Posted here is a memorandum that explores the legal actions that might be brought against the Government of Ontario for its arbitrary refusals to reappoint incumbent, meritorious Members and Vice-Chairs of Ontario’s adjudicative tribunals when those reappointments were rightfully expected and recommended by their tribunal Chair.

It concludes that there appear to be viable causes of action including, particularly, breach of employment contracts, that could be pursued on an individual basis but which might also serve as the basis for a class action.

MEMORANDUM

For Members of Ontario Adjudicative Tribunals

Whose Expected, Meritorious Reappointments were Refused

 

June 5, 2019

 

Legal Remedies, Class Actions

 

PRELUDE

This memorandum is presented to the members of Ontario’s administrative justice system for whatever use they may choose to make of it.

INTRODUCTION

The memorandum explores the legal actions that might be brought against the Government of Ontario for its arbitrary refusals to reappoint incumbent Members and Vice-Chairs of Ontario’s adjudicative tribunals when those reappointments were rightfully expected and recommended by their tribunal Chair.

It concludes that there are arguably viable causes of action, including, particularly, breach of contract, that could be pursued on an individual basis but which might also serve as the foundation for a class action.

THE FACTS

Since before 2006, it had been provincial government policy and the established practice in Ontario, that new Members or Vice-Chairs of adjudicative tribunals would be appointed in the first instance to only a two-year term. However, as long as they met and continued to meet the tribunal’s performance standards, they could count on receiving two subsequent reappointments; the first for a three-year term and the second for a five-year term, for a total of ten years.[2]

The ensuing, three-year and five-year reappointments were understood to be conditional only on the chair’s merit-based, reappointment recommendations.

This policy was formally described in the Management Board of Cabinet’s Agencies and Appointments Directive (the “Appointments Directive”), circa 2006.  See section 3.2.2.

In the period between 2005 and June 2018, there appears to have been no known instance of tribunal adjudicators being refused their expected three-year and five-year reappointments when those reappointments had been recommended by their Chairs.

Beginning with the change of government in June 2018, there have been numerous instances of the government refusing the expected reappointments, notwithstanding Chair recommendations.

QUALIFICATIONS TO BE A PARTY TO THESE LEGAL PROCEEDINGS

The litigation strategies set out below contemplate legal action by former tribunal adjudicators who meet the following criteria:

1. They were appointed as a full-time or part-time Member or Vice-Chair of an Ontario adjudicative tribunal and were coming to the end, or were at the end, of either their first two-year term, or their ensuing three-year term;
2. Their reappointment to the next expected term was recommended by their tribunal Chair; and
3. That reappointment was refused by the Government.

CLASS ACTION

Legal actions could be brought by individual Members or Vice-Chairs.  However, consideration might be given to having the legal actions of individuals consolidated in a class action.  There are a number of former Members and Vice-chairs who have been the victims of these arbitrary reappointment refusals, and a class action would allow for remedies for all who qualify, without their having to put their names forward.

A class action would also serve an important public education purpose in having the nature of the administrative justice system, and particularly the issue of reappointment policies relative to that system’s security-of-tenure needs, examined in a prominent, court proceeding.

THRESHOLD QUESTIONS

Were These Political Appointments?

Of course, it has long been understood that Order-in-Council appointments are political appointments influenced by partisan and patronage considerations and inherently open to review when a different political party comes to power. This understanding, as it applied to the appointments of members of adjudicative tribunals, led to a revolving-door syndrome that over the years damaged the competency and efficiency and undermined the independence and impartiality of those tribunals.

But the culture of partisan/patronage OIC appointments was never a comfortable fit with the appointment of tribunal adjudicators since it could not be rationally reconciled with the independence and impartiality the common law requires for rights adjudicators.[3]

Ontario put an end to that culture as far as appointments to its adjudicative tribunals were concerned in 2009, and replaced it with a system of statutory, professional appointments.

The legislation that accomplished this major reform is to be found in section 14 of the Adjudicative Tribunals Accountability, Governance and Appointments Act, 2009 (ATAGA). It was ground-breaking legislation and it reads as follows:

Adjudicative tribunal members to be selected by competitive, merit-based process

14 (1) The selection process for the appointment of members to an adjudicative tribunal shall be a competitive, merit-based process and the criteria to be applied in assessing candidates shall include the following:

1. 1. 1. Experience, knowledge or training in the subject matter and legal issues dealt with by the tribunal.
      2. Aptitude for impartial adjudication.
      3. Aptitude for applying alternative adjudicative practices and procedures that may be set out in the tribunal’s rules.  2009, c. 33, Sched. 5, s. 14 (1).

