Court File and Parties
CITATION: Maranatha Drugs Inc. v. Ministry of Health and Long Term Care, 2012 ONSC 2677
DIVISIONAL COURT FILE NO.: 64/12
DATE: 20120502
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
HEROLD, ASTON AND WILTON-SIEGEL JJ.
BETWEEN:
MARANATHA DRUGS INC. c.o.b. as SUPERCARE PHARMACY Applicant
– and –
HER MAJESTY THE QUEEN IN RIGHT OF ONTARIO as represented by the EXECUTIVE OFFICER OF THE ONTARIO PUBLIC DRUG PROGRAMS of the MINISTRY OF HEALTH AND LONG-TERM CARE Respondent
Tyler Hodgson and Christiaan A. Jordaan, for the Applicant
William Manual and Kristin Smith, for the Respondent
HEARD at Toronto: May 2, 2012
Oral Reasons for Judgment
WILTON-SIEGEL J.
[1] Maranatha Drugs Inc. c.o.b. as Supercare Pharmacy (“the applicant”) seeks judicial review of a decision dated February 3, 2012 (“the Decision”) of the Executive Officer (“the Executive Officer”) of the Ministry of Health and Long-Term Care of Ontario (“the Ministry”).
[2] The Decision terminated Supercare’s ability to provide publicly subsidized drugs to customers under the Ontario Drug Benefit Act, R.S.O. 1990, c. O-10 (“the Act”) and receive payment from the Government of Ontario.
[3] The applicant raised an issue of natural justice as well as the reasonableness of the Decision and whether the Decision was ultra vires. Given the determination on the first issue, we do not directly address the other issues in these Reasons.
[4] The Executive Officer served a Notice of Order and Termination and Notice of Suspension dated November 10, 2011 identifying two baskets of claims that she believed were fraudulent, inaccurate or misleading:
Recovery claims, for which there were principally technical deficiencies; and
Unsubstantiated claims, for which there is an inability to reconcile the applicant’s purchase orders with its billings to the Ministry.
[5] The Executive Officer has the authority to make an order suspending the applicant under s.11.1(1) of the Act, which does not however set out any procedural requirements for the Executive Officer’s review of any response to her Notice. The Subscription Agreement dated December 1, 2008 between the applicant and the Executive Officer provided in s.12.3 that it could be terminated after twenty-one days notice during which the applicant is entitled to make representations.
[6] In Baker v. Canada (Minister of Citizenship and Immigration), [1999] 2 S.C.R. 817 at paras. 21-28, the Supreme Court addressed the factors to be considered in determining the content of the duty of fairness in any given circumstance. In our view, the nature of the decision, the importance of the decision to the applicant and the legitimate expectations of the applicant in the present circumstances require that the applicant be given a short period of time to provide the evidence that it says is available to it to address the key issues raised by the Executive Director with respect to the unsubstantiated claims.
[7] The Executive Officer’s decision is based on a finding of fraudulent conduct on the part of the applicant. It is undisputed that implementation of the Decision, which is currently stayed pursuant to a consent order, will terminate the economic viability of the applicant’s business.
[8] Lastly, with specific reference to the review process, the applicant presented explanations for the alleged discrepancies in respect of the unsubstantiated claims. However, given the short period of time between the Executive Officer’s letter of December 14, 2011 identifying the key issues and the specified deadline for submissions of December 20, 2011, the applicant did not provide supporting evidence to any significant extent.
[9] Although there is reason to doubt the ability of the applicant to produce the evidence that it says it can assemble with respect, in particular, to the exchange of products and the holding of stock for clients, the applicant has a reasonable expectation that it will be allowed to attempt to do so. Given the manner in which this process developed, this has not yet occurred.
[10] In our view, this is a close call on the issue of procedural fairness, in particular because it is not clear on the record before us that the applicant will be able to provide meaningful evidence that addresses the discrepancies in respect of the unsubstantiated claims. The tipping point for us however is that, as mentioned, the Decision effectively puts the applicant out of business on the basis that its billing practices constituted fraud and dishonesty on a significant scale. This is to be assessed against the absence of demonstrable prejudice that would flow from a short additional period of time to permit the applicant to provide whatever further evidence it can in respect of the issues identified by the Executive Officer.
[11] Accordingly, the application is allowed in part on the terms endorsed on the Application Record.
HEROLD J.
[12] The application is, for very brief oral reasons of the Court delivered today, allowed in part, subject to the following terms:
Schedule “A” to the order of Aston J. dated February 29, 2012 is incorporated into this order;
The applicant shall have until June 4, 2012 to make whatever further submissions, and provide whatever further evidence, it sees fit to the respondent; and
The stay ordered by Aston J. shall continue and expire at 11:59 p.m. on the 15th day after the decision of the Executive Officer is released.
COSTS
[13] No order as to costs.
WILTON-SIEGEL J.
HEROLD J.
ASTON J.
Date of Reasons for Judgment: May 2, 2012
Date of Release: June 4, 2012
CITATION: Maranatha Drugs Inc. v. Ministry of Health and Long Term Care, 2012 ONSC 2677
DIVISIONAL COURT FILE NO.: 64/12
DATE: 20120502
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
HEROLD, ASTON AND WILTON-SIEGEL JJ.
BETWEEN:
MARANATHA DRUGS INC. c.o.b. as SUPERCARE PHARMACY Applicant
– and –
HER MAJESTY THE QUEEN IN RIGHT OF ONTARIO as represented by the EXECUTIVE OFFICER OF THE ONTARIO PUBLIC DRUG PROGRAMS of the MINISTRY OF HEALTH AND LONG-TERM CARE Respondent
ORAL REASONS FOR JUDGMENT
WILTON-SIEGEL J.
Date of Reasons for Judgment: May 2, 2012
Date of Release: June 4, 2012