2012 NBCA 53, 2012 NBCA 53

COURT OF APPEAL OF NEW BRUNSWICK 174-11-CA ANNE SMALL APPELLANT ANNE SMALL APPELANTE - and - - et - NEW BRUNSWICK LIQUOR CORPORATION RESPONDENT SOCIÉTÉ DES ALCOOLS DUNOUVEAU-BRUNSWICK INTIMÉE Small v. New Brunswick Liquor Corporation, 2012NBCA 53 Small c.

Société des alcools du Nouveau-Brunswick,2012 NBCA 53 CORAM: The Honourable Justice Robertson The Honourable Justice Bell The Honourable Justice Green CORAM : L’honorable juge Robertson L’honorable juge Bell L’honorable juge Green Appeal from a decision of the Court of Queen’sBench: November 15, 2011 Appel d’une décision de la Cour du Banc de la Reine: Le 15 novembre 2011 History of Case: Historique de la cause : Decision under appeal: 2011 NBQB 321 Décision frappée d’appel : 2011 NBQB 321 , 2011 NBBR 321 Preliminary or incidental proceedings: N/A Procédures préliminaires ou accessoires : s.o.

Appeal heard: April 24, 2012 Appel entendu : Le 24 avril 2012 Judgment rendered: June 14, 2012 Jugement rendu : Le 14 juin 2012

Reasons for judgment by: The Honourable Justice Robertson Motifs de jugement : L’honorable juge Robertson Concurred in by: The Honourable Justice Bell The Honourable Justice Green Souscrivent aux motifs : L’honorable juge Bell L’honorable juge Green Counsel at hearing: For the appellant: E. Thomas Christie, Q.C. For the respondent: J. Gordon Petrie, Q.C. Avocats à l’audience : Pour l’appelante : E. Thomas Christie, c.r. Pour l’intimée : J. Gordon Petrie, c.r. THE COURT The appeal is dismissed with costs of $2,500. LA COUR L’appel est rejeté avec dépens dont le montant est fixé à 2 500 $.

The judgment of the Court was delivered by ROBERTSON J.A. I. Introduction [ 1 ] The appellant’s non-unionized employment with the respondent corporation was terminated without cause. By virtue of

Part IV of the Public Service Labour Relations Act , R.S.N.B. 1973, c. P-25, the provisions of that Act apply to employees of the New Brunswick Liquor Corporation. One of those provisions permits adjudication of certain grievances and one of the questions posed to the adjudicator was whether the appellant was entitled to a “retirement allowance”, as set out in one of the Corporation’s by- laws. The interpretative issue raised a pure question of law: Is an employee who is dismissed without cause entitled to a retirement allowance under the By-law?

The adjudicator answered the question affirmatively and, in response, the Corporation sought judicial review. Applying the review standard of reasonableness, the application judge ruled the adjudicator’s interpretative decision failed to meet that threshold. The former employee appeals to this Court and argues the judge erred in failing to “properly” apply the reasonableness standard. Contrary to what the application judge ruled, the appellant insists the adjudicator’s interpretative decision fell within the “range of acceptable outcomes”, as explained in Dunsmuir v.

New Brunswick , 2008 SCC 9 , [2008] 1 S.C.R. 190. [ 2 ] Both parties have framed the central issue in terms of whether the application judge properly applied the deferential standard of review. I am acutely aware of the incisive remarks of Bastarache and LeBel JJ. in Dunsmuir : “Deference is both an attitude of the court and a requirement of the law of judicial review” (para. 48).

Judicial attitude is a reality for those reviewing courts which continue to struggle with the legal understanding that an interpretative decision, involving a pure question of law, is sustainable under the badge of “reasonableness” even though it is not “correct”. These are the cases where the common law provides the analytical framework for ascertaining the drafter’s “intention”. And these are the cases where there is usually no range of possible outcomes; just

two opposing

interpretations. What we are left with are two related and practical questions:

(1) What moves an interpretative decision, involving a pure question of law, from the category of reasonableness to the category of unreasonableness?; and

(2) How does the application of the reasonableness standard differ from the application of the correctness standard in cases involving such questions? [ 3 ] The questions are relevant because the legal standard of reasonableness lacks objectivity unless there are guidelines or a framework for its application. Otherwise, the reasonableness of an interpretative decision may well reflect the personal opinion of the reviewing judge. These reasons assert the general proposition that deference is owed to an interpretative decision that resolves an ambiguity. The adjudicative tribunal must weigh and balance competing arguments in support of both

interpretations and the reviewing court must generally defer to the one chosen by the tribunal. However, the question of whether there is an ambiguity is dependent on the application of accepted interpretative principles and rules governing the task of contractual or statutory

interpretation. This is true regardless of the standard of review to be applied and this is why there is overlap when it comes to the application of either review standard. In short, an interpretative decision can be neither correct nor reasonable if the reasoning offered is tied to a defective application of a legal rule or framework. All of that said, these reasons seek to deflate any potential argument this Court’s application of the deferential standard is a poorly camouflaged application of the correctness standard.

I do so because I share the application judge’s ultimate opinion that the adjudicator’s interpretative decision fails the deferential standard. [ 4 ] When the relevant provisions of the By-law are read textually and contextually there is no ambiguity. The By-law expressly states the retirement allowance is payable only to those who retire, die or are laid off. It also states the allowance is not payable to those who resign or are dismissed.

The adjudicator’s decision to read down the word “dismissed” to mean “dismissal for cause” and to expand the by-law’s exhaustive definition of “lay off” to include “dismissal without cause” is, in my respectful view, infused with reviewable error. II. Background [ 5 ] The essential facts are as follows. The appellant, Anne Small, had worked for New Brunswick Power Corporation from 1999 until 2006. In 2006, she accepted employment with the respondent, the New Brunswick Liquor Corporation. In August of 2010, Ms. Small’s employment was terminated.

