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![]() Reviews (Section 76)Orders and Reasons - Procedural and Others
Review No.: RR-97-004 Download full document in MS Word format, compressed - zip (20K) through FTP Download full document in Adobe Acrobat format through FTP Download full document in MS Word format, compressed - zip (20K) through HTTP Download full document in Adobe Acrobat format through HTTP
Ottawa, Friday, September 26, 1997 Review No.: RR-97-004 IN THE MATTER OF a review, under section 76 of the Special Import Measures Act, of the finding made by the Canadian International Trade Tribunal on January 20, 1993, in Inquiry No. NQ-92-004, concerning gypsum board, composed primarily of a gypsum core, with paper surfacing bonded to the core, originating in or exported from the United States of America; AND IN THE MATTER OF a motion dated September 9, 1997, brought by Georgia-Pacific Corporation in respect of certain interrogatories served on National Gypsum Company. O R D E RThe Canadian International Trade Tribunal hereby orders, pursuant to section 17 of the Canadian International Trade Tribunal Act, National Gypsum Company to respond, by Friday, October 3, 1997, to the interrogatories served on it by Georgia-Pacific Corporation on August 25, 1997, and by Westroc Inc. on August 26, 1997, subject to the modifications set out in Annex “A” to this order. Arthur B. Trudeau ANNEX ATribunal Comments and Directives With Respect to Interrogatories for National Gypsum
STATEMENT OF REASONSINTRODUCTIONBy separate orders, each dated September 26, 1997, the Canadian International Trade Tribunal (the Tribunal) directed CGC Inc. (CGC) and National Gypsum Company (National) to respond to the interrogatories served on them by Georgia-Pacific Corporation (Georgia-Pacific) and Westroc Inc. These are the Tribunal’s reasons with respect to those orders. BackgroundBy letter dated August 25, 1997, counsel for Georgia-Pacific served a set of interrogatories on CGC through its counsel. The interrogatories requested information and documentation regarding, among other things, US production, sales and exports of gypsum board, and requested CGC to respond on behalf of USG Corporation (USG). By letter dated August 29, 1997, counsel for CGC advised counsel for Georgia-Pacific that, “as a subsidiary of USG, CGC is not in a position to respond to your request for information on behalf of USG Corporation as decisions concerning information and records in the hands of USG is the purview of USG Management rather than CGC management.” Counsel for Georgia-Pacific exchanged another round of correspondence, but counsel for CGC maintained the position that CGC was not in a position to respond. By letter dated August 25, 1997, counsel for Georgia-Pacific served a set of interrogatories on National, in which it requested National to provide information and documentation concerning various matters, including National’s pricing, transportation costs and the value and volume of sales from National’s plants. National did not respond to Georgia-Pacific’s interrogatories until September 15, 1997. Georgia-Pacific’s MotionBy letter dated September 9, 1997, counsel for Georgia-Pacific applied to the Tribunal for an order in respect of its August 25, 1997, interrogatories to CGC and National. Georgia-Pacific requested the following relief: • an order directing CGC to provide Georgia-Pacific with all of the information and/or documentation requested in its August 25, 1997, interrogatories, which is in the possession, power or control of CGC and USG, on behalf of CGC and USG; • in the alternative, an order directing CGC to provide Georgia-Pacific with all of the information and/or documentation requested in Georgia-Pacific’s interrogatories, which is in the possession, power or control of CGC and USG, on behalf of CGC alone; or • in the further alternative, an order directed at CGC requiring it to provide Georgia-Pacific with all of the information and/or documentation requested in Georgia-Pacific’s interrogatories, which is in the possession, power or control of CGC, and an order directed at USG requiring it to provide Georgia-Pacific with all such information and/or documentation in its possession, power or control, whether directly or through counsel for CGC. Counsel for Georgia-Pacific also seeks an order of the Tribunal directing National to provide Georgia-Pacific with all of the information and/or documentation requested in Georgia-Pacific’s August 25, 1997, interrogatories and in National’s possession, power or control. In the motion, counsel for Georgia-Pacific notes the following. By letter dated July 29, 1997, the Tribunal advised counsel that it had established fixed time frames for interrogatories in the present review. Attached to that letter were guidelines with respect to interrogatories. The guidelines provide that interrogatories or requests for the production of documents could be directed to any party and that a party so served would be required to provide a “full and adequate” response within a certain time frame. The guidelines provide that any party unable or unwilling to provide a full and adequate response, on the grounds that the information or documents requested are irrelevant, provide a response that sets out the reasons for that contention. The guidelines also state that, where a party contends that information or documents necessary to provide a full and adequate response are unavailable, that party