SUPERIOR COURT OF JUSTICE – ONTARIO
DIVISIONAL COURT
RE: Trevor H. (“Chaim”) Wrightman, The Medicine Shoppe, Larry Schwartz, Howard Alexander Folliott and Mildred Folliott v. The Minister of Health and Long Term Care (Ontario)
BEFORE: Kiteley J.
COUNSEL: Ron Marzel and Alan Young, solicitors for the Applicants
Sarah Blake and Robert Donato, solicitors for the Respondent
HEARD AT
TORONTO: March 19, 2008
E N D O R S E M E N T
1In an application for judicial review, this is a motion for an interim order in the nature of certiorari staying the order1 of the Executive Officer of the Ontario Drug Benefit Program (the “Program”) whereby she notified the applicant Trevor H. Wrightman that the Health Network Subscription Agreement was terminated on 90 days notice, taking effect on April 2, 2008.
Background
2Wrightman is a pharmacist who operates The Medicine Shoppe in Toronto. Schwartz, Folliott and Folliott are patients.
3The Ontario Drug Benefit Act (the “Act”)2 established a public drug system designed “to meet the needs of Ontarions, as patients, consumers and taxpayers”. Pursuant to s. 1.1, the Executive Officer has the power to perform functions or duties under the Act and the regulations to administer the Program.
4The following sections of the Act are relevant:
Payment of claim of operator
5(1) . . . an operator of a pharmacy who submits to the executive officer a claim for payment in respect of supplying a listed drug product for an eligible person pursuant to a prescription is entitled to be paid by the executive officer the amount provided for under section 6.
Refusal to dispense prohibited
- No operator of a pharmacy shall refuse to supply a listed drug product for an eligible person in order to avoid the operation of a provision of this Act but an operator may refuse to supply a listed drug product for an eligible person if the proper exercise of professional judgment so requires.
Opting Out
- (1) An operator of a pharmacy may notify the executive officer that the operator elects not to accept payment from the executive officer under section 5.
(2) Beginning ninety days after the day the executive officer receives the notice under subsection (1), the operator is not entitled to payment from the executive officer under section 5 and is not required to supply listed drug products for eligible persons under section 10.
Order suspending operator’s right to payment
11.1 (1) If the executive officer believes on reasonable grounds that with respect to a pharmacy there has been a breach of a condition that is prescribed by the regulations or agreed to by the operator of the pharmacy, the executive officer may make an order suspending the operator of the pharmacy from being entitled to receive payment from the executive officer under this Act.
Effect of order
(2) Beginning on the day set out in the order, the operator is not entitled to payment by the executive officer under this Act.
(3) Beginning on the day set out in the order, the operator may charge or accept payment from, a person other than the executive officer in an amount not exceeding the sum of
(a) the amount the executive officer would have paid under this Act, absent the order; and
(b) the amount the operator could have charged under this Act, absent the order.
Agreement to conditions
(7) The executive officer and an operator of a pharmacy may enter into an agreement that the operator of the pharmacy will abide by conditions set out in the agreement even if no order has been made under this section.
Claim from eligible person
11.3 (1) An eligible person who submits to the executive officer a claim for payment in respect of the supply of a listed drug product is entitled to be paid by the executive officer the amount the executive officer would have paid to an operator of a pharmacy or a physician absent an order under section 11.1 . . .
(2) The entitlement of an eligible person under subsection (1) is subject to this Act and the regulations to the same extent as the entitlement of an operator of a pharmacy or a physician would be, absent the order under section 11.1 . . .
5Based on those excerpts, the scheme of the Act is that a pharmacist has an obligation to dispense listed drug products. The pharmacist may opt into or out of the Program. The Executive Officer may issue an order suspending the pharmacist from being entitled to receive payment. If so, the pharmacist may recover from the patient the same amount that the pharmacist would have been paid through the Program. The circumstances under which the Executive Officer has authority to make a suspension order are described as where s/he “believes on reasonable grounds that . . . there has been a breach of a condition that is prescribed by the regulations or agreed to by the” pharmacist. The Executive Officer and an operator of a pharmacy may enter into an agreement that provides that the operator will “abide by conditions”.
6S. 23 of Ontario Regulation 201/96 (the “Regulation”) defines the Health Network as the electronic information retrieval system used by the Ministry to receive and process claims for payment under the Act. Pursuant to s. 24, the pharmacist is required to submit a claim by direct electronic transmission via the Health Network.
