Correctness and Reasonableness are the Two Standards for Judicial Review of Administrative Tribunal Decisions: Dunsmuir v New Brunswick, [2008] 1 SCR 190

This seminal case lays out a standard for judicial intervention of administrative tribunal decisions.  Dunsmuir arises out of a labour dispute, but the standard of judicial review presented in the case has universal application to tribunal decisions, including administrative tribunal decisions on immigration.

Facts

David Dunsmuir, the appellant, was employed by the Department of Justice for the Province of New Brunswick.  Dunsmuir was reprimanded on three occasions during his employment.  He was dismissed effective December 31, 2004 because the employer determined that Dunsmuir was not right for the job.  Cause for the termination was explicitly not alleged and Dunsmuir was given four months’ pay in lieu of notice.

On September 1, 2004, Dunsmuir commenced a grievance process under s 1001.1 of the Public Service Labour Relations Act (PSLRA).  He alleged that he was not provided with the reasons for the employer’s dissatisfaction, an opportunity to respond to the employer’s concerns, notice of termination, due process or procedural fairness and adequate length of the termination notice period.  The grievance was denied and referred to an adjudicator.

The preliminary issue that the adjudicator faced was whether he was authorized to determine the reasons underlying the employer’s decision to terminate.  Using s 97(2.1) of the PSLRA, the adjudicator determined that he was able substitute another penalty for the discharge.  Using 100.1(5) of the PSLRA and the mention of s 97 therein, he determined that an adjudicator has jurisdiction to make the determinations described in s 97(2.1).  The adjudicator made a preliminary finding that an employee is entitled to an adjudication as to whether a dismissal was for cause.  The Province of New Brunswick, the respondent, applied for judicial review of the adjudicator’s decision.  The respondent argued that the adjudicator exceeded his jurisdiction in his preliminary ruling by determining that he was authorized to determine whether the termination was for cause.

Before reviewing the adjudicator’s decision, the reviewing judges had to decide what standard to apply for a judicial review of the adjudicator’s decision.  In other words, they had to decide how they were going to review the adjudicator’s decision.  The Court of Queen’s Bench applied the correctness standard with respect to the statutory provisions, patent unreasonableness standard with respect to the factual decisions and reasonableness simpliciter with respect to the questions of mixed fact and law.  The Court of Appeal held that the proper standard with respect to the adjudicator’s authority is reasonableness simpliciter and not correctness.  However, the adjudicator’s interpretation of caselaw warrants correctness standard.  The Supreme Court of Canada notes that the issue of standard of review of administrative decisions is troubling and calls for reexamination.  The Court also examines the questions pertinent to the facts of this case, but this discussion is largely omitted from this summary.

The Court is split into three. The majority consists of McLachlin, Bastarache, LeBel, Fish and Abella.  Justice Binnie writes a separate decision.  Deschamps, Charron and Rothstein hold a third decision.

Analysis

Majority

The majority starts by reviewing the principles of judicial review.  Judicial review is connected with the preservation of the rule of law.  The Court emphasizes the balance in upholding the rule of law and upholding democratic principles by avoiding undue interference.

The current system of judicial review of administrative tribunal decisions is difficult to implement and the Court proposes to develop a more coherent and workable framework.  The existing system involves three standards of review: correctness, patent unreasonableness and reasonableness simpliciter.  In Canadian Union of Public Employees, Local 963 v New Brunswick Liquor Corp, Dickson introduced, in addition to the existing correctness standard, the patently unreasonable standard, which called for a deferential approach to administrative decisions.  The Court affirmed that a judicial review must still determine correctness of administrative decisions when it comes to certain issues.  Canada v Southam Inc introduced a third standard, reasonableness simpliciter, which asked whether the decision was reasonable.  Iacobucci said that unlike the patent unreasonableness standard, which examined for defects on the face of a decision, reasonableness simpliciter required a searching review to discover the defect.

The majority in this case points to several difficulties with the existing scheme. More specifically, distinction between the two reasonableness standards is difficult to determine.  Another difficulty with the existing system is that the application of patent unreasonableness standard seems to require parties to accept at times an unreasonable decision.  The standard allows for a possibility of accepting an irrational decision simply because the irrationality is not clear enough.  The Court notes that it is inconsistent with the rule of law to retain irrational decisions.

The Court decides to simplify the system by reducing it to two standards: reasonableness and correctness.  The Court collapses the patent unreasonableness and reasonableness simpliciter standards into one “reasonableness” standard.  The Court explains the new standard.  Reasonableness is deferential to the decisions of administrative tribunals as long as the decisions falls within a range of possible, acceptable outcomes.  Under the standard, courts look for qualities that make a decision reasonable, which incudes such factors as existence of justification, transparency and intelligibility within the decision-making process.

