Licence Appeal Tribunal

DATE: 2016-07-21

FILE: 10179/CPA

CASE NAME: 10179 v. Director under the Consumer Protection Act, 2002

Appeal from an Order for Immediate Compliance issued by the Director under the Consumer Protection Act, 2002

MDG Newmarket Inc. c.o.b. Ontario Energy Group and Evgueni Farber a.k.a. Eugene Farber Appellants

-and-

Director under the Consumer Protection Act, 2002 Respondent

MOTION TO QUASH WITNESS SUMMONS

ADJUDICATORS: Laurie Sanford, Vice-Chair, presiding Gary Yee, Associate Chair

APPEARANCES:

For the Appellants: Pradeep Chand, Counsel

For the Respondent: Jeffrey P. Ludlow, Counsel Graeme Adams, Counsel

Heard in Toronto: June 30, 2016

MOTION DECISION

INTRODUCTION

1The Appellants have served the Respondent with a witness summons, and the Respondent is making this motion to quash it. This is a proceeding in which the Tribunal is hearing an appeal by the Appellants from an order for immediate compliance issued on April 5, 2016 by the Respondent Director under the Consumer Protection Act, 2002 (the "Director"). The hearing on the merits is scheduled to begin on August 3, 2016 and is scheduled for a total of eight days, into September.

2The Tribunal heard submissions from counsel for both parties, including factums and books of authorities. The Tribunal is ordering that the summons be quashed. As these reasons will indicate, the summons is worded much too broadly and generally in terms of the documents that the Director is being asked to bring to the hearing. Furthermore, the evidence being sought from the Director will not be relevant to the findings that the Tribunal needs to make in this appeal.

3People or companies in the business of providing specified goods or services to consumers are subject to the requirements of the Consumer Protection Act, 2002, R.S.O. 2002 c. 30, Sch. A (the "Act"). In this case, the Director made an order for immediate compliance with certain provisions of the Act because it was her opinion that the order was in the public interest, which is the test set out in section 112 of the Act. The Director issued extensive reasons. This was supported by affidavits of various investigators who considered the conduct of Ontario Energy Group ("OEG"), which provides heating, cooling and ventilation products to consumers. The Director's order directs the Appellants to stop their sales representatives from making certain representations to consumers, to revise OEG's written agreements, and to make other revisions to their alleged business practices.

The Witness Summons

4The Appellants seek to summons Barbara Duckitt, who is the Deputy Director designated as the Director under the Act. The Summons to a Witness form contains the Appellant's description of Ms. Duckitt's relationship to the appeal in Appendix A, and the last paragraph states: "The review of the Director in weighing the public interest and believing on reasonable grounds that the Applicants have engaged or are engaging in activities that contravene the CPA is integral to the Appeal of this matter and the evidence of the Director is required."

5Appendix B is a list of all the documents and items that the witness should bring with her to the Tribunal hearing, and it states as follows:

DOCUMENTS REQUIRED

1. All documents, notes, and correspondence pertaining to the issuance of the Order for Immediate Compliance dated April 5, 2016.

2. All correspondence, documents and notes pertaining to communications with Inspectors of the Ministry of Government and Consumer Services and the subsequent issuance of the Order for Immediate Compliance dated April 5, 2016.

3. All correspondence, documents and notes pertaining to the discussion of the issuance of the Order for Immediate Compliance issued April 5, 2016, with staff, employees, affiliates or representatives of the Ministry of Labour, the Ministry of Government and Consumer Services and the Ministry of the Attorney General.

4. All information, documents, notes, and reports, pertaining to the investigation of the Applicants that were reviewed by the Director prior to the issuance of the Order for Immediate Compliance issued April 5, 2016.

ISSUES

6The Respondent presented four grounds to quash the summons.

a. The Director cannot be compelled to testify because she is an administrative decision-maker exercising her statutory authority.

b. The summons is a "fishing expedition" and an abuse of process.

c. The Director's evidence is not relevant.

d. The Tribunal's Rules were not followed.

A. Compellability of the Director

7Counsel for the Respondent submitted that the Director should be protected from being called as a witness in the same way as a judge or an adjudicative tribunal member. The courts have compelled tribunal members to be examined about their deliberative process only in very rare cases when there has been some evidence pointing to a breach of natural justice – see Québec (Commission des affaires sociales) v. Tremblay 1992 CanLII 1135 (SCC), [1992] 1 SCR 952.