Tribunal-specific qualifications

(2) If a member of an adjudicative tribunal is required by or under any other Act to possess specific qualifications, a person shall not be appointed to the tribunal unless he or she possesses those qualifications.  2009, c. 33, Sched. 5, s. 14 (2).

Publication

(3) The responsible minister of an adjudicative tribunal shall make public the recruitment process to select one or more persons to be appointed to the tribunal and in doing so shall specify,

(a) the steps intended to be taken in the recruitment process; and

(b) the skills, knowledge, experience, other attributes and specific qualifications required of a person to be appointed.  2009, c. 33, Sched. 5, s. 14 (3).

Chair to recommend appointments, reappointments

(4) No person shall be appointed or reappointed to an adjudicative tribunal unless the chair of the tribunal, after being consulted as to his or her assessment of the person’s qualifications under subsections (1) and (2) and, in the case of a reappointment, of the member’s performance of his or her duties on the tribunal, recommends that the person be appointed or reappointed

These provisions govern the appointment and reappointment of members of “adjudicative tribunals” – the 37 adjudicative tribunals prescribed in Schedule 1, of O. Reg. 126/10 – and not, it may be noted, the appointment or reappointment of members of regulatory agencies in which the influence of partisan considerations may still be deemed appropriate.

The ATAGA provisions that ensure that partisan considerations do not influence the appointment or reappointment of the members of adjudicative tribunals may be summarized as follows:

a. The requirement of a public notice (by the responsible Minister) of:

• • • the fact that a recruitment process is underway;
    • the position-specific, adjudication-relevant qualifications that will be required of a successful applicant; and
    • the steps that will be followed in the recruitment process;

b.  The requirement that the selection process be “merit-based” and “competitive”; and

c.  The requirement that no candidate will be appointed to the position, or reappointed, unless the tribunal chair recommends the appointment or reappointment.

This is self-evidently a process for the appointment of professional adjudicators that was intended to align with the administrative-justice system’s security-of-tenure needs attendant on the adjudicative role of Members and Vice-Chairs of adjudicative tribunals in the Ontario system of administrative justice.

Candidates who sought and won these merit-based appointments on their own initiative in accordance with these statutory provisions had no reason to view their appointments as partisan and have the right not to have them so viewed by others. These were not appointments reasonably subject to an expectation on anyone’s part of disruption following the election of a new government.

Are Cabinet Appointment Decisions Amenable to Court Review?

Since it is the Lieutenant Governor in Council that has the statutory power to appoint and reappoint the Members and Vice-Chairs of most adjudicative tribunals, another threshold question is whether decisions of that body are subject to court review. The answer is certainly yes.

In Attorney General of Canada v. Inuit Tapirisat, [1980] 2 SCR 735 at 748, Justice Estey, speaking for the Supreme Court, said this:

Let it be said at the outset that the mere fact that a statutory power is vested in the Governor in Council does not mean that it is beyond review.  If that body has failed to observe a condition precedent to the exercise of that power, the court can declare that such purported exercise is a nullity.

It is also well settled that discretionary decisions, such as the exercise of an appointment power, can be subject to court oversight.  Discretionary decisions may, for instance, be challenged for failure to comply with principles of procedural fairness.  See Baker et al.

LITIGATION STRATEGIES

Action for Breach of Contract

The most straightforward, and from a public-interest perspective the most useful, litigation choice would be for Members and Vice-chairs who have been refused expected reappointments to come together and sue the Government in a class action claiming unmitigated damages for breach of their fixed, 10-year-term, employment contracts.  Individual actions for breach of contract would, of course, also be a reasonable option.

The Contract

Candidates, measuring their personal and professional qualifications against the ATAGA qualifications, applied for these appointments in response to public notices of vacancies, and subjected their qualifications to assessment in the merit-based, competitive, selection process that ATAGA required.  Having won that competition, candidates then contemplated the government’s offer of a mere two-year term appointment that was coupled, however, with its promise of future reappointments covering a total of ten years conditional only on continued good performance (as attested to by the tribunal Chair).  

Candidates who accepted that offer did so in reliance on the promise of assured subsequent reappointments to justify giving up other career options that were less precarious than a mere, two-year term.   The offer of a ten-year term of employment, conditional only on a performance review at two and five years, is what the candidates accepted.  The Government breached the contract when it refused those reappointments notwithstanding chair reappointment recommendations.

Precedent

There is precedent for a breach-of-employment-contract action based on a government’s failure to honour a promise to reappoint an adjudicative member of an adjudicative tribunal.

In Matkowski v. Saskatchewan, 2007 SKQB 46, a full-time vice-chair of the Saskatchewan Labour Relations Board who had been appointed to the position for a five-year term and at the end of that term was denied a promised reappointment sued the government for breach of contract.  He had accepted the appointment – and given up his legal practice to do so – in reliance on a promise from the government that he would be reappointed to subsequent terms as long as his decisions were “based on the facts and law.”

