Lindsay v. Nova Scotia (Department of Consumer Affairs)
Gertrude M. Lindsay, Applicant
R. Laird Stirling, Minister, Department of
Consumer Affairs for the Province of
Nova Scotia, Respondent
Nova Scotia Judgments:  N.S.J. No. 388
Action S.H. No. 57980
76 N.S.R. (2d) 208
Nova Scotia Supreme Court - Trial Division
Halifax, Nova Scotia - In Chambers
Judgment: November 18, 1986
Licences -- Natural justice -- Duty of fairness -- Minister of Consumer Affairs suspecting applicant for license to operate funeral home acting as cover for husband whose licence revoked following conviction for fraud in operating home -- Minister refusing to issue licence -- Minister having discretion to refuse to issue licence for any reasonable cause -- Minister having duty to act fairly -- Minister failing to act fairly by considering extraneous matters -- Decision of Minister quashed -- Judicial review -- Mandamus -- Bars -- Court refusing to grant mandamus so as to compel Minister to reach any particular decision -- Mandamus granted compelling Minister to reconsider decision properly -- Embalmers and Funeral Directors Act, R.S.N.S. 1967, c. 86, ss. 12, 16(1), 19, 19A, B, C, D, E, 20A.
This was an application for certiorari to quash the decision of the Minister of Consumer Affairs refusing a licence to operate a funeral home and for mandamus to compel the issuing of the licence. The applicant applied for a licence under the Embalmers and Funeral Directors Act for a licence to operate a funeral home. The Minister denied the application even thought the applicant met the requirements of the Act and Regulations on the ground that the applicant was acting as a front for her husband who lost his own licence following convictions for fraud relating to the conduct of a funeral home.
HELD: The application was allowed in part. Although the Minister was given the discretion to refuse to issue a licence for any reasonable cause under s. 19A(2) of the Act he was under a duty of fairness, the exercise of which was reviewable by way of certiorari. The applicant was entitled to have her application dealt with on its own merits and to have excluded from consideration matters irrelevant to the application. By considering extraneous matters the Minister did not meet the duty to act fairly. The decision was therefore to be quashed. As to the granting of mandamus, in discretionary situations the court would not direct how the discretion was to be exercised provided it was exercised on proper legal principles. The court would intervene when the principles were not followed but would not order mandamus directing any particular decision. The most the court would do would be to insist that the Minister consider the application properly.
Mark H. Arnold, for the applicant.
Alison Scott, for the respondent.
MacINTOSH J: -- The Applicant seeks an order in the nature of certiorari quashing the decision of the Minister of the Department of Consumer Affairs, for the Province of Nova Scotia, denying the Applicant a license to operate a funeral home pursuant to the Embalmers and Funeral Directors Act, R.S.N.S. 1967, c. 86 s. 19A. The Applicant also seeks an order in the nature of mandamus compelling the said Minister to issue to her a license to operate a funeral home.
Counsel for the Applicant sets forth the facts in his brief as follows:
The Applicant, Gertrude M. Lindsay, is a registered funeral director, and lives in Bedford, County of Halifax, Province of Nova Scotia. On or about June 16, 1986 she filed a written application with the Department of Consumer Affairs, Province of Nova Scotia, for a license to operate a funeral home pursuant to the Embalmers and Funeral Directors Act R.S.N.S., 1967, c. 86, s. 19, 19A (1). The Applicant's proposal was to open a funeral home in Bedford, Nova Scotia called Bedford Memorial Chapel. The Applicant proposed to operate the funeral home with the assistance of two funeral directors and embalmers: Mr. William Bonner and Mr. William Freeman.
On or about June 23, 1986 the Applicant received a letter from one A. M. Merry, an official with the Department of Consumer Affairs. The letter requested more detail in regard to the application for licensing. The major concern of the Department of Consumer Affairs appeared to be the status of a purported lease dispute in regard to the location of the proposed funeral home and the involvement, if any, of the Applicant's husband, R.D. Lindsay, in the operation of the proposed business.
