When can a hearing which has commenced be reassigned to a new decision-maker or a decision-maker substituted to render a final decision? Several recent decisions have attempted to wrestle with these thorny issues.
In High-Crest Enterprises Limited v Canada, 2017 FCA 88, the Federal Court of Appeal had to decide whether the Chief Justice of the Tax Court of Canada had the power to remove a case from a presiding judge and assign it to another one. The Tax Court of Canada is a statutory court.
A judge of the Tax Court heard this case on Feb. 26, 2014 and reserved judgement.
Almost a year and four months later, on June 23, 2015, the Chief Justice summoned the parties to a conference call and informed them that: (1) the case had not been resolved in a timely, efficient and effective fashion; and (2) that he was removing the file from the presiding judge in order to have a judgement rendered as soon as possible. Counsel were informed that the decision would be rendered in one of two ways: (1) with the consent of the parties, the Chief Judge could assign the matter to a new judge, who would render a decision based upon the transcript of the hearing of the case, or (2) there would be a new trial before a new judge assigned by the Chief Justice.
The parties’ suggestion that the presiding judge be allowed more time was rejected, so they chose to have a new judge appointed. Based upon the transcript of the original hearing, the new judge dismissed High-Crest’s appeal. High-Crest then appealed this decision to the Federal Court of Appeal.
A majority of the Court of Appeal noted that while subsections 8(1) and (2) of the Courts of Administration Services Act, S.C. 2002, c. 8 and subsection 14(2) of the Tax Court of Canada Act, R.S.C. 1985, c. T-2, grant the Chief Justice the power to reassign judges to cases, this did not include the power to unilaterally remove a case from a judge who has heard the matter and was therefore seized of it unless that judge had died, was incapacitated, displayed a conflict of interest or had an apprehension of bias. The majority noted that allowing the Chief Justice to reassign cases after a judge was seized of it, conflicted with the principle that the person who decides a case must be the same person who hears the case. The majority held that the decision by the second judge was a nullity and referred the matter back to the original judge to render a decision.
As a result, the Federal Court of Appeal held that for a statutory court such as the Tax Court (and by necessary implication for statutory tribunals), absent clear authority derived from the court's governing legislation, the Chief Justice did not have the authority to reassign a case except when the judge is no longer able to continue with it due to a form of incapacity.
In dissent, Justice Stratas concluded that the Chief Justice’s power to reassign extended to situations beyond the death or incapacity of the original judge. He also argued that there was no language in the legislation limiting the Chief Justice’s powers, but that the poer to reassign should only be exercised after a careful consideration of all factors such as: bad faith, administrative reasons, and whether the judge has begun writing his reasons. The dissent further noted unless it is impossible for a case to continue with the original judge (i.e., death or incapacity), procedural obligations are owed to the respective parties, as the decision to reassign can significantly affect their legal and practical interests.
A somewhat different result was reached by the Ontario Court of Appeal in Ontario (Securities Commission) v MRS Sciences Inc., 2017 ONCA 279, in which the court upheld a decision of the Ontario Securities Commission to bifurcate a proceeding into two separate hearings with different adjudicators.
In 2007, the OSC issued a notice of hearing against MRS Sciences Inc. and the individual appellants alleging various breaches of the Securities Act, R.S.O. 1990, c. S.5. At the merits hearing in 2009, the hearing panel found that the appellants had sold securities without being registered as dealers and traded securities without a prospectus. The adjudicators who presided over the merits hearing had been appointed to five-year terms with the OSC which expired in February, 2011. In May, 2011, the OSC informed the appellants that a different set of adjudicators would preside over their sanctions hearing. The appellants brought a preliminary motion challenging the jurisdiction of the differently constituted sanctions panel. The OSC dismissed the motion.
The panel ordered a 10-year trading ban, a 10-year director and officer ban, reprimands, administrative penalties and costs against the appellants. After an unsuccessful appeal to the Divisional Court, the appellants appealed to the Ontario Court of Appeal, arguing that pursuant to s. 4.3 of the Statutory Powers Procedures Act, R.S.O. 1990, c. S.22, panel members whose terms had expired before a decision had been rendered have their term continued for the purpose of participating in the decision. For this reason, they argued that the adjudicators who presided over the merits hearing should have presided over the sanctions hearing as well.
The court rejected that argument, finding that under the SPPA and the OSC’s Rules of Procedure, the terms “hearing” and “proceeding” were not synonymous. The OSC’s conclusion that the merits and sanctions hearings were separate, and therefore could be presided over by different adjudicators, was consistent with the SPPA, the Rules, and the legislative decision in the Securities Act to have panels that were small in number with a rotating composition of adjudicators.
The court also rejected the appellants’ argument that it was procedurally unfair to have a different set of adjudicators preside over the sanctions panel. The appellants were provided the opportunity to adduce evidence and to contest opposing evidence. The sanctions panel heard the appellants’ submissions on sanctions and costs, and the adjudicators had the benefit of reviewing transcripts from the merits panel decision. The court dismissed the appeal, finding that the OSC’s decision was reasonable and there was no breach of procedural fairness in having different adjudicators preside over the merits and sanctions hearings.
Take Aways
1. A tribunal or statutory court must review its governing legislation and rules to determine whether it has the authority to re-assign a matter to a new panel.
2. As noted by the majority in High-Crest Enterprises Limited, substituting a new decision-maker to render a decision, particularly when the original decision-maker who heard the matter continues to be available, should only be done in exceptional circumstances.
3. Where it is impossible for the original decision-maker to see a matter through in its entirety, procedural obligations should be considered to protect the legal and practical interests of the parties involved. As suggested by the dissent in High-Crest Enterprises, a decision on how to proceed in such circumstances should not be made lightly and the problem affecting the decision maker, should be disclosed to the parties, reviewed with them including the considerations for and against reassignment or substitution, and submissions should be invited on whether reassignment or substitution should take place.
4. While the Ontario Court of Appeal in MRS Sciences appropriately undertook an individual analysis of the structure and legislative powers of the specific administrative body in question, consideration still needs to be given to procedural fairness concerns that result from bifurcating components of a proceeding amongst different adjudicators.
Christopher Wirth is a partner and Alex Smith and Maneet Sadhra are students-at-law at Keel Cottrelle LLP