The Life and Times of Patent Unreasonableness

Post-Vavilov, can a legislature freely specify the standard of review? The answer seems obvious. Legislation overrides the common law, so as the Vavilov majority states, “…where the legislature has indicated the applicable standard of review, courts are bound to respect that designation, within the limits imposed by the rule of law” (Vavilov, at para 35).

In most cases, this clear language of the Court will be dispositive. Clearly, where the legislature specifies a standard of review (as opposed to a ground of review—see Khosa), it must be given effect. However, there are niche issues to consider. For example, what about standards of review that have defined statutory or common law meanings? Such a term, for example, is the patent unreasonableness standard, a standard of review that typified the “pragmatic and functional” era in administrative law, and that was put to bed in Dunsmuir. Patent unreasonableness still has some play in the BC Administrative Tribunals Act and in the Ontario Human Rights Code (s.45.8) in relation to decisions by the Ontario Human Rights Tribunal. How affected is the patent unreasonableness standard by Vavilov?

In this post, I want to explore the status of patent unreasonableness post-Vavilov. First, I want to suggest that patent unreasonableness, as a statutory standard of review, is a distinct standard that should be respected post-Vavilov as an instantiation of legislative intent, absent constitutional constraints. I then turn to ask whether such constraints are present, either because of Vavilov or otherwise. As I will note, there are constitutional issues with patent unreasonableness on questions of law that can be framed in various ways. I conclude by noting that patent unreasonableness may be an unconstitutional standard of review.

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Patent unreasonableness, as a standard of review, originally had a common law meaning, as set out in CUPE v New Brunswick (see Dunsmuir, at para 35). In addition to the standards of review of reasonableness simpliciter and correctness, patent unreasonableness was the most deferential standard of review. Patent unreasonableness refers to the “immediacy” or “obviousness” of the defect in a decision-maker’s decision (see Southam, at para 57; Dunsmuir, at para 37). In order for a decision to be found patently unreasonable, the decision must be immediate and obvious (this reminds me of the old ground of an “error on the face of the record). This is the distinguishing factor between the previous distinction between “reasonableness simpliciter” and “patent unreasonableness.”

In Dunsmuir, of course, the Court did away with this distinction, deciding that patent unreasonableness was no longer an available standard of review. The Court reasoned (1) that the distinction between patent unreasonableness and reasonableness was largely illusory (Dunsmuir, at para 41) and (2) that patent unreasonableness might require a a court to accept a decision that is irrational, simply because the error isn’t clear enough—this presents Rule of Law issues (see Dunsmuir, at para 42).

That said, patent unreasonableness as a statutory standard of review remains in some contexts. The BC Administrative Tribunals Act, for example, prescribes a standard of patent unreasonableness where the statute contains a privative clause (section 58(1)). In Ontario, the Human Rights Code, as noted above, prescribes a standard of patent unreasonableness—though the Ontario courts have interpreted this provision as only requiring reasonableness review, in light of Dunsmuir (see Shaw v Phipps ONCA, at para 10). The Supreme Court has held that the standard of patent unreasonableness in this context has a distinct meaning, “but the content of the expression, and the precise degree of deference it commands in the diverse circumstances of a large provincial administration, will necessarily continue to be calibrated according to general principles of administrative law” (Khosa, at para 19).

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The first issue with patent unreasonableness raises the question of how far the common law analysis set out in Vavilov can go to alter the standard of patent unreasonableness, given the comments in Khosa. BC courts have split on the issue. As I have blogged about before, in College of New Caledonia, the Court concluded that “Vavilov has not changed the law with respect to the meaning of patent unreasonableness under [the BC ATA]” (College of New Caledonia, at para 33). Meanwhile, in Guevara v Louie, the BCSC concluded that Vavilov’s comments on the reasonableness standard “also apply to a review of reasons on the standard of patent unreasonableness” because common law jurisprudence may impact what constitutes a patently unreasonable decision (Guevara v Louie, at para 48).

Generally, I am of the view that patent unreasonableness as a standard, if prescribed by the relevant legislature, must remain as distinct as possible. This is because the selection of patent unreasonableness—either as defined by the legislature explicitly or by the common law, as incorporated by legislation—is a distinct choice by the legislature that should be respect. The legislature clearly could not have intended that patent unreasonableness would be modified by Vavilov. So, as much as possible—in order to respect legislative choice—patent unreasonableness should be considered a distinct legislative standard.

Of course, this does not rule out the influence of the common law. In the BC ATA, patent unreasonableness is largely defined by grounds that resemble abuse of discretion—here, the common law cannot play much of a role, because patent unreasonableness has been defined clearly by the legislature. But in the Ontario Human Rights Code, patent unreasonableness is not defined. Here, the common law definition of patent unreasonableness—as it existed at the time of enactment—can supplement the legislative term. In such cases, the benchmark for patent unreasonableness may draw limited inspiration from Vavilov. But to say that Vavilov turns patent unreasonableness into a wholly different standard is a different matter altogether; one that, to my mind, disrespects the legislative choice to enact a more deferential standard of review. To my mind, College of New Caledonia gets this basically correct.

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If patent unreasonableness is a distinctive standard, then the question becomes: is it a constitutional standard of review on questions of law? To be sure, issues regarding the constitutionality of various standards of review are not often explored in Canadian administrative law. In Quebec, however, the constitutionality of the Court of Quebec applying deferential standards of review is an issue that will be heard by the Supreme Court of Canada soon. This indicates that the constitutionality of particular standards—especially those prescribed in legislation—might be an important issue going forward. In my view, there are two such potential constitutional issues with the patent unreasonableness standard. First, the Rule of Law—as conceived in Vavilov—could be a fetter on the legislature’s choice to prescribe a patent unreasonableness standard of review. Second, s.96 could itself found a challenge to the patent unreasonableness standard. In whole, I find this latter challenge more convincing.

