Date: 20020808
Docket: S. H. No. 175932
IN THE SUPREME COURT OF NOVA SCOTIA
[Cite As: Bowater Mersey Paper Co. v. Communications, Energy & Paperworkers Union of Canada, Local 141, 2002 NSSC 198]
IN THE MATTER OF: The Trade Union Act
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IN THE MATTER OF: A grievance by the Communications, Energy and Paperworkers Union of Canada, Local 141 (Hourly Workers), Local 141 (Salaried Workers), and Local 259 concerning an alleged failure to honour a Letter of Intent dated February 21, 1994
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IN THE MATTER OF: An application by Bowater Mersey Paper Company Limited for an Order to quash and set aside the Award of Professor Peter E. Darby, Arbitrator, dated November 9, 2001
BETWEEN:
BOWATER MERSEY PAPER COMPANY LIMITED
APPLICANT
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COMMUNICATIONS, ENERGY & PAPERWORKERS UNION OF CANADA, LOCAL 141 (HOURLY WORKERS), LOCAL 141 (SALARIED WORKERS), AND LOCAL 259
RESPONDENT
D E C I S I O N
HEARD BEFORE: The Honourable Justice Glen G. McDougall, Supreme Court of Nova Scotia, on February 21st, 2002, at Halifax, Nova Scotia, in Chambers
DECISION: August 8th, 2002
COUNSEL: Ms. Karin A. McCaskill, for the Applicant
Mr. Ronald A. Pink, Q.C., for the Respondent
McDougall, J.:
[1] This application brought by Bowater Mersey Paper Company Limited (“Bowater”) against the Communications Energy & Paperworkers Union of Canada, Local 141(Hourly Workers), Local 141 (Salaried Workers), and Local 259 (the “Union”) seeks a review of the decision of a consensual arbitrator who was appointed according to the collective agreement. This grievance was launched by the Union. Both the Union and Bowater agree that the arbitrator was properly appointed.
[2] Bowater now seeks to have the arbitrator’s award quashed along with costs to the applicant. In presenting its case, counsel for Bowater, Ms. Karin McCaskill, identified the following issues:
Issue 1: What is the standard of judicial review?
Issue 2: Did the arbitrator commit a jurisdictional error by failing to decide the issue before him and by deciding issues that were not before him?
Issue 3: Did the Arbitrator commit a jurisdictional error when he made an order with indefinite future application?
Issue 4: Is the Arbitrator’s Award patently unreasonable in that he has given an interpretation to the Letter of Intent that its language will not reasonably bear?
Issue 5: Is the Arbitrator’s Award patently unreasonable in that he dismissed as irrelevant all of the evidence adduced by the parties as to their shared interpretation of the Letter of Intent?
Issue 6: Is the Arbitrator’s Award patently unreasonable in that Arbitrator Darby appears to have relied in his analysis exclusively on language of a Letter of Intent between Canadian Pacific Forest Products Limited (Thunder Bay Mill) and Communications, Energy & Paperworkers Union of Canada, Locals 39 and 257 in such a way that is not supported by the evidence?
Issue 7: Is the Award patently unreasonable in the Arbitrator Darby has made an order that is vague and otherwise incapable of implementation?
[3] Counsel for the Union, Mr. Ronald A. Pink, Q. C., stated the issues as follows:
1) What is the standard of Judicial review?
2) Did the Arbitrator commit a reviewable error when he found Bowater had breached the Letter of Intent on workforce restructuring?
Analysis and Decision
[4] I will first deal with the appropriate standard of review required of this case. There is no doubt that a superior court has jurisdiction to review the decisions of administrative tribunals and, as in this case, the decision of a properly appointed consensual arbitrator. The degree of curial deference shown by the court will, of course, depend on the mechanism by which the arbitrator was appointed and the level of expertise required of and demonstrated by that individual. It is incumbent upon superior courts to be minimally intrusive and to respect decisions made within a tribunal’s or individual area of expertise.
[5] Judicial review is not the equivalent of an appeal. As was stated by the Supreme Court of Canada in Bell Canada v. Canada (C.R.T.C.), [1989] 1 S.C.R. 1722 at 1744-45:
... the jurisdiction of a court on appeal is much broader than the jurisdiction of a court on judicial review. In principle, a court is entitled, on appeal, to disagree with the reasoning of the lower tribunal. However, within the context of a statutory appeal from an administrative tribunal ... curial deference should be given to the opinion of the lower tribunal on issues which fall squarely within its area of expertise.
