Vennat v. Canada (Attorney General), (2006) 299 F.T.R. 12 (FC)

• Judge: Noël, J.
• Court: Federal Court (Canada)
• Case Date: August 23, 2006
• Jurisdiction: Canada (Federal)
• Citations: (2006), 299 F.T.R. 12 (FC);2006 FC 1008

Vennat v. Can. (A.G.) (2006), 299 F.T.R. 12 (FC)

MLB headnote and full text

[French language version follows English language version]

[La version française vient à la suite de la version anglaise]

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Temp. Cite: [2006] F.T.R. TBEd. SE.014

Michel Vennat (demandeur) v. Procureur général du Canada (défendeur)

(T-611-04; 2006 CF 1008; 2006 FC 1008)

Indexed As: Vennat v. Canada (Attorney General)

Federal Court

Noël, J.

August 23, 2006.

Summary:

Beaudoin was President and Chief Executive Officer (CEO) of the Business Development Bank of Canada (BDC) from 1993 to 1999. When he left, a transaction providing for the payment of Beaudoin's pension was made between Beaudoin and the BDC. Vennat was appointed President and CEO of the BDC. Following difficulties relating to the performance of the transaction, Beaudoin obtained judgment in the Superior Court of Quebec. The judgment contained harsh remarks about the BDC and Vennat. The federal government expressed concerns about Vennat's appointment. Vennat obtained a meeting with the Minister of Industry and had eight days to prepare submissions on his behalf. The Governor in Council issued two orders in council, first suspending Vennat without pay and finally terminating his appointment. Vennat applied for judicial review. Both parties moved to strike parts of the affidavits and to remove certain evidence.

The Federal Court of Appeal allowed the motions in part. The court allowed the judicial review application, quashed the orders in council and remitted the matter to the Governor in Council for reconsideration.

Administrative Law - Topic 223

The hearing and decision - Right to be heard - Who is entitled to be heard - When Beaudoin left his position as President and Chief Executive Officer (CEO) of the Business Development Bank of Canada (BDC), a transaction providing for the payment of Beaudoin's pension was made between Beaudoin and the BDC - Following difficulties relating to the performance of the transaction, Beaudoin obtained judgment in the Superior Court of Quebec - The judgment contained harsh remarks about the BDC and Vennat, the new President and CEO - The federal government expressed concerns about Vennat's appointment - Vennat obtained a meeting with the Minister of Industry and had eight days to prepare submissions on his behalf - The Governor in Council issued two orders in council, first suspending Vennat without pay and finally terminating his appointment - Vennat applied for judicial review - The Federal Court allowed the application - Vennat's right to be heard was not truly observed - The meeting Vennat attended was only two hours long - In the absence of a personalized inquiry, Vennat could not have meaningfully responded to the Minister's reasons for dissatisfaction considering the complexity of the matter - The brief period of time Vennat had to prepare his submissions was relevant in assessing the quality of Vennat's right to respond - Finally, the Governor in Council applied the wrong standard when asking Vennat to rebut the presumption of facts found in the judgment - See paragraphs 197 to 212.

Administrative Law - Topic 225

The hearing and decision - Right to be heard - What constitutes not being heard - [See Administrative Law - Topic 223 ].

Administrative Law - Topic 262

The hearing and decision - Right to a hearing - When right exists - When Beaudoin left his position as President and Chief Executive Officer (CEO) of the Business Development Bank of Canada (BDC), a transaction providing for the payment of Beaudoin's pension was made between Beaudoin and the BDC - Following difficulties relating to the performance of the transaction, Beaudoin obtained judgment in the Superior Court of Quebec - The judgment contained harsh remarks about the BDC and Vennat, the new President and CEO - The federal government expressed concerns about Vennat's appointment - Vennat obtained a meeting with the Minister of Industry and had eight days to prepare submissions on his behalf - The Governor in Council issued two orders in council, first suspending Vennat without pay and finally terminating his appointment - Vennat applied for judicial review - The Federal Court allowed the application - Procedural fairness required that a personalized inquiry be conducted before proceeding with Vennat's removal, even if the judgment created a simple presumption of facts - The decision-maker should have allowed Vennat to present his evidence by affidavit, interviews or counter-evidence in the context of that personalized inquiry - Vennat could not, in less than eight days, review all of the relevant evidence in order to rebut the presumption - That time period was clearly insufficient - The fact that the position was a public office did not have the effect of compromising Vennat's right - The factual situation described in this case, and the type of investigation conducted, did not reflect a high standard of justice, considering the significant impact of the decision on Vennat's career and reputation - This was a breach of procedural fairness - See paragraphs 133 to 174.