must set out the reasons for the unavailability and provide information which it considers would be of assistance to the person who initiated the interrogatories. In the motion, counsel for Georgia-Pacific also notes that CGC and USG participated in the Tribunal’s inquiry, Inquiry No. NQ-92-004, [1] which led to the finding under review. In Inquiry No. NQ-92-004, CGC supported an injury finding, whereas USG did not. Since the Tribunal’s finding, CGC has become a wholly owned subsidiary of USG. While USG participated in the Tribunal’s review initiation, or notice of expiry process, which preceded the present review and responded to a Tribunal questionnaire in the review, it is not a party to the review. Counsel for Georgia-Pacific submits that both CGC and National have failed to comply with the Tribunal’s interrogatory guidelines by failing to provide a full and adequate response to Georgia-Pacific’s interrogatories. Moreover, counsel for Georgia-Pacific submits that, even if counsel for CGC is correct in maintaining that CGC is not required to file a response on behalf of USG, it is in violation of its obligation to “provide any alternative information or documents” that would be of assistance to Georgia-Pacific. Counsel for Georgia-Pacific submits that National has violated its obligation to file a response to Georgia-Pacific’s interrogatories. Counsel for Georgia-Pacific submits that the Tribunal’s interrogatory guidelines were created to provide parties to the review with the right to obtain, in a timely manner, all relevant information and documentation in the possession of, or reasonably accessible by, other parties. In this respect, counsel submits that the Tribunal’s interrogatory system is analogous to the discovery systems utilized by superior courts. As such, counsel submits that the Tribunal’s interrogatory guidelines should be “informed” by the superior courts’ application of discovery rules. Counsel for Georgia-Pacific notes that rule 30.02(4) of the Ontario Rules of Civil Procedure [2] provides that “[t]he court may order a party to disclose all relevant documents in the possession, control or power of the party’s subsidiary or affiliated corporation or of a corporation controlled directly [or] indirectly by the party and to produce for inspection all such documents that are not privileged.” Counsel notes that the Ontario District Court utilized that rule in Peters v. General Motors of Canada, [3] in ordering General Motors of Canada Ltd. to disclose all relevant documents in the possession, control or power of its affiliated corporation, General Motors Corporation, a US corporation. Counsel for Georgia-Pacific points out that rule 450(1)(b)(ii) of the Federal Court Rules [4] provides that the court “may order a party to disclose in an affidavit of documents all documents relevant to any matter in issue that are in the possession, power or control of any corporation or individual that directly or indirectly controls the party. [5] ” Counsel submits that, even before rule 450(1)(b)(ii) was enacted, in Monarch Marking Systems, Inc. v. Esselte Meto Ltd., [6] the Federal Court—Trial Division ordered a Canadian company to produce documents in the possession and control of its foreign affiliate. Counsel for Georgia-Pacific submits that that the Federal Court—Trial Division’s decision in Monarch was cited with approval by the Federal Court of Appeal in R. v. Crestbrook Forest Industries Limited. [7] Counsel for Georgia-Pacific submits that the conduct of CGC and National is such as to thwart the Tribunal’s objectives in establishing the interrogatory guidelines to the prejudice of Georgia-Pacific and that the interests of equity, efficiency and natural justice warrant the granting of the relief sought by Georgia-Pacific. By letter dated September 11, 1997, the Tribunal invited CGC and National to respond to Georgia-Pacific’s motion and provided Georgia-Pacific with the opportunity to reply to such responses. CGC’s ResponseCounsel for CGC submits that, contrary to the assertions of Georgia-Pacific, on August 29, 1997, it responded to Georgia-Pacific’s interrogatories in accordance with the interrogatory guidelines. Counsel states that he advised Georgia-Pacific that CGC was not in a position to respond to Georgia-Pacific’s interrogatories “on behalf of” USG, as the interrogatories called for information and documents in the hands of USG, and decisions concerning same would require USG’s authority. CGC also pointed out that, in subsequent correspondence with Georgia-Pacific, it reiterated its position, but invited Georgia-Pacific to direct interrogatories directly to CGC. To date, Georgia-Pacific has not availed itself of that opportunity. Counsel for CGC submits that, to make the order requested by Georgia-Pacific, the Tribunal would have to pierce the corporate veil and make a finding that CGC is an agent of USG or that CGC was established by USG as a “rouse” [sic] through which to act. Counsel submits that it is well settled in law that subsidiary corporations enjoy a strong presumption favouring their existence as separate and distinct legal entities. In counsel’s submission, where there is no express or implied agency, fraud, conspiracy or evidence that the subsidiary is the alter ego of the parent corporation, the corporate veil should not be lifted. Counsel submits that there is no evidence upon which the Tribunal could arrive at such a finding with respect to CGC. In this regard, counsel