Date: 20220202

Docket: T-1377-21

Citation: 2022 FC 125

Toronto, Ontario, February 2, 2022

PRESENT: Case Management Judge Trent Horne

BETWEEN:

CHIINA MOBILE COMMUNICATIONS GROUP CO., LTD;

CHINA MOBILE INTERNATIONAL (CANADA) INC., AND

CHINA MOBILE INTERNATIONAL (UK) LIMITED

Applicants

and

CANADA (ATTORNEY GENERAL)

MINISTER OF INNOVATION, SCIENCE AND INDUSTRY,

AND GOVERNOR GENERAL IN COUNCIL

Respondents

ORDER AND REASONS

[1] This is a document production motion in an application for judicial review.

[2] The application challenges an order of the Governor in Council (commonly called the Cabinet, and referred to in these reasons as the GiC) which required China Mobile Communications Group Co., Ltd. to divest itself of its Canadian business, or wind up the Canadian business, on the basis of national security concerns. On this motion, the documents requested by the applicants effectively fall into two categories. The first is a request under Rules 317 and 318 for documents that were before the Minister of Innovation, Science and Industry when a decision was made to refer the matter to the GiC, and the preceding national security review. The second relates to the materials that were before the GiC when making the order; this involves a challenge to a certificate issued under section 39 of the Canada Evidence Act, RSC, 1985, c C-5 (Canada Evidence Act).

I. The Parties

[3] The applicant China Mobile Communications Group Co., Ltd. (CMCG) is a Chinese state-owned company that provides mobile communication services, including voice, data, text messaging, roaming and network services, to customers throughout China.

[4] The applicant China Mobile International (UK) Limited (CMI UK) is mainly responsible for the operation of CMCG’s international business. CMI UK is a wholly-owned subsidiary of China Mobile International Limited (CML), which in turn is a wholly-owned indirect subsidiary of CMCG.

[5] The applicant China Mobile International (Canada) Inc. (CMI Canada) is the Canadian business that was the subject of the review described below under the Investment Canada Act, RSC 1985, c 28 (1st Supp) (ICA). It is a wholly-owned subsidiary of CMI UK. CMI Canada provides data and business support services to CML, as well as mobile communication services, including pre-paid call plans. It sells voice services, voice over IP services, internet services, long distance services and wireless services, with a principal focus on customers with a connection to both China and Canada.

[6] There are three named respondents: the Attorney General of Canada, the Minister of Innovation, Science and Industry (the Minister), and the Governor General in Council.

II. Background

[7] The GiC’s order under review was made under the ICA. At a very high level, the ICA deals with ownership of Canadian businesses by non-Canadians. Part IV.1 of the ICA deals with investments by a non-Canadian that could be injurious to national security. Given the nature of the applicants’ document requests, it is useful to review the material sections of the statute, and the events leading to the order under review.

[8] Pursuant to section 25.2 (all references to sections in these reasons will be to sections of the ICA, unless otherwise indicated), if the Minister has reasonable grounds to believe that an investment by a non-Canadian could be injurious to national security, the Minister may, within the prescribed period, send a notice to the non-Canadian that an order for the review of the investment may be made.

[9] An investment is reviewable if the Minister, after consulting with the Minister of Public Safety and Emergency Preparedness, considers that the investment could be injurious to national security and the GiC, on the recommendation of the Minister, makes an order within the prescribed period for the review of the investment (subsection 25.3(1)).

[10] If an order for a review is made, the Minister is required to send a notice to the non-Canadian making the investment indicating that an order for the review of the investment has been made, and advise them of their right to make representations (subsection 25.3(2)). If the non-Canadian wishes to make representations, the Minister is required to afford them a reasonable opportunity to do so (subsection 25.3(4)).

[11] After consultation with the Minister of Public Safety and Emergency Preparedness, the Minister must then do one of two things. The Minister can refer the investment under review to the GiC, together with a report of the Minister’s findings, if the Minister is satisfied that the investment would be injurious to national security, or, on the basis of the information available, the Minister is not able to determine whether the investment would be injurious to national security. Alternatively, the Minister can send a notice to the non-Canadian indicating that no further action will be taken in respect of the investment if the Minister is satisfied that the investment would not be injurious to national security (subsection 25.3(6)).

[12] If the matter is referred to the GiC, the GiC has broad powers. The GiC may, by order, “take any measures in respect of the investment that he or she considers advisable to protect national security”, including certain enumerated things. These include requiring the non-Canadian to divest themselves of control of the Canadian business or of their investment in the entity (subsection 25.4(1)).

[13] Decisions and orders of the GiC, and decisions of the Minister, under Part IV.1 of the ICA may be judicially reviewed in the Federal Court (section 25.6).

[14] Here, CMI Canada received notice on or about December 14, 2020 that the Minister responsible for the ICA had reasonable grounds to believe that the investment by CMCG to establish CMI Canada could be injurious to national security, and that an order for review of this investment may be made under subsection 25.3(1). CMI Canada was advised that an order for review may be made within 45 days of the date of the letter, and that the letter constituted a notice pursuant to subsection 25.2(1).

[15] CMI Canada received a further notice on January 28, 2021 that an order for the review of the investment had been made by the GiC under subsection 25.3(1). A summary of the national security concerns was provided. CMI Canada was reminded of its right to make representations to the Minister, and was asked for its plans for making such representations in person and/or in writing.

