Issue #18: November 14, 2021
International commercial arbitration, Vavilov in PRRA, JR in Quebec
lululemon athletica canada inc v Industrial Color Productions Inc, 2021 BCCA 428 (November 12, 2021)
Context: The appellant (Lululemon Athletica Canada Inc.) applied to the British Columbia Supreme Court under s 34(2)(a)(iv) of the International Commercial Arbitration Act (ICA) to set aside an arbitral award of roughly one million USD on the basis that the arbitrator had decided a matter beyond the terms of the submission to arbitration. The arbitrator found that Lululemon’s notice of termination of its Service Agreement with Industrial Color Productions Inc. (ICP) took effect 75 days later than intended. Thus, ICP should be awarded its anticipated lost revenue for those 75 days. Lululemon brought an application to “set aside” the decision under the ICAA. The chambers judge dismissed the application, finding that the arbitrator’s decision was reasonable. The appellant now seeks to challenge this decision on the basis that the standard of review should be correctness.
Issue: What is the standard of review under this provision of the International Commercial Arbitration Act?
Holding: Under the statute, the standard of review of correctness applies to applications to set aside. However, Vavilov is not applicable because it “does not address the field of arbitration” [46].
Analysis: A very neat case. As a general, abstract matter, the broad conclusion that Vavilov does not address a particular field, in my view, is not enough to conclude that it does not apply. However, to my mind, the Court sets out a principled reason to distinguish Vavilov that is particular to the relevant international arbitration statute here.
The Court concludes that correctness applies on applications to set aside under the BC international commercial arbitration statute. This is because of the language of the particular statutory provision providing for the set aside “right to appeal” does not suggest “any sort of deference to the arbitrator’s own view of jurisdiction” [41]. Indeed, applications to set aside address issues like incapacity, excess of jurisdiction of the arbitrator, etc. See also previous authority in Ontario: United Mexican States v Cargill, Inc, 2011 ONCA 622, leave to appeal refused.
However, the application of the correctness standard in this context has nothing to do with Vavilov, so one of the limits on “Vavilov’s domain” may be international commercial arbitration (depending on the statute). This case follows authority in British Columbia that holds that “it would be an error…to import into [the ICAA] an approach which has been developed as a branch of statutory interpretation in respect of domestic tribunals created by statute”: The United Mexican States v Metaclad Corporation, 2001 BCSC 664 at para 54.
As James Plotkin and I argue in our paper on the subject, Vavilov should apply to domestic arbitration, specifically its holding on the appellate standard of review. But as we say, “[n]one of the international arbitration statutes in force in Canada allow for appeals on the merits by agreement or otherwise” [pg 38]. Vavilov purports to apply to situations “when the merits of an administrative decision are challenged” (Vavilov, at para 16). So it stands to reason that the Court here was right: on the terms of this statute, the Vavilov framework does not apply because applications to set aside do not strictly deal with the merits of an arbitral decision.
A.B. v Canada (Citizenship and Immigration), 2021 FC 1206 (November 9, 2013)
Context: The applicant, a female citizen of St. Vincent and the Grenadines fled that country and came to Canada at the age of 19 in 2001. This was part of her efforts to escape physical, mental, and sexual abuse by her father. Since arriving in Canada, the applicant pursued a number of different immigration processes to stay in Canada, but all of them were unsuccessful. Most recently, the applicant applied for a Pre-Removal Risk Assessment (PRRA), but was denied. The applicant then retained new counsel, and applied for a reconsideration of the PRRA on the basis of incompetent representation. Her request for reconsideration was denied given her previous efforts to obtain status as a refugee in Canada (which also failed). The PPRA officer refused to consider any evidence that pre-dated the failed refugee claim because the “applicant had not explained why she had not provided it to the panel […] and also noted that the risks cited by the applicant in her PRRA were essential the same as those already considered” [11]. The applicant now seeks judicial review of this decision.
Issue: Was the decision by the PPRA officer to deny the reconsideration of the applicant’s negative PPRA assessment reasonable?
Holding: The Court granted the application for judicial review. The decision to deny reconsideration of the PPRA application was unreasonable given the officer’s failure to adequately consider the context of the decision, as well as accept the applicant’s claim that she had inadequate representation throughout the original process.
