File No: CT-2004-013 COMPETITION TRIBUNAL IN THE MATTER OF the Competition Act, R.S.C. 1985, c.C-34, as amended, and ss. 3 and 49 of the Competition Tribunal Rules, Can. Reg. SOR/94-290;
AND IN THE MATTER OF the acquisition by West Fraser Timber Co. Ltd. of Weldwood of Canada Limited;
AND IN THE MATTER OF an application under s. 106(2) of the Competition Act by Bums Lake Native Development Corporation, Lake Babine Nation, Bums Lake Band, and Nee Tahi Buhn Indian Band to rescind or vary the Consent Agreement between the Commissioner of Competition and West Fraser Timber Co. Ltd. and West Fraser Mills Ltd. filed and registered with the Competition Tribunal on December 7, 2004 under s. 105 of the Competition Act.
BETWEEN: BURNS LAKE NATIVE DEVELOPMENT CORPORATION, COUNCIL OF LAKE BABINE NATION AND EMMA PALMANTIER, ON HER OWN BEHALF AND ON BEHALF OF ALL MEMBERS OF LAKE BABINE NATION, COUNCIL OF BURNS LAKE BAND AND ROBERT CHARLIE, ON HIS OWN BEHALF AND ON BEHALF OF ALL MEMBERS OF BURNS LAKE BAND and COUNCIL OF NEE TAHI BUHN INDIAN BAND AND RAY MORRIS, ON HIS OWN BEHALF AND ON BEHALF OF ALL MEMBERS OF NEE TAHI BUHN INDIAN BAND
- and-
COMMISSIONER OF COMPETITION, WEST FRASER TIMBER CO. LTD. and WEST FRASER MILLS LTD. Respondents
MEMORANDUM OF ARGUMENT OF THE APPLICANTS OGILVY RENAULT LLP Barristers & Solicitors 200 Bay Street, Suite 3800 Royal Bank Plaza, South Tower Toronto, Ontario M5J 2Z4 Dany H. Assaf Orestes Pasparakis Tel: (4 16) 216-4072 Tel: (4 16) 216-4815 D. Michael Brown Tel: (416) 216-3962 Fax: (416) 216-3930 Solicitors for the Applicants
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Applicants
COMPETITION 1'RIBUNAL TRIBUNAL DE LA CONCURRENCE F ~ ~ I O L !e= 22 2005 D E V D I REGISTRAR • REGISTRAIRE T OTTAWA,ON l 00/71-i ,
- 2 -PART I - OVERVIEW 1. This motion is brought by the Applicants for an order striking out the notice of reference (the "Reference") filed by the Commissioner for Competition (the "Commissioner") on the basis that: (a) the reference procedure is not available to the Commissioner in this application; and (b) in any event, this Reference in particular is inappropriate.
2. Properly construed, the Commissioner's reference power enables her to seek direction from the Competition Tribunal (the "Tribunal") on questions of law, jurisdiction, practice and procedure in order to fulfil her duties as an administrator, regulator and decision maker.
3. The reference power is not, as the Commissioner suggests, a mechanism that can be used by the Commissioner as a litigant to determine disputed applications. Absent the consent of all parties, the issues raised in an application should be decided by the hearing of the application itself or by a properly constituted interlocutory motion within the application under the Competition Tribunal Rules.
4. The issues ratsed by the Applicants must be determined within the framework of the Application that has been commenced and not by the Reference served unilaterally by the Commissioner. To order otherwise would do injustice to the statutory scheme enacted by Parliament and would be grossly unfair to the Applicants. PART II - THE FACTS 5. On December 7, 2004, the Commissioner and West Fraser Mills Ltd. and West Fraser Timber Co. Ltd. ("West Fraser") entered into a consent agreement in connection with the Weldwood/West Fraser merger (the "Consent Agreement") which was filed with the Tribunal pursuant to section 105 of the Competition Act. Competition Act, R.S.C. 1985, c.C-34, as amended in 2002 ("Competition Act").