On or about June 26, 1986 the Applicant forwarded to the Department of Consumer Affairs two letters responding to the Department's concerns. The first letter was from the Applicant's solicitor indicating that to the best of his knowledge and belief there was no legal process pending in regard to the location of the proposed new funeral home. The second letter, from R. D. Lindsay, stated very clearly that he was in no way associated with the Applicant's firm, Bedford Memorial Chapel.
On or about July 7, 1986 the Applicant received a letter from one R. G. Martin, Director, Consumer Services Division, Department of Consumer Affairs. The Director stated:
"Given the relationship which exists, both personal and business, and the close proximity of Mr. Lindsay's business premises and residence to Bedford Memorial Chapel, this Department is not convinced of the existence of an arms length relationship between Mr. Lindsay and the Bedford Memorial Chapel.
On receipt of the information requested, your application will be given further consideration."
On or about July 11, 1986 the Applicant responded in writing. She indicated that R. D. Lindsay would "in no way be involved in the operation of Bedford Memorial Chapel."
On or about July 24, 1986 the Applicant received a letter from R. Laird Stirling, Minister, Department of Consumer Affairs, Province of Nova Scotia. The Minister informed the Applicant that he was denying her application for a funeral home license. The Minister concluded "... that Mr. Lindsay would have an integral role in the operation of this business." The Minister's conclusion was based upon three premises:
"The relationship which currently exists between yourself and Mr. Lindsay on a business level."
"His close proximity to the funeral home."
"Your lack of experience in the overall management of such a business."
On or about September 3, 1986 the Applicant issued an Originating Application before this Honourable Court for an Order in the nature of Certiorari quashing the decision of R. Laird Stirling, Minister, Department of Consumer Affairs, Province of Nova Scotia, denying the application for a license to operate a funeral home. On or about September 30, 1986 an amended Originating Notice was issued to include an Order of Mandamus compelling the Minister to issue the license to operate a funeral home to the Applicant.
Counsel for the Respondent agrees with the facts as outlined for the Applicant but adds the following:
The Respondent accepts the facts as set out in the Applicant's brief but would add the following.
The Applicant proposed to operate her funeral home under the firm name Bedford Memorial Chapel, an unincorporated partnership.
Neither Bedford Memorial Chapel, Mrs. Lindsay nor her partners own any assets associated with the operation of the funeral home, Bedford Memorial Chapel. The building in which the business is proposed to operate is owned by Mr. R. D. Lindsay and leased to the applicant. All facilities, equipment and utensils required to operate as a funeral home are leased from Mr. R. D. Lindsay. The motor vehicles necessary to carry on operation of the business are owned by Mr. R. D. Lindsay and leased to the Applicant.
The Applicant and Mr. R. D. Lindsay reside in an apartment physically located over the premises to be operated as a funeral home.
Mr. R. D. Lindsay was convicted on three counts of attempting to defraud contrary to s. 338(1)(a) and 421(2) (b) of the Criminal Code of Canada and two counts of fraud pursuant to s. 338(1)(a) of the Criminal Code of Canada, the 25th day of November, 1985, arising from his operation of a funeral business.
The issues are whether the decision of the Minister is -
Reviewable by way of certiorari
If the answer is in the affirmative, are there grounds that certiorari should issue?
Is mandamus available to compel the Minister of Consumer Affairs to issue a license under s. 19A of the Embalmers and Funeral Directors Act?
Relevant sections of the Act applicable to the licensing of funeral homes include the following:
FUNERAL DIRECTOR'S LICENSE
12 The Board shall issue a funeral director's license to a person who:
is not less than nineteen years of age, and has complied with the requirements of the regulations, and has paid the annual fee; or
on the first day of January, 1955, was carrying on business as a funeral director in the Province of Nova Scotia, and pays the annual fee.
LICENSE OF FUNERAL DIRECTOR REQUIRED
16 (1) No person shall act as funeral director or carry on the business of funeral director unless he is a licensed funeral director.
LICENSE TO OPERATE FUNERAL HOME
19 No person shall conduct, maintain, operate or manage a funeral home, or hold himself out as operating a funeral home, unless he is issued a license to do so pursuant to this Act and that license has not expired, been cancelled or suspended.