Administrative Law - Topic 265

The hearing and decision - Right to a hearing - Persons entitled to a hearing - [See Administrative Law - Topic 262 ].

Administrative Law - Topic 547

The hearing and decision - Decisions of the tribunal - Reasons for decisions - When required - When Beaudoin left his position as President and Chief Executive Officer (CEO) of the Business Development Bank of Canada (BDC), a transaction providing for the payment of Beaudoin's pension was made between Beaudoin and the BDC - Following difficulties relating to the performance of the transaction, Beaudoin obtained judgment in the Superior Court of Quebec - The judgment contained harsh remarks about the BDC and Vennat, the new President and CEO - Following correspondence between Vennat and the Minister of Industry, the Governor in Council issued two orders in council, first suspending Vennat without pay and finally terminating his appointment - A letter advised Vennat that "[the Governor in Council] lost confidence in [Vennat] as President of the Business Development Bank of Canada and that [Vennat's] conduct in respect of the issues contemplated in the reasons of the decision in the matter of Beaudoin is incompatible with [his] continued appointment" - Vennat applied for judicial review - The Federal Court discussed the nature of the duty to act fairly - The court held that reasons for decision were necessary when terminating an appointment for cause, for two reasons - Firstly, the decision to remove the President and CEO was of very important significance to that person - It followed that this person was entitled to know the reasons with some precision - Secondly, the President and CEO was appointed to hold office during good behaviour - A cause for removal was necessary in such cases - See paragraphs 81 to 88.

Administrative Law - Topic 549

The hearing and decision - Decisions of the tribunal - Reasons for decisions - Sufficiency of - When Beaudoin left his position as President and Chief Executive Officer (CEO) of the Business Development Bank of Canada (BDC), a transaction providing for the payment of Beaudoin's pension was made between Beaudoin and the BDC - Following difficulties relating to the performance of the transaction, Beaudoin obtained judgment in the Superior Court of Quebec - The judgment contained harsh remarks about the BDC and Vennat, the new President and CEO - Following correspondence between Vennat and the Minister of Industry, the Governor in Council issued two orders in council, first suspending Vennat without pay and finally terminating his appointment - A letter advised Vennat that "[the Governor in Council] lost confidence in [Vennat] as President of the Business Development Bank of Canada and that [Vennat's] conduct in respect of the issues contemplated in the reasons of the decision in the matter of Beaudoin is incompatible with [his] continued appointment" - Vennat applied for judicial review - The Federal Court allowed the application - The Governor in Council had an obligation to give reasons, namely, the obligation to inform Vennat of the reasons for the removal while considering the position that he submitted - The reasons given to Vennat did not appear to fulfil that obligation - There was nothing in the dismissal order or in the letter which could be characterized as analysis or reasoning, and the reasons did not make any mention of Vennat's position - There was nothing other than findings in the Order in Council and the letter - There should have been at least some degree of reasoning or analysis - Vennat was not informed of the reasons for dismissing the written and oral arguments submitted - See paragraphs 92 to 95.

Administrative Law - Topic 2266

Natural justice - The duty of fairness - What constitutes procedural fairness - [See Administrative Law - Topic 262 ].

