March 27th, 2008
‘By reading the characteristic features of any man’s castles in the air you can make a shrewd guess as to his underlying desires which are frustrated’ – John Dewey
What’s in a name? Apparently, quite a lot. In Dunsmuir v New Brunswick,  1 SCR 190 [“Dunsmuir”], a majority of the Supreme Court of Canada has reformed the Court’s approach to substantive review in administrative law by, among other things, changing the name. The old order of the ‘pragmatic and functional approach’ is deposed. It is replaced by a new order of ‘standard of review analysis’. The Queen is dead; long live the Queen. The background and relevant content of the decision are ably summarized in contributions by Julian Ho [(12 March 2008) <court: <www.thecourt.ca>] and Professor Lorne Sossin [(17 March 2008) <www.thecourt.ca>] at TheCourt.ca.
The role of standard of review analysis is to signal to those who are affected by government decisions – ranging from the issuance of a license to the investigation of professional misconduct to the expropriation of land – the likelihood that a court will intervene by altering or overturning those decisions. It is an esoteric area of law, but one that has wide-ranging implications for everyone whose life and livelihood is subject to regulation and who may, one day, be pushed to challenge the government in a court. In deciding to fight City Hall, as the saying goes, one naturally prefers to have an idea of whether and how a court is likely to change a decision in one’s favour.
For nearly 30 years, the Supreme Court has rightly accepted that government decision-makers should usually receive deference from courts. There are various reasons for this. One is to respect the choices of the legislature to delegate authority to specialized agencies or local democratic bodies. Another is to acknowledge the superior expertise that such decision-makers can develop in their field, relative to courts. Yet another is to accept that judicial intervention in matters of public policy may at times frustrate important regulatory activity.
The conundrum has not been to find reasons for judicial deference. It has been to sort through the different rationales that weigh for and against intervention, and to work out how they should be balanced and prioritized in a way that is understandable and reasonably predictable.
An innovation of the pragmatic and functional approach, now dethroned, was to outline a list of ‘factors’ that courts were committed to considering when asked to review substantive decisions of government. This ‘list approach’ was helpful because it allowed all to see, at least, what a court would turn its mind to when sculpting its review position in relation to a particular decision of a particular agency.
Ironically, though, by applying a single template to all cases, the old approach also created new uncertainty. Not all factors were as pertinent in all cases, and even where they were, it sometimes appeared as if the courts could spin individual factors, as they had done in much earlier periods, by twisting the legal tests in order to find ways to intervene or defer, as they preferred.
How will this change? With Dunsmuir, the list approach has been jettisoned and the Court has given a clearer indication of how particular factors may drive the standard of review, without the need to work through less significant considerations. Thus, for example, where an agency exercises authority within its specialized mandate, this will create a strong presumption for deference, and one need not argue about how the terms and context of the relevant statute, or the wider regulatory purpose, may also weigh for or against intervention. On the other hand, where the question before the court is constitutional or jurisdictional – or where it involves legal matters of central importance to the legal system and outside an agency’s expertise – a court will substitute its own view for that of the agency.
In this way, the list of factors has been displanted by more specific and stepped guidelines on how certain characteristics of a statute or an agency or a decision will call for deference, barring exceptional reasons to the contrary.
It is a subtle change, no doubt, so subtle as to make one wonder why they even bothered to change the label to ‘standard of review analysis’. Justice Binnie asks as much in his separate opinion by citing Shakespeare: ‘that which we call a rose by any other name a rose would smell as sweet’. But the change is, I would say, more than meaningless. Would a rose smell as sweet if it was named ‘the pragmatic and functional flower’? Would the oddness and impenetrability of the name not distract us from the scent?
I have no difficulty with the re-branding, even if only to mark symbolically an attempted turn toward simplicity. My difficulty with the majority’s reasons in Dunsmuir arise from other matters. The first is that aspects of the decision point to new areas of obfuscation and confusion. The second is that the decision as a whole will probably herald less deference to administrative decisions.
In the first place, the Court not only changed the methodology that is used to arrive at the standard of review. It also collapsed the two standards that were previously used to demarcate degrees of deference (reasonableness and patent unreasonableness) into a single standard of ‘reasonableness’. This seems likely to export the uncertainties that infused the pragmatic and functional approach as a whole into the second stage of substantive review, at which a court must apply the standard of review. Thus, we shall now debate, not whether specialized expertise or a privative clause should lead to deference, but rather whether ‘reasonableness’ entails more or less deference than its ancestor standards.
In this respect, Dunsmuir cuts a more direct path to the standard of review, but creates new dilemmas, and new opportunities for intervention, once the court arrives at its destination.
The major challenge for the Supreme Court arises from the underlying tension between clarity and flexibility which is, at a certain level, utterly unavoidable. The Court must direct lower courts (and everyone else) as to the degree to which judges should supply a backstop against dangers of arbitrary decisions and jurisdictional frolics by the administration, while also dissuading courts from tinkering in policy or casting an ideological veto over government.
