(Continuation)

This Panel is constituted under NAFTA Article 1904 to review a determination of the CITT in accordance with Canadian anti-dumping duty law. This Panel is directed to apply relevant statutes, legislative history, regulations, administrative practice and judicial precedents to the extent that a court of ... [Canada] ...would rely on such materials.⁴²

Binational Panels are further directed by the NAFTA to apply:

... the standard of review set out in Annex 1911 and the general legal principles that a court of the importing Party otherwise would apply to a review of a determination of the competent investigating authority. ⁴³

Annex 1911 defines the standard of review, in the case of Canada, as the grounds 12 set out in subsection 18.1(4) of the Federal Court Act, as amended. Moreover, as Canada is the importing Party, the general legal principles of Canadian law are to be applied in this review. ⁴⁴

Section 18.4 of the Federal Court Act lists the grounds for which a tribunal may be reviewed. These grounds are that the tribunal:

a) acted without jurisdiction, acted beyond its jurisdiction or refused to exercise its jurisdiction;

b) failed to observe a principle of natural justice, procedural fairness or other procedure that it was required in law to observe;

c) erred in law in making a decision or order, whether or not the error appears on the face of the record;

d) based its decision or order on an erroneous finding of fact that is made in a perverse or capricious manner or without regard for the material before it;

e) acted, or failed to act, by reason of fraud or perjured evidence; or

f) acted in any other way that was contrary to law.

These grounds for review are read in light of the standard of review developed by the Supreme Court of Canada. The Supreme Court of Canada has stated that "the central question in ascertaining the standard of review is to determine the legislative intent in conferring jurisdiction on the administrative tribunal". ⁴⁵

In order to assist the courts in deciphering legislative intent and determining the appropriate standard of review, the Supreme Court of Canada has developed a spectrum of standards of review. This spectrum was initially developed in Pezim and has been refined in Southam and Pushpanthan.

The spectrum ranges from patently unreasonable, on the one extreme, where deference is at its highest to correctness at the other extreme where deference is at its lowest. ⁴⁶

This standard was further refined to include a third standard of reasonableness in cases where the appropriate standard falls between the two extremes. ⁴⁷

Where exactly on the spectrum the appropriate standard of review falls in the circumstances is determined by a functional and pragmatic analysis.

The Federal Court Act provides that a court may review a tribunal decision where it:

18.4(a) acted without jurisdiction, acted beyond its jurisdiction or refused to exercise its jurisdiction. In determining the standard of review, this Panel must distinguish between questions establishing the parameters of a tribunal's jurisdiction and questions within a tribunal´s jurisdiction.⁴⁸

Questions demarcating the jurisdiction of a tribunal are those questions which yield answers which define the powers of the tribunal to embark on proceedings, issue orders, etc. ⁴⁹

These questions are identified by a pragmatic or functional analysis which examines:

… not only the wording of the enactment conferring jurisdiction on the administrative tribunal, but the purpose of the statute creating the tribunal, the reason for its existence, the area of expertise of its members and the nature of the problem before the tribunal.⁵⁰

At the heart of this analysis is an effort to glean whether the legislature intended that the question at issue be decided by the tribunal acting within its jurisdiction or the courts.⁵¹

It is settled law that with respect to questions dealing with a tribunal's jurisdiction, correctness is required and the concept of deference is severely constrained. That is, a tribunal must be correct with respect to any question which defines its jurisdiction.⁵²

This Panel must determine whether the tribunal correctly determined any question affecting its jurisdiction. If the tribunal incorrectly dealt with this question, this Panel must remand. If the relevant question does not affect the tribunal's jurisdiction, then a different standard is applicable.

The Federal Court Act provides that a court may review a tribunal where it:

18.4 ( c ) erred in law making a decision or an order, whether or not the error appears on the face of the record.