[6] Indeed, even if there exists a statutory right of review, the Supreme Court of Canada in its recent decisions indicates that the courts must also consider other factors. In Canada (Director of Investigation and Research, Competition Act) v. Southam Inc., [1997] 1 S.C.R. 748 at 773, the court concluded that “expertise ... is the most important of the factors that a court must consider in settling on a standard of review.” In that case and in spite of the existence of a statutory right of appeal, Iacobucci, J. held that deference was owed to the tribunal. In essence, even where there is a right of appeal, courts should defer where they perceive that the board or tribunal or arbitrator has more specialized expertise than they do.
[7] In addition, judicial review is not meant to be an investigation into the merits of the issue before the original tribunal. Rather, it is meant to be an investigation into the propriety of the processes that brought about that result.
[8] In judicially reviewing the proceedings of an administrative tribunal, a court will interfere in three instances. They are:
(a) jurisdictional error;
(b) failure to conform to principles of natural justice; and
(c) error of law on the face of the record.
[9] The amount or degree of curial deference depends on how the error is categorized. If it is a jurisdictional error it then normally receives the least amount of deference. However, within the jurisdictional category errors generally may be classified as either “narrow” or “broad.”
[10] Narrow errors of jurisdiction relate generally to a provision which confers jurisdiction; that is, one which describes, lists and limits the powers of the decision maker or decision making body, or which is intended to circumscribe the authority of the decision making entity. If the tribunal is incorrect in interpreting such a provision, it will be found to have exceeded its jurisdiction or refused to exercise its jurisdiction as it was bound to do, and consequently, the decision will be set aside. See U.E.S., Local 298 v. Bibeault, [1998] 2 S.C.R. 1048.
[11] A broad error of jurisdiction occurs where the question answered by the decision making entity was within its jurisdiction to determine, but the interpretation was so patently unreasonable that its construction cannot be rationally supported and demands intervention by a court. See CUPE v. City of Montreal, [1997] 1 S.C.R. 793.
[12] Counsel for Bowater raised two issues dealing with the arbitrator’s jurisdiction. They are issues 2 and 3 as previously stated.
[13] Applicants seeking review of an administrative decision will often attempt to characterize them as jurisdictional in order to reduce the amount of deference that the court will give them. The standard of correctness for the review of such alleged errors is considerably less onerous than the standard for reviewing errors of law in which the “patently unreasonable” test is used.
[14] In the case of Domtar Inc. v. Québec (Commission d’appel en matière de lésions professionnelles), [1993] 2 S.C.R. 756 at 772, L’Heureux-Dubé, J., writing for the unanimous court, held that to determine if an issue is within the jurisdiction of the board, the court should ask “... who is in the best position to rule on the impugned decision,” the administrative tribunal or the court?
[15] It appears clear that the Supreme Court of Canada is saying that courts should be hesitant to characterize issues as jurisdictional unless they are clearly so. Indeed, even if the decision is not protected by a privative clause but is intended to be final and binding, courts should demonstrate a willingness to show some deference if the decision maker has a specialized expertise.
[16] As further support for use of the correctness standard in deciding issues of jurisdictional error. I refer to the case of Pushpanathan v. Canada (Minister of Citizenship and Immigration), [1998] 1 S.C.R. 982, wherein Bastarache, J., stated at 1005 that:
But it should be understood that a question which “goes to jurisdiction” is simply descriptive of a provision for which the proper standard of review is correctness, based upon the outcome of the pragmatic and functional analysis. In other words, “jurisdictional error” is simply an error on an issue with respect to which, according to the outcome of the pragmatic and functional analysis, the tribunal must make a correct interpretation and to which no deference will be show.
[17] Therefore, the primary question a court must ask is not whether the issue goes to jurisdiction of the tribunal, but rather “was the question which the provision raises one that was intended by the legislators to be left to the exclusive decision of the board?” See Pasiechnyk v. Saskatchewan (Workers’ Compensation Board), [1997] 2 S.C.R. 890 at page 905, which is a decision of Sopinka, J.
