Issue #44: June 5, 2022
More on judicial/admin precedents, standard of review on regulations, international law
Hussey v Bell Mobility Inc, 2022 FCA 95 (May 31, 2022)
Category: Application of the reasonableness standard (judicial and administrative precedent)
Context: This is a decision of an Adjudicator appointed under the Canada Labour Code, concluding that Hussey was unjustly dismissed from her employment, and awarding her compensation in lieu of reinstatement. The Adjudicator also awarded costs to Hussey.
Issues: Basically, whether the Adjudicator was bound by both judicial and arbitral precedents [17]. Additionally, the costs issue relates to the adequacy of the reasons of the Adjudicator. There are also issues related to procedural fairness and the substantive reasonableness of the Adjudicator’s choice of valuation, which I do not address here.
Holding: The FCA dismissed the appeal, finding the Adjudicator’s decision reasonable.
Analysis:
The core issue was the method used by the Adjudicator to determine compensation for non-reinstated employees [31-32]. Hussey argued that judicial precedent, including Wilson v Atomic Energy, 2016 SCC 29, rendered the Adjudicator’s choice of method—the so-called “common law approach”—unreasonable. In dealing with this issue, the Court first asked itself what Wilson decided [35]. It concluded, much like Keurig, below, that Wilson did not apply to this case: “the Court was addressing a problem that does not arise in this case…” [47]. In all, the Court was satisfied that “there is no judicial pronouncement to the effect that the common law approach is unreasonable or wrong in law” [60].
On the question of arbitral precedent, the Court reiterated the governing approach in Vavilov, which requires administrators who depart from an internal consensus to demonstrate why they did so [63]. Here, the arbitral decisions were unclear—there was no “consensus” constraining the Adjudicator or requiring justification.
Finally, on the costs decision, the Court accepts that the Adjudicator “could have better justified his award of costs” [101]. While the Adjudicator did not expressly refer to case law cited by Hussey, he did cite and apply the important principle of proportionality which is part of the context in which this decision was made [102, Vavilov, at paras 91-94]. Accordingly, there was enough here to show that the decision was reasonable.
A few points from this decision on stare decisis:
As we will see in Keurig below, the framework for stare decisis cases post-Vavilov is taking shape. With both administrative and judicial precedents, the approach is basically the same: administrators can depart from either judicial or administrative precedents if they provide a reason for doing so: Vavilov, at paras 112, 131. Courts should first determine whether the precedent is on point: does it deal with the issue in front of the court now? Courts should then determine, if the precedent does apply, whether an administrator adequately justified any departures from it. But in reality, this 2nd step may not need to be addressed in some cases where a party attempts to stretch a precedent to cover an issue currently before a court, in order to constrain the decision-maker. As here: Wilson was not applicable.
Arbitral cases may present an additional wrinkle. The Court says that “[a]rbitrators who depart from an arbitral consensus must provide the line of reasoning which brings them to do so…” [63, my emphasis]. The Court goes on to hold that there is no real arbitral consensus here constraining the decision-maker—there were “two lines” of decisions [64]. Where there is no clearly dominant line of cases, the arbitral jurisprudence cannot serve as a constraint requiring justification—this is supported by the Court’s use of the term “consensus.” I wonder if this extends to other administrative tribunals and decision-makers—if there is no consensus, does binding precedent simply not matter in this way? I still think the Vavilov approach requires a decision-maker to at least justify why it chose one line over another, but so long as it does so, a decision should not be unreasonable on the basis of administrative stare decisis.
Keurig Canada Inc v Canada (Border Services Agency), 2022 FCA 100 (June 2, 2022)
Category: Application of the reasonableness standard (administrative precedent)
Context: Keurig brings an appeal under the Customs Act against a decision of the Canadian International Trade Tribunal [CITT]. The CITT decided that Keurig’s appeal of a tariff classification should be dismissed. Specifically, the CITT decided that Keurig’s machines should be classified as “coffee-makers.” Keurig argues that they should be classified as “other electro-thermic appliances” [2].
Issue: CITT decisions are appealable to the Federal Court of Appeal on any question of law [15]. The main issue in this case is whether the Tribunal was correct in its interpretation of the tariff classification scheme [19].
Holding: The appeal should be dismissed, and the CITT’s interpretation of the machines as “coffee-makers” is correct.
Analysis: Keurig, in part relying on a technical statutory interpretation argument, claimed that the category “coffee-makers” should include machines that only make coffee [28]. The problem for Keurig was a CITT precedent on point [13, 30, see also Vavilov]. That precedent found that “even though the goods in question could be used to make a ‘variety of hot beverages…’ they were coffee makers” [30]. This interpretation might suggest that the CITT’s interpretation in this case is reasonable (Vavilov, at para 121).
Keurig’s argument demonstrates two ways for a party to “escape” an internal precedent. The party could argue, first, that the precedent is simply inapplicable because while it appears to deal with an issue relevant in a current case, it does not, perhaps because it did not deal with a specific issue at hand in the current case [32]. This was the main point raised by Keurig. Second, the party could argue that while a previous administrative decision is applicable, in that it deals with issues relevant to a current case, the previous case was wrong, or inapposite to the case at hand, and a current case has every reason to depart from it. We see these same arguments in cases where, under Vavilov, the force of judicial precedents on administrative decisions is at issue (see Hussey, above and Issue #42).
