Issue #70: December 11, 2022
Standard of review for regulations (again!), disclosure, procedural fairness.
Innovative Medicines Canada v Canada (Attorney General), 2022 FCA 210 (December 5, 2022)
Category: Selection of standard of review (regulations)
Context: The appellants challenged parts of a regulation amending the Patented Medicines Regulations as ultra vires.
Issue: What is the standard of review?
Holding: The standard of review is reasonableness. The Governor in Council’s decision to make the regulation was reasonable. Woods JA concurred in the result, but declined to express a view on certain paragraphs of the majority opinion offering further explanation for why Vavilov should be the starting point for judicial review of regulations. Nonetheless, she acknowledges that the Court is bound by Portnov v Canada (Attorney General), 2021 FCA 171 (Issue #7), which makes many of the same points as the majority judgment.
Analysis: In majority reasons authored by Stratas JA and joined by Locke JA, the Federal Court of Appeal responds to the Alberta Court of Appeal’s recent cases holding that the Katz test, and not Vavilov, applies to judicial review of regulations for reasons related to the separation of powers. I addressed these cases in Issue #68. As the Court here tells us, '‘[t]his matters” [30]. The Katz test is “hyperdeferential” [30, citing Paul Daly] and a special carveout from reasonableness review for regulation-making. There are regulations that could survive Katz that would not necessarily survive Vavilov [41].
The Court here recounts some of the reasons for preferring Vavilov, following its decision in Portnov:
(1) “Vavilov tells us…to look first to it for the methodology we should follow. It also tells us that earlier cases, like Katz, remain good law only if they are consistent with it…” [32]. This point, the Court says, has been only reinforced by the Supreme Court’s recent decision in Law Society of Saskatchewan v Abrametz, 2022 SCC 29 (Issue #48), where the Supreme Court applied Vavilov’s holding on rights of appeal to an issue of procedural fairness.
(2) On the substance, the Court says that regulations are just like any other type of administrative action. The Court explains that in developing administrative law methodology, “too often we have fastened onto differences in form. We have developed different rules for matters that, in their real essence and true nature, are substantially the same. The result? Unnecessary complexity, confusion and incoherence” [35]. These distinctions in form, endorsed by the ABCA, are “now thoroughly discredited” [37]. As readers will know, I agree with this point wholeheartedly.
The Court goes on to apply reasonableness review. It notes that, in so doing, Vavilov instructs that a key factor in the review of regulations is “limiting statutory language” on which Vavilov focuses, rather than "the nature of the instrument being enacted” and the “maker of the instrument” [40]. The Court looks to the record—the Regulatory Impact Analysis—to explain why the Governor in Council adopted the regulation [48].
Some other aspects of the decision bear mentioning. The Court, in dealing with an argument that the Governor in Council’s decision was motivated by an “improper purpose” beyond federal powers, puts little weight on evidence of legislative history [51, 55]. This follows recent opinions of the Supreme Court of Canada [61]. And here, the Court offers an additional reason for granting little weight to such evidence: “…statements by persons other than the administrative decision-maker, by themselves, say little about the purposes behind the decision, unless there is some persuasive tie to the decision-maker” [61]. This last point, in my view, is important and valuable.
Normko Resources Inc v Alberta (Minister of Environment and Parks), 2022 ABCA 368 (November 30, 2022)
Category: Preliminary issue (admission of evidence).
Context: After a ministerial order assessing a penalty against the respondents, as lessees on public land, the respondents challenged the decision on judicial review. At issue is whether a briefing note from the Appeal Board, issued after a hearing, making recommendations to the Minister, should be disclosed. The Minister argued that the briefing note was protected by public interest privilege or immunity, in the interest of “candor and frankness in ministerial advice to enhance the quality of public decision-making” [6].
Issue: Did the chambers judge correctly decide that the briefing note should be disclosed?
Holding: Yes.
