Canada: Edmonton East (Capilano): Standard Of Review Heads South

The Supreme Court of Canada released its administrative law decision in Edmonton (City) v. Edmonton East (Capilano) Shopping Centres Ltd., 2016 SCC 47 ("Edmonton East") in late 2016.1 The decision was one of our Top Ten Appeals of 2016. It marked a significant shift in how courts determine the standard of review for questions of law on judicial review. The result is that it will be more difficult for individuals and companies to challenge the acts and decisions of government actors, even if the government actors have stepped outside of their legislated authority.

Background

Edmonton East involved a shopping mall in Edmonton whose property value was assessed as $31 million for municipal taxation purposes. The company that owned the mall disputed the assessment by filing a complaint with Edmonton's Assessment Review Board (the "Board"). The company argued that the true value of the mall was $22 million, which would result in a much lower municipal tax burden. But then before the Board, the City of Edmonton claimed that it had actually made an error, and the true value of the mall was $45 million.

Following a hearing, the Board increased the assessed value to $41 million. The company applied for judicial review and the Alberta Court of Queen's Bench made an order setting aside the Board's decision. The Court of Appeal affirmed this order.

The key issue before the courts was whether the Board had the jurisdiction to increase the assessed value given that the company had filed a complaint seeking to decrease the assessed value.

The relevant statutory scheme can be summarized as follows:

  • The Municipal Government Act ("MGA") only permits an "assessed person" or "taxpayer" to contest a municipal property assessment before an assessment review board.2
  • The review board may decide to "change" or not to "change" the assessment.3 The board has a duty to not alter an assessment that is fair and equitable.4
  • The review board only has jurisdiction to hear complaints about any matter shown on an assessment notice,5 and can only hear matters in support of an issue on the complaint form.6
  • An assessed person has the right to request information from the municipality, and the review board cannot consider information that was requested by, but not provided to, the assessed person.7
  • The assessed person must provide evidence 42 days before the hearing date; the municipality must provide such disclosure 14 days before the hearing date; and the assessed person must provide the rebuttal evidence 7 days before the hearing date.8
  • Crucially, the MGA at the time included a statutory right of appeal to the Court of Queen's Bench, with leave, on a "question of law or jurisdiction".9
  • More generally, assessment review boards are established by the various municipalities in Alberta, meaning that each board is unique and that different boards can apply the MGA differently throughout the province.10

This statutory scheme was the subject of much debate between the Supreme Court majority and dissent, and was key to the Court of Appeal's application of a correctness standard of review.

Alberta Court of Appeal

The Alberta Court of Appeal applied a correctness standard of review and upheld the lower court's order overturning the Board's decision. Justice Slatter for a unanimous Court of Appeal wrote a cri de coeur focusing on the values underlying judicial review.11 The Court of Appeal noted that "standard of review" is not a value unto itself but rather exists to maintain the integrity of our governance system, illustrated by the need to defer to administrative tribunals.12 A key value, and the "polar star" of the analysis, is to consider what the legislature intended.13 Where the legislature provides a statutory right of appeal from a tribunal to a court (as the MGA did here), the reviewing court becomes "internal" to the system of administrative justice, rather than the reviewing court being "external" to the administrative system.14 The Court of Appeal further stated that the Dunsmuir factors should not be applied as a "mechanical and formalistic test".15 Even where the nature of the question at issue leads to a presumption of deference, the presumption can be rebutted depending on the circumstances of the case.16 Applied to the facts at bar, the Court of Appeal considered the Board's expertise on the particular subject-matter relative to the expertise of the reviewing court.17 This factor militated in favour of correctness, since the Board does not have expertise regarding statutory interpretation, whereas the superior courts do. The Court of Appeal applied a correctness standard of review and upheld the lower court's order setting aside the Board's decision.

Supreme Court of Canada

The Supreme Court divided sharply in a 5–4 split, with the majority applying a reasonableness standard and overturning the Court of Appeal, and the dissent holding that correctness applied.

The Supreme Court Majority

The Supreme Court majority created a formal rule to determine standard of review for questions of law, applied a reasonableness standard to the Board's decision, and overturned the lower courts to affirm the Board's decision.

