Go West – Life Is Patently Unreasonable There

The potential of Online Dispute Resolution (ODR) has long been touted by many of us as part of the solution to the access to justice problem in Canada, especially for low-intensity disputes.

The first province to introduce ODR was B.C. in 2012 with the Civil Resolution Tribunal Act (the “Act”), followed soon after by Quebec’s Plateforme d’Aide au Règlement des Litiges en ligne (PARLe). The success of ODR internationally means that it is a question of time as to when it comes to Ontario, especially with the introduction of programs like joint divorce applications online.

A few features of the B.C. tribunal, including a general rule under the Act requiring self-representation, i.e. prohibiting the direct assistance of counsel, was cause for concern, but likely emerged out of an assumption that larger parties in these disputes would be the only ones who would be represented, while individual claimants and parties would not be able to justify the expense. Tribunal members are not fully independent as they can be fired for cause, have strict term limits, and have their remuneration determined by cabinet.

Starting in 2016, the tribunal started hearing strata property (i.e. condo) disputes, and claim claims matters in June 2017. For those interested in ODR, one of the remaining questions remains how courts will treat these decisions on review. Review by courts has become of particular of interest with the amendments introduced this year in B.C. under Bill 22, which would expand the tribunal’s jurisdiction under the Act to motor vehicle accident claims.

This past week we heard from Lauryn Kerr, Legal Counsel at the BC Civil Resolution Tribunal, at the Legal Innovators Roundtable at Thomson Reuters in Toronto. For many of us in Ontario, this was our first in-depth introduction to the B.C. ODR system.

One thing that jumped up immediately for me was the standard of review that would be used in the new auto dispute system. The existing system provides a right of review for small claims decisions by the Provincial Court, and for strata property decisions that emerge on a question of law. Bill 22 would remove the latter right of review for strata property for aspects deemed within its jurisdiction under s. 121 of the Act, rendering the tribunal a specialized body to hear such matters, with limited judicial review for express areas of non-expertise in s. 122.

Although liability issues for the new motor claims would be reviewed by the courts on a standard of correctness, the quantum of damages and any minor injury determinations under an expedited process would be reviewed on a standard of patently unreasonable. This standard of patently unreasonable is only possible because Bill 22 renders the tribunal one of specialized expertise in these auto claims under s. 56.7(1), and incorporates the privative clause provision in s. 58 of the Administrative Tribunals Act,

(2)In a judicial review proceeding relating to expert tribunals under subsection (1)

(a) a finding of fact or law or an exercise of discretion by the tribunal in respect of a matter over which it has exclusive jurisdiction under a privative clause must not be interfered with unless it is patently unreasonable,

(b)questions about the application of common law rules of natural justice and procedural fairness must be decided having regard to whether, in all of the circumstances, the tribunal acted fairly, and

(c)for all matters other than those identified in paragraphs (a) and (b), the standard of review to be applied to the tribunal’s decision is correctness.

[emphasis added]

For those of us in Ontario, where our auto insurance regime are already markedly different than the ICBC claims system, and numerous reforms have failed to provide a reduction in premiums, it’s this privative clause that makes the new B.C. system so unique.

The reason for this is the Supreme Court of Canada’s decision a decade ago in Dunsmuir v. New Brunswick, where the Court noted that there was an insufficient distinction between an unreasonable and patently unreasonable standard, as “there cannot be shades of irrationality.” It would be inconsistent with the rule of law to maintain such a standard, causing the Court to remove this standard entirely,

[45] We therefore conclude that the two variants of reasonableness review should be collapsed into a single form of “reasonableness” review. The result is a system of judicial review comprising two standards — correctness and reasonableness…

The question for courts following this decision was how statutes drafted before Dunsmuir that include a patently unreasonable standard, including s. 58 of B.C.’s Administrative Tribunals Act, should be interpreted in light of this passage.

A small handful of obscure regulations in Ontario, such as s. 9(1) of the Special Purpose Accounts, and s. 11(1) of the Payments out of Special Purpose Accounts, contain this patently unreasonable standard. More relevantly, it can be found in s. 45.8 of the Human Rights Code, s. 23.1 of the Environmental Assessment Act, and s. 163.3(39) of the Labour Relations Act.

Even then, the few Ontario decisions post-Dunsmuir in Ontario citing this standard have read the statutory wording down, given the Court’s rationale on having shades of irrationality. For example, the recent Ontario Divisional Court decisions in  Abbey v. Ontario (Community and Social Services) at para 22, Alabi v. Madkour at para 16, Murray v. Human Rights Tribunal of Ontario at para 19, and Stepanova v Human Rights Tribunal of Ontario at para 18, have all read this patently unreasonable standard in statute down to a reasonable standard instead.