[16] On August 6, 2021, the GiC made an order under subsection 25.4(1) (the Order). The Order was delivered to CMCG on August 9, 2021. In summary, the Order required CMCG to divest itself of its Canadian business, or wind up the Canadian business. The materials provided to CMI Canada stated that:

And whereas the Minister of Industry, after consideration of all of the information collected and all the of the representations made during the course of the review and after consultation with the Minister of Public Safety and Emergency Preparedness, being satisfied that the investment – by posing the following risks – would be injurious to national security, has, under subparagraph 25.3(6)(a)(i) of the Act, referred the investment under review to the Governor in Council, together with a report of the Minister’s findings and recommendations on the review: (emphasis added)

[17] The applicants do not know when the report of the Minister’s findings was provided to the GiC, but believe it to be around July 2021. The applicants have never been provided with a copy of this report.

III. The Application for Judicial Review

[18] On September 7, 2021, the applicants filed an application for judicial review. It describes the decision under review, and the relief requested, as follows:

THIS IS AN APPLICATION FOR JUDICIAL REVIEW IN RESPECT OF an order of the Governor in Council dated August 6, 2021 and communicated to China Mobile Communications Group Co., Ltd. (“China Mobile”) on August 9, 2021, pursuant to subsection 25.4(1) of the Investment Canada Act, R.S.C. 1985, c 28 (the “ICA”), ordering that China Mobile (a) divest itself of all right, title, interest and ownership in China Mobile International (Canada) Inc. (“CMI Canada” or the “Canadian business”) and all assets used to carry on the Canadian business, whether held directly or indirectly through owners, subsidiaries or affiliates, including by equity or debt; or (b) wind up the Canadian business, on the basis that the Governor in Council was satisfied that CMI Canada’s business may be injurious to national security (the “Decision”) following referral by the Minister of Innovation, Science and Industry (the “Minister”) (the “Referral”).

THE APPLICANT MAKES AN APPLICATION FOR:

1. An Order setting aside the Decision;

2. In the alternative, an Order setting aside the Decision, and remitting the issue back to the Minister and Governor Council to re-determine the matter;

3. A stay of the Decision pending the outcome of this application and any appeals;

4. Costs of this application on an elevated scale; and

5. Such further and other relief as counsel may advise and/or this Honourable Court may permit.

[19] The notice of application is lengthy and detailed. It includes a request for material in possession of the GiC and the Minister, specifically:

Request for Material in the Possession of the Minister

63. Pursuant to Rule 317 of the Federal Courts Rules, the Applicants hereby request all of the material relevant to the application and to the Decision that is in the possession of the Governor in Council and Minister and not in the possession of the Applicants (the “Certified Tribunal Record”), including, but not limited to, the report of the Minister’s findings and recommendations to the Governor in Council referred to in the Order and all communications between the Minister and the Minister of Public Safety and Emergency Preparedness related to the Canadian business.

[20] In the notice of application, the following documents are included under heading “this application will be supported by the following material”: the record and proceedings before the Minister leading to the Decision, including the Certified Tribunal Record.

[21] The respondents sent a letter in response to the Rule 317 request on September 28, 2021. The letter stated, in part: “pursuant to Rule 318(2) of the Federal Courts Rules, we inform you that the requested material are confidences of the Queen’s Privy Council for Canada and as such, cannot be disclosed because of their confidential nature. Enclosed is a description of the information being withheld on the grounds of Cabinet confidentiality”. This letter did not expressly refuse production of material that was before the Minister when making the decision to refer, or the earlier national security review, on the basis that those decisions were not at issue in this proceeding.

IV. Scope of Rule 317

[22] Unless the Court orders otherwise, an application for judicial review is limited to a single order in respect of which relief is sought (Rule 302).

[23] The notice of application identifies a single order in respect of which relief is sought – an order of the Governor in Council dated August 6, 2021 and communicated to CMCG on August 9, 2021, pursuant to subsection 25.4(1) of the ICA. The applicants have not sought to judicially review the order for the review of an investment (subsection 25.3(1), communicated to the applicants on January 28, 2021), or the decision of the Minister to refer the investment under review to the GiC (paragraph 25.3(6)(a)).

[24] Subrule 317(1) provides as follows:

Material in the Possession of a Tribunal

Obtention de documents en la possession d’un office fédéral

Material from tribunal

Matériel en la possession de l’office fédéral

317 (1) A party may request material relevant to an application that is in the possession of a tribunal whose order is the subject of the application and not in the possession of the party by serving on the tribunal and filing a written request, identifying the material requested.

317 (1) Toute partie peut demander la transmission des documents ou des éléments matériels pertinents quant à la demande, qu’elle n’a pas mais qui sont en la possession de l’office fédéral dont l’ordonnance fait l’objet de la demande, en signifiant à l’office une requête à cet effet puis en la déposant. La requête précise les documents ou les éléments matériels demandés.

[25] On its face, Rule 317 is limited to material “in the possession of a tribunal whose order is the subject of the application”. Here, the order under review is the August 6, 2021 order of the GiC, not the earlier decisions or orders of the Minister or the GiC, particularly the order for the review of an investment, or the decision of the Minister to refer the investment under review to the GiC.