Administrative Law - Topic 2266

Natural justice - The duty of fairness - What constitutes procedural fairness - When Beaudoin left his position as President and Chief Executive Officer (CEO) of the Business Development Bank of Canada (BDC), a transaction providing for the payment of Beaudoin's pension was made between Beaudoin and the BDC - Following difficulties relating to the performance of the transaction, Beaudoin obtained judgment in the Superior Court of Quebec - The judgment contained harsh remarks about the BDC and Vennat, the new President and CEO - Consequently, the Governor in Council issued two orders in council, first suspending Vennat without pay and finally terminating his appointment - Vennat applied for judicial review - The Federal Court allowed the application - Even if the Governor in Council was not bound to a duty of impartiality in the context of an employer-employee relationship, she was nonetheless bound to an obligation of fair play and of transparency - The evidence indicated that these obligations were not observed and that the procedure followed was not consistent with the "high standard of justice"- Three elements showed that the Governor in Council had an inappropriate attitude, inconsistent with transparency and fair play - Firstly, it was Vennat that was demanding that the procedural safeguards be observed, while the Governor in Council should have taken it upon herself to offer these safeguards to Vennat and explain the decisional framework to him - Secondly, the rules of procedure were unknown by the person bound by them - This could hardly be qualified as transparent - Thirdly, several of Vennat's concerns went unanswered during the process - See paragraphs 185 to 190.

Administrative Law - Topic 2602

Natural justice - Evidence and proof - Burden of proof - When Beaudoin left his position as President and Chief Executive Officer (CEO) of the Business Development Bank of Canada (BDC), a transaction providing for the payment of Beaudoin's pension was made between Beaudoin and the BDC - Following difficulties relating to the performance of the transaction, Beaudoin obtained judgment in the Superior Court of Quebec - The judgment contained harsh remarks about the BDC and Vennat, the new President and CEO - Consequently, the Governor in Council issued two orders in council, first suspending Vennat without pay and finally terminating his appointment - Vennat applied for judicial review - The Federal Court allowed the application - Vennat's right to be heard was not truly observed - The Governor in Council required that Vennat establish that the remarks of the judge were fatally incorrect, tainted by fraud or dishonesty, or that he bring forth new evidence that had not previously been available to the judge - That burden was certainly not appropriate and was not known by Vennat - It was therefore not possible for Vennat to reverse the simple presumption of facts that rested on him as a result of the decision - See paragraphs 208 to 212.

Administrative Law - Topic 3345.1

Judicial review - General - Practice - Evidence (incl. new evidence) - When Beaudoin left his position as President and Chief Executive Officer (CEO) of the Business Development Bank of Canada (BDC), a transaction providing for the payment of Beaudoin's pension was made between Beaudoin and the BDC - Following difficulties relating to the performance of the transaction, Beaudoin obtained judgment in the Superior Court of Quebec - The judgment contained harsh remarks about the BDC and Vennat, the new President and CEO - Consequently, the Governor in Council issued two orders in council, first suspending Vennat without pay and finally terminating his appointment - Vennat applied for judicial review - The Attorney General moved for the removal of Désautels' (former Auditor General of Canada) affidavit as well as the removal of the paragraphs in Vennat's affidavit based on that evidence - The Federal Court allowed the motion - Generally, at the judicial review stage, only evidence relied on in the decision under review had to be considered - However, to be admitted on an exceptional basis, the evidence that was not available to the decision-maker had to serve to establish that there was a breach of procedural fairness, and not that the applicant was correct on the merits - The disputed evidence had no relevance to the issues of procedural fairness - It was intended to establish that Vennat should prevail on the merits and was not in the Governor in Council's possession during the suspension without pay process and Vennat's removal - Further, it contained proceedings associated with a remedy taken in the Superior Court of Québec, and not with this proceeding - The evidence had to be expunged from the record - See paragraphs 38 and 43 to 47.

Administrative Law - Topic 3345.1

Judicial review - General - Practice - Evidence (incl. new evidence) - When Beaudoin left his position as President and Chief Executive Officer (CEO) of the Business Development Bank of Canada (BDC), a transaction providing for the payment of Beaudoin's pension was made between Beaudoin and the BDC - Following difficulties relating to the performance of the transaction, Beaudoin obtained judgment in the Superior Court of Quebec - The judgment contained harsh remarks about the BDC and Vennat, the new President and CEO - Consequently, the Governor in Council issued two orders in council, first suspending Vennat without pay and finally terminating his appointment - Vennat applied for judicial review - The Attorney General moved to have certain paragraphs struck from Vennat's affidavit on the basis that they contained information that was not or could not have been before Governor in Council when the decisions were made - The Federal Court allowed the motion - See paragraphs 39, 48 and 49.

