Defiance of Administrative Law: Canada (Attorney General) v. Bri-Chem Supply Ltd., 2016 FCA 257

Blogging remains slow, primarily because I have been without a computer for almost two months (!), and in the circumstances I am very happy when a blog entry that more or less writes itself comes along.

The Canadian Federal Court of Appeal’s recent decision, per Stratas J.A., in Canada (Attorney General) v. Bri-Chem Supply Ltd., 2016 FCA 257 addresses a novel issue. Do front-line administrative decision-makers have an obligation to obey the decisions of an administrative tribunal?

At issue here was an interpretation by the Canadian International Trade Tribunal of the Customs Act, made initially in a case called Frito-Lay and reiterated in these proceedings. Reiterated because the border officials who administer the Customs Act on a day-to-day basis did not accept that Frito-Lay had been correctly decided and sought to relitigate it before the Tribunal — although they had discontinued the appeal they had lodged in respect of Frito-Lay. The Tribunal found that the attempted relitigation was an abuse of process.

The Tribunal’s conclusion on abuse of process was appealed to the Federal Court of Appeal. The argument was that administrative tribunals are not subject to the constraints of precedent to the same extent as courts. And if no panel of an administrative tribunal can bind a subsequent panel, there can be no abuse of process in relitigating an issue. There is, in essence, no “law” to obey.

Rejecting this argument, Stratas J.A. upheld the Tribunal’s conclusion that an abuse of process had occurred. He explained that the principle of stare decisis (see here) operates in a nuanced way in the administrative setting: panels are not bound by previous decisions, but in the interests of finality, certainty and predictability, “later panels should not depart from the decisions of earlier panels unless there is good reason” (at para. 44). From the point of view of a front-line administrator, the decisions of those who sit in the higher echelons of the administrative hierarchy should generally be respected, but can be challenged in some circumstances. For if they were obliged to accept all decisions unthinkingly, “a serious error might persist, possibly perpetually” (at para. 49).

Stratas J.A. proposed the following general framework:

In my view, an administrator can act or take a position against an earlier tribunal decision only if it is satisfied it is acting bona fide in accordance with the terms and purposes of its legislative mandate and only if a particular threshold has been crossed. This threshold should be shaped by two sets of clashing principles discussed above: the principles of certainty, predictability, finality and tribunal pre-eminence on the one hand, and, on the other, ensuring that potentially meritorious challenges of arguably wrong decisions can go forward.

What is the threshold? In an administrative regime like the one before us, the administrator must be able to identify and articulate with good reasons one or more specific elements in the tribunal’s earlier decision that, in the administrator’s bona fide and informed view, is likely wrong. The flaw must have significance based on all of the circumstances known to the administrator, including the probable impact of the flaw on future cases and the prejudice that will be caused to the administrator’s mandate, the parties it regulates, or both.

This is something far removed from an administrator putting essentially the same facts, the same law and the same arguments to a tribunal on the off-chance it might decide differently. Tribunal proceedings are not a game of roulette where a player, having lost, can just hope for better luck and try again.

When the administrator tries to persuade the tribunal that its earlier decision should no longer be followed, the administrator must address at least the matters discussed above, offering submissions that are not simply a rerun. They must go further than just a modest modifying or small supplementing of the earlier submissions. The tribunal may then decide whether its earlier decision remains good law after considering the evidence before it, the terms and purposes of the legislation, and any other legal standards that properly bear on its decision (at paras. 50-53).

Stratas J.A. also noted that an administrative tribunal can state a case for resolution by the courts, which may often be an effective and efficient means of clarifying the law authoritatively where there is a dispute between a tribunal and front-line administrators (at para. 55).

On the facts, the border officials “simply reargued the issues decided in Frito-Lay on virtually identical facts and law, without identifying any flaws, let alone serious flaws, in the particular reasoning in Frito-Lay” (at para. 58). Having discontinued their appeal of Frito-Lay, they were bound to accept it unless they had good reasons to challenge its authority. The problem was this: “Rather than fighting Frito-Lay in this Court, the CBSA chose to fight it by resisting it at the administrative level” (at para. 59). The conclusion that there had been an abuse of process was justified because the border officials had not provided good reasons for refusing to accept Frito-Lay despite the discontinuance: “The discontinuance of Frito-Lay placed a higher tactical burden upon the CBSA in this case to demonstrate its good faith and to offer good reasons to the Tribunal both as to why Frito-Lay should not be followed and why the appeal from Frito-Lay was discontinued” (at para. 61).

In the background there are fascinating issues about whether individuals, as private persons or public officials, have an obligation to obey the law. On the face of it, one would think the obligation on public officials is greater than any obligation on private persons. However, in an administrative structure that features dozens, hundreds or thousands of front-line decision-makers, whose decisions are irregularly funneled upwards for resolution by a tribunal (and exceptionally by the courts), and in which the principle of stare decisis applies in modified form, this obligation of obedience must by necessity be tempered to some extent. Stratas J.A.’s reasons here represent a thoughtful attempt to work through the scope of this obligation in an administrative setting.

This content has been updated on October 27, 2016 at 10:31.