The Court quashed two Orders of the Governor in Council, first suspending the Applicant without pay from his duties as President and CEO of the Business Development Bank of Canada and, second, terminating his appointment. The Government had failed in its duty to treat the Applicant fairly

24. October 2006 0

Administrative law – Decisions of administrative tribunals – Ministerial orders – Employment law – Government employees – Termination of employment – Hearings – Fairness – Judicial review – Natural justice – Procedural requirements and fairness

Vennat v. Canada (Attorney General), [2006] F.C.J. No. 1251, Federal Court, August 23, 2006, Noël J.

The Applicant had been serving as President and CEO of the Business Development Bank of Canada (“BDC”). His predecessor, Mr. Beaudoin, had left his post following disputes within the BDC during 1999. At this time, Mr. Beaudoin and the BDC negotiated a transaction providing for the payment of Mr. Beaudoin’s pension. The following year, following difficulties relating to the performance of the pension transaction, Mr. Beaudoin filed a motion to homologate the transaction in the Superior Court of Quebec. The BDC asked that the transaction be annulled and the motion be dismissed, while also counter-claiming against Mr. Beaudoin.

On February 6, 2004, Denis J. of the Superior Court of Quebec made a decision in Beaudoin v. Banque de développement du Canada, [2004] J.Q. No. 705, homologating the transaction and ordering the BDC to comply with it. The judgment contained harsh remarks about the BDC and the Applicant, who was a witness at the hearing. The decision was not appealed.

On February 24, 2004, an Order was adopted by the Governor in Council suspending the Applicant without pay from his duties. This information was conveyed to the Applicant by way of a letter from the Minister of Industry, who also informed the Applicant that he had until March 1, 2004 to produce written reasons explaining why his appointment should not be terminated for cause. The Applicant provided the Minister with a letter in response and a meeting was held on March 1, 2004 between the Applicant and his counsel, the Minister of Industry, the Clerk of the Privy Council, and general in-house counsel at the Department of Industry.

On March 10, 2004, the Applicant’s counsel wrote a letter to the Minister proposing that the matter be referred to the Judicial Council for an inquiry regarding the Applicant’s possible removal, in accordance with s. 69 of the Judges Act, R.S. 1985, c. J-1.

On March 12, 2004, the Minister informed the Applicant that the Governor in Council had adopted an Order dismissing him from his post. The Applicant filed this application for judicial review in respect of both Orders in Council.

The parties acknowledged the existence of the duty of procedural fairness. The Court considered the nature or substance of the duty to act fairly. The Court considered the factors established by the Supreme Court of Canada’s decision in Baker v. Canada (Minister of Citizenship and Immigration), [1999] 2 S.C.R. 817. In this case, the duty to act fairly required a high standard of justice and the observance of transparency and fair play.

The Governor in Council had an obligation to conduct a personalised inquiry, and this obligation was not observed. Even if the judge’s remarks in the Beaudoin case should have significant weight in the eyes of an employer, this did not mean that the employee loses the right to a personalised inquiry by the Governor in Council. The Applicant’s formal request for an inquiry, as well as his denial of the facts alleged in the judgment, were circumstances that would play a role in justifying a more elaborate inquiry. The complexity of the matter also justified such an inquiry.

The Applicant was also denied the opportunity to properly respond to the Governor in Council’s concerns. Even if the judgment created a simple presumption of facts, for the Applicant to properly attempt to reverse the presumption, the decision-maker should have allowed him to present his evidence by affidavit, interviews or counter-evidence in a context of that personalised inquiry. The time period granted the Applicant (less than eight days) was clearly insufficient to review all of the relevant evidence in order to rebut the presumption. It made no difference that the Applicant held a public office. The circumstances did not reflect a high standard of justice, considering the significant impact of the decision on the Applicant’s career and reputation, and was a breach of procedural fairness.

The Applicant was also entitled to the procedural safeguards recognised in Knight v. Indian Head School Div. No. 19, [1990] 1 S.C.R. 653. Considering these safeguards, the Court found that the Applicant had been informed of the reasons for the Governor in Council’s dissatisfaction. However, his right to respond had only been observed in part. Finally, the Governor in Council had applied too onerous a burden on the Applicant to establish that the remarks of the Judge in the Beaudoin case were fatally incorrect or tainted by fraud or dishonesty, or that he bring forth new evidence that had not previously been available to the Judge. That burden was not appropriate and was not known by the Applicant.

Given the Court’s findings regarding procedural fairness, it was unnecessary for the Court to review the substantive decisions in the case.

In the result, the Orders in Council were quashed and the matter referred back to the Governor in Council.

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