Dunsmuir v New Brunswick 2008 SCC 9,  1 SCR 190 is the leading Supreme Court of Canada decision on the topic of substantive review and standards of review. The decision is notable for combining the reasonableness (simpliciter) and patent unreasonableness standards of review into a single reasonableness standard.
David Dunsmuir was hired by the Department of Justice of the Province of New Brunswick as of February 25, 2002. His work was unsatisfactory to his employer and he received multiple written notices to this effect. Ultimately, his employer decided to terminate his employment as of December 31, 2004. On August 19, 2004, Dunsmuir was informed in a letter that his employment was being terminated. As his employment was not being terminated 'for cause', Dunsmuir was granted several months of paid leave with which to find a new job.
Dunsmuir grieved his dismissal in a letter sent to the Deputy Minister on September 1, 2004. When his grievance was denied, he gave notice that he would refer the grievance to adjudication. An adjudicator was selected by the agreement of both parties. The adjudicator held that Dunsmuir had been denied procedural fairness in the manner of his dismissal and that the dismissal was thus void ab initio; the adjudicator ordered Dunsmuir to be reinstated as of August 19, 2004. On judicial review to the Court of Queen's Bench, the decision was overturned. That decision eventually reached the Supreme Court of Canada.
The trial court took an application for judicial review and said the correct standard of review is correctness against the adjudicator's decision because the adjudicator did not have jurisdiction to inquire. It said that Dunsmuir received procedural fairness because of the hearing before the adjudicator and maintained the 8 month decision.
The Court of Appeal said that reasonableness was the correct standard and that the adjudicator was unreasonable because the employer dismissed the employee at pleasure, and that the common law rules did not require any more procedural fairness that Dunsmuir received.
The Court began by canvassing the recent history of administrative law decisions on the standard of review, including CUPE v. New Brunswick Liquor Corp., Crevier v. Quebec, Canada (Director of Investigation and Research) v. Southam Inc. and Pushpanathan v. Canada. The court noted the general unworkability of the current state of the judicial review of administrative decisions in Canada. In response, the court decided to dispense with having three standards of review (correctness, reasonableness (simpliciter), and patent unreasonableness). Instead, the court decided that henceforth there shall be only two standards: correctness and reasonableness. Additionally, the decision to apply a correctness standard will no longer be based on 'jurisdictional' issues.
The court emphasized the use of precedent to simplify the issue of standard of review. First, courts must ascertain whether the jurisprudence has already determined in a satisfactory manner the degree of deference to be accorded with regard to a particular category of question. Second, where the first inquiry proves unfruitful, courts must proceed to an analysis of the factors making it possible to identify the proper standard of review.
The following matters were identified as being subject to the correctness standard:constitutional questions regarding the division of powers between Parliament and the provinces
determinations of true questions of jurisdiction or vires
the question at issue is one of general law “that is both of central importance to the legal system as a whole and outside the adjudicator’s specialized area of expertise”
questions regarding the jurisdictional lines between two or more competing specialized tribunals
When this new analytical framework was applied to the facts of the Dunsmuir case, the court determined that the reasonableness standard was the correct approach on which to judge the administrative decision in question. In that regard, the court ruled that the decision failed to meet this standard, and was therefore unreasonable.
The ruling has consolidated the law relating to standards of judicial review in Canada, and has effectively required a full standard of review analysis to be performed in all current disputes arising from administrative decisions. Dunsmuir does not stand for the proposition that the “adequacy” of reasons is a stand‑alone basis for quashing a decision, or as advocating that a reviewing court undertake two discrete analyses — one for the reasons and a separate one for the result. It is a more organic exercise — the reasons must be read together with the outcome, and serve the purpose of showing whether the result falls within a range of possible outcomes.
The Dunsmuir principles were subsequently clarified in Canada (Citizenship and Immigration) v. Khosa, where Binnie J. commented,
However, Dunsmuir will not overrule specific requirements that are given in a statutory framework - therefore, the duty of procedural fairness will continue to apply in such cases.
In addition, the ruling has effectively ensured that most forms of public employment are best viewed through the lens of private employment law principles, irrespective of whether the affected person may be categorized as a public office holder. Therefore, appeals on grounds of procedural fairness will be available only to a few categories of public employment, and reinstatement procedures will occur even less frequently.