Justice Karakatsanis writing for the majority began her analysis by suggesting that the day "may be approaching" when it is possible to write an administrative law judgment "without a lengthy discussion of the standard of review."18 She then twisted years of standard of review analysis on questions of law into a single rule: Questions of law are to be reviewed on a reasonableness standard of review, except if the question of law falls within one of the following categories:

  1. Constitutional questions regarding the division of powers;
  2. An issue of law of central importance to the legal system as a whole and outside the adjudicator's specialized area of expertise;
  3. A true question of jurisdiction or vires; or
  4. An issue regarding the jurisdictional lines between two or more competing specialized tribunals.

In reaching this rule, the majority relied upon parts of the Dunsmuir majority listing examples of types of questions that could attract a correctness standard of review under the contextual standard of review analysis.19

The majority also looked at six of its own recent decisions in which it had applied a reasonableness standard of review even where there was a statutory right of appeal.20 The majority distinguished the Tervita case,21 in which the Supreme Court relied upon a statutory right of appeal in applying a correctness standard; the majority said that the appeal provision in Tervita was "unique" as it granted a right of appeal as if the tribunal's decision were a decision of a lower court.22

The majority noted, in a general sense, that expertise "inheres in a tribunal itself as an institution", and that courts are often not as qualified as a given agency to interpret the agency's enabling statute.23

Finally, the majority lamented that "[t]he contextual approach can generate uncertainty and endless litigation concerning the standard of review".24

The majority then held that the Board's interpretation of its authority was reasonable.

The Supreme Court Dissent

The four–member dissent, authored by Justices Côté and Brown, were quite critical of the majority's reasons. The dissent would have applied a correctness standard of review and upheld the order overturning the Board's decision.

The dissent began by explaining that the "overall aim" of the standard of review analysis is always to "discern legislative intent".25 The standard of review analysis is "necessarily flexible" as it locates the "polar star" of legislative intent.26

The dissent criticized the category–based approach endorsed by the majority:

[T]he ostensibly contextual standard of review analysis should not be confined to deciding whether new categories have been established. An approach to the standard of review analysis that relies exclusively on categories and eschews any role for context risks introducing the vice of formalism into the law of judicial review, as it seeks to "secure a measure of certainty or predictability at the cost of blindly prejudging what is to be done in a range of future cases, about whose composition we are ignorant". ... Disregard for the contextual analysis would represent a significant departure from Dunsmuir and from this Court's post-Dunsmuir jurisprudence.27 [emphasis added]

That said, the dissent agreed that where judicial precedent has already established the standard of review for a particular type of question, that standard should be binding on future courts (this is the first stage of the Dunsmuir two-step analytical framework).28

The dissent then considered the statutory scheme—in particular, the statutory right of appeal, and the Board's relative lack of expertise in statutory interpretation (its day-to-day work is the valuation of property).29

The dissent made an important observation about the relative expertise of tribunals and courts:

The majority's view that "expertise is something that inheres in a tribunal itself as an institution" (para. 33) risks transforming the presumption of deference into an irrebuttable rule. Courts must not infer from the mere creation of an administrative tribunal that it necessarily possesses greater relative expertise in all matters it decides, especially on questions of law. ... Respect for legislative supremacy must leave open to the legislature the possibility of creating a non-expert administrative decision maker, or creating an administrative decision maker with expertise in some areas but not others.30

After establishing a correctness standard of review, the dissent considered the assessment complaint mechanism and determined that a "complaint belongs to the taxpayer".31 The dissent would have held that the Board did not have the jurisdiction to raise an assessment when a taxpayer made a complaint seeking to reduce the assessment. The dissent said the Board's jurisdiction was limited to reviewing the matters on a complaint form, not making a de novo determination.32

Comments on Edmonton East

The majority's ratio in Edmonton East has already been the subject of withering criticism. The esteemed administrative lawyer D. P. Jones writes that he "strongly think[s] that the minority's decision is right, both in principle and in result".33 Another constitutional law scholar did not mince his words, writing, "If this is not post-truth jurisprudence, it's pretty close."34

