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CCCA_V3No1_Col-McCarthys-FIN.qxd:CCCA_V1No2_Col-Litigat-V1.qxd 1/21/09 3:08 PM Page 38 Legal Update – McCarthy Tétrault LLP A victory for the rule of law Why the duty of procedural fairness should be taken seriously. here is no question that Canada is a From the perspective of producers, it has Justice Campbell’s decision may not be Tgreat country, but occasionally we take many advantages. On the B.C. coast, how- the last word on the issue. But it caused for granted some of what makes it great. ever, where IslandTimberlands’ operations me to reflect on the power of the rule of For example, in Canada, you can sue the are located, standing timber applications law in Canada. Justice Campbell, appoint- government for treating you unfairly, and are not permitted. ed by the federal government,had no hes- you can win.A recent case I argued in the IslandTimberlands filed a standing tim- itation rejecting that government’s argu- Federal Court, Island Timberlands LP v. ber application, wishing to take advantage ments for deference and concluding that Canada (Minister of ForeignAffairs),2008 FC of their substantial benefits. Predictably, it was acting illegally.While this is nothing 1380,reminded me how remarkable this is. the federal government refused it, citing unusual for Canadians,there are still many It also made me wonder whether its policy of not permitting such applica- countries in this world where such a thing Canadian corporations are overlooking tions in the coastal region. The govern- would be unimaginable. Even those in opportunities to invoke the duty of proce- ment did state that Island Timberlands democratic countries should not take for dural fairness to challenge unfair govern- could make submissions as to why the granted the ability to ask an independent ment treatment. government should depart from its policy judiciary to call a government to account. Island Timberlands owns large tracts of but refused to explain the reasons for its The outcome also caused me to reflect private forest lands in British Columbia. It policy – thereby rendering illusory the on the power of the duty of procedural is subject to a log export regime adminis- right to make submissions for a policy fairness. From humble beginnings in tered by the federal government that change or exemption. Nicholson v. Haldimand-Norfolk Regional requires B.C. forest land owners who wish In response, Island Timberlands Police Commissioners, [1979] 1 S.C.R. 311, to export logs to first offer them to brought an application for judicial review. the duty has blossomed to permeate every domestic sawmills. Only if there is no On December 17, 2008, Justice Douglas aspect of government action in Canada. domestic purchaser (at a “fair” price) is Campbell of the Federal Court set the Even in the mundane administration of export permitted. government’s decision aside. He conclud- a highly technical regulatory regime like This regime is a significant irritant for ed that the federal government had the one governing B.C. log exports, gov- owners of private forest lands in B.C.The breached its obligation of procedural fair- ernments have an obligation to treat their international price for logs is almost always ness: the “invitation to IslandTimberlands stakeholders fairly, and the courts will step higher than the domestic price, so to provide a reason to deviate from the in where that duty is breached. Canadian landowners perceive the regime as block- policy begs an obvious question: what is corporations subject to regulatory ing their access to more lucrative markets. the worth of a submission for change regimes should not forget this fact, and At the same time, log export restrictions without knowledge of the rationale for should be assertive in invoking the duty are politically very popular in B.C., where maintaining the status quo? In my opinion, to stand up to unfair governmental treat- some portray the export of logs as amount- the answer is ‘worthless.’” (para. 37). ment that they face. ing to the export of processing jobs. Justice Campbell ordered the govern- Regardless of whether log exports are ment to state the rationale for the policy, Geoff R. Hall is a partner in McCarthy desirable, the federal regime has an admin- to give Island Timberlands a reasonable Tétrault’s Litigation Group in its Toronto office. istrative quirk.In the B.C.interior,log pro- opportunity to submit an argument for a His practice focuses primarily on corporate/ ducers who wish to export are permitted policy change, to reconsider the applica- commercial litigation. Mr. Hall holds an LL.B. to start the application process before the tion after considering those submissions, from the University of Toronto Law School and logs are harvested. This is known as a and to provide written reasons for its ulti- an LL.M.from Harvard Law School.He clerked “standing timber” application, made while mate decision. at the Supreme Court of Canada and was called the timber is still “standing” in the forest. The appeal period has not yet run, so to the Ontario bar in 1993. 38 CCCA Canadian Corporate Counsel Association SPRING 2009