Federal Court Decisions

Date: 19990805

Docket: T-2432-88

BETWEEN:

HER MAJESTY THE QUEEN

Applicant

- and -

CHAMBRE D'IMMEUBLE DU SAGUENAY-LAC ST. JEAN INC.,

CHAMBRE D'IMMEUBLES DE QUÉBEC,

CHAMBRE D'IMMEUBLE DE MONTRÉAL,

CHAMBRE D'IMMEUBLE DE L'OUTAOUAIS INC.,

ASSOCIATION OF REGINA REALTORS INC.,

CALGARY REAL ESTATE BOARD CO-OP LTD.,

FRASER VALLEY REAL ESTATE BOARD,

WINDSOR-ESSEX COUNTY REAL ESTATE BOARD,

LONDON AND ST. THOMAS REAL ESTATE BOARD, AND

THE CANADIAN REAL ESTATE ASSOCIATION

Respondents

REASONS FOR ORDER

SHARLOW J.:

1                                   On December 20, 1988, Mr. Justice Addy of this Court made an order pursuant to subsection 34(2) of the Competition Act prohibiting certain conduct by the Canadian Real Estate Association (CREA) and nine of its member organizations (each a local real estate board or association). The order was made on consent, after negotiations that followed an investigation by the Director of Investigation and Research. For convenience I will refer to the order as the "CREA order."

2                       On March 18, 1999, section 34 of the Competition Act was amended by S.C. 1999, Chapter 2, section 11[1](the "amending statute"). Subsection 34(2), the statutory authority for the CREA order, was not amended.

3                       The amending statute adds a new provision to the Competition Act, subsection 34(2.2), which limits to ten years the term of an order made under "this section." No such time limitation existed before the amendment.

4                       CREA argues that the effect of subsection 34(2.2) is to terminate the CREA order on March 18, 1999.[2] For the reasons below, I have concluded that CREA is correct.

Section 34 of the Competition Act, as amended

5                       Effective March 18, 1999, section 34 reads as follows:

34.(1)    Where a person has been convicted of an offence under Part VI, the court may, at the time of the conviction, on the application of the Attorney General of Canada or the attorney general of the province, in addition to any other penalty imposed on the person convicted, prohibit the continuation or repetition of the offence or prohibit the doing of any act or thing, by the person convicted or any other person, that is directed toward the continuation or repetition of the offence.[3]

(2)    Where it appears to a superior court of criminal jurisdiction in proceedings commenced by information of the Attorney General of Canada or the attorney general of the province for the purposes of this section that a person has done, is about to do or is likely to do any act or thing constituting or directed toward the commission of an offence under Part VI, the court may prohibit the commission of the offence or the doing or continuation of any act or thing by that person or any other person constituting or directed toward the commission of the offence.

(2.1)    An order made under this section in relation to an offence may require any person

(a) to take such steps as the court considers necessary to prevent the commission, continuation or repetition of the offence; or

(b)    to take any steps agreed to by that person or the Attorney General of Canada or the attorney general of the province.[4]

(2.2)    An order made under this section applies for a period of ten years unless the court specifies a shorter period.[5]

(2.3)    An order made under this section may be varied or rescinded in respect of any person to whom the order applies by the court that made the order

(a) where the person and the Attorney General of Canada or the attorney general of province consent to the variation or rescission; or

(b) where the court, on the application of the person or the Attorney General of Canada or the attorney general of the province, finds that the circumstances that led to the making of the order have changed and, in the circumstances that exist at the time the application is made, the order would not have been made or would have been ineffective in achieving its intended purpose.[6]

(2.4)    No proceedings may be commenced under Part VI against a person against whom an order is sought under subsection (2) on the basis of the same or substantially the same facts as are alleged in proceedings under that subsection.[7]

(3)    The Attorney General of Canada or the attorney general of the province or any person against whom an order is made under this section[8]may appeal against the order or a refusal to make an order or the quashing of an order

(a)    from a superior court of criminal jurisdiction in the province to the court of appeal of the province, or

(b)    from the Federal Court - Trial Division to the Federal Court of Appeal,

as the case may be, on any ground that involves a question of law or, if leave to appeal is granted by the court appealed to within twenty-one days after the judgment appealed from is pronounced or within such extended time as the court appealed to or a judge thereof for special reasons allows, on any ground that appears to that court to be a sufficient ground of appeal.

