Does This Kat(z) Have Nine Lives?

In Katz, the Supreme Court set out the approach to judicial review of regulations. The Katz approach is (or, maybe, was) a carve-out from the general law of judicial review. As Professor Daly notes, it grants a “hyperdeferential” margin of appreciation to those that promulgate regulations. The Katz approach, based on previous cases, simply asked whether regulations are “irrelevant” “extraneous” or “completely unrelated” to the statutory scheme (Katz, at para 28), with the challenger bearing the onus.

Whether Katz has survived Vavilov is an open question. Vavilov purported to be a “comprehensive approach” to the determination of the standard of review (Vavilov, at para 17) for administrative action. On its face, that means that Vavilov‘s formula for determining the standard of review should apply to all instances of judicial review of administrative action—including judicial review of not only adjudicative acts, but “legislative” acts, as well. This would be a change, though: pre-Vavilov, there was (at least in theory) no judicial review for the “reasonableness” of legislative acts, and such decisions could not be set aside for errors other than jurisdictional ones. Specifically, Katz incorporates the old adage that judicial review does not entitle a court to review the merits of the legislative act, its “political, economic, or social…” context, or even whether it actually is rationally connected to its objective (see Katz, at para 28; Thorne’s Hardware, at 112-113).

Enter the recent decision of the Federal Court of Appeal (per Stratas JA) in Portnov. There are many issues in the case, but one concerned the propriety of Katz post-Vavilov. For the Court, Stratas JA suggests an easy answer to this question: “Thus, in conducting reasonableness review, I shall not apply Katz. I shall follow Vavilov” [28]. Stratas JA offers a number of reasons for this conclusion:

  1. The Katz approach (and its predecessors) were organized around the fundamental concept of “jurisdiction,” a “vestige” which Vavilov “eradicated” [22];
  2. Oddly, in the pre-Vavilov era, the Supreme Court sometimes simply reviewed regulations for their reasonableness under cases like Catalyst and Green [24].
  3. Vavilov is “intended to be sweeping and comprehensive” [25], and if there is a question as to whether Vavilov applies to an issue not addressed in that case, courts should ask how Vavilov’s general framework applies [25].
  4. Katz is a rule that “applies across-the-board to all regulations,” that “sits uneasily with Vavilov which adopts a contextual approach to reasonableness review” [27].

I think Portnov is right on the money.

Katz is problematic, in my view, because it (1) undermines the coherence of Vavilov’s simplicity; and (2) undermines the virtue of the contextual approach to reasonableness in Vavilov.

First, Vavilov was an attempt to finally address Binnie J’s comments in Dunsmuir, which encouraged a standard of review framework that “…get[s] the parties away from arguing about the tests and back to arguing about the substantive merits of their case” (Dunsmuir, at para 145). Part of this was the introduction of a presumption of reasonableness for most cases of judicial review. As I have written before, I have issues with this broad-based presumption (I do not buy the assumption that delegation necessarily implies deference) but it has one virtue: it may be wrong, but it is strong—it simplifies matters a great deal. That presumption, and the associated correctness exceptions, are largely principled. They are based on the core constitutional concepts of legislative sovereignty (choice to delegate) and the Rule of Law (guaranteeing judicial review of certain stringency on certain questions). A carve-out for regulations, with an ultra-deferential approach, simply complicates the conduct of judicial review for no principled reason. This is because whether an administrator is exercising adjudicative power or legislative power, it is delegated power all the same. And from the perspective of simplicity (with due regard for countervailing considerations) Vavilov‘s general principles for determining the standard of review should be determinative in all instances of judicial review of administrative action.

This is an issue of doctrine, but Stratas JA also provides good substantive reasons for not applying Katz. The contextual approach to reasonableness introduced by Vavilov, too, has its flaws: context can sometimes lead to uncertainty. But if context is adequately described by markers of unreasonableness (say, the “constraints” offered in Vavilov), the uncertainty is limited. Applying those constraints to the context of legislative instruments is perfectly justifiable. It may be, as in Catalyst or Green, that Vavilovian reasonableness is quite relaxed when dealing with certain legislative instruments. In other cases it may be more stringent. The constraints offered in Vavilov take account of the legislative context in a way that, at least to some extent, tracks the words and language used by the legislature to delegate power. With a fine-tuned approach like this, there is no need for a presumptive rule that puts a thumb on the scales for those that promulgate regulations based on any functional reasons.

Some judges of the Supreme Court have indicated an interest in preserving the coherence of Vavilov based on its general principles. In Wastech, for example, Brown and Rowe JJ filed a concurring opinion that would have applied Vavilov to the context of a commercial arbitration. They would have applied a correctness standard of review based on Vavilov’s holding on rights of appeal. These judges said this in Wastech:

[120]                     Factors that justify deference to the arbitrator, notably respect for the parties’ decision in favour of alternative dispute resolution and selection of an appropriate decision‑maker, are not relevant to this interpretive exercise. What matters are the words chosen by the legislature, and giving effect to the intention incorporated within those words. Thus, where a statute provides for an “appeal” from an arbitration award, the standards in Housen apply. To this extent, Vavilov has displaced the reasoning in Sattva and Teal Cedar.Concluding otherwise would undermine the coherence of Vavilov and the principles expressed therein.

I think this is the right approach. Vavilov’s general principles have much to say about many forms of decision-making. And, luckily for us, the fact that these principles have something to say makes judicial review much simpler for the parties and courts. No need for special rules any longer, and so I hope this Kat(z) is out of lives.

For more on this issue, see the following resources:

Paul Daly

John Mark Keyes

The Disuse of Knowledge in the Administrative State

Regulation is not the right tool for intelligently dealing with complexity

Advocates for the administrative state typically promote it on the basis of its great usefulness in contemporary society. Without the expertise that administrators bring to their work, they say, we could not deal with the complexity of the world around us. Although, in the wake of the Supreme Court’s ruling in Canada (Minister of Citizenship and Immigration) v Vavilov, 2019 SCC 65, this is no longer part of the rationale for deference to administrative decision-makers in Canadian law, this view is still widely held by administrative theorists in North America. Indeed it is part of the pro-administrativist critique of Vavilov, for example in a post by Mary Liston over at Administrative Law Matters. But this view is fundamentally wrong, even backwards.

A passage from Matthew Lewans’ book Administrative Law and Judicial Deference captures this traditional view nicely. Compared to the past,

we must tackle a broader array of complex social issues―human rights, immigration, national security, climate change, economic policy, occupational health and safety, public access to health care and education, etc―about which there is deep disagreement. And we cannot hope to address these issues intelligently without harnessing the experience, expertise, and efficiency the modern administrative state provides. (187)

Other pro-administrativists, if they have not themselves written such things, would I think wholeheartedly agree with them. To the extent that I specifically criticize Professor Lewans’ argument, below, it is only in a representative capacity.

One thing to note about this passage, and its innumerable equivalents elsewhere, is that it is not supported by any detailed arguments or evidence. The hopelessness of intelligently dealing with the issues that consume contemporary politics without “harnessing the experience, expertise, and efficiency” of the bureaucracy is simply asserted by writers and taken on faith by readers. But I think we need to query these claims before accepting them, and not because I have watched too much Yes, Minister to have much faith in the experience and expertise, let alone the efficiency, of the administrative state.

More fundamentally, the state ― and especially the administrative state ― often is not merely lousy at addressing complexity intelligently, but actively opposed to doing so. The reason for this is that its laws and regulations, to say nothing of its discretionary rulings, serve to eradicate rather than harness the information needed for intelligent behaviour in a complex world. They give both the rulers who wield them and the citizens who clamour for them the illusion of purposive action and control, while actually preventing the operation of the mechanisms that serve to communicate information about the world much more effectively than laws and regulations ever can: prices and markets.

As F.A. Hayek famously pointed out in “The Use of Knowledge in Society“, there is an enormous amount of information that even the best experts armed with the boundless powers of the modern administrative state cannot acquire: information about the circumstances, needs, and desires of individuals and organizations. This information is unlike the scientific, technical knowledge that experts might be able to centralize in the hands of the bureaucracy. In particular, this local knowledge changes much too quickly to be communicated and assimilated by an authority. As Hayek explains, “the economic problem of society” ― that is, the question of how to use the resources available to us most effectively ― “is mainly one of rapid adaptation to changes in the particular circumstances of time and place”. From this,

it would seem to follow that the ultimate decisions must be left to the people who are familiar with these circumstances, who know directly of the relevant changes and of the resources immediately available to meet them. We cannot expect that this problem will be solved by first communicating all this knowledge to a central board which, after integrating all knowledge, issues its orders. 

I would add also that, even if a “central board” could acquire information as fast as individuals and businesses, it could not make new rules to reflect this information fast enough, or consistently with the requirements of the Rule of Law, which include the relative stability of the legal framework.

But how do individuals acquire knowledge which, Hayek insists, even a sophisticated bureaucracy cannot gets its hands on? The answer is, through market prices, which reflect aggregate data about the relative scarcity of goods and services available in a given time and place: “Fundamentally, in a system in which the knowledge of the relevant facts is dispersed among many people” ― which is to say, in any society in which there many people, and especially in complex modern societies to which pro-administrativsts such as Professor Lewans refer, “prices can act to coördinate the separate actions of different people in the same way as subjective values help the individual to coördinate the parts of his plan”.

Hayek gives the example of how, if something people need to produce other things other people need becomes more scarce, such as its price goes up

without an order being issued, without more than perhaps a handful of people knowing the cause, tens of thousands of people whose identity could not be ascertained by months of investigation, are made to use the material or its products more sparingly; i.e., they move in the right direction. 

The right direction, that is, from society’s perspective ― the direction of the society’s overall resources being used more effectively where they are most needed. Hayek pointedly describes the functioning of the price mechanism, its ability to economically and quickly communicate information no bureaucracy could gather “by months of investigation” as a “marvel”. He is right.

But, to repeat, the state all too often prevents this marvel from happening. The state outlaws market transactions, and so prevents the communication of information through market prices, left, right, and centre, and interferes with those transactions it doesn’t outlaw. Ronald Reagan summed up the state’s ― and the statists’ ― thinking: “If it Moves, Tax it. If it Keeps Moving, Regulate it. And if it Stops Moving, Subsidize it.” This is not all the state does, of course. The state, if it functions well, also enables markets by keeping peace, protecting property rights, and enforcing contracts. They state may supplement markets by correcting genuine market failures, though these are rather fewer and further between than statists tend to assume. But there’s no denying that much of what the state does, and especially much of what pro-administrativists ― be they on the political left (as most of them have long tended to be) or on the right (as the followers of Adrian Vermeule and other common good will-to-power conservatives, about whom co-blogger Mark Mancini has written here) consists in overriding, displacing, and even criminalizing markets, and so destroying rather than harnessing information. The state not only is stupid; it makes us less intelligent too.