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- 3 -Consent Agreement among the Commissioner, West Fraser Timber Co. Ltd. and West Fraser Mills Ltd., dated December 7, 2005, Public Version.
6. The Consent Agreement provides, inter alia, for the divestiture of Weldwood/West Fraser's interest in Babine Forest Products Limited ("BFPL"). This forced divestiture will have devastating effects for the First Nations peoples of Bums Lake, including the Applicants. Amended Statement of Grounds and Material Facts of the Applicant at paras. 2, 40-45.
7. In February, 2005, the Applicants filed a Notice of Application asking to have certain terms of the Consent Agreement rescinded or varied under subsection 106(2) of the Competition Act. Notice of Application of Burns Lake Development Corporation et al., dated February 3, 2005.
Amended Notice of Application of Bums Lake Development Corporation et al., dated February 11, 2005.
8. On February 23, 2005, the Chairperson of the Tribunal "directed counsel to provide letters containing their views about whether, as a preliminary matter, the question of the Applicants' status as 'directly affected persons' under subsection 106(2) of the Competition Act should be considered on a reference with an agreed Statement of Facts". Letter from Justice Simpson, Chairperson of the Competition Tribunal ("Chairperson"), dated February 23, 2005.
9. On March 15, 2005, the Applicants and the Commissioner filed submissions with the Chairperson on the appropriateness of a reference. In particular:
(a) Counsel for the Commission proposed that a reference proceed in respect of certain issues; and
(b) Counsel for the Applicants stated that it would be inappropriate to proceed with any reference before the Tribunal.
Letters from Counsel to the Chairperson of the Competition Tribunal dated March 15, 2005.
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- 4 -10. On April 4, 2005, without leave of the Tribunal, the Commissioner unilaterally filed a Notice of Reference (the "Reference") with the Tribunal while the appropriateness of this procedural step was a matter before the Tribunal. Notice of Reference, dated April 4, 2005. 11. The Reference asks the Tribunal to consider several questions: I. (a) What is the nature and scope of the interest sufficient to satisfy the "directly affected" requirement for standing in subsection 106(2) of the Act?
(b) In particular, must an applicant under subsection 106(2) be "affected":
(i) in relation to competition; and (ii) in relation to its substantive rights and/or pecuniary interests? (c ) In particular, must an applicant under subsection 106(2) be affected "directly" in that the alleged effect must be:
( i) suffered (or threatened to be suffered) by the applicant exclusively as a consequence of the Consent Agreement, and not as a result of other factors, influences, or circumstances; and
(ii) imminent and real, and not hypothetical or speculative? (d) As to the application of subsection 106(2), have the Applicants, as grouped below, disclosed in their Notice of Application herein facts which, if proved, establish that they are "directly affected" for the purposes of subsection 106(2):
(i) Burns Lake Native Development Corporation, a body corporate established in 1974 (the "Corporation");
(ii) Counsel of Bums Lake Band, Council of Lake Babine Nation, Council of Nee Tahi Buhn Indian Band (the "Bands"); and
(iii)Robert Charlie, Emma Palmantier and Ray Morris (the "Chiefs")?
2. At the time a consent agreement is registered under section 105 of the Act, are the parties required to file evidence to substantiate that the merger or proposed merger is likely to substantially lessen or prevent competition without the remedial terms in the consent agreement? If so, is the absence of such filed evidence sufficient to support a finding that "the terms could not be the subject of an order of the Tribunal" as required to be established by an applicant under subsection I 06(2) of the Act?
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- 5 -3. In an application under subsection 106(2) of the Act to vary or rescind the terms of a consent agreement, is the Tribunal authorized, by the language "that the terms could not be the subject of an order of the Tribunal," to engage in a de novo review of whether the merger or proposed merger is likely to substantially lessen or prevent competition?