In this case, guided by a policy that departures from previous administrative precedents are “particularly undesirable” in the CITT context, the Court rejected both of these arguments [32]. Specifically, for the Court, Keurig erroneously believed that the precedent should not apply in this case. For the reasons outlined at para 32 et seq, the Court was not convinced that a narrow interpretation—leaving the classification only for exclusive coffee-makers—was justified, and a departure from previous CITT precedent was also not justified in the circumstances.
Nonetheless, the case is interesting as a way to demonstrate how purportedly persuasive administrative precedents can be challenged. It also shows how courts may be less likely in some cases to countenance departures from previous administrative precedents—in CITT cases, for example. I think courts should refrain from picking favourites in this way, though I do understand the persuasive reasons to do so in the specific case of the CITT. Consistency in administrative decision-making is a good thing no matter the context—and justification should be expected where there is a departure from internal precedent. The intensity of review should not be adjusted depending on how important, in the court’s view, consistency is in a particular context.
Canada (Attorney General) v Muller, 2022 FCA 99 (June 2, 2022)
Category: Application of the reasonableness standard (reasons, materiality)
Context: Muller, a member of the RCMP, was charged with breaches of the RCMP Code of Conduct, one of which—use of inappropriate and unlawful force—is relevant on this appeal. A “Conduct Authority” under the RCMP Act found this charge established and imposed a penalty. Muller appealed, and under the RCMP Act, the Commissioner referred the case to an External Review Committee, which concluded that the Conduct Auhority erred “in finding that the respondent had admitted to using inappropriate and unwanted force…and…by failing to apply the proper legal test for ascertaining whether the conduct was likely to bring discredit to the Force” [4]. On final appeal to a Conduct Appeal Adjudicator, the Adjudicator found the Conduct Auhtority’s decision “not clearly unreasonable” [5]. On judicial review, the Federal Court set aside the Adjudicator’s decision based on (1) the “error” that the charge was made out because Muller admitted to it; and (2) the reasons of the Review Committee adopted by the Adjudicator. The Federal Court declined to remit the matter.
Issue: Is the decision reasonable?
Holding: The Adjudicator’s decision is reasonable.
Analysis:
Materiality: The fact that the first decision-maker (Conduct Authority) concluded that Muller admitted to the misconduct was not material to the final decision [19]. This was an “erroneous statement” that did not end up affecting the Adjudicator’s ultimate decision on the merits (Muller, . I agree: this is a good example of an “error” that is not sufficiently central to warrant intervention.
Reasons: I have focused, in this newsletter, on the role of reasons post-Vavilov, highlighting how in some contexts, courts are expecting more. But I have also taken pains to point out that this higher bar is not absolute: reasons need not be long or perfect. Here, we have a situation where the Adjudicator seemed to provide reasons that assessed the misconduct in its institutional context—through the assessment of the RCMP Code of Conduct. The Federal Court, however, failed to assess the reasons through the lens of the Code of Conduct, and accordingly “parsed” the Adjudicator’s reasons according to “its view of how an officer should act and the nature of conduct that is likely to discredit the Force” [22]. This goes too far, and the FCA rightly dismissed the application for judicial review.
Thales DIS Canada Inc v Ontario, 2022 ONSC 3166 (June 1, 2022)
Categories:
Selection of the standard of review (general questions, international law)
Role of “jurisdiction”
Context: This case concerned a challenge to two decisions of the Ontario government relating to contracting for the design and production of Ontario government identity cards. The request for bids issued by the government contained provisions that required that “card stock” used for the identity cards be produced in Canada. In a complaint to a director of Supply Chain Ontario within an internal bid process not prescribed by statute (but contained in a “Procurement Directive”), Thales argued that these provisions violated the Canada-EU free trade agreement (CETA), which prevents “discrimination” by party countries to favour domestic production. The Government responded that its bid fell within the “public safety exception” contained in CETA, which permits domestic production in these circumstances if it is shown that it is necessary for public safety purposes [90-91]. The director found that the complaint was unsubstantiated. On judicial review, Thales argued that both the initial decision to request bids and the director’s decision were unreasonable.
Issues: There are a number of issues on this application, but they include: (1) Is judicial review available? (2) What are the standards of review? (3) Are the decisions reasonable?
Holding: Nishikawa J held that (1) the decisions are reviewable; (2) the standard of review on both decisions is reasonableness; (3) both decisions are unreasonable.
In a concurring opinionm Corbett J would have also quashed both decisions, but ultimately concluded that the court should not “undertake a substantive review of the decision” made by the director [158]. This is because, in Corbett J’s terms, the director lacked jurisdiction to undertake any review of the bid decision, because “Ontario’s choice to resort to an internal bid dispute process to decide a claim under CETA was a breach of CETA” [160]. On this thinking, the bid decision is unreasonable, and the director’s decision is made without jurisdiction.
