Re Ombudsman of Ontario and Ministry of Financial Institutions et al.

Re Ombudsman of Ontario and Ministry of Financial Institutions et al.

[Indexed as: Ontario (Ombudsman) v. Ontario (Ministry of Financial Institutions)]

High Court of Justice, Divisional Court, Callaghan CJ-H.C., Osler and J. Holland JJ.
December 13, 1989.

Administrative law – Ombudsman – Ombudsman undertaking investigation into complaints of shareholders about action of government official taking control of assets of trust company pursuant to Order in Council – Ombudsman legislation not applicable to deliberations and proceedings of Executive Council – Ombudsman having authority to proceed with investigation – Ombudsman Act, R.S.O. 1980, c. 325, s. 14

Pursuant to s. 158(a) of the Loan and Trust Corporations Act, R.S.O. 1980, c. 249, the Lieutenant-Governor in Council issued O.C. 6/83 directing the registrar under the Act to take possession and control of the assets of a trust company. In response to complaints from some preferred shareholders of the company with respect to the registrar’s actions and decisions concerning the takeover, the Ombudsman notified the Ministry of Financial Institutions of its intention to investigate the complaints. The Attorney-General raised a jurisdictional objection to the Ombudsman’s investigation based on s. 14(b) of the Ombudsman Act, 11.5.0. 1980, c. 325, which provides that the Act does not apply to deliberations and proceedings of the Executive Council or any committee thereof.

On an application pursuant to s. 15(5) of the Ombudsman Act for a determination concerning the Ombudsman’s jurisdiction, held, the Ombudsman has the tight to undertake the proposed investigation.

Section 14(b) must be given a restrictive interpretation when one looks at the Act and considers the jurisdiction conferred on the Ombudsman by s. 15, together with the contemplated procedure after investigation as reflected in s. 23. Section 14(b) protects only the processes of deliberation and the deliberations of the Executive Council- Beyond that, the Ombudsman has jurisdiction to inquire into the effect of Orders in Council on the administration at large and on the public affected.

Cases referred to

Re Brit Columbia Development Corp. v. Friedmann (1984), 14 D.L.R. (4th) 129, [1984] 2 S.C.R. 447, (1985) 1 W.W.R. 193, 55 N.R. 298

Statutes referred to

Loan and Trust Corporations Act, R.S.O. 1980, c. 249 [repealed 1987, c. 33 s. 230], s. 158(a)
Ombudsman Act, R.S.O. 1980, c. 325, ss 14(b), 15(5), 22(3)(e), 23

APPLICATION pursuant to s. 15(5) of the Ombudsman Act (Ont.) for a declaratory order determining certain stated questions about jurisdiction.

Eric R. Murray, Q.C., and Nora A. Gillespie, for applicant.
T.C. Marshall, Q.C, for respondents.

The judgment of the court was delivered orally by

CALLAGHAN C.J.H.C.:-This is an application pursuant to s. 15(5) of the Ombudsman Act, R.S.O. 1980, c. 325 (Act). The application is for a declaratory order determining certain stated questions. At the outset of this hearing, counsel on behalf of the applicant sought to amend the first question and no objection was taken to that application. Accordingly, the application to amend is granted and the first question now reads as follows:

(a) Does subsection 14(b) of the Ombudsman Act preclude the Ombudsman from investigating decisions, recommendations, acts or omissions made by a person or persons other than the Executive Council in the course of administering a government organization pursuant to an Order-in-Council or regulation and to report, inter alia on the effect of the Order-in-Council or regulation and make recommendations in respect thereof?

The second question stated reads:

(b) If the answer to the foregoing is yes, is the Ombudsman precluded from investigating the decisions, recommendations, acts or omissions done by the Registrar under the Loan and Trust Corporations Act and all those acting under him in connection with the Crown Trust Company?

Briefly, the background giving rise to this application is 0.0. 6/83 dated January 7, 1983. That Order in Council was made by the Lieutenant-Governor in Council pursuant to s. 158(a) of the Loan and Trust Corporations Act R.S.O. 1980, c. 249. It directed B the registrar under that Act to take possession and control of the assets of the Crown Trust Company.

In 1984 after that action was taken by the registrar, the Ombudsman received complaints from a number of preferred shareholders of Crown Trust with respect to the registrar’s actions and decisions concerning the take-over. In response to these complaints the Ombudsman notified the Ministry of his intention to investigate the complaints, and he was advised at that time by the Attorney-General of the existence of civil litigation and was given an indication that there was a fear that his investigation would interfere with a concurrent and ongoing criminal investigation. Upon receiving that advice the Ombudsman suspended his investigation until the criminal investigation resulted in charges being laid in or about February, 1987. At that time the Ombudsman indicated to the Attorney-General that he h intended to resume his investigation.