8The case law that recognizes this protection for adjudicative decision makers is clear. In trying to extend this to administrative decision makers, Respondent's Counsel cited a Nova Scotia Court of Appeal case – Waverley (Village) v. Nova Scotia (Acting Minister of Municipal Affairs) (1994), 1994 NSCA 58, 129 NSR (2d) 298, at para. 17. This case was in the context of an applicant for judicial review seeking to examine a cabinet minister about his discretionary decision to exempt a quarry from a requirement for a local development permit.

9In addition, Respondent's Counsel cited Payne v. Ontario (Human Rights Commission) (2000), 2000 CanLII 5731 (ON CA), 192 DLR (4th) 315 (Ont. CA). In para. 172 of that decision, the Court applied Tremblay and the concept of deliberative secrecy to prevent the examination, in a judicial review process, of the Registrar of the Ontario Human Rights Commission about the Commission's decision to dismiss the appellant's human rights complaint.

10The Tribunal notes that the majority decision of Sharpe, J.A. in Payne referred to the Commission as a tribunal, and expressed a concern that Commission member's collegial decision making process be protected. The Tribunal notes that the Human Rights Commission, as it was at that time, had investigation and enforcement functions that may be analogous to the Director's responsibilities under the Consumer Protection Act. However, the Commission's function that the Court was trying to protect was its decision making at the adjudicative stage, which involved Commission members deliberating and discussing whether to send a complaint to a hearing or to dismiss it. That is a process of independent adjudication between two parties, in contrast to the Director in this case, whose function is more accurately described as a regulator with the responsibility for investigation and enforcement on behalf of the government.

11In highlighting this distinction, the Tribunal finds support in the case of Zahariev v. Ontario (Registrar of Motor Vehicle Dealers and Salespersons), 2005 CanLII 44815 (ON SCDC), which the Tribunal had presented to counsel at the hearing to obtain their submissions. The Registrar under the motor vehicle dealers regulatory scheme may be analogized to the Director under the Consumer Protection Act. The Divisional Court, at para. 10 and 11 of Zahariev, cited its decision in Registrar, Motor Vehicle Dealers Act v. Shine Car Sales (2003), 2003 CanLII 11437 (ON SCDC), which stated: "It should be understood that the Tribunal owes no deference to the Registrar's opinion. The Registrar is an investigator. The Registrar is not a trier of fact whose opinion is based upon a hearing and so entitled to deference."

12Respondent's Counsel submitted that the Director does not have the powers of an investigator under the Act, but only the power to appoint investigators. The Tribunal does not accept this as a relevant difference in the context of considering whether the Director is compellable or not. The Director is enforcing and regulating consumer practices, as opposed to adjudicating, which tribunals do, and which some hybrid regulators also do at certain stages of their functions (e.g., the Ontario Securities Commission, the Ontario Energy Board, the Law Society).

13As noted in Tremblay, the concept of deliberative secrecy recognizes that the judge's right to refuse to answer as to how and why the judge arrived at a particular judicial conclusion is essential to judicial independence. That rationale also applies to statutory decision makers exercising an adjudicative function, subject to the exception where there may have been a breach of natural justice. The Tribunal does not accept that it also applies to a non-adjudicative function, such as the administrative decision making of the Director in this case. While Payne and older cases may have made broad references to "administrative" decision maker, that does not provide a clear enough line of legal authority to treat a regulator in the same way as an independent adjudicator by extending the judicial concept of deliberative secrecy to the regulator's exercise of their statutory function.

14In the end, as the Tribunal's analysis below will show, even if the regulator may not be able to rely on deliberative privilege, the regulator may still be shielded from being called as a witness to answer questions about their decision making. This is because, in most regulatory schemes, the reasoning and process behind why a regulator made a certain enforcement decision will not be relevant to an appellate tribunal's assessment of the merits of that decision. Instead, it will be the underlying evidence and facts that will be important to consider, not the regulator's process or thoughts in arriving at its decision that is being appealed. This Tribunal does not have the function of judicial review of the regulator's conduct, or of hearing complaints about alleged unfairness in the regulator's conduct or decision making.

B. Abuse of Process, and Lack of Relevance

15The second and third grounds argued by the Respondent are partly related. Both counsel agree that a summons may be quashed if there is an abuse of process or if the evidence being sought from the witness would not be relevant. Both counsel also cited case law that noted that the setting aside of a summons is "drastic relief."

