The court set aside a decision of the Respondent to cancel a “final” certificate of inspection on the Applicant’s shipment of wheat after it had been shipped and sold on the basis of the inspection certificate. The Respondent had the regulatory power, which it had not exercised, to do what it had done, but the court could not give administrative practice the force of law by implying a power which the Respondent had failed to exercise by regulation.

Administrative law – Decisions of administrative tribunals – Canadian Grain Commission – Certificate of inspection – Powers to cancel – Regulatory powers of tribunals – Functus officio – Limitations – Judicial review – Compliance with legislation – Jurisdiction – Standard of review – Correctness

Saskatchewan Wheat Pool v. Canada (Canadian Grain Commission), [2004] F.C.J. No. 1568, Federal Court Regina, Saskatchewan, September 23, 2004, Kelen J.

The Applicant Wheat Pool is a licensed grain dealer whose principal business is handling and marketing grain on behalf of the Canadian Wheat Board. The Respondent Commission is the federal agency responsible for establishing and maintaining Canada’s grain quality standards pursuant to the Canada Grain Act, R.S.C. 1985, c. G-10. It also engages in the inspection and grading of grain.

The Applicant had loaded twenty-five railcars with wheat at its facility at Brandon, Manitoba. At that time, the wheat was visually inspected by one of the Respondent’s inspectors and certified as grade No. 2 Canadian Western Red Spring Wheat. Approximately two weeks later, the grain was visually inspected again when it was loaded onto a vessel at the Applicant’s Thunder Bay port terminal. It received the same grade and the final certificate of inspection was issued. The Respondent’s inspector retained a sample of the grain which was sent to the Respondent’s grain research laboratory for testing. Within a week, the grain was unloaded at Quebec City and sold to an end-user. Following the Respondent’s lab tests, the Respondent advised the Applicant that the grade of the grain in question would be lowered to Canadian Western Feed Wheat. The original “final” certificate was cancelled and a new and corrected certificate was issued.

This application for a judicial review of the Respondent’s decision was brought after the expiry of the limitation period in section 18.1(2) of the Federal Courts Act, R.S.C. 1985, c. F-7. A preliminary issue was whether the court should grant an extension of time to the Applicant. The court held that all the criteria outlined by the Federal Court of Appeal in Grewal v. Canada (M.E.I.), (1985), 63 N.R. 106 (F.C.A.), had been met. Those criteria are:

1)   whether granting an extension is necessary to do justice between the parties;

2)   whether an applicant has an arguable case for setting aside the impugned decision;

3)   whether there is a proper justification for the delay, taking into account factors such as the intention to file an application within the allowed time and that the intention was maintained continuously thereafter; and

4)   whether an opposing party will suffer prejudice from the grant of an extension.

Applying the functional and pragmatic approach, the court agreed with the parties that the standard of review was correctness. The issue was whether the Respondent had the jurisdiction to cancel a certificate after a laboratory analysis determined that the original final certificate was incorrect. This was a question of law about the powers of the Respondent under the Act, and was also one of general importance and precedential value to the grain industry. Under the circumstances, no deference should be accorded to the Respondent on that question.

The Applicant argued that the Respondent was functus officio once it had issued the final certificate of inspection at Thunder Bay. The court quoted from the Supreme Court of Canada’s decision in Chandler v. Alberta Association of Architects, [1989] 2 S.C.R. 848, which held, generally, that once a Tribunal has reached a final decision in respect to the matter that is before it in accordance with its enabling statute, that decision cannot be revisited because the Tribunal has changed its mind, made an error within jurisdiction, or because there has been a change of circumstances. The court held that the Chandler decision applied to final decisions of tribunals or to matters that had been finally resolved through adjudication. The Respondent’s issuance of a certificate of inspection was not the type of decision contemplated by the Supreme Court of Canada in Chandler, since it did not involve a proceeding before a Tribunal and was purely an administrative exercise. Additionally, the issuance of a certificate of inspection did not have the same finality as a proceeding before a Tribunal because of certain limitations in modern grain inspection. The Respondent was not functus officio.

The court then turned to consider whether the Respondent had exceeded its statutory authority by cancelling the certificate of inspection issued at Thunder Bay and substituting it with a second corrected certificate. Section 34 of the Canada Grain Act authorized the Respondent to cancel a certificate in specific circumstances. Applying the expressio unius est exclusio alterius canon of statutory construction, the court held that unless there was an express provision in the Act or regulations for the cancellation of a certificate in the circumstances of this particular case, the Act implied that a final certificate cannot be cancelled under the Act or Regulations.

Section 16(1) of the Act provided that the Respondent may, by regulation, establish grades for any kind of western wheat, specifications for those grades, and methods, visual or otherwise, for determining the quality of the grain. The court considered that the Respondent thereby had the power to enact regulations which require shipments of wheat to be subject to laboratory analysis, and that the certificate of grade provided at the time of shipment, based on a visual inspection, would be subject to revision and correction. That would necessarily require that the original certificate of grade be cancelled.

The Respondent had failed to exercise its powers, by regulation, to set out the method, visual or otherwise, for determining the characteristics of the grain. The Canada Grain Regulations covered some subjects regarding the grading of samples but did not provide for the cancellation of a certificate of grade. An implied power cannot permit cancellation of a certificate after the fact. That power can be enacted by regulation in clear specified circumstances and according to clear procedures. Part of the process of regulation is giving notice to affected parties and providing them with an opportunity to make representatives for or against a proposed regulation. The court cannot give administrative guidelines the force of law by implying a power which the Commission has failed to exercise by regulation. Otherwise, there would be no reason to enact regulations.

The application was allowed and the decision of the Respondent to cancel the “final” certificate issued at Thunder Bay was set aside.

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