(c) appoint another person in the stead of, or to act in the stead of, the public officer.
[28]However, the Attorney General seeks to draw a distinction between Mr. Pelletier’s position and that of other persons holding appointments at pleasure. He says that the removal of Mr. Pelletier from office is a political matter and, as such, is subject to a different regime than those cases which resemble Knight. Having regard to the political nature of the process by which Mr. Pelletier was appointed and then removed, the Attorney General argues that the content of the duty of fairness is much reduced.
[29]Where the government seeks to replace an appointee holding office at pleasure for purely partisan political reasons, the Attorney General, while conceding that while some form of procedural fairness is mandated by the statutory nature of the power being exercised, argues that the content of that duty is even more limited than the duty imposed in Knight. On the other hand, where the government seeks to remove an office holder for misconduct, the Attorney General concedes that a higher standard of procedural fairness applies. However, even in those cases, the requirements of procedural fairness are tempered by constraints such as the fact that the government (i.e. Cabinet) generally acts through senior civil servants who may not know what the government proposes to do after it deliberates and who are bound by Cabinet confidentiality if they do know.
[30]These considerations led the Attorney General to argue that Mr. Pelletier was owed a duty of procedural fairness falling below that identified in Knight, specifically, that there was no need for an express notice of the grounds for the government’s dissatisfaction. In support of this position, the Attorney General relied upon selected passages from the decision of the Supreme Court in Moreau‑Bérubé v. New Brunswick (Judicial Council), [2002] 1 S.C.R. 249 and a decision of the High Court of Australia, The State of South Australia v. O’Shea (1987), 163 C.L.R. 378 (H.C.). It is sufficient, says the Attorney General, that the person knows or ought to know, by virtue of all of the surrounding circumstances, that their appointment is at risk.
[31]The Attorney General says the application Judge made three mistakes in deciding the matter as he did. The first is that he erred in his assessment of the evidence of the telephone conversation between Messrs. Côté and McCutcheon and Mr. Pelletier. Given Mr. Pelletier’s sophisticated understanding of the inner workings of government, and the circumstances surrounding the call itself, the application Judge ought to have found that Mr. Pelletier either knew, or ought to have known, at the time of his conversation with Messrs. Côté and McCutcheon that his office was at risk. Had the application Judge drawn the proper conclusion as to Mr. Pelletier’s state of mind and, had he given effect to the fact that Mr. Pelletier was asked if he had anything else to say, the application Judge would have concluded that Mr. Pelletier was aware of the reasons for the government’s dissatisfaction with him and was given an opportunity to be heard.
[32]The Attorney General’s second argument is that the application Judge erred when he held that it was not appropriate for him to speculate as to Mr. Pelletier’s state of mind. Given the nature of the argument made by the Attorney General, the application Judge was bound to decide whether Mr. Pelletier knew or ought to have known that his position was at risk. By failing to do so, the application Judge essentially failed to exercise his jurisdiction.
[33]The Attorney General’s third argument bears on the standard of proof. He alleges that the application Judge reversed the onus of proof by requiring the Attorney General to show that Mr. Pelletier did not know or was not confused as to the precariousness of his position in the period following the publication of the Cardinal article. The Attorney General argues that it was for Mr. Pelletier to make the case that he was confused or uncertain since he is better placed to comment on his state of mind than is the Attorney General.
Analysis of the Attorney General’s arguments
[34]As a preliminary matter, it is important to remember that the issue in this case is not whether the government was entitled to put an end to Mr. Pelletier’s appointment. Mr. Pelletier held his office at pleasure; the government was entitled to remove him at any time for any reason. The duty of procedural fairness, whatever its content, deals only with the process by which the government exercises its right to terminate his appointment and not with the substance of the decision itself. The right to be given reasons and the right to be heard do not create, by implication or otherwise, a right to be removed from office only for reasons which meet some standard of rationality: see Knight, at pages 674-675:
The justification for granting to the holder of an office at pleasure the right to procedural fairness is that, whether or not just cause is necessary to terminate the employment, fairness dictates that the administrative body making the decision be cognizant of all relevant circumstances surrounding the employment and its termination (Nicholson, supra, at p. 328, per Laskin C.J.). One person capable of providing the administrative body with important insights into the situation is the office holder himself. As pointed out by Lord Reid in Malloch v. Aberdeen Corp., supra, at p. 1282: “The right of a man to be heard in his own defense is the most elementary protection of all . . . .” To grant such a right to the holder of an office at pleasure would not import into the termination decision the necessity to show just cause, but would only require the administrative body to give the office holder reasons for the dismissal and an opportunity to be heard.
