A-749-00
2002 FCA 121
Air Canada (Appellant)
v.
The Commissioner of Competition and I.M.P. Group Ltd (CanJet Airlines) (Respondents)
Indexed as: Air Canada v. Canada (Commissioner of Competition) (C.A.)
Court of Appeal, Richard C.J., Evans and Malone JJ.A. --Toronto, February 4; Ottawa, March 22, 2002.
Competition -- Competition Tribunal affirming, extending temporary order made by Commissioner of Competition under Competition Act, s. 104.1 -- Order prohibiting Air Canada from offering discount fares on certain routes operated by competitor -- Latter offering new low-fare air service in Canada -- Complaining to Competition Bureau about conduct of Air Canada in lowering fares -- Commissioner determining Air Canada's conduct anti-competitive, competitor likely to be eliminated as competitor on specific routes in absence of temporary order -- Tribunal relying on Competition Tribunal Act, s. 11(1) (authorizing it to hear s. 104.1(7) application and "any related matters") for jurisdiction -- Tribunal erred in law in examining legality of Commissioner's opinion Air Canada's discount fares constituting anti-competitive conduct act -- Competition Act, s. 104.1(7) permitting Tribunal to confirm temporary order if conditions in s. 104.1(1)(b) existed -- Expressly identifying aspects of temporary order Tribunal may review, not empowering Tribunal to review other aspects of order -- CTA, s. 11 identifying matters lone member can decide -- Not conferring powers Tribunal as normally constituted would not have -- Jurisdiction to review temporary restraining order limited by s. 104.1(7) to issue of harm.
Practice -- Mootness -- Appeal from decision of Competition Tribunal affirming, extending temporary order made by Commissioner of Competition under Competition Act, s. 104.1 -- Appeal moot as order subject of appeal expired more than year ago -- Court should nevertheless hear appeal -- Expiry of temporary order not removing adversarial relationship between parties to appeal -- Issues raised herein likely to arise in subsequent disputes between Air Canada, Commissioner -- Appeal of sufficient public interest to justify Court's hearing it, even though moot -- Appeal raising important questions about role played by Tribunal in reviewing exercise of Commissioner's powers.
Administrative Law -- Judicial Review -- Certiorari -- Competition Tribunal affirming, extending temporary order of Commissioner of Competition prohibiting Air Canada from selling certain fares on certain routes on ground Air Canada engaging in anti-competitive conduct, could result in elimination of competitor -- Air Canada can apply to Trial Division under Federal Court Act, s. 18.1 for review of temporary order based on abuse of power conferred on Commissioner by Parliament -- Subject to limited grounds on which Tribunal can review order under Competition Act, s. 104.1(7), strong privative clause in s. 104.1(11) purporting to exclude judicial review of other aspects of order -- Such provisions presumed not to preclude judicial review of exercise of statutory power -- Nothing in s. 104.1(11) avoiding application of presumption.
This was an appeal from a decision of the Competition Tribunal affirming and extending a temporary order made by the Commissioner of Competition under section 104.1 of the Competition Act. Subparagraph 104.1(1)(b)(ii) permits the Commissioner to make a temporary order prohibiting anti-competitive acts if the Commissioner considers that in the absence of a temporary order a competitor will suffer a significant loss of revenue. Under subsection 104.1(7) the Tribunal may confirm the temporary order if it is satisfied that the conditions in paragraph 104.1(1)(b) existed. Subsection 104.1(11) prohibits review in any court of temporary orders, except as provided in subsection 104.1(7). The order prohibited Air Canada from offering discount fares on certain routes operated by a competitor, CanJet Airlines. In April 2000, the respondent I.M.P. Group Ltd. announced the launch of CanJet Airlines which would offer a new low-fare air service in Canada. On September 1, 2000, Air Canada responded to CanJet's entry into the market by announcing reduced fares on some competing routes, including L14EASTS fares on three routes out of Halifax, Nova Scotia, and two out of Windsor, Ontario. A few days later, CanJet complained to the Competition Bureau about the conduct of Air Canada in lowering its fares. On October 12, 2000, the Commissioner issued a 20-day temporary order prohibiting Air Canada from selling L14EASTS fares "or similar fares" on the five routes out of Halifax and Windsor where CanJet was competing. The Commissioner was of the opinion that Air Canada had engaged in possible anti-competitive conduct and that, in the absence of a temporary order, CanJet was likely to be eliminated as a competitor on specific routes and would suffer other harm that could not be adequately remedied by the Tribunal. The Tribunal confirmed and varied the Commissioner's order by extending it until December 31, 2000 and deleting the words "any similar fares" because of their vagueness. The Tribunal held that, on a subsection 104.1(7) review, it was not confined to considering the issue of harm, because subsection 11(1) of the Competition Tribunal Act authorized it to hear and determine the subsection 104.1(7) application and "any related matters". According to the Tribunal, there was sufficient evidence before it to conclude that, at the time of the hearing, if no order were in force, Air Canada's fare reductions were likely to cause harm to CanJet, namely, a significant loss of revenue. Two main issues were raised: (1) whether the appeal was moot, and (2) whether the Competition Tribunal has jurisdiction under subsection 104.1(7) to consider whether the Commissioner has properly exercised the power under subsection 104.1(1) to prohibit the doing of "an act or thing that could in the opinion of the Commissioner constitute an anti-competitive act".
Held, the appeal should be dismissed.
