Standard of Review: Merits or Not

Canadian administrative lawyers worry a lot about the standard of review. In many cases there is significant disagreement over whether the reasonableness standard or correctness standard should be applied. Occasionally, weary voices suggest that all this haggling over the standard of review is an unnecessary distraction from the merits of cases.

Standard of Review: Plus Ça Change?

In my recently published article, "The Unfortunate Triumph of Form over Substance in Canadian Administrative Law", I argued that Dunsmuir did not make administrative law any simpler.

It is always gratifying to be proved right, so it is with (gloating!) pleasure that I note the decision in Manitoba v. Russell Inns Ltd. et al., 2013 MBCA 46. As Beard J.A. noted, determining the appropriate standard of review is no easy task. Assigning a decision to one of the post-Dunsmuir categories is not self-evident. As she put it:

38               There is a significant amount of academic commentary accumulating that questions whether this revised procedure has simplified the determination of standards of review or merely substituted one complex system for another.

Courts and Copyright: Some Thoughts on Standard of Review

My essay on the Supreme Court of Canada's copyright pentalogy will be published around Easter in a volume edited by Michael Geist, the working title of which is The Copyright Pentalogy: How the Supreme Court of Canada Shook the Foundations of Canadian Copyright Law (see page 18 here).

You can download my paper here. Here is the abstract:

In June 2012, the Supreme Court of Canada decided five important copyright cases.

In doing so, it also introduced an innovation to the law of judicial review. In Rogers Communications Inc. v. Society of Composers, Authors and Music Publishers of Canada, a majority of the Court held that, even though the Copyright Board was interpreting its own statute (typically, a situation in which deference is appropriate), no deference would be paid to its interpretation of the scope of copyright.

For the majority, Justice Rothstein explained that the Copyright Board and the Federal Court of Canada have concurrent jurisdiction to deal with issues of copyright law. As the Copyright Board does not operate in a "discrete and specialized" administrative regime, deference to its decisions on matters of interpretation would be inappropriate. I argue that the new "shared jurisdiction" exception will lead to confusion. Clever counsel will doubtless try to stretch the Court's logic to other areas, such as competition and securities regulation. I further suggest that it was unnecessary to develop this exception, because the Court already possesses the doctrinal means of addressing the problems by which it was concerned.

My primary focus is thus relatively narrow, confined to technical questions of administrative law. However, I adopt a broader lens towards the end of this paper and suggest that Canadian courts ought to be more willing to accord deference to the decisions of the Copyright Board. Courts do not, in short, have the copyright on wisdom about intellectual property law.

I then conclude with some thoughts on the application of the general principles of administrative law in one of the other cases in the pentalogy, Alberta (Education) v. Canadian Copyright Licensing Agency (Access Copyright). The serious disagreement between the majority and minority judges in that case casts light on an important issue in administrative law, the characterization of administrative decisions 

My original post from last year, in which I developed the arguments in the paper for the first time, is here.

Not to say I told you so

But, I told you so. In my piece on the Supreme Court of Canada's copyright pentalogy (to appear next year in Michael Geist's edited collection), I predicted that the concurrent jurisdiction innovation would cause confusion.

Sure enough, counsel for the losing party in Pastore v. Aviva Canada Inc., 2012 ONCA 887 made an application for the Ontario Court of Appeal to re-open the case, on the basis that account had not been taken of the concurrent jurisdiction innovation (which appeared after the close of argument in Pastore and before the release of the ONCA's reasons).

A Theoretical Book but a Practical Approach

Over the next couple of weeks, I am going to blog occasionally about my new book, A Theory of Deference in Administrative Law:Basis, Application and Scope. For my first post, I thought I would start with something that does not really appear in the book at all: a brief overview of the approach I urge. Despite the daunting title, what I actually propose is, in my view, quite simple. I have drawn on Canadian cases to provide examples, solely because they feature in an article I am currently revising, which will shortly appear in the McGill Law Journal; I hope to post it on SSRN by the end of this week. In principle, this approach is applicable in any common law jurisdiction where there is judicial review of administrative action.

Process and Substance: What Happens when the Decision-Maker Doesn't Listen?

Another example from the Canadian courts of the thin line separating process from substance: Turner v. Canada (Attorney General), 2012 FCA 159. On this occasion, the determination that a question went to process is again plausible at first sight but troubling on closer inspection.

Unequal Treatment of Local Government Taxpayers in North America

The highest courts of both the United States and Canada have both recently pronounced on claims relating to the unfairness of local government taxation systems. Before the Supreme Court of Canada, the argument went to the substantive reasonableness of the municipal by-law at issue. Further south, the Supreme Court of the United States was asked to find a violation of the equal protection clause of the 14^th Amendment to the U.S. Constitution. Doctrinally, the cases are distinct, but the striking similarity of the issues engaged and the results reached makes for an interesting comparison.