Notice of Reference paras. 1-3. 12. On April 18, 2005, at the direction of the Tribunal, the Commissioner filed its Response to the Notice of Application. Response of the Commissioner, dated April 18, 2005. PART III - ISSUES 13. The position of the Applicants is that: (a) the Commissioner is not entitled to bring a reference under section 124.2(2) of the Competition Act in this application; and
(b) in any event, this Reference has been improperly brought by the Commissioner.
PART IV-LAW The Proper Interpretation of the Reference Section 14. The reference power under subsection 124.2(2) of the Competition Act allows the Commissioner to seek the guidance of the Tribunal on questions of law, jurisdiction, practice and procedure: Reference by Commissioner - The Commissioner may, at any time, refer to the Tribunal for determination a question of law, jurisdiction, practice or procedure, in relation to the application or interpretation of Parts VII.1 to IX.
15. Subsection 124.2(2) is similar to the reference power granted to federal tribunals, boards and commissions under section 18.3 of the Federal Courts Act. In fact the scope of section 18.3 of the Federal Courts Act is identical to subsection 124.2 (2) of the Competition Act. Federal Court Act, R.S.C. 1985, c.F-7, as amended, and Competition Act.
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- 6 -16. The purpose of the reference power under subsection 18.3 of the Federal Courts Act is to provide assistance or direction to a board, tribunal or commission in its decision-making or administrative capacity. The reference power is limited to the referral of questions or issues that could otherwise be determined by the referring body itself. Martin Service Station Ltd. v. Canada (Minister of National Revenue), [1974) 1 F.C. 398 (C.A) at p. 399.
Air Canada v. Canada (Commissioner of Official Languages), [1997) F.C.J. No. 976 (T.D.) (Q.L.) at para. 13.2
Re Immigration Act, [1991) F.C.C. No. 1155 (F.C.A.) 17. The role of subsection 124.2(2) of the Competition Act is analogous to section 18.3 of the Federal Courts Act: it is to permit the Commissioner to seek direction from the Tribunal on matters relating to her administrative, regulatory and decision-making capacities under Parts VII. I to IX of the Competition Act.
18. Where the Commissioner herself is a party to a contested proceeding, however, subsection 124.2(2) cannot serve, as a method of determining the outcome of the proceeding on a preliminary or summary basis. As George Addy notes in his commentary on section 124.2: The Act has also been amended to allow the Tribunal to hear and decide references. . . . The Commissioner may also unilaterally refer a question of law, jurisdiction, practice or procedure relating to Parts VIl.1 to IX of the Act to the Tribunal. The Commissioner's ability to unilaterally refer questions to the Tribunal, however, does not include the right to refer questions relating to a particular case (i.e., questions of"mixed law and fact") .... [Emphasis added].
G. Addy et al. "Reform of the Tribunal Process" (Insight National Conference on Canada's Changing Competition Regime, The Old Mill, Toronto, February 26-27, 2003 at p.11)
19. To extend the Commissioner's reference power under subsection 124.2(2) to allow the Commissioner to seek the determination of issues in a pre-existing adversarial proceeding to which the Commissioner is a party, would be to give the Commissioner a power of reference that is entirely without precedent under Canadian law.
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- 7 -The Air Canada Case 20. In a recent case conference, reference was made to the Air Canada v. Commissioner of Competition as supportive of the Commissioner's position. It is not. The Air Canada case was not a reference as it was decided prior to the introduction of section 124.2. Moreover, the order (to determine certain preliminary issues prior to the hearing of the application) was expressly made on consent of the parties. Accordingly, to the extent the procedure in that case was akin to a reference it is analogous to the consent reference procedure under subsection 124.2(1) and not the Commissioner's unilateral reference power under subsection 124.2(2). Air Canada v. Commissioner of Competition, 2000 Comp. Trib. 26. W.P. McKeown, Q.C. "New practices and Procedures at the Competition Tribunal" (CBA Annual Fall Conference on Competition Law, Ottawa, Ontario, October 3 and 4, 2002).
