IN THE SUPREME COURT OF BRITISH COLUMBIA
Citation: Canwood International Inc. v. Bork, 2012 BCSC 578
Date: 20120420 Docket: S096089 Registry: Vancouver
In the Matter of the Judicial Review Procedure Act, R.S.B.C. 1996, c. 241 And In the Matter of the Employment Standards Act, R.S.B.C. 1996, c. 113
Between:
And
Canwood International Inc.
Olaf Bork, Employment Standards Tribunal, Director of Employment Standards and Attorney General of British Columbia
Respondents
Before: The Honourable Mr. Justice Harris
On Judicial Review from: Employment Standards Tribunal,
March 2, 2009, BC EST #D023/09 and June 22, 2009, BC EST #RD065/09
The Petitioner:
James G. Matkin, Q.C. (self-represented)
Ib S. Petersen
David W. Garner Stephanie T. Mayor
Michelle J. Alman
Jean M. Walters
Vancouver, B.C. January 16-20, 2012
Counsel for the Respondent Olaf Bork:
Counsel for the Respondent Employee Standards Tribunal:
Counsel for the Respondent Director of Employment Standards:
Counsel for the Respondent Attorney General of British Columbia:
Place and Date of Hearing:
Reasons for Judgment
Petitioner
Canwood International Inc. v. Bork
Page 2
Written Reply of the Petitioner: Written Surreply of Mr. Olaf Bork:
Written Surreply of the Attorney General of British Columbia:
Written Response of the Petitioner to the Surreply:
Place and Date of Judgment:
January 27, 2012 February 24, 2012 February 28, 2012
March 5, 2012
Vancouver, B.C. April 20, 2012
Canwood International Inc. v. Bork Page 3
Introduction
[1] This matter involves the judicial review of two decisions of the Employment Standards Tribunal (the “Tribunal”), an appeal decision and a reconsideration of the appeal, both of which upheld a determination by the Director of Employment Standards finding that the petitioner, Canwood International Inc. (“Canwood”), owed $60,000 in wages under the Employment Standards Act, R.S.B.C. 1996, c. 113 (the “ESA”), to a former employee, the respondent Mr. Bork.
[2] Canwood argues that the Tribunal reached a patently unreasonable result in upholding the Director’s decision that Mr. Bork was an employee and that he was owed wages in the form of a bonus payable on the happening of one particular event. Canwood also argues that it is a federally regulated entity and that the Tribunal erred in rejecting Canwood’s constitutional argument based on the division of powers under the Constitution. It also raises issues of natural justice including issues arising from the participation of the Director in the appeal and reconsideration proceedings before the Tribunal.
[3] This matter did not proceed, however, directly to a review of the Tribunal decisions based on the record before it. The petition had been set, by agreement, to be heard starting on January 16, 2012. But Canwood set down applications to amend the petition to be heard on January 16, 2012 and for the hearing of the amended petition to take place starting that day. Those applications were opposed.
[4] Before it was possible to proceed to the merits of the matter before the Court, I issued rulings on the amendment application and certain related preliminary matters. I dismissed the application to amend the petition and excluded affidavits filed in support of the amended petition. I further ruled that the record on judicial review was the record that had been transmitted to the Tribunal by the Director as supplemented by certain evidence of constitutional facts provided by Canwood to, and admitted by, the Tribunal. That record was found in the affidavit of Tammy Nystrom sworn September 19, 2011. Finally, I ruled that the subject matter of the judicial review was both the appeal to the Tribunal and the Tribunal’s reconsideration

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of that appeal, and not simply the Tribunal’s reconsideration decision. Those rulings were made with reasons to follow. These are those reasons, as well as the reasons on the merits of the judicial review petition.
[5] For the reasons that follow, the application for judicial review is dismissed.
The Application to Amend the Petition and Related Preliminary Matters
[6] Both in the petition and the proposed amended petition, Canwood sought orders quashing the original determination by the Director dated November 12, 2008, the original appeal decision of the Tribunal dated March 2, 2009 and the reconsideration decision of the Tribunal dated June 22, 2009. It will be apparent that the application to amend the petition was brought over two years after the reconsideration decision.
[7] Mr. Matkin, who represented Canwood in his capacity as a director of the company, was apologetic about the length of time it had taken to bring this matter to court and to bring the amendments forward. He accepted the basic principle that judicial review is on the record before the administrative tribunal. He said that the amendments and the affidavits supporting them did not expand the record or introduce new facts going beyond it. He also said he was not inviting this Court to engage in a trial de novo. In support of his argument he referred to a principle of “granularity”. He said that the additional evidence merely amplified, informed, clarified or explained the facts before the Tribunal. His argument, as I understood it, was that the petition should be amended, and the additional evidence received, in order that the constitutional issue Canwood wished to advance could be properly understood and so that a proper and just determination could be made of whether Canwood fell within federal jurisdiction and, accordingly, was beyond the jurisdictional reach of the Tribunal. In effect, I was being asked to admit the additional affidavits in order that the real issue between the parties could be properly adjudicated.
[8] I accept the general proposition that the discretion to permit amendments should be exercised liberally to ensure that the real issues between the parties are

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decided on their merits, while having regard to, amongst other matters, the prejudice that might result if an amendment is granted. But here, I am satisfied that this proposed amendment is not necessary to ensure that the real issue between the parties is adjudicated on the merits. Indeed, to permit the amendment would frustrate the object of ensuring the real issue is properly before the Court. The effect of the amendment and supporting material would be to expand the record beyond that which is properly the subject of judicial review. It would transform these proceedings from judicial review into a different kind of proceeding. It would turn them into a rehearing, a new hearing or a trial de novo.
[9] It is clear that as a general rule judicial review is based on the record of the inferior tribunal, see Kinexus Bioinformatics Corporation v. Asad, 2010 BCSC 33 at para. 17. This is inherent in the nature of judicial review. In conducting a judicial review a court exercises a supervisory jurisdiction to ensure that statutory decision- makers do not overstep their legal authority. Judicial review involves ensuring that a tribunal acts within its jurisdiction in deciding matters it is authorized to decide by its governing legislation and that it does not lose jurisdiction by breaching principles of natural justice or rendering decisions going beyond the deference owed to it, see Dunsmuir v. New Brunswick, 2008 SCC 9; Lang v. British Columbia (Superintendent of Motor Vehicles), 2005 BCCA 244; and Actton Transport Ltd. v. British Columbia (Employment Standards), 2010 BCCA 272 [Actton].
[10] Recently, in Actton, the Court of Appeal disapproved of a court receiving evidence that was not before the Employment Standards Tribunal. Coincidentally, that new evidence went to the very question before this Court: namely, did the employment and labour relations of a corporate entity fall within federal jurisdiction.
[11] In this case, Canwood did not raise a constitutional issue before the Director. The constitutional issue was raised for the first time on its appeal to the Tribunal. The Tribunal admitted and considered “new evidence” relevant to the constitutional issue on the appeal. At that time the constitutional argument was founded on the proposition that Canwood’s proposed business meant it was engaged in trade and
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commerce and that it was functionally integrated with CN Rail, a federal undertaking, and partnered with First Nations. Since then the constitutional argument has been transformed, and the grounds that Canwood is functionally integrated with a federal undertaking and that Canwood falls under the federal power over Indians and Indian Lands have been abandoned. It will be necessary to return to this matter later.
[12] Canwood did not attempt to introduce additional evidence going to constitutional facts on the Tribunal’s reconsideration of the appeal. It has, however, attempted to supplement the record on judicial review both in support of the petition as originally framed and also the proposed amended petition. The additional material goes both to constitutional issues and the substantive issues involving Mr. Bork’s employment status and Canwood’s agreement with him.
[13] The principle of so-called “granularity” is not a recognised basis to add to a record even if the additional material does only amplify, inform, clarify or explain the evidence before a tribunal. The record is the record. Additional material changes the record. Admitting additional material compromises the process of judicial review. To admit additional material in this case would be to prevent a proper judicial review of the decisions of the Tribunal. That review should be a review of the decisions of the Tribunal based on the evidence before it.
[14] I am, in any event, not persuaded that the additional affidavits merely provide greater detail in support of evidence already before the Tribunal. On my review, the proposed evidence expands rather than simply explains the evidence before the Tribunal. To admit that evidence would mean that the exercise in this Court was not limited to a judicial review, but had ventured into a fresh investigation and determination of issues on the basis of material that had not been before the Tribunal. Judicial review would be converted into some form of rehearing on the merits or a trial de novo. The Court of Appeal has made it clear that this Court should not engage in such a venture.
[15] To put the matter another way, the proposed amendment and affidavits do not assist in ensuring that the true dispute between the parties is properly and fairly
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joined and decided. This is a consequence of the fact that judicial review is, with limited exceptions, based on the record of the administrative tribunal under review. The supplementary affidavits are irrelevant, therefore, to the issue before the Court.
[16] In reaching this conclusion, I found it necessary to determine what decision is or decisions are the subject matter of this judicial review in order to decide what the record is on judicial review. Canwood’s petition and proposed amended petition seek judicial review of all three decisions: namely, the original Director’s determination as well as the appeal to the Tribunal and the reconsideration by the Tribunal of that appeal.
[17] It is clear that the original Director’s determination is not the subject of this judicial review. The Legislature has put in place a statutory scheme providing for appeals of determinations by the Director. That process is protected by a privative clause. As Mr. Justice Pitfield said in Laguna Woodcraft (Canada) Ltd. v. British Columbia (Employment Standards Tribunal), [1999] B.C.J. No. 3135 (S.C.) [Laguna] at para. 11:
Under the Employment Standards Act an appeal lies to the Tribunal from any decision made by the director. Judicial review, in the ordinary course, is not available where there is an appeal to higher authority. The judicial review should be pursued, where appropriate and necessary, in relation to decisions of the Tribunal and not of the director.
[18] The particular significance of the presence of a privative clause was noted by Mr. Justice Davies in Gulf Coast Materials Ltd. v. Helgesen, 2010 BCSC 1169. In that case, the petitioner had pursued judicial review of the Director’s original determination, but abandoned it during argument. The Court noted at para. 86:
[86] Abandonment of direct judicial review of the Director’s Determination and the Director’s Recalculation Determination by Gulf Coast was not gratuitous. It was mandated by application of s. 110(1) of the Employment Standards Act, which provides:
110(1) The tribunal has exclusive jurisdiction to inquire into, hear and determine all those matters and questions of fact, law and discretion arising or required to be determined in an appeal or reconsideration under Parts 12 and 13 and to make any order permitted to be made.
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[19] This matter was of some importance in assessing whether to admit an affidavit sworn by Mr. Matkin in which he deposed to many facts about Canwood’s business which he said he recalled generally testifying to before the Director’s delegate. No transcript of oral testimony before the Director exists, although the evidence heard by him is summarised in detail in his written reasons. On the basis of the above authority, I am satisfied that the record on judicial review is the record that was before the Tribunal. Canwood did not attempt to supplement the record provided to the Tribunal by the Director by reference to the oral evidence given at the hearing before the Director. It did attempt to provide fresh evidence on non- constitutional issues. That evidence was not admitted because it did not satisfy the test for receiving fresh evidence on appeal. In the result, I am satisfied that
Mr. Matkin’s affidavit was not part of the record before the Tribunal and is not part of the record to be reviewed in this proceeding.
