Yatar and the Problem of Concurrent Proceedings

Overview

The Supreme Court of Canada released its decision in Yatar v. TD Insurance Meloche Monnex in March of this year and the Ontario Divisional Court has already begun grappling with the procedural fallout.[1] In a unanimous decision, the Supreme Court rejected the Divisional Court’s approach to streamlining the concurrent applications for judicial review and statutory appeals that frequently appear on its docket.

As is often the case when the Supreme Court releases a new administrative law decision, lawyers across the country quickly published online updates summarizing Yatar, disseminating the Court’s new gospel and highlighting its key takeaways.[2] However, little has been said about how courts like the Ontario Divisional Court should manage concurrent applications for judicial review and statutory appeals going forward.

This article reviews the Yatar saga critically through the lens of judicial economy, and suggests that while legislative changes may be required to restore efficiency to the process, there are steps that the Divisional Court could take now to reduce the burden of concurrent proceedings on parties, counsel and the court.  

Hold On, I’m an Environmental Lawyer

What does Yatar have to do with environmental law?

The Divisional Court is one of the busiest appellate courts in Canada.[3] More than a hundred different provincial statutes funnel litigants to the Divisional Court for judicial redress,[4] including legislation that matters most to Ontario environmental lawyers, such as the EPA, the EAA and others.[5]

Accordingly, environmental lawyers who represent clients seeking to challenge or defend administrative decisions in this province have a vested interest in the day-to-day management of cases in the Divisional Court and therefore a good reason to take the time to consider Yatar and its procedural implications.

At first blush, the key lesson from Yatar is relatively clear: a statutory right of appeal on questions of law is not a substitute for judicial review. This means that if a party takes issue with a decision of the LAT – or any other tribunal whose governing statute contains a limited right of appeal – it will usually make sense to commence two concurrent proceedings in the Divisional Court challenging the same decision.

The lasting effects of Yatar are murkier. By eliminating a practice that was supported by precedent and grounded in legitimate concerns about judicial economy – for reasons which, in the author’s view, do not bare sustained scrutiny – the Supreme Court has injected uncertainty into the Divisional Court’s handling of concurrent proceedings. This means more complexity for litigants and less efficiency for justice system.

The Problem of Concurrent Proceedings

All appellate courts grapple with systemic challenges, but the Divisional Court’s heavy caseload, and unique role as the primary source of judicial oversight for most tribunals in Ontario, exacerbate these problems. According to one estimate, nearly 60% of the Divisional Court’s decisions relate to applications for judicial review or statutory appeals from the decisions of tribunals, boards and other administrative law actors.[6]

The duplication of procedures as a result of “concurrent proceedings” is one systemic challenge that is especially burdensome for parties, counsel and the Court. Concurrent proceedings are not uncommon in the Divisional Court. They occur when a litigant appeals part of a tribunal’s decision and seeks judicial review of another part of the same decision, often due to restrictions in the tribunal’s governing statute. Concurrent proceedings increase the time, costs and resources required to access the justice system.

In Yatar, for example, the applicant filed both a judicial review record and a separate appeal record with the Divisional Court in order to comply with different requirements (and different deadlines) under the Rules of Civil Procedure for both appeals and applications. In addition, the parties each filed two factums, addressing different issues and different standards of review for challenging the same decision. Fortunately, the parties in Yatar were represented by experienced litigation counsel. The burden of simultaneously navigating two processes in a single case can be all but unmanageable for many self-represented litigants, who often require extensions of time and judicial assistance to steer their cases through the Divisional Court.

The Divisional Court’s Decision in Yatar

In Yatar, the Divisional Court confronted the problem of concurrent proceedings head-on.[7]

Ms. Yatar was injured in a motor vehicle accident and submitted claims for statutory benefits to the respondent insurer. After providing benefits to Ms. Yatar for a period of time, her insurer discontinued them. Ms. Yatar contested this denial of benefits before Ontario’s Licence Appeal Tribunal (the LAT). The LAT dismissed her application because the applicable limitation period had expired. Ms. Yatar’s application to the LAT for reconsideration was also dismissed. Ms. Yatar sought redress from the Divisional Court.

