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Administrative - Constitutional. Botbyl v. Heartland Farm Mutual Inc.
In Botbyl v. Heartland Farm Mutual Inc. (Ont Div Ct, 2025) the Ontario Divisional Court allowed a LAT SABS appeal, here from a LAT reconsideration decision which overturned an initial decision "that granted the Insureds relief from forfeiture of their insurance policy under s. 129 of the Insurance Act". The central issue here was whether the LAT [under s.280 'Resolution of disputes'] had jurisdiction to grant relief from forfeiture [under IA s.129], even though that provision grants such jurisdiction to the "court".
Here the court considers the argument that interpreting 'court' in this fashion violates Constitution Act, 1867, s.96 ['Appointment of Judges']:Allowing the LAT to apply s. 129 does not violate s. 96 of the Constitution Act, 1867
[52] Akinyimide does not deal with the argument that Heartland advanced before us, namely that to allow an administrative tribunal to grant what is essentially equitable relief like relief from forfeiture would destroy the intended effect of s. 96 of the Constitution Act, 1867. According to Heartland, under s. 96 of the Constitution Act, 1867, the Governor General has the sole power to appoint judges of the Superior, District and County Courts in each province. That power would be destroyed if a province could pass legislation creating a tribunal and then confer on those tribunal members the jurisdiction to grant equitable remedies, which is a s. 96 judicial power.
[53] This is another argument that was not raised before the LAT.
[54] The main case cited by Heartland to support its position on this issue is Re Residential Tenancies Act, 1979, 1981 CanLII 24 (SCC), [1981] 1 S.C.R. 714, where the Supreme Court was asked to determine the constitutional validity of a section conferring on the Residential Tenancy Commission the power to evict tenants and requiring landlords and tenants to comply with obligations under the Act. The Court applied a three-part test which was focused on the remedial power conferred on the Commission to make eviction orders and order compliance:1. Does the power conferred “broadly conform” to a power or jurisdiction exercised by a superior, district or county court at the time of Confederation?
2. If so, is it a judicial power?
3. If so, is the power either subsidiary or ancillary to a predominantly administrative function or necessarily incidental to that function? [55] At the first stage of the inquiry, the Supreme Court held that both powers at issue were analogous to the traditional powers of superior court judges both before and after confederation. At the second step, the Court determined that in substance the tribunal was exercising those powers in roughly the same way as they are exercised by the courts. With respect to the third step, the Court found that the primary purpose of the legislation at issue was to transfer jurisdiction over a large and important body of law whose primary role was not to administer policy or carry out an administrative function but to adjudicate. Therefore, it was not within the legislative competence of the provinces to empower a residential tenancy commission to make orders of eviction or compliance.
[56] However, there has been an important development in the Supreme Court’s jurisprudence since Re Residential Tenancies Act. At the first stage of the test, instead of focusing on the remedies granted to the provincial body at issue, the court now focuses on the type of dispute or its subject matter. In other words, instead of asking whether the remedy was within the exclusive jurisdiction of the superior court at confederation, the question is whether the subject matter of the dispute was within the exclusive jurisdiction of the superior court at confederation.
[57] This reframing first arose in Sobeys Stores Ltd. v. Yeomans and Labour Standards Tribunal (N.S.), 1989 CanLII 116 (SCC), [1989] 1 S.C.R. 238, which involved a s. 96 challenge to a provincial legislative scheme that granted the Director of Labour Standards for Nova Scotia the power to order reinstatement of an employee who had been dismissed without just cause. The issue was initially characterized as whether the province had jurisdiction to empower a provincial tribunal to grant the equitable remedy of specific performance of employment contracts. Writing for the majority, Wilson J. eschewed this approach as a “technical analysis of remedies” and found that it is “the type of dispute that must guide us and not the particular remedy sought.” Thus, the power at issue in that case went from the “jurisdiction to order reinstatement” to the “jurisdiction over unjust dismissal”.
[58] As Professors Hogg and Wright point out, this is important because for a tribunal’s power to be held to be a s. 96 power at confederation, it is clear that the impugned power must have been within the exclusive jurisdiction of s. 96 courts at confederation. Thus, if the power or function is characterized more broadly, it is less likely to run afoul of s. 96 as both inferior and superior courts are more likely to have shared concurrent jurisdiction at confederation. In other words, while a tribunal’s remedial powers may have been within the exclusive jurisdiction of the s. 96 courts at confederation, its subject-matter jurisdiction was not: see Peter W. Hogg & Wade Wright, Constitutional Law of Canada, 5th ed. (Toronto: Thomson Reuters Canada, 2020), at § 7:19.