Issues of law relate to the interpretation or the application of law by tribunals acting within their jurisdiction. In response to privative clauses⁵³ shielding tribunals from review, the standard of review that was traditionally applied to errors of law was "patent unreasonability". This test is very deferential and calls for a strict approach to judicial review. ⁵⁴

In Southam, the Supreme Court of Canada explained the difference between unreasonable and patent unreasonable as:

The difference between "unreasonable" and "patently unreasonable" lies in the immediacy or obviousness of the defect. If the defect is apparent on the face of the Tribunal’s reasons, then the Tribunal’s decision is patently unreasonable. But if it takes some significant searching or testing to find the defect, then the decision is unreasonable but not patently unreasonable.⁵⁵

The court in Southam went on to elaborate:

This is not to say, of course, that judges reviewing a decision on the standard of patent unreasonableness may not examine the record. If the decision under review is sufficiently difficult, then perhaps a great deal of reading and thinking will be required before the judge will be able to grasp the dimensions of the problem... But once the lines of the problem have come into focus, if the decision is patently unreasonable, then the unreasonableness will be evident.⁵⁶

In the absence of privative clauses, recent Supreme Court of Canada decisions have moderated this standard by asking the courts to employ a functional and pragmatic test to decipher legislative intent and to determine the appropriate standard of review to fit the agency and the circumstances. The analysis inherent in this test focuses upon all the relevant factors, none of which alone are dispositive.

These factors include the presence or lack of a privative clause, the presence or lack of a statutory right of appeal, the expertise or specialization of a tribunal in the circumstances, the purpose of the Act as a whole and the provision in particular and the nature of the problem -a question of law or fact.⁵⁷

In determining the appropriate standard of review, the Supreme Court of Canada has emphasized the importance of balancing the presence or lack of a privative clause with the other factors, especially the relative expertise of the tribunal.⁵⁸ The court in Pezim held that what is "crucial is whether or not the agency's decisions are protected by a private clause".⁵⁹

However, that court went on to say that even where there is no privative clause and where there is a statutory right of appeal, the concept of the specialization of duties requires that deference be shown to decisions of specialized tribunals on matters which fall squarely within the tribunal's expertise. ⁶⁰

This reasoning was adopted in Pushpanathan which held that:

… the presence of a full privative clause is compelling evidence that the court ought to show deference to the Tribunals decision, unless other factors strongly indicate the contrary as regards the particular determination in question.⁶¹

Pezim did not determine the precise extent of deference to be applied in each case. Rather, the court stated that the degree of deference "ranges from the standard of reasonableness to that of correctness".⁶² 

The court went on to elaborate:

At the reasonable end of the spectrum, where deference is at its highest, are those cases where a tribunal protected by a true privative clause, is deciding a matter within its jurisdiction and where there is no right of statutory appeal.⁶³

The Pezim case involved a tribunal decision from which there was a statutory right of appeal and which was not protected by a privative clause. In those circumstances, the Court held that the applicable standard of review fell between the two extremes of correctness and patent unreasonableness which entitled the Tribunal to "considerable deference".

The present case is similar to the one in Pezim. The CITT is a specialized tribunal deciding matters within their area of expertise⁶⁴  and is not protected by a privative clause. However, unlike the Tribunal in Pezim, the CITT is subject to judicial review rather than a statutory right of appeal.⁶⁵

These circumstances simultaneously call for a more exacting standard and deference. On the one hand, factors which call for a more exacting standard include the wording of s. 18.4 (c) which permits review of errors of law, whether or not they appear on the face of the record, the fact that the

CITT is subject to judicial review, and the fact that the CITT no longer enjoys the benefit of any type of privative clause.⁶⁶

On the other hand, the factors which counsel deference include the fact that the CITT is a specialized Tribunal making determinations within its area of expertise and the lack of a statutory right of appeal. 

Under similar circumstances the Supreme Court of Canada, has said:

...(when) there are indications both ways, the proper standard of review falls somewhere between the ends of the spectrum.⁶⁷ Under the circumstances of this review, the CITT is not entitled to the highest deference on the spectrum. The appropriate standard of review falls between the extremes of correctness and patent unreasonability which entitles the CITT to considerable deference. While this standard does not extend to the point of patent unreasonbleness, it does fall near to that end of the spectrum. This is a high degree of deference commensurate with the CITT’s expertise and the circumstances of this review.

This Panel should remand only if it finds that the CITT’s decision cannot be sustained on any reasonable interpretation of the law. This standard is also consistent with that adopted by the recent Binational Panels in Baler Twine ⁶⁸ and Concrete Panels.⁶⁹

The Federal Court Act provides that a tribunal’s determination can be reviewed for errors of fact when the tribunal:

s.18.4 (d ) based its decision or order on an erroneous finding of fact that it made in a perverse or capricious manner or with out regard for the material before it.