7The following sections of the Drug Interchangeability and Dispensing Fee Act3 (the “DIDF Act”) are relevant:
- (1) Every person who dispenses a drug pursuant to a prescription shall dispense the entire quantity of the drug prescribed at one time unless before the drug is dispensed the person presenting the prescription in writing authorizes the dispensing of the drug in smaller quantities.
(2) Despite subsection (1), the regulations may authorize dispensing a drug in less than the entire quantity prescribed under specified conditions.
- (1) The Lieutenant Governor in Council may make regulations . . .
(6) Subject to the approval of the Lieutenant Governor in Council and with prior review by the Minister, the Council of the Ontario College of Pharmacists may make regulations . . .
(c) authorizing dispensing a drug in less than the entire quantity prescribed and specifying the conditions under which that authority is to apply . . .
8The combination of these sections means that the patient may, in writing, authorize the pharmacist to dispense a quantity less than that prescribed and the College of Pharmacists may make regulations specifying the conditions of doing so. I was not referred to any such regulations.
9While I was not given the regulatory context, it is accepted that a physician make write a prescription in which the rate of dispensing, such as daily, weekly, monthly or otherwise, is specified.
Health Network System Pharmacy Subscription Agreement
10Pursuant to s. 11.1(7) of the Act, the Executive Officer requires pharmacists to sign a Subscription Agreement. In effect, a pharmacist cannot gain access to the Health Network without entering into this agreement.
11The Subscription Agreement signed by Wrightman is typical. It is between “Her Majesty the Queen in Right of Ontario as Represented by the Minister of Health” and Wrightman. It contains 21 paragraphs under the heading “terms and conditions”. Paragraphs 1, 2, 3, 4, 5, 6, 8, 9, 10, 11, 12, 13, 18 and 19 all relate to software and connectivity issues or other related matters. The following paragraphs are relevant:
That the provider warrants that claims submitted via the Network will be true and accurate to the best of the provider’s knowledge and belief and that the provider will take full responsibility for the accuracy of claims data but solely for the purposes of payment.
That the Ministry may cancel this agreement effective 30 days following notification to the provider and revoke Network access as a result of the provider’s abuse of the Network facility.
That this agreement will remain in effect for a period of 90 days from the date that it is signed, and thereafter will continue until cancelled by either party. Cancellation will be effective 90 days from the date that written notice is received.
Termination of the Subscription Agreement
12In a letter dated January 2, 2008, the Executive Officer informed Wrightman as follows:
This is to provide notice of the Ministry’s intent to terminate its Health Network Subscription Agreement with Medicine Shoppe Pharmacy. Pursuant to section 15 of the Agreement, the termination of the Agreement and your Health Network System (HNS) account will become effective on March 26, 2008.
In the interim, should you continue to submit claims to the Ministry under the Ontario Drug Benefit Program, please be advised that such claims are subject to audit by Ministry inspectors under section 14 of the Ontario Drug Benefit Act, R.S.O. 1990, c. O.10
13In a letter dated January 4, 2008, the Executive Officer informed Mr. Marzel as follows:
We acknowledge receipt of your letter dated January 3, 2008.
I am writing to advise you that we are terminating the Health Network Subscription Agreement (the “Agreement”) with Medicine Shoppe Pharmacy . . . pursuant to section 15 of the Agreement, which permits either party to terminate the Agreement for convenience and without cause by providing ninety (90) days written notice.
Notwithstanding the fact that we are terminating the Agreement for convenience and without cause, we are taking this action at this time as we are of the opinion that Mr. Wrightman may have been submitting inappropriate claims in the amount of $268,240.26 throughout the period of January 1, 2001 to March 31, 2007.
Please be advised that the effect of the termination is that Mr. Wrightman will be unable to submit any claim through the Health Network System (“Health Network”).
In light of the above, please note that subsection 24(1) of O. Reg. 201/96 made under the Ontario Drug Benefit Act (“ODBA”) prescribes that “an operator of a pharmacy or a physician who submits a claim for payment from the executive officer under the Act or a claim reversal shall submit the claim to the executive officer by direct electronic transmission via the Health Network”. In other words, effective April 2, 2008, Mr. Wrightman will be precluded from using the Health Network, and therefore, he will no longer be permitted to submit claims for an eligible person under the ODBA.
While subsection 24(2) of O. Reg. 201/96 made under the ODBA provide that claims may be submitted on paper, it is limited to the prescribed requirements.
With respect to your request for a copy of Mr. Wrightman’s Agreement, please be advised that Mr. Wrightman should have a copy of the Agreement. In the event that Mr. Wrightman does not have a copy of the Agreement, he may contact the ministry Helpline for Pharmacists at . . . .