Administrative Law - Topic 3345.1

Judicial review - General - Practice - Evidence (incl. new evidence) - When Beaudoin left his position as President and Chief Executive Officer (CEO) of the Business Development Bank of Canada (BDC), a transaction providing for the payment of Beaudoin's pension was made between Beaudoin and the BDC - Following difficulties relating to the performance of the transaction, Beaudoin obtained judgment in the Superior Court of Quebec - The judgment contained harsh remarks about the BDC and Vennat, the new President and CEO - Consequently, the Governor in Council issued two orders in council, first suspending Vennat without pay and finally terminating his appointment - Vennat applied for judicial review - The Attorney General moved to have certain paragraphs struck from Vennat's affidavit on the basis that there were allegations of law, opinion or commentary regarding evidence that was self-explanatory - The Federal Court allowed the motion - Section 81(1) of the Federal Courts Rules provided that the contents of affidavits had to be confined to the facts - Further, an affidavit could not be used to present additional arguments by one of the parties - Otherwise, the parties could use affidavits to bypass s. 70(4), which provided that a memorandum of fact and law could not exceed 30 pages, unless otherwise ordered by the court - Accordingly, the elements that were opinion, allegations of law, or commentary had to be struck - See paragraphs 40 and 50.

Administrative Law - Topic 3345.1

Judicial review - General - Practice - Evidence (incl. new evidence) - When Beaudoin left his position as President and Chief Executive Officer (CEO) of the Business Development Bank of Canada (BDC), a transaction providing for the payment of Beaudoin's pension was made between Beaudoin and the BDC - Following difficulties relating to the performance of the transaction, Beaudoin obtained judgment in the Superior Court of Quebec - The judgment contained harsh remarks about the BDC and Vennat, the new President and CEO - Consequently, the Governor in Council issued two orders in council, first suspending Vennat without pay and finally terminating his appointment - Vennat applied for judicial review - The Attorney General moved to have paragraphs 83 to 244 struck in their entirety from Vennat's affidavit on the basis that they repeated Vennat's argument before the Governor in Council - The Federal Court refused to strike the paragraphs - The paragraphs did not necessarily repeat that which was submitted to the Governor in Council - They provided an explanation of the substance of the submissions in order to enlighten the court for the purposes of the judicial review - The paragraphs were of some use in understanding this matter, which was very complex and voluminous - See paragraphs 41 and 51.

Administrative Law - Topic 3345.1

Judicial review - General - Practice - Evidence (incl. new evidence) - When Beaudoin left his position as President and Chief Executive Officer (CEO) of the Business Development Bank of Canada (BDC), a transaction providing for the payment of Beaudoin's pension was made between Beaudoin and the BDC - Following difficulties relating to the performance of the transaction, Beaudoin obtained judgment in the Superior Court of Quebec - The judgment contained harsh remarks about the BDC and Vennat, the new President and CEO - Consequently, the Governor in Council issued two orders in council, first suspending Vennat without pay and finally terminating his appointment - Vennat applied for judicial review - Vennat moved to strike certain paragraphs of the Attorney General's reply record - Vennat asserted that the judgment was not enforceable against him and that the Attorney General could not use the facts referred to therein in his submissions - The Federal Court held that the Attorney General was fully entitled to base his arguments on the facts of the judgment - The judgment was sufficient to establish a simple presumption of the facts found therein, even if Vennat reserved the right to contest it within the inherent limits of the forum - Although the judgment was not enforceable against Vennat as such, it could legitimately be used by the employer for the purposes of an inquiry, provided that Vennat, having the appropriate tools, was afforded the opportunity to rebut the presumption - Further, the Attorney General could properly use the judgment to present his position - See paragraphs 52 and 58 to 61.

Administrative Law - Topic 3354.3

Judicial review - General - Practice - Application - Limitation re orders sought - When Beaudoin left his position as President and Chief Executive Officer (CEO) of the Business Development Bank of Canada (BDC), a transaction providing for the payment of Beaudoin's pension was made between Beaudoin and the BDC - Following difficulties relating to the performance of the transaction, Beaudoin obtained judgment in the Superior Court of Quebec - The judgment contained harsh remarks about the BDC and Vennat, the new President and CEO - Consequently, the Governor in Council issued two orders in council, first suspending Vennat without pay and finally terminating his appointment - Vennat applied for judicial review - Vennat moved, under s. 221 of the Federal Court Rules, to strike certain paragraphs of the Attorney General's reply record - The Federal Court affirmed that s. 221 did not apply in the context of an application for judicial review - However, in exceptional circumstances a judge could intervene on the basis of his inherent power, or apply s. 221 by analogy, relying on s. 4 - A judge could even strike out parts of a memorandum of fact and law if such a measure was deemed necessary - See paragraphs 52 to 56.