The Court, citing Wells v. Newfoundland, conceded that the plaintiff’s agreement to accept the appointment in those circumstances resulted in a contract of employment. (See also the subsequent Supreme Court’s contract-of-employment characterization of the relationships between public officials and the government in Dunsmuir[4].)

However, the Saskatchewan Trade Union Act, which authorized the appointment of Labour Board Vice-Chairs, provided that the term of such appointments “shall not exceed 5 years.” The Court held that the term of appointment offered could not be more than what the legislation authorized and thus the assurance of further terms upon the expiration of the first five years could not have been an enforceable term of the employment contract.  The action was dismissed.

In Ontario, however, there seem to be typically no statutory limits to the length of a term of appointment to adjudicative tribunals and no other, known statutory obstacles to the Government entering into employment contracts with Ontario adjudicators.

No Obligation to Mitigate Damages

These contracts are arguably employment contracts for a fixed, 10-year term of employment conditional only on continued satisfactory service. They are not contracts for indeterminate terms of employment which can be terminated without cause on reasonable notice and for which a terminated employee’s remedy is limited to reasonable notice or payment in lieu of that notice and, in the latter case, subject to an obligation to mitigate damages by seeking other employment.

Thus, based on well-known employment-contract law, the claim of refused adjudicators could be fashioned as a claim for unmitigated damages in the total amount of salary and benefits which they would have received had the Government not breached their contracts. See Howard v. Benson Group Inc. (The Benson Group Inc.), 2016 ONCA 256 (CanLII) and also Dunsmuir, supra, para. 109.

Thus, in accordance with that law, each refused Member or Vice-Chair would have an unmitigated claim for five or 8 years of salary and benefits depending on whether it was the first or second promised reappointment that was refused.

Potential Government Response

The Government’s response to the breach of contract claim can be expected to include the claim that, if there were a contract, that contract must also be seen to include the following terms, terms that also appear in the Appointments Directive:

The ultimate decision to reappoint rests with the appointing authority. …

There is no obligation on the government to reappoint individuals for subsequent terms at the conclusion of any appointment.

The short reply to that response is that the Government could not have intended, and cannot be taken to have intended, to reserve the right to refuse the expected reappointments other than in the circumstances where there have arisen significant, relevant, and unexpected circumstances sufficient to reasonably justify exercising that right notwithstanding the rightful expectations of the appointees and the chair recommendations.  The Government appears to have made no effort to justify the refusals.

Also, the Government’s reliance on a contractual right to refuse a reappointment would involve the exercise of its appointment powers and it has no authority to exercise that power for an irrelevant or improper purpose. Given the context in which these refusals occurred, it is difficult to imagine factors motivating the government’s refusals that a court would consider proper.

Making room in an adjudicative tribunal’s roster for a partisan appointment is not the exercise of a power for a relevant or proper purpose.

For an outline of the improper purpose doctrine see below.

Alternative or Supplementary Causes of Action

If the reappointment refusals were not found to be in breach of an employment contract, the refusals could then be challenged through applications by the adjudicators for judicial review on the basis that the refusal decisions were (a) unauthorized because made for an improper purpose, or (b) unauthorized because made in a manner that ignored the adjudicators’ legitimate expectations, or (c) unreasonable in breach of the requirements of procedural fairness.

Anticipating the possible argument that in the latter proceedings there is no decision for a court to review – i.e., the current appointment terms expired and nothing was done – it is worth noting that a refusal to decide is a reviewable decision.  See Turp v. Canada, 2018 FC 12 at para. 98.  Moreover, in this factual and legislative context, it is self-evident that a failure to accept a chair’s recommendation concerning a tribunal adjudicator’s expected reappointment must have involved a decision on the part of the government.

The latter causes of action would be pleaded in the alternative to the breach-of-contract claim or, as we have seen above, in the case of the improper purpose doctrine, relied on in support of the breach-of-contract claim.

Remedies

The remedy typically sought in a challenge of a refusal decision in a judicial review proceeding would be an order quashing the refusal and referring the reappointment issue back to the government for decision on proper grounds; presumably on the basis of the merits of the applicant’s performance as evidenced by the Chair’s recommendation.

In the ordinary course, a successful judicial review application on these grounds could be expected to result in the applicant being reappointed to his or her position with compensation for the time missed in the position.

However, there is a serious, practical problem with that remedy, particularly if the court were dealing with similar challenges from a number of former tribunal vice-chairs and members.  By the time such orders could be implemented, the vacancies created by the reappointment refusals would in the meantime have been filled by new appointees, and the former adjudicators petitioning for the judicial review would by then have found employment in other places.