(1) The appeal was moot since the order that is the subject of the appeal expired more than a year ago. There was no longer any live controversy between the parties about the validity of the temporary restraining order issued by the Commissioner against Air Canada. However, the criteria prescribed by the Supreme Court of Canada in Borowski v. Canada (Attorney General) indicated that the appeal should be heard for three reasons. First, the expiry of the temporary order did not remove the adversarial relationship between the parties. The issues raised herein are likely to arise in subsequent disputes between Air Canada and the Commissioner. Second, the relatively short duration of temporary restraining orders was likely to make it difficult for Air Canada to litigate in this Court the issues raised herein that have a significance beyond the facts of this case. Third, an appeal is of sufficient public interest to justify the Court's hearing it, even though it is moot. This appeal raised important questions about the role played by the Tribunal in reviewing the exercise of the Commissioner's powers. Air Canada's decision to exercise its right to seek a determination of the constitutional validity of the relevant provisions was in no way improper, and should not preclude the Court in its discretion from hearing and determining this appeal. The Court's discretion to determine a matter despite its mootness also enables it to restrict the issues that it will decide on an appeal to those that meet the Borowski criteria.
(2) The first matter to determine was whether the Tribunal had jurisdiction to scrutinize the Commissioner's opinion at all. Air Canada can apply to the Trial Division under Federal Court Act, section 18.1 for review of a temporary order based on abuse of power conferred on the Commissioner by Parliament. Subject to the limited grounds on which the Tribunal can review an order under subsection 104.1(7), the strong privative clause in subsection 104.1(11) purports to exclude judicial review of other aspects of the validity of an order. However, provisions of this kind are presumed not to preclude judicial review of the legal validity of the exercise of a statutory power. Nothing in subsection 104.1(11) avoids the application of the presumption. By expressly identifying the aspects of a temporary order that the Tribunal may review, namely the conditions set out in paragraph 104.1(1)(b), subsection 104.1(7) precludes the implication of some broader power in the Tribunal to review temporary orders issued by the Commissioner under subsection 104.1(1). The Tribunal stated that Parliament cannot have intended to bind Air Canada by orders issued without jurisdiction. But this overlooks the courts' traditional interpretation of preclusive clauses, including such strong clauses as that contained in subsection 104.1(11), which enables a person to seek relief in the Court from a manifest abuse of statutory power.
Competition Tribunal Act, subsection 11(1) identifies matters that the Chairman or a judicial member can hear and decide when sitting alone. It does not confer powers that the Tribunal as normally constituted would not have. Whether the Tribunal has this broad review jurisdiction when sitting with its regular quorum depends on the interpretation of subsection 8(1), which provides that on an application under Competition Act, Part VIII, the Tribunal may hear and determine "any matters related thereto". Subsection 104.1 is in Part VIII. General examination by the Tribunal of the validity of a temporary order goes beyond the limits defined therein by Parliament. Whether the Tribunal is sitting with its regular quorum or under subsection 11(1) of the Competition Tribunal Act, its jurisdiction to review a temporary restraining order is limited by subsection 104.1(7) to the issue of harm. A review of the validity of the order on other grounds is not a matter related to a subsection 104.1(7) application. Subsections 8(1) and 11(1) of the Competition Tribunal Act are an inadequate basis for concluding that Parliament intended, in effect, to confer on the Tribunal the full judicial review jurisdiction of the Federal Court. It is highly implausible that Parliament intended the words "any related matter" in subsection 11(1), a provision that is not limited to subsection 104.1(7) applications, to nullify the express and specific limits imposed by subsection 104.1(7) on the scope of the Tribunal's jurisdiction to review temporary orders issued under subsection 104.1(1). The Tribunal erred in law when it examined the legality of the Commissioner's opinion that Air Canada's discount fares could constitute anti-competitive conduct.
statutes and regulations judicially
considered
Bill C-23, An Act to amend the Competition Act and the Competition Tribunal Act, 1st Sess., 37th Parl., 2001, cl. 13.1.
| Competition Act, R.S.C., 1985, c. C-34 (as am. by R.S.C., 1985 (2nd Supp.), c. 19, s. 19), ss. 9(1) (as am. by S.C. 1999, c. 2, s. 37), 10(1)(a) (as am. by R.S.C., 1985 (2nd Supp.), c. 19, s. 23; S.C. 1999, c. 31, s. 45), 13 (as am. by R.S.C., 1985 (2nd Supp.), c. 19, s. 24), 79 (as am. idem, s. 45; S.C. 1990, c. 37, s. 31; 1999, c. 2, s. 37), 104 (as am. by R.S.C., 1985 (2nd Supp.), c. 19, s. 45; S.C. 1999, c. 2, s. 37), 104.1 (as enacted by S.C. 2000, c. 15, s. 15). |
| Competition Tribunal Act, R.S.C., 1985 (2nd Supp.), c. 19, s. 8(1) (as am. by S.C. 1999, c. 2, s. 41), 11(1) (as am. idem, s. 43; 2000, c. 15, s. 16). |
| 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. 341. |
cases judicially considered
applied:
Borowski v. Canada (Attorney General), [1989] 1 S.C.R. 342; (1989), 57 D.L.R. (4th) 231; [1989] 3 W.W.R. 97; 75 Sask. R. 82; 47 C.C.C. (3d) 1; 33 C.P.C. (2d) 105; 38 C.R.R. 232; 92 N.R. 110.
considered:
Chrysler Canada Ltd. v. Canada (Competition Tribunal), [1992] 2 S.C.R. 394; (1992), 92 D.L.R. (4th) 609; 42 C.P.R. (3d) 353; 138 N.R. 321.
referred to:
Roberts v. Canada, [2000] 3 C.N.L.R. 303; (1999), 247 N.R. 350; 27 R.P.R. (3d) 157 (F.C.A.).
APPEAL from a decision of the Competition Tribunal ((2000), 10 C.P.R. (4th) 195) affirming and extending a temporary order made by the Commissioner of Competition under section 104.1 of the Competition Act, which prohibited Air Canada from offering discount fares on certain routes operated by a competitor. Appeal dismissed on the ground of mootness, although the Tribunal erred in law by examining the legality of the Commissioner's decision.
appearances:
Katherine L. Kay and Eliot N. Kolers for appellant.
