An employer (“Taiga Works”) was unsuccessful in an attempt to be awarded costs of an appeal from a decision of the Director of Employment Standards’ delegate to the Employment Standards Tribunal

Administrative law – Decisions of administrative tribunals – Employment Standards Branch – Investigations – Costs – Employment law – Judicial review – Natural justice – Procedural requirements and fairness

Taiga Works Wilderness Equipment Ltd. v. British Columbia (Director of Employment Standards), [2010] B.C.J. No. 2198, 2010 BCCA 364, British Columbia Court of Appeal, July 30, 2010, R.T.A. Low, D.F. Tysoe and D.M. Smith JJ.A.

Some former employees of Taiga Works complained to the Employment Standards branch. A delegate of the Director of Employment Standards conducted an investigation and determined that the employees should be paid length of service compensation amounting to about $42,000.

Taiga Works appealed this decision to the Employment Standards Tribunal (the “Tribunal”). The Tribunal found that the Director’s delegate had breached the principles of natural justice by failing to disclose documents and failing to consider Taiga Works’ final written submission prior to issuing the determination. The first Tribunal member did not remit the matter back to the Director’s delegate because it held that the breaches had been cured on appeal.

Taiga Works applied to have the Tribunal reconsider that decision and a different Tribunal member decided that the breach of natural justice had not been cured but should be referred back to the first Tribunal member to hear submissions on the documents that were not disclosed prior to the determination being made by the Director’s delegate.

Taiga Works brought a judicial review of the Tribunal’s decisions and, in chambers, the court held that the Tribunal had the power to cure breaches of natural justice committed by the Director’s delegate and that the second Tribunal member had acted fairly. An order was made that each party bear its own costs.

An appeal was then taken to the court of appeal, where Taiga Works argued that the Tribunal did not have the power to cure breaches of the rules of natural justice and procedural fairness. Both the Director and the Tribunal argued that the Tribunal did have the power to cure the delegate’s breaches of natural justice and procedural fairness. The court of appeal held that the breaches of the principles of natural justice and procedural fairness could be cured on appeal, “if the proceedings before the initial Tribunal and the appellate Tribunal, as a whole, satisfied the requirements of fairness”. The matter was referred back to the Director for rehearing since the direction given by the second Tribunal member did not do enough to ensure that the proceedings reached an acceptable level of fairness.

This appeal was on the question of costs. Taiga Works argued that, because it succeeded on the appeal, it should be awarded a separate set of appeal costs against both the Director and the Tribunal. The Director and the Tribunal argued that each party should bear its own costs, since that is the usual costs order in administrative tribunal cases.

The court found that, following Lang v. British Columbia (Superintendent of Motor Vehicles), 2005 BCCA 244, costs do not necessarily follow the event where administrative or quasi-judicial tribunals are involved. Costs are only awarded in unusual or exceptional cases. Where a Tribunal has acted in good faith and conscientiously, then even if there is an error, a reviewing body will not impose costs.

Costs may be awarded against an administrative Tribunal where it has cast itself in an adversarial position, manifested a notable lack of diligence, initiated the litigation, or where bias among the Tribunal members has necessitated a new hearing. None of these circumstances were present in this case. The first and second Tribunal members had each acknowledged the breaches of natural justice and procedural fairness. The principal issue was whether the appellate Tribunal had the capacity to cure such a breach, which the court viewed as akin to a jurisdictional question. There was no need to depart from the normal practice that, where an administrative Tribunal makes submissions with respect to its jurisdiction, costs are not awarded against the Tribunal even if those submissions are not accepted.

To stay current with the new case law and emerging legal issues in this area, subscribe here.