Issues of fact arise from determinations of fact made by a tribunal acting within its jurisdiction. The wording in s. 18.4(d) is much stricter than that found in s.18.4(c ) which counsels a more deferential approach to issues of fact than to issues of law.

However, the line that divides issues of fact from issues of law may not be clear at first instance, and indeed issues of fact may at times be mixed with issues of law. The courts have developed an appropriate litmus test to assist in this task. The court in Pushpathan adopted the reasoning in Southam which held :

… it is not always easy to say precisely where the line should be drawn, though in most cases it should be sufficiently clear whether the dispute is over a general proposition that might qualify as a principle of law or over a very particular set of circumstances that is not apt to be of much interest to judges and lawyers in future.⁷⁰

The courts have recognized a tribunal’s superior position in determining questions of fact and have given tribunals greater deference as complicated questions of fact and law draw closer to issues of fact. Several recent Federal Court of Appeal decisions have dealt with the appropriate standard of review to be applied to CITT dumping determinations in the context of issues of fact and issues of substantial fact mixed with law. Depending on the circumstances of the particular case, the courts have described this standard as patently unreasonable ⁷¹ , akin to patently unreasonable ⁷² , or as a "fourth standard" which is slightly less deferential than patently unreasonable ⁷³.

These decisions are refinements to the spectrum analysis articulated by the Supreme Court of Canada in Pezim and Southam. In the circumstances particular to each case, the courts articulated the appropriate standard of review by balancing the factors calling for a more exacting standard with those calling for more deference.

In the particular circumstances of this review, this Panel must balance competing factors. On the one hand, it must consider the factors calling for deference which include the strict language of s.18.4(d), the fact that the CITT is a specialized tribunal making findings of fact within its area of expertise with the benefit of analyzing the evidence first hand and the fact that the CITT is not subject to a statutory right of appeal. On the other hand, it must consider factors calling for a more exacting standard which include the absence of any type of privative clause and the fact that the CITT is subject to judicial review.

Given that the present review has "indications that go both ways", the appropriate standard of review in these circumstances falls between the extremes of correctness and patent unreasonability which entitles the CITT to considerable deference. While this deference does not reach the level of patent unreasonableness, it does fall very near to that end on the spectrum. In the context of reviewing issues of fact or substantial issues of fact mixed with law under these circumstances, the considerable deference which is accorded to the CITT is even greater than in the context of issues of law.

The standard of review normally applied to issues of fact or substantial issues of fact mixed with law is that there must be a rational connection between the facts and the tribunal’s findings. This statutory standard however is not whether there is any evidence at all, but whether there is evidence which, reasonably reviewed, is capable of supporting the tribunal’s finding. Such evidence need not be substantial nor need the Panel arrive at the same determination as the Tribunal in light of it. ⁷⁴

This Panel should remand only if it finds that the CITT’s determination cannot be sustained on any reasonable interpretation of the facts.

The SIMA provides, under section 43 (1.01) that, where an inquiry referred to in section 42 involves goods of more than one NAFTA country, or one or more NAFTA countries and goods of one or more other countries, "the Tribunal shall make a separate order or finding under subsection (1) with respect to the goods of each NAFTA country.

Both the CITT and the Complainant acknowledge that the CITT made no separate order or finding in respect of Mexico. The Complainant argues, however, that a failure to issue a separate order in respect of Mexico constitutes an error of jurisdiction and an error of law. The Complainant argues further, that in issuing a separate order, the CITT is required to provide separate reasons as well. The CITT,

Stelco and IPSCO argue that the stipulation for a separate order in section 43 (1.01) is a technical requirement only and that, if the Panel deems it appropriate, it should only remand with instructions that the CITT issue a separate order, without requiring separate reasons.

Given that the interpretation of the SIMA is within the jurisdiction of the CITT and that the CITT is charged with the duty to interpret and apply the SIMA, including section 19 42, in a reasonable manner the Panel remands this matter to the CITT for its consideration. In particular, the Panel instructs the CITT to determine whether, under section 43 (1.01) of the SIMA, a separate order is required in respect of Mexico and further, whether separate reasons are also requisite.