In May of 1987, the Attorney-General raised various concerns with the investigation proposed by the Ombudsman and requested the Ombudsman to reconsider his position. The Ombudsman did, but concluded, however, that he would proceed with the investigation.

In March of 1988, the Attorney-General raised a jurisdictional objection to the Ombudsman’s investigation winch gives rise to this application. His objection was set forth in a letter which was forwarded to the Ombudsman on September 9, 1988. In that letter, the Attorney-General states:

It is our opinion that Section 14(b) of the Ombudsman Act absolutely precludes an investigation which in any way could lead to comment on the propriety of decisions of the Executive Council or one of its committees. (Application Record pp. 30-31]

The opinion goes on to state:

Any such investigation, however, must stop short of any investigation, conclusions or recommendations respecting an Order-in-Council since the Ombudsman has no jurisdiction by reason of s. 14(b) of the Act to investigate such matters.

Section 14(b) of the Act provides as follows:

14. This Act does not apply

(b) to deliberations and proceedings of the Executive Council or any committee thereof.

In argument before us, it was conceded by counsel on behalf of the Ombudsman that s. 14(b) prohibits the Ombudsman from investigating the basis on which the Executive Council arrived at a particular decision, including the materiality of the factors considered and the sufficiency or otherwise of the basis for that decision. It was not conceded, however, and indeed it was strenuously urged on this court that the Ombudsman had authority to consider the effect of decisions of the Executive Council on the public or on other aspects of government and, in addition, had the authority to recommend that such decision be reconsidered by government. Indeed, it was submitted that the Order in Council should be viewed in light of the fact that the Ombudsman could request that any law, forming the basis of decision, be reconsidered (Act, s. 22(3)(e)).

In approaching this dichotomy as to the effect of s. 14(b), we have to be guided by the existing case-law which makes it clear that as we approach this statute the objects of the legislation must govern the interpretation given to it by the court. As was stated by the Supreme Court of Canada in considering the British Columbia Ombudsman Act, R.S.B.C. 1979, c. 306:

The objects of the legislation and the degree to which it should receive a large and liberal interpretation ca best be understood by examining the scheme of the statute as well as the factors that have motivated the creation of the Ombudsman’s office.

(Re British Columbia Development Corp. v. Friedmann (1984), 14 D.L.R. (4th) 129 at p. 137, [1984] 2 S.C.R. 447, [1985] 1 W.W.R. 193.)

The Supreme Court of Canada considered the historical background to the office in our parliamentary government:

The Ombudsman represents society’s response to these problems of potential abuse and of supervision. His unique characteristics render him capable of addressing many of the concerns left untouched by the traditional bureaucratic control devices. He is impartial. His services are free, and available to all. Because he often operates informally, his investigations do not impede the normal processes of government. Most importantly, his powers of investigation can bring to light cases of bureaucratic maladministration that would otherwise pass unnoticed. The Ombudsman “can bring the lamp of scrutiny to otherwise dark places, even over the resistance of those who would draw the blinds”: Re Alberta Ombudsman Act (1970), 10 D.L.R. (3d) 47 at p. 61, 72 W.W.R. 176 at pp. 192-3 (Alta. S.C.), per Milvain C.J.T.D. On the other hand, he may find the complaint groundless, not a rare occurrence, in which event his impartial and independent report, absolving the pub authority, may well serve to enhance the morale and restore the self-confidence of the public employees impugned. In short, the powers granted to the Ombudsman allow 1dm to address administrative problems that the courts, the legislature and the executive cannot effectively resolve.

(Re British Columbia Development Corp. v. Friedmann, supra, at pp. 139-40.)

When one looks at the Act and considers the jurisdiction conferred on the Ombudsman by s. 15, together with the contemplated procedure after investigation as reflected in s. 23, it is clear that s. 14(b) must be given a restrictive interpretation. We are o the view that s. 14(b) protects only the processes of deliberation, and, the deliberations, of the Executive Council. Beyond that, the Ombudsman has jurisdiction to inquire into the effect of t1 Orders in Council on the administration at large and on the public affected.

In the circumstances, therefore, the opinion of the Attorney General expressed as above was clearly wrong and the Ombudsman had the right to undertake the investigation that he proposed to undertake with reference to this matter. Accordingly, the first question stated is answered in the negative and the declaration will issue in the terms set forth in the first question stated. The applicant shall also have its costs of these proceedings payable forthwith after assessment.

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