First, Vavilov’s comments on the Rule of Law present a challenge to the imposition of a patent unreasonableness standard on questions of law. Recall that, in Dunsmuir, the Court (in a throwaway line, mind you) reasoned that patent unreasonableness presents rule of law issues, because it could shelter otherwise illegal decisions from review. Indeed, as noted above, the Ontario courts have taken these concerns to heart. They have read the “patent unreasonableness” standard in the Human Rights Code as merely demanding “reasonableness” review (see Intercounty Tennis Association, at para 45). In Intercounty Tennis Association, the Court relied on Vavilov’s Rule of Law comments (at para 43, saying that the legislature’s standard of review choice must be respected “within the limits imposed by the rule of law”) to reach this conclusion:

[44] As set out above, returning to an era where “patent unreasonableness” is given a meaning beyond “reasonableness” does raise rule of law concerns – namely, the fact that an irrational decision is allowed to stand because its irrationality is not “clear” or “obvious” enough.

I am sympathetic to these Rule of Law concerns. But there is a preliminary question that must first be answered: does the Rule of Law have substantive force, such that it can bind the choice of legislatures within its limits?

Of course, the Court has previously held that the Rule of Law cannot be used to attack the content of legislation (Imperial Tobacco, at para 59). But as Leonid Sirota notes, there might be valid reasons to distinguish Imperial Tobacco. And at the very least, Vavilov’s comments on the Rule of Law, particularly the comment that legislatures can specify the standard of review within the limits imposed by the Rule of Law, seem to suggest that the Rule of Law, as a principle, will set the boundaries for the standards the legislation can choose.

The other way to view the issue is that Vavilov merely spoke to the common law standard of review analysis. That is, the Rule of Law, within the common law analysis, can impact the court’s choice of a standard of review. But once the legislature legislates, the common law analysis—including the comments on the Rule of Law—cease to apply.

I must admit that, at first, I was drawn by this common law angle. But how does one square the Court’s comments, then, about the limits imposed by the Rule of Law? I can’t seem to reconcile these comments, to be frank. They seem to suggest that the Rule of Law will impose limits on the legislature’s selection of the relevant standard of review. Given that this is likely the case, it would seem to suggest that the Rule of Law does have substantive content, contrary to Imperial Tobacco.

I think a preferable interpretation, rather than relying on a potentially limitless unwritten constitutional principle, is one rooted in s.96 of the Constitution Act, 1867. That is, s.96 has developed such that the role of the superior courts in policing the boundaries of administrative action is constitutionally guaranteed, especially on questions of law: see Crevier. Patent unreasonableness, as a statutory standard, is one that impacts this supervisory function of the superior courts—it requires a court, having identified an error, to measure whether it is “obvious” enough to warrant intervention. This means that certain errors—even material ones—will be allowed to stand . In Quebec, this issue is currently being litigated with respect to the Court of Quebec and the potential requirement of “double deference’”—which has the effect of sheltering illegal decisions from review. This clearly impacts the reviewing function of the Court. In this respect, patent unreasonableness could be unconstitutional because it requires courts to simply ignore errors that otherwise arise.

In light of this conclusion, the question then arises: what do courts do with this when faced with a ptent unreasonableness standard? One could imagine two scenarios. First, one can take the Ontario court’s position, which is to say, a position rooted in constitutional avoidance: read patent unreasonableness to simply mean something else. Another option is to simply strike the legislation prescribing patent unreasonableness, either pursuant to the Rule of Law or under s.96. I think constitutional avoidance in this context is not a sound idea, because as I said earlier, patent unreasonableness can have a distinct meaning if set out in statute (like the BC ATA) and otherwise draws inspiration from the common law definition of patent unreasonableness. This takes “avoidance” too far—avoidance is typically only feasible when a term is ambiguous and there are two plausible meanings one could take of the view. But here, patent unreasonableness is, to my mind, not necessarily ambiguous—though its contours may be hazy.

In my view, we must deal with any constitutional problem faced by patent unreasonableness head on. In my view–and holding my tongue as much as possible in light of the Quebec case on deference–the patent unreasonableness standard has the potential to shelter material errors of administrative actors from judicial scrutiny. This, on an understanding of s.96, is unconstitutional.

Put differently, I think the best way to approach the patent unreasonableness standard, post-Vavilov, is to simply conclude that it is unconstitutional because it minimizes and restricts the reviewing role of the courts. I do not expect anyone to actually pick up this argument—but I think it is a fair point to make in light of that standard. Overall, though, the question of patent unreasonableness will continue to grip courts in jurisdictions where the standard is relevant. This post is designed to provide a toolbox of arguments as litigants and courts deal with this question.

Author: Mark Mancini

I am a graduate of the University of New Brunswick Faculty of Law (JD) and the University of Chicago Law School (LLM). I am the National Director of the Runnymede Society, a national law student organization dedicated to debate on issues relating to the Rule of Law, constitutionalism, and individual liberty. I clerked at the Federal Court for Justice Ann Marie McDonald. I have interests in administrative law broadly, with specific interests in substantive review of administrative interpretations of law. I am also interested in law and economics. Any views expressed on Double Aspect are mine, and do not represent the views of the Runnymede Society.

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