The Court of Appeal’s Consideration of Sault Dock: A New Test, Refinement or More of the Same?

INTRODUCTION

The Ontario Court of Appeal’s (“CA”) recent decision in Knauff v. Ontario (Human Rights Tribunal) (“Knauff”) sought to resolve two CA panels’ disagreement about the continuing relevance of the test for leave to appeal in Sault Dock Co. Ltd. and City of Sault Ste. Marie (Ont. CA) (“Sault Dock”). (I considered the two CA decisions, West Whitby Landowners Group Inc. v. Elexicon Inc. [“West Whitby”] and Davis v. Aviva General Insurance Company [“Davis”] in my January 7, 2025 Slaw post, “Tension on the Ontario CA: Thwarting a Judicial Coup?”.) My focus there was on whether West Whitby, by loosening the Sault Dock test, might have the effect of diminishing the independence of administrative tribunals by giving a greater scope to leave to appeal from the Divisional Court to the Court of Appeal. None of the decisions have addressed this issue and I refer to it only briefly below.

West Whitby challenged the continuing relevance of the test under Sault Dock; the panel in Davis defended Sault Dock and suggested that the panel in West Whitby could have reached the result it did in the case without trying to change Sault Dock, downplaying what it saw as an attempt in effect to establish a new test without going through the proper process of a five-person panel.

Adam Knauff had brought a complaint to the Ontario Human Rights Tribunal (“the Tribunal”) that his employer, the Ministry of Natural Resources, had discriminated against him when he was an active firefighter in failing to provide vegan meals at times other meals were provided. He maintained that “ethical veganism” was a form of “creed”, a protected ground under section 5(1) of the Ontario Human Rights Code (“the Code”). He requested that the Divisional Court quash the Tribunal’s decisions relating to the complaint.

The parties settled the claim of discrimination before the Divisional Court heard the case; however, Knauff still wanted the Tribunal to determine whether ethical veganism is a protected ground under the Code and when the Tribunal decided it was not, he sought judicial review of the Tribunal’s decision. The Divisional Court found the matter moot, and held this was not a proper case in which to exercise its discretion to hear it anyway. Knauff sought leave to appeal from the Divisional Court’s decision not to hear the matter.

As I explained in my May 13, 2025 Slaw post “Joining Battle: Preparing to Determine the Test for Leave to Appeal (Or, the Fate of Sault Dock”), “[i]n Knauff v. Ontario (Human Rights Tribunal) (“Endorsement”), Zarnett J.A. (Case Management Judge) of the Ontario Court of Appeal stated that Knauff had indicated in his motion for leave to appeal from the Divisional Court that ‘he intended to ask the Court to clarify the test for leave to appeal from the Divisional Court and to that end, requested that this leave motion be heard by a five-judge panel’.” Subsequently, Fairburn A.C.J.O directed a five-person panel hear the case (Knauff, “Endorsement”, paras. 2, 3).

And so, having been nudged by West Whitby, adhering to the protocol urged by Davis and seizing an opportunity, a five-person panel of the Court of Appeal has now articulated what is in effect a refashioning of Sault Dock.

THE TEST IN SAULT DOCK

Before exploring the Court of Appeal’s new take on Sault Dock, a quick reminder of the original test.

An appeal from the Divisional Court to the Court of Appeal requires the leave of the Court of Appeal “on a question that is not a question of fact alone” (Courts of Justice Act, s.6(1)). According to Sault Dock, the question must have an impact on the development of Ontario jurisprudence. In other words, the criterion is not the impact on the parties, but whether the decision will settle the matter of interest for the general public (or a large segment thereof).

Under Sault Dock, as a preliminary step in the analysis, the court determines whether the dispute raises one of the following kinds of questions: interpretation of a Canadian or Ontario statute, including whether it is constitutional; the interpretation or clarification of a general rule or principle of law; the interpretation of a municipal by-law where the issue is of public importance (but not all municipal by-laws); or interpretation of an agreement where the issue is of public importance (but not all agreements).

In addition, the court could grant leave if “special circumstances” related to the public interest (“such as the introduction of new evidence, obvious misapprehension of the Divisional Court of the relevant facts or a clear departure from the established principles of law resulting in a miscarriage of justice”) or if it seemed it was in the interests of justice to grant leave. Furthermore, “in cases in which there is clearly an error in a judgment or order of the Divisional Court, it is … the duty of the Court of Appeal to grant leave so that it might correct the error” but “the possibility that there may be error in the judgment or order will not generally be a ground in itself for granting leave”. (Sault Dock)

The Court of Appeal in Knauff summarized the framework in Sault Dock as first requiring a determination of “the importance of the question in issue viewed from the perspective of the development of Ontario law and the interest of the public, rather than from the perspective of the parties”. And second, requiring a determination of whether the question is arguable, “providing a short, non-exhaustive list of examples of cases that if arguable, might merit leave” (Knauff, CA, para. 11). The Court listed the examples in Sault Dock (see above) and then referred to Sault Dock’s “residual category of cases that might merit leave” (see above).