[20] In my view, the attempt improperly to expand the record is a sufficient reason to deny the application to amend the petition and to rule that the additional affidavits are not admissible for the purpose of judicial review. I note, however, that it has taken an unreasonable and inordinate amount of time to bring these amendments forward for determination. The ESA puts in place a scheme for determining and enforcing employee rights that is intended to be cost-effective, efficient and expeditious. The availability of judicial review should not be permitted to frustrate those objectives. No satisfactory explanation was offered why it took so long to bring these applications. The respondents were pressing the petitioner to define the constitutional issues, to delineate a proper constitutional question and to apply to amend the petition from the very early days of this dispute.
[21] The unexplained delay in doing so is a factor which militates against exercising my discretion in favour of the amendments. If the amendments were granted, a further adjournment of at least several months of the judicial review application would be inevitable. The respondents would be entitled to time to file new application responses. In my view, this would cause prejudice to Mr. Bork who has already been waiting since at least June 2009 to receive his award. A further
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adjournment of the judicial review would frustrate the legislative purposes set out above.
[22] In my view, the material before me demonstrates that the petitioner has failed to recognise its obligation to bring forward its full case at the earliest time so it can be properly adjudicated. The petitioner has consistently sought to expand the record by injecting new issues and attempting to introduce new evidence at various stages in the proceeding. There is no reason that I can see why the fundamentals of the material attempted to be introduced on the judicial review could not have been put before the Director’s delegate in the first instance. Certainly it could all have been before the Tribunal. This alone would, in my opinion, have been a sufficient reason to deny the application to amend the petition and the introduction of the additional affidavits on which it depended.
[23] For reasons I will return to later, I am satisfied that the present judicial review is of both Tribunal decisions (i.e. the appeal decision and the reconsideration of the appeal), and the record is the record the Tribunal had in relation to both the appeal and the reconsideration.
The Petition for Judicial Review
Which Decisions is/are the Subject of Judicial Review?
[24] The petitioner seeks the following relief:
1. An order quashing the reconsideration decision of the Tribunal dated June, 22, 2009;
2. An order quashing the appeal decision of the Tribunal dated March 2, 2009;
3 An order quashing the determination of the delegate of the Director dated November 12, 2008; and
4. Certain consequential orders and declarations, including costs.
[25] As I have already ruled, this judicial review is of the two Tribunal decisions and not the original determination by the Director’s delegate. During the course of

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argument a question arose about whether judicial review is limited to the reconsideration decision. This issue arose because I asked whether the conclusion recently reached by the Court of Appeal in United Steelworkers, Paper and Forestry, Rubber, Manufacturing, Energy Allied Industrial and Service Workers International Union, Local 2009 v. Auyeung, 2011 BCCA 527 [Auyeung], that judicial review of decisions of the Labour Board is limited to reconsideration decisions and not the original decision or appeal to the Board, was applicable to the decisions of the Employment Standards Tribunal. Mr. Peterson, on behalf of Mr. Bork, took the position that it was; other counsel disagreed.
[26] To appreciate the factors bearing on this question it is useful to have regard to the structure of the rights under the ESA to appeal determinations of the Director and, then, apply for a reconsideration of the appeal. The Tribunal, it will be recalled, has exclusive jurisdiction in respect of those matters set out in s. 110 of the ESA, which reads:
110(1) The tribunal has exclusive jurisdiction to inquire into, hear and determine all those matters and questions of fact, law and discretion arising or required to be determined in an appeal or reconsideration under Parts 12 and 13 and to make any order permitted to be made.
(2) A decision or order of the tribunal on a matter in respect of which the tribunal has exclusive jurisdiction is final and conclusive and is not open to question or review in any court.
[27] This privative clause has the effect of limiting judicial review to matters in which the Tribunal has, in effect, exceeded its jurisdiction.
[28] The right to appeal a determination by the Director is found in s. 112 of the ESA. It reads:
112(1) Subject to this section, a person served with a determination may appeal the determination to the tribunal on one or more of the following grounds:
(a) the director erred in law;
(b) the director failed to observe the principles of natural justice in making the determination;
(c) evidence has become available that was not available at the time the determination was being made.
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…
[29] The statute, therefore, limits the grounds of appeal. Importantly, there is no appeal from findings of fact made by the Director. It follows that disagreements about what facts ought to have been found on the evidence cannot form the subject matter of judicial review. The only way that alleged errors about findings of fact may form the basis of appeal is if the findings rise to the level of constituting an error of law. Under the Tribunal’s jurisprudence this may occur if findings are made in the absence of evidence or if the findings are so unreasonable that they amount to the commission of a palpable and overriding error in reaching conclusions that cannot be reasonably entertained or adopting a method of assessment that is wrong in principle, see Gemex Developments Corp. v. British Columbia (Assessor of Area #12) (1998), 62 B.C.L.R. (3d) 354, [1998] B.C.J. No. 2275 (C.A.) at para. 9.
[30] On appeal, the statute defines the relief the Tribunal may grant:
115(1) After considering whether the grounds for appeal have been met, the tribunal may, by order,
(a) confirm, vary or cancel the determination under appeal, or (b) refer the matter back to the director.
[31] The Tribunal has the power to reconsider its decisions on the application of
the Director, a person named in a decision or order of the Tribunal, or on its own motion:
116(1) On application under subsection (2) or on its own motion, the tribunal may
(a) reconsider any order or decision of the tribunal, and
(b) confirm, vary or cancel the order or decision or refer the matter back to the original panel or another panel.
(2) The director or a person named in a decision or order of the tribunal may make an application under this section.
(3) An application may be made only once with respect to the same order or decision.
[32] The ESA does not expressly define the criteria the Tribunal is to apply on reconsideration, although those criteria have been articulated in the Tribunal’s own
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jurisprudence. What is clear is that the Tribunal exercises a discretionary power on reconsideration; a power to be exercised in accordance with the purposes of the governing legislation.
[33] In Auyeung, the Court of Appeal examined the legislative scheme created by the Labour Relations Code, R.S.B.C. 1996, c. 244 (the “Labour Relations Code”), in which provision is made for reconsideration by the Board of its own original decisions. The Court concluded that judicial review should be limited to the decision reconsidering the original decision or refusing leave to reconsider it. This followed from the scheme of the legislation which conferred on the Board the jurisdiction to reconsider original decisions and the specialized jurisdiction of the Board. The Court reached the following conclusion at paragraphs 46 and 47:
[46] Recognizing that generally an applicant must exhaust internal remedies by seeking leave for reconsideration suggests that the Legislature intended to limit court intervention out of deference to the highly specialized jurisdiction of the Board. In my view, if the Board concludes that an original decision is not inconsistent with the principles of the Code and this conclusion is not patently unreasonable, unfair or incorrect, it is not consistent with the obligation on an applicant generally to exhaust internal remedies and makes little sense for a court to embark on a judicial review to determine whether the original decision itself was correct, unfair or patently unreasonable.
[47] It is apparent to me that the court must respect both the highly specialized jurisdiction of the Board and the scheme of review established by the Legislature. The Legislature has limited the review of first instance decisions under the Code, be they arbitral awards or original decisions. This limitation should not be thwarted by court review based on the scope of review mandated by the ASA.
[34] Mr. Peterson submitted that these principles apply with equal force to the Employment Standards Tribunal. It too is a highly specialized tribunal entrusted with the obligation to reconsider its own appeal decisions in light of the purposes and objects of the legislation. The existence of a power of reconsideration in the ESA similarly suggests that the Legislature intended to limit court intervention. In his view, therefore, judicial review should be limited to a review of whether the Tribunal, in the reconsideration decision, breached the principles governing the exercise of discretionary powers set out in the Administrative Tribunals Act, S.B.C. 2004, c. 45 (the “ATA”), s. 58(3).
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[35] The effect of this submission, if correct, would be to limit review to an examination of whether the Tribunal had acted on reconsideration in a patently unreasonable manner by exercising its powers; (a) arbitrarily or in bad faith, (b) for an improper purpose, (c) based entirely or predominantly on irrelevant factors, or (d) by failing to take statutory requirements into account.
[36] Mr. Garner, counsel for the Tribunal, submitted that the Auyeung case does not stand for a general principle that judicial review is always limited to reconsideration decisions where a statutory body is granted a power to reconsider its own earlier decisions. He submitted that the case should properly be understood as reflecting the specialized nature of the Labour Relations Board in the context of the particular statutory scheme incorporated in the Labour Relations Code.
[37] Mr. Garner submitted that the courts have long recognised, and paid deference to, the specialized nature of labour relations and the principles and policies reflected in labour legislation. The legislative scheme is policy oriented and involves balancing rights and obligations inherent in the employment relationship in accordance with the principles of the Labour Relations Code and its policies. In his submission, it was critical to the Court of Appeal’s decision that the power of reconsideration found in s. 141 of the Labour Relations Code expressly stipulated the criteria to be employed in determining whether to reconsider a decision and expressly conferred on the Board the power to determine whether the original decision adequately respected the principles of the Labour Relations Code. The statutory scheme, accordingly, evinces a legislative intention that the Board, rather than the court, should determine matters at the core of industrial relations. These matters are intrinsically policy oriented rather than involving a more orthodox determination of individual entitlements in the context of a statutory scheme.
[38] These same considerations do not apply with equal force in the context of determining an individual employee’s right to wages under the ESA, even accepting the specialized expertise of the Tribunal. The statutory power of reconsideration does not expressly identify the basis upon which the Tribunal should exercise its
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power of reconsideration and does not, therefore, expressly confer on the Tribunal the exclusive authority to determine the reconsideration in the same way as with the Labour Relations Board. Moreover, the Court of Appeal does not explicitly state the proposition it enunciates to be one of general application.
[39] The decision in Auyeung has been applied to matters from the Worker’s Compensation Appeal Tribunal in Pistell v. Worker’s Compensation Appeal Tribunal, 2012 BCSC 463, and to matters from the Residential Tenancy Branch in Hudon v. British Columbia (Residential Tenancy Branch), 2012 BCSC 253. However, in Routkovskaia v. British Columbia (Human Rights Tribunal), 2012 BCCA 141, the Court of Appeal refused to apply Auyeung to a matter from the Human Rights Tribunal. In that decision, the Court held the following at para. 24:
[24] The operative administrative law framework in this case is different from that which was recently considered by this Court in United Steelworkers, Paper and Forestry, Rubber, Manufacturing, Energy Allied Industrial and Service Workers International Union, Local 2009 v. Auyeung, 2011 BCCA 527. Relevant differences include that the British Columbia Labour Relations Board’s jurisdiction to reconsider is broader and is codified in s. 141 of the Labour Relations Code, R.S.B.C. 1996, c. 244. It is also relevant that seeking reconsideration by the Board is an internal remedy that generally must be exhausted before applying for judicial review. As a result, the reasoning in United Steelworkers does not apply to these judicial review proceedings and the court below was not limited to solely reviewing the reconsideration decision.