The Reference is Unavailable 21. The Commissioner's interpretation of subsection 124.2(2) is contrary to: (a) the legislative scheme under both the Competition Act and the Competition Tribunal Act;
(b) the wording of section 124.2 of the Competition Act; and (c ) the Practice Direction promulgated by the Tribunal. 22. Moreover, the Commissioner's interpretation of subsection 124.2(2) should be rejected as it violates established principles of procedural fairness and the Canadian Bill ofR ights. The Legislative Scheme 23. The Competition Tribunal Act sets out the Tribunal's powers to hear disputes as a court of record.
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- 8 -Competition Tribunal Act, R.S.C. 1985, c.19 (2"d Supp.), as amended, ("Competition Tribunal Act") s. 9(1 ).
24. The Competition Tribunal Rules outline the procedure to be followed before the Tribunal. The Rules are not a complete code and are supplemented by Rule 72(1) (the "gap rule") and a practice direction. Competition Tribunal Rules, SOR/94-290 ("Competition Tribunal Rules"), Rule 72(1).
Practice Directions for the Competition Tribunal, August 30, 2002, as amended January 10, 2005 ("Practice Direction").
25. Under this statutory regime, there are procedures by which an application can be disposed of prior to a full hearing: (a) Subsection 9(4) of the Competition Tribunal Act, which allows the Tribunal to dispense with applications on a summary basis in accordance with any established rules on summary disposition; and (b) Rule 221 of the Federal Court Rules, in conjunction with the gap rule, which allows a party to bring a motion to strike all or portions of an application. (i) Summary Determination 26. Prior to the recent amendments, the Tribunal was unable to hear references and did not have the jurisdiction to grant summary judgment. Canada (Commissioner of Competition) v. P. V.I. International Inc., [2001) C.C.T.D. No. 14.
W.P. McKeown, Q.C., "New Practices and Procedures at the Competition Tribunal" (CBA Annual Fall Conference on Competition Law, Ottawa, Ontario, October 3 and 4, 2002)
27. Now, Section 9(4) of the Competition Tribunal Act provides: 9(4) Summary Dispositions- On a motion from a party to an application made under Part VII.I or VIII of the Competition Act, a judicial member may hear and determine the application in a summary way, in accordance with any rules on summary dispositions.
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- 9 -28. Section 9(5) provides that the Tribunal member can dismiss an Application in whole or in part ifhe or she determines that there is "no genuine basis" for the application: 9( 5) Decision - The judicial member may dismiss the application in whole or in part if the member finds that there is no genuine basis for it. The member may allow the application in whole or in part if satisfied that there is no genuine basis for the response to it.
29. Subsections 9(4) and 9(5) were added at the same time as subsection 124.2(2) in the same amending legislation. If the legislators had intended that the reference power be used by the Commissioner to dispose of applications summarily, there would have been no need for subsections 9(4) and 9(5).
(ii) Motion to Strike 30. It is now established that the Tribunal can hear motions to strike an application pursuant to Rule 221 of the Federal Court Rules. The Tribunal has recourse to the Rule 221 through the gap rule. Commissaire de la concurrence c. RONA Inc. 2005, Trib. concur. 9 ("Rona").
P. VJ International Inc. v. Canada (Commissioner of Competition), [2003] F.C.A. 83.
31. In Rona, also an application under section 106 of the Competition Act, the Commissioner recently sought to strike the Application under Rule 221 of the Federal Court Rules. The Commissioner asserted, and the Tribunal agreed, that recourse to Rule 221 of the Federal Court Rules was available through the gap rule. Rona, at paras. 27-29. (iii) The Role of the Reference Power 32. In light of these established procedures, there is no room for a reference to: (a) determine issues summarily. Subsections 9(4) and 9(5) of the Competition Tribunal Act perform this role; or
(b) function as a motion to strike. The existing case law and practice confirm that Rule 221 of the Federal Court Rules is operative.