Donald J. Rennie, Melanie Aitken and Donna C. Blois for respondent Commissioner of Competition.
No one appearing for respondent I.M.P. Group Ltd.
solicitors of record:
Stikeman Elliott, Toronto, for appellant.
Deputy Attorney General of Canada for respondent Commissioner of competition.
Davies Ward Phillips & Vineberg LLP, Toronto, for respondent I.M.P. Group Ltd.
The following are the reasons for judgment rendered in English by
Evans J.A.:
A. INTRODUCTION
[1]This is an appeal from a decision of the Competition Tribunal dated December 7, 2000, and reported as Air Canada v. Canada (Commissioner of Competition) (2000), 10 C.P.R. (4th) 195. In this decision the Tribunal affirmed and extended a temporary order made by the Commissioner of Competition under section 104.1 [as enacted by S.C. 2000, c. 15, s. 15] of the Competition Act, R.S.C., 1985, c. C-34 (as amended by R.S.C., 1985 (2nd Supp. ), c. 19, s. 19). The order prohibited Air Canada from offering discount fares on certain routes operated by a competitor, CanJet Airlines, a new entrant in the domestic air transportation market. The temporary order was varied and extended by the Tribunal, and expired on December 31, 2000. CanJet is now out of business.
[2]This appeal concerns the interpretation of the Commissioner's statutory power to issue temporary orders and the Tribunal's role in reviewing them. In particular, Air Canada alleges that the Tribunal erred in law by failing to review on a standard of correctness the Commissioner's opinion that Air Canada's discount fares "could constitute an anti-competitive act". The Tribunal also committed a legal error, it is argued, when it concluded that the facts before it established that, without the temporary order, CanJet was [at paragraph 87] "likely [to] suffer a significant loss of revenue" as a result of Air Canada's discounted fares. Accordingly, Air Canada submits, the Tribunal's order should be set aside, since there was no legal basis for either the Commissioner's opinion that Air Canada's conduct could constitute an anti-competitive act, or the Tribunal's conclusion that, without the temporary restraining order, CanJet was likely to sustain a significant loss of revenue.
[3]The broader context of these proceedings is Air Canada's acquisition of the failing Canadian Airlines International Ltd. in the summer of 2000. Rather than allowing Canadian Airlines to become bankrupt, the Commissioner approved the merger, even though Air Canada would thereby dominate the domestic air service market. Parliament amended the Competition Act to deal specifically with the new reality of Air Canada's market dominance. These amendments included a provision empowering the Commissioner to issue a temporary restraining order against a domestic air carrier pending the completion of the investigation of an alleged abuse of market dominance. In addition, regulations were promulgated prescribing a code of conduct for Air Canada. The regulations were to be supplemented by guidelines from the Commissioner, which did not in fact appear until February 2001.
[4]The order in dispute in this case is the first to be issued by the Commissioner under section 104.1.
B. FACTUAL BACKGROUND
[5]Although complex issues of competition law underlie the principal proceeding against Air Canada arising from its discount fares, the facts relevant to this appeal can be stated quite shortly. In April 2000, I.M.P. Group Ltd. announced the launch of CanJet Airlines which would offer a new low-fare air service in Canada. It received permission from the Canada Transportation Agency to accept reservations for flights starting in September. Advance tickets were put on sale in July 2000 at prices well below the full economy fares that Air Canada was then offering on those routes. CanJet subsequently further reduced its fares in response to lower fares being offered by Royal Airlines, another discount air carrier.
[6]Air Canada responded on September 1, 2000, to CanJet's entry into the market by announcing reduced fares on some competing routes; those from which the present proceedings arise were the L14EASTS fares available on, among others, three routes out of Halifax, Nova Scotia, and two out of Windsor, Ontario. While the fares on these routes were comparable to those first announced by CanJet, they did not match those later offered by CanJet in response to Royal's fares.
[7]On September 7, 2000, two days after it started flying, CanJet complained to the Competition Bureau about the conduct of Air Canada in lowering its fares, and the Bureau started an investigation of the L14EASTS fares. In response to a request from the Bureau, Air Canada supplied information about its operations on the routes served by CanJet, including a profitability report for each of the routes in question.
[8]On September 27, 2000, the Bureau received an application from six residents of Canada pursuant to subsection 9(1) [as am. by S.C. 1999, c. 2, s. 37] for an inquiry into possible offences committed by Air Canada, including an allegation that it had engaged in anti-competitive conduct that was lessening competition contrary to section 79 [as am. by R.S.C., 1985 (2nd Supp.), c. 19, s. 45; S.C. 1990, c. 37, s. 31; 1999, c. 2, s. 37]. Next day, the Bureau converted its investigation of CanJet's complaint about the L14EASTS fares into a formal inquiry pursuant to paragraph 10(1)(a) [as am. by R.S.C., 1985 (2nd Supp.), c. 19, s. 23; S.C. 1999, c. 31, s. 45].
[9]On October 12, 2000, the Commissioner issued a 20-day temporary order prohibiting Air Canada from selling L14EASTS fares "or similar fares" on the five routes out of Halifax and Windsor where CanJet was competing. The order stated that the "Commissioner is of the opinion that Air Canada has engaged in conduct that could constitute anti-competitive conduct in that Air Canada reduced its fares to target CanJet on the restrained routes." Further, the Commissioner considered that, in the absence of a temporary order, "CanJet is likely to be eliminated as a competitor on specific routes and suffer other harm that cannot be adequately remedied by the Tribunal."