[40] I agree with the submissions of Mr. Garner. It is not apparent that in limiting judicial review to the Board’s reconsideration decisions the Court did intend to state a proposition of general application, rather than reach a result arising in the context of a particular statutory scheme. The situation of the Employment Standards Tribunal is distinguishable from that of the Labour Relations Board. Although the ESA is remedial legislation, in issues such as this the Tribunal is considering appeals from determinations that focus on an adjudication of entitlements under the statutory scheme. The Tribunal, whether on appeal or on reconsideration, is not evaluating whether original decisions have implemented policy in respect of which it has specialized expertise. Moreover, it is not exercising powers of reconsideration
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according to statutory criteria that suggest that the court’s jurisdiction to review is limited.
[41] Before the Court of Appeal decision in Auyeung, the settled view appears to have been that judicial review relating to matters under the ESA is of the Tribunal decisions (both on appeal and the reconsideration) though not of the Director’s original decision because the Tribunal has exclusive jurisdiction over those decisions by operation of the statute, see Laguna. Given the differences between the ESA and the Labour Relations Code in the way the power of reconsideration is defined and given the absence of any statement by the Court that the principle in Auyeung is of general application, I consider it would be a mistake to conclude that Auyeung was intended to disturb the existing conventional wisdom about the scope of judicial review under the ESA. In my view, therefore, the present judicial review is in respect of both Tribunal decisions.
[42] In reaching this conclusion, I recognise that in Auyeung, the Court of Appeal commented that in light of the obligation to exhaust internal remedies, the availability of reconsideration suggests an intention to limit court intervention, but that comment must be read in the context of the statutory scheme as a whole and the nature of the statutory power of reconsideration. I am not persuaded that the availability of seeking leave to reconsider a decision, standing alone, is sufficient to limit judicial review to the reconsideration decision.
[43] I appreciate that the conclusion expressed in these reasons may appear to conflict with the views expressed by my brother and sister judges in Pistell and Hudon. My ruling on this question was made during the hearing in the early part of the week of January 16, 2012. The decision in Hudon is an oral judgment pronounced on January 12, 2012. It was not available to the parties when this issue was argued before me. Neither were the reasons in Pistell. They were released on March 29, 2012. These reasons reflect the analysis I undertook of the issue to give my ruling in January without the benefit of the views expressed in those judgments. I mean no disrespect to my colleagues to the extent that my reasoning may differ from theirs.
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The Proceedings under Review
[44] Each of the respondents complains that the petitioner has failed properly to set out the grounds of judicial review. Each complains that the petitioner has repeatedly sought to expand or change the basis of the judicial review application by adding new arguments and attempting to expand the record. There is considerable merit to these complaints. In order to deal with what is properly before me it is necessary to set out in some detail the proceedings below so that the judicial review of the Tribunal’s decisions can be set in the proper context.
General Background
[45] The general background underlying this dispute is canvassed extensively in the Director’s decision from which the following summary is taken. Canwood is a company founded in 2005 with a business plan that included the export of lumber, primarily sourced from First Nations, from British Columbia to foreign markets.
Mr. Bork, although originally a director, became Canwood’s only full-time employee. In 2005, Canwood started the creation of a permanent log sort yard in Kersley and began negotiations with CN Rail to build a rail spur at Kersley. The rail spur was essential for the transportation of logs from the interior of British Columbia to the coast for export.
[46] In June 2007, Canwood entered into a contract with CN Rail to construct the rail spur. The rail spur was completed and certified through an inspection by CN Rail on October 14, 2007. Later in the proceedings, Canwood attempted to contest this conclusion, although it was supported on the evidence before the Director.
[47] Before the rail spur was completed, the Board of Directors at Canwood imposed a wage, consulting and expense freeze that resulted in Mr. Bork being laid off. Beginning September 20, 2007, Mr. Bork agreed to continue working on a contract basis and to cease to be an employee of Canwood. Mr. Bork continued in that capacity until the spring of 2008.
[48] During the course of the negotiations with CN Rail, Mr. Bork and Mr. Matkin discussed the granting of a bonus to Mr. Bork on the completion of the rail spur. The
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parties disagree about whether the completion of the rail spur was the only condition to the entitlement to payment of the bonus.
[49] In April 2007, Mr. Bork was buying out the lease on a vehicle and requested by e-mail a credit reference from Mr. Matkin. That e-mail referred, among other matters, to a bonus for the rail spur and requested that Mr. Matkin make reference to that bonus in his credit reference letter. This letter has been referred throughout these proceedings as the “comfort letter”.
[50] Mr. Matkin wrote the “comfort letter” in which he said, “This will confirm you (sic) salary has been $6500 per month with the right of performance bonuses. You will for example be entitled to a bonus of $60,000 on successful completion of the CN rail spur at the Kersley Sort Yard”.
[51] The CN rail spur was completed, but the bonus was not paid. Mr. Bork filed a complaint seeking to enforce payment of the bonus as wages under the ESA.
[52] As will be seen, Canwood has argued and reargued substantially the same issues before the Director, on appeal to the Tribunal and on its application to the Tribunal for reconsideration. It has attempted to supplement its arguments by reference to additional “facts” at different stages of the proceeding. Essentially the same arguments have been advanced on judicial review, with the exception of the constitutional argument that was recast for the purpose of judicial review.
[53] Canwood has taken the position throughout that Mr. Bork was not an employee at the time any entitlement to a bonus arose. By October 2007, Mr. Bork had been laid off. In any event, he was an independent contractor at the time any entitlement to receive a bonus arose. Moreover, Mr. Bork should have been seen as a controlling mind of Canwood and not as a mere employee attracting the protection of the ESA.
[54] Canwood has consistently argued that there was no agreement to pay a bonus because any such agreement would require approval by the Board of Directors, which was never given. Mr. Matkin did not have the authority to enter into
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such a significant bonus agreement with Mr. Bork. Canwood argues Mr. Bork knew this.
[55] Canwood also argues that, in any event, a bonus agreement of this kind is necessarily discretionary, contingent on multiple conditions such as performance, and subject to the ability of the company to pay it. These kinds of terms are necessary and implied legal incidents of a bonus contract and the various adjudicators have made errors of law in failing to give effect to these legal principles in interpreting whatever agreement existed between Canwood and Mr. Bork. In any event, an agreement to pay a bonus is legally and conceptually different from an agreement to pay wages. The adjudicators have made errors of law in failing to recognise and give effect to this fundamental distinction.
[56] Lastly, Canwood argues the “comfort letter” is not a contract and is not probative evidence of whatever agreement may have existed.
The Director’s Determination
[57] The Director’s decision, dated November 12, 2008, dealt with a complaint filed by Mr. Bork under s. 74 of the ESA. Mr. Bork complained that he had not been paid a bonus, in the amount $60,000, to which he was entitled. After a full day hearing, the Director decided the issue in Mr. Bork’s favour and against Canwood. The Director heard evidence from Mr. Bork and evidence from three witnesses on behalf of Canwood. He received documentary evidence relevant to the issue.
[58] The Director’s decision is lengthy. It canvassed the issues raised by the parties, set out the evidence in detail, analysed the conflicts in the evidence, reviewed the applicable legal principles under the ESA and reached conclusions based on findings of fact.
[59] In reaching his decision, the Director concluded that Mr. Bork was an employee of Canwood and not one of its controlling minds, and therefore the ESA applied to him. He went on to conclude that Canwood had agreed to pay Mr. Bork a bonus of $60,000 upon satisfaction of one condition only, namely the completion of the rail spur. The Director treated the bonus as wages for the purposes of the ESA
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and decided that Mr. Bork remained entitled to payment of those wages even though at the time the rail spur was completed Mr. Bork had been laid off and was working on commission. The Director concluded that, even though Mr. Bork had been laid off, he remained an employee performing essentially the same work as he had done earlier.
[60] In arriving at his decision, the Director rejected what he described as Canwood’s primary argument that “the bonus… is a performance bonus which contained terms and conditions he did not meet, including the requirement that
Mr. Bork be a current employee when the rail spur was completed”. He also rejected Canwood’s contention that Mr. Bork was a director and officer of Canwood and was therefore not eligible to claim wages through the Employment Standards Branch and that Mr. Matkin, who was a director of Canwood, did not, to the knowledge of
Mr. Bork, have the authority to agree to grant Mr. Bork a bonus.
[61] The Director reached his conclusions through an analysis of the evidence and made a finding of credibility in favour of Mr. Bork and against Mr. Matkin on the question of whether there was an agreement to pay a bonus and what the conditions of payment were.
[62] The Director referred to the “comfort letter” in the following passage:
The primary piece of evidence in this complaint is the credit reference written by Mr. Matkin and addressed to Mr. Bork. Mr. Bork is quite correct that the letter, read by another party, could quite easily be understood to mean that the completion of the rail spur is the only condition that had to be met in order for the bonus to be awarded. That is what the letter says in the clearest of English. But Canwood is correct in asserting that this credit reference, while being a window into the agreement between the parties, is merely a credit reference and that as such it does not automatically represent a proper employment agreement or contract per se. Although this letter is extremely probative to my decision in this complaint, I agree that it would be an error to enforce the credit reference letter as though it were a proper contract without giving the issue a more detailed analysis.
[63] The Director then went on to examine all of the evidence and make his
findings of fact based on credibility. These findings underlay his conclusions that the bonus was payable solely on the completion of the rail spur.
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[64] Importantly, the Director concluded that even if Mr. Bork had ceased to be an employee when the rail spur was completed, he was still entitled to the bonus because the work which entitled him to it had been substantially completed when he was laid off. Canwood would later contest this proposition before the Tribunal by referring to evidence that was not before the Director even though it had been available. The Tribunal refused to admit new evidence on these issues.
[65] When the matter was before the Director, Canwood did not dispute the jurisdiction of the Director to decide the complaint brought by Mr. Bork by raising any constitutional question.
The Appeal to the Tribunal
[66] Canwood appealed the Director’s decision to the Employment Standards Tribunal. For the first time it raised an issue of constitutional jurisdiction. Canwood took the position that its labour and employment relations fell within federal jurisdiction. It also attempted to introduce on the appeal additional evidence going both to the constitutional issue and the question of Mr. Bork’s entitlement to a bonus. Finally, Canwood also sought to introduce new evidence suggesting that Mr. Bork might have had a conflict of interest at the time he was involved with Canwood.
[67] On March 2, 2009, the Tribunal dismissed the appeal.
[68] The Tribunal considered each of the alleged errors raised by Canwood.
