Vavilov and Municipalities: There Really is a New Boss (Nick Falzon)

This is a post by lawyer Nick Falzon (Young Anderson), prompted by the recent Guest Posts from the West Coast series

As a lawyer operating “in the trenches” of post-Vavilov municipal administrative law, I write this respectful response to Professor Alexandra Flynn’s post: “There’s a New Boss in Town: Vavilov and Municipalities”. While I agree that Vavilov substantially changes the framework to be applied to the judicial review of municipal councils, Professor Flynn has missed an important part of the picture in understanding just how significant the changes have been in the municipal law context.

Catalyst Paper – A new statement of an old principle

Where I part company with Professor Flynn is that, in my view, Catalyst Paper Corp v. North Cowichan, 2012 SCC 2 tells only half of the story when it comes to curial deference to municipalities. Catalyst does not, in my view, stand for the broad proposition that “municipal decisions are almost always judicially reviewed on a standard of reasonableness”. This broad generalization fails to account for the line of judicial authority which existed alongside Cataylst and which addressed the issue whether a bylaw or resolution was even authorized by the enabling statute.

First to Catalyst. The company in that case challenged a District of North Cowichan tax rate bylaw which set industrial tax rates at more than twenty times higher than residential tax rates.[1] Unhappy with that rate, Catalyst challenged the bylaw on the basis that it was unreasonable. As Professor Flynn rightly points out, this sounds a lot like Wednesbury unreasonableness, a relatively ancient ground of challenge to municipal decisions.[2] Catalyst Paper, in the mould of Wednesbury, did not address any questions of statutory interpretation – the Court reviewed the impugned bylaw for process and content.[3] Importantly,it was undisputed that the District had the statutory authority to pass a tax rate bylaw. Catalyst’s only argument was that the bylaw was so unreasonable that no reasonable municipal council could have passed it. It was a challenge to the reasonableness of the bylaw in substance, rather than its vires.

The reference to “vires” of course evokes the much-maligned “jurisdictional challenge” that Dunsmuir and its progeny had left on life support. Notably, Dunsmuir’s only example of ajurisdictional challenge made reference to precisely this kind of challenge, from United Taxi:

In other words, true jurisdiction questions arise where the tribunal must explicitly determine whether its statutory grant of power gives it the authority to decide a particular matter. The tribunal must interpret the grant of authority correctly or its action will be found to be ultra vires or to constitute a wrongful decline of jurisdiction: D. J. M. Brown and J. M. Evans, Judicial Review of Administrative Action in Canada (loose‑leaf), at pp. 14-3 to 14-6.  An example may be found in United Taxi Drivers’ Fellowship of Southern Alberta v. Calgary (City), [2004] 1 S.C.R. 485, 2004 SCC 19.  In that case, the issue was whether the City of Calgary was authorized under the relevant municipal acts to enact bylaws limiting the number of taxi plate licences (para. 5, per Bastarache J.).  That case involved the decision-making powers of a municipality and exemplifies a true question of jurisdiction or vires.  These questions will be narrow.  We reiterate the caution of Dickson J. in CUPE that reviewing judges must not brand as jurisdictional issues that are doubtfully so.[4]

The death of jurisdictional questions and expansion of deference to municipalities

Dunsmuir and United Taxi are both in line with the Court’s earlier decision in Nanaimo v. Rascal Trucking, 2000 SCC 13. There, the Court outlined a two-step process for determining whether municipal action was authorized. First, the reviewing court was to apply a correctness standard to the threshold question whether, as a matter of statutory interpretation, the action was “authorized”:

The fact that councillors are accountable at the ballot box, is a consideration in determining the standard of review for intra vires decisions but does not give municipal councillors any particular advantage in deciding jurisdictional questions in the adjudicative context.  As a result, the courts may review those jurisdictional decisions on a standard of correctness.[5]

The Court’s rationale for applying correctness review to these kinds of questions, while deferring on merit-based inquiries,makes sense as a matter of policy: municipal councilors do not have any particular expertise on questions of statutory interpretation, and thus a correctness standard should apply to their understanding of their legal authority. Within the scope of that authority, however, deference is appropriate because those councilors are elected to make decisions affecting the community to which they are accountable.