[26] The function and limits of Rule 317 was reviewed in detail by the Federal Court of Appeal in Tsleil-Waututh Nation v Canada (Attorney General), 2017 FCA 128 (Tsleil). This includes:

• Rule 317 plays a limited role (para 106);

• Rule 317 means what it says. The only material accessible under Rule 317 is that which is “relevant to an application” and is “in the possession” of the administrative decision-maker, not others (para 107);

• it is evident from the text of Rule 317 that it cannot be used to obtain material that is in the possession of others (para 111);

• it is often said in the case law that Rule 317 is restricted to the actual material the administrative decision-maker had before it when making the decision and nothing more (para 112); and

• Rule 317 does not in any way serve the same purpose as documentary discovery in an action (para 115).

[27] Paragraph 114 of Tsleil is particularly relevant to the issues on this motion:

[114] In cases where some other government entity has information and supplied some of it to the administrative decision-maker, again only the information that was actually before the administrative decision-maker is obtainable under Rule 317:

This surely has reference to “material” that was before the federal board, commission or other tribunal whose decision is the subject of an application for judicial review pursuant to section 18.1 of the [Federal Courts Act] and not to the contents of a Minister’s file where no decision of his [or her] is the subject of the judicial review.

(Eli Lilly and Co. v. Nu-Pharm Inc., 1996 CanLII 4073 (FCA), [1997] 1 F.C. 3 (C.A.) at pages 28-29.) To the same effect, see Canadian Arctic Resources Committee Inc. v. Diavik Diamond Mines Inc. (2000), 2000 CanLII 15536 (FC), 35 C.E.L.R. (2d) 1, 183 F.T.R. 267 at para. 27:

To engage in such a review of all of the documents that were before the Responsible Authorities would in effect be a challenge to the comprehensiveness of the Comprehensive Study Report and indeed of the underlying science relied upon by the Responsible Authorities and of their expertise. This goes far beyond the judicial review of a Minister’s decision which was based upon a report arising out of many months investigation by the Responsible Authorities.

[28] I also note paragraph 137 of Tsleil: “in various places in its submissions, the Tsleil-Waututh Nation appears to misunderstand the limits of Rule 317. For example, it appears to be under the misapprehension that Rule 317 can be used to access documents held by government departments other than the Governor in Council. For the reasons explained above, this is not so.”

[29] In this proceeding, the investigative files of the Investment Review Division and the Minister requested in the amended notice of motion plainly go beyond what Rule 317 requires. To grant the relief requested would be directly contrary to the guidance in Tsleil. The Minister and the Investment Review Division are not tribunals whose order is the subject of this application (as set out above, the notice of application only challenges the Order). Documents in the possession of the Minister and the Investment Review Division are not the subject of a proper Rule 317 request in this proceeding.

[30] I acknowledge that the notice of application, under the heading “grounds of review”, asserts that the Minister erred in law and/or acted in a manner that was contrary to law by initiating the review on the basis of irrelevant considerations unrelated to national security; by making the referral without a sufficient evidentiary basis; and taking irrelevant considerations into account. But raising this as a ground of review cannot overcome the limitations of Rules 302 and 317. If the applicants wanted to challenge any decision of the Minister that preceded the Order, it should have been done directly. Such a challenge cannot be advanced indirectly.

[31] The applicants argue that if the Minister’s decision to refer the matter to the GiC was unreasonable, the Order can be set aside on that basis. Even if that argument has merit, I am not persuaded that a notice of application that is expressly limited to a challenge of one decision (the Order) can be read so as to require production of materials from another decision-maker (the Minister) relating to a preceding decision (the decision to refer). If the applicants wanted to challenge a decision of the Minister, that would have required a separate notice of application for that decision, or alternatively required leave of the Court to challenge more than one decision in this proceeding.

[32] The applicants submit that the Order could only come into being if certain steps preceding it occurred, and that if any of those necessary steps or decisions leading to the Order were unreasonable or invalid, the Order itself may be overturned because it is unreasonable. The applicants therefore submit that the reasonableness of the decisions leading up to the Order have been properly raised in this application for judicial review. I disagree. I can find no authority that stands for the proposition that judicially reviewing one decision necessarily means any preceding decisions or orders leading up to it are necessarily before the Court as well. This would be contrary to Rule 302 and the scope of Rule 317 as defined in Tsleil.

[33] The applicants submit that, even if they had been made aware of the Minister’s decision to refer the matter to the GiC, an application for judicial review may have been dismissed as premature, particularly before the GiC had made a decision under section 25.4. That may be so, but it is not the case here. Upon receipt of the Order, the applicants knew that the Minister had made a decision to refer. Such a decision appears to be judicially reviewable under section 25.6 of the ICA, but the applicants have not commenced any proceedings in respect of it.

[34] In support of their position that a review of the Minister’s decision is before the Court, the applicants also refer to the fact that, in addition to the Governor General in Council, the Attorney General and Minister of Innovation, Science and Industry have been named as respondents. The applicants point out that the respondents have not moved to strike the proceedings as against them or otherwise raised an objection in this respect. I give this no weight.