No cause was alleged and she was provided with four months’ salary in lieu of notice. Ms. Small grieved the decision, in accordance with the Public Service Labour Relations Act , and sought reinstatement and alternative relief. The adjudicator determined he lacked the jurisdiction to reinstate Ms. Small, but granted the alternative relief. First, the adjudicator held the years of service with New Brunswick Power counted as service with the Corporation. Consequently, any entitlement to benefits would be based on Ms. Small having 11 years of continuous service. Employing that figure, the adjudicator held Ms.

Small was entitled to 11 months’ salary in lieu of notice. The adjudicator then turned to the question of whether Ms. Small was entitled to a retirement allowance (composed of two distinct benefits) under

Article 22.01 of By-law #4 of the Corporation. Two of the relevant provisions read as follows: 22.01

(1) An employee with five (5) or more years continuous employment who retires, dies, or is laid off, is entitled to a retirement allowance. […] 22.04 An employee who resigns or is dismissed is not eligible for a retirement allowance. [ 6 ] At the adjudication hearing, the Corporation focused on the fact the benefit outlined in

Article 22.01(1) is available only if the employee “retires, dies or is laid off” and, correlatively, the benefit is not available to an employee who “resigns” or is “dismissed” as stated in

Article 22.04. The Corporation argued that, as Ms. Small was dismissed, she did not qualify for the payment of a retirement allowance. The employer also argued that, as the word “dismissed” was not qualified, it applied to employees who were dismissed with or without cause. Ms. Small responded by arguing the only reasonable

interpretation that could be given to the word “dismissed” was that it applies only to dismissals for cause. Otherwise, an employer could dismiss a long-term employee without cause, on the eve of his or her retirement, and escape the payment of the retirement allowance. The adjudicator accepted this argument and offered an additional reason. As it was safe to assume the Corporation drafted the By-law, any ambiguity had to be resolved in favour of Ms. Small. [ 7 ] The Corporation also advanced an alternative argument with respect to the retirement allowance. Assuming that

Article 22.04 does not apply to employees who are dismissed without cause, it was argued that Ms. Small did not come within

Article 22.01 because she did not die or retire, nor was she laid off. The adjudicator rejected this argument by concluding the term “laid off” had to be interpreted to mean an employee who was dismissed without cause. To reach that conclusion the adjudicator cited Girling

v. Crown Cork & Seal Canada Inc. , [1994] B.C.J. No. 164 (S.C.) (QL) , aff’d [1995] B.C.J. No. 1873 (C.A.) (QL) . The adjudicator read that decision as standing for the proposition that because an employee who loses his or her employment in a non-union setting usually has no right to be re-employed, the term “lay off” has no technical meaning. For this reason, the adjudicator concluded the term “laid off”, as set out in

Article 22.01, can only mean “dismissed without cause”. This interpretative ruling led the adjudicator to conclude that Ms. Small was entitled to the retirement allowance. [ 8 ] The Corporation sought judicial review on two grounds: (1) the adjudicator’s interpretative ruling to credit Ms. Small for years of service with New Brunswick Power was unreasonable; and (2) the adjudicator’s finding that Ms. Small was entitled to a retirement allowance was also unreasonable.

Applying that deferential standard of review, the application judge rejected the first ground but accepted the second and, consequently, set aside the adjudicator’s ruling that Ms. Small was entitled to a retirement allowance: New Brunswick Liquor Corporation v. Small , 2011 NBQB 321 , 381 N.B.R. (2d) 133. The application judge held it unreasonable for the adjudicator to interpret

Article 22.04 such that the word “dismissed” should be read down to mean only dismissal for cause. The application judge’s reasoning is tied to the hypothetical long-term employee who is dismissed without cause on the eve of retirement and would be denied a retirement allowance. Here is how the application judge disposed of Ms. Small’s interpretative argument: Although this example appears compelling at first blush, it does not stand up to more probing scrutiny.

Even if one were to accept that an employer would be mean spirited enough to do what is suggested, he would soon realize that it would not be in his interests to do so. For example, Mr. Jones has been employed for 30 years and is about to retire. He would be entitled to 125 days of salary as a retirement allowance. Mr. Mean fires him the day before the retirement party without cause. Mr. Jones sues Mr. Mean for wrongful dismissal and is awarded 24 months salary and benefits in lieu of notice. Mr. Mean’s action would therefore save 125 days of salary but end up costing two years in salary and benefits.

In short, the hypothetical example relied upon does not support the argument that “dismissed” must mean “dismissed for cause”. [para. 12] III. Issues – Argument [ 9 ] Ms. Small appeals to this Court on the ground the application judge “erred in law by not properly applying the required standard of review” with respect to the adjudicator’s interpretative ruling regarding Ms. Small’s entitlement to a retirement allowance.

The Corporation did not file a cross-appeal with respect to the application judge’s decision upholding the adjudicator’s ruling on the issue of continuous service. [ 10 ] It is common ground we must evaluate the reviewing judge’s application of the reasonableness standard on the standard of correctness. Ms.

Small makes the general plea that the adjudicator’s decision meets the standard of reasonableness articulated in Dunsmuir and as applied by this Court in Bowater Maritimes Inc. v Communications, Energy and Paperworkers Union, Locals 117, 146, 164 and 263 and International Longshoremen’s Association, Local 1433 , 2011 NBCA 22 , 368 N.B.R. (2d) 348, at paras. 24 and 30 . Ms. Small also cites a more recent decision of the Supreme Court of Canada: Newfoundland and Labrador Nurses’ Union v. Newfoundland and Labrador (Treasury Board) , 2011 SCC 62 , [2011] 3 S.C.R. 708.

In that case, the Supreme Court revisited the following well-known passage from Dunsmuir: A court conducting a review for reasonableness inquires into the qualities that make a decision reasonable, referring both to the process of articulating the reasons and to outcomes. In judicial review, reasonableness is concerned mostly with the existence of justification, transparency and intelligibility within the decision-making process.