La cohérence décisionnelle en droit administratif

Je pensais de garder cette décision jusqu’au retour en classe des étudiants du préscolaire à la fin de l’été, mais finalement j’ai conclu que les principes découlant de ladite décision sont trop intéressants pour les cacher plus longtemps. La Cour d’appel y explique très clairement les principes de la révision judiciaire au Québec.

Reasons and Reasonableness in Administrative Law

In describing the deferential standard of review of reasonableness in Dunsmuir v. New Brunswick, the Supreme Court of Canada was very eloquent. Where a standard of review of correctness is appropriate, the reviewing court substitutes its judgment for that of the initial decision-maker. But where deference is owed,

A court conducting a review for reasonableness inquires into the qualities that make a decision reasonable, referring both to the process of articulating the reasons and to outcomes.  In judicial review, reasonableness is concerned mostly with the existence of justification, transparency and intelligibility within the decision-making process.  But it is also concerned with whether the decision falls within a range of possible, acceptable outcomes which are defensible in respect of the facts and law.

For more on Canadian judicial review doctrine, see my paper here.

One of the questions left unanswered by Dunsmuir was how this standard of reasonableness coheres with the duty to give reasons. This question is an important one, because the duty to give reasons has traditionally been treated as a matter of procedural fairness. When a right to procedural fairness is engaged, the standard of review is correctness: it is the reviewing court that decides whether the applicant has been treated in a procedurally fair manner.

Now, the distinction between procedure and substance is a tricky one (see my earlier post here) and here it gives rise to a problem. Assuming that the standard of review of the substance of a decision should be reasonableness, clever counsel could undermine deference by claiming that the reasons were insufficient. Adequacy of reasons, remember, attracts a standard of correctness and substitution of judgment. The idea would be to have the reviewing court substitute its judgment for that of the decision-maker in deciding whether the reasons given were adequate to explain the decision under review. An end-run around the standard of reasonableness could be accomplished by manipulating the distinction between procedure and substance.

Such sleight of hand is no longer possible after the Supreme Court of Canada’s decision in Newfoundland andLabrador Nurses’ Union v. Newfoundland and Labrador (Treasury Board). Justice Abella noted with approval the warning of Professor Bryden: “courts must be careful not to confuse a finding that a tribunal’s reasoning process is inadequately revealed with disagreement over the conclusions reached by the tribunal on the evidence before it” (para. 21). She went on to explain that the better reading of Dunsmuir is that the adequacy or inadequacy of reasons goes only to whether the decision is reasonable, not to procedural fairness:

[14]    Read as a whole, I do not see Dunsmuir as standing for the proposition that the “adequacy” of reasons is a stand-alone basis for quashing a decision, or as advocating that a reviewing court undertake two discrete analyses — one for the reasons and a separate one for the result.  It is a more organic exercise — the reasons must be read together with the outcome and serve the purpose of showing whether the result falls within a range of possible outcomes.  This, it seems to me, is what the Court was saying in Dunsmuir when it told reviewing courts to look at “the qualities that make a decision reasonable, referring both to the process of articulating the reasons and to outcomes”.

Where no reasons at all have been offered in support of a decision, the failure to give reasons may be a breach of procedural fairness: “Where there are no reasons in circumstances where they are required, there is nothing to review” (para. 22). Beyond that, what matters is the reasonableness of the decision, determined in part by the adequacy of the reasons given for it.

As chance would have it, my current recreational reading is Amartya Sen’s The Idea of Justice. In explaining why the conventional economic view of rational choice is inadequate, Professor Sen comments in terms eerily reminiscent of the language used in Dunsmuir and Newfoundland Nurses:

Having reason to do something is not just a matter of an unscrutinized conviction – a strong ‘gut feeling’ – that we have ‘excellent grounds’ for doing what we choose to do. Rather, it demands that we investigate the reasons underlying the choice and consider whether the alleged reasons survive searching and critical examination, which one can undertake if and when the importance of such self-scrutiny is understood. The grounds of choice have to survive investigation based on close reasoning (with adequate reflections and, when necessary, dialogue with others), taking note of more information if and when it is relevant and accessible (p. 180).

That is not the only area of overlap between Professor Sen and the Supreme Court. In some areas of decision-making, such as labour relations, only laconic reasons need be given to parties well-versed in the intricacies of the relevant relationships and legal provisions. Taking Justice Abella’s view of the relationship between reasons and reasonableness, sparseness in explanation is not problematic. Thus it is interesting to note that Professor Sen continues: “When the reasons for a particular choice are established in our mind through experience or habit formation, we may often choose reasonably enough without sweating over the rationality of every decision” (p. 181).

Clearly, great minds think alike!

