Energy Regulatory Forum May 19,2010 McDougall Centre (Pekisko Room) - 2: 15 to 3:15 Calgary TIPS ON AVOIDING SUCCESSFUL JUDICIAL REVIEW I The Honourable Neil C. Wittmann Chief Justice, Court of Queen's Bench of Alberta and David Phillip Jones, Q.c. de Villars Jones A. What you need to know about the modern approach to the Standard of Review The most revealing mistake counsel make is when they address the Court on standards of judicial review. For example, some counsel pre-empt the judge as to the degree of a court's deference. They will assert that "this is a question of law, so the court will apply the correctness standard." Very few cases actually fall into the correctness basket. In order to avoid judicial review, decision-makers and counsel need to know why and how their decisions will be reviewed. I. Basic Overview: The cases Dunsmuir 2 and Khosa 3 make up the seminal jurisprudence on the standard of review of administrative decisions. One wit has said that after Khosa: "Hel1 should freeze over before the courts interfere with a tribunal decision." That's not quite true. Courts undertake to review tribunals' decisions to ensure the legality, the reasonableness and the fairness of the administrative process and its outcomes: Dunsmuir, at para. 28. Also, courts have a constitutional duty to ensure that public authorities do not overreach their lawful powers: at para. 29. I This paper was prepared with the assistance of Michelle Somers, Executive Legal Officer at the Alberta Court ofqueen's Bench., ~ 2008 sec 9, [2008] 1 S.c. R. 190. 3 2009 sec 12, [2009] 1 S.C.R. 339.
(1) Standard of Review Dunsmuir: two standards of review: correctness and reasonableness. Functional and pragmatic analysis tossed out. 2 N.B. Binnie J., agreed with the majority in the result, but distanced himself from the view that the new analysis did away with the old functional and pragmatic analysis (quoting Shakespeare: "a rose by any other name...", at para. 121). He said Dunsmuir has merely shifted the problem from one existing between patent unreasonableness and reasonableness to one existing within reasonableness itself. This has been borne out by some of the subsequent jurisprudence: e.g., United Nurses ofalberta, Local 301 v. Capital Health Authority, 2009 ABCA 202; Communications, Energy and Paperworkers I Union, Local 1520 v. Maritime Paper Products Ltd., 2009 NSCA 60 (chambers judge applied correctness standard "dressed up in reasonableness'clothing"). Also, the patently unreasonable standard still fonns part of some legislation, e.g. British Columbia's Administrative Tribunals Act and Ontario's Human Rights Code. He also differed from the majority view on deference to the tribunal when it makes conclusions on questions of law. The majority's statement -- that the court's view will prevail when the issue is one of general law of central importance to the legal system as a whole and outside the adjudicator's expertise -- is too broad. Rather, the court should say categorically it will not apply deference to an administrator's conclusion of law outside their home statute. Otherwise, one gets caught up on debate of whether or not a question of law is one "of central importance to legal system as a whole." [para. 128] A year after Dunsmuir, Justice Binnie wrote for the majority in Khosa. (2) How courts detennine the standard of review: Khosa: Two steps (para. 53): i) When choosing between correctness and reasonableness, existing jurisprudence is helpful. ii) When jurisprudence not conclusive, court will look at presence or absence of privative clause, purpose of tribunal detennined by enabling legislation, nature of question at issue, and expertise of tribunal in dealing with issue. ~ Deference means court will not re-weigh the evidence or substitute its own solution, but rather must detennine if the outcome falls within a range of reasonable outcomes: [Khosa, para. 59]. As long as a tribunal's decision-making process and outcome fit comfortably with the
principles ofjustification, transparency and intelligibility, court will not substitute its own view [Khosa, para. 59, citing Dunsmuir]. (3) Automatic Correctness Review a) Statute In 2003, the Supreme Court ruled that, apart from statutory prohibitions, agencies are obliged to adjudicate on constitutional questions that arise in the course of proceedings before them, including Charter issues: Nova Scotia (Workers' Compensation Board) v. Martin; Nova Scotia (Workers' Compensation Board) v. Laseur." Since then, Alberta and British Columbia have withdrawn most, but not all, their agencies' powers to decide constitutional issues. In Alberta, a decision-maker has no jurisdiction to determine a question of constitutional law unless a regulation has conferred that jurisdiction: Administrative Procedures and Jurisdiction Act 5 [formerly Administrative Procedures Act, R.S.A. 1980, c. A-2]. The Alberta Energy and Utilities Board, which has since split into two regulatory bodies - the Energy Resources Conservation Board and the Alberta Utilities Commission - is among the tribunals designated in the regulation 6 under the Act. The Act also confers a discretion on an agency listed in the Regulation to refer a constitutional question to the Court of Queen's Bench. b) Jurisprudence The court's view will prevail when the issue is one of general law ofcentral importance to the legal system as a whole and outside the adjudicator's expertise: Dunsmuir. The question remains: what is a question of general law of central importance to the legal system as a whole? 3 In addition, the correctness standard will apply to three types of issues 7 : i) matters that fall within the categories allocated to courts under s. 96 of the Constitution ii) jurisdiction of tribunal to make decision (question of law) iii) procedural safeguards 4 2003 see 54, [2003] 2 S.C.R. 504. 5 R.S.A. 2000, c. A-3, s. 7( 1). 6 Designation a/constitutional Decision Makers Regulation. Reg. 69/2006. 7 Khosa, at para. 126-129.