Here are some high-level comments on Edmonton East, all of which are critical of the decision:

First, the dissent hit the nail on the head when it called out the majority's rejection of the contextual approach to judicial review in favour of a formalistic approach. From a pragmatic perspective, the Supreme Court majority, in a misguided effort to make the law simpler, made the law even murkier as parties, lawyers and the judiciary are left struggling how to define the "categories" of questions that attract a correctness standard of review. From a normative perspective, it creates a formalistic system that is "unconcerned with the context of the actual issue before the court in any particular case"35—creating real potential for unjust and inequitable outcomes. This could represent the first step in a complete dismantling of the Dunsmuir project, which sought to establish "a test that offers guidance, is not formalistic or artificial, and permits review where justice requires it, but not otherwise."36

Second, the presence of a statutory right of appeal is now apparently irrelevant in determining the standard of review. Prior to Edmonton East, a privative clause or statutory right of appeal was one factor amongst several in the standard of review analysis. Now, it appears the only way for legislatures to ensure consistency and correctness of a tribunal's application of the law will be for the statute to exclaim, "THE STANDARD OF REVIEW IS CORRECTNESS" (which is basically what the majority asked the legislatures to do at paragraph 35 of its reasons). The existing rights of appeal encoded in innumerable provincial and federal statutes are now virtually worthless. (One wonders, why did the legislatures insert the rights of appeal in the first place?).

Third, because the majority departed from the Dunsmuir contextual approach, there result will be litigation upon litigation as prior decisions are no longer consistent with the Edmonton East formalistic approach. Recall that the first step of the Dunsmuir two-stage analysis is to consider whether existing precedent establishes an applicable standard of review for the type of decision at issue.37 The Supreme Court of Canada tweaked this in Agraira such that it is necessary to move beyond the first step "if the relevant precedents appear to be inconsistent with recent developments in the common law principles of judicial review".38 Given the Edmonton East majority's rejection of a contextual analysis in favour of a formalistic rule, it is arguable that all precedents considering the standard of review for questions of law—including those decided under the pre¬–Dunsmuir 'pragmatic and functional' approach—are "inconsistent with recent developments". It will thus be necessary to re-argue the standard of review on questions of law even where prior decisions clearly establish a standard. The only winners here will be the lawyers. That cannot be what the Court intended.

Fourth, a reasonableness standard of review does not advance access to justice. Justice Karakatsanis for the majority reasoned that "A presumption of deference on judicial review also fosters access to justice to the extent the legislative choice to delegate a matter to a flexible and expert tribunal provides parties with a speedier and less expensive form of decision making."39 This is absurd. Firstly, the availability of judicial review does not somehow make a tribunal cease to exist. Tribunals, and the accessible rough justice they provide, are still available to parties even if the courts ensure that the tribunals operate according to their statutory mandates. If a tribunal makes a decision that is correct, parties will not be incentivized to seek judicial review—and what less should one ask of a tribunal adjudicating a person's rights than to interpret the law correctly? Secondly and more importantly, forestalling the viability of judicial review by applying an inflexible deferential standard actually denies access to justice by a person who has been adversely affected by illegal government action. Such a person then has two options: spend a lot of money to challenge a decision that will probably be upheld on a deferential standard of review, or simply accept the decision even if it is inequitable but padded with sufficient reasons so as to be "reasonably" defensible. Justice Karakatsanis' comment on access to justice seems to be, at best, a misguided attempt to double down on the accessibility "culture shift" in Hryniak.40

Fifth, although ostensibly a reasonableness review, the majority's analysis seems in substance more like a correctness review. After establishing the standard of review as reasonableness, the majority went into considerable analysis of the statutory scheme, commenting on what "makes sense" and what the various provisions "make clear" in the context of the Board's decision.41 By contrast, the dissent dove into the statutory scheme before determining the standard of review, and then closely analyzed other aspects of the statutory scheme while applying the correctness standard.

