Small v. New Brunswick Liquor Corporation, 2012 NBCA 53

The New Brunswick Court of Appeal considered the distinction between the reasonableness standard and the correctness standard of review as applied to questions of pure statutory or contractual interpretation. The court identified an overlap between the two standards: while an administrative adjudicator’s interpretation may attract deference, an adjudicator is never entitled to deviate from accepted interpretive methodology. Consequently, the Court of Appeal upheld the lower court’s finding that an adjudicator’s interpretation of the By-laws of the New Brunswick Liquor Corporation (the Corporation) was unreasonable.

The respondent employer had dismissed the appellant employee, Anne Small, without cause, which the appellant grieved under the Public Service Labour Relations Act, RSNB 1973, c P-25. The adjudicator awarded her the retirement allowance sought, basing his decision on his interpretation of the Corporation’s bylaws under Article 22.04. Article 22.04 deems “dismissed” employees ineligible for any retirement allowance; the adjudicator found ambiguity in the term “dismissed” and read it down to mean only “dismissed with cause.” Article 22.01 deems “laid off” employees eligible for the retirement allowance; the adjudicator relied on his interpretation of the former provision to interpret “laid off” as including “dismissed without cause.” On appeal, the applications judge found the adjudicator’s interpretation of the By-law unreasonable and vacated the award.

The Court of Appeal held that it is unreasonable, and a fortiori incorrect, for an adjudicator to interpret statutory or contractual provisions except according to the textual, contextual, and purposive methodology which the law imposes. Where a provision is ambiguous, the adjudicator’s choice between two reasonable interpretations will generally prevail under the deferential standard of review; but the adjudicator must first have employed the correct interpretive methodology to determine whether the provision was truly ambiguous. The adjudicator erred  by interpreting Article 22.04 as a stand-alone provision, then relying on that interpretation to interpret Article 22.01(l). Moreover, the adjudicator interpreted “laid off” in Article 22.01(l) without reference to the definition of “layoff” in Article 2.01(k). Robertson JA found that under the requisite textual, contextual, and purposive interpretive methodology, the provisions admitted of no ambiguity; rather, they unambiguously excluded the appellant from eligibility for the retirement allowance under any reasonable interpretation.

Link to Decision

Aaron SanFilippo

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