Date: 19990913
Docket: T-85-97
Ottawa, Ontario, this 13th day of September, 1999
PRESENT: THE HONOURABLE MR. JUSTICE PELLETIER
BETWEEN:
SIERRA CLUB OF CANADA, a national organization
concerned with environmental protection and restoration
and a non-profit corporation duly constituted on April 7, 1992
by Letters Patent under the Canadian Corporation Act
Applicant
- and -
THE MINISTER OF FINANCE OF CANADA
THE MINISTER OF FOREIGN AFFAIRS OF CANADA
THE MINISTER OF INTERNATIONAL TRADE OF CANADA and
THE ATTORNEY GENERAL OF CANADA
Respondents
- and -
ATOMIC ENERGY OF CANADA LIMITED (AECL)
Intervenor
REASONS FOR ORDER and ORDER
[1] Two ministers of the Crown authorize a complex financial transaction whose purpose is to make available funding for Atomic Energy of Canada Limited"s (AECL) sale of Candu reactors to the People"s Republic of China. Does this transaction trigger the requirement of an environmental assessment under the Canadian Environmental Assessment Act1. Sierra Club of Canada says it does. It brings an application for judicial review seeking to set the transaction aside.
[2] The substance of the transaction is as follows. AECL wants to sell Candu reactors to the People"s Republic of China (PRC) but the PRC requires financial assistance to fund the transaction. The Minister of Finance and the Minister of Foreign Affairs each sign a Memorandum of Authorization which authorizes Export Development Canada to lend to the State Development Bank of China up to US $1,500,000,000 "to support the sale of two CANDU nuclear reactors by Atomic Energy of Canada Limited to China National Nuclear Corporation or its nominee". Sierra Club says that this triggers the review requirement under the Act because it is a loan, guarantee or other form of financial assistance as set out in s. 5(1)(b ) of the Act.
5. (1) An environmental assessment of a project is required before a federal authority exercises one of the following powers or performs one of the following duties or functions in respect of a project, namely, where a federal authority
5. (1) L'évaluation environnementale d'un projet est effectuée avant l'exercice d'une des attributions suivantes_:
(a) is the proponent of the project and does any act or thing that commits the federal authority to carrying out the project in whole or in part;
a) une autorité fédérale en est le promoteur et le met en oeuvre en tout ou en partie;
(b) makes or authorizes payments or provides a guarantee for a loan or any other form of financial assistance to the proponent for the purpose of enabling the project to be carried out in whole or in part, except where the financial assistance is in the form of any reduction, avoidance, deferral, removal, refund,
b) une autorité fédérale accorde à un promoteur en vue de l'aider à mettre en oeuvre le projet en tout ou en partie un financement, une garantie d'emprunt ou toute autre aide financière, sauf si l'aide financière est accordée sous forme d'allègement " notamment réduction, évitement, report, remboursement, annulation
remission or other form of relief from the payment of any tax, duty or impost imposed under any Act of Parliament, unless that financial assistance is provided for the purpose of enabling an individual project specifically named in the Act, regulation or order that provides the relief to be carried out;
ou remise " d'une taxe ou d'un impôt qui est prévu sous le régime d'une loi fédérale, à moins que cette aide soit accordée en vue de permettre la mise en oeuvre d'un projet particulier spécifié nommément dans la loi, le règlement ou le décret prévoyant l'allègement;
[3] Elaine May discovers what has happened by reading the newspapers. She writes to the Ministers and tells them that they have contravened the Act and asks that they do their duty and conduct an assessment. The Ministers write back to say that the Act does not apply and that they have done their duty. Sierra Club then brings an application for judicial review of the Ministers" refusal to do their duty. But they have only failed to do their duty if the Act applies to the transaction.
[4] Not surprisingly, AECL wants to know which facts Sierra Club says triggers the operation of the Act. They ask Elaine May specific questions at her cross-examination on her Affidavit: the Act, they say, only applies if there is a payment to a proponent, who is the proponent? Ms. May, on the advice of her lawyers, refuses to answer the question. "That is a question of law" the lawyers say; "she does not have to answer that". Or, "It is our work product and we do not have to disclose it to you. You will find out when we file our Brief of Law". AECL are not content to wait until the hearing of the application to find out which position they have to defend. They say they are entitled to know the case they have to meet before the Sierra Club"s brief is served upon them. They ask for the Court"s assistance.
[5] A summary of the questions Ms. May refused to answer is attached as schedule A to these Reasons.
