Taiga Works Wilderness Equipment v BC: Consequences of a Breach of Procedural Fairness
On February 25, the British Columbia Court of Appeal (“BCCA”) released its decision in the administrative law case Taiga Works Wilderness Equipment Ltd. v. British Columbia (Director of Employment Standards), 2010 BCCA 97. At issue was whether an appellate body is able to cure breaches of the rule of natural justice or procedural fairness committed by a tribunal whose decision is under appeal.
In late 2006, employees of the appellant employer sought relief under British Columbia’s Employment Standards Act, RSBC 1996, c 113, for constructive dismissal. The Act is administered by the Director of Employment Standards (the “Director”). Delegates of the Director investigate complaints received under the Act and then issue determinations in respect of these complaints. In late 2007, the Director’s delegate issued a determination in favour of the complainant employees. The Act allows for appeal to the Employment Standards Tribunal (the “Tribunal”) on the grounds, inter alia, that “the Director’s delegate failed to observe the principles of natural justice.”
The employer appealed in accordance with these provisions. In early 2008, a member of the Tribunal found the Director’s delegate had breached the principles of natural justice in two respects. First, the delegate did not provide the employer with disclosure of documents the employees submitted to the delegate in relation to their claims for employment insurance. Second, the delegate did not consider the employer’s final written submission before issuing the determination on the day after the submission was made. The Tribunal member did not, however, “remit the matter back to the delegate for reconsideration,” as she held that the Tribunal had “held that any breaches of natural justice may be cured on appeal[,] and having reviewed the submissions, any procedural defects have been addressed.”
As provided for under the Act, the appellant applied for reconsideration of this decision by a different member of the Tribunal. While the second Tribunal member expressed, with some concern, that it was not entirely clear the appellant had been given the opportunity to make submissions with respect to all of the documents only originally disclosed to the appellant during the appeal process, he disagreed with the appellant’s position that this breach of procedural fairness could only be cured by a full oral hearing into the merits of the complaint.
Instead, he held that procedural fairness could be ensured by referring the matter back to the first Tribunal member and providing the employer an opportunity to make a complete submission in respect of the previously undisclosed documents. The first Tribunal member re-affirmed her original ruling, upon which the appellant applied for judicial review. The case eventually made its way to the BCCA, where the appellant requested that the reconsideration decision be set aside and that the matter be referred back to the Director for determination before a different delegate.
The BCCA Decision
In its decision, the BCCA set out to clarify the law of procedural fairness and the amelioration of breaches thereof. The appellant relied on the seminal Supreme Court of Canada (“SCC”) case of Cardinal v Director of Kent Institution,  2 SCR 643 [Cardinal], wherein Justice LeDain wrote:
[D]enial of a right to a fair hearing must always render a decision invalid, whether or not it may appear to a reviewing court that the hearing would likely have resulted in a different decision. The right to a fair hearing must be regarded as an independent, unqualified right which finds its essential justification in the sense of procedural justice which any person affected by an administrative decision is entitled to have. It is not for a court to deny that right and sense of justice on the basis of speculation as to what the result might have been had there been a hearing.
The BCCA, however, distinguished Cardinal:
I note Cardinal did not involve an appeal from the person who breached the duty of procedural fairness. The application was for judicial review of the director’s decision, with relief requested in the form of habeas corpus. Hence, as the case did not involve a tribunal sitting on appeal from a decision of another tribunal, it would appear doubtful that Cardinal could stand for the broad proposition asserted by the employer that an appellate tribunal cannot cure a breach of the rules of natural justice or procedural fairness. [Emphasis added]
The Court went on to briefly review four SCC cases (King v University of Saskatchewan,  SCR 678; Harelkin v University of Regina,  2 SCR 561; Supermarchés Jean Labrecque Inc v Flamand,  2 SCR 219; and, Mobil Oil Canada Ltd v Canada-Newfoundland Offshore Petroleum Board,  1 SCR 202), two decided post-Cardinal, that it found supported the position underlined above. On this basis, the Court found it “fair to say that Cardinal stands for the proposition that a breach of the rules of natural justice or procedural fairness cannot be overlooked on the basis that the reviewing court or appellate tribunal is of the view the result would have been the same had no breach occurred.”
The Court of Appeal found the cases reviewed, however, formed a basis for the conclusion that “appellate tribunals can, in appropriate circumstances, cure breaches of natural justice or procedural fairness by an underlying tribunal. The question then becomes how one should determine whether such breaches have been properly cured.”
The Court preferred to answer this question as it had previously been answered in International Union of Operating Engineers v Burnaby Hospital Society (1997), 46 BCLR (3d) 97 (CA): “One should review the proceedings before the initial tribunal and the appellate tribunal, and determine whether the procedure as a whole satisfies the requirements of fairness.” This involves “consider[ing] all the circumstances, including the factors listed by [learned authors of de Smith, Woolf & Jowell, Judicial Review of Administrative Action, 5th ed. (London: Sweet & Maxwell, 1995)]”, which are:
(i) the gravity of the error committed at first instance,
(ii) the likelihood that the prejudicial effects of the error may also have permeated the rehearing,
(iii) the seriousness of the consequences for the individual,
(iv) the width of the powers of the appellate body and
(v) whether the appellate decision is reached only on the basis of the material before the original tribunal or by way of rehearing de novo.
In this case, the BCCA concluded that neither the first nor second Tribunal member had properly cured the serious breach of procedural fairness which had occurred. Accordingly, the only only appropriate result was to grant the appellant’s request and refer the case back to the Director, to be determined by a different delegate.
Commentary and Conclusion
For my part, a “curative” requirement which imposes as a pre-requisite a lack of fairness (such as on the basis of the above five factors) beyond the simple finding a breach of procedural fairness has the potential to impose a judicial burden on the resolution of procedural fairness disputes. On the other hand, however, the ability of reviewing tribunals to cure defects in proceedings below without resorting to a whole new rehearing constitutes a considerable logistical relief not only for already overburdened administrative decision-makers but for aggrieved appellants as well.
The Court of Appeal’s specific rejection of an oral re-hearing accords with this end. The end result of a framework providing that breaches of procedural fairness should be cured by the very appellate bodies which determine the matter, however, is to ultimately increase the difficulty for those seeking to strongly impugn administrative rulings on non-substantive, procedural fairness grounds.