A claimant has to exhaust its appeal rights in the administrative process before pursuing an application for judicial review

Toth Equity Limited v. Ottawa (City), 2011 ONCA 372 is a precedent in administrative law and appeals. It holds that a claimant has to exhaust its appeal rights in the administrative process before pursuing an application for judicial review. The Court holds:

The Requirement to Exhaust Adequate, Alternative Remedies

[33]         The Divisional Court held that even if Toth had the right to appeal City Council's "non-decision" to the ARB, Toth was not required to exhaust that right before pursuing its application for judicial review. 

[34]         With respect, the Divisional Court erred in principle in so concluding.  It is an important principle of administrative law that, absent exceptional circumstances, a party must exhaust any available adequate alternative remedy within the administrative process before pursuing an application for judicial review: see Harelkin v. University of Regina, [1979] 2 S.C.R. 561. 

[35]         The Canadian courts have enforced this general principle vigorously.  In the recent decision of C. B. Powell Ltd. v. Canada (Border Services Agency), 2010 FCA 61, at paras. 31-32, Stratas J.A. of the Federal Court of Appeal, usefully describes the principle and its rationale. 

[31]     Administrative law judgments and textbooks describe this rule in many ways: the doctrine of exhaustion, the doctrine of adequate alternative remedies, the doctrine against fragmentation or bifurcation of administrative proceedings, the rule against interlocutory judicial reviews and the objection against premature judicial reviews.  All of these express the same concept: absent exceptional circumstances, parties cannot proceed to the court system until the administrative process has run its course.  This means that, absent exceptional circumstances, those who are dissatisfied with some matter arising in the ongoing administrative process must pursue all effective remedies that are available within that process; only when the administrative process has finished or when the administrative process affords no effective remedy can they proceed to court.  Put another way, absent exceptional circumstances, courts should not interfere with ongoing administrative processes until after they are completed, or until the available, effective remedies are exhausted.

[32]     This prevents fragmentation of the administrative process and piecemeal court proceedings, eliminates the large costs and delays associated with premature forays to court and avoids the waste associated with hearing an interlocutory judicial review when the applicant for judicial review may succeed at the end of the administrative process anyway… Further, only at the end of the administrative process will a reviewing court have all of the administrative decision-maker's findings; these findings may be suffused with expertise, legitimate policy judgments and valuable regulatory experience. ..  Finally, this approach is consistent with and supports the concept of judicial respect for administrative decision-makers who, like judges, have decision-making responsibilities to discharge.  [citations omitted]