(3.1)    The Attorney General of Canada or the attorney general of the province or any person against whom an order is made under this section[9]may appeal against the order or a refusal to make an order or the quashing of an order from the court of appeal of the province or the Federal Court of Appeal, as the case may be, to the Supreme Court of Canada on any ground that involves a question of law or, if leave to appeal is granted by the Supreme Court, on any ground that appears to that Court to be a sufficient ground of appeal.

(4)    Where the court of appeal or the Supreme Court of Canada allows an appeal, it may quash any order made by the court appealed from, and may make any order that in its opinion the court appealed from could and should have made.

(5)    Subject to subsections (3) and (4), Part XXI of the Criminal Code applies with such modifications as the circumstances require to appeals under this section.

(6)    A court may punish any person who contravenes an order made under this section by a fine in the discretion of the court or by imprisonment for a term not exceeding two years.[10]

(7)    Any proceedings pursuant to an information of the Attorney General of Canada or the attorney general of a province under this section shall be tried by the court without a jury, and the procedure applicable in injunction proceedings in the superior courts of the province shall, in so far as possible, apply.

(8)    In this section, "superior court of criminal jurisdiction" means a superior court of criminal jurisdiction as defined in the Criminal Code.

The CREA order

6                       The CREA order is lengthy and detailed. I do not propose to describe all of it. For present purposes it is enough to note that it prohibits certain conduct relating to the MLS (Multiple Listing Service) and the MLS trademark owned, managed and promoted by CREA through its member organizations.

7                       The CREA order apparently is intended to prevent the MLS from being used to control certain practices of real estate brokers with respect to numerous matters. The CREA order prohibited, for example, certain practices relating to the setting and sharing of commissions by real estate brokers, the restriction of co-operation between brokers who are members of a real estate board or association and those who are not, and the restriction of certain advertising practices by real estate brokers.

8                       The CREA order also imposes certain reporting requirements on CREA and the other respondents with respect to changes in by-laws, rules, codes of ethics and similar documents. In addition, CREA is ordered to require each of its member organizations, as a condition of membership, to comply with certain parts of the CREA order.

9                       Some parts of the CREA order required certain acts to be done within the seven year period after it was made. However, most of its terms have no stated time limitation. It appears that when the CREA order was made, all of its provisions except those limited to seven years were intended to have a perpetual effect on the activities of CREA and all of its member organizations.[11]

10                     Counsel for CREA argues that the words of subsection 34(2.2) are clear and should be given their plain meaning. I repeat it here for ease of refence:

An order made under this section applies for a period of ten years unless the court specifies a shorter period.

11                     Counsel for CREA argues that the CREA order was more than ten years old when subsection 34(2.2) became law on March 18, 1999, and therefore it expired at that time.

12                     There is considerable force in this argument. Anyone reading only subsection 34(2.2) would conclude that the CREA order has expired. Subsection 34(2.2), read literally, applies to all orders under section 34, whenever made. Nothing in the Competition Act or the amending statute expressly limits the application of subsection 34(2.2) to orders made after its enactment. This supports the conclusion that the CREA order expired on March 18, 1999.

13                     Counsel for CREA argues that further support for his interpretation is found in a number of decisions of the Supreme Court of Canada. None of these cases is directly on point, but they provide useful examples of the Court's approach to similar issues. In each of these cases, a statutory amendment was found to put an end to a pre-existing right arising from a contract or a regulatory or statutory scheme, where the right was not exercised before the amendment came into force. All of these cases support the argument of counsel for CREA: Acme (Village) School District No. 2296 (Board of Trustees) v. Steele-Smith, [1933] S.C.R. 47; Bellechasse Hospital Corp. v. Pilotte, [1975] 2 S.C.R. 454; Gustavson Drilling (1964) Ltd. v. Canada (Minister of National Revenue), [1977] 1 S.C.R. 271; A.G. (Quebec) v. Expropriation Tribunal, [1986] 1 S.C.R. 732; Venne v. Quebec (Commission de protection du territoire agricole du Québec), [1989] 1 S.C.R. 880.

14                     Given the authorities referred to above, the interpretation of subsection 34(2.2) proposed by counsel for CREA should be adopted unless there is some reason to limit the application of subsection 34(2.2) to orders made after it came into force.