Given the latter circumstances, reinstatements would not be a sensible or practicable remedy, and the Court would presumably be open to considering alternatives.  One such might be the award of damages.

The request for damages as an alternative remedy in judicial-review proceedings might be amenable to a class action and could be supported by asking the court to invoke its implicit jurisdiction to order “remedial innovations” in support of the rule of law.  See the Supreme Court’s examination of that jurisdiction in PEI Provincial Judges Reference[5], at para. 99.

Improper Purpose

In the exercise of its reappointment powers the Government is constrained by its broader legal obligations including the requirement that executive action must accord with the purpose and intent of the legislation that confers the power.

The statutory power to appoint, and to appoint again (i.e., reappoint), Members and Vice-Chairs of adjudicative tribunals is typically to be found in each tribunal’s constitutive statute. Thus, for example, section 32(2) of the Human Rights Code of Ontario provides that the Human Rights Tribunal “shall be composed of such members as are appointed by the Lieutenant Governor in Council… ” and section 32(5) provides that “a member of the Tribunal shall be appointed for such term as may be specified by the Lieutenant Governor in Council.”

The improper purpose law, rooted in Roncarelli v. Duplessis, was most pertinently explored by the Supreme Court in what has come to be known as the “retired judges” case –Canadian Union of Public Employees (C.U.P.E.) v. Ontario (Minister of Labour), [2003] 1 S.C.R. 539.[6] That decision confirms, in very relevant circumstances, that the exercise of a statutory power that ignores significant relevant factors or relies on irrelevant factors is invalid as being an exercise of the power for an improper purpose.

The Government’s decisions not to accept a tribunal chair’s reappointment recommendations respecting meritorious, incumbent adjudicators who were rightfully entitled to expect that reappointment is arguably the exercise of a statutory power for an improper purpose because it will be seen to have ignored the following significant relevant factors:

1. The adjudicator’s demonstrated competence and his or her known compliance with the ATAGA specified qualifications;
2. The chair’s experience-based recommendation;
3. The adjudicative tribunals’ operational need to have meritorious, experienced members reappointed as a routine matter;
4. The adjudicators’ rightful expectations; and
5. The legal system’s need for adjudicators to feel secure in their tenure – i.e., to have reason to be confident that good performance will ensure a reappointment when their current, fixed-term appointment comes to an end.

These refusal-to-reappoint decisions could also be found to be improper because they are predicated on other considerations (such as making room in a tribunal’s roster for partisan appointments) that may be shown to be irrelevant, or in a justice-system context unacceptable, or even, perhaps, unconstitutional.

Legitimate Expectations

The SCC’s decision in Mount Sinai Hospital Center v. Quebec (Minister of Health and Social Services), [2001] 2 S.C.R. 281, appears still to be the authoritative statement of the law of legitimate expectations and it seems to be clear that legitimate expectations can create rights to procedural remedies, but not substantive rights.  In this case, the procedural expectation was that the reappointment decisions for these adjudicators respecting their second and third terms would be governed by a merit-based assessment of their performance by their tribunal chair.

Reasonableness

If the court were to find that the refusals were not a breach of an employment contract, then the refusals would be subject to judicial review on the basis that procedural fairness principles applied and the refusals were, given the facts, simply unreasonable.

CONCLUSIONS

There are promising grounds for individual law suits or a class action based on claims for unmitigated damages for breach of a fixed-term, 10-year employment contract, and alternatively based on claims that the reappointment refusals were subject to judicial review on the grounds that they were unauthorized because the refusals were for an improper purpose, or in breach of legitimate expectations concerning the applicable procedure, or subject to the principles of procedural fairness and simply unreasonable.

Moreover, as mentioned, the remedy sought in the latter three, alternative claims might well be an award of damages covering the losses arising from the failure to re-appoint, pursuant to the court invoking its “remedial innovations” jurisdiction in protection of the rule of law.

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[2] At the end of the last, five-year term, a further reappointment could not be counted on because of the government’s policy of limiting service in any “given [appointed] position” to a maximum of 10 years.  But it was also known that the 10-year cap policy included the opportunity to receive a further appointment at the end of the ten years should exceptional circumstances call for it in the public interest; moreover, timed-out adjudicators could expect to rely on their 10 years of adjudicative experience in support of a new appointment to a different tribunal.

[3] Since Valente in 1985.

[4] Dunsmuir v. New Brunswick, [2008] 1 SCR 190

[5] [1997] 3 S.C.R. 3.

[6]See also the very recent decision of the Ontario Superior Court in Tesla Motors Canada ULC v. Ontario (Ministry of Transportation), 2018 ONSC 5062 (CanLII), at paras 48-57.