16Apart from the cases cited by counsel, the Tribunal notes that sections 12(1) and 23(1) of the Statutory Powers Procedure Act, R.S.O. 1990, c. 22, refer to relevance and admissibility, as well as a tribunal's general power to control its proceedings to prevent an abuse of process:

12.(1) A tribunal may require any person, including a party, by summons,

(a) to give evidence on oath or affirmation at an oral or electronic hearing; and

(b) to produce in evidence at an oral or electronic hearing documents and things specified by the tribunal,

relevant to the subject-matter of the proceeding and admissible at a hearing.

23.(1) A tribunal may make such orders or give such directions in proceedings before it as it considers proper to prevent abuse of its processes.

17The Tribunal will not hear from witnesses whose evidence is not relevant to what the Tribunal must decide. Furthermore, the Tribunal will not permit the witness summons process to be abused – this may include summonses that are used for an improper purpose, or that lead to the witness being faced with an unfair or unduly onerous situation in attempting to comply with the summons.

18In this case, the Tribunal finds that the two main concerns expressed by the Respondent are valid – first, that the summons is drafted much too broadly and generally, so that it essentially may be characterized as a "fishing expedition"; and second, that the evidence of the Director will not be relevant to the issues that the Tribunal must decide.

B.(i) Scope of the summons

19As noted above, Appendix A of the summons states the Appellants' rationale for wanting the Director to testify: "The "review of the Director in weighing the public interest and believing on reasonable grounds that the Applicants have engaged or are engaging in activities that contravene the CPA is integral to the Appeal of this matter and the evidence of the Director is required."

20Based on this rationale, the Appellants, in Appendix B of the summons, seek to have the Director bring to the Tribunal hearing all documents, notes, and correspondence pertaining to the investigation preceding the Director's Order, the issuance of that Order, and also the communications with the Director's inspectors, as well as the staff of three Ministries.

21On its face, Appendix B is too broad and general. The Respondent's Counsel cited several cases where courts have indicated that a summons may be quashed for being an abuse of process – see Williams v. Mendez, [2002] OJ No. 43 (ONSC), Coburn v. Barber, 2010 ONSC 3342, and Merck & Co. v. Apotex Inc., [1998] FCJ No. 294. In these cases, the Court quashed the summons because the party was using it for an improper purpose to go on a "fishing expedition." Another common feature of these quashed summonses was that the information or documents sought to be produced were not described in enough detail for the witness to know what to bring, and instead, the witness would have to do a "sweep" of all their records to try to comply with the summons.

22In addition to the unfairness or impracticality, the Merck case also noted that there are contempt of court sanctions for not complying with a summons. This highlights the requirement that a witness not be put into an unfair, unclear or impractical position in trying to comply with a summons.

23Respondent's Counsel also cited Payne again, where the majority judgment of the Ontario Court of Appeal agreed with the Ontario Human Rights Commission that the list of documents sought to be produced was "so sweeping and unfocused that it is apparent that the applicant is, in effect, insisting upon a general discovery of the Commission through its registrar, hoping to uncover something that will help her case. The proposed scope of examination is simply too broad."

24The Tribunal finds that this is also a valid description of the summons to the Director in this case before us. When the Tribunal asked the Appellants' Counsel to identify any specific examples of documents that only the Director could produce, as opposed to one of the Director's investigators producing the same document, Counsel could only respond that they would not know until they had a chance to ask the Director. This illustrates the practical difficulties with a summons of this nature – the Director would have to bring boxes of materials to the hearing, without anyone knowing in advance which of those materials may be relevant or not.

25Appendix B of the summons appears to be an attempt at general discovery, or an access to information request. It is framed much too broadly and generally, especially in view of the Tribunal's findings in the section below about the lack of relevance of the Director's views of her investigators' findings about alleged non-compliance with the Act or about what is in the public interest.

B.(ii) Relevance of the witness's evidence

26Appendix A of the summons reveals a faulty premise for the relevance of the Director's evidence – that the Tribunal's task is to "review" the Director's assessment of the "public interest," as opposed to making its own adjudicative decision about the statutory test. The Tribunal is holding a hearing de novo, meaning that it will make findings of fact based on the evidence presented at the Tribunal hearing (which may be somewhat similar to the "evidence" that was before the Director, but not necessarily), and then make an adjudicative decision about the "public interest."