15                     Counsel for the Crown argues that there is reason to adopt a more restrictive interpretation of subsection 34(2.2). I summarize his argument as follows. Subsection 34(2.2) puts a ten year time limitation on orders made under "this section," meaning section 34. But the words "this section" in subsection 34(2.2) refer only to the version of section 34 quoted above, the version as amended by S.C. 1999, Chapter 2 (the "amending statute").    They do not refer to the version of section 34 that was in effect when the CREA order was made. Therefore, no order made under old section 34 is touched by subsection 34(2.2).

16                     Counsel for the Crown argues that this restrictive interpretation is supported by extrinsic evidence, by transitional rules in the amending statute, and by the principles relating to the interpretation of statutory amendments that have retroactive effect.

(1) Extrinsic evidence

17                     In May of 1998, the Director of Investigation and Research represented to the Standing Committee on Industry that the newly proposed ten year limitation on prohibition orders would not apply to orders made before the amendments came into effect. The Director's statement includes an explanation as to why that is a desirable result.

18                     The statement in question may be evidence of the subjective intention of the Director or legislative drafters on his staff. It may also be evidence of a legal opinion reached or adopted by the Director in relation to what I assume was draft legislation. In either case the statement is irrelevant. It is not capable of shedding any light on the meaning of subsection 34(2.2) as finally enacted.

19                     The Director's statement also could be read as evidence of one policy reason why Parliament might have wished to ensure that subsection 34(2.2) would not apply to pre-existing orders. Such evidence may aid in establishing the objective of the amendment, which would be a relevant consideration if the amendment is capable of bearing two meanings and it is not clear which should be adopted.

20                     Even if I were to assume that subsection 34(2.2) is ambiguous in that sense, the Director's statement would not be helpful as an aid to its interpretation. The existence of the policy consideration identified by the Director is useless unless it can clearly be tied to the version of subsection 34(2.2) that was finally enacted. The record does not indicate what draft legislation was under consideration by the Committee when the statement was made or what changes, if any, were made to the draft legislation after the Committee meeting.

21                     This much is clear: prohibition orders under section 34, as amended, and under the new "administrative remedies" provision (paragraph 74.1(1)(a)), are limited to a ten year term. That suggests the existence of good policy reasons for avoiding perpetual orders.[12] Perhaps those considerations led Parliament to conclude, against the Director's apparent advice, that all prohibition orders should be limited to ten years, including those made before the amendment.

22                     All that is beside the point, however. Subsection 34(2.2) is not so ambiguous as to require evidence of extrinsic evidence to determine its meaning.

(2) Transitional rules in the amending statute

23                     There is no transitional rule in the amending statute that refers to the ten year time limitation in subsection 34(2.2). However, counsel for the Crown relies on the indirect effect of two transitional rules in the amending statute that apply to other aspects of pre-existing orders. They read as follows:[13]

39.    An order made under section 34 of the Competition Act in respect of an offence under any of sections 52, 53 or 57 to 59 of that Act, as those sections read immediately before the coming into force of sections 12, 14 and 17 of this Act, is deemed to have been made under paragraph 74.1(1)(a) of the Competition Act, as enacted by section 22 of this Act.

40.    Subsection 34(2.3) of the Competition Act, as enacted by subsection 11(2) of this Act, applies in respect of orders made under section 34 of the Competition Act whether before or after the coming into force of section 11 of this Act.

24                     Counsel for the Crown argues that these provisions demonstrate that Parliament considered the effect of pre-existing section 34 orders, and deliberately limited the effect of the amending statute to these two aspects. From this, he argues, it must be inferred that in all other respects, the amended version of section 34 was not intended to apply to pre-existing section 34 orders.