[10]On October 31, 2000, the Commissioner extended the order for another 30 days but, since CanJet was no longer operating the routes out of Windsor, he restricted the order to the three routes out of Halifax on which CanJet was still competing with Air Canada. On November 1, 2000, Air Canada filed with the Tribunal a notice of application under subsection 104.1(7) to review and set aside the Commissioner's temporary order. On November 16 and 17, 2000, Air Canada's application was heard by a judicial member of the Tribunal sitting alone, as is provided by the Competition Tribunal Act, R.S.C., 1985 (2nd Supp.), c. 19, subsection 11(1) [as am. by S.C. 1999, c. 2, s. 43; 2000, c. 15, s. 16].
C. THE TRIBUNAL'S DECISION
[11]In a decision dated November 24, 2000, the Tribunal confirmed and varied the Commissioner's order by extending it until December 31, 2000, and deleting from the order the words, "any similar fares", because of their vagueness. On December 7, 2000, the Tribunal issued detailed reasons for its decision, which run to some 90 pages in length.
[12]The Tribunal held, first, that on a subsection 104.1(7) review, it was not confined to considering the issue of harm, because subsection 11(1) of the Competition Tribunal Act authorized it also to hear and determine the subsection 104.1(7) application and "any related matters" [underlining added]. Hence, the Tribunal could determine challenges to the validity of a temporary order made on grounds unconnected with the issue of harm, the issue with which subsection 104.1(7) expressly required the Tribunal to deal.
[13]Second, the Tribunal held that, as part of its inquiry into the validity of the order, it could examine the basis of the Commissioner's opinion in light of the material before him when he made the order. However, given the preliminary stage of the Commissioner's investigation of the allegation of anti-competitive conduct, the temporary nature of the order, and the importance of maintaining the status quo pending the Commissioner's completion of the inquiry, Parliament did not intend the inquiry to be a de novo examination of the validity of the Commissioner's opinion. The Tribunal's order stated that the Tribunal had reviewed the Commissioner's opinion on a patent unreasonableness standard.
[14]As for the facts of the case before it, the Tribunal held that, even though the Commissioner had breached the Act by failing to state sufficient grounds for the order, there was enough evidence to support the Commissioner's opinion that Air Canada's reduction of the fares could constitute anti-competitive conduct. Moreover, in forming his opinion that Air Canada had engaged in anti-competitive conduct, the Commissioner was not required to have reached a definitive conclusion on what constitutes an "avoidable cost", an issue that had at that time not been detailed in guidelines. Finally, the Commissioner was under no statutory obligation to identify in the order any anti-competitive act.
[15]Third, turning to subparagraph 104.1(1)(b)(ii) the Tribunal considered de novo, and at length, the harm likely to be suffered by CanJet if a temporary restraining order were not granted. The Tribunal reached three conclusions on this issue: (a) "likely" is a synonym for probable and that the Commissioner and ultimately the Tribunal must be satisfied that, if no order were made, harm would occur on a balance of probabilities; (b) the temporary order could be upheld by the Tribunal if harm was likely either when the order was made or, if the Commissioner discharged the onus of proof, when the Tribunal reviewed it; and (c) while the evidence before the Commissioner was not sufficient to support his conclusion that harm to CanJet had been likely when he issued the order, there was sufficient evidence before the Tribunal enabling it to conclude that, at the time of the hearing, if no order were in force, Air Canada's fare reductions were likely to cause harm to CanJet, namely, a significant loss of revenue.
D. LEGISLATIVE FRAMEWORK
Competition Act, R.S.C., 1985, c. C-34
104.1 (1) The Commissioner may make a temporary order prohibiting a person operating a domestic service, as defined in subsection 55(1) of the Canada Transportation Act, from doing an act or a thing that could, in the opinion of the Commissioner, constitute an anti-competitive act or requiring the person to take the steps that the Commissioner considers necessary to prevent injury to competition or harm to another person if
(a) the Commissioner has commenced an inquiry under subsection 10(1) in regard to whether the person has engaged in conduct that is reviewable under section 79; and
(b) the Commissioner considers that in the absence of a temporary order
(i) injury to competition that cannot adequately be remedied by the Tribunal is likely to occur, or
(ii) a person is likely to be eliminated as a competitor, suffer a significant loss of market share, suffer a significant loss of revenue or suffer other harm that cannot be adequately remedied by the Tribunal.
(2) The Commissioner is not obliged to give notice to or receive representations from any person before making a temporary order.
(3) On making a temporary order, the Commissioner shall promptly give written notice of the order, together with the grounds for it, to every person against whom it was made or who is directly affected by it.
(4) Subject to subsections (5) and (6), a temporary order has effect for 20 days.
(5) The Commissioner may extend the 20-day period for one or two periods of 30 days each or may revoke a temporary order. The Commissioner shall promptly give written notice of the extension or revocation to every person to whom notice was given under subsection (3).
(6) If an application is made under subsection (7), the temporary order has effect until the Tribunal makes an order under that subsection.
(7) A person against whom the Commissioner has made a temporary order may, within the period referred to in subsection (4), apply to the Tribunal to have the temporary order varied or set aside and the Tribunal shall
(a) if it is satisfied that one or more of the conditions set out in paragraph (1)(b) existed or are likely to exist, make an order confirming the temporary order, with or without variation as the Tribunal considers necessary and sufficient to meet the circumstances, and fixing the effective period of its order for a maximum of 60 days after the day on which it is made; and
(b) if it is not satisfied that one or more of the conditions set out in paragraph (1)(b) existed or are likely to exist, make an order setting aside the temporary order.
. . .
(10) At the hearing of an application under subsection (7), the Tribunal shall provide the applicant, the Commissioner and any person directly affected by the temporary order with a full opportunity to present evidence and make representations before the Tribunal makes an order under that subsection.
(11) Except as provided for by subsection (7),
| (a) a temporary order made by the Commissioner shall not be questioned or reviewed in any court; and |
| (b) no order shall be made, process entered or proceedings taken in any court, whether by way of injunction, certiorari, mandamus, prohibition, quo warranto, declaratory judgment or otherwise, to question, review, prohibit or restrain the Commissioner in the exercise of the jurisdiction granted by this section. |
. . .
