The Public/Private Divide in Canada: Khorsand v. Toronto Police Services Board, 2024 ONCA 597 and Nova Scotia Health Authority v. Finkle and West, 2024 NSCA 87

In its 2018 decision in Highwood Congregation of Jehovah’s Witnesses (Judicial Committee) v. Wall, 2018 SCC 26, [2018] 1 SCR 750, the Supreme Court of Canada sought to clarify the approach to the scope of judicial review. Rowe J wrote, for a unanimous court, that “[j]udicial review is only available where there is an exercise of state authority and where that exercise is of a sufficiently public character” (at para. 14).

On a plain reading of this sentence, two criteria must be met for a court to consider an application for judicial review: the decision-maker at issue must be ‘exercising state authority’ and the exercise must be ‘of a sufficiently public character’. It is not clear, however, what “state authority” means, nor is the difference between “state” and “public” explained.

In a comment on the Wall decision, I noted that the Supreme Court’s references to “state” and “public” were conclusory and warned that “future courts will struggle to draw the line between “public” and “private” decision-making and identify those exercises of “state” authority that ought to be subject to judicial review remedies” (“Right and Wrong on the Scope of Judicial Review: Wall v Highwood Congregation” (2018) 31 Canadian Journal of Administrative Law & Practice 339, at p. 343).

In my view, there is really only ever one relevant question in cases about the scope of judicial review of administrative action: is the decision at issue sufficiently public in character to justify court oversight? (See further Daly, Understanding Administrative Law in the Common Law World (OUP, 2021), at p. 203.) In answering this question, it is helpful in my view to have regard to the factors set out by Stratas JA in Air Canada v. Toronto Port Authority, 2011 FCA 347, [2013] 3 FCR 605, at para. 60:

i.      the character of the matter for which review is sought;

ii.     the nature of the decision-maker and its responsibilities;

iii.   the extent to which a decision is founded in and shaped by law as opposed to private discretion;

iv.   the body’s relationship to other statutory schemes or other parts of government;

v.   the extent to which a decision-maker is an agent of government or is directed, controlled or significantly influenced by a public entity;

vi.   the suitability of public law remedies;

vii.  the existence of a compulsory power; and

viii. an “exceptional” category of cases where the conduct has attained a serious public dimension.

These factors can help us sort the state/public from the private. The difficulty is that, in Wall, the Supreme Court sought to minimize the role of the Air Canada factors (at para. 21). Two recent appellate authorities have reinvigorated the Air Canada factors and both involve interesting applications of the principles about the scope of judicial review: Khorsand v. Toronto Police Services Board, 2024 ONCA 597; and Nova Scotia Health Authority v. Finkle and West, 2024 NSCA 87.

In Khorsand, Fairburn ACJ thoroughly reviewed the post-Wall case law and academic literature. Adopting Professor McKee’s terminology, she distinguished between the institutional (state) and functional (public) aspects of the decision in Wall and concluded as follows: “Wall does not preclude reference to the Air Canada factors in teasing out why, at a minimum, the functional criterion is or is not met when determining whether a decision is public or not” (at para. 73).

In my view, this statement must be correct. Personally, I would go further, merge the institutional and functional questions and use the Air Canada factors to provide an answer to one single question I posed above: is the decision at issue sufficiently public in character to justify court oversight?

In terms of applying the Air Canada factors, Fairburn ACJ makes two other astute points. First, she adopts Groberman JA’s analysis from Strauss v. North Fraser Pretrial Centre (Deputy Warden of Operations), 2019 BCCA 207, at para. 42:

In the end, the factors are merely guidelines in deciding whether a decision made by a public official or tribunal has a sufficiently public character to be amenable to judicial review. Some will be applicable and important in particular contexts while, in those contexts, others may be irrelevant and unhelpful.

This seems entirely correct to me.

Second, she observes that in Wall, the Supreme Court was concerned to eliminate the last factor on Stratas JA’s list of factors in Air Canada, as the judges were evidently concerned that it was being used to justify judicial review in areas from which the courts should generally steer clear. Citing paras. 20-21 of Wall, where Rowe J held that a series of lower-court decisions expanding the scope of judicial review had been wrongly decided, she observes:

This passage makes clear that it is wrong to apply the Air Canada factors to transform the decision of a private actor – such as a church, sports club, or other voluntary association – into a public decision. In my view, the passage also cautions against characterizing a decision of a public body as public in function simply because a broad segment of the public may be interested in or impacted by it. For instance, a government decision to enter into a contract to purchase property may be of significant interest to, and have an impact on, a broad segment of a community; however, that would not transform the contractual decision into a public one. In other words, it is important to distinguish between “public” in the generic sense and “public” in the sense that the legality of state decision making is at play (at para. 76).

