Nfld. Tel. v. PUB (1992), 95 Nfld. & P.E.I.R. 271 (SCC);
301 A.P.R. 271
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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Newfoundland Telephone Company Limited (appellant) v. Board of Commissioners of Public Utilities (respondent)
(No. 22060)
Indexed As: Newfoundland Telephone Co. Ltd. v. Board of Commissioners of Public Utilities (Nfld.)
Supreme Court of Canada
La Forest, L’Heureux-Dubé, Sopinka, Gonthier, Cory, McLachlin and Iacobucci, JJ.
March 5, 1992.
Summary:
The Board of Commissioners of Public Utilities ordered a financial analysis of Newfoundland Telephone’s accounts for the years 1981 to 1987. The confidential report was leaked to the media and generated considerable comment. One of the Commissioners was reported as questioning the propriety of Newfoundland Telephone charging certain salary and pension expenses as operating costs. At the hearing, Newfoundland Telephone applied to have the Commissioner who spoke to the media removed from the panel on the ground of bias. The Board stated that it lacked jurisdiction to deal with the issue of bias and proceeded with the hearing. During the hearing, the offending Commissioner continued to make comments in the media that were adverse to Newfoundland Telephone. In the end, the Board found that certain pension expenses were wrongfully charged as operating costs and ordered them refunded. Newfoundland Telephone appealed the decision on the grounds that the Board erred in law when it ruled that it lacked jurisdiction to deal with the issue of bias; that there was a reasonable apprehension of bias and because the Board lacked jurisdiction to order a refund.
The Newfoundland Court of Appeal, in a decision reported at 83 Nfld. & P.E.I.R. 257; 260 A.P.R. 257, dismissed the appeal. Newfoundland Telephone appealed.
The Supreme Court of Canada allowed the appeal and quashed the Board’s order.
Administrative Law – Topic 2088
Natural justice – Constitution of board or tribunal – Bias – Apprehension of – The Board of Commissioners of Public Utilities ordered an independent and detailed financial analysis of Newfoundland Telephone for the years 1981 to 1987 – The confidential report was leaked to the media – One of the Commissioners, in the media, during both the investigative and the hearing stages, claimed that Newfoundland Telephone, a regulated utility, wrongfully charged salaries and pension costs as operating expenses – During the subsequent hearings, Newfoundland Telephone submitted that the Commissioner should be removed from the panel on the ground of bias – Nevertheless, the Commissioner remained on the panel – The Supreme Court of Canada quashed the Board’s decision on the ground that the Commissioner’s comments generated an apprehension of bias – See paragraph 39.
Administrative Law – Topic 2088
Natural justice – Constitution of board or tribunal – Bias – Apprehension of – The Supreme Court of Canada observed that boards and tribunals play an increasingly important role in our society and that the functions they fulfil are legion – Therefore, “[t]he composition of boards can, and often should, reflect all aspects of society” – The court observed that besides representatives of government and the community, advocates for the consumer or the ultimate user of the regulated product could, in appropriate cases, be members of a board – The court noted that many Boards would operate more effectively with representation from all segments of society and that there should not “be undue concern that a Board which draws its membership from a wide spectrum will act unfairly” – See paragraphs 17 to 21.
Administrative Law – Topic 2088
Natural justice – Constitution of board or tribunal – Bias – Apprehension of – A regulatory board investigated the financial accounts of a telephone utility – Later the board conducted a rate hearing – At both stages, one of the board’s members made comments in the media that were adverse to the utility – The Supreme Court of Canada discussed the issue of bias in regard to a board member – The court noted that at the investigative stage the “closed mind” test was the appropriate standard – However, once the hearing process commenced, a higher standard had to be applied because “[p]rocedural fairness then required the board members to conduct themselves so that there could be no reasonable apprehension of bias” – See paragraphs 30 to 40.
Administrative Law – Topic 2100
Natural justice – Constitution of board or tribunal – Practice and remedies – A telephone company submitted that a decision of a regulatory tribunal was invalid because of the bias of one of the tribunal’s members – The Supreme Court of Canada stated that it was impossible to have a fair hearing and procedural fairness once there was a reasonable apprehension of bias – Furthermore, the denial of the right to a fair hearing could not be remedied by the tribunal’s subsequent decision – “The damage created by apprehension of bias cannot be remedied. The hearing, and any subsequent order resulting from it, is void” – See paragraph 40.
Public Utilities – Topic 4643
Public utility commissions – Regulation – General principles – General duties of commissions – [See first
Administrative Law – Topic 2088
].
Cases Noticed:
Nicholson v. Haldimand-Norfolk Regional Board of Commissioners of Police, [1979] 1 S.C.R. 311; 23 N.R. 410; 88 D.L.R.(3d) 671, consd. [para. 21].
Martineau v. Matsqui Institution Disciplinary Board (No. 2), [1980] 1 S.C.R. 602; 30 N.R. 119; 50 C.C.C.(2d) 353; 106 D.L.R.(3d) 385, refd to. [para. 22].
Slizard v. Szasz, [1955] S.C.R. 3, consd. [para. 23].
Committee for Justice and Liberty v. National Energy Board, [1978] 1 S.C.R. 369; 9 N.R. 115; 68 D.L.R.(3d) 716, consd. [para. 24].
Old St. Boniface Residents Assn. Inc. v. Winnipeg (City) et al., [1990] 3 S.C.R. 1170; [1991] 2 W.W.R. 145; 116 N.R. 46; 69 Man.R.(2d) 134; 2 M.P.L.R.(2d) 217; 46 Admin. L.R. 161, consd. [para. 25].
Save Richmond Farmland Society et al. v. Richmond (Township) et al., [1990] 3 S.C.R. 1213; [1991] 2 W.W.R. 178; 116 N.R. 68; 75 D.L.R.(4th) 425; 52 B.C.L.R.(2d) 145; 2 M.P.L.R.(2d) 288; 46 Admin. L.R. 264, dist. [para. 26].
Cardinal and Oswald v. Kent Institution, Director of, [1985] 2 S.C.R. 643; 63 N.R. 353; 24 D.L.R.(4th) 44, consd. [para. 40].
Statutes Noticed:
Public Utilities Act, R.S.N. 1970, c. 322, sect. 5(1), sect. 5(8), sect. 14, sect. 15, sect. 79, sect. 83, sect. 85, sect. 86 [para. 30].
Authors and Works Noticed:
Janisch, Nfld. Light & Power Co. v. Public Utilities Commission (Bd.) (Case Comment) (1987), 25 Admin. L.R. 196, p. 198 [para. 28].
Counsel:
James R. Chalker, Q.C., and Evan J. Kipnis, for the appellant;
Chesley F. Crosbie, for the respondent.
Solicitors of Record:
Chalker, Green & Rowe, St. John’s, Newfoundland, for the appellant;
Kendell & Crosbie, St. John’s, Newfoundland, for the respondent.
This appeal was heard on November 7, 1991, by La Forest, L’Heureux-Dubé, Sopinka, Gonthier, Cory, McLachlin and Iacobucci, JJ., of the Supreme Court of Canada.
The decision of the court was delivered on March 5, 1992, by Cory, J., in both official languages.