However, while the LAT’s governing statute granted Ms. Yatar a right of appeal to the Divisional Court, it was a limited right for questions of law only.[8] Accordingly, in order to raise questions of mixed fact and law in her challenge to the LAT’s decision and reconsideration, Ms. Yatar brought both a statutory appeal of the LAT’s decision and a concurrent application for judicial review in the Divisional Court.

The Divisional Court dismissed Ms. Yatar’s statutory appeal on the basis that her appeal did not really raise questions of law – but only raised questions of mixed fact and law.[9]

The Court also dismissed her application for judicial review, holding that judicial review of a LAT decision regarding the denial of statutory accident benefits is only available, if at all, in exceptional circumstances.[10]

Judicial Review and Judicial Discretion

The key to understanding the Divisional Court’s dismissal of Ms. Yatar’s application for judicial review is discretion. Judicial review is a discretionary remedy.[11] Judicial oversight of administrative action may be a constitutional lynchpin in Canada, but no person has a right to judicial review. This longstanding tenet has been codified in procedural statutes across the country, including Ontario’s Judicial Review Procedures Act, which states: “The court may refuse to grant any relief on an application for judicial review.”[12]

One of the established grounds upon which a court may exercise its discretion not to award judicial review, regardless of the merits of the applicant’s case, is the existence of an adequate alternative remedy. What makes an alternative remedy “adequate”  depends on several factors. As Kristjanson J., writing for the Divisional Court in Yatar, explained:

The courts have identified several factors relevant to determining whether an alternative remedy is adequate and so would justify a decision to decline judicial review, often called the Harelkin/Matsqui factors. The Supreme Court of Canada in Strickland v. Canada (Attorney General), 2015 SCC 37, [2015] 2 S.C.R. 713 at para. 42 has summarized these factors to include “the convenience of the alternative remedy; the nature of the error alleged; the nature of the other forum which could deal with the issue, including its remedial capacity; the existence of adequate and effective recourse in the forum in which litigation is already taking place; expeditiousness; the relative expertise of the alternative decision-maker; economical use of judicial resources; and cost.”

Crucially, the Supreme Court in Strickland held that “neither the process nor the remedy need be identical to those available on judicial review”.[13] Rather, the issue is whether the remedy is adequate in all the circumstances. Further, courts are to apply a “type of balance of convenience analysis” assessing both the adequacy of the alternative remedy and the suitability and appropriateness of judicial review. The “question is not simply whether some other remedy is adequate, but also whether judicial review is appropriate”.[14] Put another way, a key question is whether the judicial review is appropriately respectful of the statutory framework and the purposes and policies underlying the statutory scheme.

Applying the Strickland factors in Yatar

Following Strickland, the Divisional Court considered four specific factors in Ms. Yatar’s case:

1. Legislative intent. The Court gave weight to “the legislative intent to limit this court’s review of LAT decisions on Statutory Accident Benefits (SABs) to questions of law only, and to allow LAT to “function with a minimum of judicial interference” on questions of fact and mixed fact and law”.
2. LAT reconsideration. The Court considered “the breadth of LAT’s reconsideration power, which includes errors of fact or law likely to affect the result because the “other forum” to be considered under Strickland includes both the statutory appeal and the first level reconsideration.”
3. Alleged errors. The Court noted that whether on a statutory appeal or on a judicial review, the reviewing court will be highly deferential to the administrative decision maker on the questions of fact or mixed fact and law raised in Ms. Yatar’s complaint.
4. Judicial economy. The Court considered the systemic difficulties of duplicative judicial reviews and appeals, noting “the duplication of materials is a heavy burden on the parties and the court in terms of time, cost and efficiency. These concerns only increase when an application for judicial review is scheduled after an unsuccessful statutory appeal in order to avoid allegations of prematurity.”