14The January 2nd letter gives notice of termination effective March 26th while the January 4th letter refers to April 2, 2008. For purposes of this motion, April 2nd is considered to be the effective date. It is this termination that Wrightman seeks to enjoin.
15It is important to this motion that both letters from the Executive Officer refer to s. 15 of the Subscription Agreement which provides for “cancellation” by either party on 90 days notice. Neither letter makes reference to s. 11.1(1) of the Act. The January 4th letter emphasizes by underlining that the “termination” is for convenience and without cause yet goes on to refer to the “opinion” of the Executive Officer that Wrightman “may have been submitting inappropriate claims” for a period covering 6 years; that would clearly be characterized as “cause”.
“May have been submitting inappropriate claims”
16Because the Executive Officer purported to terminate the Subscription Agreement without cause and because of the approach I take below to the legal issues, I will deal with this issue, albeit briefly, because so much of the material filed in support of and in opposition to the motion focused on this issue. The evidence on behalf of the MOHLTC was contained in an affidavit by Brent Fraser, the Director of Ontario Public Drug Programs.
17Wrightman has been a pharmacist since1990. He has worked at the pharmacy since then, originally as an employee and since 1998 as franchisee and owner/operator. He signed the Subscription Agreement in 1999.
18In 2001, the MOHLTC conducted an audit after a claims review revealed high numbers of claims for one ODB Recipient. The audit demonstrated that Wrightman was dispensing prescriptions to that patient and another on a daily basis in 1-day supplies. There were 90 patients to whom he was dispensing drugs on a weekly basis. The MOHLTC estimated he had been overpaid about $13000. Other administrative and claims issues led the MOHLTC to estimate another category of overpayment in the amount of approximately $10000. The MOHLTC initiated a complaint to the College of Pharmacists of Ontario, the body responsible for licensing, regulating and disciplining pharmacists.
19On April 21, 2004, Wrightman was found to have falsified a record, signed a document that he knew to contain a false or misleading statement, submitted an account he knew to be false or misleading and charged a fee that was excessive in relation to the service provided. In an agreed statement of facts, he acknowledged that conduct. He was reprimanded, conditions were placed on his licence and he was suspended for 2 months.
20In January 2007, another audit was conducted, again triggered by what the MOHLTC described as “unusually high billings”. The findings of the audit were summarized in the affidavit of Fraser. The concerns from the audit focused on dispensing 1 day and 7 day supplies: during the 2006 calendar year, 65.5% of claims Wrightman submitted were for a 1-day supply and 27.6% of claims were for a 7 day supply. It was estimated that the pharmacy received approximately $420,000 extra in fees as a result of reduced quantities as compared to the average of 29 days’ supply for all active retail pharmacies in Ontario.
21The concern of the MOHLTC was heightened because the pharmacy was closed for business on Saturday and Sunday. Wrightman was dispensing 3 days worth of medication for patients in one-day quantities, handing the medications over to a courier service to be delivered on Friday, Saturday and Sunday. He was claiming a dispensing fee for each of the three days.
22Fraser referred to a “Ministry policy” that is available on the website that the dispensing fee is the “amount a pharmacy charges for providing professional services such as patient counselling, monitoring drug therapy, providing drug information to physicians, and dispensing drug products”. The MOHLTC took the position that Wrightman had providing false and misleading information in that he was charging a dispensing fee without providing all those services.
23According to Fraser, the audit also revealed “serious dispensing errors”.
24In May, 2007, the MOHLTC filed another complaint with the College. I have been given the complaint and the extensive material that has accumulated during the course of the investigation by the College. In addition, I received a supplementary affidavit of Wrightman affirmed March 18 in which he responded with his views on the 2004 discipline decision of the College. I do not propose to review any of that in this endorsement. The College has not given Wrightman notice of any discipline proceedings.
25In response to the concerns about billing raised in the audit, Wrightman acknowledged that he did not open the pharmacy on Saturdays and Sundays. He is an orthodox Jew. He closed for the Sabbath. He advised the investigator that he went into the pharmacy on Saturday evening and on Sunday and he billed each pill-pack account on the day that the patient was supplied by the courier.
26The MOHLTC insisted on repayment of $242,601.54 of what it calculated as excessive dispensing fees. After he received notice that the MOHLTC intended to initiate recovery, he did not resist. The MOHLTC withheld $15000 bi-monthly. All of the alleged overpayment4 had been recovered by the MOHLTC before this application was started.
