The Ontario Conference of Judges v. Her Majesty the Queen in right of the Province of Ontario as Represented by the Chair of Management Board

Her Majesty the Queen in right of the Province of Ontario as Represented by the Chair of Management Board v. The Ontario Conference of Judges et al.

[Indexed as: Ontario Conference of Judges v. Ontario (Chair, Management Board)]

71 O.R. (3d) 528

[2004] O.J. No. 2643

Court File Nos. 74/04 and 138/04

Ontario Superior Court of Justice, Divisional Court, O'Driscoll, Then and Ferrier JJ.

June 21, 2004

Administrative law -- Judicial review -- Standard of review -- Dismissal of application for judicial review on grounds of delay -- Dismissal of application for judicial review on grounds that applicant did not exhaust internal remedies -- Provincial Judges Remuneration Commission -- Fifth Triennial Commission recommending salary increases -- Government applying for judicial review -- Ontario Conference of Judges applying for order in nature of mandamus requiring Government to implement recommendations -- Government's application dismissed -- Ontario Conference of Judges' application granted -- Courts of Justice Act, R.S.O. 1990, c. C.43, s. 51.13(3).

Courts -- Judges -- Remuneration -- Judicial review -- Standard of review -- Dismissal of application for judicial review on grounds of delay -- Dismissal of application for judicial review on grounds that applicant did not exhaust internal remedies -- Provincial Judges Remuneration Commission -- Fifth Triennial Commission recommending salary increases -- Government applying for judicial review -- Ontario Conference of Judges applying for order in nature of mandamus requiring Government to implement recommendations -- Government's application dismissed -- Ontario Conference of Judges' application granted -- Courts of Justice Act, R.S.O. 1990, c. C.43, s. 51.13(3).

The process for reviewing the remuneration of Ontario Court judges is established in a Framework Agreement between three associations representing Ontario Court judges (collectively, the Conference of Judges ("OCJ")) and Her Majesty the Queen in right of Ontario as represented by the Chair of Management Board (the "Government"). The Framework Agreement is enacted as a Schedule and is part of the Courts of Justice Act. Under the Framework Agreement, the Provincial Judges Remuneration Commission reviews Ontario Court judges' compensation every three years. Paragraph 27 of the Framework Agreement provides that the Commission recommendations "shall have the same force and effect as if enacted by the Legislature" and shall be implemented by the Lieutenant Governor in Council by order-in- council within 60 days of the delivery of the Commission's Report. However, within strict time limits, the Framework Agreement set out a mechanism for either party to request the Commission to reconsider its recommendat ions.

The Fifth Triennial Commission released its reasons and recommendations on December 5, 2003. The majority of the Commission recommended a 21 per cent salary increase over three years (2001-2003) plus benefit improvement and [page529] representation costs. The Commission's recommendations were not implemented within 60 days and, after several inquiries by counsel for OCJ about the matter, on February 16, 2004, OCJ applied for a declaration that the Government had breached its statutory obligation to implement the Commission's recommendations and for an order in the nature of mandamus requiring the Government to immediately implement the recommendations. On March 12, 2004, the Government responded with an application for judicial review. The Government alleged that the Commission erred in jurisdiction and in law by, amongst other things, making the avoidance of the creation of, or perception of, a two-tiered court system the determinative factor in its analysis. The Government argued that the Comm ission based Ontario Court judges' salaries on the salaries paid to Superior Court judges (parity) instead of applying the relevant and appropriate considerations as required under the Framework Agreement.

Held, the application of the OCJ should be granted; the application of the Government should be dismissed.

Contrary to the submission of the OCJ, the Commission's recommendations do not constitute legislation barring judicial review. The recommendations do not come into effect until implemented by order-in-council. The Commission exercises a statutory power of review and may be subject to judicial review. Applying the pragmatic and functional approach to determining the standard of a review of the decisions of an administrative tribunal yielded the conclusion that, in the immediate case, the appropriate standard of review for the Commission was that of patent unreasonableness. However, in the immediate case, it was not necessary to make a determination of the Government's claim that the Commission erred in law or in jurisdiction; rather, the Government's application should be dismissed on the grounds of its failure to exhaust the remedial provisions of the Framework Agreement and on the ground of delay.

It was not the case that a party to the Framework Agreement must always exhaust internal remedies before seeking judicial review. There may be exceedingly rare instances in which resort to the court could be said to be appropriate without first exhausting internal remedies. Every reasonable measure should be taken to avoid the necessity of having these matters reviewed judicially and, except in exceedingly rare circumstances, internal remedies should be first exhausted. In this case, the Government, without any explanations, failed to seek reconsideration notwithstanding that all of the grounds for judicial review came within the Commission's powers to reconsider. In this case, it was appropriate to dismiss the application by the Government on the ground of its failure to exhaust internal remedies.

The application should also be dismissed on the ground of delay. The Government delayed close to a year in agreeing to a chair of the Commission. It did not launch its application until about a month after the OCJ commenced its application. Despite urgings from the OCJ, the Government took no steps within the 60 days. About five weeks after the 60 days expired, the Government launched its application.

Accordingly, the Government's application should be dismissed and the OCJ's application should be granted.

APPLICATION for judicial review of the Fifth Triennial Report of the Provincial Judges Remuneration Commission.

