Canada: Supreme Court Extends The TeleZone Principle: Strickland v. Canada (Attorney General)

In Strickland v. Canada (Attorney General),  2015 SCC 37 ("Strickland"), the Supreme Court of Canada considered an appeal from a Federal Court of Appeal decision that found that provincial superior courts possess, in some instances, the jurisdiction to rule on the validity of federal regulations. In addition to raising this jurisdictional question, the appeal raised the more specific administrative law question of whether the Federal Court (at first instance) erred by declining to hear the appellants' judicial review application.

The Court's Strickland  decision is notable for three reasons.

First, the Court explicitly recognized that provincial superior courts have jurisdiction to address the validity of the federal regulations where doing so is a necessary step in resolving a case otherwise properly before them.

Second, the Court sharpened its earlier jurisprudence surrounding the discretionary nature of judicial review by emphasizing the importance of a forum's suitability for review. In this case, even if the Federal Court were to declare the federal regulations to be invalid, such a declaration would not bind the provincial superior courts which could continue to apply them until successfully challenged in those courts.

Third, the disagreement between Justice Cromwell (in obiter) and Justices Abella and Wagner (in their separate but concurring reasons) appears to leave for another day the question of whether the federal courts have exclusive jurisdiction to judicially review actions of federal boards, commissions and tribunals and grant remedies on administrative law grounds.  

This commentary will review the reasons of the Court and close with some implications of the Strickland  decision.

Facts and Decisions Below

The impetus for Strickland  was the alleged unlawfulness of a set of guidelines for child support ("Guidelines") created by the Governor in Council, pursuant to the powers conferred by section 26.1 of the Divorce Act,  RSC 1985 c 3 (2nd Supp). The Divorce Act  provides that the Governor in Council is to draft such guidelines "based on the principle that spouses have a joint financial obligation to maintain the children of the marriage in accordance with their relative abilities to contribute to the performance of that obligation" (s 26.1(2)).

The six appellants in Strickland  were of the view that the Guidelines  created by the Governor in Council did not reflect the ability-indexing principle set out in the Divorce Act,  and were thus unlawful or ultra vires.  They therefore sought a declaration from the Federal Court to this effect.

At first instance, Justice Gleason of the Federal Court dismissed the appellants' application for judicial review, principally on jurisdictional grounds. In her view, the provincial superior courts should have jurisdiction over a claim that the Guidelines  are ultra vires,  if that claim is made in proceedings in which those courts are asked to apply the Guidelines. To this jurisdictional point, she added that provincial superior courts possess far greater expertise than the Federal Court in matters related to divorce and child support, and thus that it would be inappropriate for the Federal Court to consider the application on its merits (Strickland  para 7). 

The Federal Court of Appeal (2014 FCA 33, "Strickland  FCA") agreed with Justice Gleason's reasons, and added that invalidating the Guidelines  would have uncertain consequences in the broader provincial family law context and that adjudication in an actual divorce proceeding in the superior courts would ensure a more complete adversarial debate (Strickland,  FCA paras 14-16). As such, the Federal Court of Appeal dismissed the appellants' application for judicial review of the Guidelines  appeal.

The appellants appealed this decision to the Supreme Court of Canada.

Issues at the Supreme Court of Canada

The appeal raised two related questions:

  1. Do the provincial superior courts have jurisdiction to address the validity of the Guidelines?
  2. Even if they do, did the federal courts err in refusing to hear the judicial review application on its merits?

The Jurisdictional Question  

Positions of the Parties

The Attorney General (here, the respondent) argued that provincial superior courts do possess the jurisdiction to consider the legality of the federally-ordered Guidelines.  It relied on Gleason J.'s ostensibly pragmatic holding that provincial courts should have jurisdiction over such a matter if the challenge is made in proceedings in which the provincial courts are asked to apply them.

In contrast, the appellants argued that litigants seeking solely a public law remedy against a federal entity may proceed only  in the federal courts. In support of this position, they pointed to section 18 of the Federal Courts Act  (RSC 1985 c. F-7).

In the appellants' view, the "exclusive original jurisdiction" to grant declaratory relief against federal bodies under section 18(1)(a) necessarily includes the jurisdiction to pronounce on the lawfulness of regulations like the Guidelines.  As such, the appellants argued that provincial superior courts are precluded from determining their legality (Strickland  para 11).

Reasons of the Supreme Court – Affirming and Applying the TeleZone Principle

Cromwell J. agreed with the Attorney General (and the federal courts below) on the jurisdictional question. In his view, "[a] provincial superior court can hear and determine a challenge to the legality of the Guidelines  where that determination is a necessary step in disposing of support proceedings properly before it" (para 15).