The administrative state, specifically, is especially guilty of this. To quote Professor Lewans once more ― and again, in a representative capacity ―

There are good reasons why legislatures invest administrative officials with decision-making authority. While a legislative assembly might be able to forge sufficient consensus on broadly worded objectives as a platform for  future action, it might reasonably conclude that interpretive disputes regarding those objectives outstrip the capacity of the legislative process. (199)

To be clear, “interpretive disputes” here are disputes about the specification of these “broad objectives”, as well as the means through which the objectives, so defined, are expected to be achieved. What Professor Lewans is saying is that delegation of power to the administration vastly increases the state’s overall ability to regulate ― that is to say, to override, displace, and criminalize markets. Legislatures might never achieve consensus on the detail of a regulation, and so wouldn’t enact any since they need at least a bare-bones consensus to enact law. But thanks to the dark wonders of delegation, the need for consensus is dispensed with, or at least reduced, and more regulation can be enacted. And of course the administrative state is simply bigger than a legislature, so it has more person-hours to expend on producing ever more regulation. The legislative process ― at least, proper legislative process, not what all too often passes for it ― is also time-consuming, while one of the supposed virtues of the administrative state is its flexibility. Faster regulatory change, while it cannot actually be effective enough to substitute or account for the information transmitted through the price system, is more disruptive to markets.

If we actually want to address the issues that confront complex contemporary societies intelligently, the administrative state is not our friend. More often than not, it serves to reinforce the state’s ability, to say nothing of its resolve, to prevent individuals and businesses from acting intelligently in the face of complexity by eliminating or falsifying the information they need to do so. At best, the administrative state then tries to provide a simulacrum of an intelligent response ― as, for example, we ask bureaucrats to puzzle out who may come to our countries to work based on what they, from their cubicles, deem to be market needs, instead of simply opening the borders and letting employers and potential workers make their own arrangements.

Why, then, are people ― and more and more people, too, as the emergence of right-wing pro-administrativsim shows ― so convinced that the administrative state is necessary? Some, alas, are not especially interested in social problems being solved effectively. They even make a virtue of inefficient institutions, slower economic growth, and more coercion. Such feelings may be especially widespread among the common good will-to-power crowd. But more people, I suspect, simply misunderstand the situation. As Hayek pointed out,

those who clamor for “conscious direction” … cannot believe that anything which has evolved without design (and even without our understanding it) should solve problems which we should not be able to solve consciously.

They think that central direction, which only the state, and specifically the administrative state, can provide is necessary. They are mistaken, and in a way that is the sadder because they unwittingly demand the exact opposite of what they actually hope for.

Post-Truth, Redux

A faithful application of Vavilov reasonableness review exposes the rot at the core of Canada’s administrative law

Co-blogger Mark Mancini has already posted on the Federal Court of Appeal’s recent decision in Alexion Pharmaceuticals Inc v Canada (Attorney General), 2021 FCA 157. He argues that it is a good illustration of how courts should review administrative decisions on the reasonableness standard, following the Supreme Court’s instructions in Canada (Minister of Citizenship and Immigration) v Vavilov, 2019 SCC 65. I agree with Mark’s analysis, so far as it goes: as a rigorous application of Vavilov that rightly emphasizes legal constraints on administrative decision-making, Justice Stratas’ reasons for the Court in Alexion are excellent. (In fact, let me highlight an additional passage that Mark does not mention: Justice Stratas notes, rightly, that administrators must interpret statutes “in a genuine, non-tendentious, non-expedient way … Result-oriented analysis is no part of the exercise”. [37] Amen!)

But, in my view they are also an excellent illustration of the considerable flaws of the Vavilov framework, with its insistence on the centrality of administrative reasons on all issues subject to the reasonableness standard of review, including issues of statutory interpretation. Indeed, Alexion illustrates the fundamental soundness of the approach taken in the case that is the great bogeyman of Canadian administrative law: the House of Lords’ Anisminic Ltd v Foreign Compensation Commission [1969] 2 AC 147. The concurring judges in Vavilov accused the majority of following Anisminic. If only!


As Mark explains in more detail, Alexion reviewed a decision by the Patented Medicine Prices Review Board that the company was selling a product “at a price that, in the Board’s opinion, is excessive” (s 83 of the Patent Act). The Court of Appeal invalidated the Board’s decision, holding that it did not explain its reasoning on key issues, including the interpretation of s 85 of the Patent Act, which sets out the criteria the Board must apply in deciding whether the price of a patented medicine is “excessive”. As Justice Stratas notes,

[a]t best, on this point the Board obfuscated, making it impossible for a reviewing court to know whether the Board has helped itself to a power it does not lawfully have. By obfuscating, the Board has effectively put itself beyond review on this point, asking the Court to sign a blank cheque in its favour. … 

[T]he Board may have helped itself to powers the statute has not given it. The absence of a reasoned explanation on certain points means that we cannot be more definitive than that. [44]-[45]

Justice Stratas notes that the Board appears to have found the pricing of Alexion’s product unreasonable, and expresses his “fundamental concern … that the Board has misunderstood the mandate Parliament has given to it under s 85. At a minimum, a reasoned explanation on this is missing“. [48; emphasis mine] And further:

Section 85 speaks of “excessive” pricing, not  “reasonable” pricing. The two seem much different. If in fact they are not different, in the circumstances of this case the Board had to explain why. Nowhere does the Board do so. [52; emphasis mine]

If I may paraphrase Justice Stratas, he is saying: it looks like the Board is doing something it’s not supposed to be doing under the statute, but hey! maybe it’s not do these things, or maybe it can do these things after all ― and we, the Federal Court of Appeal, can’t know for sure. The suggestion here ― that, absent good quality reasons given by the administrator, a reviewing court cannot say whether the administrator, in Justice Stratas’ eloquent words, “helped itself to a power it does not lawfully have” ― is entirely consistent with Vavilov. There the majority insisted that

the focus of reasonableness review must be on the decision actually made by the decision maker …  The role of courts in these circumstances is to review, and they are, at least as a general rule, to refrain from deciding the issue themselves. Accordingly, a court applying the reasonableness standard does not ask what decision it would have made in place of that of the administrative decision maker … conduct a de novo analysis or seek to determine the “correct” solution to the problem. [83]

On this approach, Justice Stratas and his colleagues are not supposed to come to their own view of the meaning of s 85 and verify the Board’s compliance with it. They are confined to assessing the Board’s explanations as to whether it has complied. Absent an explanation, the exercise fails. Vavilov is an improvement over the earlier cases in that, when such failures occur, it allows the reviewing court to stop there and send the matter back to the administrator for a do-over, instead of making up an explanation and deferring to it. (See Mark’s post for more on this).


But to say that Vavilov improves over what I once described as a post-truth jurisprudence requiring judges to play chess with themselves and contrive to lose is not to say much. In fact, Vavilov does not even leave post-truth jurisprudence behind. For how else should we think of a requirement that judges ― of an appellate court, no less ― insist that they “cannot be definitive” about the interpretation of a statutory provision and about whether an administrator “helped itself to a power it does not lawfully have” ― which is to say, exceeded its jurisdiction (there, I said it) in applying that provision?

The truth is that judges can be definitive on such things. The truth is that Justice Stratas has much to say about the meaning of s 85 and the way in which it has to be applied, as well as the more general principles of statutory interpretation (see, in particular, his important caution that “[t]he authentic meaning of the legislation … is the law, not what some politicians may have said about it at some place, at some time, for whatever reason”). [53] (I recently addressed this point here.) The truth is that, as Justice Stratas notes, “[o]ver and over again, authorities have stressed that the excessive pricing provisions in the Patent Act are directed at controlling patent abuse, not reasonable pricing, price-regulation or consumer protection at large”. [50] A jurisprudence that requires a court to assert that, notwithstanding all of this, an administrative tribunal might somehow explain all that away, and show that when it said “reasonable” it meant “excessive”, and that when it “disregarded most of the … authorities”, [51] it still complied with the law, is the jurisprudence of la-la-land.

In reality, the Board’s decision has all the appearances of a textbook example of what Lord Reid in Anisminic described as an administrative tribunal having “misconstrued the provisions giving it power to act so that it failed to deal with the question remitted to it and decided some question which was not remitted to it”. When a tribunal does so, even though in a narrow sense “the tribunal had jurisdiction to enter on the inquiry”, it loses jurisdiction in a broad sense, and the resulting decision is a nullity. Canadian courts should be able to say so ― which means that they should be free, contra Vavilov, to “decide the issue themselves”, without waiting, or even affecting to wait, to be instructed by administrators who lack the legitimacy, the independence, and the competence to speak on questions of law with any real authority.

Why is it that we can’t have nice things? An important part of the problem is the fusion, in Canadian administrative law, of what in the United Kingdom (and New Zealand) are known as legality review and reasonableness review into a (supposedly) unified category of merits review. To make things worse, the Supreme Court remains committed to an oversimplified approach to merits review, such that it almost always has to be conducted on the same reasonableness standard. The reasons-first approach may be suitable for review of fact- or policy-based administrative decisions, but applied to issues of statutory interpretation it leads to Alexion-style absurdity.

What makes Alexion even more galling, though, is the nature of the administrative body it concerns. And that’s not only, and perhaps even so much, that, pursuant to s 91 of the Patent Act the Board’s members can legally be the first five strangers the Minister of Health meets on the street one day ― or hacks. (As I wrote this, I thought I’d look up the Board’s actual membership, in the hope of being able to add a disclaimer to the effect they are all, in fact, wise and experienced experts. Only, there doesn’t seem to be any information about them on the Board’s website. Of course that doesn’t prove that they actually are hacks, let alone people the Minister met on the street, but one might have thought some transparency was in order. UPDATE: Mea culpa. The information is there, however counter-intuitive its presentation may seem to me. The members’ bios are here.)