[59] This broadening is partly a response to the concern expressed by Wilson J. in Sobeys: “The courts have recognized that s. 96 should not stand in the way of new institutional approaches to social or political problems”: at p. 253.
[60] Following Sobeys, the Supreme Court similarly held in Reference re Amendments to the Residential Tenancies Act (N.S.), 1996 CanLII 259 (SCC), [1996] 1 S.C.R. 186:[34] Two characterizations of the jurisdiction of the Director and Residential Tenancies Board have been advanced by the parties. The appellant along with the Attorneys General of British Columbia, Manitoba, Ontario and Quebec argue that the jurisdiction should be characterized as “jurisdiction over residential tenancies; disputes between residential landlords and tenants”. On the other hand, the respondent argues that the jurisdiction should be characterized as determining “residential tenancies disputes, including the power to make orders for compliance, repair, compensation, termination and possession and related matters.”
[35] The problem with the characterization advanced by the respondent and the majority of the court below is that it runs afoul of the principles set out in Sobeys Stores. It limits the historical inquiry to remedies over which the superior court exercised jurisdiction at Confederation and ignores the purpose and subject matter of the legislation. Consequently, I agree with the appellant that the proper characterization of the unproclaimed provisions is “jurisdiction over residential tenancies; disputes between residential landlords and tenants.” This characterization captures the “raison d'être of the legislation. The Residential Tenancies Act of Nova Scotia is not meant to be a replica of landlord and tenant law. It sets up a complete and comprehensive code independent of landlord and tenant law which is specifically designed for governing the residential tenancy relationship. [61] The subject matter of the jurisdiction at issue in this case is “the resolution of disputes in respect of an insured person’s entitlement to SABs or in respect of the amount of SABs to which an insured person is entitled”: Stegenza v. Economical Mutual Insurance Company, 2019 ONCA 615, 147 O.R. (3d) 65, at para. 37. Statutory accident benefits are a provincially created entitlement to solve a social problem that did not exist at the time of confederation. Therefore, they could not have been within the exclusive jurisdiction of the superior court at that time. Thus, granting the LAT the power to order relief from forfeiture would not run afoul of s. 96.
[62] Our view on this question is reinforced by the fact that many provincial statutes provide administrative tribunals with the power to grant remedies that are equivalent to equitable remedies. The Arbitration Acts of Alberta, British Columbia, Manitoba, New Brunswick, Ontario and Saskatchewan expressly entitle arbitral tribunals to decide a dispute in accordance with law, including equity, and to order specific performance, injunctions and other equitable remedies. . Poorkid Investments Inc. v. Ontario (Solicitor General)
In Poorkid Investments Inc. v. Ontario (Solicitor General) (Ont CA, 2023) the Court of Appeal heard (and allowed) an appeal of a "declaration that s. 17 of the CLPA violates s. 96 of the Constitution Act, 1867 and is of no force and effect", in the course of a class action against the Crown and police regarding allegation of 'under-policing' [my term] with respect to indigenous protests near Caledonia, Ontario. CLPA s.17 requires a plaintiff to obtain prior leave from the court when suing for misfeasance in public office or for "a tort based on bad faith respecting anything done in the exercise or intended exercise of the officer or employee’s powers or the performance or intended performance of the officer or employee’s duties or functions" [CLPA s.17(1)].
In these quotes, the Court of Appeal sets out the constitutional basis of administrative tribunals in relation to the s.96 constitutional superior courts:The role and jurisdiction of superior courts
[20] Although Canada’s constitutional structure is premised on federalism, Canada’s judicial system is unitary in nature: the judges of provincial superior courts are appointed by the federal government. In Reference re Residential Tenancies Act, 1981 CanLII 24 (SCC), [1981] 1 S.C.R. 714, at p. 728 (“Residential Tenancies”), Dickson J. (as he then was) described the judicature provisions of the Constitution Act, 1867 as supporting a “strong constitutional base for national unity”. In Reference re Code of Civil Procedure (Que.), art. 35, 2021 SCC 27, 459 D.L.R. (4th) 555 (“Quebec Reference”), the Supreme Court emphasized that the judicature provisions, along with s. 92(14), were designed by the Fathers of Confederation to strike a balance between provincial initiatives on the administration of justice and the need to respect the status of the superior courts as the centrepiece of the unitary judicial system. The Court added that the fundamental principles underlying s. 96 and the organization of Canada’s judiciary are national unity and the rule of law: Quebec Reference, at paras. 1-2,4.
