The Balance of Convenience in Judicial Review Applications—A Lesson in the Cannabis Space

Written By Gavin Finlayson and Ethan Schiff

In judicial review applications, the reviewing court's decision to grant a remedy is discretionary, even if the applicant makes out its case on the merits (although typically the court will grant remedial relief where the case is made on the merits). As well, the applicant is generally limited to the evidence and materials that were before the administrator, and (subject to limited exceptions—such as evidence going to bias) leave is required before fresh evidence is adduced.

How does the reviewing court employ its remedial discretion when the relief sought may adversely affect the rights of third parties, and what role does extrinsic evidence play in the exercise of that discretion? These issues played out recently in Reynolds v Registrar (Alcohol and Gaming Commission), 2019 ONSC 5571, where the Ontario Divisional Court emphasized the broad range of factors courts may consider in exercising discretion to grant an administrative law remedy. The decision confirms that it pays to be proactive when another party's judicial review may affect your clients' rights. Judicial review applicants must also carefully consider filing evidence of prejudice if the requested relief may affect the rights of third parties.

In Reynolds, the applicants sought judicial review of the decision of the Registrar of the Alcohol and Gaming Commission of Ontario (AGCO) to disqualify them from applying for a limited number of cannabis retail licences available in Ontario, after they won the right to apply through the AGCO's second cannabis licence lottery. The application revolved around interpretation of the AGCO's rules requiring applicants to deliver an original letter of credit within five days of being notified that they were among the winners of the lottery. The applicants argued they did not receive notification from the AGCO on the notification date because the emails sent by the AGCO to the email addresses provided by the applicants "bounced back," and subsequent successful attempts to notify them should be taken to extend the time period for compliance. The Registrar held that the applicants did not submit their original letters of credit within five days of the original emails being sent and were accordingly disqualified. The applicants sought an order of certiorari quashing the Registrar's disqualification decision and reinstating them to the "selected list", which would necessitate removing the "next in line" third parties who the AGCO invited to apply for licences after the applicants were held to be non-compliant.

The Divisional Court held that the AGCO Registrar's decision to disqualify the applicants was reviewable on a "reasonableness" standard (i.e., the Court was not entitled to substitute its view for that of the Registrar so long as the Registrar's decision was not unreasonable) and went on to find that the Registrar's decision was reasonable. According to the Divisional Court, this was largely because the applicants were aware of the key dates and timelines, provided ineffective contact information, and did not explain why their email addresses were apparently faulty and why they could not be reached by telephone.

Although this conclusion was sufficient to dispose of the application, the Court went on to consider whether it would have granted the remedy sought, quashing the decision below, if the applicants had made out their case on the merits. In assessing the balance of convenience to determine whether granting the requested remedy was advisable, the Court considered the impact of the requested remedy on the "next in line" third parties. These third parties intervened in the application and adduced evidence of the substantial, irrevocable prejudice that would result if the court granted the applicants' requested remedy (such as making investments based on their inclusion on the selected list). By contrast, the applicants filed no evidence of prejudice resulting from their own disqualification. The Court also compared the conduct of the intervenors (who were "truly innocent") with that of the applicants (who, among other things, had no explanation as to why their email addresses did not work). The Court held that the balance of convenience weighed against granting the requested remedy, even if the case had been made out on the merits.

Reynolds demonstrates the saliency of impacts of proposed administrative law remedies beyond the main parties. Applicants who seek relief that may affect third parties should consider filing evidence to support the balance of convenience. Parties who may be affected by relief sought on a judicial review should consider intervening in the proceedings and seeking to file evidence, even though they are not named in the style of cause.

Gavin Finlayson and Ethan Schiff of Bennett Jones LLP acted for one of the "next in line" selected third party interveners.

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