Taking these factors into consideration, the Divisional Court concluded that the appeal on questions of law, combined with the right to seek reconsideration, constituted an adequate alternative remedy in this case, and further, that judicial review of a LAT denial of statutory accident benefits decision such as this would typically only be available in exceptional circumstances. There were no such exceptional circumstances in Ms. Yatar’s case.

Justice Kristjanson’s straightforward approach to dealing with concurrent applications for judicial review from LAT decisions in Yatar quickly became a tool in the Divisional Court’s case-management arsenal for streamlining duplicative and inefficient proceedings. Absent exceptional circumstances, concurrent applications for judicial review were generally dismissed. By the time that the Court of Appeal released its decision upholding Yatar in June 2022, the Divisional Court had already cited its reasons in Yatar 14 times.

The Court of Appeal’s Decision in Yatar

On appeal to the Ontario Court of Appeal, Ms. Yatar focused on this phrase “exceptional circumstances” and argued that the Divisional Court had erred by limiting judicial review for cases involving LAT decision regarding SABs to “exceptional circumstances”. Writing for the Court of Appeal, Nordheimer J. agreed with Ms. Yatar that the phrase “exceptional circumstances” was problematic as it created  confusion regarding access to judicial review as a remedy in other contexts, but ultimately endorsed the substance of the Divisional Court’s analysis.[15]

Specifically, the Court of Appeal held that while the Divisional Court was right that the statutory appeal on questions of law and the LAT’s reconsideration process together provided an “adequate” alternative remedy to judicial review for Ms. Yatar, and therefore a valid reason for the Divisional Court not to exercise its discretion to hear and determine Ms. Yatar’s judicial review application, Kristjanson J.’s reasons could have been clearer. According to Nordheimer J., the Divisional Court did not mean to suggest that judicial review in general was only available in exceptional circumstances, but rather, that this discretionary remedy would be exercised only rarely, given this specific legislative scheme for disputes regarding statutory accident benefits:[16]

In my view, when the Divisional Court said that it would only exercise its discretion to hear and determine an application for judicial review in exceptional circumstances, what it was attempting to communicate is that it would only be in rare cases that the remedy of judicial review would be exercised, given the legislated scheme for the resolution of disputes over SABs. Put another way, the Divisional Court was recognizing that there would have to be something unusual about the case to warrant resort to the discretionary remedy of judicial review, given the legislative scheme. That legislative scheme includes the right to reconsideration of the Tribunal’s preliminary decision and the statutory right of appeal from decisions of the Tribunal on questions of law.

The Court of Appeal similarly dismissed the arguments advanced by certain interveners. For example, The Income Security Advocacy Centre had argued that the Divisional Court’s analysis of the legislative intent was “narrow and incomplete”. The Court of Appeal rejected this argument, stating that the Divisional Court had correctly interpreted the legislative scheme as “evincing and intention to limit recourse to the courts” and observing that “It is inconsistent with the legislature’s decision to limit the right of appeal to questions of law alone to then hold that the remedy of judicial review is all-encompassing.” The Court of Appeal also rejected the argument made by both the Income Security Advocacy Centre and the Advocacy Centre for Tenants Ontario that there must be a wide-ranging right of judicial review in cases such as this, or in cases involving certain classes of persons, such as tenants or social assistance recipients. As Nordheimer J. observed, this argument ignores the fact that the legislature has the right, through legislation, to restrict appeal rights. And further, it ignores the “salient fact” that the remedy of judicial review is discretionary.

The Court of Appeal also made two comments regarding the Divisional Court’s reference to the systemic difficulties associated with duplicative judicial reviews and appeals. First, the Court of Appeal directed that if a party intends to utilize both their right of appeal and their right to seek judicial review, then those proceedings must be brought together. Second, once both proceedings are commenced, a motion should be brought for the two proceedings to be heard together with a single appeal book / application record and a factum covering both proceedings. Both of these comments align with the Divisional Court’s established practice relating to the management of concurrent judicial reviews and appeals. Justice Nordheimer also noted that it would be open to the Divisional Court Practice Direction that expressly directs that this is the process to be followed, in an effort to avoid such motions and streamline the process for consolidation.