Provincial legislative authority
[21] Section 92(14) of the Constitution Act, 1867 establishes the exclusive authority of the provinces over the administration of justice, which includes prescribing the procedure that must be followed in civil matters. As the application judge noted, Ontario has established various procedural mechanisms that govern the ability of litigants to bring their disputes to the superior courts for adjudication, including r. 21.01 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, which permits matters to be determined prior to trial; r. 20 of the Rules of Civil Procedure, which establishes a summary judgment procedure to resolve matters without a trial; rr. 2.1.01 and 2.1.02 of the Rules of Civil Procedure and s. 140 of the Courts of Justice Act, R.S.O. 1990, c. C.43, which preclude frivolous or vexatious proceedings; and the Class Proceedings Act, 1992, S.O. 1992, c. 6, which permits class actions by named plaintiffs but requires preliminary motions to certify the proceedings and appoint a representative plaintiff.
[22] There is no question that the CLPA is within Ontario’s legislative authority. However, Ontario’s authority to enact the CLPA must be considered alongside other constitutional provisions to ensure the consistent operation of the Constitution as a whole. Provincial legislative authority under s. 92(14) cannot be exercised in a manner that infringes s. 96 and the core jurisdiction of superior courts that it has been held to protect.
Protecting the core jurisdiction of the superior courts
[23] Section 96 of the Constitution Act, 1867 is ostensibly a simple provision governing the appointment of judges to the superior courts – courts of inherent jurisdiction. It provides as follows:96. The Governor General shall appoint the Judges of the Superior, District, and County Courts in each Province, except those of the Courts of Probate in Nova Scotia and New Brunswick. [24] However, s. 96 has come to be understood as performing a much more significant role: “protecting the special status of the superior courts of general jurisdiction as the cornerstone of our unitary justice system”: Quebec Reference, at para. 4. Doctrine has developed with a view to protecting the special status of the superior courts – ensuring that their jurisdiction is not usurped by Parliament or a provincial legislature, whether by transferring their core powers to inferior courts and administrative tribunals or removing them altogether. If this were to occur, the superior courts would lose their essential nature and the federal-provincial structural balance fundamental to Canada’s justice system would be lost.
[25] Where legislation seeks to establish adjudicative authority in an administrative tribunal or inferior court, the three-part test set out in Residential Tenancies applies. The court asks:1) Whether the power, function, or jurisdiction purported to be conferred conforms to the power, function, or jurisdiction exercised by s. 96 courts at the time of confederation. If it does, the court asks:
2) Whether, in its institutional context, the power, function, or jurisdiction is judicial in nature. If it is, the court asks:
3) Whether, having regard to the tribunal’s function as a whole, the power is a sole or central function of the tribunal, such that it is operating like a s. 96 court. [26] In essence, the Residential Tenancies test permits administrative tribunals and inferior courts to exercise authority once exercised by s. 96 courts so long as the exercise of that authority is not the sole or central function of the tribunal or inferior court, such that it is operating like a s. 96 court: Residential Tenancies, at p. 736. The Residential Tenancies test thus aims to protect the historical jurisdiction of superior courts: Quebec Reference, at paras. 55-59.
[27] In MacMillan Bloedel Ltd. v. Simpson, 1995 CanLII 57 (SCC), [1995] 4 S.C.R. 725, the Supreme Court added that while adjudicative authority can, in some circumstances, be established outside the context of the superior courts, on no account can the inherent or core jurisdiction of the superior courts be transferred exclusively to another court or removed. Lamer C.J., writing for a majority of the Court, acknowledged that the core jurisdiction concept was difficult to define, but said that it is of “paramount importance” to the existence of the superior courts. He endorsed a broad conception set out by I.H. Jacob in “The Inherent Jurisdiction of the Court” (1970), 23 Curr. Legal Probs. 23, in which Jacob described the power of superior courts to maintain their authority and prevent their process from being obstructed as “intrinsic” and the “very life-blood” and “very essence” of superior courts. “Without such a power”, Jacob wrote: “the court would have form but would lack substance. The jurisdiction which is inherent in a superior court of law is that which enables it to fulfil itself as a court of law”: at p. 27.
[28] Thus, core jurisdiction is defining of the superior courts and must be guarded jealously. In MacMillan Bloedel, Lamer C.J. put the matter this highly: removal of any part of the core jurisdiction, he said, “emasculates the court, making it something other than a superior court”: at para. 30.
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