Unanswered Questions post-Dunsmuir

In a recent decision, Justice Stratas of the Federal Court of Appeal raised a host of questions about the applicability of the Supreme Court of Canada's re-shaping of judicial review doctrine to decisions taken by discretionary decision-makers:

[19]           I am inclined to find that the Director is subject to this “normal” or “usual” position of deference to his decision-making. But there exists considerable uncertainty on this, arising from Dunsmuir itself, previous case law, and the unusual circumstances of this case:

(a)        We are dealing with a Ministerial delegate, not a “tribunal” in any formal sense. In Dunsmuir the Supreme Court used the word “tribunal” on this point. In my view, although it is not perfectly clear, in Dunsmuir the Supreme Court did not intend to restrict this position of deference to interpretations by formal tribunals. Throughout its discussion of the standard of review, the Supreme Court used the terms “tribunal,” “decision maker,” “exercises of public authority,” “administrative bodies,” “adjudicative tribunal,” “adjudicative bodies,” “administrative tribunal,” and “administrative actors”: Dunsmuir, supra at paragraphs 28-29, 31, 33, 41, 47-50, 52, 54-56, and 59. It seems to have used the terms interchangeably and, collectively, they are wide enough to embrace a Ministerial delegate such as the Director.

(b)        In a relatively recent decision, albeit before Dunsmuir, the Supreme Court did not defer to the interpretation of a Ministerial delegate who was interpreting a statute closely related to his function: Hilewitz v. Canada (Minister of Citizenship and Immigration); De Jong v. Canada (Minister of Citizenship and Immigration), 2005 SCC 57 (CanLII), 2005 SCC 57, [2005] 2 S.C.R. 706, (a visa officer making an assessment under subparagraph 19(1)(a)(ii) of the Immigration Act, R.S.C. 1985, c. I‑2); see also Canada (Minister of Citizenship and Immigration) v. Patel, 2011 FCA 187 (CanLII), 2011 FCA 187 and cases cited at paragraph 27 of Patel. This is certainly consistent with how we today approach decisions involving some other Ministerial delegates. For example, in the income tax context, income tax assessors – Ministerial delegates – are very familiar with the Income Tax Act. One might think that the normal administrative law standard of review analysis would apply to appeals of these administrators, with deference to their legal interpretations being the result: see, e.g., Canada (Director of Investigation and Research) v. Southam Inc., 1997 CanLII 385 (SCC), [1997] 1 S.C.R. 748 and Dunsmuir, supra at paragraph 54. But it does not. The Tax Court of Canada, sitting in appeal on income tax assessments, and this Court do not defer at all to the statutory interpretations of the Minister’s delegate.

(c)        The Supreme Court spoke in Dunsmuir of deference to interpretations of certain types of “statutes.” Did it mean to restrict this principle to “statutes”? There would appear to be no principled basis to do so. Deference probably also applies to interpretations of other types of laws, such as the Order in Council in this case.

(d)        The Director’s title seems to suggest that he administers programs such as this, and so he could be considered to be interpreting what Dunsmuir described as a law “closely connected with [his] function,” warranting our deference. But there is no evidence in the record on this one way or the other, nor would one expect there to be such evidence given the narrow nature of a record on judicial review.

(e)        The position of deference for administrative interpretations of statutes is said in Dunsmuir to apply only “usually” or “normally.” Does this qualification refer to the situations mentioned in Dunsmuir where the correctness standard applies? Perhaps not, as these situations largely do not involve issues of statutory interpretation. Does this qualification refer to some as yet unidentified situations? We simply do not know.

(f)         In this particular case, as we shall see, the Director did not engage in any actual interpretation of the Order in Council. Rather, he simply interpreted and applied an administrative policy made under that Order in Council. Does this mean that the Director’s decision is subject to correctness review? I am not so sure. There are statements in Dunsmuir that suggest that the Director’s failure to interpret the Order in Council may not matter. In two places in Dunsmuir, the Supreme Court suggests that in assessing the substance of decision-making under the reasonableness standard we are to examine the outcome reached by the decision-maker and not necessarily the plausibility of the reasons actually given. At paragraph 47, we are directed to ask ourselves “whether the decision falls within a range of possible, acceptable outcomes which are defensible in respect of the facts and law” and at paragraph 48 we are told that an administrative decision can be supported on the basis of reasons that “could [have] be[en] offered” [emphasis added].

(g)        I am not alone in my doubts on this issue. Recently, this Court discussed Dunsmuir and the standard of review that should apply to the Governor in Council’s interpretation of a statute. It found the law in this area to be unclear: Global Wireless Management Corp. v. Public Mobile Inc., 2011 FCA 194 (CanLII), 2011 FCA 194 at paragraph 35.