Those errors are accurately set out in the following terms at para. 7 of the Decision:
… The following errors are identified and elaborated upon in the appeal and the accompanying submission:
1. Canwood is a federally regulated enterprise and the Director erred in assuming jurisdiction over the employment claim filed by Bork under the Act;
2. Alternatively, the Director erred in finding Bork was an employee of Canwood under the Act on October 24, 2007, which was the date of the alleged contravention;
3. Alternatively, the Director erred in assuming jurisdiction over the complainant because Bork had the most influence on the direction of the company and, in effect, was a “controlling mind” of the company;
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4. The director erred in the interpretation of the “comfort letter” dated April 27, 2007;
5. Alternatively, even if the “comfort letter” could have been interpreted as an agreement to pay Bork a bonus, the Director erred in not deciding the bonus was conditional on the financial ability of the company to pay it;
6. Alternatively, the Director erred in failing to interpret the agreement in the context of the changing employment relationship;
7. Alternatively, the Director erred in not deciding the payment of the bonus required formal approval of Canwood’s Board of Directors; and
8. Determinations made against the Directors of Canwood are flawed.
[69] The Tribunal first considered the admission of new evidence. Insofar as those documents went to the issue of the entitlement to the bonus, the Tribunal refused to admit them. It concluded that the evidence had been available for the hearing before the Director and should have been submitted then. It did, however, admit documents that were relevant to the constitutional issue. The appeal was decided on the basis of the record before the Director supplemented by those documents bearing on the constitutional issue. The Tribunal refused Canwood’s request for an oral hearing.
[70] The Tribunal next turned to the constitutional question. Canwood’s argument was that Canwood’s normal, habitual or core activities engaged federal jurisdiction in two ways; (a) Canwood asserted its core business was “international trade” in conjunction with CN by virtue of exporting logs sourced from First Nation’s lands by rail and ships; and (b) Canwood asserted its core business operations were directly involved with the status and lands of First Nations. Specifically, Canwood relied on federal jurisdiction under s. 91 of the Constitution Act, 1867 [Constitution Act], over the regulation of trade and commerce (s. 91(2)), navigation and shipping (s. 91(10)), and Indians, and the lands reserved for the Indians (s. 91(24)). The focus of its argument was that it was functionally integrated with CN Rail and First Nations. It should be pointed out that Canwood’s constitutional argument advanced the general power over trade and commerce by relying on one case, General Motors of Canada Ltd. v. City National Leasing, [1989] 1 S.C.R. 641 [General Motors], which dealt only
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with that general power and not with the so-called second prong of the trade and commerce power dealing with international trade. This is important because on judicial review Canwood relies only on the second prong of the trade and commerce power, a matter not squarely argued before the Tribunal. Canwood has, as I have noted, abandoned its constitutional argument based on functional integration with a federal undertaking, i.e. its integration with CN Rail and its connection with Indians and Indian lands.
[71] The Tribunal concluded that there was no evidentiary or legal basis supporting the constitutional jurisdictional arguments advanced by Canwood. Since the standard of review on this question is one of “correctness”, I will return to the reasoning of the Tribunal later in these reasons.
[72] The Tribunal proceeded on the basis that the grounds of appeal from a decision of the Director are statutorily limited by s. 112 of the ESA. Those grounds are that the Director erred in law, failed to observe the principles of natural justice or that evidence that was not otherwise available at the time of the decision had since become available.
[73] The Tribunal addressed each ground of the appeal in dealing with Mr. Bork’s entitlement to the bonus. In brief, the Tribunal concluded that the Director had not made any error of law in reaching the conclusions he did. In substance, Canwood was contesting findings of fact, or mixed fact and law, reached by the Director and was simply re-arguing the case.
[74] More specifically, the Tribunal could find no error of law in the Director’s conclusion that Mr. Bork was an employee after he had been laid off in September 2007 for the purpose of defining his status under the ESA. A common theme running through all of the proceedings in this matter, including judicial review, is that Canwood has been arguing on the basis of common law principles, rather than on the basis of the application of the statutory criteria found within the ESA.
[75] The Tribunal concluded that the allegation that the Director made an error in concluding that Mr. Bork was not a controlling mind was nothing more than a disagreement with the Director’s finding of fact on this point.
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[76] The Tribunal also rejected the argument that the Director had misinterpreted the so-called “comfort letter” of April 27, 2007. Canwood argued that the Director had treated the letter as if it were a binding contract when in fact it was nothing more than a letter written to support a credit application which referred to a bonus. The Tribunal concluded that the Director had not treated the comfort letter as a “contract”, but had used it as one piece of evidence, admittedly a critical piece among many, as part of the analysis to determine if there was an agreement and what the agreement was. The Tribunal accepted that the Director had reached a conclusion on the consideration of all of the evidence and on an assessment of the relative credibility of the respective positions of the parties. The Tribunal said at para. 67 that “the Director received other evidence, received submissions from the parties on the effect of that evidence on the question posed, weighed the evidence, considered the submissions and reached a conclusion”. In doing so, the Tribunal concluded he committed no error of law.
[77] The Tribunal disposed of an argument that the Director had reached contradictory findings of fact on whether there was more than one condition underlying entitlement to the bonus by accepting that there had been a typographical error in one paragraph dealing with that matter. The Director had said that the apparent contradiction arose because of the inadvertent failure to include the word “not” when discussing the conditions of payment of the bonus. Again, the Tribunal concluded no error of law had been committed by the Director.
[78] In respect of each of the other alleged errors, the Tribunal concluded that Canwood had not succeeded in demonstrating that the Director had made any error of law. In each case, nothing more was in issue than disagreements about facts, the inferences to be drawn from the evidence or unsupported legal arguments that certain conditions necessarily must be implied by law into bonus agreements, such as the conditional or discretionary nature of bonuses, and their payment being dependent on performance or the capacity of the company to pay.
[79] Finally, the Tribunal rejected two other grounds of appeal. First it rejected the proposition that there had been a breach of natural justice because the Director had
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unfairly and unreasonably intervened in the appeal by making submissions in support of the process by which he had reached the conclusions in his decision. The Tribunal concluded that the ESA contemplates the Director having a role in the appeal and reconsideration processes, including making complete submissions on all aspects of the appeal including natural justice. The Tribunal rejected Canwood’s position in the following terms:
[96] While the Tribunal has continued to recognize the Director’s role is not to be the statutory agent or advocate of the employee and the Director must appreciate that that can be a fine line between explaining the basis or analytical process for a decision and advocating on behalf of one of the parties, there is nothing in the submissions made by Canwood on this ground that would allow me to conclude the Director has gone beyond his accepted role.
[80] The Tribunal, finally, summarily rejected the proposition that any potential conflict of interest recently raised by Canwood could disentitle Mr. Bork from enforcing his statutory rights and did not admit the evidence so as to call on Mr. Bork to meet the case.
[81] Accordingly, the appeal was dismissed.
The Application for Reconsideration
[82] After the appeal was dismissed, Canwood applied to the Tribunal asking it to
exercise its discretion to reconsider its confirmation of the Director’s decision. Canwood alleged several fundamental errors of law, breaches of natural justice, serious misstatements of facts and that the Tribunal erred in concluding that the evidence of Mr. Bork’s alleged “conflict of interest” was not relevant and in failing to deal with certain issues on the appeal.
[83] The Tribunal refused to exercise its discretion to reconsider the appeal. It noted that reconsideration is a discretionary statutory power approached through a two-stage analysis. First, the Tribunal reviews the application to decide whether the applicant had raised questions of law, fact, principle or procedure which are so significant that they should be reviewed because of their importance to the parties or their implications for future cases. Moreover, where the primary focus of an
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application for reconsideration is to have the panel “re-weigh” the evidence, the tribunal will not embark on reconsideration.
[84] Here, the Tribunal concluded that the application for reconsideration had not passed the first stage of the analysis because Canwood’s application represented nothing more than an attempt to reargue issues that had already been (correctly) adjudicated by the Tribunal.
[85] On the question whether errors were committed in finding that Mr. Bork was an employee rather than an independent contractor or a controlling mind of Canwood, the Tribunal concluded at para. 20 that:
The application regarding these two points amounts to nothing more than a simple statement of disagreement with the conclusions initially reached by the delegate and subsequently affirmed by the Tribunal. In short, these issues have been argued, decided, reargued and then decided again. I see no reason to embark on a third review particularly when these issues overwhelmingly strike me as having been correctly decided.
[86] The Tribunal rejected the argument that the Director and the Tribunal hearing the appeal had erred in their interpretation of written communications, concluding that the Director’s conclusions regarding the bonus amounted to findings of fact that had been reached properly on consideration of the totality of the evidence. The Tribunal also rejected each of the other alleged errors in the interpretation of the contract such as implied terms about “ability” to pay, performance, or other conditions precedent to the obligation, finding no errors of law in the findings of fact made or the principles applied.
[87] The Tribunal evidently found no merit in the proposition that there had been any breach of natural justice in the involvement of the Director in the appeal or in the correction of the text as the result of the omission of the word “not” in one paragraph.
[88] The Tribunal rejected Canwood’s argument that the Tribunal had, in deciding the appeal, made serious misstatements of facts relating to Canwood’s involvement with First Nations communities and whether Mr. Bork’s bonus was payable as a result of only one qualifying condition. The Tribunal could see no misapprehension
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of the evidence or any failure to reach a correct result in respect of both these matters.
[89] Beyond alleging that the Tribunal had, in deciding the appeal, misstated facts about Canwood’s connections to First Nations, Canwood did not argue the constitutional issue on the reconsideration application.
[90] All other issues raised by Canwood were also rejected as a basis for reconsideration. The Tribunal concluded as follows:
[42] I have now addressed each and every one of the arguments Canwood advanced in support of its application for reconsideration of the Tribunal’s decision to confirm the Canwood Determination. In each case, I have found that the arguments do not raise even a prima facie case to set aside the Tribunal’s decision and, accordingly, the application simply fails to pass the first stage of the two-stage reconsideration analytical framework. However, even if I were inclined to proceed to a more detailed analysis of the various arguments advanced, I would have dismissed all of them as lacking any substantive merit. …
The Application for Judicial Review
[91] It is important to reiterate that this is a judicial review of the Tribunal’s appeal decision and the reconsideration application. It is not a judicial review of the Director’s decision, although that decision informs the review of the appeal and reconsideration decisions.
[92] The parties do not disagree about the standard of review applicable to the various issues raised by the petitioner. It will be recalled that s. 110 of the ESA confers on the Tribunal exclusive jurisdiction to determine all those matters and questions of fact, law and discretion arising or required to be determined in an appeal or reconsideration. This privative clause has clear implications for the standard of review.
[93] The parties agree that insofar as the Tribunal has considered matters falling within its exclusive jurisdiction, the standard of review is “patent unreasonableness”: see ATA, s. 58(2)(a). To meet this standard the petitioner would have to show that those decisions are “clearly irrational”, or “evidently not in accordance with reason,” or “so flawed that no amount of curial deference can justify letting [them] stand”, see
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Phillips v. British Columbia (Workers’ Compensation Appeal Tribunal), 2011 BCSC 576, at para. 31-32.
[94] To the extent that the Tribunal exercised discretionary powers, for example, in relation to whether to reconsider the appeal decision, s. 58(3) of the ATA defines the applicable standard. It stipulates that a discretionary decision is patently unreasonable if the discretion; (a) is exercised arbitrarily or in bad faith, (b) is exercised for an improper purpose, (c) is based entirely or predominantly on irrelevant factors, or (d) fails to take statutory requirements into account.
[95] Under s. 58(2)(b) of the ATA, questions about the application of common law rules of natural justice and procedural fairness must be decided having regard to whether, in all of the circumstances, the Tribunal acted fairly.