Ultimately, notwithstanding its removal of the requirement for “exceptional circumstances” referenced by the Divisional Court and its comments about addressing the systemic problems posed by concurrent proceedings,[17] the Court of Appeal substantially endorsed the Divisional Court’s decision, finding that removing “exceptional circumstances” from the analysis did not change the rationale or the result of the decision because, “It remains true that it will only be a rare case where the remedy of judicial review will be properly resorted to, given the alternative remedies that are available to an unsuccessful party.”[18]

With the Court of Appeal’s blessing, the Divisional Court’s reliance on its analysis in Yatar continued apace. By January 2023, the Court of Appeal’s decision had been added to the Divisional Court’s casebook of often-cited decisions.[19] (The list of often-cited cases is published by the Court for the convenience of counsel. Parties referring to cases on that list do not need to include the full case in their Book of Authorities.) By March 2024, when the Supreme Court of Canada released its decision in Yatar, the Divisional Court had cited its Yatar decision 31 times and the Court of Appeal’s Yatar decision 19 times.

The Supreme Court’s Decision in Yatar

However, in its March 2024 decision, the Supreme Court overturned the Court of Appeal and ended the Divisional Court’s approach to streamlining concurrent applications for judicial review and statutory appeals.

According to Rowe J., writing for a unanimous Supreme Court, the Court of Appeal and the Divisional Court had both erred in principle by failing to properly apply the Supreme Court’s decision in Strickland and by relying on a statutory right of appeal for questions of law as indicative of legislative intent to restrict access to judicial review for questions of fact and mixed fact and law when no such inference is warranted. 

To fully understand why Supreme Court disagreed with the Court of Appeal and the Divisional Court, it is helpful to start with two key aspects of the lower courts’ decisions in Yatar that Rowe J. affirmed.

First, the Supreme Court agreed with the Ontario courts that judicial review is a discretionary remedy. Justice Rowe explained that a court’s discretion to permit judicial review applies both to its decision as to whether to hear an application for judicial review on the merits and to its decision to award the remedy of judicial review once the application has been heard. The only aspect of judicial review that is not discretionary, Rowe J. explained, is the requirement to “consider” the application for judicial review. Specifically, while a court need not hear an application for judicial review on its merits, it must at least consider the request and decide whether judicial review is appropriate in the particular case.[20]

Second, the Supreme Court affirmed that the Strickland factors apply when a court exercises its discretion to decline to hear an application or award judicial review on the basis that an adequate alternative remedy exists for the applicant. However, in its application of Strickland, the Supreme Court placed more emphasis than the Divisional Court or the Court of Appeal on the concept of appropriateness. Specifically, Rowe J. emphasized that the Strickland analysis is not solely about the available alternative, but also the suitability and appropriateness of judicial review in the circumstances: “the question is not simply whether some other remedy is adequate, but also whether judicial review is appropriate.”[21]

However, despite agreeing that judicial review is a discretionary remedy, and agreeing that the Strickland test was the analytical approach, the Supreme Court found that both the Court of Appeal (and the Divisional Court) had erred by failing to apply the Strickland factors correctly for three reasons.

First, the Supreme Court held that the lower court had erred by holding that the limited right of appeal reflected an intention to restrict recourse to the courts on other questions arising from the administrative decision, and that judicial review should thus be rare. According to Rowe J.,[22]

The legislative decision to provide for a right of appeal on questions of law only denotes an intention to subject LAT decisions on questions of law to correctness review. The idea that the LAT should not be subject to judicial review as to questions of facts and mixed facts and law cannot be inferred from this.

In response to the argument that the legislative scheme, including its 2016 amendments, reflected a policy choice to limit the courts’ involvement in accident benefits disputes, the Supreme Court demurred, stating “The legislature could have decided to encompass all types of errors in the right to appeal, but it did not.”