Other provinces have not been so reluctant. The Alberta Court of Queen’s Bench in Juneja v Alberta (Registrar of Motor Vehicle Services), where the court said,

[43] …Dunsmuir did not operate to oust the principle of parliamentary supremacy. It did not amend or otherwise render inoperative the relevant provision of the Act. As was pointed out by Supreme Court in Pushpanathan v. Canada 1998 CanLII 778 (SCC), [1998] 1 S.C.R. 982 , at para 26, “[t]he central inquiry in determining the standard of review exercisable by a court of law is the legislative intent of the statute creating the tribunal whose decision is being reviewed. More specifically, the reviewing court must ask: ‘[W]as the question which the provision raises one that was intended by the legislators to be left to the exclusive decision of the Board?”

…

The Supreme Court of Canada did touch on the issue of pre-existing statutory language briefly in obiter in Canada (Citizenship and Immigration) v Khosa, where the majority stated,

[19] Generally speaking, most if not all judicial review statutes are drafted against the background of the common law of judicial review. Even the more comprehensive among them, such as the British Columbia Administrative Tribunals Act, S.B.C. 2004, c. 45, can only sensibly be interpreted in the common law context because, for example, it provides in s. 58(2)(a) that “a finding of fact or law or an exercise of discretion by the tribunal in respect of a matter over which it has exclusive jurisdiction under a privative clause must not be interfered with unless it is patently unreasonable”. The expression “patently unreasonable” did not spring unassisted from the mind of the legislator. It was obviously intended to be understood in the context of the common law jurisprudence, although a number of indicia of patent unreasonableness are given in s. 58(3). Despite Dunsmuir, “patent unreasonableness” will live on in British Columbia, but the content of the expression, and the precise degree of deference it commands in the diverse circumstances of a large provincial administration, will necessarily continue to be calibrated according to general principles of administrative law. That said, of course, the legislature in s. 58 was and is directing the B.C. courts to afford administrators a high degree of deference on issues of fact, and effect must be given to this clearly expressed legislative intention.

[emphasis in the original]

This passage was unsurprisingly quoted in subsequent litigation in B.C., and was ultimately referred to and interpreted by the Court of Appeal in Pacific Newspaper Group Inc. v. Communications, Energy and Paperworkers Union of Canada, Local 2000 as follows,

[46] It is clear from Binnie J.’s comments that the standard of patent unreasonableness continues in British Columbia after Dunsmuir. In my view, his next statement (“the content of the expression … will necessarily continue to be calibrated according to general principles of administrative law”) did not signify that the standard of patent unreasonableness would evolve along with changes in the standard of reasonableness at common law post-Dunsmuir. All I believe he was endeavouring to say was that, just as the meaning of patent unreasonableness changed at common law before Dunsmuir, it is susceptible to change after Dunsmuir.  If he had intended to say that the standard of patent unreasonableness in British Columbia will correspond to the standard of reasonableness at common law post-Dunsmuir, he would have done so explicitly.  Parenthetically, I note that Mr. Justice Rothstein, in dissent in Khosa, commented at para. 105 that it was unclear what principles of administrative law Binnie J. was referring to in the above quoted paragraph.

[emphasis added]

The Supreme Court of Canada was again faced in 2016 with the patently unreasonable standard in another case emerging from B.C., in British Columbia (Workers’ Compensation Appeal Tribunal) v Fraser Health Authority, where the Court appears to apply the patently unreasonable standard in evaluating a challenging legislative scheme involving difficult matters of complex facts and uncertain scientific evidence.

Although the B.C. decisions are still interpreted as maintaining a patently unreasonable standard only when explicitly designated by statute, this is not the understanding that has been applied by the courts in Ontario, who are also dealing with the same wording in their own respective statutes.

The ideological divide may be found in Khosa itself, where the majority suggest that where patent unreasonableness should be interpreted in the context of general administrative law principles as developed through common law, whereas Justice Rothstein’s dissent disagreed about applying the common law into a legislative standard. In any case, this ideological divide did not pronounce itself in Fraser itself, as the dissent centered on entirely different issues.

The bigger question then is how the patently unreasonable standard would be applied to the ODR mechanism of the BC Civil Resolution Tribunal. The Court in Fraser still continued to define patently unreasonable at para 48 in pre-Dunsmuir terminology, even while affirming the ability of the common law to allow this standard to evolve.

What does assist the tribunal is that Bill 22 allow for a right to a lawyer for accident claims under s. 20(1), unlike the other ODR aspects, and do not use the patently unreasonable standard for liability and quantum for motor vehicle accident cases up to the maximum $50,000 (ss. 56.7(2), 133(1)(c)). Bill 22 also allows the courts to retain constitutional authority under s. 113, but it’s still unclear how courts will deal with these underlying administrative law issues.

Perhaps the upcoming “new Dunsmuir” case of Bell/Vavilov/NFL next month at the SCC will help create more consistency across Canada, and the materials before the Court certainly point to these discrepancies. As I told the Lawyer’s Daily this past week, this case has the potential to transform administrative law completely. The BC Civil Resolution Tribunal is unique in that it purports through legislative wording alone to create an expert tribunal in law, which in fact becomes an impossibility given the broad nature of disputes put before it, an approach which remains unique anywhere in Canada.

If ODR is to be successful, it requires the courts to uphold and affirm the legislative scheme that creates it. In the B.C. example, the shades of irrationality in the standard of review will ultimately be the true test of its effectiveness.