notes that CGC is a Canadian corporation of long-standing history and activities in Canada, with full management and control over its operations. Moreover, given that USG is a US corporation, the order sought by Georgia-Pacific would be extraterritorial. Counsel for CGC also submits that, even if the Tribunal is prepared to accept counsel for Georgia-Pacific’s analogy to the Ontario and Federal Court discovery systems, the Tribunal’s interrogatory guidelines do not contain an affiliate exception comparable to those contained in the Ontario Rules of Civil Procedure or the Federal Court Rules. Counsel notes that the affiliate exception rules were added to the Ontario and Federal Court rules only recently. Counsel argues that, because the Tribunal’s interrogatory guidelines contain no affiliate exception provision, it would only be appropriate to draw an analogy between the Tribunal’s interrogatory guidelines and the Ontario and Federal Court rules as they existed prior to the addition of the affiliate exceptions in those rules. On this basis, counsel submits that the cases cited by counsel for Georgia-Pacific, which were decided after the affiliate exceptions were added to the rules, are of no assistance. Counsel for CGC refers the Tribunal to the Federal Court—Trial Division’s decisions in Indalex Ltd. v. The Queen [8] and Bowlen v. R. (No. 2), [9] both decided before the addition of the affiliate exception to the Federal Court Rules, and to the UK Court of Appeal’s decision in Lonrho Ltd. v. Shell Petroleum Co., [10] which, counsel submits, stand for the proposition that it is only in very rare circumstances that courts will require discovery beyond documents and information within the possession, power and control of the parties to a proceeding. Counsel submits that, even if the Tribunal is able to imply the existence of a rule analogous to the affiliate exception in its interrogatory guidelines, it should heed the caution of the Federal Court of Appeal in Crestbrook that the power to order such discovery, or in this case interrogatories, should be used sparingly. National’s ResponseCounsel for National in Canada submits that counsel for Georgia-Pacific has provided no justification for the information that he has requested National to produce. Counsel for National also submits that “the imbalance between the tenuous relevance of that data [requested] and the burden placed upon [National] to provide a complete response is self-evident.” Finally, counsel for National indicates that National is prepared to respond, on a best effort basis, to certain questions posed by Georgia-Pacific. The Tribunal also received a submission from counsel for National in the United States. Counsel noted that, in this review, National has already completed a detailed questionnaire sent to it by the Tribunal. Counsel notes that opposing counsel in this review had an opportunity to offer comments on what the Tribunal’s questionnaires should contain. In counsel’s submission, having availed themselves of that opportunity, the scope of the Tribunal’s questionnaire should be adequate for both the Tribunal’s and opposing counsel’s needs in preparing for the hearing. Counsel for National submitted that the questions posed by Georgia-Pacific concerned matters which were only remotely relevant to the issues before the Tribunal and/or were overly burdensome when the very significant amount of work required for the preparation of answers was compared to their limited probative value. Finally, counsel indicated that the answers to certain of the questions could be obtained from information already on the record in the review. Georgia-Pacific’s ReplyIn reply to counsel for CGC’s submission, counsel for Georgia-Pacific notes that neither CGC nor its counsel has provided any indication as to whether or not they have or have had access to some of the information or documents contemplated in Georgia-Pacific’s interrogatories. Moreover, counsel for Georgia-Pacific notes that counsel for CGC has not indicated whether any attempt has been made to request USG to provide that information or those documents. Finally, counsel for Georgia-Pacific notes that counsel for CGC has indicated that CGC will respond to interrogatories concerning only its own operations. Counsel for Georgia-Pacific submits that these facts, taken together, lead to the inference that CGC has access or has had access to some or all of the information or documents in issue and that it intends to use those documents selectively in presenting its case to the Tribunal. With respect to counsel for CGC’s arguments regarding the lifting of the corporate veil, counsel for Georgia-Pacific submits that the Tribunal does not have to pierce the corporate veil or find that CGC is USG’s agent in order to make the order that it seeks. In Georgia-Pacific’s submission, the Tribunal may issue the order if it concludes that the administration of justice warrants the production of the relevant evidence. However, in the submission of counsel for Georgia-Pacific, if the Tribunal is not prepared to issue an order on that basis and goes on to consider the legal issues raised by counsel for CGC, it should still grant Georgia-Pacific the relief that it seeks. Counsel for Georgia-Pacific submits that the Tribunal may pierce the corporate veil, even if it concludes that CGC is USG’s agent for one purpose and is autonomous for all other purposes. In support of that proposition, counsel for