Analysis: This is a decision that draws attention to the “impact on the individual” Vavilov constraint (Vavilov, at para 106). It gives some teeth to this constraint in a concrete way despite the pre-Vavilov rule that the justificatory standard on refusals to reopen a decision is not at the high end of the scale [44, Ghaddar v Canada (Citizenship and Immigration), 2014 FC 727 at paras 18-19].
A PRRA is “focused on risks facing a claimant if they return to their country of origin…” [33]. An applicant can request a reconsideration of a PRRA decision: first she bears the onus to “open the door to reconsideration…based on the interests of justice or the unusual circumstances of the matter”; and second, the officer reconsiders the decision on the merits [21]. For the Court, the Officer’s reasons for refusing to reopen on the first stage fell “short of what is required by reasonableness review” [32] in large part because of the “impact” Vavilov constraint.
The Court highlights, first, that the impact of a PRRA decision on an individual is great: it engages s.7 of the Charter because it is focused on the risks facing a claimant if they return to their country of origin [33, see also B010 v Canada (Citizenship and Immigration), 2015 SCC 58 at para 75. Given this standard, the Officer’s failure to adequately grapple with the Applicant’s vulnerable status as a person suffering from Post-Traumatic Stress Disorder “of a complex nature” [39] was, in conjunction with other things, unreasonable. Here, this particular Vavilovian constraint takes a central role.
However, it is important not to make too much of the potential for this constraint: it very much depends on the context and the interplay with the other Vavilovian constraints. For example, in Portnov v Canada (Attorney General), 2021 FCA 171 at para 44, the impact on the affected individual in the application of a particularized regulation was considered and weighed, but other contextual constraints suggested, as is common, that the “Governor in Council’s decision [under the statute] is relatively unconstrained within the meaning of Vavilov” [44]. Clearly the regulatory context is different from a PRRA decision.
Dowd v Binette, 2021 QCCA 1663 (November 5, 2021)
Context: This is a decision of the Police Ethics Committee which confirmed the citation of two officers under the Quebec police code of ethics [23]. That decision was appealed under a right of appeal to the Court of Quebec, which dismissed the appeal. The officers sought judicial review of the Court of Quebec decision. The Superior Court allowed the judicial review and remitted to the Court of Quebec for a re-hearing.
Issue: What is the standard of review for a decision appealed to the Court of Quebec?
Analysis: While this issue is somewhat narrow respecting the Court of Quebec, there is a broader point of principle that is valuable for those learning administrative law: the Housen standard (palpable and overriding error on mixed fact and law/fact, correctness on law), which now applies on rights of appeal, does not completely eschew deference.
A core issue was the standard of review as between the Court of Quebec and the Police Ethics Commissioner. Recall that in the recent case of Reference re Code of Civil Procedure (Que), art 35, 2021 SCC 27 at paras 147-149, the Supreme Court of Canada confirmed that the Court of Quebec “is no longer bound by the obligation of judicial deference and must now apply the appellate standards from Housen in any appeal it hears from an administrative decision.” Here, the Superior Court judge concluded that (1) deference is no longer a factor where there is a right of appeal [28]; and (2) “expertise” is discarded as a factor to consider in the standard of review analysis.
But as the QCCA says here, both conclusions are far too broad. First, the Housen standard does contemplate deference on mixed fact and law and fact questions [49]. The change that Vavilov introduces is primarily on questions of law, where a correctness standard now applies. The Superior Court judge went too far by saying that there was no deference at all on the appellate standards of review (see Superior Court decision at para 38). The Housen standard is not a redo.
On expertise, the Superior Court judge also went too far. The judge seemed to suggest that Vavilov totally rejected the idea of expertise. But this is wrong. Vavilov says that expertise is “folded into the new starting point” of a presumption of reasonableness, which is solely based on the legislative choice to delegate (Vavilov, at paras 30-31). More to the point, expertise is not a standalone reason for deference, and it is not presumed as a matter of fact. Instead, the expertise of a decision-maker should be shown in the reasons (Vavilov, at para 93). And of course, as noted above, the appellate standards of review contemplate deference not based on generalized notions of expertise, but based on the privileged position of the decision-maker in assessing questions of fact and mixed fact and law [57].
Disclaimer: Nothing in the SEAR is legal advice. The SEAR is not designed to be comprehensive. It is designed to collect some cases that I believe are interesting to practitioners and students, and to provide my quick thoughts. Not all of the cases presented are fully analyzed ie) I’ve selected the most relevant issues in some of the cases. Please complement the SEAR with your own research and study. Any mistakes are my own.
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