As this passage suggests, it is important to set Wall in context. This was the key concern of the Supreme Court. The use of an institutional criterion and a functional criterion was designed to ensure that the scope of judicial review was not enlarged to include matters inappropriate for court oversight. But this also means, in my view, that if the Air Canada factors (minus the last one) can respond to the Supreme Court’s key concern, they should be used. And, in my view, they can indeed be applied in a way that is sensitive to that concern.

Khorsand might be a case in point. K wanted to become a special constable with the Toronto Community Housing Corporation. To do so, K needed to pass a security screening conducted by the Toronto Police Service (or more specifically, its Talent Acquisition Unit). He failed to pass: neither the TPS nor the TCHC provided any reasons; documents disclosed after a freedom of information request revealed that there had been 9 interactions between K and the TPS (none of which identified any criminal behaviour) and that K had been described as “Brown”, “Middle Eastern”, or “Persian”. Reading between the lines, K suspected he had been discriminated against on the grounds of race.

K sought judicial review on the grounds of procedural unfairness and unreasonableness. But Fairburn ACJ held that the screening decision was not amenable to judicial review.

First, although the power to appoint someone as a special constable is statutory, the pre-screening decision here was at one remove from the appointment power. The decision was taken under a Memorandum of Understanding between the TPS and TCHC, the provisions of which:

oblige the TCHC – the actual employer of TCHC special constables – to satisfy itself of a community patrol officer applicant’s suitability before it can advance that person for appointment as a special constable. Indeed, the TCHC must already have hired the person, trained them, and ensured that “all screening tests” have been conducted “by or on behalf of the TCHC” at its own expense, before it may even put the individual forward “to the Board for appointment as a special constable.” Under s. 15 of the MOU, the TCHC “shall not put forward to the Board an applicant for appointment as Special Constable” where the TCHC is not satisfied with “the results of the background investigations.” In other words, the pre-screening decision was made by the TAU at the request of the TCHC as part of its hiring process (at para. 81).

The hiring decision was, therefore, to be made before the TPS became involved (at para. 82).

Second, the majority of the court below had expressed concerns about systemic discrimination and saw a role for judicial review as a matter of public importance. Following Wall, however, “these concerns cannot transform a discretionary employment-related decision into a public decision” (at para. 90). Fairburn ACJ was also not convinced that the references to K’s ethnicity in the disclosed documents were, without more, enough to demonstrate racial discrimination (at paras. 91-97).

Third, public law remedies were not suitable here. Judicial review meant disclosure, “subject only to an undefined process to protect sensitive law enforcement information” (at para. 103). But this risked undoing the carefully calibrated statutory regimes for disclosure (at para. 101). Furthermore, judicial review, and concomitant disclosure, could have a chilling effect:

This is akin to a more classic job reference check and something that may be recorded in the notes of the person conducting the check. If such notes informed the reason for Mr. Khorsand’s failure, the majority’s reasons dictate that the notes would have to be disclosed. In my view, that would place a chill on receiving honest and objective feedback about a potential TCHC community patrol officer (at paras. 107-108).

For these Air Canada-type reasons (see iii and iv above), judicial review was not appropriate.

The Nova Scotia Court of Appeal reached the opposite conclusion in Finkle and West. Here, the issue related to disciplinary action taken against doctors by the Authority. The Authority argued that the relationship was contractual and thus not subject to judicial review. However, Fichaud JA found that the matter was subject to judicial review. To begin with, there was state action as the Authority used the doctors’ privileges — set out in legislation and regulations — as “leverage” to impose disciplinary measures (at para. 79). This provided a “legislative nexus” (at para. 70) and led to the conclusion that the Authority “exercised state authority” (at para. 77). These can easily be related to the Air Canada factors about the nature of the decision-maker, its relationship to government and the exercise of compulsory authority.

In addition, Fichard JA applied the Air Canada factors (at para. 85, adopting Khorsand) to determining whether this exercise of state authority was public:

In this case, the motions judge discussed those factors from Air Canada’s list that the judge determined to be applicable to the circumstances (paras. 91-94). Justice Keith found (1) this was not a private matter, as the NSHA exercised authority further to subordinate legislation under the Health Authorities Act, rather than applying contractual or business considerations, (2) the NSHA’s power was compulsory for physicians with privileges and (3) a public law remedy was suitable. The judge’s analysis displays no error of law (at para. 86).

The bottom line, then, is that the Air Canada factors were useful to both appellate courts in determining the scope of judicial review. Although Fichaud JA analyzed the existence of “state” authority without reference to the factors, they can be understood to have influenced his analysis, and he clearly used them on the question of ‘publicness’. Again, in my view, only one question need be answered, and it can be answered by reference to the Air Canada factors. This was the path Fairburn ACJ followed in Khorsand. Regardless of the question posed, the answers given here are very interesting and quite instructive about the difficulties that arise on the edges of the public/private divide.

This content has been updated on October 23, 2024 at 20:38.