A standard of review analysis should not be appl ied to these three issues, notwithstanding that some courts do engage in it. Either the tribunal had the power to decide the issue, or it did not. Either the procedure was fair, or it was not. (4) Reasonableness Nor will a standard of review analysis be required wherei) precedent has already established it for the particular matter at hand (Dunsmuir), ii) where there is a statutorily prescribed standard a) Deference towards specialized tribunals: Questions of law often fall within a tribunal's area of expertise and years of experience. Reasonableness will normally be the appropriate standard where: the decision is protected by a privative clause; the question is one of fact, discretion or policy, or the legal and factual issues are intertwined and not readily separable; the statutory authority is interpreting its home or closely related statute, even on pure questions of law. Example #1 - The Board is deciding on whether to grant an application to build a new pipeline. Main test is public's interest, including environmental safety. Courts have no more expertise on this than a Board, and considerably less experience Example #2 - application to decide whether rates are reasonable. Question of law, but courts are no more able to judge reasonableness of rate request than the board. However, reasons should be written so that the court can assess their reasonableness. b) Reasonableness generally: The template is in Dunsmuir, at para. 47. The Court will look at: i) the process of articulating the reasons and the outcomes ii) justification, transparency and intelligibility of the reasoning iii)whether the decision falls within a range of possible outcomes which are defensible in fact and in law 4 II. What does all this mean for the regulatory decision-maker? The fundamental task of a tribunal is to adjudicate the proceeding by providing a fair
5 process, making findings of fact, and drawing legal conclusions from those facts. How well the tribunal carries out this function will usually determine whether or not the decision is judicially reviewed. A successful judicial review will be grounded on errors ofjurisdiction or process that the tribunal may have made. Understanding the standards that a reviewing court will apply is critical for insulating a decision from intervention. PROCEDURAL FAIRNESS The law on the conduct of tribunals has developed aspects that pertain to fairness but which have not traditionally formed part of the law on the duty of fairness or the rights of natural justice. These are addressed below in the context of the framework of a typical hearing process. Former Justice Dennis Lane, Q.c. of the Superior Court of Justice of Ontario framed his advice th is way: HOW TO GET JUDICIALLY REVIEWED IN AN INFINITE NUMBER OF EASY LESSONS 8 Get the law wrong Don't give reasons Treat audi alleram partem as just an old Latin phrase Don't give adjournments Forget about the adversary system Don't give disclosure Stick to "the way we have always done it" Always stick to your guidelines A wink and a nod MODEL CODE In Alberta, the Administrative Procedures and Jurisdiction Act 9 governs the procedures to be followed by various (but not all) administrative agencies. The Act was first passed in 1980, and is now seriously deficient. It has not kept up with the law respecting fairness, nor with new methods and processes that could help make tribunals more efficient. In 1999, the Alberta Law Reform Institute, after wide consultation within a 8 CAMPUT (Canadian Association of Members of Public Utility Tribunals) Kingston Education Seminar. 9 Supra, note 5.
6 diverse category of administrative bodies, drafted a Model Administrative Procedures Code. The Code is a comprehensive statutory reference that covers all aspects of Pre-Hearing Powers and Procedures, Hearing Powers and Procedures, Decision and Reasons, and Miscellaneous Powers. In 2008, the Alberta Law Reform Institute developed the Code further. Its Consultation Memorandum No. 13, Powers and Procedures ofadministrative Tribunals draws from recent administrative tribunal reforms in British Columbia and Saskatchewan, and reorganizes and streamlines the 1999 Code. Each provision is extensively annotated with helpful notes. The 2008 Consultation Memorandum, including the annotated Model Code, can be accessed at http://www.law.ualbcrta.ca/alri/docs/cm 13.pdf To this date, the Model Code has not been adopted by the Legislature. B. Key Questions A Regulator Must Ask 10 I. At the Application Stage: 1. Can we inquire into this matter? Can we grant the relief requested? The tribunal's enabling statute empowers it to hear the mauer, or some other statute gives it the jurisdiction. Alternatively, the power may be practically necessary for the accomplishment of the object intended to be secured by the statutory regime: jurisdiction by necessary impl ication. With respect to a provincial tribunal, the subject matter should not be one over which jurisdiction is validly given to a federal tribunal (e.g., transportation; National Energy Board). 2. Is this tribunal competent over the subject matter compared to a reviewing court? Courts will apply a greater degree of deference on questions that turn on understanding technical issues that require expertise. (e.g., Atco Electric Ltd. V Alberta (Energy and Utilities Board), 2004 ABCA 215, [2004] II W.W.R. 220.) 10 The following draws liberally from material presented by David Mullan, Professor Emeritus, Queen's University, at the 2009 CAMPUT (Canadian Association of Members of Public Utility Tribunals) Kingston Education Seminar.
