Administrative Hearings and Disclosure

Today's Court of Appeal decision in 1657575 Ontario Inc. v. Hamilton (City), 2008 ONCA 570 provides useful guidance regarding fairness and the need to make full disclosure.

In short, where there has been a material failure to make full disclosure an administrative determination will be so tainted as to be set aside without considering whether the result would have been the same had there been no unfairness.

The Court writes:

b) Procedural fairness and the disclosure obligation

[24] The extent of the procedural rights encompassed in the duty of fairness depends on the content of the particular statute or regulation and on the nature of the rights affected. The criteria to be considered in determining the content of the duty of procedural fairness include:

(a) the nature of the decision being made and the process followed in making it;
(b) the nature of the statutory schemes and the terms of the statute pursuant to which the body operates;
(c) the importance of the decision to the individual affected;
(d) the legitimate expectations of the person challenging the decision; and
(e) choices of procedure made by the agency itself.
See Baker v. Canada (Minister of Citizenship and Immigration), [1999] 2 S.C.R. 817 at paras. 21-27.

[25] Disclosure is a basic element of natural justice at common law and, in the administrative context, procedural fairness generally requires disclosure unless some competing interest prevails. As discussed in Jones & de Villars, Principles of Administrative Law, 4th ed. ( Scarborough, Ont.: Carswell, 2004) at 258:

The courts have consistently held that a fair hearing can only be had if the persons affected by the tribunal's decision know the case to be made against them. Only in this circumstance can they correct evidence prejudicial to their case and bring evidence to prove their position. Without knowing what might be said against them, people cannot properly present their case.
See also May v. Ferndale Institution, [2005] 3 S.C.R. 809 at paras. 92-93.

[26] As noted by Lane J. in Waxman v. Ontario (Racing Commission) (2006), 216 O.A.C. 353 at para. 11 (Div. Ct.), the failure to make proper disclosure has the effect of rendering the process "irretrievably tainted with unfairness from the outset."

[27] In cases involving breaches of procedural fairness, the court will generally set aside the decision without considering whether the result would have been the same had there been no unfairness. This principle was recognized by the Supreme Court in Cardinal v. Director of Kent Institution, [1985] 2 S.C.R. 643 at 661, in which LeDain J. rejected the suggestion by counsel that a relevant consideration in the procedural fairness analysis is whether the holding of a hearing would have persuaded authorities to change their minds on the decision made:
[T]he denial of a right to a fair hearing must always render a decision invalid, whether or not it may appear to a reviewing court that the hearing would likely have resulted in a different decision. The right to a fair hearing must be regarded as an independent, unqualified right which finds its essential justification in the sense of procedural justice which any person affected by an administrative decision is entitled to have. It is not for the court to deny that right and sense of justice on the basis of speculation as to what the result might have been had there been a hearing.

[28] In my view, therefore, the central issue for consideration in this case is the impact that the failure to make disclosure had on the appearance of justice and the fairness of the hearing. I need not consider whether, had full disclosure been provided, the appellant would still have been unable to persuade the licensing committee members to reach a different decision.