Analysis: The briefing note was producible here because the recommendation provided to the Minister by the Appeal Board was the basis of a decision made in the Minister’s “adjudicative capacity” [9]. Here, this recommendation is not political or legal advice, nor protected by Crown immunities. The statute here establishes the Appeal Board as an “impartial tribunal” to formulate recommendations for the Minister, who has a power of decision [7]. As such, the respondents are entitled to the document, since it forms the basis for the decision: Vavilov, at paras 99-100.
Esfahani v Samimi, 2022 ABKB 795 (December 5, 2022)
Category: Selection of standard of review (arbitral appeals)
Context: In this case, Samimi appeals to set aside an arbitrator’s matrimonial property award under s.44(1) of the Arbitration Act. That provision says “that if the arbitration agreement so provides, a party may appeal an award to the court on a question of law, on a question of fact or on a question of mixed fact and law” [26].
Issue: What is the standard of review?
Holding: The appellate standards of review apply in this case [85].
Analysis: The question of the standard of review for arbitral appeals has been in controversy post-Vavilov: see e.g. Issue #18, Issue#66. Among other things, the question is whether Vavilov’s statements about rights of appeal—in other words, that the presence of a right of appeeal attracts the appellate standard as a matter of consistent expression—applies to arbitral appeals. The question is complicated because the Supreme Court in Sattva Capital Corp v Creston Moly Corp, 2014 SCC 53 decided that the reasonableness standard applies in cases of commercial arbitration.
The Court here decides that Vavilov overtakes Sattva, for a number of reasons. For one, the Court is not convinced that Sattva even applies in Alberta, considering that it was limited to the British Columbia statute at issue in that case, concerning commercial arbitration [66]. Regarding Vavilov specifically, the Court says that it “cannot ignore the strong statements in Vavilov about the legislative intent associated with the Legislature’s choice in the Act to create a statutory appeal and the presumption of consistent expression…” [77]. The text, context, and legislative history of the Alberta statute in this case supported this assertion. And the Court also accepts that the application of the appellate standards does not undermine, and is in fact consistent with, the core principle of party autonomy animating the Alberta arbitration scheme [82]. The Court cites an article, written by James Plotkin and I, which made this argument [70]. I also agree completely with a point the Court makes, at para 81: the appellate standard of review may provide more certainty for parties—a key principle of arbitration schemes—than the “evolving and changing administrative law standard of review framework” [81].
Ford v University of Ottawa, 2022 ONSC 6828 (December 7, 2022)
Category: Application of the reasonableness standard; procedural fairness
Context: Ford sought judicial review of a decision of the University of Ottawa’s Senate Appeals Committee. The Committee upheld two prior decisions by the School of Nursing to fail Ford on his final clinical placement practicum.
Issue: Is the decision reasonable? Was it reached in a procedurally fair manner?
Holding: The decision is unreasonable, and Ford was denied procedural fairness.
Analysis: The Court concludes that the Appeals Committee decision was unreasonable because of a failure of justification [59]. The original reasons for decision offered by the university at the time of the decision “provided no rationale at all for its decision” [60] and it was only on judicial review that the minutes of the Appeal Committee were shared. Of course, these reasons should have been disclosed at the time of the decision as a matter of procedural fairness [61]. But more fundamentally, this isn’t a case like Zeifmans LLP v Canada, 2022 FCA 160, where the record was clear about the rationale for the decision in light of sparse reasons (see Issue #60). Here, the minutes failed to demonstrate how the Appeals Committee arrived at its decision [62]. In such cases, and in my reading of the law, such decisions should be unreasonable.
The Court ultimately concludes that procedural defects in the process leading up to the Appeals Committee hearing were not cured by that hearing. The Court notes that a procedural defect can be cured “[w]here a hearing before an appellate or reviewing body amounts to a hearing de novo…” [90]. But no such curing could occur here: the errors leading up to the Appeals Committee hearing were “serious”; the Appeals Committeeprocedure “was not a full reconsideration” and instead was only a “perfunctory appearance” [91]. In my view, the Court rightly concludes that the procedural defects in this case could not be cured.
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.