[96] Finally, in respect of true issues of jurisdiction, specifically the constitutional issues in this case, the standard of review is correctness, see ATA, s. 58(2)(c). This statement needs, however, to be modestly refined. It seems clear that insofar as the constitutional issues give rise to pure questions of law, the standard is correctness. But to the extent that the constitutional issue rests on the Tribunal’s findings of constitutional facts, curial deference is owed.
[97] The petitioner’s position on this judicial review is that it can meet the standard of review applicable to each issue it raises.
[98] In its petition, Canwood raised seven grounds of judicial review based on errors in law and jurisdiction and breaches of natural justice. The first set of grounds invoke a variety of matters arising out of the interpretation of the relationship between Mr. Bork and Canwood, including whether Mr. Bork was an employee, whether the bonus was discretionary and a performance bonus, and whether the “comfort letter” was misinterpreted, all of which attract the patently unreasonable standard of review. The second distinct ground invokes constitutional jurisdiction over the dispute; a matter attracting the correctness standard of review. The third set of grounds invokes issues of natural justice, which attracts the fairness standard of review.
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Matters Falling within the Jurisdiction of the Tribunal
[99] In his submissions to the Court, Mr. Matkin focused on two primary errors in the conclusions reached by the Tribunal on the appeal. In his submission, both of these errors were patently unreasonable and both have the effect of depriving the Tribunal of jurisdiction. The first involves the conclusion that Mr. Bork was an employee at the time his entitlement to a bonus was said to arise. The second relates to the terms of the bonus agreement, and in particular, the conclusions about the agreement and its terms derived from the interpretation of the “comfort letter”. In one form or another, wrapped into the submissions were all of the arguments that Canwood has advanced at each stage of these proceedings.
[100] It should be remembered that my review of the appeal decision, in respect of these matters, is limited to the question whether the appeal decision is patently unreasonable. That is to say, I am required to determine whether the Tribunal reached patently unreasonable conclusions in its analysis of the findings of the Director.
[101] In approaching this analysis, I recognise that the ESA is a remedial statute. It has a primary objective of protecting minimum standards for individuals in employment relationships with an employer. But I accept that the purpose of the ESA is not limited to protecting minimum employment standards only. Its purpose extends to protecting entitlements going beyond the minimum.
[102] The ESA provides statutory protection for entitlements such as wages owing to employees. What and who is entitled to protection under the ESA is a matter of statutory interpretation. The question whether someone is an employee for the purposes of the ESA and whether they are entitled to wages for the purposes of the ESA are also matters of statutory interpretation. Those questions cannot be reduced to the application of common law principles, although those principles may inform the analysis of whether the statute applies to a given relationship or issue.
[103] It will be seen that the definitions of “employee” and “wages” in the ESA are both broad and not equivalent to the definitions of those terms in the common law:
1(1) In this Act:
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…
“employee” includes
(a) a person, including a deceased person, receiving or entitled to wages for work performed for another,
(b) a person an employer allows, directly or indirectly, to perform work normally performed by an employee,
(c) a person being trained by an employer for the employer’s business, (d) a person on leave from an employer, and
(e) a person who has a right of recall;
…
“wages” includes
(a) salaries, commissions or money, paid or payable by an employer to an
employee for work,
(b) money that is paid or payable by an employer as an incentive and relates to hours of work, production or efficiency,
(c) money, including the amount of any liability under section 63, required to be paid by an employer to an employee under this Act,
(d) money required to be paid in accordance with
(i) a determination, other than costs required to be paid under section 79 (1) (f), or
(ii) a settlement agreement or an order of the tribunal, and
(e) in Parts 10 and 11, money required under a contract of employment to be paid, for an employee’s benefit, to a fund, insurer or other person, but does not include
(f) gratuities,
(g) money that is paid at the discretion of the employer and is not related to hours of work, production or efficiency,
(h) allowances or expenses,
(i) penalties, and
(j) an administrative fee imposed under section 30.1;
[104] Whether an individual is an employee for the purposes of the ESA, whether they are entitled to wages, and whether the nature of any obligation for financial remuneration falls within the obligation to pay wages are not just matters of the application of the statute; they are matters at the heart of the jurisdiction of the Director and the Tribunal. The specialised expertise of the Director and the Tribunal in relation to these matters is recognised by the privative clause conferring on the
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Tribunal exclusive jurisdiction over those matters and ousting the jurisdiction of the Court.
[105] Canwood does not argue that the Tribunal failed to recognise that the Director’s conclusions were unsupported by the evidence. The focus is on the interpretation of the facts. Canwood says that the conclusions reached rested on an irrational legal analysis both in terms of the legal principles to be applied to the particular circumstances of the dispute and a misapprehension of the scope of the ESA.
[106] I cannot conclude that the Tribunal, in assessing and deciding the appeal, reached a patently unreasonable result. The Tribunal correctly identified and applied the grounds of appeal defined by the statute. It concluded that, in substance, the appeal amounted to little more than an attempt to reargue findings of fact and mixed fact and law and that Canwood had been unable to demonstrate any error of law in the Director’s conclusions capable of supporting an appeal.
[107] The ESA, as evidenced by the limited appeal rights found in s. 112, contemplates that the Director has the jurisdiction to find the facts relevant to a dispute. In this instance it is evident that the Director was entitled to find facts about Mr. Bork’s status as an employee or otherwise of Canwood, whether there was an agreement to pay him a bonus, and what the terms of that agreement were.
[108] I agree with the respondents when they argue that Canwood is simply taking issue with conclusions of fact reached by the Director. The issue here, however, is not whether those findings were correct, but whether the Tribunal, in deciding the appeal, reached a patently unreasonable conclusion in deciding that these matters were findings of fact and did not give rise to grounds of appeal. I can see nothing patently unreasonable in the Tribunal’s decision on this point. The Tribunal carefully analysed the evidence that the Director had relied on in reaching his conclusions, the manner in which the Director had analysed that evidence, and the legal principles he applied to the evidence. All of that constituted a proper, careful and correct approach to analysing the issues on the appeal.
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[109] The Tribunal also concluded that the Director had not erred in law in the legal principles he applied to the dispute. Canwood’s attack on those legal principles is drawn from its view of the applicable legal principles derived from common law. It argues, for example, that Mr. Bork could not be treated as an employee because he had been laid off before the rail spur had been completed. It suggests that bonuses are always discretionary, subject to the ability of the company to pay, conditional on performance, and not mandatorily payable upon the fulfillment of one condition. It says also that a “comfort letter” cannot be used as evidence of the agreement between the parties.
[110] I must say that I am more than skeptical of the merits of any of these arguments as a matter of principle. I do not think that the authorities referred to by Canwood support the conclusions it seeks to advance. I see nothing wrong in the proposition that a “comfort letter” might constitute evidence of an agreement between the parties. It is not itself the contract, but the Director did not suggest that it was. I see nothing wrong in a company agreeing to pay a bonus on the fulfillment of only one condition. I do not think that it is inevitable that it would be an implied term of any such contract that payment of the bonus would be conditional on other matters, such as on performance or on the ability of the company to pay at the time entitlement to the bonus arose.
[111] But even if there were some merit in these propositions as a matter of the application of the common law, that would not be sufficient to ground a conclusion that the Tribunal was patently unreasonable in rejecting these arguments. Entitlement to wages as an employee under the ESA is a statutory entitlement to be determined by an application of the statute to the circumstances. It is not a question of the application of the common law, although, as I have observed, there is no doubt the common law may inform the interpretation of the requirements created by the statute.
[112] The ESA exists in part to protect the economic rights of employees and to ensure, at least, minimum standards of protection for employees in their dealings with their employers. The applicable statutory criteria defining such matters as
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wages are broad. There is no doubt, in my view, that entitlements under the ESA are broader than those that might otherwise exist in the common law. In this instance, unless the conclusions reached by the Tribunal are patently unreasonable, it is for the Tribunal to determine whether the Director made any error in law in concluding that Mr. Bork was entitled to payment of the bonus as wages under the ESA. Stated differently, unless the conclusions reached by the Tribunal are patently unreasonable, it is irrelevant whether I would have reached a different result.
[113] The Tribunal concluded that the Director had not made an error in law in concluding that Mr. Bork was an employee, rather than a controlling mind of Canwood, and was therefore entitled to the protection of the ESA. It also concluded that there was no error in the Director’s decision that Mr. Bork continued to be an employee after he had been laid off because he was doing substantially the same work before and after the layoff. In any event, there was no error in the conclusion that Mr. Bork was entitled to the bonus, as wages, notwithstanding the layoff, because he had done all that was substantially necessary to earn it by the date of the layoff. The Director had concluded that laying off employees shortly before entitlement to wages arose could not be permitted as a means of frustrating an employee’s entitlement to wages under the ESA.
[114] Canwood has not, in my opinion, been able to point to anything patently unreasonable in the way in which the Tribunal, in deciding the appeal, went about analysing the Director’s decision in respect to these matters. The question is not whether the Tribunal was correct, or even whether the Director was correct in the conclusions reached. The question is whether the Tribunal was patently unreasonable in the conclusions it reached on the appeal. I see no basis on which to reach that conclusion.
[115] Canwood argues that it cannot have been the object or purpose of the ESA to protect the rights of an executive to a significant performance related bonus entitlement which arose only after the executive had left the company. But this argument depends on a misinterpretation of the conclusions reached by the Director,
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who analysed the factual circumstances in a very different manner from the way that they have been advanced repeatedly by Canwood throughout these proceedings.
[116] In the result, Canwood has not demonstrated that the Tribunal, in respect of these matters, reached a patently unreasonable conclusion in dismissing the appeal. The Tribunal’s method of analysis and the conclusions reached were not irrational, unsupportable, devoid of reason or demonstrably flawed. In fact, in my view, they were entirely reasonable and, if it were the test, would satisfy the standard of correctness.
[117] The same must be said for the reconsideration decision. In substance, Canwood’s argument on judicial review does not rise above mere disagreement with the conclusions reached on reconsideration. Reconsideration is a discretionary matter. The Tribunal deciding the reconsideration application properly set out the standard to be applied in determining whether to reconsider a decision. That standard is discretionary. It involves first analysing whether the applicant had raised questions of law, fact, principle or procedure which are so significant that they should be reviewed because of their importance to the parties or their implications for future cases. Where the application essentially involves re-argument, the Tribunal is unlikely to exercise its discretion in favor of reconsideration.
[118] It is clear that the Tribunal applied these criteria in reaching its conclusion that Canwood had not met the test for reconsideration. Canwood is not able to point to any basis on which to conclude that the Tribunal had not met the standards required of it in the exercise of its discretion. I see nothing in the record that could support an argument that the Tribunal acted arbitrarily or in bad faith, or for an improper purpose or reached conclusions based entirely or predominantly on irrelevant factors. Independent of whether the Tribunal reached a correct result on the reconsideration application, it clearly went about its consideration properly, took into account appropriate purposes and based its analysis on relevant factors. Nor do I find that the decision failed to take any necessary statutory requirements into account.
[119] In the result, this component of the judicial review application is dismissed.
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Natural Justice
[120] The petition alleges four distinct ways in which there has been a breach of the principles of natural justice. I will address each of these arguments in turn.