Second, with respect to the alternative remedy itself, the Supreme Court’s disagreement with the lower courts’ analysis was simple: the fact that the statutory appeal was limited to questions of law could not be adequate because Mr. Yatar raised errors of fact or mixed fact and law. Review of the questions she raised was not available under the statutory right of appeal, and therefore not adequately addressed. Similarly, reconsideration was not appropriate because the reconsideration decision itself is the subject of the review.

Finally, although the Supreme Court recognized the legislative intent to streamline disputes and reduce costs, and held that judicial economy is a legitimate concern, it found that this was outweighed by the countervailing consideration “to ensure that those whose interests are being decided by a statutory delegate have a meaningful and adequate means to challenge decisions that they consider to be unreasonable having regard to their substance and justification, or were taken in a way that was procedurally unfair.”

As a result, the Supreme Court concluded that the elements of the reconsideration decision that were not covered by the limited right of appeal should be judicially reviewed. The Supreme Court undertook that review and found that the LAT’s decision with respect to Ms. Yatar’s benefits was unreasonable.

Understanding Yatar and its Implications

The Supreme Court’s decision in Yatar has been commended for its simplicity and for bringing the Ontario courts’ approach to concurrent proceedings in line with Vavilov.

However, the appeal of Yatar may be superficial.

On one hand, the Supreme Court was certainly correct that a limited right of appeal is not a privative clause and further, that the legislature’s intent to restrict statutory appeals from decisions of the LAT to questions of law is different than an intent to prohibit judicial review on questions of fact or mixed fact and law.

But neither the Divisional Court nor the Court of Appeal held otherwise. The inference the lower courts drew from the statutory scheme, including its 2016 amendments, was simply that the legislature intended to limit recourse to the courts for this type of dispute. And that inference is a reasonable one: a limited right of appeal is, by definition, limited. Why would a legislature ever bother limiting a party’s right to appeal to the Divisional Court to questions of law if that same party has an all-encompassing right to seek judicial review from the Divisional Court in any event?

Similarly, the Supreme Court’s quick work of the alternative remedy may offer pleasing symmetry, but the idea that an adequate alternative remedy must address the exact same types of errors is at odds with the Court’s earlier guidance in Strickland – specifically, that “neither the process nor the remedy need be identical to those available on judicial review” because the issue is overarching whether the remedy is adequate in all the circumstances. It is interesting that both the Divisional Court and the Court of Appeal relied on that passage from Strickland, but the Supreme Court’s reasons in Yatar do not refer to it once.

Further, from the perspective of judicial economy, the Supreme Court’s decision in Yatar is lacking. Instead concurrent challenges to decisions of the LAT (and other tribunals with limited rights of appeal) being rare, duplicative and unnecessarily complex concurrent proceedings will likely become the norm in the Divisional Court once again. Absent legislative changes or the introduction of a Practice Direction from the Divisional Court, the corollary burdens of duplicative records, parallel timelines, increased costs, and unnecessary complexity will fall on parties and the court to resolve on a case-by-case basis.

Since the release of the Supreme Court’s decision in Yatar, we have already seen decisions by the Divisional Court attempting to resolve these and related procedural questions. In Humberplex Developments Inc. v. Ontario (AG), 2024 ONSC 2335, the applicants brought a judicial review application as well as motion for leave to appeal the tribunal’s decision. The leave motion was held in abeyance while the judicial review application was pending. The applicants attempted to advance a breach of procedural fairness argument in their application for judicial review. Distinguishing Yatar, the Divisional Court held that the motion for leave to appeal (and appeal, if leave is granted) provided an adequate alternative remedy to judicial review in the circumstances. As a result, while the application was dismissed, the applicants will have a “second kick at the can” through their motion for leave to appeal.

Another example of the Divisional Court grappling with the procedural implications of Yatar is Casa Loma Residents Association v. 555 Davenport Holdings Ltd., 2024 ONSC 2297.

