Canada: Judicial Review And Private Entities: The Limits Of The Remedy Confirmed In The Conservative Party Of Canada V. Trost

Last Updated: May 29 2018
Article by David P. McCutcheon, Dina I. Awad and Adam Ollenberger

Judicial review is a public law remedy, but does this preclude it from being available for decisions made by private entities such as voluntary associations or political parties? Divergent lines of judicial authority have led to inconsistent answers to this question in Ontario. However, a recent decision of the Ontario Divisional Court, The Conservative Party of Canada v. Trost, 2018 ONSC 2733 [Trost], has now confirmed that the answer to that question is "yes". Importantly, the Divisional Court held that the Ontario Court of Appeal's decision in Setia v. Appleby College, 2013 ONCA 753 [Setia], was not intended to expand the availability of judicial review beyond the traditional scope of supervision of government activity.

Background

Mr. Trost was a candidate in the leadership contest for the Conservative Party of Canada (the "Party"). The Executive Director of the Party alleged that Mr. Trost's campaign leaked the Party's membership list. After an inquiry, Mr. Trost was fined $50,000 for the leak. He applied for judicial review of that decision on the basis that the Party failed to follow its own rules, and alleged that the decision gave rise to a reasonable apprehension of bias.

The Party moved to quash Mr. Trost's application on the basis that it was not amenable to judicial review because the decision to fine Mr. Trost was not an exercise of statutory authority. A single judge of the Court referred this question to a hearing before a full panel of the Divisional Court for resolution, which was necessary because two lines of conflicting jurisprudence had arisen in the courts of Ontario and other jurisdictions as to the availability of judicial review for decisions of private entities. Some authorities held that judicial review was solely limited to decisions or activities based in statutory exercises or grants of power. The conflicting line of authorities held that, in circumstances where the matter was of sufficient public importance and in light of a variety of contextual factors, decisions of private entities that were not the product of exercises of statutory authority could be judicially reviewed.

In Ontario, judicial review is made available pursuant to the Judicial Review Procedure Act, which does not specify when judicial review remedies are available to applicants. The prerogative writs have historically only been available for government decisions. Recently, however, some applications for judicial review of private entities' decisions have been allowed to proceed on the basis of Setia. In Setia, the Ontario Court of Appeal applied a series of contextual factors (initially set out by Stratas J.A. in Air Canada v. Toronto Port Authority Et Al, 2011 FCA 347) to conclude that a decision of a private school regulated by the Education Act was governed by private and not public law.

Divisional Court decision

Justice Swinton, for the full panel of the Divisional Court, allowed the Party's motion to quash Mr. Trost's application on the basis that the Party's decision was not amenable to judicial review. The Court applied seven of the Setia factors to find that the Party's disciplinary decision "is not a decision to which a public law remedy can be applied" (at para 14).

The first Setia factor, the character of the matter for which review is sought, supported the inapplicability of judicial review because the matter is a contractual dispute arising from the terms of participation in the Party leadership race. The dispute was limited to the application of that contract. The Court found that this was not a matter of importance to the public.

The second factor, the nature of the decision maker and its responsibilities, was relevant because political parties are not government actors, notwithstanding that they play important roles in parliamentary governance in Canada. The fact that political parties participate in governance was not sufficient to make their internal affairs subject to judicial review, as they are engaged in essentially private activities and are subject to review by the Courts pursuant to private law remedies.

The third factor, the extent to which the challenged decision is founded in law, pointed to judicial review being unavailable because the matter arose out of a private contract between the parties.

The fourth factor, the body's relationship to other statutory schemes or other parts of government, relates to the second factor, in that the party does not stand in a relationship to other statutory schemes or parts of government as it is a private actor that is governed by its own constitution.

The fifth factor, the extent to which the decision maker is an agent of government, controlled or significantly influenced by public entity, points to the same conclusion, as political parties are independent of the government.

The existence of compulsory power also did not support judicial review being available because the power being exercised was a result of a contract, rather than a conferral of state power on a discipline body.

The final factor considered by the Court, the "exceptional category" of cases where the conduct has attained a serious public dimension, was the primary source of the conflict between the two lines of jurisprudence governing this matter. The Court canvassed the jurisprudence which focused on this factor, and held that previous decisions in which the actions of private entities were made subject to judicial review on the basis that they had sufficient public import were wrongly decided. The "exceptional category of cases" factor does not give courts free rein to a judicial review of decisions of private entities with broad public impact. Rather, this factor, along with others, was to be used to distinguish between those decisions of government entities that were subject to private law remedies, such as the termination of employment contracts, as opposed to public law remedies. In other words, there still needs to be a government nexus to the decision at issue. The Court stated at paragraph 33:

"The factors set out in Setia are used to determine whether public law remedies or private law remedies are available in respect of a particular exercise of power of a governmental decision maker or a decision maker who derives power from government. Those factors were not meant to be used to subject the decisions of private actors to judicial review."

As a result, the Divisional Court quashed the application and awarded costs to the Party.

Implications

This decision confirms the traditional boundaries of judicial review and the unavailability of public law remedies to review decisions made by private entities that do not derive their authority from statute. In its 37 paragraph decision, the Divisional Court did not elaborate in detail regarding any policy reasons for the limits set on judicial review. The consequences of this decision remain to be determined, as it is still within the appeal period. Furthermore, a decision currently under reserve by the Supreme Court of Canada, in the appeal of Wall v. Judicial Committee of the Highwood Congregation of the Jehovah's Witnesses, 2016 ABCA 255, will settle this issue in Canada. In the Wall case, the Alberta Court of Appeal held that the internal conduct of an unincorporated religious organization could be the subject of judicial review where alleged breaches of natural justice or significant proprietary interests were involved. A strongly worded dissent in that decision agreed with the conclusion of the Ontario Divisional Court in Trost that a judicial review was not available to interfere with the activities of private parties. It is hoped that the Supreme Court will provide a more fulsome discussion of any policy considerations underlying its conclusion when it considers the appeal. The final word on this matter from the Supreme Court is expected sometime this year.

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