[121] First, it is submitted that it was procedurally unfair not to consider fresh evidence of an alleged potential conflict of interest based on an allegation that Mr. Bork may have secretly worked for a competitor at the material time.
[122] This issue arose late in the appeal proceeding when Canwood forwarded a page from an Internet site disclosing that Mr. Bork worked for a company in the same line of business as Canwood. There is nothing on the face of the document that shows that Mr. Bork was working for this competitor at the same time as he was working for Canwood. The suggestion that he was working for both companies at the same time is purely speculative. The allegation that Mr. Bork may have worked for both companies at the same time is not supported by probative evidence.
[123] The Tribunal deciding the appeal did not call on the other parties to respond to this allegation. The Tribunal did, however, address the merits of the suggestion of a potential conflict of interest. The Tribunal stated that the potential conflict of interest was irrelevant to the issue of entitlement to wages and that even if it were true, Mr. Bork’s entitlement to wages would not be affected. Under the ESA, an employer is precluded from making any deduction from wages. On the reconsideration application, the Tribunal considered how the Tribunal, in deciding the appeal, had dealt with the matter and agreed with its conclusion.
[124] In the circumstances, I can see nothing procedurally unfair in the way in which the Tribunal dealt with this matter both on appeal and reconsideration. The conclusion reached by the Tribunal that the alleged conflict of interest was in any event irrelevant to Mr. Bork’s entitlement to wages is one that the Tribunal is entitled to reach. Inquiring into the alleged conflict of interest would not have affected the outcome. In the opinion of the Tribunal, the manner in which it dealt with this issue did not prejudice any substantive right that Canwood had under the ESA. That latter substantive conclusion is not one that was demonstrated by Canwood to be patently unreasonable.
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[125] Second, the petition alleges that the Tribunal breached natural justice by misstating and ignoring the petitioner’s arguments. I see no merit in this allegation. My review of the record supports the conclusion that, both on appeal and reconsideration, the Tribunal was meticulous in the care taken to understand, evaluate and deal with the various arguments advanced by Canwood in all their kaleidoscopic permutations. In substance, this ground of review amounts to nothing more than a disagreement with the conclusions reached by the Tribunal.
[126] Third, Canwood alleges a breach of the principles of natural justice because the Tribunal permitted the Director to make submissions on the appeal and the reconsideration and failed to refer the matter back to the Director when the Director acknowledged the mistake in failing to insert the word “not” in a paragraph dealing with whether there was more than one condition entitling Mr. Bork to payment of the bonus.
[127] The Tribunal accepted submissions from the Director that dealt with the analytical process by which he went about reaching his conclusion. It also accepted a statement from the Director asserting that he had made a typographical error in failing to insert the word “not” in a sentence. The Tribunal concluded that the statutory scheme contemplated the participation of the Director in an appeal, albeit in a limited role. It concluded that the Director neither crossed the line nor made inappropriate submissions on the appeal. It also accepted that the failure of the Director to include a word in one paragraph of his decision was indeed a typographical error; something that was obvious given the reasoning of the Director throughout the decision.
[128] Canwood argued that the Director did not make a typographical mistake and that the paragraph in question revealed a contradictory analysis of the evidence. On the one hand, the Director appeared to acknowledge that there was little evidence supporting the view that there was only one condition for the bonus and, elsewhere, concluded that there was only one condition for the bonus. What was in issue, therefore, was a substantive matter and not a mere question of correcting a slip.
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[129] I can see no merit in this argument. It is plain and obvious from a fair reading of the reasons of the Director that he accepted that there was only one condition for payment of the bonus and rejected Canwood’s argument that there were several performance related conditions. It is obvious that the paragraph in question only makes proper sense and fits coherently with the overall analysis if the word “not” is inserted in the following sentence: “Given that Canwood has not presented any direct evidence that there were other terms and conditions attached to the bonus, I have not found many factors that may direct me towards a finding that the completion of the rail spur was not the only condition attached to receiving the bonus”. The inserted “not” is underlined.
[130] Canwood also submits that the Tribunal rendered s. 123 of the ESA nugatory when it concluded that it did not need to rely on the section to find an error in the Director’s decision because the Director had conceded the existence of an error. Section 123 of the ESA states that “[a] technical irregularity does not invalidate a proceeding under this Act”. With respect, I can see no error in the conclusion of the Tribunal that it did not need to resort to s. 123 to accept that a typographical error had been made in a particular paragraph.
[131] Accepting the representation of the Director on this point has not resulted in any denial of natural justice or procedural fairness.
[132] Equally, I see no merit in the argument that the Director inappropriately made submissions on the appeal and the reconsideration application. It seems clear that the statute does contemplate that the Director will have a role in the appeal and on reconsideration. This much is recognised in British Columbia Securities Commission v. Burke, 2008 BCSC 1244. In any event, I cannot see that the Tribunal made any mistake in its conclusion that, in making submissions, the Director did not go beyond his appropriate role. It may be recalled that the Tribunal on appeal reached the following conclusions at para. 96:
While the Tribunal has continued to recognize the Director’s role is not to be the statutory agent or advocate of the employee and the Director must appreciate that there can be a fine line between explaining the basis or analytical process for a decision and advocating on behalf of one of the parties, there is nothing in the submissions made by Canwood on this ground

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that would allow me to conclude the Director has gone beyond his accepted role.
[133] I agree with that assessment of the submissions made by the Director and, accordingly, cannot conclude that, in making those submissions and in the Tribunal receiving them, any breach of the principles of natural justice occurred.
[134] Finally, Canwood complains that it was denied the opportunity to make oral submissions before the Tribunal on both the appeal and the reconsideration. Canwood argues that an oral hearing was required because of the complexity of the issues and the fact that the findings of the Director rested in part on conclusions of credibility.
[135] The principles of natural justice do not call for oral hearings simply because matters may be complex or credibility is an issue, see D. Hall & Associates Ltd. v. Director of Employment Standards et al., 2001 BCSC 575. The parties had been given a full opportunity to present their cases before the Director. No appeal lies from findings of fact, although it is apparent that Canwood was attempting to reargue the facts on appeal. The parties had every opportunity to fully present their cases in writing on appeal and reconsideration. The submissions made by Canwood were extensive and complete. They were not denied any opportunity to make every point they wished to make. I can see no error in principle, or breach of any principle of natural justice, in the Tribunal declining to hear oral submissions in addition to the voluminous written submissions before it.
[136] I dismiss the application for judicial review based on the allegation that Canwood was denied natural justice before the Tribunal.
The Constitutional Issue
[137] Canwood submits that its labour and employment relations fall within federal jurisdiction because its core business activities, if the business plan had been implemented, would fall within international trade, which is the second prong of the trade and commerce power. As I have already noted, Canwood has abandoned the claim that it falls within federal jurisdiction because its business was functionally
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integrated with CN Rail, a federal undertaking, and because its business relations were with First Nations.
[138] Counsel for the Attorney General raises a number of objections to this argument. First, she argues that judicial review should be based on the evidentiary record and grounds before the Tribunal. She notes that Canwood has attempted to alter the grounds of its constitutional position and to bolster the constitutional facts by supplementing the record or by improperly asserting constitutional facts that are not and were not in evidence before the Tribunal.
[139] The Attorney General takes the position that Canwood has failed properly to state a constitutional question and has failed properly to provide the particulars and grounds of its constitutional position as it is required to do. The Attorney General is correct in her observation. Nonetheless, she agreed to proceed with the constitutional question in the interest of having it resolved. Although the Attorney General agreed to respond as best she could to the constitutional position as she understood it, her first position is that I should decline to decide whether Canwood falls under federal rather than provincial jurisdiction because the proper constitutional foundation, particularly the material constitutional facts, necessary to raise the issue, have not been provided. Moreover, the particular basis that Canwood now relies on to support its claim that it falls within federal jurisdiction was not put to the Tribunal. It would be going beyond the proper scope of judicial review to entertain that argument now.
[140] Nevertheless, should I decide to consider the constitutional question, the Attorney General submits that the argument that Canwood falls within federal jurisdiction on the basis of the international trade prong of the federal trade and commerce power is without merit.
[141] Canwood, for its part, submits that there is a sufficient matrix of constitutional facts in the record to permit the Court to decide the jurisdictional question. It relies on the finding of the Director that “Canwood is a corporation founded in 2005 whose business objective was to export lumber from British Columbia to foreign markets, with a specific focus on trees which had been affected by the mountain pine beetle.
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The main concept of the company was to source wood from First Nations’ land to China”. It also argues that I can rely on the evidence of the company’s business plan, even if that plan was not implemented in practice. Moreover, I can take judicial notice of the regulatory environment in which Canwood would have operated in exporting wood. Canwood submits that this regulatory environment is primarily federal.
[142] The Attorney General provided a fair statement of the petitioner’s points of fact and argument on the constitutional issue. The following paraphrases that summary.
[143] First, the petitioner concedes that there is insufficient integration between Canwood and CN Rail and First Nations people to bring Canwood into federal jurisdiction by virtue of functional integration with either of them. However, Canwood is a “federal undertaking” for the purpose of federal jurisdiction because it is “functionally in the business of international trade and commerce” and its business is the export of wood sourced from Indian communities. It is, therefore, a federal work or undertaking.
[144] Canwood submits that applying the “functional” test to its operations and normal and habitual activities shows that Canwood was engaged primarily in the international wood trade with customers in Asia and organizing log export contracts. It is therefore an international business and undertaking. These activities included negotiating contracts for sale, organizing log shipments by rail to the coast and then by ship to Asia and organizing and paying for transportation to the port where the shipments would be loaded onto ships.
[145] The international wood trade is within the legislative authority of the federal government and is exclusively regulated by it.
[146] Although Canwood abandoned the argument that it was functionally integrated with CN Rail and First Nations’ peoples, its involvement with them remained relevant to the federal character of its activities. Canwood also conceded that it had not implemented its business plan owing to financial exigencies.
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[147] I should add that my own review of the documents, relevant to the nature of Canwood’s business, suggests its business operations were not as exclusively focused on log exports to international markets as Canwood argued. Those documents show revenues generated by services provided at the log sort yard, including to other domestic forest companies, contracts with other private owners, the acquisition of private property, including TSL’s, milling of logs and generating revenue from hay. All of this erodes, to some degree, Canwood’s claim to be exclusively engaged in the “international wood trade”. But since I am of the view that Canwood cannot succeed even if its case is put at its highest, I will not dwell on this frailty in its argument.
[148] The issue of constitutional jurisdiction was raised for the first time on appeal to the Tribunal. At that point Canwood’s argument was that it fell under federal constitutional jurisdiction for employment standards because “the core business of Canwood is international trade… Canwood is just like an international trucking company and international trucking companies fall under federal constitutional jurisdiction”.
[149] In its statement of grounds of appeal, Canwood asserted that:
Canwood is a federal company. It operates a material handling and international log marketing service that is exclusively international. It has used log sorting yards or depots in British Columbia at Kersley, Prince George and Vancouver. From these depots logs are delivered to customers outside the province, particularly in China, Japan and the United States. Canwood is therefore a federal undertaking like Alltrans Express.