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- 10 -33. The only remaining issue is whether the reference power is available to determine "questions of law" that arise within a proceeding. The better view is that any "questions of law" should be determined in accordance with Rule 220 of the Federal Court Rules. 34. It is preferable for Rule 220 to be used over the reference procedure to determine questions of law for several reasons:
(a) Rule 220 can be invoked by either party whereas subsection 124.2(2) is only available to the Commissioner. All parties should be able to raise issues of law. Indeed, that is the practice not only in the Federal Court but in every provincial superior court in Canada. Further, it would be unjust (and contrary to the Canadian Bill ofR ights as discussed below) to give such a power to one litigant and not the other;
(b) Rule 220 sets out a process for the hearing of the question of law and addresses the role of the Court, the filing of materials and the method of argument. The reference section, which was not intended for this purpose, is silent on these matters; and
(c) While the reference power is analogous to a hearing on a point oflaw, both are separate processes. To use the reference power to decide questions of law is to stretch the reference power beyond its traditional use in circumstances in which it is unnecessary to do so.
Novopharm Ltd. v. Wyeth Ltd., (1986) 26 D.L.R. (4 1 h) 80 (FCA). 35. Given that there are a number of procedural avenues available to litigants within an application to determine issues summarily, there is no room for the reference power to play this role for only one litigant in the midst of contested proceedings. The reference power should be restricted to its intended purpose of providing the Commissioner with access to direction from the Tribunal at times when it would be otherwise unavailable.
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- 11 -The Wording ofS ection 124.2 36. In bringing the Reference, the Commissioner relies on the phrase "at any time" contained in subsection 124.2(2). The suggestion is that the Commissioner is entitled "at any time" to bring a reference, even in the midst of a disputed application. This cannot be correct. 3 7. Subsection 124.2(2) must be read within the context of the section as a whole. In its proper context, the phrase "at any time" does not mean "without limitation" but rather that "at any time" an issue arises in respect of which the Commissioner needs direction, the Tribunal is available to provide the necessary direction. R. Sullivan, ed., Driedger on the Construction of Statutes, 3d ed. (London: Butterworths, 1994) at pp. 247-248.
38. Guidance for the proper scope of subsection 124.2(2) is found in subsection 124.2(1 ). Subsection 124.2(1) specifically applies to situations involving the Commissioner and another party. In those circumstances, a reference can only be brought on consent of both parties. 124.2(1) Reference if parties agree - The Commissioner and a person who is the subject of an inquiry under section 10 may by agreement refer to the Tribunal for determination any question oflaw, mixed law and fact, jurisdiction, practice or procedure, in relation to the application or interpretation of Part VII.I or VIII, whether or not an application has been made under Part VII.I or VIII.
39. The Commissioner's interpretation of subsection 124.2(2) conflicts with the plain language of subsection ( 1) . If the Commissioner can bring a reference "at any time", then the consent of the other party in subsection ( 1) would be unnecessary. 40. The phrase "at any time" must mean that the Commissioner may seek direction of the Tribunal on a point of law, jurisdiction, practice or procedure, at any time, in the absence of a proceeding or hearing.
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- 12 -41. Typically, an administrative authority such as the Commissioner may use the reference power to seek guidance in administering a regulatory regime or in exercising a discretionary or decision making power. The reference power is not intended to give one party to a contested proceeding an advantage over the other party.
42. For example, in December 2004, prior to entering into the Consent Agreement, the Commissioner could have filed a reference on whether, as a question of law, jurisdiction, practice or procedure, it was required to file evidence of a substantial lessening of competition along with the Consent Agreement.