[35] Applications for judicial review are summary proceedings that should be determined without undue delay (Mazhero v Canada (Industrial Relations Board), 2002 FCA 295 at para 5). The Court discourages interlocutory motions in applications for judicial review (Canadian Generic Pharmaceutical Association v Canada (Governor in Council), 2007 FC 154 at para 25). The respondents have not admitted or conceded (directly or indirectly) that the Minister is a proper party to this application, or that the Minister’s referral decision is at issue in this application. A party may not circumvent the requirements of Rule 302, or expand the scope of Rule 317, by adding additional respondents.

[36] The applicants argue that, in response to the Rule 317 request in the notice of application, the respondents’ September 28, 2021 correspondence (described above) did not take the position that the Minister’s decision was not under review. I do not agree that, by this correspondence, the respondents have conceded that documents before decision-makers other than the GiC are subject to production in this application. Further, I do not agree that applicants, generally, can bypass Tsleil by drafting broad Rule 317 requests.

[37] In argument, the applicants sought to distinguish the “pipeline cases” (Tsleil and Tsleil-Waututh Nation v Canada (Attorney General), 2018 FCA 153) on the basis of the nature of the respective statutory schemes. In brief, it was submitted that, in the pipeline cases, the role of the National Energy Board (NEB) is much different. The applicants submit that the NEB has an obligation to make assessments and recommendations, but no power to make decisions. Unlike proceedings under the ICA, the NEB cannot make a “go/no go” decision, i.e. whether to refer a matter to the GiC. Under the ICA, the Minister can put an end to the national security review before it goes to the GiC (paragraph 25.3(6)(b)).

[38] I cannot agree that this is a material consideration. Rule 317 does not have flexible application, depending on the procedural steps and the obligations of participants that precede the tribunal’s decision that is under review. I do not read anything in Tsleil that would permit such an elastic approach. The obligations of documentary production under Rule 317 are defined by the text of the Rule and the jurisprudence interpreting it, not the duties and powers of decision-makers that precede the tribunal whose decision is under review.

[39] The respondents argue that the Minister’s decision to refer the matter to the GiC is not a “decision” that can be subject to judicial review. This appears incorrect in light of the plain language of section 25.6, which contemplates judicial review of “decisions of the Minister under this part”, but this is not an issue that needs to be resolved on this motion. Even if I assume that the Minister’s decision to refer the matter to the GiC is subject to judicial review, that decision has not been challenged in this proceeding.

[40] The scope of Rule 317 is limited to material that was in the possession of the tribunal whose order is the subject of the application. The applicants’ motion seeks production of documents that were before other decision-makers (the Minister and the investigative files of the Investment Review Division). For all the above reasons, the applicants’ motion pursuant to Rules 317 and 318 will be dismissed.

V. Production of Materials That Were Before the GiC

[41] As for the materials that were before the GiC when the Order was made, the respondents have resisted production on the basis of Cabinet confidence. A certificate pursuant to section 39 of the Canada Evidence Act was delivered to the applicants, objecting to the disclosure of certain information. The applicants seek to set the certificate aside.

[42] In response to the Rule 317 request, counsel for the respondents sent a letter to counsel for the applicants on September 28, 2021. That letter enclosed three documents: a letter dated September 28, 2021, signed by the Assistant Clerk of the Privy Council; a description of the documents that would not be disclosed on the basis of cabinet confidence; and the Order in Council P.C. 2021-851. The September 28, 2021 letter stated (among other things):

Pursuant to Rule 318(2) of the Federal Courts Rules, we inform you that the requested material are confidences of the Queen’s Privy Council for Canada and as such, cannot be disclosed because of their confidential nature. Enclosed is a description of the information being withheld on the grounds of Cabinet confidentiality.

As required by Rule 318 of the Federal Courts Rules, please find enclosed a certified copy, in English and in French, of the following material before the Governor in Council in making the Order in Council P.C. 2021-851 of August 6, 2021.

[43] The description of the material that was said to constitute Cabinet confidence was not signed by a minister of the Crown or the Clerk of the Privy Council. It is not a certification that complies with the requirements of section 39 (all references in these reasons to section 39 are to section 39 of the Canada Evidence Act).

[44] Counsel for the applicants responded the next day. Among other things, the September 29, 2021 correspondence expressed disagreement that the records requested pursuant to Rule 317 were protected by section 39 of the Canada Evidence Act, and expressed an intention to move to compel disclosure and production pursuant to Rule 318.

[45] The applicants’ notice of motion was served on December 20, 2021. As of that date, the respondents had not provided a certificate pursuant to section 39. Such a certificate (the Certificate) was sent to the applicants the following day. The Certificate was signed by Janice Charette, the Interim Clerk of the Privy Council and Secretary to the Cabinet. The Certificate stated:

1. I am the Interim Clerk of the Privy Council and Secretary to the Cabinet.

2. I have examined the information described in the Schedule attached hereto for the purpose of determining whether it constitutes a confidence of the Queen's Privy Council for Canada and whether it should be protected from disclosure under section 39 of the Canada Evidence Act, R.S.C. 1985, C-5.

3. I certify that under subsections 39(1) and (2) of the Canada Evidence Act, the information referred to in the said Schedule is a confidence of the Queen's Privy Council for Canada for the reasons set out in the Schedule attached hereto, and I object to the disclosure of the information.