Cases referred to Bodner v. Alberta (2002), 222 D.L.R. (4th) 284, [2003] 9 W.W.R. 637, 36 C.P.C. (5th) 1, 2002 ABCA 274, 16 Alta. L.R. (4th) 244, [2002] A.J. No. 1428 (C.A.); [page530] Dr. Q. v. College of Physicians and Surgeons of British Columbia, [2003] 1 S.C.R. 226, 223 D.L.R. (4th) 599, 302 N.R. 34, [2003] 5 W.W.R. 1, 2003 SCC 19, 11 B.C.L.R. (4th) 1, [2003] S.C.J. No. 18; Harelkin v. University of Regina, 1979 18 (SCC), [1979] 2 S.C.R. 561, 96 D.L.R. (3d) 14, 26 N.R. 364, [1979] 3 W.W.R. 676; Law Society of New Brunswick v. Ryan, [2003] 1 S.C.R. 247, 257 N.B.R. (2d) 207, 223 D.L.R. (4th) 577, 302 N.R. 1, 674 A.P.R. 207, 2003 SCC 20, 31 C.P.C. (5th) 1, [2003] S.C.J. No. 17; O.P.S.E.U. v. Ontario (Ministry of the Environment) (1996), 1996 12469 (ON SCDC), 141 D.L.R. (4th) 575, [1996] O.J. No. 4140 (Div. Ct.); Ontario Nurses' Association and Peterborough Civic Hospital (Re) (1982), 1982 3274 (ON SCDC), 132 D.L.R. (3d) 415 (Ont. H.C.J.); Reference re Remuneration of the Judges of the Provincial Court of Prince Ed ward Island, 1997 317 (SCC), [1997] 3 S.C.R. 3, 121 Man. R. (2d) 1, 156 Nfld. & P.E.I.R. 1, 150 D.L.R. (4th) 577, 217 N.R. 1, 483 A.P.R. 1, 158 W.A.C. 1, [1997] 10 W.W.R. 417, 46 C.R.R. (2d) 1, 118 C.C.C. (3d) 193, 11 C.P.C. (4th) 1; Victoria Hospital Corp. v. London & District Service Workers Union (1996), 97 O.A.C. 321, [1996] O.J. No. 4009 (Gen. Div.)

Statutes referred to Courts of Justice Act, R.S.O. 1990, c. C.43, ss. 51.13, 53; Sched., paras. 2, 6, 7, 8, 11, 13, 17, 20, 22, 25, 27, 28, 34, 35-40

Authorities referred to Fifth Triennial Report of the Provincial Judges Remuneration Commission ("Davie Report") (Toronto: The Commission, 2003) (Chair: Louisa M. Davie) Report on the Review of the 2003-04 Fiscal Outlook ("Erik Peters Report") (Toronto: Queen's Printer for Ontario, 2004)

Janet E. Minor and Sean Hanley, for the Government of Ontario. C. Michael Mitchell, Steven Barrett and Charlene Wiseman, for respondent The Ontario Conference of Judges.

[1] BY THE COURT: -- The applicant, Her Majesty the Queen in right of the Province of Ontario as represented by the Chair of Management Board (the "Government"), applies for judicial review of the Fifth Triennial Report of the Provincial Judges Remuneration Commission (the "Commission"). The Government requests that the Commission's Report be set aside and that the Commission be directed to reconsider its recommendations in light of the court's reasons for decision. The Commission's binding Report awards Ontario Court judges a 21 per cent salary increase over three years -- April 1, 2001, 2002 and 2003 -- plus benefit improvements and representation costs. The salary increase is in addition to the 28 per cent increase for the preceding three years already provided to judges as a result of the Commission's Fourth Triennial Report in 1999. [page531]

[2] The Government claims that the Commission erred in jurisdiction and in law in treating what it described as its "desire to avoid the creation of, or perception of, a two- tiered court system" as the determinative factor in its analysis. The Government argues that in doing so the Commission based Ontario Court judges' salaries on the salaries paid to Superior Court judges (parity) instead of applying the relevant and appropriate considerations as required under [para] 25 of the Framework Agreement referred to below.

[3] The Government argues that the Commission erred in jurisdiction and in law in failing to comply with its statutory mandate to give "every consideration" to prevailing economic conditions in the province and the overall state of the provincial economy, including information respecting the province's fiscal outlook that emerged in October 2003, and which remained current up to the release of the Commission's Report on December 5, 2003.

[4] Further, it is the Government's position that the Commission breached the requirements of procedural fairness and natural justice in considering new economic information and in drawing conclusions on the significance of "newspaper reports" that referred to "an increased deficit" without requesting further submissions from the parties.

[5] In a separate application, commenced prior to the Government's application, the Ontario Conference of Judges ("OCJ") seeks a declaration that the Government has breached its statutory obligation to implement the Commission's recommendations, and for an order in the nature of mandamus requiring the Government to immediately implement the recommendations. The two applications were argued together. Counsel agreed that the Government's application should be argued first. On March 16, 2004, these applications for judicial review came before another panel of this court: MacFarland, Then and McCombs JJ., Ontario Conference of Judges v. Ontario (Chair, Management Board), [2004] O.J. No. 1297 (S.C.J.). That panel's endorsement read, in part: "Because of the government's cavalier approach which necessitated the request" by the OCJ for adjournment until April 7, 2004, the court awarded complete indemnity costs to the OCJ in the fixed amount of $34,195.