Worse is the fact that the Board acts as both prosecutor and judge in the cases it handles, the separation of powers be damned. This par for the course in the administrative state, to be sure ― but no less pernicious for all that. I note, for the sake of completeness, that it is “Board Staff” that “filed a Statement of Allegations” against Alexion, rather than Board members ― but staff (pursuant to s 93(2)(b) of the Patent Act) are managed by the Board’s Chairperson, i.e. one of its members. The Board’s internal “separation of powers” is more sham than ersatz.

Why exactly should the views of this judge-and-prosecutor, this two-headed abomination against due process of law, about the meaning of the statute it is charged with applying be entitled to any regard by actual judges? In Vavilov, the Supreme Court insists that this is to respect Parliament’s intent. But, as I have been saying since my first comment on Vavilov here, the Court ignores Parliament’s direction, in s 18.1(4)(c) of the Federal Courts Act that the federal courts grant relief when administrative decision-makers err in law, which clearly requires these courts to come to their own view about what statutes mean and whether the administrator in a give case has complied with the law. In this way too, Vavilov perpetuates Canadian administrative law’s disregard for truth.


In case this needs to be clarified, none of the foregoing is a critique of Justice Stratas and the decision in Alexion. As I said above, I think that the decision is about as good as it could have been while being a faithful application of the Vavilov framework. If the Board takes what Justice Stratas seriously, it will make a much better, and most importantly, a lawful decision next time. It is the framework itself that is rotten.

But the rot set in four decades ago, and no judge of the Federal Court of Appeal can solve them ― even one who has made Herculean efforts to, like Justice Stratas. Perhaps even the Supreme Court cannot fully undo the damage it has inflicted on our law when it turned away from the Anisminic path and waded into the dark forest of deference to the administrative state. But if Alexion illustrates the possibilities ― and the limits ― of what the Supreme Court accomplished in Vavilov, and I think it does, then one has to conclude that the Supreme Court hasn’t tried very hard at all.

Alexion: No Blank Cheques Here

In Alexion Pharmaceuticals Inc v Canada (Attorney General), 2021 FCA 157, the Federal Court of Appeal clarified the law of judicial review post-Vavilov (particularly as it applies to reasonableness review) and set out an important reminder: administrators are not a law unto themselves. In order to make sure that this is the case, particularly in situations of legislative interpretation, administrators must explain their decisions. They must do so in a way that engages with the statute under interpretation. In this way, Alexion says something important: when administrators interpret statutes, there is only so much of a margin of appreciation. They must deal with the law.

I first describe the controversy in Alexion and the Court’s holding. Then I outline why this decision is a landmark one for the post-Vavilov world.

**

Alexion is a pharmaceutical company that produces a drug called Soliris. The Patented Medicine Prices Review Board had to decide whether Alexion priced Soliris excessively under the Patent Act. The relevant section is s.85 (1), which lists a number of factors that the Board must consider to make a determination. One of the factors is “the prices at which the medicine and other medicines in the same therapeutic class have been sold in countries other than Canada” (s.85(1)(c)). Only after a consideration of these factors can the Board turn its attention (if necessary) to s.85(2), which asks the Board to also consider “the costs of making and marketing the medicine and any other factors it considers relevant.”

As the Court aptly notes, “Section 85 is the law. The Board’s analysis should start with the law. Whatever the Board does must be consistent with the law” (Alexion, at para 34). The Board, in making its excessive pricing decision, noted that it is charged with determining “the relevance and weight of each factor” in s.85 (Alexion, at para 43). The Board concluded that Soliris was priced excessively, largely because it was priced more than the lowest international price in a list of seven comparator countries (Alexion, at para 3).  Put differently, out of all the seven countries, the Board found Soliris to be priced excessively because it was not the cheapest option. This was despite the fact that the Board’s own guidelines suggested that, normally, “the highest international price” is a key comparator (Alexion, at para 57). In reaching this conclusion, the Board seemingly followed a standard of “reasonableness”: because Soliris is price higher than one of the comparator countries, the Board implicitly concluded that the price of Soliris is unreasonable (see Alexion, at para 51).

For the Court, Stratas JA concluded that the Board failed to properly justify its decision with reference to the statute at hand: Alexion, at para 64, 66. The Court made a number of important comments justifying this decision:

  1. Prior to Vavilov, “…the Supreme Court instructed us to do our best to try to sustain the outcomes reached by administrators” which included “reviewing courts [picking] up an administrator’s pen and [writing] supplemental reasons supporting the administrators’ outcomes” (Alexion, at para 8). This “ghostwriting” was, as is evident, “antithetical to the reviewing courts’ role as an independent reviewer” (Alexion, at para 8).
  2. In this sense, there is a clear relationship between reasons and outcome on judicial review (Alexion, at para 28 et seq). While Vavilov speaks of outcome and reasons as separate, there are many cases where the reasoning on a particular legal question will lead to an illegal outcome; for example, in this case, “certain words the Board used suggest that it went beyond its permissible statutory mandate by regulating the reasonableness of pricing, rather than preventing abusive pricing…” (Alexion, at para 11).  In this case, when the Board spoke of “reasonableness” rather than abusive pricing, “[i]t may be that the Board was trying to reach an outcome that on the facts and the law was not reasonably open to it” (Alexion, at para 32).
  3. The failure of explanation in this case arose on a few different fronts:
  • The Board utterly failed to deal with the most important and central restriction on its authority: s.85 of the Patent Act. We  know that in paras 120-122 of Vavilov the Court notes that “the merits of an administrative decision maker’s interpretation of a statutory provision must be consistent with the text, context and purpose of the provision,” and that the decision-maker must demonstrate that its alive to these “essential elements.” This is because “the governing statutory scheme is likely to be the most salient aspect of the legal context relevant to a particular decision” (Vavilov, at para 108). So when the Board adopted a standard of reasonableness rather than addressing the actual point of the statute—set out in s.85 and the associated case law—it transgressed its authority.
  • The Board’s failure to explain its departure from its own Guidelines was problematic from a reasonableness perspective. While Guidelines adopted by the Board cannot supercede an analysis based on s.85 itself, they can validly guide discretion. Here, the Board did not explain why it did not follow its own Guidelines, which stressed the highest price comparator country.

**

There is a lot packed into Alexion, but I think it is worth noting the various things the Court does with Vavilov, especially when it comes to the reasonableness standard.

First, the Court arguably doubles down on the statute as the most important restraint on administrative power. Many of us who read Vavilov for the first time in December 2019 fastened onto paras 108-110 (and also paras 120-122) of that decision as quite important. Those paragraphs hardened a cardinal rule of administrative interpretations of law: it is the statute that the administrator is interpreting (its text, context, and purpose) that cabin the discretion of an interpreting administrator. Now, how this happens is where the rubber meets the road. But the fact that the statement was made by the Supreme Court—and that it is adopted wholeheartedly by the Court of Appeal in this case—is promising.

There are, of course, different ways that a court can ask an administrator to abide by the terms of its statute, and these ways can be more or less interventionist. Alexion is somewhat reminiscent of another case decided post-Vavilov, Richardson. I blogged about that case here. While the comments made by Nadon JA in that case were obiter, they staked out an even more radical understanding of Vavilov’s paragraphs 108-110 and 120-122. In that case, the administrator at hand erroneously applied the “implied exclusion” rule of interpretation, which the Supreme Court has held is insufficient as the sole basis on which to understand the meaning of statutory provisions (see Green, at para 37). Imposing the Supreme Court’s method of interpretation, particularly with regards to particular canons, is one way to force an administrator to abide by a statute. Another, more general and less stringent way, is what Stratas JA did in Alexion. There the Board misapprehended its own statutory purpose and failed to actually deal with the overriding goal of s.85: excessive & abusive pricing. It also ignored many of the factors set out in s.85(1). This is just a different way of getting at paras 108-110 of Vavilov: the Board failed to address its statute under the governing approach to statutory interpretation.

The fact that the Court in Richardson and Alexion did the same thing in different ways is perhaps indicative of a challenge with Vavilov. The decision says a lot, not all of it always internally consistent. Specifically, the challenge going forward with this rather legalistic vision of reasonableness review is how it meshes with the deference that is built-in to the Vavilov framework. Vavilov makes clear at various points that administrators are not asked to engage in a formalistic interpretation exercise (para 119), and that ‘[a]dministrative justice’ will not always look like ‘judicial justice’…” (para 92). Accordingly, as Professor Daly notes, “some portions of Vavilov are liable to become battlegrounds between different factions of judges, those who favour more intrusive review on questions of law in one camp, their more deferential colleagues in the other” (at 15). One could conceive, as Professor Daly does, of Richardson as “betraying a favouritism for an interventionist standard of reasonableness review on issues of statutory interpretation” (at 14).

However, I would say that Alexion and Richardson are of the same ilk, different points on a similar spectrum. Both are directed towards subjecting administrators to legal requirements, but Alexion does so in a more general way, faulting the administrator for failing to address the relevant statutory purpose (among other things). Richardson does the same thing in a more specific way, faulting an administrator for applying a proper tool of interpretation to the exclusion of the statutory purpose. Both, in my view, are plausible views of Vavilov.

Methodologically, there are other important elements of Alexion. One element is the connection that Stratas JA draws between reasons and outcome. Vavilov speaks of reasons and outcome as separate things, but in reality, they are probably intrinsically connected in at least some cases. Alexion provides a good example. In many cases, it was simply impossible for the Court to determine whether the Board had ventured an opinion on the core legal issue at play in the case. Where the Board did offer an opinion, it cast its decision in terms of the wrong legal standards.  This led it astray, and it was led astray because its reasoning failed to glom onto the important part of the entire thing: the statute.

This leads to a final point about Alexion. Thank goodness we no longer need to worry about courts coopering up deficient decisions under the Nfld Nurses line of cases. As the Court in Alexion mentions, this decision could have gone a very different way under pre-Vavilov case law. The Court would have asked itself to supplement reasons for decision instead of supplanting them.  But as the Court notes, “[m]any of us recoiled at this” (Alexion, at para 9). Why? Because it offends the principle of legality, fundamental to the administrative law system, for a court to uphold a decision that is legally flawed. Of course, deference sometimes asks us to abridge the principle of legality in a strict sense; but there are extremes, and a court making a decision for an administrator is to my mind (and, apparently the mind of the Supreme Court) a bridge too far. As the Court in Alexion says, there are no blank cheques in the law of judicial review (Alexion, at para 44).

All told, Alexion is an important recap of developments post-Vavilov. Particularly on the application of the reasonableness standard, the Court moves the needle in important ways.