4. I further certify that paragraph 39(4)(a) of the Canada Evidence Act does not apply in respect of the information as it has not been in existence for more than twenty years and that paragraph 39(4)(b) of the said Act does not apply in respect of the information in question.

5. If oral evidence were sought to be given on the content of the information the disclosure of which I have in this certificate objected to, I would object to such evidence on the same grounds as described above in relation to the information in question.

[46] The Certificate attached a schedule, which included the following descriptions:

1. Submission to the Governor in Council, July 2021, in English and in French, from the Honourable Francois-Philippe Champagne, Minister of Innovation, Science and Industry (the Minister), regarding the proposed Order in Council pursuant to subsection 25.4(l) of the Investment Canada Act, including a letter to the Minister from the Honourable Bill Blair, the Minister of Public Safety and Emergency Preparedness, the signed Ministerial recommendation, a draft Order in Council, and accompanying materials.

This information, including all its attachments in their entirety, which are integral parts of the document, constitutes a memorandum the purpose of which is to present proposals or recommendations to Council, and a record used for or reflecting communications or discussions between ministers of the Crown on matters relating to the making of government decisions or the formulation of government policy. Therefore, the information is within paragraphs 39(2)(a) and 39(2)(d) of the Canada Evidence Act.

2. Signed and approved Order in Council of August 6, 2021, concerning China Mobile Communications Group Co. Ltd.

This information is a record recording deliberations or decisions of Council. The information therefore is within paragraph 39(2)(c) of the Canada Evidence Act.

[47] The schedule to the Certificate (dated December 17, 2021) was the same as the description of material that was sent to the applicants on September 28, 2021, signed by Mr. Fox.

[48] The respondents’ motion record includes a three paragraph affidavit of Mr. Jeremy Adler, the Acting Chief of Staff in the office of the Clerk of the Privy Council. Mr. Adler states that he knows Janice Charette to be the Interim Clerk of the Privy Council and Secretary to the Cabinet. His affidavit also states that he witnessed Ms. Charette sign the Certificate. Mr. Adler was cross-examined on his affidavit. The applicants requested that Ms. Charette be made available for cross-examination; the request was refused.

[49] The respondents’ motion record includes an affidavit of Ani Mamikon, one of the respondents’ counsel of record. The affidavit attaches correspondence between counsel relating to whether a challenge to the Certificate was properly before the Court on this motion. The affidavit is brief (three paragraphs) and concludes with “counsel for the respondents did not expect that the applicants would raise any arguments in their memorandum of fact and law directed against the Certificate”.

[50] Ms. Mamikon did not make submissions at the hearing. To the extent leave is required to use the affidavit on this motion (Rule 82), such leave is granted.

[51] I note that Ms. Mamikon’s affidavit does not assert any prejudice, or claim that the respondents would have presented their motion materials any differently had the notice of motion been more clear in its challenge to the Certificate.

[52] The respondents have known since September 29, 2021 that the applicants objected to the assertions of Cabinet privilege. For reasons known only to the respondents, a section 39 certificate was apparently not prepared until December 17, 2021, and was not delivered to the applicants until after their notice of motion had been filed. While the amended notice of motion does not, in the relief requested, expressly request that the Certificate be set aside, I am satisfied that the respondents knew this was a live issue, and that all parties have had full opportunity to present written and oral argument on it. It would be a waste of resources, and contrary to the guiding principles of Rule 3, to defer adjudication of this issue to another hearing.

[53] Subsection 39(1) of the Canada Evidence Act reads as follows:

Confidences of the Queen’s Privy Council for Canada

Renseignements confidentiels du Conseil privé de la Reine pour le Canada

Objection relating to a confidence of the Queen’s Privy Council

Opposition relative à un renseignement confidentiel du Conseil privé de la Reine pour le Canada

39 (1) Where a minister of the Crown or the Clerk of the Privy Council objects to the disclosure of information before a court, person or body with jurisdiction to compel the production of information by certifying in writing that the information constitutes a confidence of the Queen’s Privy Council for Canada, disclosure of the information shall be refused without examination or hearing of the information by the court, person or body.

39 (1) Le tribunal, l’organisme ou la personne qui ont le pouvoir de contraindre à la production de renseignements sont, dans les cas où un ministre ou le greffier du Conseil privé s’opposent à la divulgation d’un renseignement, tenus d’en refuser la divulgation, sans l’examiner ni tenir d’audition à son sujet, si le ministre ou le greffier attestent par écrit que le renseignement constitue un renseignement confidentiel du Conseil privé de la Reine pour le Canada.

[54] This section allows a minister or the Clerk of the Privy Council to issue a certificate asserting that specified information constitutes a confidence of the Queen’s Privy Council for Canada, barring its disclosure without any examination or hearing.

[55] Certificates are issued to protect Cabinet confidences and nothing more. A certificate cannot be issued to thwart public inquiry or gain tactical advantage in litigation (Tsleil at para 25; Babcock v Canada (Attorney General), 2002 SCC 57 (Babcock) at para 25).

[56] Challenging a section 39 certificate is difficult. Unlike, for example, motions considering litigation privilege or solicitor-client privilege, the Court cannot examine the disputed documents on a section 39 challenge.

