Québec Inc. v. Quebec (Régie des permis d'alcool) [1996] 3 S.C.R. 919: Fair hearing by independent tribunal -- Administrative tribunals -- Régie des permis d'alcool -- Cancellation of liquor permits on account of disturbance of public tranquility

Present: Lamer C.J. and La Forest, L'Heureux-Dubé, Sopinka, Gonthier, Cory, McLachlin, Iacobucci and Major JJ.

ON APPEAL FROM THE COURT OF APPEAL FOR QUEBEC

Civil rights -- Fair hearing by independent tribunal -- Administrative tribunals -- Régie des permis d'alcool -- Cancellation of liquor permits on account of disturbance of public tranquility -- Structure and operating procedures of Régie -- Whether Régie complies with guarantees of independence and impartiality set out in s. 23 of Charter of Human Rights and Freedoms -- Scope of s. 23 of Charter -- Charter of Human Rights and Freedoms, R.S.Q., c. C-12, ss. 23, 56(1) -- Act respecting liquor permits, R.S.Q., c. P-9.1, ss. 2, 75, 86(8).

Following a hearing, the directors of the Régie des permis d'alcool du Québec revoked the respondent's liquor permits on the ground of disturbance of public tranquility -- a penalty provided for in ss. 75 and 86(8) of the Act respecting liquor permits (the "Act"). The respondent brought a motion in evocation in the Superior Court in which it asked (1) that the Régie's decision be quashed and (2) that s. 2 of the Act, which established the Régie, be declared invalid on the basis that the Régie did not comply with the guarantees of independence and impartiality set out in s. 23 of the Charter of Human Rights and Freedoms. The Superior Court granted the motion and, by declaring the impugned provision invalid and of no force or effect, called the very existence of the Régie into question. However, the court suspended the effect of the declaration of invalidity for a period of 12 months. The Attorney General of Quebec and the Régie appealed the decision. In 1993, the Régie des alcools, des courses et des jeux replaced the Régie des permis d'alcool, but the parties considered the Superior Court proceedings to be as important as ever because of the similarity between the two bodies. The Court of Appeal allowed the appeal in part, declaring s. 2 of the Act to be valid. However, the majority of the court held the reference to s. 75 in s. 86(8) of the Act to be invalid and of no force or effect.

Held: The appeal should be allowed.

Per Lamer C.J. and La Forest, Sopinka, Gonthier, Cory, McLachlin, Iacobucci and Major JJ.: Section 23 of the Charter entrenches in Quebec the right of every citizen to a public and fair hearing by an independent and impartial tribunal. The word "tribunal" used in that section is defined in s. 56(1) of the Charter as including "any person or agency exercising quasi-judicial functions". Section 56(1) applies to every agency that exercises quasi-judicial functions, even incidentally. Whether or not s. 23 is applicable therefore depends on the characterization of the functions of the agency that are in question. If they are quasi-judicial, the agency is a "tribunal" and must in exercising them comply with the requirements of impartiality and independence. In this case, s. 23 is applicable to the Régie because a decision to cancel a permit on account of disturbance of public tranquility is the result of a quasi-judicial process. The permit holder's rights are clearly affected by the cancellation. While the issuance of a permit may in certain respects be regarded as a privilege, its cancellation has a significant impact on the livelihood of the permit holder, who loses the right to operate his or her business. It is also significant that the process leading to the cancellation of a permit on account of disturbance of public tranquility is similar to that in a court. The Régie may make its decision only after a hearing in the course of which witnesses may be heard, exhibits filed and submissions made. Although there is strictly speaking no lis inter partes before the Régie, individuals with conflicting interests may present contradictory versions of the facts at the hearing. Finally, a decision to cancel a permit on the ground of disturbance of public tranquility results from the application of a pre-established standard to specific facts adduced in evidence and is a final judgment protected by a privative clause. Although in making such a decision the Régie may to some extent establish a general policy that it has itself developed, it does so by means of a standard imposed by and set out in the Act. The application of such a policy to specific circumstances, with the assessment of the facts it presupposes, is a quasi-judicial act.