The Core of It: Quebec Reference and Section 96

At the end of June, the Supreme Court of Canada released its decision in the Court of Quebec case (what I call, unoriginally, the Quebec Reference). The main question in the case: does art. 35 of the Code of Civil Procedure, which grants the Court of Quebec exclusive jurisdiction over all civil disputes up to a value of less than $85000, abridge s.96 of the Constitution Act, 1867. Section 96, in general, protects the role of the superior courts. The Court (per Côté & Martin JJ) concluded that the $85 000 limit, combined with the broad, exclusive grant of power to the Court of Quebec over private law issues, did abridge s.96. Wagner CJ filed a partial dissent and Abella J filed a dissent.

This case contains elements that will both clarify and muck up the s.96 world. On one hand, the Court convincingly elucidates the importance of the rule of law, the core role of the superior courts, and the constitutional limits on legislative derogation of superior court powers. On the other hand, the Court introduces a new “modified” test to add to the s.96 mix, and does not do enough to clarify the circumstances in which this test can be invoked.

As a side note, the Court also briefly addressed the deference problem that was raised by the court below. I wrote about that issue here. The Court did the right thing and held that the issue was moot given Vavilov.

***

Section 96 is an odd constitutional provision, in part because the bare text does not correspond to the role that the provision now plays. Section 96 gained a “judicially-nourished luxuriance” which added substantive heft to what is, on first glance, just an appointment power vested in the federal government. Now, s.96 (along with other provisions) protect the role of the superior courts as “the centerpiece of the unitary judicial system” (Quebec Reference, at para 29). In administrative law, s.96 plays an important role. It prevents the legislature, in so many words, from divesting superior courts of so-called “core” powers in favour of administrative decision-makers.

Against this backdrop, Côté and Martin JJ began their opinion by looking to the historical context in which s.96 finds itself. As we know, constitutional provisions like s.96 cannot be understood by viewing them in temporal isolation. By now, it is obvious that constitutional provisions must, in part, be interpreted by looking into the historic context—say, the historical purpose—behind these provisions (see, most famously, Big M at 344; but more recently Comeau, at para 52). In this case, the “compromise reached at Confederation that is central to Canada’s judicial system, as well as the role and purpose of s.96” formed the bulk of the analysis [30].

The historical analysis, for Côté and Martin JJ, led to the conclusion that national unity and the rule of law were the “two key principles” on which the role of the superior courts is based (Quebec Reference, at para 42). Taken together, these principles guarantee “a nucleus” to the superior courts, and s.96 “forms a safeguard against erosion of the historic compromise” (Quebec Reference, at para 41). That compromise was the division of labour between superior courts in the province and the federal government, which holds an appointment power designed to “reinforce the national character of the Canadian judicial system” (Quebec Reference, at para 43).

As for the Rule of Law, the Court made some very important comments about the role of s.96. For Côté and Martin JJ, “[t]he rule of law is maintained through the separation of judicial, legislative, and executive functions” (Quebec Reference, at para 46). The superior courts play an important role because “the task of interpreting, applying and stating the law falls primarily to the judiciary” (Quebec Reference, at para 46). They are best positioned to guard the rule of law. In fact, even though the Court has sometimes spoken favourably about the role of provincial courts in guarding the rule of law, Côté and Martin JJ specifically noted that superior courts are the “primary” guardians of the rule of law.

What does all of this mean? The bottom line for the Court—and this is somewhat of a new formulation—was that s.96 protects against the creation of parallel or shadow courts that mirror the functions of s.96 courts (see paras 53 et seq). To this end, the court has historically developed two tests to prevent legislative derogation from s.96. First is the so-called Residential Tenancies test, determines whether a legislative grant “affects a jurisdiction that has historically been exercised by the superior courts” (Quebec Reference, at para 71). The second is the so-called “core jurisdiction” test, solidified in MacMillan Bloedel. Both have different functions in preventing the creation of parallel courts. The Residential Tenancies test protects the historic jurisdiction of the superior courts. It “was established at a time when…a modern administrative state was emerging in Canada” to which the Court was “sensitive” (Quebec Reference, at para 77). For the Court, a purpose of this test was to “avoid stifling institutional innovations designed to provide administrative rather than judicial solutions for social or political problems” while still protecting the historical jurisdiction (Quebec Reference, at para 77). The core jurisdiction test, on the other hand, serves as a backstop, even if a particular grant passes the Residential Tenancies test. While what the core of superior court powers is necessarily amorphous, some common things jump to mind: judicial review jurisdiction, and for our purposes, “general jurisdiction over private law matters” (Quebec Reference, at para 82). Here, the Court concluded that the superior courts’ core jurisdiction “…presupposes a broad subject-matter jurisdiction whose scope corresponds, at the very least, to the central division of private law…” (Quebec Reference, at para 83).

Typically, the courts have not fleshed out the sorts of factors to consider when determining where a core superior court power is affected by legislative derogation. In the Quebec Reference, Côté and Martin JJ endeavoured to provide guidance where the legislature has vested a court with provincially appointed judges a jurisdiction as broad as the one in the Quebec Reference (Quebec Reference, at para 88). The judges called the collection of these factors the “modified” core test (Quebec Reference, at para 79). These factors included:

The scope of the jurisdiction being granted, whether the grant is exclusive or concurrent, the monetary limits to which it is subject, whether there are mechanisms for appealing decisions rendered in the exercise of the jurisdiction, the impact on the caseload of the superior court of general jurisdiction, and whether there is an important societal objective. This list is not exhaustive. Other factors may be relevant in different contexts: one need only think, for example, of geographical limitations.

Given that the grant of power in this case was broad and exclusive—granting the Court of Quebec power over the entire law of obligations at the monetary limit (Quebec Reference, at para 99)—s.96 was abridged by the legislative grant.

A major question that the Court addresses in this case is the scope of its reasons. That is, does this modified “core” test and the factors it involves supplant the old “core jurisdiction” test?:

The multi‑factored analysis we are adopting here is not intended to replace the current law. The analysis under s. 96 continues to involve two tests. The first — the Residential Tenancies test— continues to apply to any transfer of historical jurisdiction of the superior courts to an administrative tribunal or to another statutory court. The second — the core jurisdiction test — continues to apply in order to determine whether a statutory provision has the effect of removing or impermissibly infringing on any of the attributes that form part of the core jurisdiction of the superior courts. Where a transfer to a court with provincially appointed judges has an impact on the general private law jurisdiction of the superior courts, the question whether the infringement on the core jurisdiction is permissible or impermissible should be answered having regard to the factors discussed above. 

***

While Wagner CJC and Abella J’s opinions are interesting and contain information worth reading, I think there are good and bad elements of the majority’s opinion in this case.

First, the good. It is reassuring to see a “resounding endorsement” of the role of the superior courts in the Canadian constitutional order. Sounding in both national unity and the rule of law, the majority has—more than rhetorically—strengthened the “rampart” that s.96 erects against the creative reassignment of superior court powers (Quebec Reference, at para 145). Specifically, the Court’s comments on the Rule of Law are interesting and welcome. We see, here, a glowing endorsement of the role of the separation of powers in Canadian law, and the role of the Rule of Law in relation to the separation of powers. For a Court that has insisted there is no strict separation of powers in Canada, it is interesting to see that, whatever the content of the separation is, it does real analytical work in relation to s.96.  Relatedly, it is reassuring to see the Court draw a direct separation between provincial courts and superior courts. Clearly, the latter have a greater constitutional footing than the former.

Another good piece of this decision: the synthesis of the case law around the prohibition of parallel courts. Section 96 has a somewhat tortured history, and it is defensible for the Court to distill the cases down to a simple proposition: legislatures cannot create parallel or shadow superior courts. In fact, this is the role s.96 has typically played in the constitutional order. Consider, for example, the controversy at issue in Farrah. There, a provincial legislature created a tribunal that had exclusive jurisdiction over questions of law, supported by privative clauses. As the Court noted in Crevier, the Farrah problem was the de facto creation of a s.96 court (Crevier, at 238). More examples abound, and so the Quebec Reference’s synthesis of this important point—the main goal of s.96—is important and helpful.

Now, on to the (potentially) bad: there will be an inevitable confusion that arises in the application of the modified core test the Court endorses. Professor Daly says that this approach is contextual, and meshes well with other aspects of Canadian public law. Contextual tests are not necessarily bad, but it is worthwhile to point out that what they provide in flexibility they trade away in certainty. In this context, a lack of certainty could arise in two ways. First, and in general, I wonder whether we need so many tests to govern s.96. As a reminder, we have three: the Residential Tenancies test, the core test, and the modified core test for cases like the Court of Quebec. The life of the law is experience, and so the Court in the Quebec Reference had to work with the tests that had been developed. That said, in a perfect world, I do think there is a way to simplify the test to determine whether s.96 has been abridged. In my view, most of the analytical work can be done by delineating the categories of “core” jurisdiction that have been recognized by the Court in the case law. While the Residential Tenancies test does play a historical function, ensuring that s.96 protects the jurisdiction of the superior courts at least as it was at Confederation, the core jurisdiction categories could also serve this function while providing more categorical guidance. This would, I admit, entail drawing rather broadly the content of the “core,” and this is what, in part, divided the various opinions in the Quebec Reference. On this account, the core would include substantive considerations (such as judicial review jurisdiction, private law jurisdiction, etc) rather than simply procedural powers concerning the management of inherent process (see Abella J’s characterization of core powers at para 301). There would have to be play in the joints, of course, to allow for institutional innovations resulting from the exercise of legislative sovereignty, particularized by s.92(14) of the Constitution Act, 1867; but I am candidly unsure why one test, grounded in the rule of law, which protects substantive and procedural powers of the superior courts is undesirable.

Relatedly, the modified core test is supposedly limited to cases involving courts, and the lead opinion emphatically says that it is not replacing the law when it uses this modified test (see para 144) . But as Paul Daly notes, it is an open question whether this modified test applies to administrative actors as well. While I am reticent, as I said above, about adopting yet another test to govern s.96, there is no principled reason why the tests developed should apply differently based on whether the derogation is in favour of a “court” or an administrative actor. The evil with which s.96 is concerned is the creation of shadow courts that functionally act as s.96 courts. Whether the recipient of this power is an administrative actor or some administrative actor, there is a chance that a shadow court could be created by the delegation of power mixed with the liberal use of privative clauses. Indeed, in Farrah and Crevier, the issue was the de facto creation of a s.96 court, even in the auspices of an administrative body. While the Court of Quebec is a unique judicial body in Canada, Professor Daly notes that broad delegations of power have been made to various tribunals across the country. Those broad delegations would, it seem, be captured by the Court’s modified test.