25                     It is true that if Parliament had intended subsection 34(2.2) to apply to pre-existing orders, it could have enacted a transitional rule to say so. It could be said with equal force that if Parliament had intended subsection 34(2.2) to apply only to orders made after its enactment, it could have said so in subsection 34(2.2).[14]

26                     I do not accept that sections 39 and 40 of the amending statute support the suggested inference.

27                     Section 39 deals with orders made under specific offence provisions of the former Competition Act,[15]and provides that they are deemed to have been made under paragraph 74.1(1)(a) of the Competition Act. Paragraph 74.1(1)(a) is a new provision that is part of a new regime providing for civil rather than criminal sanctions in certain cases. Conduct prohibited under the new civil regime is called "reviewable conduct." The legal effect of orders under the new civil regime is substantially different from the legal effect of orders under the old criminal regime. But for section 39, there would be an issue as to whether the new civil regime applies to pre-existing orders made under the old criminal regime, given the likelihood of interference with vested rights.

28                     Section 40 expressly makes pre-existing orders subject to new subsection 34(2.3), which permits orders made under section 34 to be varied or rescinded. There was no such provision in the Competition Act before the 1999 amendments. There is a presumption that the court has no power to vary or rescind an order unless that power is expressly reserved or granted by statute.    Section 40, like section 39, indicates a recognition of the need to rebut the presumption against interference with vested rights.

29                     I conclude that the transitional rules cited by counsel for the Crown do not assist in the interpretation of subsection 34(2.2). They indicate only that Parliament provided specifically for the effect of the amending statute on pre-existing section 34 orders where there was a specific reason to ensure that such orders would be subject to the exercise of newly created statutory powers.

(3) Whether subsection 34(2.2) has retroactive effect

30                     Counsel for the Crown cites the presumption against the retroactive effect of statutory amendments, and argues that the interpretation of subsection 34(2.2) proposed by CREA gives it a retroactive effect that is both unintended and unwarranted. Counsel for CREA argues that subsection 34(2.2) has no retroactive effect.

31                     In this regard both counsel referred to the analysis of retroactive legislation found at pages 118 - 120 of Côté, The Interpretation of Legislation in Canada.[16] The following definition of "retroactive effect" appears at page 118:

... there is retroactive effect when a new statute applies in such a way as to prescribe the legal regime of facts entirely accomplished prior to its commencement.

32                     This is substantially the definition adopted by the Supreme Court of Canada in Gustavson Drilling (supra). The following appears in that case at page 279-280:

... the repealing enactment in the present case, although undoubtedly affecting past transactions, does not operate retrospectively in the sense that it alters rights as of a past time. The section as amended by the repeal does not purport to deal with taxation years prior to the date of the amendment; it does not reach into the past and declare that the law or the rights of parties as of an earlier date shall be taken to be something other than they were as of that earlier date. The effect, so far as [sic] appellant is concerned, is to deny for the future a right to deduct enjoyed in the past but the right is not affected as of a time prior to enactment of the amending statute.

33                     In applying this definition, the first step is to identify the facts to which are attached legal consequences. The second step is to situate those facts in time. In this regard, there are three kinds of facts.[17] An action or event is an ephemeral fact, easily fixed in point of time. A continuing fact is a state of affairs that persists over time and has a duration (for example, the ownership of property), and so may be partly in the past and partly in the future. A successive fact is one that is made up of a series of other facts or steps, each of which must occur before the successive fact can be situated in the past. Once the facts are identified and situated in time, the third step in the analysis is to determine how the statutory amendment applies to the facts. Only if the amendment alters the legal consequences of facts that are entirely in the past can it be said to be retroactive.

34                     Counsel for the Crown argues that the only relevant fact is that the CREA order was made on December 20, 1988. He says that if CREA is correct, the effect of the amendment is to start a ten year clock ticking on that date that, but for the amending statute, would not exist. That, he argues, is a retroactive effect.

35                     Counsel for CREA argues that the CREA order should be classified as a continuing fact that determined the legal rights and obligations of CREA and the other respondents for a period commencing on December 20, 1988 and continuing as long as the order remained in effect. He argues that under the interpretation he proposes, the amendment does not change the legal effect of anything that occurred before its enactment. The CREA order remained in effect until that date, and it will continue to govern the consequences of any breach of the CREA order that may have occurred before that date. The amendment merely puts an end to the duration of the CREA order, so that it is not possible, after March 18, 1999, for the CREA order to be breached. On this point I agree with counsel for CREA.

Conclusion

36                     I conclude that the CREA order ceased to have effect on March 18, 1999 and will issue a declaration to that effect.

                                                                                                Karen R. Sharlow

                                                                                   

                                                                                                            Judge

Ottawa, Ontario

August 5, 1999