Crown - Topic 541

Orders-in-council - General principles - When Beaudoin left his position as President and Chief Executive Officer (CEO) of the Business Development Bank of Canada (BDC), a transaction providing for the payment of Beaudoin's pension was made between Beaudoin and the BDC - Following difficulties relating to the performance of the transaction, Beaudoin obtained judgment in the Superior Court of Quebec - The judgment contained harsh remarks about the BDC and Vennat, the new President and CEO - Consequently, the Governor in Council issued two orders in council, first suspending Vennat without pay and finally terminating his appointment - Vennat applied for judicial review - The Federal Court held that the process of adoption of Orders by the Governor in Council was very different than the process leading to a judicial decision - It was a non-judicial and non-formalistic procedure - Accordingly, the removal of the President and CEO of the BDC had to be effected in a framework that need not be judicial or formalistic - The Governor in Council was master of the procedure as a general rule - See paragraphs 77 and 78.

Crown - Topic 5127.1

Officials and employees - Appointment and employment - Appointment during good behaviour (incl. termination of) - [See Administrative Law - Topic 223, Administrative Law - Topic 262, Administrative Law - Topic 547, Administrative Law - Topic 549, second Administrative Law - Topic 2266 and Crown - Topic 541 ].

Crown - Topic 5127.1

Officials and employees - Appointment and employment - Appointment during good behaviour (incl. termination of) - The Federal Court discussed the concept of holding office during good behaviour in relation to specific procedural safeguards for the termination of the appointment - The court held that "the concept of holding office during good behaviour is not in itself enough to substantiate finding an automatic and clearly defined acknowledgement of specific procedural safeguards. That said, Parliament's use of the term: 'during good behaviour' is not insignificant. It is certainly an important indication of its intention to give the President and Chief Executive Officer of the BDC enhanced procedural safeguards. This becomes clear on analyzing the status of the BDC within the federal system and the purpose assigned to it" - See paragraphs 96 to 105.

Practice - Topic 2806

Curative provisions - For noncompliance with rules - [See Administrative Law - Topic 3354.3 ].

Cases Noticed:

Knight v. Board of Education of Indian Head School Division No. 19, [1990] 1 S.C.R. 653; 106 N.R. 17; 83 Sask.R. 81, consd. [para. 5].

Beaudoin v. Banque de développement du Canada, [2004] J.Q. No. 705 (S.C.), refd to. [para. 13].

Smith v. Minister of National Revenue (2001), 272 N.R. 174; 2001 FCA 86, refd to. [para. 43].

Chopra v. Canada (Treasury Board) et al. (1999), 168 F.T.R. 273 (T.D.), refd to. [para. 43].

McFadyen v. Canada (Attorney General) (2005), 341 N.R. 345; 2005 FCA 360, refd to. [para. 44].

Ontario Association of Architects v. Association of Architectural Technologists of Ontario, [2003] 1 F.C. 331; 291 N.R. 61 (F.C.A.), refd to. [para. 44].

Canada (Procureur général) v. Regroupement constitué de l'Association des professionnelles et des professionnels de la vidéo du Québec (APVQ) et al., [2003] N.R. Uned. 221; 2003 FCA 304, refd to. [para. 55].

Granville Shipping Co. v. Pegasus Lines Ltd. et al. (1994), 86 F.T.R. 77 (T.D.), refd to. [para. 55].

Pfeiffer v. Superintendent of Bankruptcy et al. (2004), 322 N.R. 62; 2004 FCA 192, refd to. [para. 55].

Canadian Broadcasting Corp. v. Taylor et al., [2001] F.T.R. Uned. 75 (T.D.), refd to. [para. 55].