The Court seems to draw a distinction between administrative actors and courts, noting that the Residential Tenancies test was in part developed to accommodate the developing administrative state. While whatever test is adopted by the Court must be sensitive to the legislative choice to delegate, the functional reasons motivating that delegation cannot exceed constitutional limits; in other words, s.96 is the brake against unfettered legislative delegation that creates unaccountable shadow courts. No matter the desirability of an administrative state, legislative action is limited by s.96. And for that reason, there is no good reason why s.96 should be different in the context of administrative actors versus courts.

There is more in this decision, including the Court’s interpretive approach when it comes to s.96. For now, though, the Quebec Reference is an important jurisprudential statement about the role of s.96. No matter the difficulties that courts may have in applying the doctrine in this case, at the very least we have important statements about the role of s.96.

Esprit d’Escalier

Just two years after its notorious decision in Gray’s case, the Supreme Court took a more skeptical view of the executive’s claims of broad emergency powers

There is a wonderful French phrase that describes the flash of wit that only comes well after the conversation in which it would have served is over ― say, as one is walking down the stairs, leaving the party: esprit d’escalier. We’ve all had it, no doubt. A so has the Supreme Court ― or so it seems to me after reading an old decision co-blogger Mark Mancini recently pointed out to me, In re Price Bros and The Board of Commerce of Canada, (1920) 60 SCR 265.

This case offers a spirited example of robust statutory interpretation being used to counter-act an overbroad grant of discretion to the executive in wartime legislation. For this it deserves to be more widely known (and I take it that this was Mark’s first interest in the decision). But, for my part, I cannot fail to note the sad contrast with the Supreme Court’s better-known engagement with such things just two years earlier, with In Re George Edwin Gray, (1918) 57 SCR 150.


Recall that in Gray, a majority of the Supreme Court adopted an extremely broad reading of the powers delegated to the Governor-in-Council by the War Measures Act, 1914. Specifically, the key issue there was whether the governor could, by regulation, override an exemption from the obligation to do military service that had previously been granted by statute. In the leading judgment (in which three of the four judges in the majority concurred), Justice Anglin recognized that

[n]o doubt the amendment of a statute or the taking away of privileges enjoyed or acquired under the authority of a statute by order-in-council is an extreme exercise of the power of the Governor-in-council to make orders and regulations of a legislative character. (180)

Still, he found that it was justified, in view of the breadth of the grant of powers in section 6 of War Measures Act

to do and authorize such acts and things and to make from time to time such orders and regulations as he may by reason of the existence of real or apprehended war, invasion or insurrection deem necessary or advisable for the security, defence, peace, order and welfare of Canada.

These words were followed by an enumeration of specific subjects the regulations could address, but since that was introduced by a clause providing that the enumeration was “for greater certainty, but not so as to restrict the generality of the foregoing terms”. For Justice Anglin, this meant that it would be wrong to apply to ejusdem generis maxim of statutory interpretation, which suggests that mention of examples means that the general category has to be understood by reference to these examples.

And Justice Anglin insisted, too, that

The exercise of legislative functions such as those here in question by the Governor-in-council rather than by Parliament is no doubt something to be avoided as far as possible. But we are living in extraordinary times which necessitate the taking of extraordinary measures. (181-82)

Chief Justice Fitzpatrick made a similar point:

It seems to me obvious that parliament intended, as the language used implies, to clothe the executive with the widest powers in time of danger. Taken literally, the language of the section contains unlimited powers. Parliament expressly enacted that, when need arises, the executive may for the common defence make such orders and regulations as they may deem necessary or advisable for the security, peace, order and welfare of Canada. The enlightened men who framed that section, and the members of parliament who adopted it, were providing for a very great emergency, and they must be understood to have employed words in their natural sense, and to have intended what they have said. (158-59)


Meanwhile, Price Bros concerned an order of the Board of Commerce requiring a paper company to supply specified quantities of newsprint to certain newspapers. (Remember those?) Simplifying somewhat, the Board’s jurisdiction to make such an order was supported on two grounds. First, a previous order under the War Measures Act invested the Board with the powers of a “Commissioner and Controller of Paper”, including, specifically, the power to make orders of this nature. Second, the Board separately had jurisdiction under the Combines and Fair Prices Act (the forerunner of the Competition Act) to regulate trade in a “necessary of life”, defined as

a staple and ordinary article of food (whether fresh, preserved, canned, or otherwise treated) clothing and fuel, including the products, materials and ingredients from or of which any thereof are in whole or in part manufactured, composed, derived or made, and such articles of any description as the Board may from time to time by special regulation prescribe.

The Supreme Court, with only Justice Mignault dissenting as to the War Measures Act, and unanimously as to the Combines and Fair Prices Act, found that the Board’s order was ultra vires.

Justice Idington, who had dissented in Gray, effectively rejected its holding that the delegation of power under section 6 of the War Powers Act is practically unlimited and isn’t confined to the matters enumerated in that provision. For him, one of these subjects had to support the impugned regulations, and none could. In particular, authority to regulate “trading, exportation, importation, production and manufacture” cannot

apply to the mere direction of selling newsprint paper by a manufacturer thereof to a person wishing to use it. Indeed, after much consideration, I cannot think how that purely business transaction of a very ordinary type can be said to have any relevancy to the matters therein specified of possibly vital importance in many ways conceivable in a state of war. (270)

Justice Brodeur, who had also dissented in Gray, was of a similar view.

For their part, Justices Duff and Anglin, who had been in the majority in Gray, neither contradicted nor endorsed this analysis; nor did they so much as mention Gray. (Nor did their colleagues, for the record.) They focused on a somewhat different issue: that regulation of the paper trade in 1920, a year and a half after the armistice and almost a year after peace was officially concluded, could not sensibly be said to be “necessary or advisable for the security, defence, peace, order and welfare of Canada” “by reason of the existence of … war”. Justice Duff was all circumlocution, but Justice Anglin went so far as to say that it would take bad faith to really think so, and the government must rather have been mistaken about its war powers subsisting despite the war having ended, to “[t]he common knowledge possessed by every man on the street, of which courts of justice cannot divest themselves”. (279)

As for the other argument, to the effect that the Board could regulate newsprint as a “necessary of life”, the Court was, as mentioned above unanimous in rejecting it, and indeed in finding it rather unserious. Justice Anglin’s reasons, though, are worth a closer look, because they offer yet another point of contrast with Gray. In that case, he had found that the prefatory “for greater certainty, but not so as to restrict the generality of the foregoing” excluded the application of the ejusdem generis canon of interpretation. Not so here with the “articles of any description” clause, though Justice Anglin explicitly noted that

[a]t first blush the words “of any description” appended to the general words “other articles” would almost seem to have been inserted  to indicate an intention to exclude the application to this section of the ejusdem generis rule, and to require that the general words “other articles” should here be given their ordinary general construction. (283)

But, Justice Anglin said, “consideration of the character of the Act and of the context as a whole” suggests “that Parliament cannot have meant that words the ‘other articles’ should bear their ordinary broad signification”. (285) For one thing, Parliament wouldn’t have needed to describe staple foods explicitly, if it were otherwise; for another, because the designation of an item as a “necessary of life” by the Board allowed for the imposition of criminal penalties for its “accumulation or withholding from sale”, he found it

inconceivable that Parliament meant to confer such wide and unheard of powers. I rather think that no one would be more surprised and shocked than the legislators themselves were they informed that they had done so. I am therefore satisfied that Parliament must have intended that the words “other articles of any description” in sec. 16, notwithstanding their obvious and emphasized generality, should receive a much more restricted construction. (286)

Justice Anglin observes, for good measure, that Poarliament “must be taken to have been fully cognizant of … the ejusdem generis rule of construction so frequently acted on by the courts”. (286)


All that makes sense to me; there is much to like about Price Bros. But wouldn’t the arguments that prevailed there ― and prevailed rightly ― have applied with equal force in Gray? If general language referring to “articles of any description” could be read down to only apply to a comparatively narrow class of items; if the courts, rather than an administrative board, could authoritatively interpret what is necessary for life; if Parliament must be taken to be cognizant of the ejusdem generis principle when legislating; a fortiori, if the limited reading of the War Measures Act offered by Justices Idington and Brodeur deserved no express disagreement; why wasn’t any of that so in the earlier case?

The answer, I’m afraid, seems inescapable. When the judges saw “extraordinary times”, a “time of danger”, “a very great emergency”, they saw also “extraordinary measures” taken by “enlightened men”. Once the danger had passed, the enlightened men became capable of incompetence if not bad faith, and judges gathered their wits, or redressed their backbones. A Marxist take on it all might point out that the Supreme Court refused to take the side of a simple farmer torn off from his land and sent to do and die, but did side with capitalists denied the opportunity of profit. But I am no Marxist, and have no reason to suppose that this is fair. More likely, the older maxim is the better: Inter armes tacent leges.

So perhaps this is all inevitable. Perhaps we should even be happy that the judges did, after all, recover ― mostly. Consider Justice Mignault’s partial dissent in Price Bros: Neither common knowledge nor even proclamations by the King satisfied him, and he insisted that only a proclamation by the Canadian government, in the form prescribed by the War Measures Act, would have put an end to the government’s emergency powers under that Act. The government had not troubled itself with issuing such a proclamation. This might be something to ponder as we are dealing with one emergency, and facing strident calls for governments to proclaim and assume enormous powers to try to deal with yet another, climatic, one.

But this brings me to the last point I’ll make here, and it might be a somewhat hopeful one. Gray is usually taken as authority for Parliament’s ability to delegate vast powers to the executive, especially in emergency contexts. That’s true, so far as that goes. But it’s worth noting, first, that just two years after it was decided it may already have been seen as something of an embarrassment, including by the same judges who decided it. Perhaps more significantly, at the very least, Price Bros should be taken as authority for the proposition that courts should not take the executive’s assertions about the existence of emergencies and the need for emergency powers on faith. However deferential they may be while the emergency is ongoing, their willingness to check the executive in this respect is a salutary constraint on powers that could easily destroy the constitution in its absence.

