SCC: Limited Statutory Rights of Appeal Do Not Preclude Judicial Review for Unaddressed Questions

Introduction

The recent decision of Yatar v. TD Insurance Meloche Monnex [1] brings a much-needed addition to the caselaw relating to the proper approach for judicial review of administrative decisions. In this case, the Supreme Court of Canada confirmed that statutory rights of appeal limited to one type of question, such as a question of law, does not preclude judicial review pertaining to other, unaddressed questions, such as questions of fact, or questions of mixed law and fact. While a court does have discretion to hear an application for judicial review and decide issues on the merits, including whether to deny relief, this discretion does not extend to evolving consideration of the application for judicial review altogether.

Factual Background

Ms. Yatar was injured in a car accident and sought benefits under the Statutory Accident Benefits Schedule — Accidents on or After November 1, 1996, O. Reg. 403/96 (“SABS”).[2] She applied to her insurer, TD Insurance Meloche Monnex, (“TD”) to get these benefits. She claimed for income replacement benefits, housekeeping, and home maintenance benefits. Although TD initially considered Ms. Yatar’s claim for benefits valid, they later varied her benefits in three separate letters. The first letter stopped all benefits and the second letter restored income replacement benefits only. However, the third letter yet again denied all benefits.[3]

Interceding Amendments

Significant statutory amendments that occurred around the time of Ms. Yatar’s claim made matters more complex. When Ms. Yatar commenced her procedures, the Insurance Act[4] gave policyholders a two-year limitation period after their insurer’s refusal to pay benefits to start a proceeding. It also set out mandatory mediation, which extended the limitation period to 90 days after the provision of the mediator’s report. The amendments to the Insurance Act eliminated mandatory mediation and gave exclusive jurisdiction at first instance to the License Appeal Tribunal (“LAT”) over the resolution of SABS disputes. By the time of these amendments, Ms. Yatar had long since completed mandatory mediation. Crucially, the License Appeal Tribunal Act[5] was amended so that parties could only appeal LAT decisions on questions of law. [6]

The License Appeal Tribunal

When Ms. Yatar brought an application to the License Appeal Tribunal for reconsideration of her income replacement, housekeeping, and home maintenance benefits, the LAT held that her claim was time-barred, and held that time began to run when Ms. Yatar received the first denial letter. Accordingly, Ms. Yatar’s application was dismissed.[7]

Ontario Superior Court of Justice (Divisional Court)

Since Ms. Yatar’s right of appeal from the LAT decision was restricted to questions of law by virtue of the amendment to the License Appeal Tribunal Act, she appealed to the Divisional Court with an argument that the LAT made an error of law. However, she also sought judicial review on questions of fact or mixed law and fact at the Divisional Court.[8]

The Divisional Court dismissed Ms. Yatar’s application, holding that she showed no errors of law made by the LAT and instead made mere unsubstantiated allegations.[9] Although the Divisional Court agreed that the limited right of appeal set out in the License Appeal Tribunal Act did not prevent it from conducting judicial review of other unaddressed questions, it stated that judicial review was a discretionary remedy, with such discretion being exercisable only when there are “exceptional circumstances” or no alternative remedies, such as the LAT proceeding. The court also gave heavy weight to the idea that the legislative intent of the License Appeal Tribunal Act amendment was likely to limit judicial review of LAT decisions on statutory accidents benefits to questions of law only. The court further held that there were no exceptional circumstances surrounding Ms. Yatar’s application that would justify exercising the court’s discretion to conduct a judicial review. [10]

Ontario Court of Appeal

The Court of Appeal dismissed Ms. Yatar’s appeal, but corrected the Divisional Court’s language and stated that “exceptional circumstances” are not required for the exercise of discretion to conduct a judicial review, but rather that judicial review would be exercised only in “rare cases,” particularly if a statute legislated a limited right of appeal. The Court of Appeal agreed with the Divisional Court that a limited statutory right of appeal does not preclude judicial review of unaddressed questions. Like the Divisional Court, the Court of Appeal held that judicial review was a discretionary remedy, with the court’s discretion applicable both to its decision to undertake review and grant relief. Moreover, it agreed with the Divisional Court’s emphasis on the LAT proceeding as an appropriate alternate remedy to judicial review and echoed the Divisional Court’s point about legislative intent.[11]

The Court of Appeal noted that even if Ms. Yatar’s judicial review application ought to have been considered, it would have failed because she did not show that the LAT’s decision was unreasonable, nor did she demonstrate that the underlying denial of her benefits, which triggered the running of the limitation period, was unreasonable.[12]

The Supreme Court of Canada

When considering whether a court should exercise its discretion to undertake judicial review, the Supreme Court rooted its decision in the rule of law and constitutional principles. It stated that “the principle that public authorities are subordinate to the supervisory power of the superior courts is the cornerstone of the Canadian and Quebec system of administrative law. Such judicial review is a necessary consequence of the rule of law.”[13] The Supreme Court further commented that “judicial review is intimately connected with the preservation of the rule of law.”[14]

The Supreme Court added that “A person has a right to seek judicial review, and “[t]o give courts a discretion not to hear judicial review applications because of their perception of the quality and quantity of internal reconsiderations would allow judicial discretion to trump [a] constitutional principle.” In other words, “While there is discretion to hear the application on the merits and deny relief, this discretion does not extend to decline to consider the application for judicial review.”[15]

The Supreme Court explained that at minimum, a judge must consider the application, which means that the judge must determine whether judicial review is appropriate. The judge can then decline to consider the merits based on the existence of appropriate alternatives, or refuse to grant a remedy even if the decision under judicial review was unreasonable. [16]

The Court of Appeal erred by inferring legislative intent from the limited right of appeal in the amended License Appeal Tribunal Act. The Supreme Court stated that “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” and not the idea that the “LAT should not be subject to judicial review as to questions of facts and mixed facts and law.”[17]

Furthermore the Supreme Court held that the statutory right to appeal and the LAT decision itself, were not adequate alternative remedies. The statutory right to appeal was restricted to questions of law and Ms. Yatar raised questions of fact, or questions of fact and law. The LAT process could not be an adequate alternative because it is the LAT decision itself that is the subject of the review.[18]

The Supreme Court stressed that balance is required and that accordingly, courts should still consider the appropriateness and suitability of judicial review even in cases where valid alternatives are present.[19]

The Supreme Court also concluded that the Court of Appeal erred in holding that the LAT decision was reasonable. It stated that the LAT failed to consider the reinstatement of Ms. Yatar's benefits as per the second letter, as this would have reset the running of the limitation period until another valid denial was made. The LAT also misinterpreted the 90-day limitation extension after the provision of the mediation report, which could also have a bearing on when the limitation period was supposed to run. As a result, the Supreme Court concluded that the LAT decision was unreasonable. In light of this, the Supreme Court sends the matter back to the LAT. [20]

Takeaways

Yatar clarifies a murky area of ​​administrative law and finally provides some clarity for clients who are wondering whether it is possible to raise unaddressed questions on judicial review after they have already exercised a limited statutory right of appeal. The Supreme Court's resounding “yes” to this question serves as a reminder of the constitutional importance of the “supervisory power of the superior courts” [21] and as a glimmer of hope, albeit on different legal questions, for those whose statutory appeals are unsuccessful.

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