Federal Court of Appeal opines on binding nature of previous panels’ SCC Interpretations

Here at TheCourt.ca, we are usually concerned either with recent decisions of the Supreme Court of Canada (“SCC”), or with future cases of the SCC. However, we seldom take the time to look at how existing cases of the SCC are being interpreted by lower courts and the issues that arise in such situations. I thought I would take today to look at one such issue: the question of whether and when judges should be bound by previous SCC interpretations by other judges of the same court. In eBay Canada Ltd v MNR, [2010] 1 FCR 145 [eBay], Justice Evans looked specifically at this issue as it relates to the Federal Court of Appeal (“FCA”).

In eBay, the main dispute concerned the appeal of an ex parte order of the Federal Court under s. 231.2 of the Income Tax Act, RSC 1985, c 1 (5th Supp) to produce information from foreign computer servers identifying “PowerSellers” in Canada. The contentious issue in this case was whether the Minister could have used the general provision of s. 231.2 to order the production of such information when another section of the Act (s. 231.6) explicitly contemplated ‘foreign-based information.’ (I took a look at this case from a technology law perspective here)

Additionally, the court also analyzed the standard that the Minister must meet before a judge should authorize the Minister’s request for information concerning unnamed persons pursuant to s. 231.2(3). What is important for our purposes is not so much the outcome of the case, but rather the way Justice Evans rejected the argument that an earlier decision of the FCA should not be followed because “it was inconsistent with an [even] earlier decision of the Supreme Court of Canada” (para 56). At paragraphs 57-59, he reasons:

[57] …[T]his Court has decided in Miller v Canada (Attorney General), 2002 FCA 270, 220 D.LR. (4th) 149, that only in unusual and limited circumstances should one panel of the Court decline to follow a decision of another panel. In particular, Justice Rothstein (then of this Court) stated that, in order to ensure a degree of certainty and stability in the law, a panel should not depart from a prior decision of another panel “merely because it considers that the first case was wrongly decided” (at para. 8). However, the Court in Miller also said (at para. 10) that a panel was not bound to follow a prior decision which was “manifestly wrong” in one or more specified senses, which do not include inconsistency with a prior Supreme Court of Canada decision.

[58] Nonetheless, counsel for the appellants argued that it is fundamental to the due administration of justice in Canada that lower courts are bound by decisions of the Supreme Court of Canada. Hence, he said, it must always be open to this Court to decline to follow one of its previous decisions if that decision was inconsistent with previous Supreme Court jurisprudence.

[59] I do not agree. In my opinion, a determination by this Court of the legal effect of a Supreme Court decision is as subject to the general principle set out in Miller as a decision by this Court on any other question of law.

Given this characterization, it could conceivably be the case that FCA judges may feel that a former panel’s interpretation of a SCC decision is ‘manifestly wrong’, but is nevertheless obliged to follow it. This is certainly a curious development in that if looked at from a different perspective, in this particular case, FCA judges seem more bound by previous decisions than by SCC decisions.

Nevertheless, despite the seeming usurpation of power from the SCC, consistency across the different panels sitting on a court is likely a more pressing goal. This makes sense in light of the fact that the SCC could always overrule a wrong interpretation.