43. Now, however, with the commencement of the Application, this issue is properly determined within the context of the Application and in accordance with the procedures provided for under the Competition Tribunal Rules. 44. Indeed, the phrase "at any time" suggests that a reference is not an interlocutory proceeding but a new proceeding commenced at the instance of the Commissioner. The phrase "at any time" cannot properly be read to supplant the procedures for the hearing of application. The Practice Direction 45. On August 30, 2002, the Competition Tribunal issued the Practice Direction (the "Practice Direction") to: ... clarify and supplement the Competition Tribunal Rules ... and to provide detailed procedural instructions until formal amendments to the Rules are finalized. This Practice Direction should be read in conjunction with the existing Rules.
Preamble to Practice Direction. 46. Part III of the Practice Direction concerns references made under section 124.2 of the Competition Act and supports the Applicants' interpretation. 4 7. The Practice Direction: DOC'STOR: 948791\6
- 13 -(a) sets out the documentation that needs to be filed on a reference. The Practice Direction does not anywhere provide procedures for serving opposing parties or filing responding argument; and
(b) provides for the appointment of "an amicus curiae when the Commissioner files a notice ofreference under subsection 124.2(2)".
48. The Practice Direction supports a traditional interpretation of the reference power and not that it be used as some sort of vehicle for summary determination. Had the intention been that the reference provision function as a means of deciding contested issues between parties, the Practice Direction would have a different procedural framework which would provide for:
(a) service of opposing parties; (b) the effect of the reference on the application; and (c) the delivery of responding and reply materials. The Reference is Unfair to the Applicants Striking Pleadings 49. In this case, the Commissioner is attempting to use the Reference to obtain a remedy normally only available on a motion to strike: she seeks an order striking the Applicants' Notice of Application. Commissioner's Memorandum of Argument on the Reference, at para. 60 50. Allowing the Commissioner to employ a reference to obtain this result would be grossly unfair to the Applicants. The courts have consistently held that an order striking a pleading is a drastic remedy that should only be employed in the clearest of cases. In Rona, the Tribunal refer:red to the remedy as "draconian". Rona, at para. 36 Hunt v. Carey Canada Inc., [ l 990] 2 S.C.R. 959, at p. 976-979 ("Hunt v. Carey")
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- 14 -51. To protect the rights of the respondent on a motion to strike the courts have adopted a strict test whereby pleadings will be struck only if it is "plain and obvious" that the claim cannot succeed. As described more fully by the Supreme Court of Canada: Thus, the test in Canada governing the application of provisions like Rule 19(24 )(a) of the British Columbia Rules of Court is the same as the one that governs an application under R.S.C. 0. 18, r. 19: assuming that the facts as stated in the statement of claim can be proved, is it "plain and obvious" that the plaintiffs statement of claim discloses no reasonable cause of action? As in England, if there is a chance that the plaintiff might succeed, then the plaintiff should not be "driven from the judgment seat". Neither the length and complexity of the issues, the novelty of the cause of action, nor the potential for the defendant to present a strong defence should prevent the plaintiff from proceeding with his or her case. Only if the action is certain to fail because it contains a radical defect ranking with the others listed in Rule 19(24) of the British Columbia Rules of Court should the relevant portions of a plaintiffs statement of claim be struck out under Rule 19(24)(a).
Hunt v. Carey, at p. 980 52. The Federal Court has held that even ifthere are no factual issues in dispute, a motion to strike under Rule 221 will fail if there exists a contentious legal issue of statutory interpretation to be resolved. Unless the resolution of such an issue is clear and obvious it should be left to be determined at trial. The Queen v. Amway of Canada, [1986] 2 F.C. 312 at p. 326 (F.C. T.D.) Pfizer Canada Inc. v. Apotex Inc. (1999), 1 C.P.R. (4th) 358 at p. 369 (F.C. T.D.)
53. Whereas a motion to strike is governed by the well established "plain and obvious" test, a reference is an originating process which does not benefit from this reverse onus.