(14) When a temporary order is in effect, the Commissioner shall proceed as expeditiously as possible to complete the investigation arising out of the conduct in respect of which the temporary order was made.
(15) No action lies against Her Majesty in right of Canada, the Minister, the Commissioner, any Deputy Commissioner, any person employed in the public service of Canada or any person acting under the direction of the Commissioner for anything done or omitted to be done in good faith under this section. [Underlining added.]
Competition Tribunal Act, R.S.C., 1985 (2nd Supp.), c. 19 [s. 8(1) (as am. by S.C. 1999, c. 2, s. 41)]
8. (1) The Tribunal has jurisdiction to hear and dispose of all applications made under Part VII.1 or VIII of the Competition Act and any related matters.
. . .
11. (1) The Chairman of the Tribunal, sitting alone, or a judicial member designated by the Chairman, sitting alone, may hear and dispose of applications for interim orders under subsection 100(1) or 104(1), and applications under subsection 4.1(2) or (4) or 104.1(7), of the Competition Act and any related matters. [Underlining added.]
E. ISSUES AND ANALYSIS
| Issue 1 Mootness |
[16]In his response to the appellant, counsel for the Commissioner submitted that the Court should dismiss the appeal at the outset, on the ground that, since the order that is the subject of the appeal expired more than a year ago, the matter is moot. I agree that the appeal is moot. There is no longer any live controversy between the parties about the validity of the temporary restraining order issued by the Commissioner against Air Canada. That order has expired and no longer has any practical effect on Air Canada's right to charge the discounted fares to which the order related.
[17]However, counsel for Air Canada argued that the matter is not moot because the Commissioner may make another temporary order under section 104.1 against Air Canada with respect to Tango, its low-fare, "no frills" division. If the Tribunal is required in the future to review an order affecting Tango's operations, that review may raise some of the issues about section 104.1 that are in dispute in this appeal.
[18]In my opinion, this possibility cannot prevent the present appeal from being moot. However, it is a factor to be considered in the Court's exercise of its discretion to hear an appeal that is moot, in accordance with the criteria prescribed in Borowski v. Canada (Attorney General), [1989] 1 S.C.R. 342, at pages 358-365, and derived from the reasons why courts generally refuse to decide matters that are moot. In my opinion, these criteria indicate that the Court should hear this appeal.
[19]First, I am satisfied that the expiry of the temporary order did not remove the adversarial relationship between the parties to this appeal. The following observation by Sopinka J. in Borowski, supra (at page 363) is equally applicable to this case: "The appeal was fully argued with as much zeal and dedication on both sides as if the matter were not moot."
[20]Moreover, the issues raised in this appeal about the interpretation of the Commissioner's powers under section 104.1, and about the scope and intensity of the Tribunal's review of those orders, are likely to arise in subsequent disputes between Air Canada and the Commissioner, and to be hotly disputed. However, other issues raised by the appellant are restricted to the facts of this case, in particular whether the Tribunal erred when it concluded that there was sufficient evidence to justify a finding of probable harm of the kind described in paragraph 104.1(1)(b). The expiry of the order effectively ended any adversarial context with respect to those issues.
[21]Second, the relatively short duration of temporary restraining orders is likely to make it difficult for Air Canada to litigate in this Court the issues raised in the present appeal that have a significance beyond the facts of this case. They may well be "evasive of review" (Borowski, supra, at page 364). At present, temporary orders may last for no more than 20 days, although the Commissioner can extend them for another one or two 30-day periods, up to a maximum of 80 days in all. In addition, the Tribunal may extend an order for up to 60 days from the date when it confirmed the Commissioner's order.
[22]Assuming that it is possible to get a subsection 104.1(7) proceeding before the Tribunal within 80 days, as in fact happened in this case, it still may not be practicable for a party to have an appeal heard in this Court within 60 days of the Tribunal's decision, despite the Court's willingness to attempt to accommodate parties who request an expedited hearing. In this case, 13 months have elapsed between the expiry of the temporary order as extended by the Tribunal and the hearing of the appeal. Further, the Tribunal will not necessarily always exercise its discretion to extend an order, or to extend it for the statutory maximum period.
[23]Counsel for the Commissioner argues that the Court should also take into account Bill C-23, An Act to amend the Competition Act and the Competition Tribunal Act, clause 13.1 of which would add a new subsection (5.4) to section 104.1. This provision would empower the Tribunal to extend a temporary order "for such period as the Tribunal considers necessary to give the Commissioner a reasonable opportunity to receive and review the information" requested for the purpose of his inquiry. It is argued that this power will effectively remove any barrier to a party's ability to appeal a Tribunal decision before the expiry of a temporary order.
[24]In my opinion, Bill C-23 is an inadequate basis for concluding that there will be no practical impediment to litigating the issues raised in this appeal that are likely to arise in subsequent proceedings and to remain contentious. For one thing, when this appeal was heard, Bill C-23 had been passed in the House of Commons, but had not emerged from the Senate. Consequently, even if Bill C-23 is ultimately enacted, the proposed amendment to section 104.1 may not survive in its present form. Further, an expanded power to extend a temporary order will only assist a party seeking to appeal, if and when it is exercised.
[25]The third consideration relevant to the Court's exercise of its discretion is whether an appeal is of sufficient public interest to justify the Court's hearing it, even though it is moot. I am of the opinion that it is. The appeal raises important questions about the role played by the Tribunal in reviewing the exercise of the Commissioner's powers that should be settled sooner rather than later. The power to issue temporary orders is important both to the Commissioner's ability effectively to protect the public interest in competition among domestic air carriers, and to the interest of Air Canada in carrying on its business without undue hindrance and uncertainty about the ground rules within which it must operate. Moreover, the economic health of air transportation in Canada is a matter of considerable concern to millions of Canadians.