27In addition, Wrightman changed his practice and billed a single dispensing fee for a 3 day supply of medications. In July 2007, Wrightman changed his practice again and began to open the pharmacy briefly on the weekends (after the end of the Sabbath) and prepare and dispense the daily pill packs on those days and bill on those days.
28The MOHLTC acknowledges that Wrightman has changed his practice and that the overpayment has been recovered. The MOHLTC continues to have issues with Wrightman including the safety issues of leaving medications with a courier, dispensing medications as authorized by the patient rather than as directed in the prescription by the physician, and, while the pharmacy is open briefly on Saturday and Sunday, Fraser observed that Wrightman isn’t really available to provide “professional services” as required by Ministry policy.
29For purposes of this motion, I conclude that Wrightman submitted claims for dispensing fees that the MOHLTC considered “inappropriate”. The Ministry initiated recovery and all of the “inappropriate” claims have been recovered. In addition, as a result of the report by the Ministry to the College, Wrightman’s professional body is conducting an investigation in which there is considerable disagreement on the facts. Counsel for Wrightman illustrated the conflict by reference to the documentation on the issue whether a physician had continued to order a drug for a patient suffering from Cellulitis. I need not make any findings of fact in order to rule on this motion for four reasons. First, Wrightman arguably acquiesced in the recovery of the “inappropriate” claims in the amount of $242,601.54. Second, Wrightman has stopped the practices that gave rise to the “inappropriate” claims. Third, while the argument about patient safety had some basis when Wrightman was leaving drugs with a courier company to deliver on Saturday and Sunday, that practice has been discontinued. Fourth and most important, the Executive Officer did not rely on cause in the January 2nd notice of termination.
Issues in the Motion
30The applicants Wrightman and the Medicine Shoppe take the position that the Executive Officer’s authority pursuant to s. 11.1(1) to terminate for cause displaces any common law right that the Executive Officer might have to terminate pursuant to s. 15 of the Subscription Agreement. As indicated in paragraph 1 above, the applicant seeks an interim order in the nature of certiorari “staying the January 2, 2008 order” of the Executive Officer. However, it emerged during submissions that it was the failure of the Executive Officer to terminate by making an order pursuant to s. 11.1(1) that was in issue. These applicants argue that the only method of termination was if the Executive Officer exercised the statutory power of decision in s.11.1(1). The failure to act pursuant to s. 11.1(1) is the basis of the application for judicial review.
31The applicants Schwartz, Folliott and Folliott argue that they have a constitutional right under s. 7 of the Charter of Rights and Freedoms to make autonomous and effective choices with respect to their medical treatment. They take the position that s. 7 prevents the government from arbitrarily depriving a patient of his/her choices with respect to medical treatment. Medical treatment is defined as a continuum of services that includes a physician writing a prescription and a pharmacist dispensing the medication. These patients assert a right to be served by a pharmacy that will dispense medications daily. The MOHLTC did not give the patients an opportunity to be heard on the issue of effective dispensing. The patients argue that the Executive Officer has acted arbitrarily in denying patients a form of prescription dispensing which meets their unique medical needs.
32The respondent takes the position that s. 14 of the Proceedings Against the Crown Act5 (“PACA”) expressly provides that the court shall not grant an injunction against the Crown or its servants. In any event, the entire scope of rights in respect of termination are limited to the Subscription Agreement. This being a contract dispute, the Executive Officer’s termination of the Agreement is not reviewable on judicial review.
33Counsel had modestly different expectations as to when the application for judicial review would be ready to proceed. Counsel for the applicants estimated 4 to 5 months while counsel for the respondent suggested 4 to 6 weeks. If interim relief is granted, the court must be mindful of the time the order is in effect. For purposes of this motion, I assume that the application for judicial review will be heard in approximately 8 weeks.
Serious Issues to be tried
34Before dealing with the different issues that affect Wrightman and the patients, I focus on whether an application for judicial review lies. That requires a determination for purposes of this motion as to whether a statutory power of decision is engaged. If, as counsel for the respondent argues, this is “a contract dispute”, the motion must be dismissed.
35The applicants rely on Delivery Drugs Ltd. (c.o.b. Gastown Pharmacy) v. British Columbia (Deputy Minister of Health)6. The petitioners were operators of pharmacies who sought judicial review of the decision of the Deputy Minister of Health to terminate the Pharmacy Participation Agreements that permitted the petitioners to participate in PharmaCare, a program administered by the Ministry of Health. The letters of termination cited three reasons: the operators had been charged with criminal offences relating to the pharmaceutical practice; one of the operators had pleaded guilty to such an offence; and the pharmacies had wrongfully submitted claims for drugs. The respondent took the position that judicial review was not available because the dispute was a contractual matter.