But it is also concerned with whether the decision falls within a range of possible, acceptable outcomes which are defensible in respect of the facts and law. [para. 47] [ 11 ] The above passage had led some to believe the review standard of reasonableness was comprised of two discrete components: one relating to the sufficiency of the reasons, the other relating to whether the decision falls within the range of acceptable outcomes.

In Newfoundland and Labrador Nurses’ Union , Abella J . , writing for a unanimous court, rejected the notion that the “adequacy” of reasons was a stand-alone basis for quashing a decision and that Dunsmuir stood for the proposition that a reviewing court must undertake two discrete analyses: one for the reasons and the other for the result. Instead, the reasons must be read together with the outcome for the purpose of determining whether the result falls within the range of possible outcomes. Quoting from the dissenting reasons of Evans J.A. in Public Service Alliance of Canada v.

Canada Post Corporation , 2010 FCA 56 , [2010] F.C.J. No. 272 (QL), Abella J. held that reasons do not have to be “perfect”, nor do they have to be comprehensive, nor are they to be reviewed in a “vacuum”. The result is to be looked at in the context of the evidence, the parties’ submissions and the process. Against this background, Ms. Small submits to this Court: The adjudicator’s reasons were fulsome, grounded in the documentary evidence provided and the testimony of [Ms. Small]. The reasons reflect jurisprudence as presented to him and exhibited a logical analysis that he felt was warranted.

The expertise of the adjudicator is presumed and not in question by the parties.

[ 12 ] Parenthetically, there is no challenge to the adequacy of the reasons in this case, nor could there be. The adjudicator was called on to rule on several arguments, all of which are intelligently canvassed in comprehensive reasons. Ms. Small’s argument rests on an accepted premise: the adjudicator need not be correct with respect to the interpretative issue at hand. Her argument moves on to challenging the application judge’s solitary reason for setting aside the adjudicator's interpretative ruling with respect to the retirement allowance.

The application judge found the adjudicator’s hypothetical to be flawed. Ms. Small now responds that the application judge’s reasoning is flawed. Ms. Small offers the hypothetical of a 30-year employee who is close to mandatory retirement and who is dismissed without cause a week before the retirement date. In her submission, Ms.

Small asks whether the employee would be entitled to a reasonable notice period based on the full number of years of service and responds to her own question with three words: “It is doubtful.” [ 13 ] Both in the Court of Queen’s Bench and in this Court, the Corporation challenged the adjudicator’s interpretative ruling that a “lay off” under

Article 22.01 must mean a “dismissal without cause”. The Corporation points to

Article 2.01(

k) which defines the word “layoff” and which the adjudicator failed to expressly address in his analysis. As well, the Corporation argues the adjudicator erred in allowing the common law principle articulated in Girling v. Crown Cork & Seal Canada Inc. to displace the contractual provisions governing the employment relationship. Within this framework, the Corporation argues the adjudicator had effectively arrived at a “tortured

interpretation” to support the finding of Ms. Small’s entitlement to a retirement allowance. In my respectful view, there is merit to the Corporation’s arguments. IV. Analysis [ 14 ] The parties’ arguments compel me to return to the questions originally posed:

(1) What moves an interpretative decision, involving a pure question of law, from the category of reasonableness to that of unreasonableness?; and

(2) How does the application of the reasonableness standard differ from the application of the correctness standard, when it comes to deciding this category of interpretative issue? Before addressing those questions, it is best to offer some general observations with respect to the state of the deference doctrine in administrative law, as articulated by the Supreme Court of Canada following the release of Dunsmuir .

Those observations provide the necessary context to the questions posed. [ 15 ] There are significant similarities between the deference doctrine as it has developed in the administrative as opposed to civil law context. But there is also a major difference. The difference materializes when the decision under review involves a pure question of law, as opposed to a question of fact or a question of mixed law and fact. Let me restate the well-known. In the civil context, a decision of a judge of first instance involving a question of fact or a question of mixed law and fact is owed deference.

Findings of fact are evaluated on the standard of palpable and overriding error, as are findings of mixed law and fact (see Housen v. Nikolaisen , 2002 SCC 33 , [2002] 2 S.C.R. 235, para. 36 and see the slightly revised formulations expressed in H.L. v. Canada (Attorney General) , 2005 SCC 25 , [2005] 1 S.C.R. 401). Not surprisingly, in the administrative law context, the decisions of adjudicative bodies pertaining to findings of fact or determinations involving a question of mixed law and fact, which are reviewable, are also accorded deference, albeit on the standard of reasonableness.

Cases involving these kinds of questions rarely make it to the Supreme Court. When they do, it is because the case also involves a pure question of law. [ 16 ] In short, the deference doctrine in the administrative law context is not materially different from the doctrine being applied in the civil context when it comes to an adjudicative tribunal’s findings of fact and findings of mixed law and fact. In both contexts, deference is owed even though the standard is sometimes expressed differently ( e.g ., “palpable and overriding error” v. “reasonableness”).

For greater certainty, the policy reasons that animate the deference obligation under the civil law should apply equally to administrative decision-makers vested with adjudicative functions. [ 17 ] This leaves for consideration the standard of review to be applied to pure questions of law, which fall under one of two umbrellas: (1) the identification of a common law or equitable principle or rule, or analytical framework; and (2) the

interpretation of a contractual or statutory provision. It is trite to acknowledge that no deference is owed to a trial, application or motion judge’s ruling involving a pure question of law. An appellate court is free to arrive at its own opinion (see Housen v. Nikolaisen , at para. 8 ). While correctness has always been the accepted review standard for questions of law decided within the context of civil proceedings, the same cannot be said when it comes to determinations by an administrative tribunal performing adjudicative functions. The general understanding is that reviewing courts owe deference to a tribunal’s rulings involving the

interpretation of its home statute, a closely- related statute and any contractual arrangements that fall within the scope of the tribunal’s mandate, even though the issue involves a pure question of law. But the path which the Supreme Court of Canada took to arrive at this point was by no means direct. A succinct historical overview may be helpful.