Georgia-Pacific cites Nedco Ltd. v. Clark, [11] Aluminum Co. of Canada Ltd. v. Toronto [12] and Toronto v. Famous Players Canadian Corp. [13] Counsel submits that, for the purposes of the Tribunal’s review, CGC is acting as the sole representative of USG and that CGC is thus acting in a manner “akin” to an agent. Counsel for Georgia-Pacific also takes issue with counsel for CGC’s submission that the Tribunal’s interrogatory guidelines do not contain an affiliate exception and that one cannot be implied. Counsel for Georgia-Pacific submits that counsel for CGC’s argument on this point is illogical. In that connection, counsel for Georgia-Pacific points out that the Tribunal’s interrogatory guidelines were “enacted” after the affiliate exceptions were added to both the Ontario and Federal Court rules and that the Tribunal enacted the guidelines with the knowledge that superior courts had the power to order “affiliates” to produce documents. In the submission of counsel for Georgia-Pacific, in light of that fact, the existence of that power in the superior courts must “inform” the Tribunal’s consideration of its power under the interrogatory guidelines. Moreover, counsel for Georgia-Pacific argues that, even before the Ontario and Federal Court rules contained an express affiliate exception, the courts would, in appropriate circumstances, order that documents in the possession of affiliated corporations be produced. In other words, the power of those courts to make such orders is not derived from the rules, but rather is part of their inherent jurisdiction as superior courts of record. With respect to National, counsel for Georgia-Pacific notes that National has failed to comply with the interrogatory guidelines, in that it failed to provide a response of any kind within the time frame established. Counsel submits that it is too late for National to challenge the relevance of Georgia-Pacific’s interrogatories, to provide cursory responses to select interrogatories or to challenge Georgia-Pacific’s right to issue interrogatories at all on the grounds that its counsel had an opportunity to comment on the Tribunal’s questionnaires. Counsel submits that all of the information sought in the interrogatories to National is relevant. Moreover, counsel submits that, taken to its logical conclusion, National’s position would see a complete elimination of interrogatories in the review process. REASONS FOR DECISIONThe Tribunal is of the view that Georgia-Pacific’s motion raises the two following issues: • whether the Tribunal has the power to order CGC and National to respond to Georgia-Pacific’s interrogatories; and • if the Tribunal does have such power, whether it should exercise it in this case. Tribunal’s Power to Order Production of Documents and InformationSubsection 17(2) of the Canadian International Trade Tribunal ActMany of the parties’ submissions with respect to the Tribunal’s power to order CGC and National to respond to Georgia-Pacific’s interrogatories focused on the interrogatory guidelines issued by the Tribunal on July 29, 1997. The Tribunal is of the view that those guidelines do not add or detract from the Tribunal’s power. They are a “guideline” issued by the Tribunal to bring structure to its interrogatory process, aimed at facilitating the exchange of information by parties prior to the hearing in a productive and timely manner. The Tribunal is a quasi-judicial body created pursuant to the Canadian International Trade Tribunal Act [14] (the CITT Act). With certain exceptions, tribunals such as this one have only such powers as are bestowed on them by their enabling legislation. Section 17 of the CITT Act provides as follows: (1) The Tribunal is a court of record and shall have an official seal, which shall be judicially noticed. (2) The Tribunal has, as regards the attendance, swearing and examination of witnesses, the production and inspection of documents, the enforcement of its orders and other matters necessary or proper for the due exercise of its jurisdiction, all such powers, rights and privileges as are vested in a superior court of record. (Emphasis added) As noted above, Georgia-Pacific’s interrogatories contemplate the production of various documents, as well as the provision of certain information. It is well established as a matter of law that superior courts have the power to order parties to their proceedings to produce documents. On that basis, the Tribunal is of the view that subsection 17(2) of the CITT Act provides it with the necessary authority to order parties to its proceedings to produce documents. The question of whether that power should be exercised in this particular case is addressed below. With respect to the production of information, as distinct from existing documents, the Tribunal is of the view that the Federal Court of Appeal’s decision in Interprovincial Pipe Line Limited v. National Energy Board is instructive. [15] In that case, Interprovincial Pipe Line Limited appealed an order of the National Energy Board (the Board) directing it to produce certain information pertaining to Lakehead Pipe Line Company Inc., a wholly owned US subsidiary. The Court found that, for the information to be created, Interprovincial Pipe Line Limited would have to instruct Lakehead Pipe Line Company Inc. to perform certain “calculations, reconciliation, analysis, adjustments, estimates and forecasts. [16] ” The Court stated that the issue in the appeal was “whether the