ISSUE OF LICENSE
19A (1) Subject to the regulations, the Minister may issue a license to operate a funeral home.
REFUSAL TO ISSUE LICENSE
The Minister may for any reasonable cause refuse to issue or re-issue a license in respect of a funeral home.
TERMS AND CONDITIONS
A license shall be subject to such terms, conditions and restrictions as are provided by the regulations.
FORM OF APPLICATION
19B (1) An application for a funeral home license shall be in the form prescribed by the regulations.
FORM AND EXPIRY OF LICENSE
The license shall be in the form prescribed by the regulations and shall expire one year from the date on which it was issued or on such other date as prescribed by the regulations.
CANCELLATION OR SUSPENSION
19C The Minister may cancel or suspend a funeral home license where
the licensee is not capable of providing the service required by the license;
the funeral home described in a license has become unsuitable for the purpose authorized by the license;
the funeral home does not comply with the terms, conditions or restrictions of the license;
the licensee has contravened this Act or the regulations; or
the funeral home does not comply with enactments applying to it.
19D A funeral home license shall be deemed to be cancelled when the person to whom it was issued ceases to operate or own the funeral home for which the license was issued.
LICENSING OF EXISTING FUNERAL HOME
19E Every funeral home that on the date this Section comes into force is in operation under the management of a funeral director or licensed embalmer licensed by this Act shall be licensed upon the payment of the fees prescribed by the regulations and thereafter be subject to this Act and the regulations.
Pursuant to s. 20A of the Act, the Governor in Council issued regulations relating to the licensing of funeral homes. The court was given to understand by counsel that there was full compliance with these regulations by the Applicant, as well as her having been issued a Funeral Director's License under the Act. In other words, there has been compliance with all requirements of this particular statute by the Applicant.
Counsel for the Respondent argues that the function of the Minister of Consumer Affairs is ministerial and therefore not reviewable by certiorari which is generally considered available only where decisions are judicial or quasi-judicial. Whether a particular decision is to be termed judicial, quasi-judicial, or administrative (or ministerial) is at times difficult to determine, as one term seems to overlap into the other. The importance of a distinction between these terms would seem to be lessening.
Traditionally, the prerogative remedy of certiorari has been available only in respect of decision-makers who, in reaching a decision, are obliged to act judicially or quasi-judicially either by statute or by implication from common law principles. However, all this may be changing, particularly with the emergence of the duty to act fairly with procedural content. There is authority for the proposition that certiorari lies to control the decisions of bodies obliged to act in a procedurally fair way irrespective of classification and also a suggestion that certiorari is a general supervisory remedy available with respect to all statutory bodies irrespective of classification. (per Mullen, Administrative Law, 2d ed, at 3-197)
The extent of this "duty to be fair" principle is discussed in Principles of Administrative Law, Jones & deVillars at p. 174-76:
Dickson J. then turned his attention to the availability of certiorari to remedy a breach of the duty to be fair procedurally. He referred to Atkin L.J.'s famous quotation in R. v. Electricity Commissioners; Ex parte London Electricity Joint Committee Company:
Wherever any body of persons having legal authority to determine questions affecting the rights of subjects, and having the duty to act judicially, act in excess of their legal authority they are subject to the controlling jurisdiction of the King's Bench Division exercised in these writs.
Dickson J. noted the danger of construing this quotation too restrictively. In particular:
There has been an unfortunate tendency to treat "rights" in the narrow sense of rights to which correlative legal duties attach. In this sense, "rights" are frequently contrasted with "privileges", in the mistaken belief that only the former can ground judicial review of the decision-maker's actions.
His Lordship thus rejected such a narrow concentration on "rights" and focused instead on the public policy underlying judicial review:
When concerned with individual cases and aggrieved persons, there is the tendency to forget that one is dealing with public law remedies, which, when granted by the courts, not only set aright individual injustice, but also ensure that public bodies exercising powers affecting citizens heed the jurisdiction granted to them. Certiorari stems from the assumption by the courts of supervisory powers over certain tribunals in order to assure the proper functioning of the machinery of government. To give a narrow or technical interpretation to "rights" in an individual sense is to misconceive the broader purpose of judicial review of administrative action. One should, I suggest, begin with the premise that any public body exercising power over subjects may be amenable to judicial supervision, the individual interest involved being but one factor to be considered in resolving the broad policy question of the nature of review appropriate for the particular administrative body.