[18] For decades, the law required reviewing courts to ascertain whether there was an intention, on the part of thelegislature or Parliament, to insulate an expert tribunal’s decisions from review on the standard of correctness and to accord deference onwhat is now labeled the standard of reasonableness.

At one time, the notion of intent was to be determined by the application of the“pragmatic and functional approach” which required consideration of at least four key factors: (1) the absence or presence of a privativeclause or a statutory right of appeal; (2) expertise: (3) the purposes of the Act as a whole and the provision in question; and (4) the natureof the problem – a question of law or fact (see Pushpanathan v. Canada (Minister of Citizenship and Immigration), (SCC), [1998] 1 S.C.R. 982, [1998] S.C.J. No. 46 (QL) at paras. 29-38).

Typically, the first factor was usually thought to be of one of theclearest indicators of legislative intent. The second factor was circumscribed by a presumption of expertise and is still referred to in thejurisprudence when discussing whether correctness is the applicable standard of review. This explains why a lay tribunal, such as theAppeals Tribunal, established under the Workplace Health, Safety and Compensation Commission Act, S.N.B. 1994, c. W-14, and whichinvolve a question of law, are not accorded deference (see Canada Post Corporation v.

Carroll, 2012 NBCA 18, 383 N.B.R. (2d) 326).The third factor focused on whether the issue involved the

interpretation of the tribunal’s enabling statute. The fourth factor is the onewith which the Supreme Court has been preoccupied since the release of Dunsmuir. [19] Dunsmuir eliminated the deferential review standard of “patent unreasonableness” leaving us with twostandards: correctness and reasonableness. Dunsmuir also affirmed the principle that constitutional issues regarding the division ofpowers and other constitutional issues are subject to the correctness standard (at para. 58).

As well, privative clauses were declaredineffective to insulate jurisdictional questions from review under the standard of correctness (see Crevier v. A.G. (Québec) et al., (SCC), [1981] 2 S.C.R. 220, [1981] S.C.J. No. 80 (QL); U.E.S., Local 298 v. Bibeault, (SCC), [1988] 2S.C.R. 1048, [1988] S.C.J. No. 101 (QL) and C.U.P.E. v. N.B. Liquor Corporation, (SCC), [1979] 2 S.C.R. 227, [1979]S.C.J. No. 45 (QL)). [20] On the other hand, Dunsmuir held that a tribunal decision involving the

interpretation of its enabling statute(now referred to as the “home statute”) would “usually” be accorded deference. The same is said of an administrative tribunal that had adeveloped expertise in the application of a general common law or civil law rule in relation to a specific statutory context. Otherwise,correctness is the proper review standard where the question at issue is one of general law “that is both of central importance to the legalsystem as a whole and outside the adjudicator’s specialized area of expertise” (Dunsmuir at para. 60, citing Toronto (City) v.

C.U.P.E.,Local 79, 2003 SCC 63, [2003] 3 S.C.R. 77 at para. 62). Such questions are said to require uniform and consistent answers. [21] However, soon after the release of Dunsmuir, the Supreme Court virtually abandoned the notion that thedeference doctrine in administrative law is animated by the search for legislative intent. No longer was that Court concerned withwhether the tribunal’s home statute contained a privative clause or with the other factors identified in Pushpanathan. The decision of theSupreme Court in Canada (Citizenship and Immigration) v.

Khosa, 2009 SCC 12, [2009] 1 S.C.R. 339, is authority for that proposition.In that case, the Supreme Court was dealing with s. 18.1 of the Federal Courts Act, R.S.C. 1985, c. F-7. That

section permits judicialreview with respect to decisions of federal boards or commissions on stated grounds (e.g., excess of jurisdiction and error of law). Themajority of the Supreme Court held that s. 18.1 did not speak to the applicable standard of review but only to the grounds of review, thatis to say, whether the issue was reviewable in the Federal Court. Once the issue was found to come within the ambit of s. 18.1, thereviewing court had to rule on the applicable standard of review. On the question of whether an error of fact qualifies as an error of lawsee VSL Canada Ltd. v.

Workplace Health, Safety and Compensation Commission and Duguay et al., 2011 NBCA 76, 376 N.B.R. (2d)292, which explains how a finding of fact, infused by a palpable and overriding error, qualifies as an error of law and is reviewable unders. 22(2) of the Workplace Health, Safety and Compensation Commission Act. [22] The majority in Khosa went on to hold that the law had developed to the point that, with or without a privativeclause, a measure of deference had come to be accepted as appropriate in circumstances where a particular decision had been allocated toadministrative decision-makers in matters that relate to their special role, function and expertise (Khosa at para. 25).

Deference was to beextended not only to questions of fact and policy, but to a tribunal’s

interpretations of its constitutive and related enactments “becausethere may be multiple valid

interpretations of a statutory provision”. This understanding of the present law is reinforced by the fact thatsince the release of Dunsmuir, the Supreme Court has yet to engage the “pragmatic and functional approach” for isolating the properstandard of review. Instead, the analysis has focused on whether the question of law decided by the administrative tribunal was the kindof question for which deference should be accorded. Hence, today, the task of the reviewing court is to identify the types of legalquestions for which correctness is the proper standard.

The “going-in presumption” is that any interpretative decision of the tribunal’shome and related statutes will attract the deferential standard as will questions of law that are not of “central importance” to the legalsystem. There are three recent decisions of the Supreme Court which confirm this abbreviated understanding of the law. [23] In Nor-Man Regional Health Authority Inc. v. Manitoba Association of Health Care Professionals, 2011 SCC59, [2011] 3 S.C.R. 616, the Supreme Court affirmed a decision of an arbitrator who had accepted the union’s

interpretation of a vacationbenefit clause in a collective agreement. However, the arbitrator applied the doctrine of estoppel to deny the relief being sought. TheCourt held that as the equitable remedy did not involve a question of central importance to the legal system as a whole, and was not aquestion beyond the expertise of the arbitrator, deference was owed to the arbitrator’s estoppel ruling. Equally important is the revelationthat labour arbitrators are not always bound to apply equitable and common law principles, including estoppel, in the same manner ascourts of law.

