Supreme Court of Canada sets out New Framework in Assessing Standard of Review of Administrative Decisions

December 19, 2019

What is the “standard of review”?

In considering a challenge to the decision of an arbitrator, tribunal or other administrative body, whether by appeal or judicial review, this is always a fundamental question. Yet, finding the right answer has remained one of the most confusing legal questions out there. This has resulted in seemingly inconsistent decisions and loads of time spent by lawyers and courts on argument over the standard on which an issue will be reviewed instead of the issue itself.

The reason that standard of review is so important is that it effectively defines how willing a reviewing court is going to be to overturn the decision being challenged.

In an effort to clarify how to determine the appropriate standard of review, the Supreme Court of Canada (SCC) has recalibrated the law at several points. However, for the last ten years, the leading framework has been the one set out by the SCC in Dunsmuir v. New Brunswick (Dunsmuir). In that case, the SCC decided that there are only two possible standards of review: “correctness” or “reasonableness”. Where correctness applies, the reviewing court is permitted to overturn a decision it disagrees with. Where reasonableness applies, the reviewing court must generally defer to the administrative body unless the decision was not within a range of reasonable outcomes. In short, it is much more difficult to succeed on judicial review or appeal if reasonableness is applied.

Dunsmuir also set out a number of factors that should be considered to make a contextual determination as to whether or not reasonableness or correctness should apply to a particular issue. That being said, parties arguing for correctness in recent years have routinely found themselves on the losing end. Indeed, as administrative bodies have played an increasing role in determining parties’ rights in various contexts, courts have shown increasing reluctance to review an administrative body’s decision on the standard of correctness and have instead seemingly preferred to show deference by applying the standard of reasonableness.

In the process, it has been increasingly difficult to determine when exactly correctness may apply. For instance, while the SCC has said that the standard of correctness will apply to “true questions of jurisdiction”, no one in the last decade seems able to agree on what that means or how such issues should be treated.

In light of this climate, the Canadian legal community has long been anticipating the SCC’s decisions in Vavilov, Bell Canada, and National Football League, which promised to revisit the standard of review framework and become the new leading law on the issue.

Well, this morning (December 19, 2019), the legal community got their holiday wish as the SCC released its decisions and, in particular, released the decision in Minister of Citizenship and Immigration v Vavliov (“Vavilov”), wherein the majority of the SCC set out a new framework for determining the standard of review of an administrative decision.

In short, here is the new framework for the administrative legal world to behold and follow going forward:

  1. There is a presumption that an administrative decision will be reviewed on the standard of reasonableness.
  2. The “reasonableness” presumption can be rebutted in two circumstances:

a. The applicable legislation demonstrates an intention that a particular standard of review is to apply; or
b. The rule of law requires the standard of correctness to apply, meaning the issue raises a:

i. Constitutional question;
ii. Question of law that is of central importance to the legal system; or
iii. Question related to the jurisdictional boundaries between two or more administrative bodies (i.e. which administrative body should decide the issue)

A few bombshells are immediately apparent from this decision. First, under the prior framework, the contextual analysis that looked to the expertise of a particular tribunal had become a key part to determining the appropriate standard of review. The more a question before an administrative body fell within the core of its expertise, the more inclined a court was defer to its decision. Now, the expertise of the tribunal is irrelevant to this analysis. So, regardless of the nature of a particular issue before the administrative body, it is presumed that the decision maker has the mandate to interpret and apply the law with minimal judicial interference.

Second, legislation that provides for an appeal of an administrative body’s decision, whether as a right or by leave, is a signal that the legislature did not intend reasonableness to apply. Instead, the SCC held that an appeal of an administrative body’s decision must follow the same analysis as appeals of court decisions, meaning that:

  1. Questions of law are reviewed on a standard of “correctness”; and
  2. Questions of fact or mixed fact and law are reviewed on a standard of “palpable and overriding error”.

This is a potential game changer for those dealing in contexts where a statutory appeal is provided for, as previously questions of law on those appeals have almost invariably been reviewed on the standard of reasonableness.

Third, the SCC has once and for all killed the concept of “true questions of jurisdiction”. True questions of jurisdiction will no longer be a recognized basis for correctness to apply, unless the jurisdictional issue is determining the boundaries as between two or more administrative bodies.

The SCC’s decision in Vavilov also goes on to provide refined guidance to what a “reasonableness” review of a decision should involve. To this end, an important takeaway is that a reasonableness review looks at both the outcome of the administrative body’s decision, as well as the decision-making process.

That said, in a certain sense, proper application of the reasonableness standard has not changed. Courts will still look for whether a decision is “transparent, intelligible and justified”. The reasons offered by the administrative body remain the focal point of the court’s analysis, and where reasons are not required, reasonableness can be determined from the record and context of the decision. The SCC explained that a decision will be unreasonable if a court is unable to follow the logic of the decision-maker.

However, the SCC provided guidance on another basis for which a decision will be found unreasonable: if it is “untenable in light of the relevant factual and legal constraints that bear on it.” Important constraints noted by the SCC are:

  1. The governing statutory scheme. The SCC described this as the “most salient” aspect of the legal context. In a sense, a court will ask whether the administrative body acted in accordance with its mandate. General principles of statutory interpretation are important here.
  2. The evidentiary record. Decisions must be supported by the “factual matrix”.
  3. Consistency with prior decisions. Administrative decision-makers are not bound by past practices, but consistency is preferred and justification must be provided when departing from established precedent.
  4. Impact on an individual. Where a decision has the potential to have a significant impact on an individual, administrative bodies are expected to take that into account and ensure that their reasons demonstrate that they have considered the consequences of such a decision.

While the Valivov decision is fresh and the framework set out therein remains to be tested in future practice, our immediate take away is that this new framework offers a simplified route to addressing the standard of review, and has potential to significantly change how statutory appeals of administrative body decisions are handled going forward.

Naturally, the above summary is only a high level review of a very important 200+ page decision of the SCC. If you would like further advice on how this decision may impact on a potential administrative decision affecting you or your business, our team would be happy to discuss further.

Cox & Palmer publications are intended to provide information of a general nature only and not legal advice. The information presented is current to the date of publication and may be subject to change following the publication date.