The Alberta Court of Appeal (the Court) recently released its decision in Bahcheli v. Yorkton Securities Inc. While the context of the appeal was the dismissal of an action under the “drop-dead rule”, the major procedural issue was one that has been debated since the introduction of the new Rules of Court in November 2010, namely whether new Rule 6.14(3) has changed the standard of review on appeal of a Master’s decision. This case represents the first opportunity that the Court has had to consider this issue. In a unanimous decision written by Justice Côté, the Court overturned several recent Queen’s Bench decisions and held that there was no reason to change the standard of review that has been used for the past 90 years, notwithstanding the change in wording of the relevant Rule in late 2010. This decision allows lawyers to better advise on the likelihood of success of an appeal, having provided some certainty on the standard of review.

Background

Rule 6.14(3) addresses appeals from a Master’s decision. The Rule provides as follows:

“6.14

...

(3) An appeal from a master’s judgment or order is an appeal on the record of proceedings before the master and may also be based on additional evidence that is, in the opinion of the judge hearing the appeal, relevant and material.” [emphasis added]

When the new Rules of Court came into force in November 2010, much of the Alberta legal community interpreted this Rule as changing the standard of review for such appeals. While historically appeals from the decisions of Masters were considered hearings de novo, which therefore required no deference by the Judge hearing the appeal, the wording of Rule 6.14(3) regarding “an appeal on the record”, with new evidence to be allowed only if it was “relevant and material” raised the question of whether that standard had now been changed.

Several recent Queen’s Bench decisions had held that this wording did indeed mandate a new standard of review. For example, in Janvier v. 834474 Alberta Ltd. (which has since been followed a number of times), Macklin J. held that, instead of correctness, a normal appellate standard of review was now appropriate. For questions of law, the standard would remain correctness, but for facts accepted or inferences drawn by the Master and for questions of mixed fact and law, the standard of review would no longer be correctness but unreasonableness. Findings of fact could only be interfered with if the Master had made a palpable and overriding error.

Reasons of the Court of Appeal

Despite the line of lower court decisions holding that Rule 6.14(3) had changed the standard of review on appeal from a Master, Justice Côté for the Court concluded that the appropriate standard would remain correctness: Judges will not be required to defer in any way to a Master’s decision. Justice Côté held that changing the standard would create a number of problems and would conflict with Masters’ well-recognized function in Alberta, which is to provide quick decisions subject to broad review by Judges when and if necessary.

One of the main reasons that the Court elected not to change the standard of review was the number of exceptions to a deferential standard that would necessarily remain. For example, since it is settled law that there cannot be deference to a Master’s findings of fact or use of discretion where the Judge hears new evidence, then a standard of correctness would still need to be applied if such new evidence was heard on appeal. Having multiple standards of review would add unnecessary complexity to these appeals.

There is also a constitutional basis for this decision. Masters, who are provincially appointed, cannot finally adjudicate something that in 1867 would have been decided by the superior courts. Requiring a federally appointed superior court Judge to defer to the evidentiary findings of a Master could potentially interfere with that Judge’s jurisdiction.

Moreover, Masters are unable to hear viva voce evidence or make findings of fact where there are conflicting affidavits, which strengthens the need for broad review on these appeals.

When read literally, neither the old Rule nor the new Rule actually dictates the standard of review on appeal. The correctness standard that has been used in Alberta for close to the past century was based entirely on the Court’s interpretation of the prior rules. The Court made it clear that the existing standard as discussed in the authorities will continue to apply and that the wording of new Rule 6.14(3) merely concerns the proper use of evidence on the appeal.

Conclusion

The Bahcheli decision confirms that the standard of review for appeals from Masters remains as it was before the new Rules came into force. Judges will not be bound by any findings of fact or inferences made by the Master even if no new evidence is introduced on appeal. The Court held that the purpose of Masters in Alberta is to provide a “quick, easy adjunct to judges, subject to ready review by judges”, and that narrowing such review would only hinder that established purpose.