7 If the court sees itself as more or just as expert as the tribunal, it is unlikely to attribute much weight to expertise arguments. II. Appointing the Decision-Makers I. Is the tribunal acting according to the principles of Procedural Fairness? Two main components: i) Right to be heard ii) Right to an impartial decision-maker. No actual bias by tribunal member as defined by closed mind or interest in outcome or relationship with a party. No reasonable apprehension of bias against member: test is "What would an informed person, viewing the matter realistically and practically - and having thought the matter through - conclude? Would he think it is more likely than not that [the decision-maker], whether consciously or unconsciously, would not decide fairly?": Wewaykum Indian Band v. Canada, 2003 see 45, [2003] 2 S.C.R. 259, at para. 60. III. Notice of the Proceeding Procedural fairness imposes duty to give a person who may be affected by the decision a reasonable opportunity to present his case (audi alteram partem). Notice must state the subject matter and potential consequences, and an explanation on how the affected person may participate IV. Pre-Hearing Testing of Applicant's Evidence Pre-hearing testing of applicant's evidence: those potentially affected by the order sought must know the case they have to meet and be able to respond effectively. Use of prehearing devices: i) interrogatories or information requests ii) technical conferences with applicants' presentations iii) technical conferences with "discovery questioning"on applicant's evidence
8 V. Evidence of Other Interested Parties is Filed and Tested Procedural faimess requires that an affected party be given an opportunity to respond to the application: i) filing of responding evidence, lay or expert, satisfies requirement in part ii) pre-hearing testing of responding evidence through Information Requests VI. The Hearing: Receiving the Evidence and Submissions Five Baker I I factors: i) extent of fairness protections detennined by nature of decision and process followed in making it - there is a spectrum offaimess standards: at one end, judicial-like decision requires trial model protections: very high standard, like court's duty offaimess - at the other end, decision is highly discretionary: standard of procedural faimess not as high ii) greater procedural protection required when no appeal procedure within statute, or decision determinative of issue iii) the greater the impact of decision on the life of the individual, the more stringent the procedural protections. Contrast regulatory rate setting and professional discipline decisions iv) procedural expectations based on niles, policies, guidelines and practices give rise to higher standard v) choice of procedures adopted by the agency making the decisions and its institutional constraints is critical - they have to justify why they have adopted particular procedural protections A fair hearing is not necessarily equivalent to a trial. Basic requirements are: i) opportunity to test the case: "Natural Justice is not met by conducting private interviews with a witness or taking evidence without giving notice to participants": Sylvester v. Pincher Creek (Municipal District No.9) Subdivision and Development Appeal Board. /2 ii) opportunity to present another side of the story iii) ability to make submissions to a tribunal as to what it should do Rules of evidence: the greater the potential impact of a tribunal's order on the legal rights of a person, the more a tribunal should adhere to rules of evidence - 1\ Baker v. Canada (Minister ofcitizenship and Immigration), [1999] 2 S.C.R. 817. 12 2008 ABeA 92, [2008] 9 W.W.R. 604.
9 i) relevant evidence whose probative value outweighs its prejudicial effect ii) designed to ensure a fair hearing Those who may be affected by an order must be able to put their case before the tribunal i) format of submissions is within tribunal's discretion (subject to any statutory requirement) ii) oral, written in lieu oforal, or written with Iimited oral VII. The Decision I. Is this tribunal dealing with issues touching on the Constitution, common law, or non-home statutes, statutes to which it does not often refer? These issues increase the likelihood of intervention by a court, and call for special attention from the decision-maker. Avoid grand pronouncements on general law. In fact, think twice before making dictums on regulatory law and policy where fact-based findings will do. Where such incursions are unavoidable, try to confine yourself to your home statute, referring principally to facts on which your decision is based. Conversely, remember that it is still desirable to establish a coherent body of tribunal precedent that is not based solely on facts. You may find some tolerance on this issue. The Supreme Court of Canada recently shifted from its position that correctness is the necessary standard for constitutional issues: Lake v. Canada (Minister ofjustice). 13 " [I]n the extradition context, the proper assessments...involve primarily fact-based balancing tests. Given the Minister's expertise...he is in the best position to determine whether the factors weigh in favour ofor against extradition." (at para. 41.) This approach fits comfortably within many decisions made by regulatory agencies. Administrative Procedures and Jurisdiction Act l4 expl icitly gives a "designated decision maker" (including the Energy Resources Conservation Board and the Alberta Utilities Commission) the authority to determine i) any challenge to the applicability or validity of an enactment of the Parliament of 13 2008 see 23, [2008] I S.C.R. 761. 14 Supra. note 5.