If judicial review will issue even where "rights" are not technically affected, must there nevertheless be a duty to act judicially before certiorari is available? Again, Dickson J. rejected such a restriction on the availability of certiorari - relying principally upon Lord Reid's judgment in Ridge v. Baldwin, and on the now long line of English cases on the duty to be fair. These authorities indicated to His Lordship that
the application of a duty of fairness with procedural content does not depend upon proof of a judicial or quasi-judicial function. Even though the function is analytically administrative, courts may intervene in a suitable case.
In my opinion, certiorari avails as a remedy whereever a public body has power to decide any matter affecting the rights, interest, property, privileges, or liberties of any person.
At p. 177, the authors conclude:
The duty to be fair is now undoubtedly part of our law and a breach of the duty to be fair can be corrected by certiorari, even if no judicial or quasi-judicial function is involved.
Instead of characterizing functions as judicial or executive, the courts must now concentrate squarely on the real question which has always been before them: Was the procedure used in this case fair in all the circumstances?
As this case concerns the actions of a Minister of the Crown, i.e. a member of the Provincial Cabinet, the court must examine quite closely its right to interfere by way of certiorari or otherwise. The position of this court can be found in the following comments of MacKeigan, C.J.N.S. (as he then was) in Bedford Service Commission et al v. Attorney General of Nova Scotia (1977), 18 N.S.R. (2d) at 147:
A court of law is exactly that, a court of law, to administer the law, to adjudicate on legal rights, and to determine justiciable questions. It has no power to act as a sort of ombudsman, or general overseer of political or administrative bodies or officials, or to act as a commission of inquiry into economic, social or ecological matters. Courts have no right to interfere with intra vires legislation or administrative action by persons or bodies acting within their powers.
Further in the Irving Oil v. Attorney General of Nova Scotia (1979), 35 N.S.R. (2d) at 269, the erstwhile Chief Justice has cited with approval Lord MacMillan in D.R. Fraser & Co. v. Minister of National Revenue  A.C. (P.C.) at 36:
The criteria by which the exercise of a statutory discretion must be judged have been defined in many authoritative cases, and it is well settled that if the discretion has been exercised bona fide, uninfluenced by irrelevant considerations and not arbitrarily or illegally, no court is entitled to interfere even if the court, had the discretion been theirs, might have exercised it otherwise.
The scope of judicial review of decisions made pursuant to statutory authority was reviewed by the Supreme Court of Canada in Thorne's Hardware Ltd. et al v. The Queen,  1 S.C.R. at 106. In the Thorne's case, it was argued that an Order in Council extending the boundaries of St. John Harbour was ultra vires because it was not in conformity with the objects of s. 7(2) of the National Harbours Board Act.
The Act in question provided in s. 7(1) that the National Harbours Board had jurisdiction over certain harbours "for the purpose of and as provided in the Act" and "likewise has administration management and control of" certain works and property. The appellants had argued that the power of Governor in Council to extend harbour boundaries must be motivated "with an eye to administration management and control of the harbour". They also argued that monetary motivation, i.e. increased revenue for the Harbours Board as a result of increased boundaries, was irrelevant to the exercise of Governor in Council's jurisdiction.
Mr. Justice Dickson, (as he then was) held that:
I have no doubt as to the right of the courts to act in the event that statutorily prescribed conditions have not been met and where there is therefore fatal jurisdictional defect. Law and jurisdiction are within the ambit of judicial control and the courts are entitled to see that statutory procedures have been properly complied with: R. v. National Fish Co.,  Ex. C.R. 75; Minister of Health v. The King (on the Prosecution of Yaffe),  A.C. 494 at p. 533. Decisions made by the Governor in Council in matters of public convenience and general policy are final and not reviewable in legal proceedings. Although, as I have indicated, the possibility of striking down an order in council on jurisdictional or other compelling grounds remains open, it would take an egregious case to warrant such action. This is not such a case. (at p. 111)
However, the Thorne's case involved an Order in Council as opposed to the exercise of discretion by a designated member of the Provincial Cabinet under this particular statute. Generally speaking, in the former situation, the court will not interfere while in the latter, the decision may be subject to review.