Sixth, it is odd that the majority spent so many paragraphs on the hypothetical reasons that the Board could have given. Counsel to the company conceded the key jurisdictional issue at the Board hearing, so the Board did not offer any reasons why it interpreted its constating legislation as giving it the authority to raise the assessment. Thus, as noted by both Mr. Jones and Prof. Daly, the majority offers a host of reasons that the Board could have given for its decision to exercise its jurisdiction to reduce the assessment.42 That has the uncanny effect of vesting in the Board the legal genius of the highest court in Canada.

Seventh, the majority's category–based approach does not permit a correctness review even if the same decision-maker has adopted conflicting interpretations of the law across multiple decisions. Until recently, it was accepted that conflicting decisions could justify a correctness standard (but if most of the tribunal's decisions adopted a single interpretation, the standard would be reasonableness).43 In situations of conflicting decisions, after Edmonton East, people will have no idea which interpretation of the law (each of which could be considered "reasonable") should govern their behaviour.44

Eighth, there is no principled basis to limit correctness review to constitutional questions "regarding the division of powers".45 Should not the courts be able to weigh in on constitutional questions about, for example, the fundamental rights protected by the Charter of Rights and Freedoms?46 Or section 35 of the Constitution Act, 1982, which enshrines the rights of Aboriginal peoples, being one of the most important and rapidly–evolving areas of Canadian law?47 Such questions would probably constitute an "issue of law of central importance to the legal system", but would not necessarily be "outside the adjudicator's specialized area of expertise" so as to attract a correctness standard. For example, a court today would probably agree that Aboriginal issues are within the expertise of the Minister of Indigenous and Northern Affairs. The Minister could thus interpret the constitutional rights of Aboriginal peoples knowing that her interpretation will be entitled to curial deference. It elevates the Minister above the constitutional provisions created to delimit and direct her authority.

In closing, there are multiple ways to interpret Edmonton East. It may be a blip on the doctrinal radar, an aberration that will be smoothed over in the successive waves of administrative law jurisprudence. Or it may signal a much larger shift—recall Justice Abella's call in the Wilson decision to revamp and simplify the standard of review framework,48 a call that was appreciated in principle by four other justices, although they declined to commit to such a move at the time.49 And Justice Karakatsanis wrote in Edmonton East that "any recalibration of our jurisprudence should await full submissions".50 Canadian administrative law may be heading toward one of its once-in-a-decade makeovers—and to this end, we note that the Supreme Court recently granted leave in the Groia case (previously discussed here).51

Case Information

Edmonton (City) v. Edmonton East (Capilano) Shopping Centres Ltd., 2016 SCC 47

Docket: 36403

Date of Decision: November 4, 2016

Footnotes

[1] Edmonton (City) v Edmonton East (Capilano) Shopping Centres Ltd, 2016 SCC 47 ("Edmonton East").

[2] Municipal Government Act, RSA 2000, c M-26, s 460 ("MGA").

[3] MGA, ibid s 467.

[4] MGA, ibid s 467.

[5] MGA, ibid s 460.1.

[6] Matters Relating to Assessment Complaints Regulation, Alta. Reg. 310/2009 (Municipal Government Act), s 9(1) ("Assessment Complaints Regulation").

[7] Assessment Complaints Regulation, ibid, s 9(4).

[8]Assessment Complaints Regulation, ibid s 8(2).

[9] MGA, supra s 470. This provision has since been amended and now simply refers to deadlines and documents if the decision of a review board is subject to judicial review. It no longer contains a statutory right of appeal on questions of law or jurisdiction: Bill 21, Modernized Municipal Government Act, 2nd Sess, 29th Leg, 2016, cl 64, as amended (assented to 9 December 2016, comes into force upon proclamation).

[10] MGA, ibid s 454; Edmonton East ABCA at para 30.

[11] Edmonton East (Capilano) Shopping Centres Limited v Edmonton (City), 2015 ABCA 85 ("Edmonton East ABCA"), .

[12] Edmonton East ABCA, ibid at para 13.

[13] Edmonton East ABCA, ibid at paras 15, 19.

[14] Edmonton East ABCA, ibid at paras 17–19.

[15] Edmonton East ABCA, ibid at para 23.

[16] Edmonton East ABCA, ibid at para 23.