This conclusion was chiefly supported by a line of cases beginning with Canada (Attorney General) v TeleZone Inc.,  2010 SCC 62 ("TeleZone") which interpreted section 18 of the Federal Courts Act. Indeed, Justice Cromwell extends the reasoning of the Court in TeleZone which he acknowledges did not resolve the precise issue in Strickland to articulate what he calls the "TeleZone principle."

In TeleZone,  the Supreme Court held the Ontario Superior Court of Justice had the authority to review the legality of a Federal Minister's actions during a tendering process for the purposes of the plaintiff's claim for damages in relation to those actions. In so doing, the Court rejected the interpretation urged upon it by the Attorney General that section 18 of the Federal Court Act  required litigants to obtain a successful application for judicial review at the Federal Court before  bringing a damages claim in provincial court. The Court in TeleZone  rejected the Attorney General's position for several reasons.

First, to accept the Attorney General's argument would sanction a "bottleneck" of delays that was "manifestly not the intention of Parliament" (TeleZone  para 3).  Second, the Court in TeleZone  held that section 18 had to be read in the broader context of the Act,  which includes section 17's explicit conferral on the provincial superior courts of concurrent jurisdiction "in all cases in which relief is claimed against the Crown." In light of this broader concurrent authority, the Court in TeleZone  held that section 18 must be understood as a "reservation or subtraction from the more comprehensive grant of concurrent jurisdiction in s 17" (para 5). This contextual interpretation of section 18 as a "subtraction" from section 17 provides the foundation for the TeleZone  principle that provincial superior courts must be able to pronounce on the lawfulness of federal laws or orders where it is necessary for determinations properly within their purview.

Cromwell J. in Strickland  states this conclusion from TeleZone  pithily: "Thus, the provincial superior courts may exercise their concurrent jurisdiction where the attack on a law or an order is essential to the cause of action and adjudication of that allegation is a necessary step in disposing of the claim" (Strickland  para 24, citing TeleZone  67). This statement appears to be the clearest formulation of the TeleZone  principle upon which the Court in Strickland  subsequently relies.

Cromwell J. is quick to add – as was Binnie J. in TeleZone –  that this principle only applies when determining the validity of the underlying federal order is a genuinely necessary step in an otherwise valid proceeding. That is, it must not be "simply made to appear as such as the result of artful pleading." (Strickland  para 24, citing TeleZone  para 75).

The Court in Strickland  goes on to canvass the companion and subsequent cases to TeleZone,  which, although not perfectly analogous, support, in its view, the TeleZone  principle (paras 25-29).

Cromwell J.'s ultimate conclusion on the first issue, after applying the TeleZone  principle, is:

[I]n the context of family law proceedings otherwise properly before them, the provincial superior courts can decide that the Guidelines  are ultra vires  and decline to apply them if doing so is a necessary step in resolving the matters before them (para 33).

The Administrative Law Question:

Having answered the first (jurisdictional) question, Cromwell J. turned to consider whether the Federal Court erred by refusing to entertain the appellants' application for judicial review. As the SCC noted, the Federal Court did so chiefly on the recognized ground that an adequate alternative to review exists: the greater expertise of provincial courts in family law matters made the latter a more suitable forum to review the Guidelines  (Strickland  para 35).

The appellants disagreed with the conclusions of the Federal Courts. In their view, the possibility of challenging the Guidelines  in child support proceedings was neither an adequate nor an alternative forum, as it does not provide all remedies available to them on judicial review. Further, they argued, a Federal Court determination of the Guidelines' lawfulness would be a more efficient means of review than various divorce proceedings in provincial superior courts.

The Reasons of the Supreme Court – The Federal Court Did Not Err

Before answering the question in earnest, Cromwell J. provided a brief summary of the law around judicial review. He affirmed that the discretionary nature of judicial review is well established in both common law and the relevant provisions of the Federal Courts Act,  and that this discretion is entitled to deference on appeal  (Strickland,  paras 37-39). He also noted the proposition from TeleZone  that the Federal Court's determination of whether to exercise its review discretion should consider not just the availability and adequacy of alternative remedies, but also the suitability and appropriateness of review in the circumstances (Strickland  para 43).

After reviewing the relevant law, Cromwell J. went on to reject the appellants' argument, finding that their "core" claim that they are entitled to a ruling on the legality of the Guidelines  is based on three flawed propositions (Strickland  para 47). These flaws are as follows:

First, the appellants' claim that they are "entitled" to a ruling on the legality of the Guidelines  is "fundamentally at odds" with the discretionary nature of judicial review. This discretionary nature reflects the fact that judicial review – unlike private law – is not directed at exclusively vindicating the rights of individuals.

Second, Cromwell J. held that the determination of an adequate alternative is a broad inquiry that is not simply a matter of the possible advantages conferred on individual litigants. Such an inquiry should also consider the larger legislative context. As he notes, Parliament entrusted the entire area of family law to provincial superior courts. In his view, it would be "curious, to say the least, if the legality of a central aspect of that regime [the Guidelines] were to be finally decided by the federal courts, which, as a result of federal legislation, have virtually no jurisdiction with respect to family law matters" (Strickland  para 51].