. . .
The argument to the effect that, since the employer can dismiss his employee for unreasonable or capricious reasons, the giving of an opportunity to participate in the decision‑making would be meaningless, is unconvincing. In both the situation of an office held at pleasure and an office from which one can be dismissed only for cause, one of the purposes of the imposition on the administrative body of a duty to act fairly is the same, i.e., enabling the employee to try to change the employer’s mind about the dismissal. The value of such an opportunity should not be dependant on the grounds triggering the dismissal.
[35]To the extent that the Attorney General’s position is that a decision to revoke an appointment of one who serves at pleasure for misconduct is subject to a higher standard of procedural fairness than a purely political decision, the facts of this case call for the higher standard since the revocation of Mr. Pelletier’s appointment was clearly based upon an allegation of misconduct. The government’s press release leaves no doubt on that score.
[36]The question then becomes the content of that higher standard of procedural fairness. The Supreme Court’s decision in Knight established, and its subsequent decision in Baker v. Canada (Minister of Citizenship and Immigration), [1999] 2 S.C.R. 817 confirmed, that the duty of fairness is variable according to the circumstances.
[37]The Attorney General argues that, given the political nature of Mr. Pelletier’s appointment the duty of fairness was satisfied if, as the Attorney General alleges, he knew or ought to have known that his office was at risk and why.
[38]With respect, the argument is one of form over substance in that the purpose of express notice is to ensure that those at risk are aware of the jeopardy they face and the reasons for that jeopardy. Nothing in Knight would support the conclusion that a person who was fully aware of the risk of removal and of the grounds of disapproval could nonetheless establish a violation of procedural fairness from the mere fact that formal express notice had not been given.
[39]It is one thing to say that the duty of fairness to a person in the position of Mr. Pelletier is satisfied when that person knows, even in the absence of express notice, on the basis of the surrounding circumstances, that his or her office is at risk and the reasons for which it is. It is quite another thing to say that the duty of procedural fairness to that person is satisfied when, absent express notice, they ought to know, on the basis of the surrounding circumstances, that his or her appointment is at risk and the reasons why. The difference lies in the fact that the person with actual knowledge is in a position to make appropriate representations to the decision maker. The person who has only constructive knowledge, i.e. the person who ought to know, is not in a position to be heard because that person has no present knowledge that he or she is at risk or why, even if, objectively, they ought to know. One can hardly impose on a person, in the name of procedural fairness, the obligation to anticipate trouble and to mount a defence before being attacked. Procedural fairness requires actual knowledge of the pending threat and of the reasons for it; constructive knowledge will not do. Consequently, the issue in this case is whether Mr. Pelletier actually knew, notwithstanding the absence of express notice, that his position was at risk and why it was at risk.
[40]The Attorney General attempted to bolster his argument by arguing that express notice was not only not required but not possible because of the constraints under which the power to remove Mr. Pelletier from office was exercised. He argued that Messrs. Côté and McCutcheon could not provide Mr. Pelletier with more information than they did because they were bound by Cabinet confidentiality, as was Mr. Valeri. This argument is spurious. Cabinet confidentiality did not prevent the issuance of a press release in which the government justified its removal of Mr. Pelletier from office. If it was appropriate to make such an announcement to the public at large after terminating Mr. Pelletier’s appointment, it was surely appropriate to raise the matter squarely with Mr. Pelletier prior to doing so.
[41]It does not assist the Attorney General that he chose not to file affidavits from Mr. Côté, Mr. Himelfarb, Mr. Valeri or Mr. Reynolds. If the constraints alleged by the Attorney General were truly a factor in the conduct of these gentlemen, then it was easy enough to have them say so under oath. Argument and speculation are no substitute for evidence.
[42]This leads to the next issue which is the application Judge’s purported failure to speculate as to Mr. Pelletier’s state of mind. The Attorney General says that the question of Mr. Pelletier’s knowledge of the situation is the key issue in the litigation and that the application Judge was bound to decide it. It is obvious that the application Judge did decide this question, in that he concluded that Mr. Pelletier did not know of the reasons for his removal until after the fact: see paragraph 94 of his reasons. The issue is not so much what he decided but how he decided it. The Judge’s comment that he should limit himself to the facts and not speculate as to Mr. Pelletier’s state of mind suggests to the Attorney General that the application Judge simply refused to consider the evidence which would have established Mr. Pelletier’s state of mind.