36Section 4(5) of the Continuing Care Act7 provided that the minister could terminate the agreement if an operator failed or refused to comply with a provision of an applicable standard, guideline or directive or a term or condition of the Pharmacy Participation Agreement. The Deputy Minister had not terminated pursuant to s. 4(5) but pursuant to the Agreement.
37The chambers judge considered the doctrine of statutory displacement. She concluded that the object of the Continuing Care Act is to provide a framework for government oversight and administration of delivery of selected health care services to eligible clientele and that the integral means of achieving those objectives is the statutory regulation of relations between the Minister and the operators who deliver those services. At paragraph 69, she held as follows:
Section 4 of the Act governs agreements between those parties, and provides clarity and consistency in their contractual arrangements. Operators are mandated to comply with the agreements and other standards set by the Minister. The Minister may only terminate the agreements for non-compliance.
38At paragraph 76, she held:
My interpretation of the Act and the Regulation as a whole lead me to conclude that s. 4 is intended to provide a complete code to govern the Minister’s contractual relations with those pharmacies that participate in PharmaCare. . . . I find that the Minister’s rights to contract at common law with such pharmacies has been displaced by s. 4, and agreements between these parties must instead be made in conformity with that legislation. One corollary of this is that the Minister cannot include a term in those agreements that permits termination without cause, as that would be in direct conflict with s. 4(5) of the Act.
39And at paragraph 78:
. . . Here, however, there is an express contradiction between the Act and government policy as exemplified in the terms of the pharmacy participation agreements used by PharmaCare. Section 4(5) of the Act specifies termination only for non-compliance, while the agreements permit termination without cause. While the decision in Associated Respiratory Services Inc. is not directly analogous, I find it does support the view that, once a health care service is prescribed as continuing care under the Act, it must be provided in accordance with the Act, or not at all.
40The chambers judge found that s. 4(5) governed the termination of the Pharmacy Participation Agreements and the decision of the Deputy Minister to terminate them was the exercise of a statutory power of decision. She went on to find that the pharmacists were owed a duty of fairness. She granted an order for certiorari, quashing the decision to terminate the Agreements and remitting the matter to the respondent for reconsideration.
41In dismissing the appeal (and the cross-appeal), the majority of the Court of Appeal largely agreed with the chambers judge but disagreed with her finding at paragraph 76 above that the Continuing Care Act was a “complete code”. At paragraph 64, the majority observed that it was not necessary for the chambers judge to have gone that far; it was enough to decide the case that
the thing done by the respondent – the termination of the agreements – was provided for in s. 4(5) of the Act and therefore had to be done in accordance with the limitations and conditions imposed on the power conferred by s. 4(5), since, by necessary implication, the Crown’s power to do that thing was displaced by s. 4(5). And, since the decision was made pursuant to the statutory power conferred in s. 4(5), it was an exercise of a statutory power of decision and is subject to judicial review under the Judicial Review Procedure Act.
42Counsel for the respondent argued that the legislative regime in British Columbia is distinguishable from the Act and the facts in this case. I agree that the Continuing Care Act has greater detail as to the agreement that the minister might make with operators. But the differences in the legislation do not render the principles inapplicable.
43I am satisfied that there is a genuine issue for trial whether the Executive Officer exceeded the statutory authority in s. 11.1(1) of the Act by purporting to terminate pursuant to s. 15 of the Subscription Agreement for three reasons. First, arguably the Executive Officer has the jurisdiction only to “suspend”, not terminate pursuant to s. 11.1(1) of the Act. If the doctrine of statutory displacement is found to apply here, the Executive Officer had no jurisdiction to terminate pursuant to s. 15.
44Second, the Subscription Agreement is no ordinary contract such as an agreement between the MOHLTC and a contractor to build premises. There is no offer, acceptance, negotiations, or exchange of consideration. The pharmacist could only gain access to the Health Network by signing the Subscription Agreement. Indeed, I infer by the name of the document that the MOHLTC recognized that it is not a contract in the usual sense. Where there is some doubt that the instrument in question is a contract, the doubt ought to be resolved in favour of the subscriber.
45Third, if the Subscription Agreement could be characterized as a contract, it provides for termination under s. 15 without reference to cause and under s. 14 for “abuse of the Network facility”. The Executive Officer ought not to be allowed to “hedge her bets” and give notice under s. 15 yet raise issues about “inappropriate payments” that might arguably fit under s. 14. If termination is available under s. 14 (which is doubtful given the clear conflict between s. 11.1(1) of the Act and s. 14 of the Subscription Agreement) and the applicant is terminated “for abuse of the Network facility”, the Executive Officer should be required to so stipulate.