[57] The leading authority on section 39 certificates is the Supreme Court’s decision in Babcock. As set out in paragraph 21 of that decision, section 39 is Canada’s response to the need to provide a mechanism for the responsible exercise of the power to claim Cabinet confidentiality in the context of judicial and quasi-judicial proceedings. It sets up a process for bringing information within the protection of the Act. Certification by the Clerk of the Privy Council or by a minister of the Crown is the trigger by which information becomes protected.

[58] A certification is valid if: (1) it is done by the Clerk or minister; (2) it relates to information within subsection 39(2); (3) it is done in a bona fide exercise of delegated power; (4) it is done to prevent disclosure of hitherto confidential information (Babcock at para 27).

[59] In respect of the third point, the power exercised must flow from the statute and must be issued for the bona fide purpose of protecting Cabinet confidences in the broader public interest. The function of the Clerk under the Canada Evidence Act is to protect Cabinet confidences, and this alone. It is not to thwart public inquiry nor is it to gain tactical advantage in litigation. If it can be shown from the evidence or the circumstances that the power of certification was exercised for purposes outside those contemplated by section 39, the certification may be set aside as an unauthorized exercise of executive power (Babcock at para 25).

[60] Unless the Clerk of the Privy Council decertifies the information (which was not done here), a section 39 certificate can be set aside if it can be established that: the description of the information is insufficient on its face to establish that the information is a Cabinet confidence; or that the power to certify was exercised improperly (Babcockat paras 28, 31, 39-40; Tsleil-Waututh Nation v Canada (Attorney General), 2017 FCA 128 at paras 27-28, 31; Volpe v Canada (Governor General), 2021 FC 1133 (Volpe) at para 27.

A. Is the certificate sufficient on its face?

[61] As set out in paragraph 46 above, there are two categories of information in the schedule to the Certificate.

[62] As for item #1, the submission to the GiC is described as including a letter to the Minister from the Minister of Public Safety and Emergency Preparedness, the signed Ministerial recommendation, a draft Order in Council, and accompanying materials.

[63] This description closely resembles item #2 in the certificate that was before the Court of Appeal in Tsleil (para 29). Justice Stratas concluded that the description in that matter was adequate, and that if more particularity in the descriptions were supplied, there would be a substantial likelihood that the information that lies at the heart of what section 39 exists to protect would be disclosed to some extent (para 42).

[64] A similar description in a section 39 certificate was also before the Court in Volpe (para 29). There, Justice Fuhrer concluded that this description fell within section 39 (para 32), and dismissed the production motion.

[65] I am not persuaded that I should, considering the Certificate on its face, arrive at a different conclusion than Justice Stratas in Tsleil or Justice Fuhrer inVolpe. Since the description in the Certificate is so close to the ones in Tsleil and Volpe, I could not arrive at a contrary finding without disregarding precedent that is binding on me.

[66] I have also considered the certificate itself, to which the descriptions are attached as a schedule. The Certificate attests (as reproduced in paragraph 45 above) that that the information has been examined, and that it constitutes a confidence of the Queen’s Privy Council for Canada. This further supports a conclusion that the Certificate, on its face, was issued for the bona fide purpose of protecting Cabinet confidences in the broader public interest, not to thwart public inquiry or gain tactical advantage in litigation. This also provides an assurance that the Interim Clerk of the Privy Council directed her mind to the criteria and limitations of section 39 of the Canada Evidence Act (Smith, Kline & French Laboratories Ltd v Canada (Attorney General), (1983), 1983 CanLII 5055 (FCTTD), 76 CPR (2d) 192 at para 24).

[67] The applicants argue that the Certificate is deficient, in part, because it does not provide the exact date of the submission from the Minister to the GiC. The description given is “July 2021”, but does not indicate what day in July the submission was made. The applicants submit that the date is material because subsection 25.4(1) of the ICA provides that the GiC may make an order “within the prescribed period”. The specific date of the Minister’s submission may inform whether the Order was made within the required period. The applicants submit that the full date of the Minister’s submission cannot be privileged, and that the information is relevant to the issues to be determined on the application.

[68] A notice of application must set a complete and concise statement of the grounds intended to be argued (subrule 301(d)). The purpose in clearly setting out the relief sought and grounds to be argued is not only that the other parties will know the case to be met and not be caught by surprise, but also so that the Court hearing the matter will know what issues it will have to consider and determine (Air Canada v Toronto Port Authority, 2010 FC 774 at para 80, aff’d 2011 FCA 347; see also Abbott Laboratories v Canada (Minister of Health), 2006 FC 1558 at paras 97-103).

[69] Here, the grounds of review set out by the applicants in their notice of application do not challenge the timeliness of the Order. As such, the specific date of the submission to the GiC set out in this part of the schedule to the Certificate is irrelevant, and the Certificate will not be set aside for this reason.

[70] I acknowledge that the grounds for review in the notice of application state that “the [Order] should be set aside on one or more of the following issues” (emphasis added). Phrases such as “such further and other relief as counsel may advise and this Honourable Court deems just” or other basket clauses have been determined to be insufficient to meet the requirements of Rule 301 (SC Prodal 94 SRL v Spirits International B.V., 2009 FCA 88 at para 11).