“Administrative Sabotage” and the Ontario Human Rights Tribunal

Recently, Professor David Noll (Rutgers Law) posted a fascinating article called “Administrative Sabotage” on SSRN, forthcoming in the Michigan Law Review. You can view the article here, and Professor Noll wrote a fascinating thread outlining its main arguments. The abstract:

Government can sabotage itself. From the president’s choice of agency heads to agency budgets, regulations, and litigating positions, presidents and their appointees have undermined the very programs they administer. But why would an agency try to put itself out of business? And how can agencies that are subject to an array of political and legal checks succeed in sabotaging statutory programs?

This Article offers an account of the “what, why, and how” of administrative sabotage that answers those questions. It contends that sabotage reflects a distinct mode of agency action that is more permanent, more destructive, and more democratically illegitimate than other more-studied forms of maladministration. In contrast to an agency that shirks its statutory duties or drifts away from Congress’s policy goals, one engaged in sabotage aims deliberately to kill or nullify a program it administers. Agencies sabotage because presidents ask them to. Facing pressure to dismantle statutory programs in an environment where securing legislation from Congress is difficult and politically costly, presidents pursue retrenchment through the administrative state.

[…]

Professor Noll’s paper is a significant contribution, relevant outside of the United States. In fact, as I have written about previously (see Mark Mancini, “The Political Problem with the Administrative State” (2020) 2 Journal of Commonwealth Law 55) the Ford government’s treatment of the Ontario Human Rights Tribunal (OHRT) is a classic example of a government legitimately delaying appointments to stymie the practice of the administrative justice system. Professor Noll has now provided the theoretical and linguistic tools for us to understand this phenomenon in administrative government, even for us in Canada.

***

Noll’s focus is “the sabotage of statutory programs by agencies that administer them” [7]. In this, Noll’s project fits in a rich tradition of public administration scholarship that has studied the various ways in which bureaucrats can undermine policy objectives set by their enabling statutes, through mal -administration, “shirking” or drifting, or sabotage. Sabotage can be defined as bureaucratic action that “deliberately undermines policy objectives of the superiors” (see John Brehm & Scott Gates, Working, Shirking and Sabotage: Bureaucratic Response to a Democratic Republic, at 21).  Sabotage “involves a specific stance on the part of the agency toward the program it administers” and the stance “seeks to eliminate a program [the agency] administers” [8]. Sabotage is thus different from other bureaucratic phenomena, in that it involves a deliberate and intentional sacking from within of the agency’s ability to fulfill its delegated mandate [7]. A classic basic example of sabotage that Noll points out—and that I address in my paper on the OHRT—is “non-appointments”—failing to appoint agency heads, or other important positions, as the case may have it [30].

Administrative sabotage, in either Canada or the United States, is a destructive practice that undermines the legislative choice to delegate to agencies. As Noll says: “Rather than use delegated authority to enforce and elaborate statutory policy, an agency uses that authority to undermine the program it administers. In structural terms, this use of delegated authority is at odds with the principle of legislative supremacy” [10]. Once a legislature has delegated power to an agency, it is a condition of the delegation that the power be exercised according to the enabling statute. Agencies and politicians that fail to live up to these delegated terms—and worse, agencies and politicians that actively undermine them—act inconsistently with the power they have been given. Moreover, they act undemocratically—they undermine the legislative plan & bargain containing the conditions governing the administrative action.

Complicating this conventional picture is the emergence of theories of executive control over the administrative state and the desirability of political control as a constitutional matter. The unitary executive theory in the US, for example, generally holds that all executive power is placed in a President, and it therefore follows that the “executive”—including executive administrative agencies—must be controlled by the President (see, for the nuances, Seila Law). In Canada, we have a parliamentary system, but the gist is similar in at least some respects. Legislatures provide powers to executives and administrative decision-makers to make decisions. Legislatures also structure the relationship between the executive and the administrative state, creating and controlling powers of appointment, for example (see the classic example in Saskatchewan Federation of Labour, 2013 SKCA 61). A strong executive power advocate may claim that that the executive can lawfully engage in sabotage by appointing people who wish to undermine the agency itself. It can do so because the executive is the representative of the people, and thus is the politically legitimate actor, in contradistinction to unaccountable administrators.

In the US, the Trump administration furnished many examples of administrative sabotage, and it mooted the defense of the practice. A prominent example included Mick Mulvaney and the Consumer Financial Protection Bureau (the CFPB). The CFPB is in charge of imposing a variety of consumer financial laws. Mick Mulvaney, appointed the head of the CFPB, had previously indicated that he supported abolishing the CFPB [3]. Of course, by itself this is neither here nor there. But once Mulvaney became the head of the agency, on the conventional picture, he had no discretion to undermine the legislative bargain simply because he disagreed with it in principled. Yet he did so: he “declined to request money to fund the Bureau’s operations; installed “Policy Associate Directors” to shadow bureau chiefs protected by the civil service laws; rescinded, stayed, or delayed major rules on payday lending, overdraft fees, and student loan servicing…” [3]. Mulvaney justified these practices by appealing to the adage of “elections have consequences” [11].

Noll’s paper also explores the various reforms that might be adopted to stop sabotage. Noll shows how courts and Congress have been largely unable to control sabotage. Presidents and courts that have a reflexively anti-administrativist agenda may, in fact, be incentivized to exacerbate and permit administrative sabotage. But as a practical matter, there is another issue: many instances of “administrative sabotage” are simply not amenable to judicial review: “it is simple to invent technocratic explanations for agency actions designed to undermine a statutory program…”, and as such, there are evidential hurdles [13-14]. Noll suggests that specific statutory reforms that might shed light on the question, the goal of these reforms being that the statutory schemes are designed to prevent sabotage—“policymakers should not assume that programs will be administered in good-faith” [50]. Noll suggests statutory appointment qualifications consistent with the Constitution; and, notably for our purposes, endorses the proposition that broad statutory delegations (the norm since the New Deal) encourage sabotage [54].

***

There is much in Noll’s piece to recommend it to Canadians, but I want to focus on just two points: (1) Noll’s conclusions about delegated power; and (2) the case of the OHRT, arguably an example of Noll’s sabotage.

As noted above, and since the New Deal, scholars have argued—and sometimes assumed—that broad delegations of statutory power are desirable. So the old case goes, legislatures simply do not have the time and expertise to consider all the factors when legislating; and particularly in complex fields of regulation, it makes sense to delegate power to so-called expert agencies. As a descriptive matter, this is likely true, and for that reason, it makes sense for legislatures to “trade-off” political control for expertise (as Epstein & O’Halloran once put it).  But this does not speak to the degree to which this should happen. As I wrote in my article on the matter [94], and as Noll essentially argues:

The real problem with executive discretion, then, is not that it abridges independence; but that it has a potential of being misused to undermine the limitations on statutory power that arise in the context of a delegating statute. The goal should be to cabin executive discretion tightly so that it, necessarily, cannot undermine delegated legislative power. Broad delegations, on this understanding, should be avoided.

The point is that the solution to sabotage starts not with depending on the good-faith of administrators (as a previous generation of pro-administrativist scholars did), or depending on the political control exercised by an executive actor (who may have incentives to permit sabotage). Instead, it starts with the legislature slightly increasing the cost of legislating by keeping the possibility of sabotage in mind when legislating, and using its powers to put meaningful limits on delegated powers.

This raises an important point about independence. To simplify, in Canada, the independence of administrative decision-making is parasitic on the degree to which a statute permits that independence (famously, see Ocean Port). Statutes can either liberate or constrict executive control over the administrative state. One way for executives to control so-called “independent” tribunals is for the legislature to vest an appointment power in the executive. Assuming this power is exercised according to the terms of the statute, there is no constitutional objection; while independence of administrative decision-making may be a good in some cases, it is not self-evidently legally required (though see the reading of the caselaw suggested by Ron Ellis in his text, Unjust By Design). And political control by elected actors is desirable in a system of responsible government.

But again, this is only true to an extent. Sabotage is quite different from an executive exercising lawfully delegated powers of control; it is a situation where an executive or agency head may intentionally choose to exercise power it does not have to undermine the power it has been granted. The sin of omission here is not that the executive is simply choosing not to exercise delegated power; it is that the executive is actively using its position to undermine the entire statutory bargain setting up the agency.

And this is exactly what happened in the case of the Ontario Human Rights Tribunal. As late as January 2021, observers argued that “…Ontario’s human rights enforcement system has become dysfunctional” in part because “The final resolution of a claim can now take years for individuals who have experienced discrimination.” The cause of this delay: few of the human rights adjudicators whose tenure is at-pleasure have been replaced. I previously studied this phenomenon as an example of a situation where an executive was failing to implement delegated statutory power. Indeed, the relevant legislation delegates power to the Cabinet, who “shall” make appointments to the tribunal [my paper, at 82]. By failing to do so, the government created grist for the mill of its critics, who asserted—not unreasonably—that the government was intentionally starving the tribunal and delaying the resolution of claims.

The failure here is traceable, ultimately, to the legislature—though the executive undermining of delegated power is the evil to which the legislature should have turned its mind. The legislature enacted the tribunal, and it can rescind its powers tomorrow. But executives do not have that authority, which is why sabotage is undesirable. So, in the OHRT case, by failing to impose timelimits for appointments and a minimum number of members, the legislation grants easily-abused delegated appointment power to the executive. So, as Noll suggests, it was the breadth of delegated power that created the conditions for sabotage.

Canadians should pay close attention to Noll’s article. While there are obvious differences between the Canadian and American administrative states, the phenomenon of sabotage is likely a common evil.

Bill C-10 and the CRTC Debacle

Does it get much worse?

Bill C-10 has passed the House of Commons. For those unaware, the bill nominally involves “compelling companies like Netflix Inc and TikTok Inc to finance and promote Canadian content.”  Experts, like the University of Ottawa’s Michael Geist, are concerned about the far-reaching impacts of this law. The concerns mostly revolve around the idea that the government’s law may reach content produced on user-driven sites, targeting individual content creators rather than the “tech giants” that are the nominal targets of the law.

I agree with Professor Geist. I share deep worries about the chilling effect this, and other measures the government is introducing, will have on free expression. But that isn’t my area of interest or expertise, for the purposes of today. Instead, whatever the content of the law, no one can gainsay Professor Geist’s conclusion, upon the tabling of the bill, that it “hands massive new powers to Canada’s telecom and broadcast regulator (the CRTC) to regulate online streaming services, opening the door to mandated Cancon payments, discoverability requirements, and confidential information disclosures, all backed by new fining powers.” The wide-reaching delegation of power will, as is common in administrative settings, be used by the CRTC to the hilt. We should expect nothing different, and we should therefore be disappointed that Canada’s government did all it can to prevent the legislature from taking a hard look at this bill.