[17] Edmonton East ABCA, ibid at para 28.

[18] Edmonton East, supra at para 20.

[19] Edmonton East, supra at para 24; Dunsmuir at paras 57–64.

[20] Edmonton East, supra at para 29.

[21] Tervita Corp v Canada (Commissioner of Competition), 2015 SCC 3, [2015] 1 SCR 161.

[22] Edmonton East, supra at para 31.

[23] Edmonton East, supra at para 33.

[24] Edmonton East, supra at para 35.

[25] Edmonton East, supra at para 65.

[26] Edmonton East, supra at para 65.

[27] Edmonton East, supra at para 70.

[28] Edmonton East, supra at paras 70–72.

[29] Edmonton East, supra at paras 73–90.

[30] Edmonton East, supra at para 85.

[31] Edmonton East, supra at para 93.

[32] Edmonton East, supra at para 116.

[33] David Philips Jones, Q.C., "Administrative Law in 2016: Update on Caselaw, Recent Trends and Related Developments, Part II—An Additional Case" (14 November 2016) case comment, online: <http://sagecounsel.com/administrative-law-2016-part-ii-additional-case/> ("Jones").

[34] Leonid Sirota, "Law in La-La-Land" (4 December 2016), blog post, online: <https://doubleaspect.blog/2016/12/04/law-in-la-la-land/>.

[35] Jones, supra at 13.

[36] Dunsmuir v New Brunswick, 2008 SCC 9 at para 43, [2008] 1 SCR 190 ("Dunsmuir").

[37] Dunsmuir, ibid at paras 57, 62.

[38] Agraira v Canada (Public Safety and Emergency Preparedness), 2013 SCC 36 at para 48, [2013] 2 SCR 559.

[39] Edmonton East, supra at para 22.

[40] Hryniak v Mauldin, 2014 SCC 7 at para 2, [2014] 1 SCR 87.

[41] Edmonton East, supra at paras 41–60. This point was also made by Jones, supra at 17 when he asks, "Is the majority's decision another example of the court actually applying the correctness standard of review disguised as reasonableness?".

[42] Edmonton East, supra at para 40; Jones, supra at 18; Paul Daly, "Which Way Forward for Canadian Administrative Law? Edmonton (City) v. Edmonton East (Capilano) Shopping Centres Ltd., 2016 SCC 47" (14 November 2016), blog post, online: <http://www.administrativelawmatters.com/blog/2016/11/14/which-way-forward-edmonton-city-v-edmonton-east-capilano-shopping-centres-ltd-2016-scc-47/> .

[43] Wilson v Atomic Energy of Canada Ltd, 2016 SCC 29 at paras 39, 60–61 ("Wilson").

[44] Jones, supra at 18 made the point that an assessment review board in a different part of the province could reach a different decision than the Board in question, resulting in a patchwork across the province. This is less problematic than the situation of the same tribunal adopting different interpretations, because at least in the Alberta context, each assessment board's interpretation is geographically limited to its municipality, and therefore residents of that municipality can know what to expect and how to behave, even if a board in a different part of the province interprets the law differently.

[45] And there is a small irony in listing "constitutional questions" at all, given the courts have repeatedly affirmed that maintaining the rule of law through judicial review is a constitutional imperative: Crevier v Attorney General of Quebec, [1981] 2 SCR 220 at 236; Dunsmuir v New Brunswick, 2008 SCC 9 at paras 31, 52, [2008] 1 SCR 190; Dr Q v College of Physicians and Surgeons of British Columbia, 2003 SCC 19 at para 26, [2003] 1 SCR 226.

[46] The Constitution Act, 1982, being Schedule B to the Canada Act 1982 (UK), 1982, c 11 ("Constitution Act, 1982"), Part I, Canadian Charter of Rights and Freedoms.

[47] Constitution Act, 1982, ibid s 35.

[48] Wilson, supra at paras 19–38.

[49] Wilson, supra at para 70.

[50] Edmonton East, supra at para 20.

[51] Groia v The Law Society of Upper Canada, 2016 ONCA 471, leave to appeal granted: SCC Docket 37112.

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