[71] The applicants refer to Babcock at para 28, where the Supreme Court reviewed the kind of description that may be needed in a section 39 certificate, specifically: “the kind of description required for claims of solicitor-client privilege under the civil rules of court will generally suffice. The date, title, author and recipient of the document containing the information should normally be disclosed.” The applicants argue that this is probably the bare minimum for the kind of description required. I disagree. This issue was addressed directly in Tsleil at para 33. I decline to depart from the reasoning in Tsleil, or hold the respondents to a different standard when the descriptions in the respective certificates, on their face, are so similar.

[72] As for the second category of documents, Cabinet privilege is asserted over a “signed and approved Order in Council of August 6, 2021, concerning China Mobile Communications Group Co. Ltd.” The basis for the objection is that it is a record recording deliberations or decisions of Council.

[73] On its face, it does not make sense that the signed Order reflects the deliberations of the GiC, or is confidential. The Order was sent to the applicants on August 9, 2021. As a consequence of these proceedings, it is now publically available. It reflects the outcome of the deliberations, but is not a record of the deliberations leading to it. On its face, item #2 in the schedule to the Certificate is deficient because it either seeks to apply Cabinet privilege to a document the applicants already have, or does not adequately describe other materials that may reflect the deliberations of the GiC.

[74] What the respondents may have meant in this description was addressed in the cross-examination of Mr. Adler. Even if this evidence (which was an answer provided by counsel, not the witness) is admissible, I have given it no weight when considering the propriety of the Certificate on its face.

[75] The same issue was before the Court in Volpe, where the Canada Evidence Act certificate in that matter also described a signed and approved Order in Council (para 29). On the record before her, Justice Fuhrer (para 33) was prepared to infer that the record of deliberations and decisions of Council that resulted in the approved version of the order before her fell within subsection 39(2), and dismissed the applicants’ motion.

[76] While I have no difficulty concluding that all Cabinet deliberations should be protected, the minister or Clerk of the Privy Council must adequately describe what is to be protected by a section 39 certificate, not rely on inferences that may or may not be drawn by the Court, particularly given the Court’s inability to examine the documents for which this kind of privilege is claimed. If the respondents intended to protect the deliberations and considerations of the GiC in item #2 for certain information or documents, this must be expressly stated. I will therefore set aside the Certificate as it relates to item #2 in the schedule, without prejudice to the respondents delivering a revised certificate. To be clear, setting aside this part of the Certificate does not require the respondents to produce any materials, either in response to the Rule 317 request or otherwise, and does not result in any express or implied waiver of privilege.

B. Was the Power to Certify Exercised Improperly?

[77] Since I have set aside the Certificate as it applies to item #2 in the schedule, I will only consider item #1.

[78] In considering whether power was exercised improperly, the Court may consider such external evidence as the challenger may be able to provide (Babcock at para 40; Tsleil at para 28). Inferences may be drawn from circumstantial evidence (Babcock at para 41).

[79] Stepping back from what the Certificate says on its face, the applicants place great weight on the fact that, without relief on this motion, they will be left with no record on the application for judicial review. Other than the Order, the respondents provided nothing in response to the Rule 317 request. The applicants submit that it is unheard of for an application for judicial review to proceed without any evidence as to what was before the decision-maker.

[80] The role of the evidentiary record in preventing administrative decision-makers from being immunized from review was discussed in detail in Tsleil. In that decision, Justice Stratas considered an “extreme example” of a circumstance where the evidentiary record of the administrative decision-maker was not before the reviewing court, and questioned how a reviewing court could evaluate whether the administrative decision-maker’s decision was based on any evidence at all (para 74). Here, that is not an extreme example, it is the circumstances faced by the applicants.

[81] In Tsleil, the Court of Appeal quoted academic commentary: “without knowing the reasoning behind a decision, it is impossible for a judge to determine if it is founded upon arbitrary reasoning” (para 76) and stated: “at least in the situation where the evidentiary record of the administrative decision-maker is not before the reviewing court in any way whatsoever—i.e., there is not even a summary or hint of what was before the administrative decision-maker—or the record is completely lacking on an essential element, concerns about immunization of administrative decision-making can come to the fore” (para 78).

[82] I have great sympathy for applicants’ position. The respondents have produced nothing in response to the Rule 317 request. There is no certainty that Rule 307 evidence will be served, what it will say, or what (if any) admissions the applicants may obtain on cross-examination. The applicants, and the Court, may have nothing to refer to in the assessment of the reasonableness of the Order, other than the Order itself. I am not, however, persuaded that this evidentiary vacuum arises from an improper exercise of authority. Rather, it arises from the nature of the proceedings and the confidences claimed.

[83] Information and materials are subject to Cabinet confidence or they are not. The fact that the record is otherwise limited or non-existent is not a reason to remove the protection that would otherwise apply to confidences of the Queen’s Privy Council for Canada. I also note paragraph 49 of Tsleil –the impact that a section 39 certificate might have on litigation is not a relevant factor in assessing the validity or sufficiency of a certificate.