As the reviewing courts could not agree on the proper standard of review, the Supreme Court’s analysis looks at the typesof questions for which correctness is generally applied and those where reasonableness normally prevails. Here is what the SupremeCourt had to say:

An administrative tribunal's decision will be reviewable for correctness if it raises a constitutional issue, a question of “general law ‘that is both of central importance to the legal system as a whole and outside the adjudicator's specialized area of expertise’”, or a "true question of jurisdiction or vires ". It will be reviewable for correctness as well if it involves the drawing of jurisdictional lines between two or more competing specialized tribunals ( Dunsmuir , at paras. 58-61 ; Smith , at para. 26; Toronto (City) v.

C.U.P.E., Local 79 , 2003 SCC 63 , [2003] 3S.C.R. 77 (" Toronto (City) "), at para. 62, per LeBel J.). The standard of reasonableness, on the other hand, normally prevails where the tribunal's decision raises issues of fact, discretion or policy; involves inextricably intertwined legal and factual issues; or relates to the

interpretation of the tribunal's enabling (or “home”) statute or “statutes closely connected to its function, with which it will have particular familiarity” ( Dunsmuir , at paras. 51 and 53-54 ; Smith , at para. 26). [paras. 35-36] [ 24 ] In Canada (Canadian Human Rights Commission) v. Canada (Attorney General) , 2011 SCC 53 , [2011] 3 S.C.R. 471 [“ Mowat ”], the Canadian Human Rights Tribunal ruled that it possessed the jurisdiction to award costs to the successful complainant. The Supreme Court held that the interpretative decision was owed deference. Its reasoning began with the premise that administrative tribunals are generally entitled to deference in respect of the legal

interpretation of their home statutes and laws or legal rules closely connected to them. The Court held that as the interpretative issue did not raise a question of jurisdiction, nor was it of central importance to the legal system as a whole or fall outside the Tribunal’s area of expertise, its interpretative decision was owed deference. However, the Supreme Court ruled the Tribunal’s

interpretation failed to pass the reasonableness standard. I shall return to this case shortly. [ 25 ] In Alberta (Information and Privacy Commissioner) v. Alberta Teachers’ Association , 2011 SCC 61 , [2011] 3 S.C.R. 654, an adjudicator had determined the Association had disclosed confidential information in breach of provincial legislation. On judicial review, the Association argued for the first time that the timelines set out in the legislation had not been observed and, therefore, the adjudicator lacked the jurisdiction to deal with the matter.

The Supreme Court rejected the argument and upheld the adjudicator’s “implicit” decision to waive the time limit on the basis the issue was not a constitutional or jurisdictional one, nor did it raise a question of central importance to the legal system as a whole.

Hence, deference was owed to the decision that would have been made, had the issue been raised before the adjudicator in a timely fashion. [ 26 ] However, the true precedential significance of the Alberta Teachers’ Association case may rest in the three sets of concurring reasons dealing with the question of whether the Court should retain a category of “true jurisdictional questions” for which the review standard would be correctness. Once again, the Supreme Court was speaking of instances in which a tribunal is interpreting its home statute or statutes closely connected to the tribunal’s functions.

The majority accepted that the category of “true jurisdictional question” should be retained, but ruled that there should be a presumption against interpretative rulings being classified as such. Reference was made to one example of a true jurisdictional question: the jurisdictional lines between two or more competing specialized tribunals examining the issue. In concurring reasons, Binnie J. would have eliminated the category of true jurisdictional question. Instead, if the issue before the reviewing court relates to the

interpretation or application of the tribunal’s home statute or a related statute, and the issue does not raise matters of legal importance beyond the statutory scheme under review, he reasoned the reviewing court should accord deference to the tribunal’s decision. Cromwell J. also rejected the use of a presumption when it comes to identifying true jurisdictional issues. But he also distanced himself from the approach of his colleague Binnie J. Instead, Cromwell J. shifted the emphasis to a search for legislative intent.

As an aside, Cromwell J’s approach is reminiscent of the once seminal decision of Beetz J. in U.E.S., Local 298 v. Bibeault . It was in that case that the “pragmatic and functional approach” was first promulgated, not for purposes of deciding the proper standard of review, but for determining whether or not an issue was truly jurisdictional. [ 27 ] I return to the reasons of Binnie J. in Alberta Teachers’ Association because they touch on a matter relevant to this appeal.

In addressing the question of whether to retain the category of jurisdictional issue, Binnie J. commented that the law of judicial review is beset with enough challenges and sufficiently complex without adding a further layer of difficulty by infusing a presumption into the deference framework. The difficulty of which Binnie J. wrote involves the application of the deferential standard of reasonableness. He posed the following question at paragraph 85 of his reasons: “What then is involved in a ‘reasonableness’ review of a tribunal’s

interpretation of its home statute?” In the same paragraph, Binnie J. responded: “It is clear that ‘the range of acceptable and rational solutions’ is context specific and varies with the circumstances including the nature of the issue under review.” Binnie J. goes on to contrast the approach taken in Mowat with the one taken in Khosa . As noted above, Mowat involved the

interpretation of a provision of the tribunal’s home statute: a pure question of law. Khosa involved a tribunal decision dealing with the question of whether an immigrant, convicted of criminal negligence causing death and subject to a deportation order, should be granted special relief and allowed to remain in Canada on “humanitarian and compassionate grounds”. The Supreme Court characterized the nature of the decision as discretionary in nature. It should be obvious that a discretionary decision does not raise a pure question of law.

It involves consideration of relevant factors and the underlying facts or what is normally labeled a question of mixed law and fact. [ 28 ] Binnie J. commented that the intensity of scrutiny applied in Mowat , and Dunsmuir as well, was not far removed from a correctness analysis. In Mowat , the Supreme Court addressed the interpretative issue in comprehensive reasons. It examined both text and context.