[43]Mr. Pelletier was well aware of the government’s first area of concern—the sponsorship scandal. He had, however, received Mr. Himelfarb’s written assurance on February 26, 2004 that the government had announced no measures to be taken with respect to his situation, in spite of a National Post story about rumours to that effect. These assurances may have comforted Mr. Pelletier somewhat prior to the appearance of the Cardinal article. After its publication, the issue was a live one once more.
[44]As for the government’s second area of concern—Mr. Pelletier’s comments with respect to Ms. Bédard—the application Judge’s review of the evidence led him to conclude that Mr. Pelletier was never told that this incident put his appointment at risk. Whether Mr. Pelletier knew or should have known that something was afoot is not the test; the question is whether Mr. Pelletier knew that his removal was under active consideration. The Judge inferred from the evidence that Mr. Pelletier was not aware that he was at risk of removal and the reasons why he was at such risk.
[45]Given that Mr. Pelletier swore in his affidavit that he first learned of the reasons for his removal from office when he read the government’s press release, it is significant that the Attorney General chose not to cross‑ examine him on his affidavit. The Attorney General had the means to test his theory that Mr. Pelletier knew that his office was at risk prior to its revocation, but in doing so he ran the risk that Mr. Pelletier’s evidence would not support his theory. Having declined to run that risk, the Attorney General cannot credibly ask the application Judge to draw a conclusion which he himself was not sure Mr. Pelletier’s evidence would support.
[46]The Attorney General’s argument that the application Judge declined to inquire into Mr. Pelletier’s state of mind does not stand up to examination. The Judge drew the inference that Mr. Pelletier was not aware of the risk he faced. As pointed out by the Supreme Court in Housen v. Nikolaisen, [2002] 2 S.C.R. 235, at paragraph 23, inferences of fact drawn by a judge of first instance are entitled to the same deference as conclusions of fact:
We reiterate that it is not the role of appellate courts to second‑guess the weight to be assigned to the various items of evidence. If there is no palpable and overriding error with respect to the underlying facts that the trial judge relies on to draw the inference, then it is only where the inference‑drawing process itself is palpably in error that an appellate court can interfere with the factual conclusion. The appellate court is not free to interfere with a factual conclusion that it disagrees with where such disagreement stems from a difference of opinion over the weight to be assigned to the underlying facts. As we discuss below, it is our respectful view that our colleague’s finding that the trial judge erred by imputing knowledge of the hazard to the municipality in this case is an example of this type of impermissible interference with the factual inference drawn by the trial judge. [Underlining in original.]
[47]The Attorney General’s third argument, dealing with the shifting of the onus of proof is also doomed to failure. By choosing to argue that Mr. Pelletier either knew or ought to have known that his appointment was at risk, the Attorney General assumed the burden of proving the facts which would support his argument. The Attorney General’s evidence did not persuade the application Judge that he should draw the conclusion which he was asked to draw. The only burden of proof which the Attorney General had to discharge was the one which he assumed.
[48]Finally, given the issues related to the question of notice, little attention was devoted to the issue of the opportunity to be heard. The Attorney General attempted to argue that Mr. Pelletier could have exercised his right to be heard by speaking either to Messrs. Côté and McCutcheon, or Mr. Valeri, but it is clear that without notice of the jeopardy to which he was exposed, there was nothing for Mr. Pelletier to say.
CONCLUSION
[49]In light of the above, I conclude that where the government, in the exercise of its statutory power to terminate the appointment of persons named to office at pleasure, proposes to act on the basis of a person’s misconduct, the duty of procedural fairness requires that, where that person does not know that his or her position is in jeopardy by reason of that misconduct, the person be informed of the possibility of removal and of the reasons for that removal, and be given the opportunity to be heard. I have deliberately refrained from speaking of “disciplinary reasons” because it seems to me to be inappropriate to import into the context of the removal, by the executive branch of government, of persons holding office at pleasure, notions which are generally associated with wrongful dismissal in the context of an employer/employee relationship.
[50]In the circumstances, I would dismiss the appeal with costs to the respondent. Mr. Pelletier asked that he be awarded costs on a solicitor-and-client basis. Costs are not generally awarded on that basis unless “there has been reprehensible, scandalous or outrageous conduct on the part of one of the parties” (Baker, paragraph 77). No such conduct having been shown in this case, costs will be awarded on a party-and-party basis and will be assessed in column III of Tariff B [as am. by SOR/2004-283, ss. 30, 31, 32] of the Federal Courts Rules [SOR/98-106, r. 1 (as am. idem, s. 2)].
Décary J.A.: I agree.
Nadon J.A.: I agree.