27The Tribunal asked the counsel to make submissions about a May 26, 2016 decision of this Tribunal in a liquor licence appeal, where the Appellant tried to summons the Deputy Registrar of the Alcohol and Gaming Commission of Ontario – see 2396919 Ontario Inc. o/a Brixton Social v. Registrar of Alcohol and Gaming (LAT File Nos. 9608/LLA and 9798/LLA). At para. 25 of that decision, Vice-Chair Flude stated:

25. The Tribunal accepts the arguments made by the Registrar in their totality. In any given matter, the first-hand evidence of the frontline inspectors is the cogent evidence. Nothing is added to the substance of the case by hearing from the Deputy Registrar that, on the basis of that same evidence, he decided to issue Notices of Proposal. The Tribunal also accepts that the fact that Mr. Mungham may have decided on some other sanction has no relevance to its determination of the facts and the appropriate sanction, if applicable. A proceeding before the Tribunal is in the nature of a de novo procedure. No deference is owed to Mr. Mungham. It is solely for the Tribunal to decide the appropriate sanction so Mr. Mungham's decision in that regard has no relevance to these proceedings.

28As Appellants' Counsel pointed out, another Tribunal decision is of course not binding. Furthermore, Mr. Chand submitted that the this decision could be distinguished because the Deputy Registrar at the AGCO had no first-hand knowledge of the evidence or facts, whereas the Director under the Consumer Protection Act appoints the investigators and directs them, and so would have personal knowledge of the facts.

29The Tribunal finds the reasoning Brixton Social case to be very useful and persuasive. First, in terms of the underlying evidence about the Appellants' consumer or business practices, there already appears to be ample material and information in the affidavits of the investigators that have been disclosed to the Appellants, and the Tribunal may hear more from consumers directly. As noted earlier, when asked what relevant evidence or documents the Director would have that her investigators would not, the Appellants' Counsel could not point to anything. Indeed, it is the investigators – and not the Director – who would have more direct or personal knowledge of any of the evidence that form the factual foundation for the assessment of whether there have been violations of the Act, and whether it is in the public interest to make an order for immediate compliance.

30Apart from this factual foundation, the Director might be seen to be well suited to testify about how she came to her conclusions about the Appellants' alleged violations of the Act, and what she considered in assessing whether the order for immediate compliance was in the public interest. But this is not relevant to the Tribunal's exercise of its statutory function. The Tribunal's task is to hear this appeal as a new or fresh hearing, and not as a review of what the Director did, or whether the Director assessed the investigators' information reasonably and fairly, or whether the Director assessed the non-compliance allegations or the public interest properly. To paraphrase from the Brixton Social case – nothing is added to the substance of the case by hearing from the Director about why she decided to make her compliance order, and the Tribunal owes no deference to the Director, because it is solely for the Tribunal to decide whether there should be an order for compliance under the Act.

31In conclusion, the Tribunal finds that this summons should be quashed. It constitutes an abuse of process because it will be improperly used as a fishing expedition, and it is so broad and general that it would be unfair and improper to compel the Director to comply with this summons. As well, the summons does not point to any relevant evidence that the Director could provide to the Tribunal.

C. Non-compliance with Tribunal's Rules of Practice and Procedure

32The Respondent's Counsel submitted a fourth ground for quashing the summons, that the Appellants have not complied with the Tribunal's Rules, and should therefore be barred from calling the Director as a witness. Although the Tribunal does not need to make a finding on this ground, since it has already ruled against the summons on other grounds, the Tribunal will note that it would not have favoured the Respondent's motion on this ground.

33The Respondent submitted that the Appellants breached Rules 8.2 and 9.2 of the Tribunal's Rules, because they did not include the Director in their earlier disclosure of a list of witnesses, and furthermore, the Appellants did not provide a "will-say" about what their witness's anticipated evidence was or what specific documents their witness would be producing.

34The Tribunal notes that its Rules may be flexibly applied, and this would not have been an appropriate case to apply the ultimate sanction of prohibiting a party from calling a witness because of a possible breach of the Rules, If this were the only ground for quashing the summons, the Tribunal would have ruled that the possible breaches identified by the Respondent could be remedied by the Appellants well before the start of the hearing on its merits, and the Respondent would not face much prejudice from this.

ORDER

1. The Tribunal grants the Director's motion to quash the witness summonses that the Appellants' Counsel has caused to be served on Barbara Duckitt, designated as the Director under the Consumer Protection Act, 2002.