[18] The Supreme Court of Canada has more recently adopted a “pragmatic and functional analysis” approach. This was first described in Bibeault, supra. The so-called “Bibeault” factors were stated by Beetz, J., who directed courts to consider the following:
(a) the wording of the enactment conferring jurisdiction on the tribunal;
(b) the purpose of the statute in creating the tribunal;
(c) the reason for the tribunal’s existence;
(d) the area of expertise of the tribunal’s members; and
(e) the nature of the problem before the tribunal.
[19] He also emphasized that the pragmatic and functional approach for determining the legislature’s intent should be applied equally to questions which, at first blush, appears to limit a tribunal’s jurisdiction. The “Bibeault” factors have been enumerated and applied in some of the most recent Supreme Court of Canada decisions (see Pezim v. British Columbia (Superintendent of Brokers), [1994] 2 S.C.R. 557 at 592; Domtar, supra; Université du Québec à Trois Rivières v. Larocque, [1993] 1 S.C.R. 471; Canada (Attorney General) v. Public Service Alliance of Canada (PSAC # 2), [1993] 1 S.C.R. 941 [PSAC # 2], CUPE v. City of Montreal, [1997] 1 S.C.R. 793 [“CUPE v. Montreal”].
[20] L’Heureux-Dubé, writing for the Supreme Court of Canada in CUPE v. Montreal, supra, at page 810 reminded courts as follows:
This court has repeatedly stated that the courts should proceed cautiously when faced with the task of assessing the jurisdiction of an administrative tribunal. These bodies play a very important and special role in regulating social, economic and political activities and relationships within an increasingly complex society. The administrative tribunal, with its specialized expertise, accumulated experience, and sensitivity as regards problems which arise in a particular field, is essential to the effective and fair implementation of state policy aimed at addressing these concerns. While the courts have maintained the important role of ensuring that these bodies limit their activity to those powers entrusted to them by the legislature, we must be careful to avoid unduly limiting the jurisdiction of such a body, thereby negating its specialized expertise and interfering with its intended functions.
[21] What then is the applicable standard of review in a case such as this, where a consensual arbitrator has been appointed? In Volvo Canada Ltd. v. International Union, United Automobile, Aerospace & Agricultural Implement Workers of America, Local 720, [1980] 1 S.C.R. 178, Laskin, C.J.C. (with whom Spence and Dickson, J.J. concurred, and with whom Estey, J., expressed “general agreement”) rejected the suggestion that “. . . the award of a consensual arbitrator under a collective agreement, to whom a specific question of law had been referred, may be impeached if he has given clauses of the collective agreement an interpretation which their language will not reasonably bear(195).” He was of the opinion that to introduce it into consensual arbitration in the context of interpreting a collective agreement would “. . . strike at the very foundation of such arbitration . . . 195.” He goes on to state:
This court has said quite plainly, that even if the construction put upon the collective agreement be, in the view of a court, a wrong one, the award must stand . . .
[22] The majority judgment of Pigeon, J., (concurred in by Beetz and Pratte, J.J.) held that the test to be applied to an arbitrator’s interpretation of a collective agreement is whether the construction is one which the agreement could reasonably bear. In concurring reasons, Mortland, J. (Ritchie, J. concurring) added that an arbitration award should not be set aside merely because the court’s conclusion differs from that of the arbitrator.
[23] There appears to be a policy of judicial restraint with respect to the decisions of consensual arbitrators unless the interpretation is so unreasonable that judicial intervention becomes a necessity. In other words, courts should only interfere if the decision is patently unreasonable. This patently unreasonable standard of review was described by Cory, J., in PSAC (# 2), supra, writing for the majority, at p. 964:
It is not enough that the decision of the Board is wrong in the eyes of the court; it must, in order to be patently unreasonable, be found by the court to be clearly irrational.
[24] It is clear, then, that the “patently unreasonable” standard of review is the appropriate one in this case. On the other hand, if, as counsel for Bowater contends, the arbitration made jurisdictional errors, then the standard of review is one of “correctness” in those instances.
Did the Arbitration commit any jurisdictional errors?
[25] Counsel for Bowater, in her pre-hearing memorandum, raised two issues (Issues 2 and 3) dealing with jurisdiction:
Issue 2: Did the Arbitrator commit a jurisdictional error by failing to decide the issue before him and by deciding issues that were not before him?
Issue 3: Did the Arbitrator commit a jurisdictional error when he made an order with indefinite future application?