The Framework Agreement

[6] The Provincial Judges Remuneration Commission reviews Ontario Court judges' compensation, including salaries, pensions and other benefits, every three years. The Commission and the process for reviewing judges' remuneration are established in a Framework Agreement between three Associations representing [page532] Ontario Court judges (now known collectively as the Conference of Judges ("OCJ")) and Her Majesty the Queen in right of Ontario as represented by the Chair of Management Board.

(Schedule to the Courts of Justice Act, R.S.O. 1990, c. C.43, as amended S.O. 1994, c. 12, s. 16 (the "Framework Agreement"))

[7] Significantly, under s. 51.13(3) of the Courts of Justice Act, the Framework Agreement is enacted as a Schedule to, and forms part of, the Courts of Justice Act:

51.13(1) The committee known as the Provincial Judges Remuneration Commission in English and as Commission de rémunération des juges provinciaux in French is continued.

(2) The composition and functions of the Commission are set out in Appendix A of the framework agreement set out in the Schedule to this Act.

(3) The framework agreement forms part of this Act.

Courts of Justice Act, supra, s. 51.13

[8] The purpose of the Framework Agreement is set out in [para.] 2, which provides:

2. The purpose of this agreement is to establish a framework for the regulation of certain aspects of the relationship between the executive branch of the government and the Judges, including a binding process for the determination of Judges' compensation. It is intended that both the process of decision-making and the decisions made by the Commission shall contribute to securing and maintaining the independence of the Provincial Judges. Further, the agreement is intended to promote co-operation between the executive branch of the government and the judiciary and the efforts of both to develop a justice system which is both efficient and effective, while ensuring the dispensation of independent and impartial justice.

[9] Paragraph 13 of the Agreement establishes the scope of the Provincial Judges Remuneration Commission's inquiry:

13. The parties agree that in 1995, and in every third year after 1995, the Commission shall conduct an inquiry respecting:

(a) the appropriate base level of salaries,

(b) the appropriate design and level of pension benefits; and

(c) the appropriate level of and kind of benefits and allowances of provincial judges.

[10] Paragraph 25 sets out mandatory criteria to which the Commission is required to give "every consideration" in making its recommendations:

25. The parties agree that the Commission in making its recommendation on provincial judges' compensation shall give every consideration to, but not limited to, the following criteria, recognizing the purposes of this agreement as set out in paragraph 2: [page533]

(a) the laws of Ontario,

(b) the need to provide fair and reasonable compensation for judges in light of prevailing economic conditions in the province and the overall state of the provincial economy,

(c) the growth or decline in real per capita income,

(d) the parameters set by any joint working committees established by the parties,

(e) that the Government may not reduce the salaries, pensions or benefits of Judges, individually or collectively, without infringing the principle of judicial independence,

(f) any other factor which it considers relevant to the matters in issue.

[11] [Paragraph] 27 of the Agreement provides that Commission recommendations for salaries and benefits other than pensions "shall have the same force and effect as if enacted by the Legislature" and shall be implemented by the Lieutenant Governor in Council by order-in-council within 60 days of the delivery of the Commission's Report.

[12] Recommendations on pensions are not binding but are presented to Management Board of Cabinet for consideration. Management Board may accept the recommendations on pensions in whole or in part or provide reasons if the recommendations are not implemented: Reference re Remuneration of the Judges of the Provincial Court of Prince Edward Island, 1997 317 (SCC), [1997] 3 S.C.R. 3, 150 D.L.R. (4th) 577 ("P.E.I. Reference") at paras. 175-80. The Commission did not address pensions in its Fifth Triennial Report and pensions are not in issue in these applications. Although pensions were not discussed at the Fifth Triennial Commission, pensions were in issue at the Fourth Triennial Commission. See: the judgment of the Divisional Court (2002), 2002 62446 (ON SCDC), 58 O.R. (3d) 186, [2002] O.J. No. 533, affirmed by the Court of Appeal for Ontario (2003), 2003 50088 (ON CA), 67 O.R. (3d) 641, [2003] O.J. No. 4155.

[13] The Provincial Judges Remuneration Commission consists of one person appointed by the OCJ representing Ontario Court judges, one person appointed by the Lieutenant Governor in Council, and the head of the Commission appointed jointly by the parties. The members of the Commission serve a three-year term and may not be themselves judges or public servants.

(Framework Agreement, [paras.] 6, 7, 11)

[14] The Framework Agreement specifically provides not only that Commission recommendations on salaries and benefits other than pensions are binding, but also that they must be implemented within 60 days of the delivery of the Report.

(Framework Agreement, [para.] 27) [page534]

[15] However, the Framework Agreement sets out a detailed and specific mechanism for either party to request reconsideration by the Commission of its decision, on various grounds. Following a Commission decision, where one of the parties believes that the Commission has failed to deal with any matter properly arising from the inquiry, or that there is an error apparent on the report, that party can seek reconsideration within strict time limits. [Paragraph] 28 of the Framework Agreement provides:

28. The parties agree that the Commission may, within thirty days, upon application by the Crown or the judges' associations made within ten days after the delivery of its recommendations and report pursuant to paragraph 15, subject to affording the Crown and the judges' associations the opportunity to make representations thereupon to the Commission, amend, alter or vary its recommendations and report where it is shown to the satisfaction of the Commission that it has failed to deal with any matter properly arising from the inquiry under paragraph 13 or that an error relating to a matter properly under paragraph 13 is apparent on the report, and such decision is final and binding on the Crown and the judges' associations, except those related to pensions.