This analytical structure for the review of municipal bylaws has persisted in British Columbia, even after the distinction between questions of jurisdiction and the merits largely evaporated from the rest of the administrative law landscape.[6] Vavilov was so dramatic for municipalities precisely because of its outright rejection of both the contextual approach and “jurisdictional questions” in all contexts. This is nicely reflected in 1120732 B.C. Ltd. v. Whistler (Resort Municipality), 2020 BCCA 101. In line with the Rascal Trucking/United Taxi approach, the chambers judge in that case applied the correctness standard of review in assessing whether Whistler had authority to enact certain bylaws challenged by the petitioners.[7]

The Court of Appeal, however, issuing its decision after Vavilov, determined that reasonableness was the relevant standard of review, even on the issue whether the local government had acted within the bounds of its statutory authority. Faced with a record that did not include “reasons” – as is the case with almost all municipal bylaws – the Court canvassed the jurisprudence dealing with the particular planning law question at issue in the case, finding that there were three reasonable interpretations of the enabling statute:

As there were at least three ways in which the Municipality’s council could have reasonably concluded that s. 479 gave it the power to adopt the Zoning Amendment Bylaw and the reasonableness of the decision to adopt the Bylaw is not being otherwise challenged, it has not been shown that the council’s decision to enact the Bylaw was unreasonable.  Hence, the council’s decision should not be disturbed on judicial review.[8]

For the municipal law bar, this is a dramatic legal development. Jurisdictional questions are well and truly dead and deference to municipal councils has been, at least in principle, expanded. That said, it remains to be seen whether and to what extent the more “robust” reasonableness test articulated in Vavilov makes a practical difference in individual cases.

Legislative intent and reasonableness

A development that is just as interesting as Vavilov’s impact on judicial review of municipal council decision-making, is its reversal of the deferential standard of review that has applied to the expert tribunal that operates in the municipal arena, the Property Assessment Appeal Board. [9] Vavilov’s impact here was significant because the decisions of that tribunal are subject to appeal, not judicial review. As such, its expertise no longer matters for standard of review purposes. In Coquitlam (City) v. British Columbia (Assessor of Area #10 – North Fraser Region), 2020 BCSC 440, the Supreme Court confirmed that the standard of review on questions of law decided by the Appeal Board is correctness. While this shift was unwelcome for the Property Assessment Appeal Board, which received curial deference since at least 2010, it resulted in that case in Coquitlam being granted greater flexibility to pursue its chosen land use objectives. In performing its own statutory interpretation exercise concerning the disputed provision, the Court stated:

Further, s. 220(1)(b) must be interpreted in light of the objects of the Community Charter generally, and s. 220 specifically. Section 3 of the Community Charter provides that the statute is intended to provide municipalities with “the authority and discretion to address existing and future community needs,” and “the flexibility to determine the public interest of their communities and to respond to the different needs and changing circumstances of their communities.” Section 4 mandates a broad interpretation of the Community Charter consistent with those purposes.[10]

While this is not deference – the municipality made no reviewable decision – one cannot help but think that this flexibility would not have been granted to the municipality if the Court was bound to defer to the reasonable interpretation of the Assessor.

Final Thoughts

While Vavilov has killed jurisdictional questions once and for all and granted deference to municipalities in an area where they historically were given none, another question remains: has Vavilov watered down the deference due to municipalities in respect of their intra vires actions?[11] As noted earlier, the reasonableness standard set out in Vavilov is nothing if not “robust”.[12] At the same, the Court has noted that within the single reasonableness standard, the “space” granted to decision-makers be wider or narrower depending on the context.[13] Which contexts will give rise to greater or lesser deference will be the stuff of considerable factual and legal argument going forward. Early indications, found for example in both Whistler and the BC Supreme Court’s recent decision in O’Shea/Oceanmount Community Association v. Town of Gibsons, 2020 BCSC 698, are that reviewing courts are continuing to show deference to municipalities.

[1] Catalyst Paper Corp. v. North Cowichan, at para 3.

[2] And is, in fact cited in Catalyst at para 20.

[3] Paras 33-34.

[4] Dunsmuir, at para 59.

[5] Rascal Trucking, at paras 33.

[6] See for example, 1193652 B.C. v. New Westminster (City), 2020 BCSC 163 at para 30; 114823 B.C. v. Whistler (Municipality), 2019 BCSC 752 at paras 181-191; Ocean Wise Conservation Association v. Vancouver Board of Parks and Recreation, 2018 BCSC 198 at paras80-82; Canadian Plastic Bag Association v. Victoria (City), 2019 BCCA 254 at para 37; Chase Discount Auto Sales Ltd. v. Waugh, 2018 BCSC 2014; and Madaninejad v. North Vancouver (District), 2015 BCSC 895 at paras 49.

[7] 2019 BCSC 752, supra.

[8] Whistler, supra, at para 88.

[9] Weyerhaeuer Company Ltd. v. Assessor of Area No. 04 – Nanaimo Cowichan, 2010 BCCA 46.

[10] Coquitlam (City) v. British Columbia (Assessor of Area #10 – North Fraser Regaion), 2020 BCSC 440 at para 55.

[11] I would go a step further and argue that Catalyst Paper unnecessarily watered down Wednesbury, but that’s another paper.

[12] Vavilov, at paras 12, 13, 67, 72, 138.

[13] Vavilov, at para 90.

This content has been updated on May 19, 2020 at 03:46.