Analysis: An interesting case with a lot of moving parts, including on reviewability of the initial bid process (raising questions of review of government contracting, etc). but here are a few standouts:
Thales sought declaratory relief, but under Ontario’s Judicial Review Procedure Act, that relief is only available in respect of a “statutory power of decision.” But relief in the nature of certiorari is available without the necessity of a statutory power of decision. Here, we have a somewhat unique situation where the entire decision process is not prescribed by statute. As a result, Thales’ sought-after declaratory relief is not available here.
There was some controversy over the standard of review of the director’s decision. Thales argued that Ontario’s obligations under international trade agreements constitute “question[s] of law of central importance to the legal system as a whole” [78]. While this sounds good in the abstract, the Court is quite right to follow Vavilov’s guidance on this, and treat international obligations as constraints under the reasonableness standard [83].
Justice Corbett’s concurring opinion is a broadside against the Government’s “failure to implement CETA according to its terms” [178]. For Corbett J, CETA prescribes (1) an “impartial administrative or judicial authority that is independent of the procuring entit[y]” [168]; (2) an appeal from a decision that is not taken by an impartial authority. Both of these conditions were not met by Ontario’s internal bid process, which is multi-purpose in nature and not specifically designed for CETA: see paras 171, 176.
Two issues could arise from Corbett J’s view. First, the opinion raises the spectre of the terminology of “jurisdiction.” Vavilov dispatched “jurisdictional questions” from the standard of review analysis as a distinct category inviting correctness review. But it did not purport to dispatch the concept of jurisdiction itself, whether framed as “statutory authority” or not. The opinion here shows why the concept of jurisdiction—whatever the label we use for the concept—can still be useful in distinct circumstances. Here, the CETA context is sui generis, and one could describe the Ontario bid process as lacking “jurisdiction” to make CETA determinations, according to the terms of CETA. I do not see this language as inconsistent with Vavilov. Second, one might say that ultimate judicial review in respect of the process satisfies CETA. But not so: what CETA prescribes is a interlocking set of requirements of internal appeals and availability of judicial review. Ultimate judicial review does not satisfy CETA alone [171].
Pacific Wild Alliance v British Columbia (Forests, Lands, Natural Resource Operations and Rural Development), 2022 BCSC 904 (June 1, 2022)
Category: Selection of the standard of review (regulations)
Context: The petititoner challenged, on a number of grounds, the legality of the permitting system implemented by British Columbia to protect the caribou population. One part of this system involves “wolf culling,” which involves the killing of wolves from aircraft under permits issued under the Wildlife Act and the Permit Regulation. The petitioner argued that the scheme under the Permit Regulation, which subdelegates power from the Lieutenant Governor in Council to regional managers [80], improperly does so.
Issue: While there are a number of issues in this case, the main one for my purposes is the standard of review applied to the petitioner’s vires challenge to the Permit Regulation.
Holding: The standard of review is reasonableness: “In other words, the vires of s.3.1 of the Permit Regulation is to be determined by an assessment of whether the decision of Cabinet to enact s.3.1 was a reasonable interpretation of its statutory authority to make regulations…” [76].
Analysis: The previously-dominant approach to judicial review of regulations is contained in Katz Group Canada v Ontario, 2013 SCC 64. Katz was extremely hands-off (Katz, at para 24-28). That said, the Court here describes the dominant approach to standard of review in this area as “correctness” and does not cite Katz (see para 72), the other authorities cited by the Court cite Katz (see para 71, for example). At any rate, no matter these nuances, there was a distinct approach to the review of regulations.
However, in my view, the Court rightly ends up concluding that questions related to the vires of regulations have now been assimilated to the Vavilov framework (see paras 68-75). While the Court acknowledged that “[t]he authorities since Vavilov have not been entirely consistent as to whether Vavilov altered the standard of review when determining the vires of a regulation,” it ultimately followed BCCA authority suggesting that the Vavilov framework applied (though in the context of a municipal bylaw): see Whistler, 2020 BCCA 101; New Westminster (City), 2021 BCCA 176.
Though some courts have said otherwise (see Hudson’s Bay Company ULC v Ontario (Attorney General), 2020 ONSC 8046, at paras 37-39; Ecology Action Centre v Canada (Environment and Climate Change), 2021 FC 1367), I am more convinced than ever that Vavilov applies here. I continue to think that the excellent decision in Portnov v Canada (Attorney General), 2021 FCA 171 tells us why. Among other things, Vavilov purported to be a comprehensive approach to the review of regulations (Portnov, at para 25). It contains a contextual approach to reasonableness review (Portnov, at para 27). The standalone approach adopted in Katz, then, should be eclipsed, because it counsels a strongly-deferential, categorical approach to regulatory review. Instead, regulations should be reviewed based on Vavilov’s constraints, like any other delegated power. These constraints may not always counsel the strong deference envisioned in Katz.
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.
“I am fond of pigs. Dogs look up to us. Cats look down on us. Pigs treat us as equals.”
― Winston S. Churchill