[26]Finally, counsel for the Commissioner submitted that Air Canada forfeited a favourable exercise of the Court's discretion to hear this appeal when it decided to challenge the constitutionality of section 104.1 in the Superior Court of Quebec, and to apply to the Tribunal for a review of the order only when the Court refused a stay of the temporary order pending the outcome of the constitutional case.
[27]I do not agree with this submission. Air Canada had a right to pursue a constitutional challenge to the temporary orders power and then, when it was refused a stay in that proceeding, to look to the Tribunal for more immediate relief, which it did just within the statutorily permitted time. In my opinion, Air Canada's decision to exercise its right to seek a determination of the constitutional validity of the relevant provisions was in no way improper, and should not preclude the Court in its discretion from hearing and determining this appeal.
[28]For all these reasons, I am of the opinion that the benefits of clarifying the law is a prudent use of judicial resources with respect to issues that are not confined to the particular facts of this appeal and to the evidence before the Tribunal. Conversely, issues that are confined to the facts of this case will not be decided in this appeal. In my opinion, the Court's discretion to determine a matter despite its mootness also enables it to restrict the issues that it will decide on an appeal to those that meet the Borowski, supra, criteria.
| Issue 2 Does the Competition Tribunal have jurisdiction in the course of conducting a review under subsection 104.1(7) to consider whether the Commissioner has properly exercised the power under subsection 104.1(1) to prohibit the doing of "an act or thing that could in the opinion of the Commissioner constitute an anti-competitive act"? |
[29]In her oral argument, counsel for Air Canada argued that the Tribunal erred in law when it found that it was open to the Commissioner to form the opinion that the L14EASTS fares on the routes in question could constitute anti-competitive conduct by Air Canada for the purpose of subsection 104.1(1). This attack had several elements, including the standard of review to be applied by the Tribunal to the Commissioner's opinion. Air Canada took the view that the Tribunal had been excessively deferential in its review of the Commissioner's opinion.
[30]In addition to disputing Air Canada's submission on the applicable standard of review, counsel for the Commissioner made the more fundamental objection that the Tribunal erred in law in considering any aspect of the order under review other than whether it was satisfied that harm of the kind described in paragraph 104.1(1)(b) had occurred or was likely to occur in the absence of a temporary order. In particular, the Tribunal had no jurisdiction to consider whether the Commissioner's opinion that Air Canada's reduced fares could constitute anti-competitive conduct.
[31]In both their written and oral submissions, the parties fully canvassed the scope of the issues that the Tribunal could consider under subsection 104.1(7). Indeed, in response to a question from the Bench, counsel for Air Canada expressly stated that she was inviting the Court to affirm that the Tribunal was correct to conclude that its inquiry was not limited to the issue of the harm that was likely to occur if a temporary order was not made.
[32]In my view, counsel was too late when she suggested at the very end of her reply that the Court could not consider this issue because the Commissioner had not made it the subject of a cross-appeal. In any event, a notice of cross-appeal is only required under rule 341 of the Federal Court Rules, 1998, SOR/98-106, "where the respondent seeks a different disposition of the order appealed from": see, for example, Roberts v. Canada, [2000] 3 C.N.L.R. 303 (F.C.A.), at paragraph 147.
[33]In the case at bar, the only reference to the scope of the Tribunal's power under subsection 104.1(7) occurs in the preamble to the Tribunal's order setting out the considerations on which it was made. The Tribunal's order itself, with which the Commissioner, of course, takes no issue, simply affirms, varies and extends in specified ways the Commissioner's order. Hence, no notice of cross-appeal was required for the Commissioner to object to the Tribunal's holding that, on a subsection 104.1(7) review, it could examine the basis of the Commissioner's opinion.
[34]Accordingly, before considering Air Canada's argument that the Tribunal erred in failing adequately to scrutinize the opinion formed by the Commissioner on whether the discount fares introduced by Air Canada could constitute anti-competitive conduct, I must determine whether the Tribunal had jurisdiction to scrutinize the Commissioner's opinion at all. If I conclude that it did not, it will not be necessary to decide whether the Tribunal erred in the manner in which it conducted the inquiry.
[35]As a backdrop to the question of what matters the Tribunal may consider in a subsection 104.1(7) review, counsel for both parties emphasized the very special nature of the powers conferred on the Commissioner by section 104.1. Thus, counsel for Air Canada stressed their draconian nature, noting in particular, that restraining orders are issued by the official conducting the investigation, without a prior opportunity for the airline concerned to be heard and without judicial oversight. In contrast, restraining orders authorized by subsection 104(1) are issued by the Tribunal.
[36]In these circumstances, she argued, and in view of the potentially serious economic impact that a restraining order could have on Air Canada's business, Parliament ought not be taken to have intended to preclude the Tribunal from ensuring that the statutory conditions precedent to the exercise of the Commissioner's power had been satisfied. An unreviewable statutory discretion that affects the interests of individuals offends the rule of law, a fundamental constitutional principle.
[37]On the other hand, counsel for the Commissioner emphasized the temporary nature of the orders and the strong privative clause shielding them from judicial review. Further, there was nothing surprising in the Commissioner's powers, since early intervention, speed and finality were essential in the situation prevailing in the air transportation industry in Canada. Without such a power, a fledgling airline might never, in both a literal and a figurative sense, properly get off the ground, thus frustrating the purpose of the statutory scheme to prevent the abuse of market position and the stifling of competition.