[16] Significantly, [para.] 34 of the Framework Agreement also accords the parties the specific right to seek reconsideration on matters relating to jurisdiction or process:

34. The parties agree that if disputes arise as to whether a recommendation is properly the subject of an inquiry referenced in paragraph 13, or whether the recommendation falls within the parameters of paragraph 27 or 30, or with respect to the process, either party may require the Commission to consider the matter further.

A request for reconsideration under [para.] 34 must be made within one month of the Commission's report. The Commission must present its reconsideration decision to the Chair of Management within one month thereafter, and the decision on jurisdiction or process "shall be given every consideration and very great weight" by Management Board of Cabinet. Moreover, the Minister must proceed to implement the Commission's recommendations even if an application for reconsideration under [para.] 34 is underway, unless the matter in dispute directly impacts the remaining items.

(Framework Agreement, [paras.] 35-40)

[17] The Government did not make any application under any of these reconsideration provisions.

The Fifth Triennial Commission

[18] The Fifth Triennial Commission ("the Davie Commission" or "the Commission") was comprised of Louisa M. Davie, Chair, Douglas K. Gray, the Government's nominee, and John C. Murray, [page535] the OCJ's nominee. The commencement of the Commission process was long delayed, for almost a year, by the failure of the Government to act promptly to agree upon a chair. The Commission finally began its inquiry in November 2002 and issued its report (the "Davie Report") on December 5, 2003, which due to no fault on the part of the Commission was more than two years later than contemplated under the Framework Agreement.

[19] The Commission released its reasons and recommendations on December 5, 2003. The majority of the Commission made the following recommendations regarding salaries:

Commencing April 1, 2001 the annual salary shall be $185,000.00 inclusive of the IAI calculated in accordance with section 45 of the Framework Agreement.

Commencing April 1, 2002 the annual salary shall be $198,000.00 inclusive of the IAI calculated in accordance with section 45 of the Framework Agreement.

Commencing April 1, 2003, the base salary shall be $202,500.00 exclusive of the IAI which shall be calculated in accordance with section 45 of the Framework Agreement and added to that base salary.

Fifth Triennial Report, p. 34

[20] With respect to benefits, the majority of the Commission recommended, inter alia, that:

a. the coverage for the Hearing Aid Benefit be increased to $3,000 every five (5) years and the current deductible and premium co-payment amounts be maintained;

b. the coverage for the Vision Benefit be expanded to include reimbursement of laser eye surgery (as the Government had agreed), and that the current co-payment of premiums be maintained but that coverage be increased to $450 every two (2) years;

c. the benefits for Out of Province Medical Coverage be updated as detailed in the Government's reply brief. In addition, the Commission recommended the addition of Global Medical Assistance for active and retiree judges.

d. Acupuncturist and Masters of Social Work be covered practitioners under the Paramedical Benefits (as the Government had agreed);

e. the Ministry of the Attorney General's Employee and Family Assistance Plan be amended to include judges (as the Government had agreed); [page536]

f. Accidental Death Benefits be increased to $250,000 for full- time judges and $175,000 for part-time and per diem judges (as the Government had agreed);

g. the restriction that automatically designates the spouse or other person who qualifies for judges' survivor allowance as the designated beneficiary for Life Insurance be removed (as the Government agreed), and that the Life Insurance benefit for retired judges be increased to $6,000; [and]

h. the Vacation Carry Over provisions be amended to reflect the increased vacation recommended by the Fourth Triennial Commission, and that judges be allowed to carry over their full vacation entitlement for a one-year period.

Fifth Triennial Report, pp. 45-48

[21] The majority of the Commission made the above noted recommendations concerning benefits. They are not in issue in this application. Many of the benefit improvements were suggested by and/or agreed to by the Government in its written submissions. In addition, the Government agreed before the Commission to make any benefits payable retroactive to the commencement of the 2002 fiscal year, i.e. as of April 1, 2002.

[22] The Commission's report was delivered on December 5, 2003. On January 5, 2004, counsel for the OCJ wrote to counsel for the Government inquiring as to when the Commission's recommendations concerning salaries and benefits would be implemented. Counsel for the Government advised that the letter had been forwarded to his client.

[23] The 60-day deadline for the implementation of the Commission's recommendations was reached on February 3, 2004. As of that date, the Government had not responded to the January 5, 2004 letter and had not implemented the recommendations as required by the legislation.

[24] Having received no response from the Government, on February 3, 2004, counsel for the OCJ sent a letter to Kevin Wilson, Assistant Deputy Minister, Human Resources Division, Management Board of Cabinet asking Mr. Wilson to advise when the Government would implement the Commission's salary and benefits recommendations.

[25] By mid-day on February 13, 2004, the Government had still not responded. OCJ counsel then wrote to the Hon. Gerry Philips, Chair of the Management Board, with a copy to, inter alia, the Hon. Michael Bryant, Attorney General of Ontario, noting the Government's failure to implement the recommendations [page537] of the Commission, reminding them of the Government's legal obligation to implement the recommendations, and requesting a meeting with either or both of these parties on an urgent basis in order to reach a quick and amicable resolution.