In Canada, most of our discussions of administrative law are synonymous with discussions of judicial review. That is, we tend to view the law of judicial review as the same as administrative law. The focus of most Canadian administrative law academics (myself included) is on the stuff of judicial doctrine; standards of review, procedural fairness, etc etc. But, in other jurisdictions, like the United States, legislatures and courts have indicated an interest in controlling administrative power themselves. The United States’ Administrative Procedure Act, despite its flaws, is at least a legislative indication that the administrative state can and should be controlled by the legislative standards regarding adjudication and rule-making.

No such interest evidently exists in Canada, as the Bill C-10 debacle shows.  Put aside, for the moment, the rather emaciated Statutory Instruments Act (see Neudorf, here for problems with this statute at 562 et seq, and my paper, here, for more). The efforts by the government (and other abettors) to do anything—whatever the optics—to limit debate and amendment of the bill are unfortunate:

All bills, no matter their consequences, should be subject to robust debate, in both Parliament and the public forum more generally. But this law, in particular, is troubling from an administrative law perspective. Parliament’s inability to even fully debate—let alone control—the mass discretion passed to the CRTC should worry all Canadians.

I accept the legitimacy of the administrative state, parasitic as it is on delegated power. But that’s the rub—the power is delegated, and amenable to control by the delegator. The legitimacy question is quite aside from the need for the formal, constitutional actors in our system (the legislatures, specifically) to fully and frankly debate the policy and legal implications of broad delegated power. In fact, legislatures may be the only ones with the power to do this in our constitutional order. Despite strong arguments to the contrary (see Justice Côté’s opinion in the GHG Reference and Alyn Johnson’s excellent paper here), I am not convinced that courts can pass on the constitutionality (let alone the policy implications) of the scope of broad delegated power. While courts are the only “independent” guardians of the Constitution (see Ell, at paras 3, 23), that does not mean that legislatures should bar themselves from considering the legalities and policy implications of their delegations.

It gives me no comfort that judges of the Supreme Court and commentators has referred to the CRTC as the “archetype” of an expert tribunal (see the opinion of Abella and Karakatsanis JJ in Bell Canada, at para 64; see also B. Kain, “Developments in Communications Law: The 2012-2013 Term—The Broadcasting Reference, the Supreme Court and the Limits of the CRTC” (2014) 64 SCLR (2d) 63). While it is certainly true that “we simply do not know what the typical bureaucratic objective function looks like” (see Gersen, here, at 335), there is clearly a risk that “[d]elegation can create iron triangles of policymakers insulated from public control…” (Gersen, at 345). This is even more apposite where the mandates that are implemented by administrative actors are vague and general, as they often are. While expertise may be a valid reason for delegation, there is an inevitable trade-off involved in delegating power to experts—there is always a risk of bureaucratic drift, or expansion of delegated mandates. The worry is multiplied when the legislature indicates little interest in debating the merits of delegated power. Indeed, perhaps the legislature has no incentive to control delegated power, except for the incentives provided by constitutional principles.

 And here, the CRTC has been given delegated power a country mile wide. As Geist noted on the tabling of the bill, many of the specifics of the bill’s new concept of “online undertakings” will be left to the regulator. For example, the third reading of the bill does not unambiguously say that it does not apply to users.  Much will be left in the hands of the CRTC through its regulation-making powers. We will not know the extent to which the market and users will be affected until the CRTC begins using its new-found powers.

Now, because of the parliamentary calendar, it does not appear  that the Senate will be able to pass the bill in time. This is good news, but it seems more fortuitous than anything. More of this vast delegated power appears on the horizon for other agencies, like the Canadian Human Rights Commission. A rigorous public will need to step in where the government has made it impossible for the legislature to fully examine the proposed law.

The Politics of Law

Is law truly just a function of politics? Should it be?

It is common in progressive circles (and, increasingly, in conservative circles, to some extent) to say that law=politics, or some variation thereof (law is always political, law is political, etc etc). The claim is usually offered without much in the way of qualification, and it appears to capture the many aspects of “law”; the creation of law, the implementation of law, and the interpretation of law.

In this post, I argue that this claim is either banally true or implausible because it merges law with politics in a way that our current system simply cannot support. To determine its veracity, the claim must be examined closely—in relation to the various ways that political considerations interact with law. A failure to do so infects the “law=politics” claim with a fatal imprecision.

I first outline the limited ways in which the claim is likely true. Then I shift gears to a normative argument: while the claim may be true in certain ways, it is not self-evident that it should be true across the legal system. In other words, there is good reason to accept that law may be “political” in certain ways; but it isn’t the case that it should be in all aspects of the law (its creation, implementation, and interpretation).

***

Before jumping in, I should acknowledge some imprecision in terms here. The law=politics claim is often made bluntly, without defining what is meant by “politics” or “political.”  It could mean, for example, that law is inevitably wrapped up in partisan politics. It could mean that law is not necessarily co-extensive with partisanship, but is correlated with political ideology more broadly. Or it could mean something very simple: law is “political” in the sense that people are “political,” meaning that law mediates disputes in a society where political disagreement is inevitable.  It could also mean a combination of all three of these things, or more.

All of these claims could be descriptively true in various ways, in relation to different aspects of law-making, implementation, and interpretation. But a failure to distinguish between these various definitions of “politics” and “political” presents an immediate hurdle for those who claim, without qualification, that law is always political. As I will note throughout, these various claims to the political nature of law may be more or less true given the institutional context. It does not follow that every political consideration is always relevant to the law.

***

Starting with the descriptive claim, it is clearly true that law can be political. The creation of law in the legislature is itself a political act. Laws are created to achieve certain aims; these aims can clearly be motivated by ideologies; and the content of law is not “neutral” as between political aims. Political parties make up the legislatures, and they vie for power in elections. In this case, and quite obviously, law is the product of political machinations. It follows that the creation of law itself can be motivated by wholly ideological reasons, quite aside from any claims to public reason or ideological neutrality. As I will note below, the notwithstanding clause is a good example of a situation where a legal power can be exercised for solely political reasons.

As well, the implementation of law by administrators, state officials, police, and others will not always be perfectly consistent with what the law says. Officials could operate on personal whim or policy preferences that are inconsistent with the policy preferences specified in the law. After all, state officials routinely fall below the standards set by the law and the Constitution—one only need to look at the number of constitutional challenges against state action that are successful in Canadian courts (though, of course, this may be due to stringent constitutional standards rather than routine malfeasance by state officials). Whether this is due to cognitive biases, outright hostility to legal norms, or mistaken application, laws can best be seen as ideals that state officials will sometimes fall below. This illustrates that state officials—at best—can only approximate legal norms. In administrative law, for example, the law of judicial review could be understood as an attempt to police the gap between the law on the books and the law as applied; to inch state officials towards following the law on the books, as much as possible.

Similarly, as a descriptive matter, the interpretation of law could be “political” or perhaps more aptly, “ideological.” Law is fundamentally a human business, and interpretation cannot be a perfect science, a simple application of axioms to words. Human beings have cognitive biases and judges are simply human beings. Notwithstanding the fact that judges sometimes speak as if they are neutral protectors of constitutional values, it is simply impossible to guarantee that law will always be interpreted authentically. To be clear, this tendency is likely true across the political spectrum—results-oriented interpretation can be common on the left or the right, and in each case, it is unavoidable that there will be results-oriented interpretation.

That said, we simply do not know the extent to which any of the above is even true in Canada. While it is plausible to suggest that judges and officials may have their judgments infected by ideology extraneous to the legal instrument under interpretation, this should not be overstated. Empirical research would be helpful in determining the extent of this phenomenon. For the most part, though, Canadian judges likely do their best to apply the law according to its terms. (NB: see Emmett Macfarlane’s work here, which tackles some of these issues. I’ve ordered the text).

***

As a normative matter, let us assume that it is true that implementation and interpretation of law can be “political” or “ideological” or something of the sort.   There are two options: we create rules, standards, and principles to limit the gap between the law as adopted and the law as applied; or we do not.  The form of these rules, standards, and principles is unimportant for our purposes. For now, it is enough to say that there is a fork in the road. Either we choose to limit the political/ideological discretion of state actors—including judges—or we do not. The point here is that while there can never be perfectly “neutral” or “impartial” creation, implementation, and interpretation of law as a matter of fact, it is desirable—as a normative matter—to limit the role of pure ideology in certain areas of law, to the extent we can.

This is obviously not true in the context of law-creation. The public understandably, and quite likely, wants our laws to be the product of a democratically-elected legislature (to the extent our electoral system leads to fair democratic outcomes in the abstract). In this sense, people vote for representatives that share their priors or who they wish to see in the legislature. Those legislatures, composed as they are by political parties, will pass laws that reflect the majority will (again, to the extent the “majority will” is represented in our electoral system). Ideally, in legislative debates, we want all the cards on the table. We want our representatives to fully and frankly air their ideological differences, and we want the public to be able to judge which program of government is best. In this sense, it is undesirable as a normative matter to (somehow) limit the politics of law in the realm of legislation.

However, as a normative matter, the story changes dramatically when it comes to law implementation and interpretation. Our Supreme Court endorses the proposition, for example, that interpretation must be conducted in order to “discern meaning and legislative intent, not to ‘reverse-engineer’ a desired outcome” (Vavilov, at para 121). Administrative decision-makers implementing law have only limited reserve to bring professional expertise to bear (Vavilov, at para 31); otherwise, they are creatures of statute, and are cabined by the terms of their statutes (Chrysler, at 410). Put differently, administrative actors implementing law have no independent reserve to make free-standing ideological determinations that are not incorporated into the law itself. A different way to put it: law is political in the legislatures, but when it is being interpreted or implemented, courts must discover the political choices embedded in the law itself.

  The Court also endorses a law and politics distinction, as a constitutional matter, when it comes to judicial independence. It says that judicial independence is “the lifeblood of constitutionalism in democratic societies” (Ell, at para 45), which “flows as a consequence of the separation of powers” (Provincial Judges Reference, at para 130). Judges should not, at least as a positive matter, render decisions that are infected by ideology—because it is the legislature’s job to make judgment calls based on political considerations, economic tradeoffs, or otherwise.