[26] With regard to issue 2, the grievance placed before the arbitrator alleged that Bowater failed “to honour Letter of Intent dated and signed February 21, 1994" [excerpt from paragraph 2 of the Arbitrator’s Award.]
[27] The applicant argued that the arbitrator exceeded his jurisdiction “by failing to decide the issue before him and by deciding issues that were not before him.” I do not agree with this assertion. The arbitrator clearly focused on the contents of the letter of intent in arriving at his decision. His view of the letter of intent was that it was a separate yet integral part of the collective agreement. It was not a “stand-alone” document. It formed part of the overall collective agreement. When the context required it, he distinguished between the letter of intent and the remainder of the collective agreement, but he did not lose sight of the fact that the two documents were inextricably interwoven into one final product.
[28] The applicant also argues that the arbitrator committed a jurisdictional error in making “an order with indefinite future application.” The arbitrator’s decision would clearly have both retroactive and future application. Unless changed by the normal collective bargaining process, the letter of intent would continue to have affect. In that sense it would indeed have indefinite future application , but as with any clause in a collective agreement, it could and most likely will be the subject of future negotiations between the employer and the union. This does not, in my opinion, constitute a jurisdictional error on the part of the arbitrator.
[29] The arbitrator was asked to rule on an alleged grievance arising out of a letter of intent that formed part of a collective agreement. As such he had to review the contents of the letter of intent and provide an interpretation based on the wording of that document. This is exactly what he did.
[30] I find there is nothing patently unreasonable in the method used by the arbitrator in deciding the meaning of the letter of intent. Furthermore, he did not err in determining the need for unanimity of agreement by all members of the Workforce Restructuring Committee before any recommendation could be implemented. Paragraph 3(a) of the letter of intent states:
3. a) The company and the union locals agree that, as soon as practical following ratification, a committee comprised of equal representation from senior management, including Human Resources and senior union representatives, will be established to discuss and implement a process which will promote the goals of increased efficiency, productivity of the plant, cost reduction, and provide to the greatest extent possible security of employment for the existing work force. The mandate of the committee shall include, but not be limited to, recommendations on restructuring of jobs and lines of progression, training requirements, and including the application of seniority for the purposes of lay-off, recall for all employees. In all areas of discussion, the committee’s recommendation must be unanimous before it can be implemented. [Emphasis added]
[31] The applicant contends that the arbitrator’s award is patently unreasonable for a number of other reasons including:
(i) ... he dismissed as irrelevant all of the evidence adduced by the parties as to their shared interpretation of the Letter of Intent ... [Issue 5]
(ii) ... [he] appears to have relied in his analysis exclusively on language of a Letter of Intent between Canadian Pacific Forest Products Limited (Thunder Bay Mill) and Communications, Energy & Paperworkers Union of Canada, Locals 39 and 257 in such a way that is not supported by the evidence? [Issue 6]
(iii) ... [he] has made an order that is vague and otherwise incapable of implementation? [Issue 7]
[32] It is clear from reading the arbitrator’s award that he treated some evidence as being relevant while some other evidence was either discounted or ignored. It is entirely within his authority to do so. I see nothing wrong in the arbitrator’s methodology or reasoning in arriving at the decision that was made.
[33] There is no arguing that the arbitrator spent a great deal of time comparing the Bowater letter of intent to the letter of content that formed part of the collective agreement at the Thunder Bay Mill. The differences between the two were used by him to support the interpretation he gave to the letter of intent at the Bowater plant. Neither the approach used nor the conclusion reached is patently unreasonable.
[34] I also disagree with the applicant’s contention that the order given by the arbitrator was vague and otherwise incapable of implementation. The arbitrator’s award, in my opinion, is quite clear. The employer and the union agreed, amongst other things, “... to discuss and implement a process which will promote the goals of increased efficiency, productivity of the plant, cost reduction, and to provide to the greatest extent possible security of employment for the existing work force. The mandate of the committee shall include, but not be limited to, recommendations on restructuring of jobs and lines of progression, training requirements, and including the application of seniority for the purpose of lay-off, recall for all employees. In all areas of discussion, the committee’s recommendation must be unanimous before it can be implemented.” [Emphasis added.]
[35] I see no reason to interfere with the decision of the consensual arbitrator in this instance. The application is therefore dismissed with costs to the respondent in the amount of $1,500.00 all inclusive.
J.