The Court then proceeds to discuss when the reasonableness standard is implemented.  The reasonableness standard is implemented in relation to questions of fact, discretion, policy, mixed facts and law and some legal issues.  Privative or preclusive clauses that are meant to minimize the interference by reviewing courts give rise to a strong indication of the reasonableness standard.  Deference is usually owed where a tribunal is interpreting its enabling statutes or statutes that are closely connected to its function or implementing a decision based on a regime in which a tribunal has special expertise.

When it comes to the correctness standard, the reviewing court implementing the standard will undertake its own analysis of the question.  It must ask whether the tribunal’s decision on a question of law was correct.  When a question of law is of central importance to the legal system and outside the expertise of the administrative decision maker, the reviewing standard is correctness.  The Court states that an exhaustive analysis to determine an appropriate standard for a question of law is not necessary if the standard has already been determined in the existing jurisprudence.  In fact reviewing courts should determine the standard of review only where there is no existing jurisprudence on the issue.  Furthermore, the Court asserts that constitutional questions and questions related to jurisdiction have been found to attract the correctness standard.

The Court uses a contextual approach to determine which of the two standards outlined above applies to the present case.  The Court acknowledges the presence of a privative clause in 101.1(1) of the PSLRA that prohibits judicial intervention in decisions made by an administrative adjudicator.  This suggests reasonableness as the standard for the interpretation of the legal question in this case.  The expertise of the labour adjudicator and the fact that he was interpreting a statute that was closely related to the tribunal further suggest reasonableness.  The nature of the legal question is not of central importance, which also points to reasonableness as the standard for the adjudicator’s interpretations of the statutes in question.

Implementing the standard of reasonableness, the Court still finds the adjudicator’s reasoning to be deeply flawed because it fell outside the range of admissible statutory interpretations.  The Court finds that the adjudicator did not take into account that the labour relations in this case are governed by private law of contract, which is made clear by s 20 of the Civil Service Act.  Under the rules of contract, where the employer chooses to exercise its right to discharge with reasonable notice or pay in lieu thereof, the employer is not required to assert cause for discharge.  Since the case is governed by the rules of contract, the respondent was within its right to dismiss the appellant without offering him a hearing.

The appeal is dismissed.

Binnie J

Justice Binnie agrees that the appeal should be dismissed based on the fact that the employment relations are governed by the rules of contract.  However, Justice Binnie’s position is that the system of judicial review calls for a reappraisal that is broader than what is offered by the majority.  Justice Binnie agreeing with the majority states that the judicial review system should be simpler and aim to create a quick and relatively inexpensive judicial review procedure.  However, Binnie J demonstrates general dissatisfaction with the changes made by the majority.

With respect to the correctness standard, Justice Binnie states that it is a distraction to unleash a debate in the reviewing courtroom about whether the question of law is of central importance to the legal system as a whole.  It would be sufficient to exempt from the correctness standard determinations on home statutes or statutes closely related to the administrative decision makers’ expertise.

With respect to the distinction between patent unreasonableness and reasonableness simpliciter, Justice Binnie states that doing away with the distinction will not solve the difficulty of determining the level of deference that courts should give to tribunal decisions.  A single standard of reasonableness shifts the debate from determining what standard to use to a debate about the appropriate level of deference within a single standard.

Justice Binnie offers a different approach.  He proposes that decisions under review should be presumed to be reasonable until the applicant shows otherwise.  An unreasonable decision is one that falls outside the scope of reasonable responses open to the decision maker under its grant of authority.  In order to demonstrate that the decision was not correct (to implement the correctness standard), the applicant would be required to demonstrate that the decision rests on an error in the determination of the legal issue not confided to the administrative decision maker.

Deschamps, Charron and Rothstein JJ

Justices agree that the appeal should be dismissed.  However, they propose a slightly different approach to reviewing standards.

Justices state that judicial review of the administrative tribunals’ decisions should not be different from appellate court reviews.  The first step is to identify whether the questions at issue are questions of law, fact or mixed fact and law.  Decisions on questions of fact always attract deference.

Questions of law require more thorough scrutiny and unlike appellate reviews require deference in certain circumstances, including where a privative clause intends to leave the final decision to the administrative body.  However, privative clauses cannot protect an administrative body where it oversteps its delegated powers or decides issues, in which it has no expertise or which concern application of the Constitution, the common law and the Civil Code.  Finally, if Parliament has provided for a statutory right of judicial review on certain questions of law, deference is not owed.

Questions of mixed fact and law attract the same deference that an appeal court would show to a lower court.  Deference is owed unless the administrative body exceeds its mandate.

Relevant Statutes and Caselaw

Public Service Labour Relations Act, RSNB 1973, c P-25, ss 92(1), 97, 101.1

Canadian Union of Public Employees, Local 963 v New Brunswick Liquor Corp, [1979] 2 SCR 227

http://scc.lexum.org/en/1979/1979scr2-227/1979scr2-227.html

Canada v Southam Inc, [1997] 1 SCR 748

http://scc.lexum.org/en/1997/1997scr1-748/1997scr1-748.html

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