10 Canada or an enactment of the Legislature of Alberta, or ii) a detennination of any right under the Constitution, including the Charter 2. Does my decision exhibit the requirements of recent jurisprudence on giving reasons? a) Duty to Provide Reasons Duty of administrative tribunals to provide reasons only recently recognized by common law: Baker/ s, in 1999; R. v. Sheppard/ 6 (in which the Supreme Court first articulated a functional test for whether reasons are required); In Alberta, duty imposed by statute prior to Baker: Administrative Procedures and Jurisdiction Act. Regulators in Alberta have generally managed to avoid judicial review on the ground of fail ing to provide reasons. However, it is the quality of the reasons that matters most. Only those who hear the parties' representations can participate in the decision-making process. Some flexibility is pennitted for consultation with other tribunal members on matters of law and policy. This is only if: i) the decision is, and is seen to be, that of the hearing members ii) evidence can be discussed with those who did not hear, but findings of fact are to be made by those who heard the proceeding iii) can discuss policy and legal issues with other members, but if a new concern arises, the panel has to go back to affected parties to obtain submissions b) Sufficiency of Reasons The central test remains that of Iacobucci J. In Law Society ofnew Brunswick v. Ryan/ 7 : "A decision will be unreasonable only if there is no line of analysis within the given reasons that could reasonably lead the tribunal from the evidence before it to the conclusion at which it arrived." However, it is arguable that this test has fallen by the wayside in the wake of Dunsmuir. Dunsmuir added a further element to the requirements of a decision: justification, transparency and intelligibility within the decision-making process. This principle was applied in Newfoundland and Labrador (Treasury Board) v. Newfoundland and 15 Supra. note 11. 16 2002 see 26, [2002] 1 S.C.R. 869, at para. 55. 17 2003 see 20, [2003] I S.C.R. 247.
II Labrador Nurses' Union. IS With Dunsmuir, energy regulators lost some of the advantage they had been accorded by the patent unreasonableness standard. The reasoning process then becomes crucial to the reviewing eye for both correctness and reasonableness. Reasonableness 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: Dunsmuir, para. 47. Invite deference. i) make sure your reasons flow logically and find reference points in the evidence adduced at the hearing ii) infuse the decision with reasoning that articulates and is in accord with a) the tribunal's policy mandate b) findings of fact c) statutorily mandated criteria 18 2010 NLCA 13, [2010] N.J. No. 63, at para. 24.
The degree of detail required is reasons that, read in the context of the record and submissions on the live issues in the case, show that the judge has seized the substance of the matter...detailed recitations ofthe law are not required: R. v. R.E.M /9 Regulators need to be aware of a common weakness - the failure to show that they have dealt with the issue or issues put before them. Issue identification is easy for lawyers due to training but it is a skill that can be lacking in regulatory decision-makers. There is no requirement that the tribunal refer to evidence that could have led it to decide differently, as long as it is clear the decision-maker grappled with the live issues before it: Clifford v. Ontario (Attorney General).20 Their sufficiency must be assessed functionally: Calgary (City) v. Calgary Firefighters Assn. 21 12 19 2008 SCC 51, [2008] 3 S.C.R. 3, at para. 43. 20 2009 ONCA 670. [2009] 0.1. No. 3900. 21 2010 ABQB 226 (Jeffrey.I.).
The functional test was applied in McDonald v. Mineral Springs Hospital. 22 You don't need to discuss every issue or fact, or to summarize all the pieces of evidence that were tendered. However, they must be sufficient to allow for meaningful appellate review and for the parties' functional need to know why the decision was made. If the court record discloses all that is needed, less detailed reasons may be acceptable (at para. 41.). Fact-finding is not as easy as it looks. In terms ofdifficulty, a typical regulatory hearing can receive evidence from experts at one end of the spectrum and from lay persons at the other. A lot of it is opinion evidence. Don't just list the evidence; include the facts that underpin your decision. A really avoidable error that regulators often make is naming the wrong parties. Reasons can be short and in plain language, but they must show the why, not the how, the decision was made. They must deal with the substance of the issue, not just draw conclusions. ********** 13 22 2008 ABCA 273, [2008] AJ. 891.