Steady as She Goes: Northern Regional Health Authority v. Horrocks, 2021 SCC 42

There was some expectation that the Supreme Court of Canada would revisit the appellate standard of review in Northern Regional Health Authority v. Horrocks, 2021 SCC 42, a case about the competing jurisdictions of a labour arbitrator and human rights adjudicator.

In both the leave materials and on the merits, the case was presented as one in which the Court could revisit the approach set out in Agraira v. Canada (Public Safety and Emergency Preparedness), 2013 SCC 36, [2013] 2 SCR 559 pursuant to which an appellate court ‘steps into the shoes’ of a first-instance judge in administrative law matters.

Having heard argument, however, the Court declined to modify the status quo. For the majority, Brown J. wrote simply: “I would decline the invitation to reconsider Agraira, which is a recent decision of the Court and remains good law” (at para. 12). Accordingly, Canadian appellate courts will continue to pay no deference to first-instance judges’ consideration of the lawfulness of administrative action: “the appellate court performs a de novo review of the administrative decision” (at para. 10).

This does not mean a de novo standard applies to all matters raised and disposed of in an application for judicial review. Brown J. acknowledged that “there may be good reason to apply the [appellate] standard where a reviewing judge acts as a decision-maker of first instance” (at para. 12). In this regard, he cited with approval Rennie J.A.’s proposition from Syncrude Canada Ltd. v. Canada (Attorney General), 2016 FCA 160, at para. 29 that first-instance findings of fact should be subject to the appellate standard of review of palpable and overriding error rather than to de novo consideration on appeal.

Left open is the question of the standard to apply to a first-instance judge’s exercise of discretion, for example in according public interest standing or determining the appropriate remedy. In “Appellate Standard of Review in Public Law Cases“, [2021] Public Law 334, I wrote:

Lastly, it should be noted that some questions which arise in public law cases will be properly classified as discretionary and subject to deferential appellate review. Findings of fact made and based on evidence admitted at first instance; decisions as to whether and under what conditions intervener status should be granted; and determinations relating to costs should certainly attract deference from an appellate court. These are questions which fit the description of judicial discretion offered by Asquith LJ in Bellenden (formerly Satterthwaite) v Satterthwaite – “that on the same evidence two different minds might reach widely different decisions without either being appealable” – and on which the answer given at first instance should only be rejected if “plainly wrong”. By contrast, questions relating to whether a claimant has exhausted alternative remedies, or is engaged in an impermissible collateral attack on an administrative decision are questions of principle – context sensitive questions, to be sure, but questions of principle nonetheless – on which the appellate court should substitute its judgement for the first-instance court. Other questions are, admittedly, difficult to classify: deciding whether or not to hear a moot matter or determining whether a claimant has public interest standing seem to straddle the line between “law” and “discretion”. What unites the questions in the “law” category is that they can be described as jurisdictional inasmuch as they relate to whether a matter is properly before the court (in which case mootness and standing would fall in the “law” category). Exercises of “discretion” relate, by contrast, to the management of matters which are properly before the court.

Debate will no doubt continue on these questions, except of course in respect of first-instance findings of fact which will be subject to the palpable and overriding error standard. (I note in passing that Brown J., in allowing the appeal, modified the first-instance judge’s order (at para. 61), on the grounds that the issue addressed in the order was not properly before the reviewing court; it was, one might, say an error in principle and/or plainly wrong.)

There is one further nuance to introduce. Even if the appellate standard of review is de novo, this does not mean that the first-instance decision can simply be disregarded. The Federal Court of Appeal made this point very clearly in Bank of Montreal v. Canada (Attorney General), 2021 FCA 189, at para. 4:

In an appeal from a judicial review before the Federal Court, this Court “steps into the shoes” of the Federal Court and determines whether the correct standard of review was identified and properly applied: Agraira v. Canada (Public Safety and Emergency Preparedness), 2013 SCC 36, [2013] 2 S.C.R. 559, at para. 46. However, this does not mean that the appellant can or should ignore the reasons given by the Federal Court in rejecting its application. Where, as is the case here, the Federal Court appears to have given a complete answer to all the arguments that it advances, an appellant bears a strong tactical burden to show on appeal that the Federal Court’s reasoning is flawed.

Inasmuch as appellate judges are uncomfortable with the de novo appellate standard of review, they can be expected to impose a “strong tactical burden” on appellants. Appellate counsel: consider yourself warned.

On the merits, Brown J. applied correctness review. This was one of the narrow categories of correctness review identified by Vavilov, namely, overlapping jurisdiction. Here, Ms. Horrocks had been a unionized worker. She had problems with alcohol addiction and, having once been reinstated after her union intervened, she was eventually dismissed. Instead of grieving her dismissal under the collective agreement before a labour arbitrator, she brought a complaint to a human rights adjudicator. Accordingly, for Brown J., a decision had to be made “concerning the jurisdictional lines between two or more administrative bodies” (at para. 7). To the argument that a fact-specific determination had to be made here about the ‘essential character’ of Ms. Horrocks’ complaint — was it truly a labour relations grievance or a human rights claim? — Brown J. responded that the standard remains correctness:

[C]orrectly determining the jurisdictional lines between two administrative bodies requires that a decision‑maker correctly identify the essential character of the dispute. Applying a reasonableness standard to this component of the analysis would undermine the objective of ensuring that one adjudicative body does not trespass on the jurisdiction of the other. I note as well that appellate authority concerning the jurisdictional lines between courts and tribunals has generally held that the essential character determination is reviewed for correctness (Stene v. Telus Communications Company, 2019 BCCA 215, 24 B.C.L.R. (6th) 74, at para. 38; Bruce v. Cohon, 2017 BCCA 186, 97 B.C.L.R. (5th) 296, at para. 80; Cherubini Metal Works Ltd. v. Nova Scotia (Attorney General), 2007 NSCA 38, 253 N.S.R. (2d) 144, at para. 12). These authorities explain that this is so notwithstanding the fact‑specific nature of the essential character inquiry, because it grounds a determination of jurisdiction (at para. 9).