54. To allow the Commissioner to seek to strike the Applicants' pleading through the vehicle of a reference, with its associated lack of protection appropriate for such a draconian remedy, would effectively circumvent the procedural protections developed over decades of Canadian jurisprudence on motions to strike. Allowing such a reference to proceed would be grossly unfair to the Applicants in that:
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- 15 -(a) it would permit the Commissioner to strike the Notice of Application without the necessity of demonstrating that it is plain and obvious that the Applicants' claims cannot succeed, and
(b) it would permit the Commissioner to strike the Notice of Application in the face of numerous contentious legal issues of statutory interpretation, many of which (such as the interpretation of "directly affected" under subsection 106(2)) have never been the subject ofj udicial consideration before.
The Bill ofR ights 55. The Commissioner's interpretation and proposed use of the reference provisions is also contrary to the Canadian Bill ofR ights.
56. Section 2( e) of the Canadian Bill ofR ights states: 2. Every law of Canada shall, unless it is expressly declared by an Act of the Parliament of Canada that it shall operate notwithstanding the Canadian Bill of Rights, be so construed and applied as not to abrogate, abridge or infringe or to authorize the abrogation, abridgment or infringement of any of the rights or freedoms herein recognized and declared, and in particular, no law of Canada shall be construed or applied so as to
( e) deprive a person of the right to a fair hearing in accordance with the principles of fundamental justice for the determination of his rights and obligations [emphasis added]
Canadian Bill of Rights, 1960, c. 44. 57. To provide that the Commissioner has unilateral reference powers in the context of a disputed application is clearly incompatible with Applicants' right to a fair hearing.
58. Essentially, the Commissioner, as one party to a dispute, wants to be able to choose issues for the Tribunal to hear separate and apart from other matters it does not wish heard. The hallmark of justice is equal treatment before the Court.
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- 16 -The Reference is Improper 59. Even if this Tribunal were to decide that the Commissioner's interpretation of section 124.2(2) is correct, the Reference should nonetheless be struck by the Tribunal. The Reference is an Abuse 60. The Commissioner unilaterally brought the Reference when the very issue of the appropriateness of the reference process was a matter properly before the Tribunal. 61. The Commissioner has improperly sought to usurp the Tribunal's role. On this basis alone, the Reference should be struck out. The Reference does not Comply with the Rules 62. According to section 98(2) of the Practice Direction, the Commissioner shall provide the Tribunal with an affidavit or affidavits in support of the Reference: 98(2) A Notice of Reference shall be accompanied by (a) an affidavit or affidavits setting out the facts on which the reference is based or an agreed statement of facts.
Practice Direction, s. 98(2). 63. As there is no agreed statement of facts, the Commissioner was obliged, but failed, to file an affidavit setting out the facts upon which the reference is based. Absence oft he Necessary Factual Foundation 64. The reason that the Commissioner did not file affidavit evidence is that it would highlight the degree to which fundamental facts are in dispute. With no agreed factual underpinning, a reference is inappropriate: At the same time, I am satisfied that a reference procedure cannot work effectively unless the originating Minister or tribunal is in a position to assure the Court that there is, essentially, no dispute as to the facts underpinning the Reference.
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- 17 -Patented Medicines (Notice of Compliance) Regulations (Ont.) (Re.), [2002] F.C.J. No. 1392 (Q.L.) (T.D.) ("Re PMNOC') at para. 34.
65. Here the facts are very much in dispute. In its Response, the Commissioner denies, amongst many other facts, that:
(a) the First Nations Peoples of Bums Lake rely on the Bums Lake Native Development Corporation (the "Native Development Corporation") to help support and promote their efforts toward economic autonomy and self-determination;
(b) the Native Development Corporation fulfils a quasi-governmental role for its First Nations members by funding and delivering social and cultural programs, training and education to Aboriginal peoples;
(c) the Native Development Corporation's interest in BFPL is its major source of funds and has a direct and important impact on the First Nations and First Nations Peoples of Bums Lake;
(d) the Applicant Native Development Corporation and Weldwood/West Fraser had a trusted and valued business relationship built up over thirty years;
(e) the Applicants have been able to use their close relationship with Weldwood/West Fraser to protect and further their interests;
(f) the Commissioner made no effort to consult with the First Nations Peoples of Bums Lake in connection with its decision; and
(g) finally and fundamentally, that there is no evidence of the substantial lessening of competition. It is noteworthy that the Respondents themselves do not agree this key point.