[84] I have also considered what kind of material may have been before the decision-maker (the GiC) when making the Order. Pursuant to the provisions of the ICA discussed above, the fact-finding is done by the Minister. If an order is made for the review of an investment, the Minister must advise the non-Canadian of their right to make submissions (subsection 25.3(2)) and, if the non-Canadian elects to do so, afford a reasonable opportunity to do so (subsection 25.3(4)). The Minister may also require the non-Canadian or other person or entity to provide information that the Minister considers necessary for the review (subsection 25.3(5)). After these steps are complete, if the Minister wishes to refer the matter to the GiC, the Minister makes the referral to the GiC, “together with a report of the Minister’s findings and recommendations on the review” (paragraph 25.3(6)(a)).

[85] It is the Minister, not the GiC, that requests and receives the information. There is therefore no reason to assume that, when the GiC made the Order, it was on the same record that the Minister had leading up to the decision to refer. The only materials that the ICA requires the Minister to provide to the GiC is a “report”. Taking into account the respondents’ response to the Rule 317 request, and the contents of the Certificate, it is reasonable to conclude that the Minister’s report (or submission, as it was described in the Certificate) was the only material that was before the decision-maker, the GiC. It is also reasonable to consider that, if the Minister is only required to provide a report (as opposed to a full evidentiary record) such a report and accompanying materials would summarize the information gathered, and be more likely to include the conclusions of the Minister and his thought process, the very things a section 39 certificate was intended to protect. I therefore conclude that the absence of a record on the judicial review (at least at this stage) arises from the nature of the proceedings, the process under ICA, and the fact that the notice of application only challenges the Order, not an effort to thwart public inquiry, or an improper litigation tactic by the respondents to gain advantage.

[86] The applicants ask that an adverse inference be drawn from the fact that the Interim Clerk of the Privy Council who signed the Certificate was not made available for cross-examination. Neither the Canada Evidence Act nor the jurisprudence interpreting it require that the author of a section 39 certificate be made available for cross-examination. The applicants also ask that an adverse inference be drawn from the numerous refusals that were given during the cross-examination of Mr. Adler.

[87] Given the nature of the material the Minister is required to provide to the GiC under subsection 25.3(6); my conclusion that the Minister’s referral decision is not in issue in this proceeding; and that the concerns raised in both the January 28, 2021 order for review of the investment and the Order raise concerns regarding national security, any inferences drawn from the refusal to make the Clerk available for cross-examination or the refusals given on Mr. Adler’s cross-examination cannot be so adverse as to conclude that the Certificate was not a bona fide exercise of power, was intended to thwart public inquiry or was misused for the purposed of obtaining a tactical advantage.

[88] The applicants also argue that there is no evidence from the respondents that it was impossible to separate what is privileged from what is not. In my view, that evidence was not required in the circumstances of this motion.

[89] In challenging the bona fides of the Certificate, the applicants also point to the fact that the initial objection to production on the basis of Cabinet confidence was made in September 2021, and was set out in a description of material signed by Edward Fox. Mr. Fox’s role is unclear, but it is clear that he is not, and has never been, the Clerk of the Privy Council. The schedule to the Certificate is dated December 17, 2021, and is identical to the document signed by Mr. Fox. While it would have been much more efficient for the respondents to have provided a proper certificate in September, I am not persuaded that the close similarity in the two documents can lead to a conclusion that the Certificate was not a bona fide exercise of power.

[90] In addition to considering the applicants’ arguments on the bona fides of the Certificate individually, I have also considered them in the aggregate, and reach the same conclusion. I am not persuaded that the evidence on the motion (and lack of evidence and circumstantial evidence) can lead to a conclusion that the Certificate was not a bona fide exercise of power. The applicants’ motion in respect of item #1 in the schedule to the Certificate will therefore be dismissed.

VI. Costs

[91] The Court has full discretionary power over the amount and allocation of costs (Rule 400(1)).

[92] The respondents were substantially, but not entirely, successful on the motion. I will therefore award costs to the respondents, fixed at $2,000.00, payable in any event of the cause. This amount approximates what would be assessed at the middle of Column III of the Tariff.

ORDER in T-1377-21

THIS COURT ORDERS that:

1. Item #2 in the schedule to the certificate served pursuant to section 39 of the Canada Evidence Act is hereby set aside.

2. The respondents are granted leave to serve a revised certificate, which must be done within 15 days of the date of this order.

3. This order does not oblige the respondents to produce any documents or information, or constitute an express or implied waiver of any privilege over the documents described in item #2.

4. The applicants’ motion is otherwise dismissed.

5. The respondents are awarded costs, fixed at $2,000.00, payable in any event of the cause.

Blank

“Trent Horne”

blank

Case Management Judge

FEDERAL COURT

SOLICITORS OF RECORD

DOCKET:

T-1377-21

STYLE OF CAUSE:

CHINA MOBILE COMMUNICATIONS GROUP CO., LTD. ET AL v AGC ET AL

PLACE OF HEARING:

held by videoconference

DATE OF HEARING:

JANUARY 19, 2022

ORDER and REASONS:

Horne, p.

DATED:

february 2, 2022

APPEARANCES:

Erica J. Baron

Mr. Nikoforos Iatrou

Mr. Akiva Stern

For The applicants

Sean Gaudet

Ani Mamikon

For The respondents

SOLICITORS OF RECORD:

McCarthy Tétrault LLP

Toronto, Ontario

For The applicants

Attorney General of Canada

Toronto, Ontario

For The respondents