[26] Subsequently, on February 13, 2004, Mr. Wilson sent a letter to counsel for the OCJ in which he stated that "the Government is giving full consideration of the recommendations of the Fifth Commission", that it expected to deal with the matter in the near future, and that "we will inform you of the Government's decision regarding the Judges' compensation package."

[27] Counsel for the OCJ replied to Mr. Wilson's letter on February 16, 2004, noting that, contrary to the clear implication in the letter, the Government did not have the discretion to consider whether or not to implement the Commission's recommendations regarding salaries and benefits, but was statutorily obligated to implement those recommendations within 60 days of the release of the Commission's Report (December 5, 2003).

[28] By notice of application issued February 16, 2004, the OCJ commenced its proceeding. The Government's application was issued March 12, 2004.

Summary of the Positions of the Parties

[29] As noted above, the Government submits that the Commission erred in jurisdiction and in law in treating what it described as its "desire to avoid the creation of, or perception of, a two-tiered court system" as the determinative factor in its analysis, and basing Ontario Court judges' salaries on the salaries paid to superior court judges instead of applying other relevant and appropriate considerations.

[30] The Government argues that the Commission erred in jurisdiction and in law in failing to comply with its statutory mandate to give "every consideration" to prevailing economic conditions in the Province and the overall state of the provincial economy.

[31] In addition, the Government argues that the Commission also breached the requirements of procedural fairness and natural justice in considering new economic information and in drawing conclusions on the significance of "newspaper reports" that referred to "an increased deficit" without requesting further submissions from the parties.

[32] The OCJ argues that the Commission's recommendations in these circumstances have the same force and effect as legislation. The recommendations form part of the Courts of Justice Act, and are no more subject to judicial review than any other provision of the Act. [page538]

[33] In this respect, under the Courts of Justice Act (and subject to the Framework Agreement), Cabinet has the power to make regulations under s. 53(1)(a.2) and (a.3) fixing judicial salaries. Had it done so, that regulation could only have been challenged either on the basis of its constitutionality, or on the basis that it was ultra vires because it dealt with a matter other than salary. Similarly, the only possible basis for challenging the salary recommendations is that those recommendations are unconstitutional or that they do not deal with salary.

[34] Moreover, Cabinet's authority to make regulations setting judicial salaries and benefits is expressly made subject to the provisions of the Framework Agreement. Section 53(3) of the Act provides: "If there is a conflict between a regulation made under clause (1)(a.2) or (a.3) and the Framework Agreement set out in the Schedule, the Framework Agreement prevails." This, argues [the] OCJ, provides further and conclusive evidence of the legislative intent that the Commission's salary and benefit recommendations are to be treated as forming part of the statute.

[35] It is argued that even if the Commission's recommendations were not accorded the force and effect of legislation, the determination of Ontario Court judges' salaries in Ontario would still not be amenable to judicial review in these circumstances, because it is a power of a "legislative" nature that has been lawfully delegated to the Commission by the legislature.

[36] In the event this court determines that the Report is judicially reviewable, the OCJ submits that the Framework Agreement should be interpreted as requiring a party to exhaust internal remedies prior to exercising any right it may have to seek judicial review. The Framework Agreement establishes a comprehensive code for the parties to follow where they believe that the Commission has "failed to deal with any matter properly arising from the inquiry under paragraph 13 or that an error relating to a matter properly under paragraph 13 is apparent on the report" ([para.] 28), or where an issue arises respecting "whether a recommendation is properly the subject of an inquiry referenced in paragraph 13", or "with respect to the process" ([para.] 34).

[37] The OCJ submits further that, even if prior resort to the Commission's internal processes was not mandatory, this court should exercise its discretion to dismiss the Government's application for its failure to exhaust its remedies at the Commission before involving the powers of the court.

[38] It is argued in the alternative by the OCJ, if the Framework Agreement permits the Government to initiate judicial review proceedings prior to or instead of seeking reconsideration [page539] before the Commission, the 60-day implementation period mandated by [para.] 27 of the Framework Agreement should be interpreted as requiring any application for judicial review to be commenced within 60 days of the Commission's decision. Otherwise, Cabinet's obligation to implement the Commission's salary recommendation within 60 days of the Commission's decision would be rendered ineffectual.

[39] Alternatively, the OCJ submits that if the 60-day time limit for bringing a judicial review application is not mandatory, the court should exercise its discretion to dismiss the instant application for delay. In this regard, it is to be noted that a court may exercise its discretion to refuse to allow an application for judicial review in circumstances where the applicant has engaged in excessive and unexplained delay in bringing the application.

[40] Finally, argues the OCJ, if this court should review the Report, the standard of review of patent unreasonableness applies and the Commission's recommendations and reasons are not patently unreasonable. Furthermore, there was no breach of natural justice in the process. The OCJ vigorously attacked the submissions of the Government that the Commission erred in law and jurisdiction.

Is the Commission Report Subject to Judicial Review?