As to the context, a careful analysis was provided with respect to the legislative history of the provision in question, the stance of the Canadian Human Rights Commission as opposed to the Tribunal, consideration of parallel provincial and territorial legislation and, finally, the purpose of the legislation. By contrast, Binnie J. observed that in Khosa , the Court applied the reasonableness standard “with a much less aggressive attitude” (para. 86).

[29] It would be misleading not to acknowledge the observations of Binnie J. in Alberta Teachers’ Association(found at paras. 85-87) were expressly and unequivocally rejected by the majority on the ground that he was reintroducing, from hisconcurring reasons in Dunsmuir, the concept of variable degrees of deference (found at paras. 135-141 of Dunsmuir). However, havingregard to the Supreme Court’s application of the reasonableness standard in cases involving the

interpretation of a statute, that is to say,interpretative questions which involve a pure question of law, as occurred in Mowat, it is fair to ask how that Court’s analysis would havediffered had it adopted and applied the correctness standard?

In my respectful view, Mowat forces the question of whether there is anappreciable difference between the application of the reasonableness and correctness standards of review in cases involving aninterpretative issue which raises a pure question of law. [30] In my opinion, there is a discernible difference when it comes to the application of the two review standards.But there is also some overlap. Consequently, I also recognize that it is easy for a reviewing court to slide from the reasonablenessstandard into the arena of correctness when dealing with an interpretative issue that raises a pure question of law.

There is nothing in thejurisprudence which deals specifically with the application of the deferential standard of review to such questions. The Supreme Courtspeaks only of the reasonableness standard in general terms and without reference to its application to the three types of questions thatare subjected to judicial review. Every administrative lawyer has memorized paragraph 47 of Dunsmuir and the reference to thereasonableness standard being concerned mostly with the existence of justification, transparency and intelligibility within the decision-making process.

It is the reference to the decision-making process that warrants special consideration. [31] The law has imposed a methodology, or legal framework, for addressing interpretative issues and it matters notwhether the issue arises in the civil as opposed to administrative law context. In both instances, the reviewing court will be examining themethodology used to reach an interpretative result, including the question of whether the wording gives rise to “ambiguity”. As a generalproposition, where deference is owed and there is ambiguity giving rise to two plausible

interpretations, the one chosen by theadjudicative tribunal must be accorded deference. However, when it comes to the task of statutory

interpretation, it is settled law that thewords of an enactment must be read in their entire context and in their grammatical and ordinary sense, harmoniously with the scheme ofthe enactment, its object and the intention of the legislature or Parliament. Alternatively stated, the

interpretation of an enactment mustbe made according to a textual, contextual and purposive analysis in order to find a meaning which is harmonious with the enactment asa whole. But if the words are clear they must generally prevail. If they are not clear, the words must yield to an

interpretation that bestmeets the overriding purpose of the statute (see Celgene Corp. v. Canada (Attorney General), 2011 SCC 1, [2011] 1 S.C.R. 3, at para.21). For purposes of deciding this appeal, it is easy to maintain that the same approach is equally applicable, with appropriatemodifications, to the

interpretation of a contract such as the By-law in question. In other words, I am taking the same approach that Iwould have taken if the interpretative issue involved a provision of a collective agreement. [32] Interpretative methodology seeks to isolate the intent of the drafter(

s) and to lead the interpreter to aninterpretation consistent with that intent. Hence, any reviewing court will look to see whether the interpretative process followed by theinterpreter remains true to the legal principles which provide the legal framework and methodology for addressing interpretative issues.When it comes to the

interpretation of legislation, those principles are conveniently outlined in texts such as those authored by Ruth Sullivan (e.g., Statutory

Interpretation (Irwin Law, Concord, Ont., 1997); Sullivan on the Construction of Statutes, 5th ed. (Toronto:Thomson Carswell, 2008)). Critical to the interpretative task is whether the text generates a real and not perceived ambiguity. But theprovision in question cannot be read in isolation.

Otherwise the plain meaning rule would defeat the requirement to conduct both atextual and contextual analysis. [33] Assuming the interpretative methodology leads to a finding of a genuine ambiguity and two plausibleinterpretations, the deference doctrine tells the reviewing court to accord deference to the one chosen by the adjudicative body. This is ageneral proposition; one which remains true in the absence of compelling reasons for concluding otherwise.

I say this because there willbe times where the interpretative task is aided by the application of presumptions which the law has developed in regard to theinterpretation of both statutes and contracts. For example, in the case of a contractual document drafted by one party, there is apresumption or canon of construction that an ambiguity must be resolved against the drafter (see generally Beaulieu v. Province of NewBrunswick, 2003 NBCA 92, 266 N.B.R. (2d) 338 and AXA Insurance v. Rolfe, 2004 NBCA 14, 269 N.B.R. (2d) 16; however, as to thebinding effect of the rules of statutory

interpretation, see Maunsell v. Olins, [1975] A.C. 373 at 382 (H.L.), as discussed in AXAInsurance v. Rolfe, Bapoo v. Co-operators General Insurance Co., (ON CA), [1997] O.J. No. 5055 (C.A.) and asdealt with in Ruth Sullivan, Statutory

Interpretation at 32). [34] The relatively easy cases are those where there is an ambiguity and one of the

interpretations would lead to anabsurd or otherwise unacceptable result. Correlatively, if an adjudicator’s decision results in an

interpretation that is classified as anabsurdity, the application of the reasonableness standard will normally warrant intervention. For example, in The City of Saint John v.Saint John Firefighters’ Association, International Association of Fire Fighters, Local 771, 2011 NBCA 31, 371 N.B.R. (2d) 247, thisCourt set aside an arbitration board’s

interpretation of a collective agreement. The

interpretation would have meant that formerfirefighters in receipt of a permanent disability pension, and also retirees in receipt of a regular pension, would maintain a lifetime right toa job with their former employer should they ever decide to return to work or were declared no longer disabled. [35] The present case is problematic because Ms. Small and the reviewing court focused on the

interpretation of

Article 22.04 to the exclusion of

Article 22.01(1). However, the Corporation has consistently challenged the adjudicator’s

interpretation of

Article 22.04 by insisting that the interpretative approach requires both a textual and contextual analysis. In other words, the adjudicator should have looked at all of the relevant provisions of the By-law before deciding whether

