Supreme Court Confronts the Use of “Fashionable” Correctness Review: McLean v British Columbia

Ever since the Supreme Court of Canada (“SCC”), in Dunsmuir v New Brunswick, [2008] 1 SCR 190 [Dunsmuir], developed a “more coherent and workable” framework for judicial review of administrative decisions, lower courts have had difficulty applying the SCC’s standard of review analysis. Misapplication generally involves a lower court undertaking a correctness review where a reasonableness standard is required. To remedy this, the SCC has released a series of decisions clarifying the deference to be afforded to administrative actors. McLean v British Columbia (Securities Commission), [2013] 3 SCR 895 [McLean], released on 5 December 2013, is the most recent of these decisions. In it, the SCC clarified the presumption of deference given to tribunals when they are interpreting their home or a closely related statute.

Facts and Judicial History 

Patricia McLean entered into a settlement agreement with the Ontario Securities Commission (OSC) in September, 2008. The agreement related to misconduct that occurred during her time as a director of a mining corporation. In January 2010, McLean received notice from the BC Securities Commission that it would be seeking an order pursuant to s.161(6)(d) of the Securities Act, RSBC 1996, c 418 [Securities Act], which empowers the Commission to bring proceedings in the public interest against individuals who have agreed with another jurisdiction’s securities regulator, by way of a settlement agreement, to be subject to regulatory action.

The proceedings under s.161 are subject to a six-year limitation period “after the date of the events that give rise to the proceedings.” Upon receiving notice from the Commission, McLean argued that this limitation period had expired, as it had been almost nine years since the last event connected to the settlement agreement. Without giving reasons, the Commission issued an order against McLean and by implication, held that the event that gave rise to the proceeding had been the OSC agreement itself.

On appeal, the BC Court of Appeal concluded that, “generally the interpretation of a limitation period provision in a statute will engage the standard of correctness.” It came to this conclusion on the grounds that limitation periods should be considered as general law that is central to the importance of the legal system. In applying a correctness standard, the court found in favour of the Commission.

The SCC reversed the decision, holding that the appropriate standard of review was reasonableness, not correctness.

Nature of the Question

In Dunsmuir, the SCC held that “deference will usually result where a tribunal is interpreting its own statute or statutes closely connected to its function, with which it has particular familiarity.” The Court clarified this position in Alberta (Information and Privacy Commissioner) v Alberta Teachers’ Associations, [2011] 3 SCR 654 [Alberta Teachers], by stating the interpretation of home and closely connected statutes “should be presumed to be a question of statutory interpretation subject to deference on judicial review.”

While this presumption is subject to a few exceptions, including questions of jurisdiction and general questions of law of central importance of the legal system, McLean holds that these exceptions are exceedingly rare:

Post-Dunsmuir, it has become fashionable for counsel to argue that the question before an administrative decision maker falls into one of the few recognized exceptional categories. One wave of cases focuses on whether the question raised a “true” question of vires or jurisdiction; see Alberta Teachers… In that case, the Court expressed serious reservations about whether such questions can be distinguished as a separate category of questions of law, but ultimately left the door open to the possibility.

A second wave – the one which the appellant now rides – focuses on “general questions of law that are both of central importance to the legal system as a whole and outside the adjudicator’s specialized area of expertise” (Canada (Canadian Human Rights Commission) v Canada (Attorney General), 2011 SCC 53…); see also Nor-Man Regional Health Authority Inc. v Manitoba Association of Health Care Professionals, 2011 SCC 59… [and] Communications, Energy and Paperworkers Union of Canada, Local 30 v Irving Pulp & Paper, Ltd. 2013 SCC 34. In each of these cases, this Court unanimously found that the question presented did not fall into this exceptional category – and I would do so again here.

Expanding on Alberta Teachers, the SCC held that when interpreting a home statute, the tribunal “holds the interpretive upper hand.” Attaching this principle to the facts of the case, the Court found that limitation periods as a conceptual matter are of central importance to the legal system but that the specific limitation period that applied to s.161 of the Securities Act was not. This was due to the finding that the Commission was in a better position to interpret the term “the events” in the limitation clause within the context of the Act.

Despite the SCC’s criticism of the use of the general question of law exception by lower courts, McLean offers little concrete guidance for future applications of judicial review. For example, the Court states that the correctness standard is reserved to “safeguard a basic consistency in the fundamental legal order.”  Yet, prior to McLean, one could plausibly argue that various tribunals and commissions interpreting the same statutory language in different ways would qualify as a “basic [in]consistency.” As a result, it seems likely that misapplication by lower courts will continue.