[41] We do not agree that the Commission recommendations constitute legislation barring judicial review. As has been noted, [para.] 27 of the Framework Agreement provides that the recommendations shall have the same force and effect as if enacted by the legislature. However, [para.] 27 of the Agreement deals with when and how the recommendations come into effect. Clearly they do not come into effect until implemented by the Order-in-Council. Without this step, the recommendations are not effective and they do not have "the same force and effect as if enacted by the Legislature" until so implemented.

[42] For the same reason, it cannot be said that the legislature has delegated a power of a legislative nature to the Commission. The "power" delegated to the Commission is not effective until implemented by Order-in-Council.

[43] The Commission exercises a statutory power of decision. In the proper circumstances, the Commission's recommendations are subject to judicial review.

The Standard of Review

[44] As the Supreme Court of Canada has consistently emphasized, the standard of review depends on whether the legislature [page540] intended for the matter in question to be determined by the tribunal or by the courts. The legislature's intention in this regard must be assessed by way of a "pragmatic and functional approach", in which four contextual factors are considered: the presence [or] absence of a privative clause; the purposes of the legislation and the provision in particular; the nature of the question -- law, fact or mixed law and fact; and the expertise of the tribunal relative to that of the reviewing court on the issue in question.

(Law Society of New Brunswick v. Ryan, 2003 SCC 20, [2003] 1 S.C.R. 247, 223 D.L.R. (4th) 577, at paras. 21 and 27; Dr. Q. v. College of Physicians and Surgeons of British Columbia, 2003 SCC 19, [2003] 1 S.C.R. 226, 223 D.L.R. (4th) 599, at paras. 21-26)

[45] We agree with the OCJ submission that a proper application of the pragmatic and functional approach in this instance yields the conclusion that the appropriate standard of review is patent unreasonableness.

[46] [Paragraph] 27 of the Framework Agreement militates in favour of the highest standard of deference to the Commission's recommendations. It is difficult to imagine a stronger expression of legislative intent to preclude judicial review than a provision which accords a tribunal's decisions the status of legislation. This court must exercise considerable caution lest it be drawn into the process of setting the basis for determining judicial compensation -- a matter which is clearly not within the purview of the court.

[47] A judicial compensation commission is intended to depoliticise the judicial remuneration process by interposing itself between the judiciary and other branches of the government, thereby securing and maintaining judicial independence. In Ontario, where the legislature has provided that the Commission's decision is binding, in order for a judicial compensation commission to serve the aim of securing judicial independence, the Commission should be as insulated from judicial review as possible. Indeed, under [para.] 11 of the Framework Agreement, judges are precluded from being members of the Commission. This also supports the most deferential standard of judicial review, because judicial review of the Commission's decisions necessarily invites scrutiny by judges of a process, which was designed to be undertaken by persons independent of the judiciary and government.

(P.E.I. Reference, supra, at paras. 166-85)

[48] The Framework Agreement also seeks to fulfil the aim of judicial independence by according the Commission a policy- making function. The Commission has been directed to interpret and apply the Framework Agreement in light of the purposes of ensuring judicial independence. It has been granted a broad discretion to [page541] consider any matter which it considers relevant to the matters in issue, in light of this purpose. Finally, in determining the appropriate level of judicial compensation, the Commission is empowered to consider written and oral submissions from other interested persons or groups, such as criminal lawyers, legal aid lawyers, and members of the public. The Supreme Court of Canada has ruled that all of these attributes weigh heavily in favour of deference:

A statutory purpose that requires a tribunal to select from a range of remedial choices or administrative responses, is concerned with the protection of the public, engages policy issues, or involves the balancing of multiple sets of interests or considerations will demand greater deference from a reviewing court . . . provisions that require the decision-maker to "have regard to all such circumstances as it considers relevant" or confer a broad discretionary power upon a decision-maker will generally suggest policy-laden purposes and, consequently, a less searching standard of review.

(Dr. Q. v. College of Physicians and Surgeons of British Columbia, supra, at para. 31; Law Society of New Brunswick v. Ryan, supra, at para. 39; Framework Agreement, [paras.] 2, 25, 22)

[49] The Supreme Court of Canada has ruled that where the matter at issue is a question of fact, or a question of mixed law and fact, a high standard of deference is warranted. A question of mixed law and fact is one which involves the application of a tribunal's enabling legislation to specific circumstances. The weighing of evidence is a "fact intensive element within [a] question of mixed fact and law".

(Dr. Q. v. College of Physicians and Surgeons of British Columbia, supra, at para. 34; Law Society of New Brunswick v. Ryan, supra, at para. 41)

[50] In this case, the nature of the issue that was decided by the Commission was one of mixed law and fact. The Commission was required to consider evidence, make factual determinations and weigh various factors within the parameters set out in the Framework Agreement. In reaching its decision, the Commission did not and is not alleged to have applied any law or legal principle outside of the ambit of the Framework Agreement itself.

[51] The issue decided before the Commission is broadly analogous to issues considered by interest arbitration boards, which are appointed to determine salaries and other terms and conditions of employment within certain parameters pre- established by statute or by agreement of the parties. In keeping with the fact-driven nature of the interest arbitration process, courts have been extremely loath to intervene with the decisions of interest arbitration boards. [page542]

(The Corporation of the City of London v. London and District Service Workers' Union, Local 220I (1996) (Ont. Gen. Div.)) (unreported); Victoria Hospital Corp. v. London & District Service Workers Union (1996), 97 O.A.C. 321, [1996] O.J. No. 4009 (Div. Ct.); Komoka Nursing Home Ltd. v. London and District Building Service Workers' Union, Local 220, [1976] O.J. No. 11; Re Ontario Nurses' Association and Peterborough Civic Hospital (1982), 1982 3274 (ON SCDC), 132 D.L.R. (3d) 415 (Ont. H.C.J.))