[150] Canwood also relied on its relationships with the First Nations in its
constitutional argument before the Tribunal on appeal.
[151] The first time that Canwood relied specifically on s. 91(2) of the Constitution Act was in its reply to the Tribunal on the appeal. The only authority cited in support of its position was General Motors, which deals only with the general trade and commerce power.
[152] The Tribunal concluded that there was no evidentiary or legal basis supporting Canwood’s constitutional arguments. Most of its reasoning dealt with the
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argument that has now been abandoned, which rested on functional integration with CN Rail and First Nations’ peoples. The Tribunal did have this to say about the
s. 91(2) argument at para. 44:
There is simply no evidence that any aspect of Canwood’s business is federally regulated under the general power over “trade and commerce”… More particularly, the subject matter of this case is employment standards and there is no evidentiary basis for asserting the general federal power to regulate trade and commerce has been used to exercise control over the employment relationship between Bork and Canwood. A company whose business includes trading its products internationally does not, on that basis, fall within federal jurisdiction.
[153] In considering the constitutional issue more generally, the Tribunal took note of the comment of the Supreme Court in Northern Telecom v. Communications Workers, [1980] 1 S.C.R. 115 [Northern Telecom], cautioning against resolving constitutional issues in the absence of vital constitutional facts.
[154] The Tribunal noted that Canwood’s assertions about its business were not evidence. Instead, it relied on the factual conclusions reached by the Director and analysed those factual conclusions in the context of the question of whether Canwood was functionally integrated with CN Rail and First Nations. It rejected Canwood’s argument about functional integration with those federal aspects and dismissed the appeal.
[155] In doing so, the Tribunal had regard to the legal principles established in Northern Telecom for determining whether an entity is subject to federal jurisdiction over its labour force and labour relations. Those principles establish that provincial competence is the rule and federal authority the exception. Parliament may assert exclusive jurisdiction if it is shown that such jurisdiction is an integral part of its primary competence over some other single federal subject, such as where there is a federal undertaking, service or business. Whether an undertaking, service or business is federal depends on the nature of its operation, an inquiry that examines the normal or habitual activities of the business as a going concern, see Jim Pattison Enterprises Ltd. v. British Columbia (Workers’ Compensation Board), 2011 BCCA 35 at para. 93-95.
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[156] It is clear, in my view, that the Tribunal correctly identified the general legal principles to be applied in determining whether the labour and employment relations of an enterprise fall within provincial or federal jurisdiction. I can see no basis for concluding that the authority of Northern Telecom has been eroded or that the general statements of principle in that case are inapplicable when the question is the relevance of a company’s participation in a field of business activity affected by federal jurisdiction.
[157] As the Attorney General points out, the Tribunal concluded that Canwood’s business was that of “developing a wholesale log marketing operation, buying logs from several sources and selling those logs to several customers”. Canwood was not functionally integrated with CN Rail and “Indianness” was not the defining characteristic of Canwood’s business. Canwood did business with other non- aboriginal potential business partners. These are all findings of fact to which deference is owed, but it does suggest that the Tribunal was skeptical of the claim that Canwood’s business was, or was intended to be, devoted to participating in international trade.
[158] Canwood submits that its application for judicial review is not premature, because it has exhausted all internal remedies and appeals under the ESA. However, Canwood did not argue the constitutional issue on the reconsideration application, except to the extent of asserting that the Tribunal had reached incorrect conclusions of fact about Canwood’s connection with First Nations. The point is made, in opposition to Canwood, that it had not exhausted its internal remedies because it failed to properly address its arguments on the constitutional question before the Tribunal on reconsideration. I see considerable force in that submission.
[159] In the context of this judicial review, Canwood conceded the following. First, it is not itself a federal undertaking, nor is it functionally integrated with a federal undertaking or entity. Moreover, the record does not establish that Canwood was in fact in the business of international sales of wood. Its business plan had not been implemented.
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[160] The Attorney General submits that these concessions are sufficient to deprive the Court of a foundation of constitutional facts sufficient to decide the issue of constitutional jurisdiction. In particular, the concession that Canwood was not in fact involved in federally regulated business, but merely planned to go into federally regulated business, when combined with the absence of evidence about federal regulation of its intended activities, lead to the conclusion that the Court ought not to consider the constitutional argument and should on that basis alone dismiss the application for judicial review.
[161] I confess to reservations about this submission. I would have thought that there could be circumstances in which a company’s intended course of action would lay a sufficient foundation for determining a constitutional question, even if the company had not yet fully embarked on that course. For example, one could imagine a company hiring on employees in preparation for implementing a business plan. Before the plan was put into effect, attempts might be made to unionize the workforce. Both the union and the employer would be interested to know whether the labour relations regime was governed provincially or federally. I would have thought that question could be answered on the basis of assumptions about what the business activities of the company would be when its business plan was rolled out.
[162] As I have concluded that Canwood’s constitutional argument fails on judicial review for other reasons, it is not necessary that I decide whether an unrealised business plan necessarily fails to provide a foundation in fact capable of raising a constitutional argument calling for decision. I will assume for current purposes that Canwood’s constitutional argument is not defeated solely because it had not yet implemented its business plan.
[163] Similarly, I am not persuaded that Canwood necessarily had to lead evidence of the extent to which its activities would have been federally regulated. I would have thought that the Tribunal or a court could take judicial notice of the federal or provincial regulations that would govern the company’s activities. Federal regulations do not need to be independently proven through evidence, although
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evidence may be necessary to establish the facts which would lead to federal regulation. I am not satisfied, therefore, that the failure to prove federal regulation by evidence deprives either the Tribunal or the court of constitutional facts necessary to determine the jurisdictional question.
[164] None of this means, however, that Canwood’s position is free from difficulty. I am satisfied that Canwood did not put before the Tribunal, either on appeal or reconsideration, the constitutional points it now seeks to make before this Court. The argument advanced before the Tribunal is different from the one that Canwood now seeks to advance on judicial review. Canwood did not argue the international trade prong of the trade and commerce power in a way that put that issue before the Tribunal. The authority relied on dealt only with the general trade and commerce power. Canwood did not provide the Tribunal with a position based on the federal regulations to which its proposed business export activities would be subject. Canwood no longer relies on the general trade and commerce power. The other constitutional arguments put before the Tribunal have also been abandoned.
[165] The result of all this is that the constitutional argument has been fundamentally recast in terms of its particulars and its legal foundation. As a result, this Court is not being asked to undertake a judicial review of the Tribunal’s decisions. It is being asked to give effect to a new argument, albeit related to arguments advanced before the Tribunal, but nonetheless different from them in important respects. In my view, this is not an appropriate exercise of the power of judicial review. I find Canwood has failed to exhaust its internal remedies before the Tribunal. It seeks now to recast its argument and to put it on a different foundation. I decline to exercise my discretion in favour of undertaking a judicial review of the Tribunal’s decision on this basis.
[166] In Johnson v. British Columbia (Workers’ Compensation Board), 2011 BCCA 255 [Johnson], the issue, as stated at para. 1 of the decision, was whether the petitioner “ought to have been permitted to include in an application for judicial review … a ground that he had not raised nor argued before … the administrative tribunal whose order he sought to set aside on review”. The chambers judge allowed
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the petitioner to advance the new ground on judicial review. In finding that the chambers judge erred in so doing, the Court first noted at para. 19 that “the decision whether to grant judicial review to a petitioner who has failed to exhaust internal remedies is a discretionary one”. The Court then held that the attempt to create a record of the new ground on judicial review “could not be a substitute for the reasons” of the administrative tribunal and that “[t]he record required for a proper review was absent”: Johnson, at para. 51.
[167] Johnson was applied in Silver Campsites Ltd. v. Pulham, 2011 BCCA 352 [Silver Campsites Ltd.], wherein the petitioner sought to advance a statutory interpretation argument on judicial review that had not been placed before the Residential Tenancy Branch. Notably, the argument advanced on judicial review was a variation of the argument placed before the Residential Tenancy Branch. Citing Johnson, Frankel J.A. held the following at para. 30-32:
[30] My difficulty with Silver Campsites’s argument is that part of it is being raised here for the first time. In the proceedings before the DRO, Silver Campsites rested its argument that a tenant must also be a resident on its own forms, rules, and regulations. It took the position that it was entitled to withhold consent under s. 48(a)(i) of the Regulation because its internal documentation contains a requirement that all tenants must be residents. In other words, it argued that it had “reasonable grounds to conclude that [the Jameses were] unlikely to comply with the tenancy agreement or applicable rules”. The DRO concluded otherwise and it was that decision that was subjected to judicial review.
[31] The argument now advanced by Silver Campsites is markedly different; it raises what I consider to be a new issue. Silver Campsites now says that, as a matter of statutory interpretation, a “tenant” under the MHPTA must be a resident. However, the DRO was never asked to interpret what can be said to be his “home statute”.
[32] As recently discussed in Johnson v. British Columbia (Workers’ Compensation Board), 2011 BCCA 255 at paras. 42-52, it is not appropriate on an application to judicially review a decision by an expert tribunal protected by a privative clause, to engage in a statutory interpretation issue relating to the tribunal’s enabling act that the tribunal was never asked to consider. The absence of a decision on the point makes the record, as it relates to the statutory interpretation issue, incomplete. That is the situation in the case at bar. Accordingly, I would not allow Silver Campsites to advance its statutory interpretation argument.
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[168] Johnson was also cited in Pacific Newspaper Group Inc. v. Communications, Energy and Paperworkers Union of Canada, Local 2000, 2011 BCCA 373 [Pacific Newspaper]. In Pacific Newspaper, the petitioner sought judicial review of the Labour Relations Board’s decision not to grant it a remedy after a three-member panel of the Board found, for a third time, that a single member of the Board had erred in dismissing the petitioner’s application to set aside an unfair employer declaration. On judicial review, the petitioner asked the Court to find that the decision of the Board to not grant it an effective remedy was patently unreasonable “because the discretion to deny a remedy can only be exercised against an applicant who has engaged in improper conduct”: Pacific Newspaper, at para. 43. This issue had not been advanced before the third reconsideration panel of the Labour Relations Board. Citing Johnson, Frankel J.A. held the following:
[44] In my view, it would not be appropriate for this Court, on the present record, to engage the issue as to when the Board can deny an effective remedy to an applicant that has otherwise made out its case. As recently discussed in Johnson v. British Columbia (Workers’ Compensation Board), 2011 BCCA 255, 305 B.C.A.C. 298 at paras. 44, 45, it is for a tribunal to interpret its enabling statute, and that interpretation is entitled to respect on judicial review. In this case, because the third reconsideration panel did not give the parties an opportunity to address whether it was open to it to not grant a remedy even though it found that PNG’s application had been erroneously dismissed, there is, in effect, no decision to review.
[169] Accordingly, I dismiss the application for judicial review on constitutional grounds. Canwood has abandoned those constitutional arguments that would have been a proper subject for judicial review and seeks to advance an argument that, by virtue of being materially different from that which was advanced before the Tribunal, is not.
[170] In the event that I have fallen into error in refusing to judicially review the Tribunal’s decision on constitutional jurisdiction, I will express my view on the merits of the argument.