[6] For the most part, the basis of Sierra Club"s objections is that the questions are either questions of law or they require Ms. May to interpret the Act in order to answer them. The exception is Q. 472, which will be dealt with separately at the conclusion of these reasons.
[7] Hugessen J. had occasion to consider the range of permissible questions in examinations for discovery in Montana Band v. Canada, [1999] F.C.J. 1088 in which an objection was taken to certain questions on the ground that they called for the expression of a legal opinion. Before addressing the specific issue, Hugessen J. restated the principles governing examination for discovery:2
| "The general purpose of examination for discovery is to render the trial process fairer and more efficient by allowing each party to inform itself fully prior to trial of the precise nature of all other parties" positions so as to define fully the issues between them. It is in the interest of justice that each party should be as well informed as possible about the positions of the other parties and should not be put at a disadvantage by taken by surprise at trial. It is sound policy for the Court to adopt a liberal approach to the scope of questioning on discovery since any error on the side of allowing questions may always be corrected by the trial judge who retains the ultimate mastery over all matters relating to admissibility of evidence; on the other hand, any error which unduly restricts the scope of discovery may lead to serious problems or even injustice at trial." (emphasis added) |
[8] The learned judge then went on to consider the specific problems of questions which mix fact and law:
| "There is of course no question that examination on discovery is designed to deal with matters of fact. "Pure" questions of law are obviously an improper matter to put to a deponent. ... But the line is rarely clear or easy to draw. Questions may mix fact and law or fact and argument; they may require the deponent to name a witness; they may still be proper. So too, questions relating to facts which have legal consequences or which may themselves be the consequence of the adoption of a certain view of the law are nonetheless questions of fact and may be put on discovery." |
[9] The category of facts which are the consequence of the adoption of a certain view of the law is what is in issue in this application. The position taken by Sierra Club in its challenge to the financing of the sale of Candu reactors is the result of a certain view of the law, specifically, that the Memorandum of Authorization signed by the Ministers of Foreign Affairs and International Trade was a form of payment or a loan guarantee or other financial arrangement within the meaning of s. 5(1)(b) of the Act. Questions which seek to identify the factual underpinning of that position are proper questions even if they require an interpretation of the Act. It would be anomalous to hold that Sierra Club was free to interpret the Act to the extent of claiming that the Memorandum of Authorization was a breach of the Act but could not be required to interpret the Act so as to identify the basis for that allegation.
[10] Sierra Club relies on a series of cases which deal with the propriety of questions involving legal conclusions. In Glaxo Canada Inc. v. Canada3, the deponent was asked whether he thought that economic and marketing considerations of an injunction being granted should be held in priority to the duty that the Health Protection Branch had to the public. Rouleau J. held that the question called for a conclusion of law which was reserved to the Court. Since the relief being sought in the application included an injunction, the question was really a question as to the ultimate issue (should the injunction be granted) and for that reason should not have been allowed. In any event, there is no issue that a pure question of law is not appropriate.
[11] In Canadian Parks and Wilderness Society v. Banff National Park (Superintendent) et al4, the Court refused to allow late filing of an affidavit of a minister of the Crown because it would not add to the material already before the Court. Part of the affidavit consisted of statements by the Minister as to his understanding of the law. MacKay J. commented that:
| "In any event, conclusions of the Minister of the day concerning documents in the record or concerning legal requirements as he understood them would be given no weight, if admitted, in the court"s consideration by judicial review of a decision made by him." |
Were AECL to attempt to file an affidavit in which the deponent offered a legal opinion to the effect that the transaction in question was not subject to the Act, Canadian Parks would be authority for the rejection of that affidavit evidence. What is being asked here is that Sierra Club, whose application is based upon the legal proposition that the Act applies to this transaction, provide particulars of how the Act applies to the transaction. While such particulars necessarily involve legal judgments, they are not before the Court as evidence of the law but rather as the particulars of the grounds upon which the application is brought.
[12] Sierra Club relies on Bland v. National Capital Commission5 for the proposition that cross-examination on an affidavit is limited to facts about which a deponent can be fairly expected to have knowledge and which is fair to the witness. In that case, Bland initiated an application under the Access to Information Act6seeking information as to the rents paid by tenants of the National Capital Commission. An employee of the Commission filed an affidavit in response to the application, setting out the record of the information request. The affidavit contained no particulars of the rents paid by tenants, and when Bland was cross-examined on the affidavit, he simply stated that he did not know the rents. The Court found that he could be questioned as to the rents and that he was therefore under an obligation to inform himself on that subject. The case is authority for the proposition that a corporate officer has an obligation to inform himself of the corporation"s knowledge of the matters in issue. The rationale is that the corporation should not be able to avoid disclosure by putting forward uninformed officers. The case is not authority for the proposition that a party cannot be asked to set out the facts upon which an application is based.