The Courts have always been careful to distinguish between acts done pursuant to the exercise of a statutory power - subject to Court review - and decisions made under the Royal prerogative - which are not per se reviewable by the Courts. (per Lacourciere, Re Multi-Malls Inc. et al and Minister of Transportation and Communications et al 14 O.R. (2d) at 58.)
As s. 19A(2) states, "The Minister may for any reasonable cause refuse to issue ... a license ..."; the Minister is the one designated by the Act to make the decision. It is a personal decision of the Minister, not of the Legislature. However, he must not exercise that discretion based on irrelevant or extraneous evidence.
The words "for any reasonable cause" in s. 19A indicates that it was not the intention of the Legislature to give the Minister an unfettered discretion - he must act reasonably in the refusal of a license to operate a funeral home.
The following is the complete text of the letter written by the Minsiter to the Applicant setting forth the reasons for his refusal:
I am in receipt of your application for a funeral home license under the Embalmers and Funeral Directors Act as well as the supporting documentation and report from the Registrar.
This application has been reviewed in detail by both my licensing officials and myself and I advise you that I have very serious reservations regarding this matter. Regardless of the fact that records at the office of Joint Stock Companies show that Mr. R. D. Lindsay is not an officer of this business, I am not convinced that he will not be involved in the operation of this funeral home. The relationship which currently exists between yourself and Mr. Lindsay on a business level, his close proximity to the funeral home and your lack of experience in the overall management of such a business, combine to lead me to the belief that Mr. Lindsay would have an integral role in the operation of this business.
This is a situation which I am not prepared to permit, for obvious reasons. It is my opinion that I would be remiss in my obligations as Minister of Consumer Affairs if, whereby issuing a funeral home license, I permitted a situation where a funeral home licensed by this department, was in any way controlled, operated or influenced by a person convicted of fraud under the Criminal Code relating to events normally associated with the operation of a funeral home.
I, therefore, formally advise you that I am denying your application for a funeral home license.
The Respondent submits that there is a business relationsip because of the Applicant's admission that the funeral home leases all equipment, utensils, vehicles and even the premises from R. D. Lindsay, the Applicant's husband. These rentals, of themselves, do not establish a business relationship relative to the operation, direction and/or management of the funeral home. What the Minister seems to be saying is that the Applicant is merely a front for her husband - that he will be the actual operator of the funeral home and not the Applicant. The Minister's words - "lead me to the belief that Mr. Lindsay would have an integral role in the operation of this business", would bear out this trend of thought. The Minister has based his refusal of a license on what he presumes will happen rather than the present actuality. At present the Applicant has applied for and received from this department a Funeral Director's License, i.e. she is deemed a proper person for such responsibilities, and she has fulfilled all rules and regulations statutorily required for the operation of a funeral home. Because of a presumption on the part of the Minister based on what might happen, he has seen fit to refuse the license.
While future events may well prove the Minister's presumption to have become a reality - until such time, the Applicant is entitled to have her application dealt with on its own merits.
The Minister must exclude from his consideration matters which are irrelevant to the issue he must consider.
Should the Applicant be granted a license and should she allow the presumptions of the Minister with regard to her husband become a reality, then the Minister might well have good cause to cancel that license.
Can it be said that the Minister has used reasonable cause in the exercise of his discretion - has he fulfilled his "duty to be fair"?
In my view, he has not. He has used irrelevant and extraneous evidence to reach his decision. It follows that the decision must be quashed.
Having found that certiorari is available to quash the decision of the Minister of Consumer Affairs, it now falls to be determined whether or not an order in the nature of mandamus is available to compel the Minister of Consumer Affairs to issue a license to the Applicant under s. 19A of the Act.