Although flexibility must be shown toward administrative tribunals when it comes to impartiality, a detailed review of the Régie's structure and multiple functions raises a reasonable apprehension of bias on an institutional level. The Act authorizes employees of the Régie to participate at every stage of the process leading up to the cancellation of a liquor permit, from investigation to adjudication. While a plurality of functions in a single administrative agency is not necessarily problematic, here a person informed about the role of the Régie's lawyers would have a reasonable apprehension of bias in a substantial number of cases. Although the Act and regulations do not define the duties of these jurists, the Régie's annual report and the description of their jobs at the Régie show that they are called upon to review files in order to advise the Régie on the action to be taken, prepare files, draft notices of summons, present arguments to the directors and draft opinions. The annual report and the silence of the Act and regulations leave open the possibility of the same jurist performing these various functions in the same matter. The annual report mentions no measures taken to separate the lawyers involved at different stages of the process. Yet such measures seem essential in the circumstances. The possibility that a jurist who has made submissions to the directors might then advise them in respect of the same matter is disturbing, especially since some of the directors have no legal training. Such a lack of separation of functions in a lawyer raises a reasonable apprehension of bias. Prosecuting counsel must never be in a position to participate in the adjudication process. The functions of prosecutor and adjudicator cannot be exercised together in this manner. Moreover, the Act and regulations authorize the chairman to initiate an investigation, decide to hold a hearing, constitute the panel that is to hear the case and include himself or herself thereon if he or she so desires. Furthermore, the annual report suggests that other directors sometimes make the decision to hold a hearing, and it does not rule out the possibility that they might then decide the case on its merits. While the fact that the Régie, as an institution, participates in the process of investigation, summoning and adjudication is not in itself problematic, the possibility that a particular director could, following the investigation, decide to hold a hearing and could then participate in the adjudication process would cause an informed person to have a reasonable apprehension of bias in a substantial number of cases. As with the Régie's jurists, a form of separation among the directors involved in the various stages of the process seems necessary to eliminate that apprehension of bias.

The three main components of judicial independence are financial security, security of tenure and institutional independence. Only the last two are in question in this case and, as is the case with impartiality, a certain degree of flexibility is appropriate where administrative agencies are concerned. In interpreting s. 23 of the Charter, it is necessary to consider the functions and characteristics of the administrative agencies in question. In the instant case, the directors have sufficient security of tenure within the meaning of Valente, since sanctions are available for any arbitrary interference by the executive during a director's term of office. The directors' conditions of employment meet the minimum requirements of independence. These do not require that all administrative adjudicators, like judges of courts of law, hold office for life. Fixed-term appointments, which are common, are acceptable. However, the removal of adjudicators must not simply be at the pleasure of the executive. The orders of appointment provide expressly that the directors can be dismissed only for certain specific reasons. In addition, it is possible for the directors to apply to the ordinary courts to contest an unlawful dismissal. Finally, in light of the evidence as a whole, the large number of points of contact between the Régie and the Minister of Public Security does not raise a reasonable apprehension with respect to the Régie's institutional independence. It is not unusual for an administrative agency to be subject to the general supervision of a member of the executive with respect to its management. The essential elements of institutional independence may be summed up as judicial control over the administrative decisions that bear directly and immediately on the exercise of the judicial function. It has not been shown how the Minister of Public Security might influence the decision-making process. The chairman is responsible for monitoring the Régie's day-to-day activities and its various employees, and for preparing the rolls. The fact that the Minister is ultimately responsible for both the Régie and the various police forces conducting investigations would not cause an informed person to have a reasonable apprehension with respect to the independence of the directors. The directors swear an oath requiring them to perform the duties of their office honestly and fairly. The Minister's links with the various parties involved are accordingly not sufficient to raise concerns.

Although the structure of the Régie does not meet the requirements of s. 23 of the Charter, the various shortcomings that have been identified are not imposed by the constituent legislation or the regulations made thereunder. It is thus not necessary to declare specific provisions of the Act to be inconsistent with the Charter. It is sufficient to grant the respondent's motion in evocation and quash the Régie's decision.

Per L'Heureux-Dubé J.: This case is governed solely by administrative law. Administrative law is part of public law and the common law generally applies in

Quebec public law, subject to legislative amendments. The common law methodology must therefore be used rather than a methodology based on the civil law. The Charter has legal preeminence over the common law because of its quasi-constitutional status. To determine what interaction there is between the common law and quasi-constitutional statute law, it is necessary to begin by analysing, identifying and setting out the applicable common law; the effect of the quasi-constitutional statute law on the common law must then be specified.