[13] Sierra Club also argues that the questions to which objection was taken call for disclosure of their solicitor"s work product. The basis of the privilege attaching to solicitor"s work product is that one party should not be able to take advantage of the diligence and research of the other party"s counsel by compelling disclosure of the latter"s efforts7. This rule is generally invoked in relation to the issue of production of documents, which is not the case here. To that extent, the privilege is not properly invoked in this case. Nor is there a privilege arising from privileged communications between solicitor and client, whether in contemplation of litigation or otherwise. The information sought is not the content of the solicitor client communication. A solicitor may well advise his client that the elements of his cause of action are A, B and C and that he hopes to prove them by means of X, Y and Z. The contents of the conversation are privileged but the elements of the cause of action do not become privileged as a result of having been the subject of a privileged conversation. They remain items about which particulars may be sought and questions may be asked in discovery.
[14] Applying these principles to the questions to which objection was taken:
Q. 71 : a) to answer when the illegal act at issue in the application occurred.
| The answer to the question is implicit in the answers given to Questions 68-70 but AECL is entitled to an explicit answer to the question. |
b) and c)
| Part b) of this question has been answered at Question 67 and 656 to 658. No further answer is required. |
| Part c) was not asked of Ms. May and she did not refuse to answer it. Were it to be asked, it would be a proper question. |
Q. 73, 84, and 430 :
| a) to identify the lender and the borrower in the loan transaction; to identify the proponent; to identify the guarantor and the person in whose favour the guarantee was given; to identify the nature and extent of the financial assistance and to whom it was provided. |
| These questions are proper questions in that they are intended to identify the basis on which Sierra Club says s. 5(1)(b) of the Act is engaged by the transaction. These are facts resulting from the adoption of a certain view of the law, referred to by Mr. Justice Hugessen in Montana Band. If s. 5(1)(b) of the Act catches this transaction, it can only be because there are payments, guarantees, or other financial arrangements involving a federal authority and a proponent. Once Sierra Club takes the position that s. 5(1)(b) applies, it can be asked to identify the federal authority, the proponent and the payment, guarantees or other financial arrangements which make it apply. |
| Q. 472 : a) to answer whether Ms. May agreed with the general consensus as to the application of the Act to Crown corporations. |
| This question is not relevant. Whether there was a consensus or not that the Act applies or does not apply to Crown corporations is not relevant to any issue before the Court. It makes no difference at all to the question of whether the Act applies to this transaction. Thus whether Ms. May agrees with it the alleged consensus can make no difference to the Act"s application. No answer beyond that already given is required. To the extent that the question is one going to credibility, it has been answered to the extent that such a question can be answered. |
[15] In the end result, there will be an order that Ms. Elaine May re-attend at her own expense to answer the questions identified as Q. 71 (a), Q. 73 (a), Q. 84 (and 430) (a) (b) and (c) in Schedule "A" to AECL"s Notice of Motion dated May 25, 1999.
ORDER
For the reasons set out above, it is hereby ordered that:
| Ms. Elaine May re-attend at her own expense to answer the questions identified as Q. 71 (a), Q. 73 (a), Q. 84 (and 430) (a) (b) and (c) in Schedule "A" to AECL"s Notice of Motion dated May 25, 1999 and attached hereto. |
"J. D. Denis Pelletier"
Judge
__________________
1 R.S.C. 1992 c. C-37.
2 There is a distinction between cross-examination on an affidavit and examination for discovery. See Merck Frost Canada Inc. v. Canada (1996), 69 C.P.R. (3d) 49. The difference is one of scope of examination; cross-examination on an affidavit is limited to matters arising out of the Affidavit and collateral matters. Within that field, the rules as to permissible questions are the same. This is implied in a number of cases, of which Upjohn Inter-American Corp. v. Minister of National Health and Welfare (1987), 14 C.P.R. (3d) 50 (F.C.T.D.) is a good example.
3 (1987), 11 F.T.R. 130 (T.D.).
4 (1994), 74 F.T.R. 218 (T.D.).
5 (1989), 29 F.T.R. 232 (T.D.).
6 R.S.C. 1985 c. A-1.
7 Hodgkinson v. Sims (1988), 55 D.L.R.(4th) 577 (B.C.C.A.).