46For those reasons, I find that the application is not frivolous or vexatious.
47For purposes of this motion, I find that there is a genuine issue for trial whether the Executive Officer exceeded the statutory authority of s. 11.1(1), that enables suspension of an operator, by purporting to terminate pursuant to s. 15 of the Subscription Agreement. There is a genuine issue for trial whether the termination is consistent with the statutory framework. That excess of authority or failure to act in accordance with the statute is a statutory power of decision that is subject to judicial review.
48I turn then to the Charter issue raised by the applicants Schwartz, Folliott and Folliott. I am not prepared to say it’s frivolous or vexatious. But, as the factum and the submissions on behalf of the respondent demonstrate, the analysis needs refinement. Having found a serious issue for trial vis-à-vis Wrightman and The Medicine Shoppe, I will not further explore it. No specific relief was sought that affected those applicants differently than the relief sought on behalf of Wrightman and The Medicine Shoppe.
Irreparable Harm
49Counsel for Wrightman and The Medicine Shoppe argues that the net effect of terminating the Subscription Agreement will be to prevent those applicants from serving the needs of the vast majority of his patients and therefore, Wrightman faces the risk of losing his business pending determination of the application.
50Counsel for the applicants and for the respondent agree that financial hardship does not usually constitute irreparable harm because such harm can be subsequently compensated by damages.
51As the Supreme Court pointed out at paragraph 59 in RJR-MacDonald Inc. v. Canada (Attorney General)8, “irreparable” refers to the nature of the harm suffered rather than its magnitude. Wrightman is a licenced pharmacist, free to seek employment opportunities elsewhere. However, the reality is that the business he has worked in and owned for 18 years is dependent on revenue generated through the Health Network. Insolvency is likely imminent if the termination is not enjoined. If Wrightman is ultimately successful on the application, it will be a pyrrhic victory because the business will have been lost.
52I am satisfied that the applicants Wrightman and The Medicine Shoppe will suffer irreparable harm if a stay is not granted.
Balance of Convenience
53The respondent argues that the integrity of the Program and the health and safety of its beneficiaries is undermined by the practices of Wrightman and The Medicine Shoppe. Further, counsel refers to paragraph 71 of RJR MacDonald where the Supreme Court concluded that courts weighing the balance of convenience should nearly always assume that irreparable harm to the public interest will result where the public authority is charged with the duty of promoting or protecting the public interest and the government activity was undertaken pursuant to that responsibility. The respondent takes the position that the balance of convenience favours the public interest in protecting the health and safety of beneficiaries of the Program over the financial self-interest of Wrightman and The Medicine Shoppe.
54The respondent reported Wrightman to the College of Pharmacists and an investigation was launched. It is the College which is required to license, regulate and discipline pharmacists. In that respect, it is the College that is the guardian of the public interest.
55The evidence of the applicants Schwartz, Folliott and Folliott described some of their health and medication needs and the importance to each of them of daily dispensing of medication. As Fraser pointed out in his affidavit, a significant number of the claims made by The Medicine Shoppe are for dispensing daily medications. That means that a significant number of patients will be affected if an interim stay is not granted. I infer that the MOHLTC has an interest in the uninterrupted service to these patients. If a stay is granted, those patients would likely be required to obtain new prescriptions, identify a pharmacy that will provide daily medications, submit the prescription and receive the medications. For those who are elderly or infirm, the prospects are good that they will be greatly inconvenienced and that dispensing services will be delayed. That would not be consistent with the principles upon which the Act is predicated.
56I am satisfied that there is no indication that the respondent or the public it serves would suffer any harm as a result of the issuance of a stay of the termination.
Injunctive Relief against the Crown
57Having found that there is a genuine issue for trial whether the termination is consistent with the statutory framework, I turn to remedy. Counsel for the respondent argued that s. 14 of the Proceedings Against the Crown Act (“PACA”)9 prohibit the granting of relief sought:
(1) Where in a proceeding against the Crown any relief is sought that might, in a proceeding between persons, be granted by way of injunction or specific performance, the court shall not, as against the Crown, grant an injunction or make an order for specific performance, but in lieu thereof may make an order declaratory of the rights of the parties.
(2) The court shall not in any proceeding grant an injunction or make an order against a servant of the Crown if the effect of granting the injunction or making the order would be to give any relief against the Crown that could not have been obtained in a proceeding against the Crown, but in lieu thereof may make an order declaratory of the rights of the parties.