The prerequisites to be met before the court will issue an order in the nature of a mandamus are set forth in Jones & deVillars, supra, as follows at p. 367:
Certain conditions must be fulfilled before a court will issue an order of mandamus. First, there must be a public duty to act and this duty must be owed to this particular applicant. In other words, the applicant will have to satisfy the locus standi requirements described below. Secondly, there must have been an express demand made to the delegate that he act and he must have refused to do so. In some cases, the delegate's conduct or lack of action may, by implication, be sufficient evidence of the refusal. Thirdly, mandamus does not lie against the Crown or its agents. This reflects the general rule that none of the prerogative remedies is available against the Crown, because in theory the court cannot treat the monarch as both applicant and respondent in the same action at the same time, nor could it commit itself in contempt for disobedience. On the other hand, the number of people entitled to this immunity is quite restricted. In particular, it does not apply to the Queen, the Lieutenant Governor, cabinet ministers or public servants when they are exercising a power conferred by statute, for then they are personae designatae.
S. 19A designates the Minister of Consumer Affairs as the person upon whom rests the statutory power to issue licenses for the operation of funeral home, that is, he is a persona designata under this statute. As such, his actions can be subject to mandamus if the other prerequisites are met.
Whether mandamus issues or not also depends upon whether, under the particular statute, a Minister is under a peremptory duty to act or has a discretionary power. In the former case, mandamus will lie.
... if the legislation imposes upon a minister a peremptory duty to do a particular act which entails a legal duty toward an individual, then if he refuses to perform that duty, mandamus would lie to force him to do so. In such a case the minister is not accountable to the Crown but to the individual to whom the legal duty is owed. (per Culliton, C.H.S., R. v. Minister of Mineral Resources (Sask.),  1 W.W.R. at 199.)
As to the discretionary situation, the court will not direct how the discretion is to be exercised provided the decision is based on proper legal principles. Failure to observe these principles calls for court intervention but still not for an order of mandamus directing any particular decision.
Mandamus lies to compel the performance of a public duty, but, where the duty involves the exercise of discretion, not so as to compel a particular result. "A mandamus goes to set a tribunal in motion, but not to prescribe the way in which they shall do any particular act " echoes a common kind of expression, which may be misleading. What is meant is that mandamus is not to be used for the purpose of altering a decision or conclusion arrived at through a "proper" exercise of discretion. It does not mean that the method of procedure adopted by the tribunal in the course of exercising a discretion, or the considerations it regards, or its motives, are beyond the reach of the court. "Proper" here means in good faith, not for an improper motive, not based on extraneous considerations, and the like.
A proper exercise of a discretion "within jurisdiction" is not subject to mandamus, but mandamus lies to correct an arbitrary exercise of discretion, and to ensure that a discretionary power is honestly exercised, and not as a result of bad faith or to further an indirect or improper motive, or upon irrelevant or alien grounds, or on extraneous considerations. (per Reid & David, Administrative Law and Practice (2d) at 403)
It is "beyond question that a mandamus cannot be directed to the Crown or to any servant of the Crown simply acting in his capacity of servant." ... Where, however, a duty has been directly imposed by statute for the benefit of the subject upon a Crown servant as persona designata, and the duty is to be wholly discharged by him in his own official capacity, as distinct from his capacity as an adviser to or instrument of the Crown, the courts have shown readiness to grant applications for mandamus by persons who have a direct and substantial interest in securing the performance of the duty. (per deSmith, Judicial Review of Administrative Action, 4th ed., at p. 553-4.)
In Padfield v. The Minister of Agriculture, Fisheries and Food,  A.C. at 1007, Lord Denning, M.R. observed:
If it appears to the court that the Minister has been, or must have been, influenced by extraneous considerations which ought not to have influenced him - or, conversely, has failed, or must have failed, to take into account considerations which ought to have influenced him - the court has power to interfere. It can issue a mandamus to compel him to consider the complaint properly.
The court in this instance refuses the application for an order in the nature of mandamus to compel the Minister to issue a license to the Applicant to operate a funeral home. The most this court will do is to insist the Minister consider the application properly in keeping with principles outlined in this decision. The application of these principles in the exercise of the Minister's discretionary power should make his final decision unassailable.
In the result, mandamus is granted directing the Minister to reconsider this application as above noted.