In that case, Myers J., sitting as a single judge for scheduling purposes, addressed a request to schedule a statutory appeal and an application for judicial review from a single decision of the Ontario Land Tribunal. Justice Myers noted that, in the normal course, where an appeal and a judicial review proceeding both lie from the same decision, it is likely to be most efficient to hear both proceedings together. However, in this case, the applicants first needed to secure leave to appeal from the Divisional Court. According to Myers J., “The bigger issue for me is whether to join the leave motion to the main hearings and do everything all at once. This will certainly be the most efficient manner of proceeding. But I agree with Mr. Dunn’s submission that joining leave with an appeal essentially undermines the leave decision.”

Ultimately, Myers J. decided that a two-hour motion for leave to appeal would be heard first, in June 2024, with a half-day hearing before a panel of the Divisional Court in September that would address either just the judicial review application, if leave to appeal is denied, or both the appeal and the application, if leave to appeal is granted. The possibility of combining hearings for motions for leave to appeal and appeals (and applications for judicial review) was not ruled out. Noting that Yatar was still new, Myers J. surmised that this issue may be ripe for review once the Divisional Court had developed a body of jurisprudence concerning appeals with judicial review proceedings under Yatar.

Managing Concurrent Proceedings Going Forward

The Divisional Court’s streamlined approach to concurrent proceedings in Yatar was rejected by the Supreme Court. As a result, going forward, parties seeking to challenge decisions of tribunals subject to limited appeal rights will likely, as a general practice, bring both an appeal and an application for judicial review in order to ensure that all available arguments are preserved for the Divisional Court’s consideration.

In light of the Supreme Court’s reasons in Yatar, it appears that the only way to reduce the prevalence of concurrent proceedings going forward would be through legislative amendments to a number of statutes in Ontario that currently provide for statutory appeals only on questions of law.

Specifically, either the legislature must enact privative clauses to make its intent to restrict judicial involvement in such decisions clearer. (And even then, the result would be uncertain given the Supreme Court’s comments in Yatar.[23]) Alternatively, and somewhat ironically, expanding such statutory appeals rights to include questions of fact and mixed fact and law may be the most effective solution to the problem of concurrent appeals. Insofar as the primary error of the Divisional Court and Court of Appeal in Yatar was concluding that a right of appeal on a question of law, together with a right of reconsideration, was an adequate alternative for judicial review, a right of appeal that expressly included all types of issues may pass the Yatar test for an adequate alternative and therefore allow the Divisional Court to resume its practice of streamlining these cases into a single proceeding.

Until such legislative changes are made, the Divisional Court will need to use case management to attempt to avoid inefficiencies and unnecessary costs for concurrent proceedings. Fortunately, the Supreme Court did not call in question all aspects of the Divisional Court’s current practices relating to the management of concurrent judicial reviews and appeals. As a result, if a party intends to utilize both its right of appeal and its right to seek judicial review, then it should continue to bring those proceedings together. Specifically, once the proceedings are commenced, the party should bring a motion before a single judge of the Divisional Court for the two proceedings to be heard together with a single appeal book / application record and factum covering both proceedings. Other procedural issues (such as whether leave to appeal needs to be heard prior to the combined hearing) should be raised at that time.

In light of the anticipated increase in concurrent proceedings as a result of Yatar, one can expect that the Divisional Court will publish a Practice Direction memorializing this practice and clarifying what timelines will apply as a default practice when statutory appeals and judicial review proceedings are combined.

As Myers J. observed in Casa Loma, the Supreme Court’s Yatar decision is still new, and it will take time to sort out the procedural implications of that decision for the management of concurrent administrative challenges. Legislative amendments, a new Practice Direction, or both, may be required to achieve the clarity, certainty and judicial economy that had been accomplished by the Divisional Court’s initial decision.

Any article or other information or content expressed or made available in this Section is that of the respective author(s) and not of the OBA.