Article 22.04 was ambiguous and whether the

interpretation which the Corporation had advanced would lead to an absurd or unacceptable result. But this is not the approach which the adjudicator took. The adjudicator adopted a two-step approach. First, he interpreted

Article 22.04 as though it were a standalone provision. Second, he interpreted

Article 22.01(1) in a manner which was consistent with the

interpretation already given to

Article 22.04. In my respectful view, this is the point where the adjudicator began his unfortunate descent into reviewable error. The adjudicator’s methodology deviated from accepted interpretative norms. Let me explain. [ 36 ] Standing alone, the adjudicator’s

interpretation of

Article 22.04 is reasonable in the sense it evinces an apparent ambiguity which is resolved by reasons which have a plausible and rational basis. Recall that

Article 22.04 provides that an employee who resigns or is dismissed is not eligible for a retirement allowance. On its face, the

Article admits of an ambiguity: Does the word “dismissed” include dismissals without cause or was it intended to apply only to dismissals for cause? The adjudicator concluded the word should be read down so as to apply only to dismissals for cause in order to avoid an absurdity or unacceptable result. The problem arises in the context of the hypothetical 30-year employee who is dismissed on the eve of retirement, without cause, and who would be denied the retirement allowance if the Corporation’s argument were to prevail.

While the interpretative argument may not lead to an absurd result, it does lead to an unacceptable one in the sense it rankles the fair-minded person’s perception of justice. Accordingly, it should come as no surprise that an adjudicator would read down the word “dismissed”. On the other hand, there is at least one argument that undermines the validity of the presumption that the hypothetical would lead to a manifestly unjust result.

Regardless of the wording of the By-law, the common law would not allow the Corporation to rely on the provisions of the By-law to deny payment of the retirement allowance for the following reason. If the only reason why the Corporation dismissed the employee on the eve of retirement was to avoid payment of the retirement allowance, the Corporation would be faced with the allegation of having acted in bad faith and of being in breach of the implied obligation of good faith performance, as explained by this Court in Doucet and Dauphinee v. Spielo Manufacturing Inc. and Manship , 2011 NBCA 44 , 372 N.B.R. (2d) 1.

In brief, an employer cannot rely on a contractual provision to establish a legal right to act in bad faith (see para. 10 of Spielo ). However, this reality does not undermine the adjudicator’s right to offer an

interpretation which avoids the need of the employee to resort to common law remedies to overcome the apparent injustice that would materialize should the hypothetical become a reality. [ 37 ] Regardless of how the common law might address the hypothetical posed, the adjudicator’s decision to read the word “dismissed” as applying only to dismissals for cause has a rational basis. It eliminates the need to rely on common law principles to reach what most would consider a fair or just result in circumstances where the Corporation’s strict reliance on the underlying contract could unfairly impact on the long-term employee. Arguably, the adjudicator’s

interpretation provides greater certainty than the application of common law principles, some of which are relatively novel. Therefore, if the only provision which the adjudicator had to interpret was

Article 22.04, I would not have been prepared to declare the adjudicator’s

interpretation “unreasonable”. But those are not our facts. The By-law contains other relevant provisions. The adjudicator was required to undertake a contextual analysis and to determine whether the

interpretation was reconcilable with other pertinent provisions and, in particular,

Article 22.01(1). [ 38 ] I pause here to note that the application judge offered another explanation with a view to undermining the relevance of the adjudicator’s hypothetical. In light of the above analysis and the analysis which follows, it is unnecessary for me to deal with Ms. Small’s argument that the application judge’s response to the adjudicator’s hypothetical is itself flawed. [ 39 ] As stated above, if this case were about the

interpretation of

Article 22.04 only, the adjudicator’s decision would have passed the threshold standard of reasonableness. Standing alone, the

Article is ambiguous as to whether the word “dismissed” applies to both dismissals for cause and without cause. The adjudicator rejected one

interpretation having regard to a legitimate consideration: to avoid an absurd or manifestly unjust result that would arise should the hypothetical posed materialize in a future case. However, the problem is that the adjudicator failed to examine other relevant provisions before settling on his

interpretation of

Article 22.04. Instead, the adjudicator proceeded to interpret

Article 22.01(1) in a manner consistent with his

interpretation of

Article 22.04. Recall that

Article 22.01(1) provides that an employee with the requisite number of years of continuous service and who dies, retires or is laid off is entitled to a retirement allowance.

Relying on common law jurisprudence, the adjudicator held that as the notion of “layoffs” has no technical meaning in the non-union setting, the term “laid off” could be interpreted to include “dismissals without cause”. [ 40 ] The adjudicator’s finding that the term “laid off” must be interpreted to mean “dismissals without cause” would force any disinterested observer to question the case law which the adjudicator relied on to sustain his understanding that the concept of a layoff in the non-union setting has no technical meaning. While it is true the application judge in Girling v.

Crown Cork stated as much, the observations were made in a factual context which requires elaboration. [ 41 ] It is an accepted feature of the collective agreement regimes that employees can be laid-off even though the unionized employer has made a formal announcement to permanently close a workplace. This is true because the workplace may not in fact close, or may be purchased by a third party. Girling was a case in which a non-unionized employee was dismissed following a plant closure.

The former employee argued he was entitled to a reduced early pension under the employer’s company pension plan, in addition to pay in lieu of reasonable notice. A provision of the pension plan expressly provided for an early pension in circumstances where the

employee was laid off due to a permanent plant closure. On application for

summary judgment, the employer argued the employee was terminated and not laid off and that, in any event, for an employee to be entitled to the reduced pension, the employee had to establish a right of recall, a right which the employee did not have. The application judge rejected the argument, while declining the invitation to follow a case which the employer had cited in support of its argument: Pawluk v. Crown Cork & Seal , March 5, 1992, unreported (Ont. Gen. Div.), and referred to at para. 15 of Girling .