[52] The members of the Commission are appointed for a three- year term over which they must conduct an inquiry into the appropriate level of salaries. During this time, the Commission must consider the parties' submissions and may hold hearings and consider submissions from groups. Practically speaking, commissions frequently consider volumes of submissions and evidence and conduct many days of oral hearings, as did the Davie Commission. Provincial remuneration commissions develop considerable expertise relative to a reviewing court commensurate with the fact-driven nature of the inquiry and the intensity of its exposure to the matters at issue.

(Framework Agreement, [paras.] 8, 20, 22, 17)

The Failure to Exhaust Internal Remedies

[53] Notwithstanding the provisions of the Framework Agreement for having the Commission reconsider any matter, including errors and matters of process, and notwithstanding the strict time limits set out in the Agreement, we do not agree with the proposition advanced by OCJ that the Agreement should be interpreted as requiring a party to exhaust internal remedies before seeking judicial review. There may be an instance in which resort to the court could be said to be appropriate without first exhausting internal remedies, but such an instance would, in our view, have to be exceedingly rare indeed.

[54] The Supreme Court of Canada has in the strongest and clearest of terms enunciated the importance of an independent determination of judicial salaries and benefits. Judges should not be placed in a position where the perception may be that they are in effect reviewing judges' salaries -- even if that perception were ill founded.

[55] Every reasonable measure should be taken to avoid the necessity of having these matters reviewed judicially, and, except in exceedingly rare circumstances, internal remedies should be first exhausted.

[56] In Bodner v. Alberta, 2002 ABCA 274, [2002] A.J. No. 1428, 222 D.L.R. (4th) 284 (C.A.), in reference to a Commission Report concerning Alberta Justices of the Peace, the government took the position that the Commission Report was in error, but it did not ask the [page543] Commission to review the matter as it was entitled to do. The Court of Appeal for Alberta had this to say [at paras. 162-64] about the government's failure to do so:

It is unfortunate that, upon concluding the Commission was in error, the government chose not to refer the error back to the Commission, which it was entitled, although, not required to do. Rather, it chose to use the error as a basis for a wholesale rejection of and modification of the Commission's recommendations. The government offers no reason why it did not avail itself of s. 20(1) of its legislation, Alta. Reg. 8/2000, which specifically provides the Commission with the power to vary if either party brings errors to its attention. The only explanation offered by government is that s. 20(1) uses the word aemay' and as such the referral is not mandatory.

One must consider this assertion. It may be that neither party is compelled to refer errors it thinks ought to be corrected back to the Commission. In that sense, it is not mandatory. But it does not follow that those alleged errors can form the basis of a wholesale rejection of the Commission's recommendations as they did here. While the government retains the power to reject, where its reasons meet the constitutional standard of justification, respect for the process connotes that a reasonable approach to these types of errors would have the government return to the Commission as contemplated by s. 20(1) of the regulation. Interpreting the process to allow government to rely on these errors as a primary basis for rejecting most of the recommendations without returning to the Commission for reconsideration, again, undermines the effectiveness of the process. As such, it should be discouraged. This is particularly so when, as here, it is government that developed the process and drafted the Order in Council creating the Commission. In other words, it set the rules. The rules ought not now be interpreted to allow government to change them.

More fundamentally, however, the constitutional standard of justification and the contextual rationality demanded of reasons for rejection suggest that reference back to the Commission is the most constitutionally appropriate venue for settling disputes of alleged errors.

[57] In this case, the Government has, without any explanations, failed to seek reconsideration of the Commission's Report and recommendations. This is so notwithstanding that all of its alleged grounds for judicial review in this court come within the ambit of the Commission's powers to reconsider issues. Furthermore, the very relief sought by the Government in this court is that the Report be set aside and that the Commission reconsider its recommendations as may be directed by this court.

[58] As noted in para. [31] above, the Government alleges procedural unfairness in allegedly considering some information and material without requesting further submissions from the parties. Yet the Government specifically rejected an opportunity to make further submissions to the Commission even before it had rendered its report. In a letter to the Commission and opposing counsel in June 2003, counsel for the Government said this: [page544]

We understand from the direction of the Commission that the surreply submissions of the Government will complete all of the submissions before the Commission. We do not believe the Commission should continue to receive further aerounds' of submissions, particularly (as argued previously) given the procedural structure outlined in the Framework. In order for the Commission to be effective, it must draw an end to its proceedings in order to permit it to prepare its report.

The majority, at p. 20, said:

Thus, although the March 27, 2003, Budget Speech and Budget Papers projected increased revenues and a balanced budget with a reserve available for debt reduction, recent newspaper reports indicate otherwise, and refer to an increased deficit.

The prevailing economic conditions and the overall state of a provincial economy do no more than call for a degree of caution, and serve as a prudent reminder against being overly generous in determining what is "fair and reasonable compensation" when payment must come from the public purse.