Third, Cromwell J. disagrees with the appellants' argument that a federal court determination of the Guidelines'  legality would be more efficient than a number of superior court proceedings. He states that any federal court ruling would not be binding on provincial superior courts, and thus, before having any practical effect, the issue would have to be re-litigated in the provincial superior courts, or, litigated to the Supreme Court. Further, even if such a binding ruling were possible, the provincial superior courts would still need to decide the impact of the illegality of the Guidelines  on particular support orders in individual cases, making "a proliferation of litigation" inevitable (para 53).

For these reasons, the Court concludes that the Federal Court did not make any reviewable error in exercising its discretion not to entertain the appellants' judicial review application (Strickland  para 61).

The Concurring Reasons of Justices Abella and Wagner

Justices Abella and Wagner agreed with Justice Cromwell's conclusions on the issues addressed above. However, they wrote separate reasons to express the view that the Strickland  decision should not be seen as categorically endorsing the assumption (upon which Strickland  was argued) that the Federal Court has exclusive original jurisdiction to grant judicial review remedies directed against regulations promulgated by the Governor in Council and that the provincial superior courts cannot declare federal regulations invalid on administrative law grounds.

In their view, it is not clear that this assumption of exclusive  jurisdiction is warranted. The SCC has never held that the Federal Court enjoys this jurisdiction exclusively, and case law surrounding the jurisdiction of provincial superior courts has affirmed that these courts "ha[ve] jurisdiction to entertain virtually any claim unless that jurisdiction is specifically, unequivocally, and constitutionally removed by Parliament" (Sorbara v. Canada(Attorney General)(2009), 98 OR (3d) 673 (CA) at para 7). Provincial superior courts already have jurisdiction to review federal boards, commissions, and tribunals on constitutional grounds.

As such, Justices Abella and Wagner reason that because there is "no evidence" that Parliament intended to prevent provincial superior courts from determining the vires  of the regulations they apply, "caution and full argument" is needed before this Court declares or is seen to declare that section 18 of the Federal Courts Act  confers exclusive jurisdiction over all  federal regulations (Strickland  para 77).

It should be noted that Cromwell J., in obiter,  briefly addresses his colleagues' concerns, if only to note that he does not share them. In his view, both the text of section 18 and the case law provide support for the proposition that the Federal Court does  enjoy exclusive jurisdiction over the  judicial review of federal administrative tribunals including the Governor in Council when exercising "jurisdiction or powers conferred by or under an Act of Parliament". However, for the majority, he notes that these questions are "for another day" (para 64).

Conclusion

For now, the role of the federal courts to judicially review the decisions of federal boards, commissions and tribunals remains their exclusive jurisdiction. If a party seeks to have a court set aside the decision of a federal agency, it must go to the federal courts for this remedy. Likewise, if the party seeks a declaration for all purposes that a federal regulation is ultra vires on administrative law grounds (as the appellants sought in this case), this remains the exclusive purview of the federal courts under s. 18 of the Act. However, federal courts have discretion to decline to hear such applications for judicial review on the basis that it is not the most appropriate forum to consider the merits.

As a result of the Strickland decision, one assumes that counsel will be very reluctant to pursue judicial review in the federal courts to seek a purely administrative law remedy – here a declaration of invalidity of the Guidelines – and instead forego this remedy and proceed with an action in the provincial superior courts wherein the validity of the impugned federal regulation or order can be considered as a step in the litigation and in conjunction with other legal remedies. The provincial superior courts now clearly have concurrent jurisdiction to consider the lawfulness of federal regulations on both a division of powers and an administrative law basis.  While unable to grant purely administrative law remedies, they can for purposes of the case before them, determine if the regulations are valid and, if not, what legal remedies are available to the plaintiff as a consequence. 

In other words, the federal court can now be bypassed  in such circumstances, and the question of validity be considered within the factual matrix of the action in a provincial superior court. For the successful plaintiff, this may be a more attractive route – to have the validity question answered for purposes of their case only without having to first seek judicial review in the federal courts. As to whether judicial economy and the efficient administration of the law are better served, as Cromwell J. expects, by multiple proceedings in provincial superior courts each considering the same question of validity, we will have to wait and see.

This being said, in the greater context, judicial review before the federal courts may continue to be favoured, for two reasons. First, the judicial review procedure is much more accessible than actions before provincial superior courts. Second, where damages are not sought, the federal court remains the more appropriate recourse, unless the federal legislative scheme, such as the Divorce Act  in this case, clearly contemplates proceedings before a provincial superior court, granting it equal if not more expertise on the matter. 

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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