Board has statutory authority to order the preparation and filing of information in a documentary form that is not already in existence. [17] ” In the course of its judgment, the Court noted that, though all of the information sought by the Board could have been obtained over an extended period of time in the form a viva voce evidence, that was not a practical way of proceeding. Like subsection 17(2) of the CITT Act, subsection 10(3) of the National Energy Board Act (the NEB Act) [18] refers specifically to the production of documents, as opposed to information. Without answering the question definitively, the Federal Court of Appeal questioned whether that provision could be relied on to provide the requisite authority for the Board’s order. In considering that question, the Court noted that, with respect to certain of the Board’s proceedings, the Board’s rules provided that the Board could order parties to provide it with “such further information, particulars or documents as the Board deems necessary.” However, the Court found that the Board’s rules did not apply to the proceeding at issue. The Court also noted that, in certain types of proceedings before the Board, the NEB Act provided the Board with express authority to order the production of information. However, the Court observed that those provisions did not apply to the proceeding at issue. After canvassing these matters, the Court stated: In view of these uncertainties I am unable to conclude that there is clearly explicit authority in the Act or the Rules for the power exercised by the Board in the present case, but given the practical necessity of the power I am of the opinion that it exists by necessary implication from the nature of the regulatory authority that has been conferred on the Board. See Halsbury’s Laws of England, 3rd ed., vol. 36, para. 657, p. 436: “The powers conferred by an enabling statute include not only such as are expressly granted but also, by implication, all powers which are reasonably necessary for the accomplishment of the object intended to be secured.”(Emphasis added) [19] In reaching that conclusion, the Federal Court of Appeal noted as follows: There can no doubt that the power to order the preparation and filing of written information of this kind is necessary to the effective exercise of the Board’s jurisdiction under the Act. Mr. Whittle, the Secretary of the Board, put the matter thus in his affidavit: It is my opinion that, if the Board is not able to require companies subject to its jurisdiction to provide information in a form directed by the Board, and if it is restricted to using unprocessed, unanalysed, unscheduled, uncollated and disorganized documents, financial and engineering data as happen to be in the custody and control of such companies, the Board, assisted by technical staff, would be unable to adequately discharge the statutory responsibilities assigned to it under the National Energy Board Act. Those words apply equally to Tribunal inquiries under the Special Import Measures Act [20] (SIMA), as well as to certain inquiries under the CITT Act. Much of the information used by the Tribunal in SIMA cases is simply not kept “on the shelf” by companies in a documentary form. In addition, in proceedings under SIMA, the Tribunal is often required to examine some portion or subset of an industry. Even where documentary information is available, it typically relates to operating companies as a whole, as opposed to subsets thereof. If the Tribunal could not obtain information organized in an accessible manner from parties, but rather could obtain only documents, it would be forced to break those documents down and “back out” the information of relevance to the inquiry. In so doing, the Tribunal would have to make numerous assumptions concerning allocations and other matters, which would very substantially lessen the accuracy and reliability of the information generated. To obtain the information required for proceedings under SIMA, the Tribunal’s staff distributes questionnaires to participants in the industry, including domestic producers, importers and exporters. The information gathered is synthesized into a detailed pre-hearing staff report which sets out, among other things, information concerning prices, imports, financial results of the domestic industry, data regarding capacity utilization, inventories and market trends. (By way of illustration, the pre-hearing staff report in this review is 88 pages in length, contains over 60 tables and figures setting out financial and economic data and includes 30 schedules setting out additional data.) The pre-hearing staff report is distributed to all parties in a given Tribunal proceeding and is heavily relied upon by the Tribunal and parties as a reference document. The Tribunal has operated in this manner since it was established in late 1988, and its predecessors operated in a similar manner. In short, if the Tribunal could not obtain information, it would be a practical impossibility to gather the information necessary for the Tribunal to discharge its mandate. The Tribunal is of the view that, under subsection 17(2) of the CITT Act, it has the power to order parties to its proceedings to produce documents and that, by necessary implication, it has the power to order parties to its proceedings to produce information. Should the Tribunal Exercise its Power to Order Production of Documents
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