Amended Statement of Grounds and Material Facts, dated February 5, 2005, at paras. 22, 27-30, 32, 50 and 54.
66. In these circumstances, it is inappropriate to proceed with a reference: DOCSTOR: 94879116
- 18 it would be an abuse of the process of this Court to allow the Minister's Reference to proceed on the basis of a factual underpinning that is clearly in dispute, that could not be rationalized without full presentation of evidence and an opportunity for cross-examination, and that would thus be essentially incapable of eliciting an informed response from the Court.
Re PMNOC at para. 34 67. In this case not only are the factual underpinnings of the case in dispute, at the present time, and given the Commissioner's failure to follow the Practice Direction, they are completely absent.
The Commissioner's Proposal 68. The Commissioner has suggested that the hearing proceed on the facts alleged by the Applicants in their Application materials. In essence, the Commissioner is proposing to challenge the Applicants case on their own facts. Courts have noted that this is not appropriate: In cases depending on the facts, however, the court should be very loath to determine those issues in a summary fashion. When the case appears only to lack evidence, so long as the gaps may be filled, either by discovery or the revelation of evidence at trial, the case should be allowed to proceed. Trials are notoriously unpredictable. Many a case apparently hopeless on the facts has been transformed into a winner by an unexpected tum of events in the form of either a surprise witness or a witness giving surprising evidence. I do not wish to predict such a result here or anticipate the type of evidence needed but it is not difficult to imagine, however unlikely it may be in the development.
Temilini v. Commissioner of the Ontario Provincial Police et al. (1990), 73 O.R. (2d) 664 (C.A.) at p. 668.
69. Indeed, and as discussed above, the Court will only exercise such jurisdiction where it is plain and obvious that the Applicants' claim will fail.
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- 19 -PARTIV-ORDERSOUGHT 70. The Applicants respectfully request an order striking out the notice of reference filed by the Commissioner.
ALL OF WHICH IS RESPECTFULLY SUBMITTED J / ' ' Dany Assaf lr Orestes Pasparakis Michael D. Brown Counsel for the Defendants DATED at Toronto this 22nd day of April, 2005. OGILVY RENAULT LLP Barristers & Solicitors 200 Bay Street, Suite 3800 Royal Bank Plaza, South Tower Toronto, Ontario M5J 2Z4
Dany H. Assaf Tel: (416) 216-4072 Fax: (416) 216-3930
Orestes Pasparakis Tel: (416) 216-4815 Fax: (416) 216-3930
D. Michael Brown Tel: (416) 216-3962 Fax: (416) 216-3930 Solicitors for the Applicants
TO: Competition Tribunal 90 Sparks Street, Suite 600 Ottawa, Ontario KIP 5B4
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- 20 -AND TO: Department of Justice Competition Law Division Place du Portage, Phase I 22nd Floor, 50 Victoria Street Gatineau, Quebec KlA OC9
Duane Schippers Tel: (819) 953-3898 Fax: (819) 953-9267
Bennett Jones LLP 3400 One First Canadian Place Toronto, Ontario M5X 1A4
Melanie L. Aitken Tel: (416) 777-4662 Fax: (416) 863-1716
Solicitors for the Commissioner of Competition AND TO: Lang Michener LLP BCE Place, P.O. Box 747 Suite 2500, 181 Bay Street Toronto, Ontario M5J 2T7
James B. Musgrove Larry S. Hughes Tel: (416) 360-8600 Fax: (416) 365-1719
Solicitors for West Fraser Timber Co. Ltd. And West Fraser Mills Ltd.
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