[38]Further, counsel for the Commissioner argued, the probing Tribunal review called for by Air Canada under subsection 104.1(7) is provided by subsection 104(1). Under this provision, the Tribunal may grant an interlocutory injunction after the Commissioner has completed his investigation and made an application to the Tribunal under section 79 for an order prohibiting anti-competitive conduct resulting in a lessening of competition. The effect of Air Canada's argument would tend to merge the powers conferred by sections 104 [as am. by R.S.C., 1985 (2nd Supp.), c. 19, s. 45; S.C. 1999, c. 2, s. 37] and 104.1, and effectively to read the latter out of the Act. In adding section 104.1 to the statutory scheme, Parliament recognized that, without a summary power to intervene very early in an investigation, the Commissioner could not adequately ensure competition in the air transportation market in Canada.
[39]Moreover, counsel for the Commissioner maintained, it was misleading for Air Canada to characterize the subsection 104.1(1) power as unfettered simply because the scope of the Tribunal's power was limited. Thus, counsel pointed to two statutory limits on the exercise of the Commissioner's power to issue a restraining order. First, on a subsection 104.1(7) review the Tribunal must determine de novo if any of the prescribed harms is likely to occur in the absence of a temporary order. Second, subsection 104.1(14) requires the Commissioner to complete as "expeditiously as possible" the investigation giving rise to the temporary order.
[40]In my opinion, the Commissioner's analysis of the statutory provisions is the more realistic and does not free from curial oversight his exercise of the power to issue a temporary restraining order. It would seem open to Air Canada to make an application to the Trial Division under section 18.1 [as enacted by S.C. 1990, c. 8, s. 5] of the Federal Court Act, R.S.C., 1985, c. F-7, to review a temporary order if it thought that the Commissioner was abusing the powers conferred on him by Parliament.
[41]Subject to the limited grounds on which the Tribunal can review an order under subsection 104.1(7), the strong privative clause in subsection 104.1(11) purports to exclude judicial review of other aspects of the validity of an order. However, provisions of this kind are presumed not to preclude the courts from reviewing the legal validity of an exercise of statutory power. I see nothing in the wording of subsection 104.1(11) that prevents this presumption from coming into play.
[42]On the other hand, the existence of the privative clause in a statutory scheme designed specifically for the administration of the Competition Act may indicate that the Court should show restraint in the exercise of its judicial review jurisdiction. However, that does not mean that the Court would be unable to intervene to prevent a manifest abuse by the Commissioner of his statutory authority.
[43]Accordingly, I do not approach the interpretation of the provisions relevant to determining the scope of the Tribunal's review powers under subsection 104.1(7) with the apocalyptic scenario in mind constructed by counsel for Air Canada. Instead, I remind myself that, although the Competition Tribunal is presided over, and in this case composed of, one of the specially designated judges of the Trial Division of the Federal Court, it is a statutory administrative body and has only such legal powers as are conferred on it by Parliament. In addition, as counsel for Air Canada conceded, in an appeal under section 13 [as am. by R.S.C., 1985 (2nd Supp.), c. 19, s. 24] of the Competition Act the Tribunal's interpretation of the provisions of the Act in dispute here is subject to review on a standard of correctness.
[44]Turning now to subsection 104.1(7) itself, I think that it is clear that, by expressly identifying the aspects of a temporary order that the Tribunal may review, namely, the conditions set out in paragraph 104.1(1)(b), the subsection does not empower the Tribunal to review other aspects of the order. Moreover, this provision surely lends itself to the maxim, expressio unius exclusio alterius, and thereby precludes the implication of some broader power in the Tribunal to review temporary orders issued by the Commissioner under subsection 104.1(1).
[45]In concluding that a broader power than that conferred by subsection 104.1(7) should be imputed to it, the Tribunal in effect adopted the rule of law argument advanced during this appeal by Air Canada. Thus, the Tribunal stated (supra, at paragraph 30):
It cannot be that Parliament intended to leave Air Canada bound by orders which were issued without jurisdiction. Any suggestion that the Commissioner cannot be required to obey the law in his dealings with Air Canada is unacceptable.
[46]I would not take issue with this sentiment. However, in my opinion, even if the Tribunal were restricted to reviewing an order on the ground identified in subsection 104.1(7), Air Canada would not be subject to the exercise of lawless caprice on the part of the Commissioner. As I have already indicated, the courts' traditional interpretation of preclusive clauses, including clauses as strong as that contained in subsection 104.1(11), enables a person to seek relief in the Court from a manifest abuse of statutory power, including a stay of the order pending the determination of its validity on an application for judicial review.
[47]However, the interpretation of administrative tribunals' powers of review is not subject to the same legal principles as those applicable to courts' judicial review jurisdiction, namely, that legislatures are presumed not to intend and ultimately are not constitutionally competent to preclude a review of the legality of administrative action that impinges on the rights or interests of individuals.
[48]Armed with what in my respectful view is the erroneous view that, on the Commissioner's interpretation of the scope of the Tribunal's power of review, Air Canada was legally at his mercy, the Tribunal found solace (supra, at paragraph 34) in subsection 11(1) of the Competition Tribunal Act. This provides that the Chairman of the Tribunal, or a judicial member designated by the Chairman, sitting alone, may hear and determine, among other things, applications under subsection 104.1(7) "and any related matters." The Tribunal concluded that these latter words enable the Tribunal to determine by reference to aspects of the order not included in paragraph 104.1(1)(b) whether an order issued by the Commissioner is statutorily authorized.
[49]In my respectful opinion, this subsection cannot support the weight placed upon it by the Tribunal. The purpose of subsection 11(1) of the Competition Tribunal Act seems simply to identify matters arising under the Competition Act that the Chairman of the Tribunal or another judicial member can hear and decide when sitting alone. Therefore, if the Tribunal, when normally constituted, does not have the power to review the validity of a temporary order on grounds not included in subsection 104.1(7), subsection 11(1) does not confer it when the Tribunal is constituted by the Chairman or another judicial member.