58Counsel for the respondent forcefully took the position that the court had no jurisdiction to order an interim stay. Because of the speed with which the matter came on, counsel for the applicants had not directed their attention to that issue. At the conclusion of submissions, I directed counsel to provide to me the authorities on which each relied with respect to the effect of s. 14.
59On Thursday, March 20th I received a fax from Ms. Blake indicating that she relied on Loomis v. Ontario (Ministry of Agriculture & Food)10 and Aroland First Nation v. Ontario11. Later that day I received from Mr. Marzel a two page supplementary memorandum of law in which he referred to Smith v. Nova Scotia (Attorney General)12, Anishinabe of the Sacred Circle Inc. v. Ontario (Minister of Health and Long-Term Care)13, Prete v. Ontario (Attorney-General)14, John Doe v. Ontario15, Bot Construction Ltd. v. Ontario (Minister of Transportation)16, Bettencourt (Litigation Guardian of) v. Ontario17, Kohn v. Ontario (Attorney General)18, Eisler (Litigation Guardian of) v. Ontario19, and 407 ETR Concession Co. v. Ontario (Minister of Transportation)20 and a paper presented by Roslyn J. Levine21
60Ms. Blake forwarded a letter in which she observed that I had not asked for written submissions and accordingly she had not done so. She noted a distinguishing feature in virtually all of the cases on which Mr. Marzel had relied.
61I do not invite further written submissions on this issue. I accept the proposition advanced by the respondent that there is a general rule that interim injunctions or declarations should not be granted against the Crown except where there is some evidence of a deliberate flouting of established law by the governmental authority.
62But that does not end the matter. Some of the cases to which counsel referred22 refer to the textbook Injunctions and Specific Performance23. At para. 3.1050 (p. 3-57), Sharpe J.A. observes the following:
There is debate as to whether an injunction may issue against a Crown servant but despite this uncertainty, it is suggested that the Canadian cases support the award of injunctions against Ministers or servants of the Crown where their course of conduct cannot be justified in law. The basic principle which emerges is that an injunction will be granted to restrain a Crown servant from exceeding the lawful limits of authority or from acting without any authority where the acts complained of constitute a violation of the plaintiff’s right.
63And further at para. 3.1120 (p. 3-62.1):
It is submitted, however, that interlocutory injunctive relief is ordinarily readily available to enjoin government wrongdoing. After a detailed review of the authorities in Smith v. Nova Scotia [citations omitted] Cromwell J.A. concluded that the legislation merely codifies the common law and that injunctions will lie against Crown servants who exceed their authority or commit acts that would attract personal liability. In Smith, a government employee was granted an interlocutory injunction to restrain a deputy minister from unlawfully terminating his employment. In MacLean v. Liquor Licence Board of Ontario 1975 513 (ON SC), [1975], 61 D.L.R. (3d) 237, 9 O.R. (2d) 597 (Div.Ct.)], the Ontario Divisional Court upheld an injunction granted against individual board members and inspectors who had threatened to cancel or suspend liquor licences of premises in which the plaintiff entertainers were performing, on the basis that their performance was indecent or immoral. [. . . ] It was also held that injunctive relief was not available against the board because it was not a suable entity. However, the court held that although the board was a Crown agent, the Proceedings Against the Crown Act did not preclude an injunction against the individual board members on the basis that they had exceeded the limits of their authority.
64Having found that it is a serious issue to be tried whether the Executive Officer exceeded the statutory authority in s. 11.1(1) of the Act by purporting to terminate pursuant to s. 15 of the Subscription Agreement, I am not precluded from granting an interim stay against a servant of the Crown to restrain that unlawful exercise of authority.
65For the reasons set out above, I consider an interim stay to be the appropriate remedy.
Conditions
66Fraser’s affidavit contained conditions sought by the respondent, should injunctive relief be ordered. The conditions contained in paragraphs 43 and 44 articulate expectations under the Act and the Subscription Agreement to which Wrightman takes no objection. The condition described in paragraph 45 is that the prescriber (i.e. the physician) must indicate on the prescription that the dispensing of a reduced quantity is necessary due to a physical or cognitive impairment which prevents the patient from taking his/her drugs in the dose and at the times prescribed. As noted, a physician may prescribe that medication be dispensed daily. The proposed condition would inappropriately restrict the decision-making of the physician. Furthermore, s. 9(1) of the DIDF Act permits the patient in writing to authorize the pharmacist to dispense less than the full prescription. I see no purpose to imposing a condition that would have such an impact on a physician or preclude the patient from exercising the right under s. 9(1). The condition imposed in paragraph 46 would require Wrightman to obtain the prior written authorization of the Executive Officer in respect of a defined list of drug products, many of which would not be controversial. I also see no purpose to imposing such a condition that would have the impact of delaying dispensing of medications pursuant to a prescription.