The CITT is given until June 21, 1999 to respond to this remand. 

On receipt of the CITT’s determination, the Panel will decide all issues arising out of these proceedings.

SIGNED IN THE ORIGINAL BY

Hernán García-Corral- Chairman

Hernán García-Corral- Chairman

William E. Code

William E. Code

Alejandro Ogarrio Ramírez

Alejandro Ogarrio Ramírez

Loretta Ortiz Ahlf

Loretta Ortiz Ahlf

Leon E. Trakman

Leon E. Trakman

Issued May 19, 1999.

⁴² NAFTA, Art. 1904 (2)

⁴³ NAFTA, Art. 1904 (3)

⁴⁴ NAFTA Article 1911 defines "general legal principles" to include "principles such as standing, due process rules of statutory construction, mootness and exhaustion of administrative remedies".

⁴⁵ Pezim, supra note 7at 589

⁴⁶ Pezim, supra note 7 at 580-90.

⁴⁷ Pezim, supra note 7 and Southam, supra note 9.

⁴⁸ Bibeault, supra note 6 at 1088.

⁴⁹ Syndicat des employés de production du Québec et de Láladie v. Canadian Labour Relations Board, [1984] 2 S.C.R. 412. [hereinafter Syndicat]

⁵⁰ Bibeault , supra note 6 at 1088.

⁵¹ Canadian Broadcasting Corporation v Canada (Labour Relations Board), [1995] 1 S.C.R. 157 at 179.

⁵² See, CAIMAW, supra note 29. See also, Syndicat, supra note 49 and Bibeault, supra note 6.

⁵³ The Supreme Court of Canada has defined a full privative clause as a provision in legislation " that declares that decisions of tribunals are final and conclusive from which no appeal lies and all forms of judicial review are excluded". See, Pushpanathan, supra note 19 at 996 .

⁵⁴ See, Bradco, supra note 21 at 340.

⁵⁵ Southam, supra note 9 at 777.

⁵⁶ Southam, supra note 9 at 777

⁵⁷ See, Pushpanathan, supra note 19.

⁵⁸ Southam, supra note 9.

⁵⁹ Pezim, supra note 7 at 590.

⁶⁰ Pezim, supra note 7 at 590

⁶¹ Pushpanathan , supra note 19 at 996.

⁶² Pezim, supra note 7 at 590.

⁶³ Pezim, supra note 7 at 590.

⁶⁴ The expertise of the CITT was discussed in Corn Growers, supra note 16.

⁶⁵ The jurisdiction of a court on appeal is much broader than the jurisdiction of a court in review. See, Bell, supra note 4 at 1774-5.

⁶⁶ The SIMA was revised in 1994 to amend s. 76(1) in so far as to remove the "final and conclusive" wording from the clause. See North American Free Trade Agreement Implementation Act., S.C. 1993, C. 44, p. 17(1).

⁶⁷ Southam, supra note 9 at 775.

⁶⁸ Synthetic Baler Twine With a Knot Strength of 200 Lbs. or Less Originating in or Exported from the United States of America, CDA-94-1904-02 (April 10, 1995).

⁶⁹ Certain Concrete Panels, Reinforced With Fiberglass Mesh, Originating in or Exported from the United States of America and Produced by or on Behalf of Custom Building Products, Its successors and Assigns, for Use or Consumption in the Province of British Columbia or Alberta, CDA-97-1904-01 (August 26, 1998).

⁷⁰ See, Southam, supra note 9 at 768 and Pushpanathan, supra note 19 at 990.

⁷¹ Pasta, supra note 34.

⁷² One Federal Court of Appeal decision notes that" there does not appear to be any practical difference between the standard set out in s.18.1(4)(d) and that of patent unreasonability". See, Stelco, supra note 33.

⁷³ Onion, supra note 12, created a fourth standard which falls between reasonable simpliciter and patently unreasonable that calls for more deference to a tribunal´s findings than that given to expert tribunals containing a statutory right of appeal but slightly less deference than that given to tribunals protected by a true privative clause.

⁷⁴ Lester, supra note 30 at 668-9