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JR - Against Decisions. Harold the Mortgage Closer Inc. v. Ontario (Financial Services Regulatory Authority, Chief Executive Officer)
In Harold the Mortgage Closer Inc. v. Ontario (Financial Services Regulatory Authority, Chief Executive Officer) (Div Court, 2024) the Divisional Court considered JR 'justiciability', here where the decisions challenged "do not affect .... legal rights or obligations":Issue 1: Is Judicial review available?
Nature of Decisions not amenable to judicial review
[68] The applicants assert that FSRA is exercising statutory powers under ss. 3 and 6 of the FSRA Act and the Decisions are amenable to judicial review.
[69] FSRA submits that the court does not have jurisdiction because the purported Decisions are not an exercise of statutory power and have no effect on the legal rights or obligations of the applicants. FSRA further submits that the application should be dismissed due to the applicants’ delay.
[70] FSRA is not specifically required or empowered by statute to issue the Transparency Guidance or publish the NOP. In this case, the Decisions were to provide a non-binding guidance document on FSRA’s administrative processes and to publish (or not publish) documents on FSRA’s website. Section 3 of the FSRA Act provides FSRA’s statutory objects: the goals FSRA strives to achieve. Section 3 does not confer any jurisdiction, authority, or a statutory power of decision upon FSRA. Section 6 provides FSRA’s natural person powers, empowers FSRA to administer and enforce legislation, and prohibits FSRA from establishing, acquiring, or dissolving subsidiary corporations. While the Transparency Guidance states that the policy achieves FSRA’s statutory objects, neither ss. 3 nor 6 confer any authority or obligation on FSRA to publish NOPs and FSRA does not rely on either section to do so.
[71] The applicants attempt to draw a parallel to The Christian Medical and Dental Society of Canada v. College of Physicians and Surgeons of Ontario, 2018 ONSC 579 (Div.Ct.), aff’d 2019 ONCA 393, 147 O.R. (3d) 398. In that case, the College of Physicians and Surgeons was found to have exercised a statutory power to establish standards for physicians in enacting policies which set broad expectations of physician behaviour which were expected to be persuasive in disciplinary hearings alleging professional misconduct.[4] The facts in that case are distinguishable. In this case FSRA is not requiring any licensee to do anything.
[72] The nature of the Decisions in this case supports that they are not statutory powers of decision and that they are not amenable to judicial review.
No Effect on Legal Rights or Obligations of the Applicants
[73] To be subject to judicial review a decision must affect the applicants’ legal rights or obligations.[5]
[74] The applicants allege that the publication of the NOP had an adverse effect on their reputation and that they have a right to have their reputation protected and dealt with fairly, specifically concerning publication of both the NOP and the RFH before the merits have been decided by FST.
[75] Although the applicants have an interest in their reputation, the publication of allegations by the regulator does not give rise to a right to judicial review. The Decisions here do not affect the legal rights, interests, property, privileges, or liberty of the applicants. The Transparency Guidance issued by FSRA simply describes when and how FSRA will publish documents related to its enforcement proceedings. Reputational damage in the circumstances of this case does not give rise to a right of judicial review.
Conclusion on availability of judicial review
[76] Having found that the Decisions do not affect the legal rights or obligations of the applicants, I conclude that judicial review is not available. In the event I am wrong in my conclusion, I go on to consider the issues of delay and reasonableness of the Decisions. . Tuquabo v. Canada (Attorney General)
In Tuquabo v. Canada (Attorney General) (Fed CA, 2024) the Federal Court of Appeal dismissed an appeal of an order striking JR pleadings, here where the applicant sought to judicially review CRA letters [under FCA s.18.1]:[3] In my view, the Motion Judge made no error in striking the appellant’s Notice of Application. In his application, the appellant sought judicial review of two letters from the Canada Revenue Agency (CRA). In the first, dated July 31, 2017, the CRA requested additional information in respect of the appellant’s Notice of Objection for the 2014 taxation year. In the second, dated May 9, 2023, the CRA replied to correspondence about the appellant’s income tax matters and his appeal to the Tax Court of Canada. The appellant also sought judicial review of a Notice of Confirmation, dated January 17, 2018, disallowing his objection and confirming his income tax assessment for the 2014 taxation year.
[4] The Motion Judge found that the application is clearly bereft of any chance of success, as it is for all intent and purposes a challenge to the validity of the Minister’s assessment. As such, she determined that the Tax Court has exclusive jurisdiction on such matters pursuant to the Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.) (the ITA), and therefore, that it was not properly before the Federal Court. As for the letters, the Motion Judge found that they were not reviewable decisions or matters within the meaning of section 18.1 of the Federal Courts Act, R.S.C. 1985, c. F-7 (the Act), because they do not affect legal rights, impose legal obligations or cause prejudicial effects: Democracy Watch v. Canada (Attorney General), 2021 FCA 133 at para. 23, citing Air Canada v. Toronto Port Authority et al., 2011 FCA 347 at para. 29 and Democracy Watch v. Conflict of Interest and Ethics Commissioner, 2009 FCA 15 at para. 10.
[5] Having carefully considered the record, I have not been convinced by the appellant that the Motion Judge made any reviewable errors. As is well established, a decision to strike a pleading is discretionary and can only be set aside if the motion judge committed a palpable and overriding error or an error of law: Michaels of Canada, ULC v. Canada (Attorney General), 2023 FCA 243 at paras. 2–5; Sagos v. Canada (Public Safety and Emergency Preparedness), 2019 FCA 47 at paras. 2–4. The Motion Judge stated the correct legal test on a motion to strike and properly relied on JP Morgan Asset Management (Canada) Inc., according to which a moving party must demonstrate that the application is "“so clearly improper as to be bereft of any possibility of success”", such that there must be "“an obvious, fatal flaw striking at the root of this Court’s power to entertain the application”": JP Morgan Asset Management (Canada) Inc. v. Canada (National Revenue), 2013 FCA 250 at para. 47.
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[7] As for the two letters, they are clearly not reviewable decisions as they did not affect the appellant’s legal rights, imposed no legal obligation, and caused no prejudicial effects. The July 31, 2017 letter simply requested further documents from the appellant to support his position, whereas the May 9, 2023 letter from the Assistant Commissioner of the CRA’s appeal branch is a courtesy letter providing the appellant with information about his ongoing appeal, as held by the Motion Judge.
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