And, in striving to leave room both for intervention and for deference in administrative law, the Court faces an immense range of institutional structures and statutory habitats for government. It is one thing to seek clarity while maintaining flexibility in the supervision of, say, a provincial ministry of the environment. It is immeasurably more complex to do so with all forms and levels of administrative decision-makers whose decisions have significant impacts for individuals.
Making ginger bread biscuits lends itself readily to a cookie cutter approach. You have hearts, snowflakes, and ginger bread people. But what cookie cutter could ever accommodate muffins, cakes, tarts, fruit loafs, and puddings?
More troubling than this quixotic quest for certainty is the Dunsmuir majority’s apparent move away from deference. There are two elements of this. First, the collapse of two deferential standards into one means that the highly deferential standard of ‘patent unreasonableness’ is no longer available as a clear check against judicial intervention. Courts will now be able to overturn a decision as ‘unreasonable’ in circumstances where before, as everyone clearly understood, the decision was properly insulated from review, other than in extraordinary circumstances.
Second, the majority’s reasons telegraph a lack respect for privative clauses. Courts do not have an overriding authority to trump the legislative will, where it speaks for the autonomy of an administrative body by clearly precluding judicial review of the body’s decisions. Stronger adherence by the Court to the straightforward principle of legislative supremacy would deliver much more clarity in substantive review than any of the reforms adopted in Dunsmuir. But it would also require judges to cede their wiggle room to intervene in cases where it is obvious, from the terms of a privative clause, that deference is warranted, but where judicial loathing for a government decision runs so deep that the court cannot help but step in.
As Binnie J. puts it, a privative clause “is more than just another ‘factor’ in the hopper of pragmatism and functionality”; barring exceptional reasons to the contrary, it existence “should presumptively foreclose judicial review on the basis of outcome on substantive grounds” (para 143). Yet the majority noticeably declines to take a clear stand for legislative supremacy, stating that “Judicial review is necessary to ensure that the privative clause is read in its appropriate statutory context and that administrative bodies do not exceed their jurisdiction” (para 52). The reference here to courts assuming the power to re-read privative clauses according to their ‘statutory context’ is alarming.
I am not suggesting that the courts will now refuse to give privative clauses their clearly intended meaning, but I expect they will tend to do so selectively, by juggling it alongside other considerations. More importantly, even where a privative clause leads courts to deference, Dunsmuir affords them greater flexibility to intervene in spite of the legislature, under the big tent of reasonableness.
How should courts approach the standard of review? I claim no special talent in unravelling the knot. But it would seem “simpler and more workable’ – as the majority frames its objective (para 45) – to say that, barring highly exceptional circumstances, the courts will defer where there is a clear legislative direction to do so or where the decision-maker has superior expertise. Also, it is of course imperative that courts not frustrate regulatory schemes by using selectivity or semantics to justify substituting their views for those of public entities whose role in society they may find distasteful or whose decisions they dislike.
There are a number of illustrations of this inappropriately interventionist stance, from different places on the political spectrum, but a good example is the Supreme Court’s decision in ATCO Gas & Pipelines Ltd. v Alberta (Energy & Utilities Board),  1 SCR 140 [“ATCO“]. In that case, a majority of the Court (on reasons of Bastarache J.) donned the cape of ‘property rights’ to overturn a decision of the Alberta Energy & Utilities Board [“The Board”] that was not only reasonable, but eminently sensible, in that it required a gas utility owner to return a portion of the proceeds of the utility’s infrastructure, upon its sale, to the utility as a whole and to its ratepayers.
The Board’s decision in ATCO clearly warranted deference. It was protected by a strong privative clause and it dealt with a matter that fell squarely within the board’s special expertise, and well outside that of the courts. But a majority of four justices could not restrain themselves, and overturned the decision in spite of the existing methodology by drawing selectively on malleable rules of statutory interpretation and, as Bastarache J. helpfully confessed, by favouring intervention ‘when property rights are at stake’ (para 86). This resort to the trump card of property rights not only defied the historic movement toward deference, however labelled, but did so in the context of a monopolized industry that will always require intensive regulation in order to guard against the obvious opportunities for owners to abuse their monopoly position.
I fear that Dunsmuir, by clipping privative clauses and by shedding patent unreasonableness, will carve out yet more space for ideological interventions like ATCO in a range of fields. It suggests an abandonment of self-discipline that is awkward and embarrassing for the interventionist court because it so clearly exposes the court’s manipulation of legal tests to suit its ideological ends. That Dunsmuir does this in the guise of clarity and simplicity is not reassuring.
If nothing else, ‘pragmatic and functional’ connoted acceptance by the courts that some issues will defy any attempt to arrive at guidelines which adequately resolve all cases. With Dunsmuir, the Court has endorsed a brand of normativism which posits that moral truth can be uncovered by statements of principles, so long as they are sufficiently clear to guide conduct. And therein lies the fantasy.[filed: Uncategorized]