In brief, the application judge in Girling concluded that for purposes of the pension plan, the employee was “on layoff” once his permanent employment ceased and, therefore, he was entitled to the reduced pension and also lost salary in lieu of notice (see Covered Bridge Golf and Country Club v. Schurman , 2009 NBCA 1 , 340 N.B.R. (2d) 168, dealing with the issue of the seasonal layoff of an employee who had been retained as the golf pro at a local club and see Nuala MacDonald-Ross v.

Connect North America , 2010 NBQB 250 , 364 N.B.R. (2d) 222, which deals with the application of s. 31 of Employment Standards Act , S.N.B. 1982, c. E-7.2, which applies to non-union employment settings and deals with the matter of layoffs and reasonable notice). [ 42 ] I agree with the Corporation’s argument that the adjudicator’s reliance on Girling v. Crown Cork is misplaced. As is evident, Girling was not a case in which the court was being asked to provide meaning to the concept of a “layoff” under the pension plan.

More importantly, Girling is a decision in which the court recognized the ordinary meaning of the term “layoff”, as used in the company’s pension plan, even though employees had no legal right of recall. Similarly, the term “laid off” found in

Article 22.01(1) does not admit of ambiguity or require reinterpretation. Accordingly, the adjudicator’s misapplication of Girling constitutes reviewable error. I hasten to add that the grievance in the present case was not pursued on the basis that Ms. Small was laid off rather than being dismissed for cause, thereby qualifying for the retirement allowance under

Article 22.01(1). [ 43 ] In conclusion, the adjudicator’s reasoning for adopting a broad

interpretation of the term “layoff” found in

Article 22.01(1) lacks a reasonable foundation, so far as that foundation rested on the application of Girling . But the

interpretation of that

Article is also flawed because the adjudicator’s analysis makes no reference to the definition of “layoff” found in

Article 2.01(k). This is a convenient point to reproduce all of the provisions of the By-law that reasonably bear on the issue at hand.

They provide the foundation for a contextual analysis which lies at the core of any interpretative analysis: 2.01(k) “layoff” means a person whose employment has been terminated because of lack of work or because of the discontinuance of a function; 22.01(1) An employee with five (5) or more years continuous employment who retires, dies or is laid off, is entitled to a retirement allowance. […]; 22.02 Where an employee in receipt of a retirement allowance […] is subsequently re-employed by the Corporation, any future retirement allowance is reduced […]; 22.03 An employee who “retires” is one who retires under the provisions of the Public Service Superannuation Act. 22.04 An employee who resigns or is dismissed is not eligible for a retirement allowance. 22.05 Where an employee is laid off, the retirement allowance shall be paid in a lump sum twelve (12) months after the date of lay- off, provided the employee has not been rehired in the Public Service. 25.01 On rehire, the employee is to be paid at least the rate of pay being received at the time of layoff unless the employee agrees to accept an appointment at a lesser rate of pay. [ 44 ] The By-law is clear.

The concept of “layoff” has a meaning, even though the employment relationship is not governed by a collective agreement. It is equally clear the By-law’s pertinent provisions admit of no apparent ambiguity. In brief, an employee with the requisite years of continuous service is entitled to a retirement allowance if he or she retires, dies or is laid off. However, no allowance is payable to those who resign or who are dismissed. A “layoff” is defined to apply to those whose employment has been “terminated” because of a lack of work or discontinuance of a function.

Moreover, the definition of “layoff” is exhaustive, as the definition begins with the word “means”. Accordingly, it was the drafter’s intention that the definition would not be varied or supplemented (see Ruth Sullivan, Statutory

Interpretation at 80-81). Had the drafter intended otherwise, the definition of “layoff” would have employed the word “includes” to signify the adoption of a non-exhaustive definition. Within this narrow context, there may be instances where there is a disagreement as to whether an employee has been laid off, as outlined in

Article 2.01(k), or dismissed without cause. But that was not the case presented to the adjudicator.

[ 45 ] In

summary, there was no reasonable basis upon which the adjudicator could read into the definition of “layoff” the concept of “dismissals without cause”. When read collectively, the relevant provisions of the By-law are clear and nothing in the common law jurisprudence supports the contrary. Moreover, once the adjudicator’s

interpretation of

Article 22.01(1) was found to be flawed, the

interpretation given earlier to

Article 22.04 had to fall, so that the two provisions could be read harmoniously. [ 46 ] Some final comments are in order. In drafting the By-law, it is evident the Corporation made a conscious decision to deny the retirement allowance to those employees who were dismissed with or without cause. From an employer’s perspective, the policy rationale underscoring this approach is obvious. Employees are often dismissed without cause in order to avoid the types of issues that would have to be addressed if the dismissal were for cause and litigation ensued.

Normally, it is cost efficient to provide compensation for lost pay in lieu of reasonable notice. This is why one cannot automatically assume that an employee who is dismissed without cause merits a retirement allowance. In the present case, the terms of the employment contract (the By-law) avoid this issue by restricting the allowance to those who retire, die or are laid off. [ 47 ] In conclusion, the adjudicator’s decision fails to meet the deferential standard of reasonableness. His interpretative analysis is flawed by reason of the failure to conduct a contextual analysis. It is also flawed because the

interpretation of

Article 22.01(1) is not supported by the jurisprudence cited. Finally, the

interpretation is flawed because of the failure to recognize that the By-law provides an exhaustive definition for the term “layoff”. Hence, when the relevant provisions are read contextually, there is no ambiguity. The term “dismissal” found in

Article 22.04 must be read together with the other provisions and when this is done, it is evident that the drafter intended that the word “dismissed” found in

Article 22.04 would apply to both dismissals for and without cause. [ 48 ] I would dismiss the appeal with costs of $2,500. ____________________________________ J.T. ROBERTSON, J.A. WE CONCUR: ____________________________________ B. RICHARD BELL, J.A. _____________________________________ BRADLEY V. GREEN, J.A.