Therefore, when determining whether or not a decision about competing jurisdictional boundaries was lawful, the decision-maker must be correct and the reviewing court must satisfy itself, based on the record, that the decision-maker came to the correct conclusion. Therefore, there was no room for deference to the first-instance judge, notwithstanding Brown J.’s comments on the appellate standard of review:

As indicated, the adjudicator’s finding that she had jurisdiction is reviewable for correctness. And if the adjudicator was bound to correctly determine her own jurisdiction, it follows that the reviewing judge was also bound to apply the same standard in reviewing the adjudicator’s decision. Concluding otherwise would allow an incorrect determination of jurisdictional lines to stand, which would undermine the values of certainty and predictability that justified the application of the correctness standard in the first instance. Even under [the appellate standard of review], no deference would have been owed to the reviewing judge’s analysis (at para. 12. See also at para. 31).

I had speculated that the Court might narrow the category of overlapping jurisdiction. In The Owners, Strata Plan BCS 435 v. Wong, 2020 BCSC 1972, at paras. 66-67, for example, Lyster J declined to apply correctness review on the basis that there was only a potential for jurisdictional overlap and no “operational conflict” between two tribunals. In my view, Lyster J.’s approach better fits the narrow basis for Vavilov’s correctness categories. It is nonetheless unsurprising that correctness review was reaffirmed in Horrocks, as this particular question has traditionally be subject to the most intrusive standard: see e.g. Regina Police Assn. Inc. v. Regina (City) Board of Police Commissioners, 2000 SCC 14, [2000] 1 S.C.R. 360; Quebec (Commission des droits de la personne et des droits de la jeunesse) v. Quebec (Attorney General), 2004 SCC 39, [2004] 2 S.C.R. 185. Notably, Karakatsanis J., who was the sole dissenter here on the merits (and co-wrote sceptical concurring reasons in Vavilov), did not advocate the application of the reasonableness standard here.

On the merits, Ms. Horrocks could not go to the human rights tribunal. Brown J. followed the two-step analysis familiar from the Court’s jurisprudence: first, interpret the scope of the labour arbitrator’s jurisdiction; second, determine if the essential character of the dispute falls within it. Brown J. saw in the mandatory dispute resolution clauses of labour relations statutes “a legislative intention to confer exclusive jurisdiction on the labour arbitrator” (at para. 30). This can be qualified by statutory language expressly or necessarily implying that labour disputes can nonetheless be raised in other fora (at para. 33), creating concurrent jurisdiction. But the quasi-constitutional character of human rights legislation is insufficient for this purpose: “the inclusion of a mandatory dispute resolution clause in a labour relations statute must qualify as an explicit indication of legislative intent to oust the operation of human rights legislation” (at para. 35). In the context of Manitoba, Brown J. held that the human rights adjudicator did not have concurrent jurisdiction (at paras. 43-46).

At step 2, Brown J. held that the essential character of the dispute related to the collective agreement. What matters, he noted, are the underlying facts, not the form the grievance or complaint takes: it is not possible to circumvent exclusive arbitral jurisdiction by complaining of a human rights breach, as the underlying essential character of the dispute must match up to the jurisdiction invoked (at para. 51. See also at para. 54: “The procedures chosen by a claimant to resolve the dispute have no relevance”). Here, the claim was that Ms. Horrocks’ “employer exercised its management rights in a way that was inconsistent with their express and implicit limits”, a complaint arising “foursquare from the NRHA’s exercise of its rights under, and from its alleged violation of, the collective agreement” (at para. 50).

The nub of the issue for Karakatsanis J. in dissent was the import of the Court’s prior jurisprudence on this particular jurisdictional overlap:

A human rights complaint from a unionized employee, even if it falls within the ambit of the collective agreement, does not automatically entail exclusive arbitral jurisdiction. Indeed, “[i]n the years since Morin was decided, concurrency has clearly been accepted across Canada as the general approach to be followed in dealing with human rights issues” (Etherington, at p. 76; see also C. Mummé, “Questions, Questions: Has Weber Had an Impact on Unions’ Representational Responsibilities in Workplace Human Rights Disputes?”, in Shilton and Schucher, One Law for All?, 229, at p. 235). Most Canadian jurisdictions have thus interpreted Morin in a manner consistent with the analysis offered in these reasons(Pickel, at p. 176). Appellate courts have generally ruled in favor of concurrent jurisdiction between an arbitrator and another statutory tribunal…To conclude, the jurisprudence does not provide a rule of arbitral exclusivity when another statutory regime is in issue. There is no presumption of exclusivity when a legislature uses a mandatory arbitration clause such that concurrent jurisdiction can only be found if there is express language to that effect. I now turn to the statutory schemes in this case (at paras. 89-90).

It followed, unsurprisingly, that the jurisdiction here was concurrent.

In sum, then, this decision does not modify the general principles of Canadian administrative law in any way, but debate and discussion are likely to continue at the margins, both on appellate standard of review and on the characterization of workplace disputes.

This content has been updated on October 26, 2021 at 17:54.