I could go on with examples of how our Court—and our system—endorses a separation between law and politics. For what it’s worth, and no matter the descriptive reality, I believe there is wisdom in articulating limits to the free-standing ideological whims of administrators and judges. Of course, these limits will not be perfect, and they will not reverse the reality that implementation and interpretation will sometimes be driven by results. But the use of rules, standards, and principles to cabin these free-standing policy preferences can be useful in ensuring that state actors and judges justify their decisions according to certain, universal standards.

Two examples could be offered. First, in statutory interpretation, we have semantic canons, presumptions, and tools to try to determine the authentic meaning of law. These “off-the-rack” tools and presumptions are far from perfect, as Karl Llewelyn once pointed out. They can be contradictory, and they are not axiomatic laws of nature that lead inexorably to certain results. But we have these rules for a reason. We use them because we have made an ex ante judgment, over the years, that they will help interpreters reach the authentic meaning of legislation (or, if one is an intentionalist, the authentic intention of legislatures). We do not expect judges to distribute palm-tree justice when faced with a law. Instead, we expect judges to justify their interpretive result through the prism of these canons and presumptions, because they are semantically and substantively useful. We do this because there is a law and politics distinction between legislative work and judicial work, endemic to our Constitution.

Of course, there is a recognition that legal principles may themselves have a certain political valence. Presumptions of liberty, substantive equality, strict construction of taxation laws–all of these rules could be said to contain certain “political” suppositions. As I have written before, I am generally not supportive of certain substantive presumptions of interpretation that put a thumb on the scale. But as Leonid Sirota writes, some of these presumptions are plausibly connected to the legal system–in this sense, they are political, but they represent values that are endemic to the legal system as it stands. Substantive equality is similar. It can, at least plausibly, be traced to the text and purpose of s.15 of the Charter. These are principles that have some connection to our legal system; they are not representative of the whims of the particular interpreter in a particular case. At any rate, forcing interpreters to justify their decisions is useful in itself.

Secondly, Doug Ford’s recent decision to invoke the notwithstanding clause presents a good difference between the ways in which law can be political, and the ways in which it should not be. When a government invokes the notwithstanding clause, it is not necessarily an exercise of reason. It could be a blunt assertion of legislative power. Now, that assertion of power can be justified by any number of considerations. If some detractors are correct, for example, Ford’s use of the clause in this case could simply be designed to punish his opponents. Less likely, it could be a good-faith attempt by a legislature to come to a different definition of a rights-balance. Whatever it is, the use of the notwithstanding clause is an exercise of power that could be motivated by distinctly political aims. In this way, legislation is quite clearly political.

However, and even if naked political judgments are not justiciable once invoked under cover of the notwithstanding clause, the public may wish to articulate a different justificatory standard for the use of power that is legalistic in nature. As Geoff Sigalet & I wrote here, the public may wish to subject politicians who invoke the notwithstanding clause to a standard of justification—the politicians should offer legitimate, objective reasons for the invocation of the clause. Again, this is not a legal requirement. But as a matter of custom, it is a requirement that the public may wish to impose on politicians as a check on rank political judgments. By imposing such a standard, the public can disincentivize uses of the clause that are not backed by solid, legal reasons.

None of this is new. Indeed, Dicey argued that for the Rule of Law to flourish in any society, the society must contain a “spirit of legality” that is separate and apart from any limits imposed on power by  courts themselves. This spirit of legality presupposes that there are some areas where the public should expect better than rank political and ideological judgments. Of course, the law & politics distinction is a matter of some controversy, and I cannot address every aspect of the distinction here. Suffice it to say: broad claims that “law is always political” cannot hold. Law is descriptively political in some ways. It does not follow that it should be in all cases. Quite the opposite, sometimes it is best for rules, standards, and principles to cabin the ideological capture of courts and others, as best they can. This will not be perfect, it will not always work, and it is not a mechanical process. But it’s worth trying.

Keeping Out or Stepping In?

When should the courts intervene in internal disputes of voluntary associations?

This is my first post since February. Apologies. Things haven’t been great, and might not improve for some time, but I do hope that, at least starting in July, I will be posting more regularly.

In Ethiopian Orthodox Tewahedo Church of Canada St. Mary Cathedral v Aga, 2021 SCC 22, the Supreme Court considered the scope of the courts’ power to interfere with the decision-making of an unincorporated private association. The dispute involved a congregation and some of its members, whom its authorities excommunicated, apparently without having given them much of a hearing.

Justice Rowe provides a neat summary of his judgment for the unanimous Court:

[C]ourts can only intervene in the affairs of a voluntary association to vindicate a legal right, such as a right in property or contract. Membership in a voluntary association is not automatically contractual. Even a written constitution does not suffice. Membership is contractual only where the conditions for contract formation are met, including an objective intention to create legal relations. Such an intention is more likely to exist where property or employment are at stake. It is less likely to exist in religious contexts, where individuals may intend for their mutual obligations to be spiritually but not legally binding. A voluntary association will be constituted by a web of contracts among the members only where the conditions for contract formation are met. [49]

The idea that courts will only intervene in the face of an alleged violation of a legal right follows from the Supreme Court’s earlier decision in Highwood Congregation of Jehovah’s Witnesses (Judicial Committee) v Wall, 2018 SCC 26, [2018] 1 SCR 750. The rules of contract formation, including the requirement that parties intend to create legal relations, and not merely socially or spiritually binding ones, are longstanding. Here, they lead Justice Rowe to find that

there is nothing that can be characterized as an objective intention to make an offer on the part of [the congregation or its leadership], and nothing that can be characterized as an objective intention to accept on the part of any of the [excommunicated members], or vice versa. [52]

But a strict application of these rules, combined with (or perhaps resulting in) the position that even a self-proclaimed constitution of the association is not necessarily a binding contract, means that the courts will keep out of the internal disputes of voluntary associations ― especially, but not only, religious ones.


People whose opinion means more than mine have been critical of this. Over at Administrative Law Matters, Paul Daly writes

the sledghammer employed in Aga obliterates any judicial enforcement of any terms in a voluntary association’s “Constitution”, even terms relating to the basic procedures for removing individuals from the organization. When read with WallAga represents a significant judicial retreat. So much for the ‘supervisory’ jurisdiction.

Again, Professor Daly’s opinion on such issues is more important than mine. But here’s a note of doubt.

I’m not sure why we should be sorry about the judicial retreat, if that’s what Aga and Wall are. The Supreme Court is clear that when employment or property (or access to resources necessary to earn a living, as in some earlier cases involving expulsions from communes of coreligionists) are at stake, the courts still should intervene. What they are retreating from are disputes about membership or leadership of voluntary associations. But should they be involved in such disputes?

I would venture ― tentatively ― that it is sensible enough to think that they should not. As Justice Rowe explains

The law concerning the formation of contractual relations embodies practical wisdom. Many informal agreements that people undertake do not result in a contract. There are, for example, mutual undertakings between friends … or between members of a household … In neither of these examples do the parties (reasonably understood) intend to be subject to adjudication as to the performance of their commitments or to the imposition of remedies such as damages or specific performance. [21]-[22] (paragraph break omitted)

These rules aren’t only about practical wisdom though. They’re also about autonomy. As Justice Rowe himself says, they allow people who don’t want the law to step into their relationships to keep it at a distance. Arguably, unincorporated voluntary associations often are places where people exercise this kind of autonomy from the legal system. Not always, to be sure. But at least as a matter of presumption and default position, there is something to be said for Justice Rowe’s (and the Supreme Court’s) approach.

At the very least, this is a matter on which reasonable people might disagree, and on which compromise solutions may be available. Professor Daly notes that provincial legislation in British Columbia and Québec enables courts to intervene in the affairs of voluntary associations, including, in the case of Québec’s Code of Civil Procedure, of “groups not endowed with juridical personality”. Perhaps this is a defensible choice, albeit one less respectful of people’s autonomy. But it’s not necessarily the only defensible choice.

In fact, there is a difference between the Québec and British Columbia statutes to which Professor Daly refers. The latter only applies to “societies” which (as it makes clear) must be deliberately incorporated by their members. If people come together and form a voluntary association without incorporating, the default regime articulated in Aga will still apply. The position in New Zealand is similar: the Judicial Review Procedure Act 2016 defines “statutory power“, which is normally subject to judicial review, as, in relevant part, “a power or right … conferred by or under … the constitution or other instrument of incorporation, rules, or bylaws of any body corporate”. A constitution or bylaws of an unincorporated association do not count.

This may be a sensible distinction to draw: a group that goes to the trouble of formalizing its operations by incorporating, and obtains the benefits of incorporation, they submit to closer scrutiny by the courts. Otherwise, they will mostly be left to their own devices, except where legal relationships such as employment or ownership are involved, or where the association takes on some regulatory or quasi-regulatory role. In New Zealand, Electoral Commission v Cameron [1997] NZCA 301; [1997] 2 NZLR 421, involving the Advertising Standards Complaints Board which, although not incorporated, effectively regulated what advertisements could and could not be distributed by the media is an example.

In fact, Professor Daly’s position may not be all that dissimilar. He asks: “What is the point of setting out procedures, rights and obligations in a document made available to members when those procedures, rights and obligations can be discarded at will?” I’m not sure how strong this objection is in Aga (where the members of the congregation, even seemingly high-ranking ones, seem not to have been aware of the relevant documents for years). But Professor Daly’s point, if I understand correctly, is that choices about the degree of formality with which an association organizes itself are important. That makes intuitive sense. But I’m not sure that the line should be drawn at the creation of a “constitution” rather than at incorporation. The latter may be a more formal, and a more easily identifiable, step, and so perhaps a better marker for the courts to refer to.

Note, by the way, that my argument here is not about religious associations in particular. There are, indeed, good reasons for the secular courts to be especially wary of intervening in their disputes, because they are likely to implicate theological considerations. But this is only a specific application of the broader principle of autonomy that is implicated when the law chooses one approach or another to judicial intervention in the private sphere. Other kinds of associations may also have reasons for wanting to keep their workings informal and outside the state’s reach.


And, to repeat, perhaps they shouldn’t be allowed to do that. Perhaps the more interventionist position chosen by the Québec legislature is the wiser one. As I have already said, my views here are tentative. But I think that a debate about first principles ― about whether it is in fact right for the state to assume the role of a supervisor over the internal doings on voluntary associations ― is worth having. By tilting the default position towards non-interventionism and so putting the onus on legislatures to introduce a different set of rules, the Supreme Court’s decision in Aga may spur something like this debate.