CHALLENGING SAULT DOCK

For the panel in West Whitby, one problem lay less with the Sault Dock decision itself than with its application. Litigants have lost sight of its flexibility and have tended to apply it “by rote”, missing the transcending question of whether determination of the issue at stake would contribute to the development of jurisprudence in Ontario.

What really seems to condemn Sault Dock, however, is that it is “old”, “so old … that it pre-dates the Canadian Charter of Rights and Freedoms” (“the Charter”). In the panel’s view, it would be difficult for the Divisional Court to assess cases that raise the Charter. One might be tempted to give credit to judges sitting as the Divisional Court that they could handle this challenge, but apparently one would be mistaken in doing so.

The proper test, from the West Whitby panel’s perspective, for granting leave to appeal from the Divisional Court to the Court of Appeal is more or less that for seeking leave to appeal to the Supreme Court of Canada: “Is the question on which leave is sought one that, by reason of its public importance, the importance of any issue of law or mixed law and fact involved, or for any other reason is of such a nature or significance that it ought to be decided by the Court of Appeal for Ontario?” (West Whitby, para. 13). This test effectively grants the Court of Appeal a very broad discretion to decide to grant leave unhindered by any pre-determined “categories”, with the potential to shift the relationship between the Divisional Court and the Court of Appeal. And, not incidentally, that in Ontario, at least, it implies the Court of Appeal is of significance akin to the Supreme Court of Canada.

The common element in Sault Dock and in West Whitby is that the matter at the heart of the application for leave to appeal has a public significance; the former gives some guidance as to what that means, although it defines it broadly, while the latter gives a wide scope of discretion to the Court of Appeal in deciding what cases to accept. Indeed, how the panel in West Whitby applies its own test implicitly confirms that (see my Slaw post, “Tension on the Ontario CA….”, on this point), although one cannot ignore that the panel in Davis stated that the West Whitby panel could have achieved the same result by applying the Sault Dock framework.

KNAUFF

And so to the Court of Appeal’s decision in Knauff.

The Court of Appeal concluded that “the essential message of Sault Dock should be maintained,” although employing an “updated framework”, regardless of whether the Divisional Court was exercising original or appellate jurisdiction (Knauff, CA, para.5) (Neither the panel in West Whitby nor that in Davis was concerned with this issue but the Knauff court’s statement makes the irrelevance of the distinction clear; the CA in Knauff discusses the history of this distinction at paras.13-16 and why a distinction is not necessary at paras. 47-51.)

In the Court of Appeal’s view, an updated framework is warranted by Ontario’s changing legal landscape, resulting in parties raising issues that do not easily fit into the Sault Dock categories, the first two of which help illustrate the meaning of “public importance” and other two of which do not, complicated by the fact that there is not an evolving jurisprudence on the meaning of public importance; by Sault Dock‘s not explaining how arguability and public importance related to each other; by lack of development of the residual category; and by the desirability of settling the “uncertainty” of whether there is a distinction between cases involving the Divisional Court’s original and appellate jurisdictions (Knauff, paras. 28-31). (Of course, any evolution of leave to appeal jurisprudence must be gleaned from the resulting decisions, since the court does not usually give reasons for why it grants leave or not.) (The CA does not include the introduction of the Charter explicitly in its decision as necessitating an update to the Sault Dock test, but it does refer in fn.7 to several changes in the “legal landscape” that West Whitby, the parties and intervenors raised as having occurred or increased since Sault Dock, including the Charter, the greater importance of the administrative state, Aboriginal rights and quasi-constitutional human rights.)

For its “updated framework”, the Knauff Court retained the criteria of importance and “arguability”. These two criteria are interrelated: “While distinct concepts, arguability and public importance have overlapping features. A question that is not arguable in the circumstances of the case cannot rise to the level of public importance warranting leave, because public importance is not gauged in the abstract. On the other hand, what makes a question arguable can inform why it is one of public importance warranting consideration by this court.” (Knauff, CA, para. 7) The Court translates this as one “key consideration” in the updated framework: “whether the proposed appeal raises an arguable question of law or mixed law and fact that is of sufficient public importance to warrant consideration by the Court of Appeal“ (Knauff, CA, para. 32; emphasis in the original).

What does “arguability” and its consideration mean in this context?