The respondent's allegations against the Régie des permis d'alcool du Québec fall under the heads of impartiality and independence. An agency's independence from the executive is a prerequisite for, but is not sufficient to guarantee, impartiality. Tribunals are never perfectly independent; their independence is relative and varies with their decision-making level. When the issue of independence is raised in a judicial review context, the courts must therefore assess the necessary degree of independence in each case based on the nature of the administrative tribunal, the institutional constraints it faces and the peremptory nature of its decisions. While independence can be seen as a continuum, the same is not true of impartiality. An agency can be either impartial or biased: there is no intermediate option. Reasonable apprehension of bias is the indicator that allows this issue to be resolved judicially. If the agency would cause an informed person to have a reasonable apprehension of bias in a substantial number of cases, a legal finding of bias will result. Flexibility comes into play in the specific content of the test for reasonable apprehension of bias in each case. However, such flexibility must not be shown in respect of impartiality: the requirement of impartiality cannot be relaxed. It is thus the reasonableness of the apprehension that will vary among administrative tribunals, not their intrinsic impartiality. In the present case, the issue of independence is subordinate to that of impartiality for the purposes of analysis. If bias is found, the issue of independence becomes totally moot.

Agencies that perform quasi-judicial or administrative acts are subject to the nemo judex in propria sua causa debet esse rule in accordance, respectively, with the duty to act in accordance with natural justice and the duty to act fairly. Since the acts alleged against the Régie are either administrative or quasi-judicial, they are subject to the duty of impartiality included in the nemo judex rule. Here, the evidence has clearly shown that the Régie would cause an informed person to have a reasonable apprehension of bias in a substantial number of cases. It should therefore be found that the Régie is biased on an institutional, organizational level. By implication, the Régie has violated the nemo judex rule and thus breached its duty to act fairly. This breach opens the door to the common law remedies applicable in the circumstances: the Régie's decision can be quashed through a motion in evocation under art. 846 C.C.P. and the provisions of the enabling statute can be declared of no force or effect inter partes under arts. 453 et seq. C.C.P.

Before examining the effect of the Charter's provisions on the common law, it must first be determined whether those provisions are applicable to the instant case. In interpreting ss. 23 and 56(1) of the Charter, particularly the concept of a quasi-judicial tribunal, the "modern" methodological approach must be applied. It is time to abandon the method based on the "plain meaning" of words as the basic approach to legal interpretation. According to the modern approach, consideration must be given at the outset not only to the words themselves but also, inter alia, to the context, the statute's other provisions, provisions of other statutes in pari materia and the legislative history in order to correctly identify the legislature's objective. It is only after reading the provisions with all these elements in mind that a definition will be decided on. This "modern" interpretation method has the advantage of bringing out the underlying premises and thus preventing them from going unnoticed, as they would with the "plain meaning" method. In light of the dynamic development of our law and the plurality of perspectives on legal analysis, the era of concealed underlying premises is now over. However, the "plain meaning" method, with its methodological estoppel that prevents the initiation of legal reasoning, is justified in a technical field such as tax law because of the imperatives of stability and predictability of the law; moreover, the use of the "plain meaning" in that area does not have any undesirable side effects.

When ss. 23 and 56(1) of the Charter are interpreted in an informed manner using the modern legal interpretation approach, the definition of the term "quasi-judicial" that must be adopted is one that limits its denotation to the "matters of penal significance" category. Section 23 is therefore applicable only to "agencies exercising quasi-judicial functions involving `matters of penal significance'". The common law remedies are available when an administrative agency makes a quasi-judicial decision in the matters of penal significance category, and ss. 23 and 56(1) of the Charter provide other remedies. In particular, in the event of a breach of the duty to be impartial in this category, the aggrieved individual may have the enabling statute struck down erga omnes, in whole or in part, under s. 52 of the Charter. In the present case, the Régie's decision to cancel the respondent's liquor permit was not a quasi-judicial decision in the matters of penal significance category. This type of decision falls within the "non-penal" category. Accordingly, s. 23 of the Charter is not applicable to this case and the erga omnes declaratory remedy is not available. The case is governed rather by administrative law and the remedies of evocation and declaration. Since the respondent's application is well founded, there is no reason to decline to exercise the remedial discretion conferred on the courts by the Code of Civil Procedure. The motion in evocation must therefore be allowed and the Régie's decision set aside.

| Return to Topic Menu | Return to Main Menu |