[50]Whether the Tribunal has this broad review jurisdiction when sitting with its regular quorum depends on the interpretation of subsection 8(1) of the Competition Tribunal Act. This provides that, on an application under Part VIII of the Competition Act, the Tribunal may also hear and determine "any matters related thereto." Subsection 104.1(1) is located in Part VIII. Therefore, the question is whether, for the purpose of subsection 8(1), the review of the validity of a temporary order on a ground not included in subsection 104.1(7) is a matter related to a subsection 104.1(7) application. If such an inquiry were a "related matter" within the meaning of subsection 8(1), then it, too, could well come within the decision-making powers delegated to the Chairman or another judicial member pursuant to subsection 11(1).
[51]Subsection 8(1) of the Competition Tribunal Act was considered by the Supreme Court of Canada in Chrysler Canada Ltd. v. Canada (Competition Tribunal), [1992] 2 S.C.R. 394. The issue in that case was whether the words "any matters related thereto" conferred jurisdiction on the Tribunal over civil contempt proceedings for breach of an order that it had made in a Part VIII application. Writing for a majority of the Court, Gonthier J. held that they did. He said (at paragraph 22) that the words, "any matters related thereto", "pertain to the applications, and not to the hearing and determination of the applications." He concluded as follows:
The jurisdiction of the Tribunal does not terminate upon the determination of an application, . . . . but it may encompass other matters related to the application, such as the enforcement of an order made pursuant to the application.
He rejected the argument that a matter was only "related" if it arose as an ancillary or incidental matter in the course of the Tribunal's hearing and determining a Part VIII application.
[52]In my opinion, however, Chrysler, supra, does not support the proposition that a general examination by the Tribunal of the validity of a temporary order is a matter related to the application under subsection 104.1(7). To conclude otherwise would in effect extend the scope of the Tribunal's review of an order beyond the limits defined by Parliament. There would have been little point in Parliament's defining in subsection 104.1(7) the scope of the Tribunal's review jurisdiction if it intended the words "any matter related thereto" in the secondary statute to free the Tribunal from the limits imposed by the provision in the principal legislation dealing specifically with this issue.
[53]In my opinion, therefore, whether the Tribunal is sitting with its regular quorum or under subsection 11(1), its jurisdiction to review a temporary restraining order is limited by subsection 104.1(7) to the issue of harm. A review of the validity of the order on other grounds is not a matter related to a subsection 104.1(7) application.
[54]Finally, it might be said that the review process would be more efficient if, rather than leaving some aspects of the legality of an order to be decided in a judicial review proceeding in the Federal Court, the Tribunal reviewed every aspect of the legality of temporary restraining orders, especially since the Tribunal is always chaired by and sometimes comprises a Federal Court judge.
[55]Whatever the merits of such a suggestion, a question on which I venture no opinion, subsections 8(1) and 11(1) are an inadequate basis in my view for concluding that Parliament intended, in effect, to confer on the Tribunal the full judicial review jurisdiction of the Federal Court. This would be the result of holding that the words "any related matter" expanded the scope of the Tribunal's review to include aspects of the validity of an order other than those clearly identified in subsection 104.1(7). It is highly implausible that Parliament intended the words "any related matter" in subsection 11(1), a provision that is not limited to subsection 104.1(7) applications, to nullify the express and specific limits imposed by subsection 104.1(7) on the scope of the Tribunal's jurisdiction to review temporary orders issued under subsection 104.1(1).
[56]Having thus concluded that the Tribunal erred in law when it examined the legality of the Commissioner's opinion that Air Canada's discount fares could constitute anti-competitive conduct, it is unnecessary to determine if the Tribunal adopted the appropriate standard of review when it decided that the order was not legally flawed.
| Issue 3 Did the Tribunal err when it concluded that, without the temporary order, CanJet was likely to suffer "a significant loss of revenue" within the meaning of subparagraph 104.1(1)(b)(ii)? |
[57]Counsel made two points here. First, in determining de novo that there was sufficient evidence of a likelihood of harm at the time of the hearing, the Tribunal applied the wrong standard of proof. The Tribunal should have asked itself whether harm of the prescribed kind was likely to occur on a balance of probability or, which is the same thing, whether the harm was more likely than not to occur. It was not always clear from the reasons of the Tribunal, counsel submitted, that this was the standard being applied.
[58]Counsel for the Commissioner agreed that the balance of probabilities is the applicable standard of proof. Seeing no reason to disagree with the parties on this issue, I need say no more about it. However, I would add that I do not agree with the suggestion made on behalf of Air Canada that the Tribunal's reasons indicate that it applied a lower standard of proof than a balance of probabilities.
[59]The second aspect of the harm issue raised in oral argument by counsel for Air Canada was that a loss of revenue could only be "significant" within the meaning of subparagraph 104.1(1)(b)(ii) if it was so large as virtually to spell the commercial death of the competitor. In the absence of any error of law by the Tribunal in its formulation of the meaning of the word "significant", whether the statutory standard is met in any given case has such a large factual element that this Court should not intervene on an appeal unless the Tribunal's conclusion was unreasonable.
[60]Whether any such error occurred here is not a question that is usefully pursued in the context of an appeal of an order that expired 13 months ago. It raises no question of law that will affect the rights of Air Canada in the future and therefore does not fall within the Borowski, supra, exception to the principle that the Court should not determine litigation that is moot.
[61]Nor would it serve any useful purpose for this Court to attempt to elaborate the meaning of "significant". The Commissioner and the Tribunal must make their assessments on the basis of the facts of each case, and having regard to the language of the statutory provision and its function in the legislative scheme. I would note only that, since the likely elimination of a competitor is one of the kinds of harm set out in paragraph 104.1(1)(b), it cannot be that harm is only "significant" within the meaning of that paragraph if it is so serious that the competitor is likely to be eliminated.
F. CONCLUSIONS
[62]For these reasons, I would dismiss the appeal with costs payable to the Commissioner by Air Canada.
Richard C.J.: I agree.
Malone J.A.: I agree.