[171] In brief, I am unable to conclude that Canwood falls within federal jurisdiction on the basis of the constitutional foundation it has put forward. Canwood’s argument amounts to little more than an assertion that if the primary activity of the company is
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to export products and there is a significant amount of federal regulation of the export of those products, then necessarily the company’s labour and employment relations are regulated under the international trade component of the trade and commerce power. Canwood was unable to provide any direct authority that supports that result. Rather, it relied on the broad and sweeping assertion that to recognise federal regulation in this context would modernize constitutional law in Canada in the face of an increasingly global business community.
[172] In my view, the Attorney General’s framework of constitutional analysis is correct. I agree that the starting point of the analysis is found in the principles enunciated in Northern Telecom. Labour and employment relations fall presumptively within provincial jurisdiction and only exceptionally within federal jurisdiction. Invariably, federal jurisdiction arises in the context of subjects specifically enumerated in s. 91 (such as banking, navigation and shipping, Indians and Lands reserved for the Indians) as well as those expressly recognised as exceptions to provincial legislative authority in s. 92(10)(a): interprovincial transportation and communication works and undertakings. In respect of these matters, Parliament has jurisdiction if it is shown that such jurisdiction is an integral part of its primary competence over some other single federal subject, see Construction Montcalm Inc. v. Min. Wage Com., [1979] 1 S.C.R. 754. See also British Columbia Packers Ltd. v. Canada (Labour Relations Board), [1974] 2 F.C. 913, F.C.J. No. 189; and Four B Manufacturing v. United Garment Workers, [1980] 1 S.C.R. 1031.
[173] In my view, Canwood cannot make out the argument that its business is a federal undertaking, integrated with a federal undertaking or integral to a single federal subject matter. The fact that Canwood would have engaged in international trade and, in respect of certain of its activities, been subject to federal regulation, is not sufficient to render its labour and employees subject to federal regulation. Before there could be federal regulation, Canwood would have to demonstrate that it is integrated with a federal work or undertaking or some single federal subject, and to do that there must exist a discrete and identifiable work or undertaking that is clearly within federal jurisdiction. Canwood cannot meet that test.
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[174] In my view, on this issue, cases such as United Transportation Union v. Central Western Railway Corp., [1990] 3 S.C.R. 1112, [1990] S.C.J. No. 136
[Central Western Railway], and NIL/TU,O Child and Family Services Society v. B.C. Government and Service Employees’ Union, 2010 SCC 45, [2010] 2 S.C.R. 696 [NIL/TU,O], are dispositive. In Central Western Railway, the fact that a local railway had an exclusive relationship with CN Rail, arranged for government owned grain cars and their delivery to CN Rail on CN Rail tracks for onward shipping, sent the grain to market in Vancouver via CN track, and operated in relation to federally regulated grain handling was insufficient to establish federal jurisdiction over the railway’s labour relations. One argument advanced was that the railway was integrated into something referred to as the “Western Grain Transportation Network”, a concept I see as analogous to “international trade in wood”. The Court found that the fact that the railway lines were interprovincial, some of the cars were owned by the federal government, the movement and distribution of grain was controlled by
the federal government and the grain elevators were federal works was insufficient to reach the conclusion that the railway was integrated with the federal local undertaking. To conclude otherwise, the Court asserted, would be “to grant Parliament a licence to “sweep in” provincial jurisdiction dealing with all matters integral to the so-called grain transport system. Such a proposition long has been rejected by the courts”: Central Western Railway at para. 56. In my opinion, that conclusion applies with equal force to the position of Canwood.
[175] Similarly, in NIL/TU,O, a multiplicity of connections between an entity providing social services and an Indian band did not oust provincial jurisdiction. Again, the majority recognised that labour relations are presumptively provincial. To displace that presumption requires a two step analysis. First, the court engages in a “functional analysis” into the nature, operations and habitual activities to decide whether it is a “federal undertaking”. Only if that question cannot be clearly answered does the court ask whether provincial regulation of labour relations would impair the core of the federal power in issue.
[176] In my view, Canwood’s claim to federal regulation cannot meet this test. It seems clear to me that its line of business is not a “federal work, undertaking or
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business” under the Canada Labour Code, R.S.C., 1985, c. L-2, or of the type contemplated by s. 92(10) of the Constitution Act. Canwood would have to demonstrate that provincial regulation of its labour relations would impair the “core” of the federal power over international trade. I find that I cannot articulate any plausible basis to conclude that Canwood could meet this test. As the majority in NIL/TU,O noted, the inquiry into whether provincial regulation would impair the “core” of the federal power raises questions of interjurisdictional immunity. I can see nothing in provincial regulation of Canwood’s labour and employment relations that would in any way impair the federal regulation of Canwood’s business activities that involve international trade. Nothing would impair regulating export permits, stipulating quality standards, controlling disease or the spread of pests or any of the other matters that might be federally regulated under the trade and commerce power.
[177] The Attorney General argues further, and I agree, that in order for an entity to bring itself into the realm of a federal undertaking in circumstances such as these, it is necessary for the entity itself to carry out the interprovincial or international activities. Entering into contracts with third-party carriers who undertake the actual interprovincial or international activity is not sufficient to ground federal jurisdiction. This result follows from the reasoning in Consolidated Fastfrate Inc. v. Western Canada Council of Teamsters, 2009 SCC 53 [Consolidated Fastfrate].
[178] That case dealt specifically with s. 92(10)(a) of the Constitution Act and whether a company having an integrated national corporate structure was an interprovincial undertaking even though it did not itself perform the interprovincial carriage of goods. Rather, it consolidated goods in one place and arranged for their shipment across provincial boundaries by third party carriers to a destination where the company then deconsolidated the goods for onward delivery.
[179] The majority of the Supreme Court of Canada concluded that the company was provincially and not federally regulated and the fact that the company entered into contracts for the interprovincial shipment of goods was not sufficient to make it an interprovincial undertaking. The majority also considered whether the dominant
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purpose rather than the actual operations of the company was an appropriate test to be applied for the constitutional analysis. The majority said this at para. 62:
The “dominant purpose” test in DHL — measured in terms of the contractual service offered rather than the actual operations of the undertaking– has the potential to sweep under federal jurisdiction many enterprises that heretofore have been understood as being subject to provincial jurisdiction based on their actual operations. As the intervener the Attorney General of Ontario observed, travel agencies whose “regular and continuous” dominant purpose is to facilitate interprovincial and international travel could become subject to federal jurisdiction, as could online companies that regularly arrange for the door-to-door delivery of their products… This kind of indeterminate fluidity in the division of powers surely cuts against the balance that underlies our federal system.
[180] I recognise that Consolidated Fastfrate dealt with a claim for federal jurisdiction under s. 92(10)(a) and not the trade and commerce power. The principle just set out and the cast of mind it displays does apply, however, to the circumstances of Canwood. Canwood’s argument may be seen as effectively resting on the company’s purpose to be part of international trade. But even though its purpose was to engage in that trade, its actual operations are something different. It would enter contracts with local suppliers for logs, sort and store them on land within the Province, enter contracts with a shipper to transport them to the port, enter contracts with other shippers to load and yet others to transport them and enter contracts with ultimate purchasers. It would not own any of the shipping facilities or actually undertake shipment and export any more than Consolidated Fastfrate did. If Consolidated Fastfrate could not bring itself within a very specific and focused head of federal jurisdiction on the basis of its business of arranging for the interprovincial shipment of goods, I fail to see how Canwood could establish that its activities are so integrated with a much more general and inchoate head of federal power so that its labour relations are federally regulated.
[181] Putting Canwood’s case at its strongest, I am satisfied that its labour and employment relations fall within provincial constitutional competence. Accordingly, the Director of Employment Standards had the jurisdiction to adjudicate the dispute between Canwood and Mr. Bork. He made no error in assuming that jurisdiction.
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[182] Finally, I should note that both Mr. Bork and the Attorney General object to a written reply provided by Canwood after the conclusion of oral submissions. For reasons that do not matter, I gave Mr. Matkin the opportunity to reply in writing to the submission by the respondents. Mr. Matkin took up that opportunity. He provided a detailed and extensive written reply.
[183] Objection is made that the reply is not proper reply, but it is instead case splitting, re-argument and improperly puts forward new arguments and “facts”. I was urged to ignore the reply.
[184] I agree that the reply is improper. For the most part, it reargued the case. At the same time, it did not add much or anything that struck me as having any material effect on what the basis of the constitutional argument was or what arguments could be advanced by Canwood. In brief, I did not see anything in the reply that might have led me either to refuse to consider an argument because it was new and advanced too late or, if new and material, to provide the respondents with an opportunity to respond to it. In short, the reply did not advance my understanding of the issues I have been called on to decide nor has my review of it prejudiced the position of the respondents.
Costs
[185] Mr. Bork applies for special costs in the event that the petition for judicial review is dismissed. In support of his application for special costs, Mr. Bork submits the following. He says that the petition for judicial review has been litigated in a manner that frustrates Mr. Bork’s right to an efficient and cost-effective determination of his entitlement to a bonus. Originally, the petition improperly named Mr. Bork’s counsel as a respondent. The petitioner has consistently attempted to expand the issues in dispute, failed to properly define the constitutional issues, repeatedly proceeded in procedurally irregular and improper ways and failed to advance the petition to a determination on its merits in a responsible and timely manner. Mr. Bork says that he has been denied payment of the monies owing to him without a proper basis. In short, he submits that the petition for judicial review was always without merit, but the resolution of it has been made infinitely more complex than it ought to

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have been. The suggestion is that there has been a deliberate effort to frustrate Mr. Bork’s entitlement to his judgment.
[186] There is no doubt that there is much merit in what Mr. Bork has to say. The petitioner has continually shifted position and attempted to expand the issues before the Court. It did so also before the Tribunal. This matter has taken too long to come to court. As I noted above, the petitioner has not provided a satisfactory explanation of the lengthy delay involved in these proceedings. The application to amend the petition was, in my view, misconceived. Proper procedures have been flouted with disturbing regularity.
[187] Mr. Matkin did acknowledge that it had taken too long for this matter to be heard on the merits. At some point in the proceeding, Canwood had been represented by counsel. Mr. Matkin took over representing Canwood in his capacity as a director of the company, and not as counsel. Although Mr. Matkin is an experienced lawyer, he did not practice as a litigator. The subtext of his comments on how this matter unfolded procedurally is that mistakes may well have been made, not through ill will, but through a lack of experience in litigation.
[188] Before I can make an award of special costs, I have to be satisfied that the manner in which the proceedings have been undertaken reveals conduct that is reprehensible or worthy of rebuke. Although I understand and sympathise with the frustration felt by the respondents in dealing with this matter, I cannot conclude that matters have risen to the level that the petitioner’s conduct has been reprehensible or deserving of rebuke.
[189] I reject the application for special costs. I am prepared to entertain brief written submissions on the question of the appropriate scale of costs.
[190] Neither the Director nor the Tribunal seek an order for costs. I do not appear to have a record of the Attorney General’s position on costs.
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Conclusion
[191] The application for judicial review is dismissed.
“Harris J.”