The appeal cannot merely be on a question of fact; short of exceptional circumstances, the issue must have been raised before the Divisional Court and not before the Court of Appeal for the first time; if the Divisional Court is entitled to deference, arguability must be determined within a deferential framework; and the issue must not be moot (unless there is a reason to exercise discretion to hear it). (Knauff, CA, para. 37) Arguability also derives from the failure of the Divisional Court to apply the correct law or standard of review “in a way that was not harmless but instead may have affected the outcome”. However, the analysis is not closed even if the Divisional Court has applied the correct law, for there may be an arguable question

…if that law, or the general principles that underlie it, should be reconsidered, expanded, qualified, clarified or changed. Indicators of that type of arguable question may include whether the issue is a constitutional one, whether the legal rule applied by the Divisional Court is out of step with developments in that area of the law, whether the issue is novel or in any event is one lacking in authoritative guidance from the Supreme Court of Canada or this court, the nature or adequacy of the Divisional Court’s reasoning on a debatable point, a dissent in the Divisional Court, conflicting case law from other jurisdictions, and/or compelling academic criticism and other legal commentary on the subject. (Knauff, CA, para. 38)

Again, these reasons for arguability give an appellate court a wide field on which to conclude that the first criterion is met and almost certainly an arguable issue based on these factors will be one of public importance.

One apparent difference between Sault Dock and the Court of Appeal’s decision in Knauff is that in the latter, “[t]here is no finite or closed category of question that can qualify as being of public importance” (Knauff, CA, para.40). I say “apparent” because by the time one runs through the various categories in Sault Dock, one reaches more or less the same result. The real difference is that the two decisions start from the opposite positions: Sault Dock lists categories but recognizes they are not exhaustive, while Knauff starts with an open-ended appreciation of what constitutes public importance.

Considering whether a matter is of public importance, once it is determined to be arguable, requires assessment of two perspectives: who is affected beyond the immediate parties (the broader the affected persons, and the more fundamental the interest affecting them, the more likely the matter is of public importance); and whether the question “goes to the development, progress, coherence, stability and predictability of the law, and thus the law’s ability to deliver justice in Ontario”. (Knauff, CA, paras. 44-45) This approach takes care of the main categories or circumstances enunciated in Sault Dock.

In the end, the Court really decided Knauff on the basis that the issue was moot and that the Divisional Court had determined it was moot and had decided not to exercise its discretion to hear it regardless. Accordingly, since Knauff was concerned only with the Divisional Court’s refusal to exercise its discretion to hear the matter although it was moot, his challenge “does not raise an arguable question of public importance” (Knauff, CA, para. 59).

CONCLUSION

Knauff’s challenge constituted merely a hook, and a rather weak one at that, on which the Ontario Court of Appeal could “resolve” what appeared to be a dispute between the two appellate panels. In doing so, it acknowledged the need to reconsider the framework in Sault Dock, as claimed by the panel in West Whitby, but used Sault Dock as a cover for an updated framework.

Ironically, as the Davis panel said of the panel in West Whitby, the Court could have reached the same decision had it applied Sault Dock. Notably, despite heading the penultimate section of its decision “Application of the Updated Framework to This Case”, it did not even undertake the pretence of applying the new framework to the elements in Knauff’s claim. Indeed, one is tempted to venture that it could have dismissed the case on almost any other basis. Rather, the Court simply undertook an exegesis of sorts about the test for leave to appeal on the flimsiest basis. Or, put another way, it reformulated the test in a manner contrary to its own injunction relating to arguability when leave to appeal is an issue; it developed it in the abstract.

Freeing the test from the categorical strictures of the first part of Sault Dock may be a good thing. Generally speaking, checklists are somewhat confining. Yet even in Sault Dock, the apparent limitation of the test is countermanded by references to “special circumstances” and “interests of justice”. At the same time, guidelines can be very helpful. In Knauff, the Court of Appeal has listed examples of the kind of circumstances that might satisfy the requirements of arguability and public importance (see, for example, para.44 on public importance) and this could encourage assessments that circumstances akin to these would satisfy them.

Ultimately, however, the value of the more loosely defined test in Knauff and its impact on the viability of Divisional Court decisions (and in many cases, the tribunal decisions that had been considered by the Divisional Court) will be revealed only in its application. And some of us will see whether Knauff attains the venerability of Sault Dock.

Finally, as far as the title to this post is concerned, the Court of Appeal in Knauff implicitly rejected the test the panel in West Whitby proposed, analogous to that the Supreme Court of Canada employs (see above), and has more modestly provided a test that is more reflective of Sault Dock with some refinement of configuration rather than a new test.