67Counsel for Wrightman asked also for a declaration that paragraph 15 of the Subscription Agreement is unlawful to the extent that it does not accord with the mechanisms for termination specifically contemplated under the Act. I do not need to make such a declaration and decline to do so. Indeed, that will likely be the subject of further submissions on the hearing of the application.
68Counsel for Wrightman also asked for an interim order in the nature of prohibition preventing the respondent from issuing an order under s. 11.1 of the Act suspending payments to Wrightman on the basis of the “speculative reasons cited in its January 4, 2008 letter”, pending final determination of the application. The thrust of the submissions on behalf of Wrightman was that the Executive Officer’s authority could only be found in s. 11.1(1) of the Act. I have agreed that that constitutes a genuine issue for trial. It would be inappropriate in the meantime for me to enjoin the Executive Officer from issuing an order under s. 11.1(1).
ORDER TO GO AS FOLLOWS:
69Pending further court order or agreement, an interim order will issue staying the termination of the Subscription Agreement contained in the letter dated January 2, 2008 by the Assistant Deputy Minister and Executive Officer of the Ministry of Health and Long Term Care.
70Pending further court order or agreement, an interim order will issue prohibiting the Assistant Deputy Minister and Executive Officer of the Ministry of Health and Long Term Care from proceeding with the termination of the Subscription Agreement.
71The interim orders in paragraphs 69 and 70 are subject to these conditions: (a) Wrightman shall submit claims in compliance with provincial legislation (such as the Ontario Drug Benefit Act, the Drug Interchangeability and Dispensing Fee Act, the Drug and Pharmacies Regulation Act, the Regulated Health Professions Act and the Pharmacy Act), standards of professional practice and code of ethics as set by the Ontario College of Pharmacists, and Ministry policies particularly as set out in the Ontario Drug Programs Reference Manual; and (b) Wrightman shall submit claims that are true, accurate and complete to the best of his knowledge and he not submit claims that he knows or should know to be false, inaccurate, misleading or excessive in relation to the service or benefit in respect of which the claim is being made.
72Costs of this motion will be determined by the Panel hearing the application for judicial review.
Kiteley J.
DATE: March 27, 2008
Footnotes
- As indicated below, the Executive Officer did not issue an order. The EO purported to terminate in a letter.
- R.S.O. 1998, Chapter O-10 and regulations
- R.S.O. (1990), c. P. 23
- I have referred to this as “alleged” overpayment because in this proceeding, Wrightman takes the position that the recovery was not warranted. That is irrelevant to the motion before me.
- R.S.O. 1990, c. P.27
- 2006 BCSC 631, [2006] B.C.J. No. 893 B.C.S.C.; appeal dismissed 2007 BCCA 550, [2007] B.C.J. No. 2424; 2007 BCCA 550
- S.B.C. 1989, c.2
- 1994 117 (SCC), [1994] 1 S.C.R. 311
- See FN 5
- (1993), 1993 8625 (ON SC), 16 O.R. (3d) 188 (Div. Ct.)
- (1996), 1996 7961 (ON SC), 27 O.R. (3d) 732 (G.D.)
- 2004 NSCA 106
- [2002] O.J. No. 4212 (Ont. S.C.J.)
- (1993) 1993 3386 (ON CA), 16 O.R. (3d) 161 (Ont. C.A.)
- [2007] O.J. No. 3889 (Ont. S.C.J.)
- [1998] O.J. No. 1263, (Ont. C.A.)
- 2005 462 (ON SC), [2005] 74 O.R. (3d) 550
- (2004) 8 C.P.C. (6th) 77, [2004] O.J. No. 4112
- (2004) 2004 17757 (ON SC), 239 D.L.R. (4th) 169, [2004] O.J. No. 1864 (Ont. S.C.J.)
- 2005 21673 (ON CA), [2005] O.J. No. 2504 (Ont. C.A.)
- Then Senior General Counsel, Ontario Regional Office, Department of Justice: Rules Fit for Breaking: Injunctions Against The Crown.
- Including Smith v. Nova Scotia (Attorney General) FN 12 at paragraph 110
- The Honourable Mr. Justice Robert J. Sharpe, looseleaf (Aurora: Canada Law Book, 2007)