But the Court does not seem to be interested in resolving these questions. Leave to appeal was refused in that case, the Minister of Fisheries and Oceans has not appealed the decision that his interpretation of the Species at Risk Act was not entitled to deference, and now the Court has refused leave to appeal in the Globalive case.

Perhaps the Court has had enough of administrative law for a while.

Separate Silos

One of the reasons offered by the concurring judges in Multani for merging administrative review and constitutional review (at least when an individualized decision was challenged) was that keeping them separate and distinct would be confusing to lower courts and litigants. That view never seemed particularly compelling to me: lawyers and judges often make and are faced with arguments that overlap and complement one another.

Interestingly, in Pridgen v. University of Calgary, where students punished for making nasty comments about a professor on a Facebook group successfully sought the quashing of the disciplinary measures against them, two of the judges on the Alberta Court of Appeal expressly avoided dealing with an argument based on the Charter, preferring instead to resolve the case on administrative law grounds. Even Madam Justice Paperny, who dealt with the Charter issue (the tricky part being whether it applies at all to universities), addressed the administrative law argument separately, agreeing that the disciplinary decision was unreasonable.

Her judgment is also notable for its treatment of the reliance by the decision-maker on hearsay evidence. She correctly noted that administrative decision-makers have more leeway than courts in permitting the introduction of hearsay, but that this leeway was exceeded in the present case:

[59]           It is generally open to administrative tribunals to admit hearsay evidence. But the relaxation of the rules of evidence does not relieve an administrative decision‑maker of the responsibility to assess the quality of the evidence received in a reasonable manner in order to determine whether it can support the decision being made. And in a subsequent judicial review, the reviewing court must consider whether the decision is “one of a range of possible outcomes”, based on the evidence that was received and assessed by the decision‑maker. It is not an error for a reviewing judge to consider the quality of the evidence and the manner in which it was assessed in conducting that analysis.

[60]           The evidence on which the University relies is not merely hearsay, it is double or triple hearsay of an extremely vague nature from an unnamed source or sources. It is simply not reasonable to conclude that “injury” within the meaning of the Student Misconduct Policy has been established on the basis of the information provided to the Review Committee, and the chambers judge committed no error in reaching that conclusion.

Thus in response to the students' argument that the decision did not conform to the University's own guidelines, the University was unable to demonstrate that its reasoning was cogent or that sufficient evidence existed in support of its decision, and its decision was unreasonable.

When Reasonable Minds Differ

Some philosophical reflections, courtesy of Justice Martineau:

[92]           The legal explanation for allowing two [differing] interpretations of the law, if reasonable, to stand is simply that courts must respect the legislator’s intention that such types of administrative decisions, which are protected by a privative clause, be not reviewed unless the tribunal has acted without or beyond its jurisdiction. This may sound strange to persons who are not familiar with judicial review and its subtleties, and I find it worthwhile to quote what late professor Chaïm Perelman (1912-1984) was writing in a text entitled “What the philosopher may learn from the study of law”, reproduced in annex to his work Justice, published in 1967 (Random House, New York) at page 94:

The diversity of laws is proof of our ignorance of true justice. That which conforms to reason cannot be just here and unjust there, just today and unjust tomorrow, just for one and unjust for another. That which is just in reason should, like that which is true, be so universally. Disagreement is a sign of imperfection, of a lack of rationality.

If two interpretations of the same text are reasonably possible, it is because the law is ambiguous, therefore imperfect. If the law is clear, then at least one of the two interpreters disputes in bad faith. In any case, disagreement is a scandal, due either to the imperfection of the legislator or to the deceptive subtlety of the lawyers. The innate sense of justice, which each equitable judge certainly possesses, should permit the rapid reestablishment of correct order.

[93]           That said, professor Perelman goes on at page 96 to provide a philosophical answer to such apparent injustice or human imperfection by telling this short anecdote:

The Jewish tradition, which never sought to conceive law on a scientific model, offers a significant story in this connection. In the Talmud two schools of biblical interpretation are in constant opposition, the school of Hillel and that of Shammai. Rabbi Abba relates that, bothered by these contradictory interpretations of the sacred texts, Rabbi Samuel addresses himself to heaven in order to know who speaks the truth. A voice from above answers him that these two theses both expressed the word of the Living God. The lesson of this story is clear: Two opposing interpretations can be equally respectable, and it is not necessary to condemn as unreasonable at least one of the interpreters.

In fact, we admit that two reasonable and honest men can disagree on a determined question and thus judge differently. The situation is even considered so normal, both in legislative assemblies and in tribunals that have several judges, that decisions made unanimously are esteemed exceptional; and it is normal, moreover, to provide for procedures permitting the reaching of a decision even when opposing opinions persist.

As a supporter of deference and interpretive pluralism it is nice to see such weighty authority. From my lips to God's ears, I might even mutter...