A provincial election took place in October 2003, resulting in a change of government. Before the Commission released its report on December 5, 2003, there were "newspaper reports" that the new government had found the "cupboard was bare". Indeed, in his dissent at p. 20, the Government's appointee to the tripartite Commission (Mr. D.K. Gray) quotes from the Erik Peters Report, an undertaking commissioned by the new provincial government and completed before the release of the Commission's Report. Mr. Gray wrote:

I think that a comparison of the treatment of judges with others paid out of the public purse may create the perception that judges are a special class to be treated differently. Such a perception would be unfortunate. This is particularly so, in my view, when one considers the most recent information available about the economic circumstances in this province. It is no secret that the provincial government is now facing a deficit of $5.6 billion, a figure which was confirmed by the report of the former provincial auditor, Erik Peters. As a result, the provincial government has made it clear that the expectations of those paid out of the public purse must be tempered. The amounts awarded by the majority will, in my view, create the impression that provincial judges are insulated from this reality, a result that, ironically, was disavowed by the Supreme Court in the P.E.I. Reference".

However, the Government, neither before nor after December 5, 2003, attempted to return to the Commission with "fresh evidence" contradicting evidence earlier adduced by Government counsel. Moreover, assuming without deciding, that the Commission should not have referred to "newspaper reports", those reports echoed the Erik Peters' report and did not paint a rosy [page545] picture of the Government of Ontario's cupboard as of the autumn of 2003.

[59] This court and others have frequently declined to grant relief where the applicant has not first exhausted its other remedies. See Harelkin v. University of Regina, 1979 18 (SCC), [1979] 2 S.C.R. 561, 96 D.L.R. (3d) 14, at pp. 574-79 and 594-97 S.C.R., pp. 40-44 and 56-58 D.L.R.; O.P.S.E.U. v. Ontario (Ministry of the Environment) (1996), 1996 12469 (ON SCDC), 141 D.L.R. (4th) 575, [1996] O.J. No. 4140 (Div. Ct.) at p. 576 D.L.R.

[60] We note also that the reconsideration provisions are in turn subject to strict time limits, specifically designed to allow the dispute to be resolved within the 60-day implementation period contemplated by [para.] 27 of the Agreement. That is, applications for reconsideration under [para.] 28 must be determined by the Commission within 30 days from the date of the Commission's decision. Similarly, applications for reconsideration under [para.] 34 must be determined by the Commission within 60 days. Further, while reconsideration decisions under [para.] 34 are not final and binding, the Agreement specifically provides that the executive must give them every consideration and very great weight. Moreover, the Framework Agreement requires that those recommendations which are not affected by the disputed jurisdictional or process issues must still be implemented within 60 days. The statutory requirement that Cabinet give the Commission's non-binding views on jurisdiction and process every consideration and very great weight, combined with the requirement that everything that can be implemented within 60 days be implemented, demonstrates legislative intention that resort to the Commission is a precondition to review. The Framework Agreement envisages that the parties will return to the Commission for it to deal with post-decision disputes.

[61] On this ground alone, we would dismiss the application by the Government and grant the application by the OCJ.

Delay

[62] We would also dismiss the application on the ground of delay.

[63] We do not agree with the submissions of the OCJ that the 60-day implementation period should be interpreted as requiring an application for judicial review to be made within 60 days of the Commission Report. That should be the norm applicable in almost all circumstances. But there may be exceptionally rare circumstances which may excuse a failure to commence within 60 days. Exceptional circumstances do not exist here and there [page546] has been no explanation for the Government's failure to launch an application within 60 days. Furthermore, there has been additional extensive delay by the Government.

[64] It delayed close to a year in agreeing to a chair of the Commission. It did not launch its application until about a month after the OCJ commenced its application. Despite urgings from the OCJ, the Government took no steps within the 60 days. About five weeks after the 60 days expired, the Government launched its application.

[65] This matter was argued on April 7, 2004. By that time, the Commission's three-year term had expired (as of March 31, 2004). To send the matter back to the Commission would require the time mandate of the Commission to be extended, which would mean the members would have to be reappointed, if possible. Even without this complication however, we would dismiss the Government application for delay.

[66] In dismissing the Government application on the above grounds, we make no determination of the merits of the Government's claim that the Commission erred in law or in jurisdiction.

[67] Accordingly, the application of the Government, being file #138/04, is dismissed.

[68] The application of the OCJ, being file #74/04, is granted. An order will issue declaring that the respondent has breached the requirement under the Courts of Justice Act to implement within 60 days of delivery (December 5, 2003) the salary and benefits recommendations set out in the Fifth Triennial Report of the Provincial Court Judges Remuneration Commission.

[69] Further, an order will issue that the Government implement the Commission's recommendations with respect to salaries and benefits for Ontario Court judges, retroactive to April 1, 2001, and that the Government do so within 30 days of the date of release of these reasons.

[70] An order will also issue that the Government pay interest from February 3, 2004, at the prejudgment interest rate set by the Courts of Justice Act, as of February 3, 2004.

[71] If the parties are unable to agree on costs, the OCJ shall file written submissions within ten (10) days of the date of these reasons. The Government shall file written submissions within a further seven (7) days. Thereafter, costs will be fixed.

Order accordingly.

[page547]