Bull (David) Laboratories (Canada) Inc. v. Pharmacia Inc. et al., [1995] 1 F.C. 588; 176 N.R. 48 (F.C.A.), refd to. [para. 55].

Pharmacia Inc. et al. v. Canada (Minister of National Health and Welfare) - see Bull (David) Laboratories (Canada) Inc. v. Pharmacia Inc. et al.

Nicholson v. Haldimand-Norfolk Regional Board of Commissioners of Police and Ontario (Attorney General), [1979] 1 S.C.R. 311; 23 N.R. 410, refd to. [para. 71].

Baker v. Canada (Minister of Citizenship and Immigration), [1999] 2 S.C.R. 817; 243 N.R. 22, refd to. [para. 72].

R. v. Corporal R.P. Joseph, 2005 CM 41, refd to. [para. 98].

Kane v. University of British Columbia, [1980] 1 S.C.R. 1105; 31 N.R. 214, refd to. [para. 120].

Hill v. Church of Scientology of Toronto and Manning, [1995] 2 S.C.R. 1130; 184 N.R. 1; 84 O.A.C. 1, refd to. [para. 121].

Prud'homme v. Prud'homme, [2002] 4 S.C.R. 663; 297 N.R. 331; 2002 SCC 85, refd to. [para. 122].

Weatherill v. Canada (Attorney General) et al., [1999] 4 F.C. 107; 168 F.T.R. 161 (T.D.), refd to. [para. 130].

Toronto (City) et al. v. Canadian Union of Public Employees, Local 79 et al., [2003] 3 S.C.R. 77; 311 N.R. 201; 179 O.A.C. 291; 2003 SCC 63, dist. [para. 139].

Vennat v. Canada (Procureur général), [2005] J.Q. No. 3772 (S.C.), refd to. [para. 139].

Lawyers Title Insurance Corp. v. Michalakopoulos, [2004] J.Q. No. 10724 (S.C.), consd. [para. 141].

Wedge v. Canada (Attorney General), (1997), 133 F.T.R. 277 (T.D.), consd. [para. 149].

Compagnie pétrolière Impériale ltée v. Québec (Ministre de l'Environnement), [2003] 2 S.C.R. 624; 310 N.R. 343, refd to. [para. 182].

Cabiakman v. Industrielle-Alliance Compagnie d'Assurance sur la Vie, [2004] 3 S.C.R. 195; 325 N.R. 1, refd to. [para. 184].

Cardinal and Oswald v. Kent Institution (Director), [1985] 2 S.C.R. 643; 63 N.R. 353, refd to. [para. 192].

Nicholson v. Haldimand-Norfolk Regional Board of Commissioners of Police and Ontario (Attorney General), [1979] 1 S.C.R. 311; 23 N.R. 410, refd to. [para. 192].

Reglin v. Creston (Town), [2004] B.C.T.C. 790; 2004 BCSC 790, refd to. [para. 192].

Woodley v. Board of Education of Yellowknife District No. 1, [2000] N.W.T.J. No. 31; 2000 NWTSC 30, refd to. [para. 192].

Rice, P.C.J. v. New Brunswick, [2002] 1 S.C.R. 405; 282 N.R. 201; 245 N.B.R.(2d) 299; 636 A.P.R. 299; 2002 SCC 13, refd to. [para. 218].

Mackin v. New Brunswick (Minister of Justice) - see Rice, P.C.J. v. New Brunswick.

Authors and Works Noticed:

Garant, Patrice, Traité de Droit administratif (5th Ed. 2004), pp. 825 to 832 [para. 90].

Counsel:

Louis P. Bélanger, Patrick Girard and Nathalie Mercier-Filteau, for the applicant;

Martine Tremblay and Alexandre Brousseau-Wery, for the respondent.

Solicitors of Record:

Louis P. Bélanger, Patrick Girard and Nathalie Mercier-Filteau, for the applicant;

Martine Tremblay and Alexandre Brousseau-Wery, for the respondent;

Georges J. Pollack (Mr. Pollack was only present for half a day, the morning of the 27th), for the intervenor.

These motions and this application were heard on June 27 and 28 and July 4 and 5, 2006, at Montreal, Quebec, by Noël, J., of the Federal Court, who delivered the following judgment on August 23, 2006.