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Medical - Public Hospitals Act (2). West Grey (Mun.) v. South Bruce Grey Health Centre
In West Grey (Mun.) v. South Bruce Grey Health Centre (Div Ct, 2025) the Divisional Court allowed a motion to quash a JR, here where the JR opposed "a decision made by South Bruce Grey Hospital Centre (“SBGHC”) to relocate 10 inpatient hospital beds from its site in Durham to its sites in Kincardine and Walkerton".
Here the court holds that, due to the private corporate nature of the South Bruce Grey Hospital Centre (SBGHC) - and despite it's public function, it was not subject to JR:[3].... The Decision was made by a private not-for-profit corporation that controls its internal management and allocation of resources to meet the performance standards expected of it as a public hospital. The Decision is not sufficiently of a public character to make it subject to judicial review.
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Position of the intervenor
[17] The Ministry of the Attorney General agrees with SBGHC that internal management and operational decisions made by the Board of Directors of a hospital corporation are not subject to judicial review. It submits that decisions of this nature are not exercises of state authority nor sufficiently public in nature to come within the scope of judicial review.
[18] The Ministry of the Attorney General submits that the Ministry of Health and Ontario Health provide oversight and funding, but they do not control the internal operations and day-to-day decision making of the hospitals as private corporations. The directors are not government employees or appointees. Hospitals are not Crown corporations or agencies established through legislation. The Ministry of the Attorney General submits that the Decision to move inpatient beds was not required by any legislation, regulation or government policy. The Decision of SBGHC’s Board of Directors did not require the Ministry of Health’s approval. It is the Ministry’s position that the Decision of SBGHC as a private corporation was not an exercise of state power and not sufficiently public to come within the scope of judicial review. The Ministry submits that the motion by SBGHC should be granted, and the Application be dismissed.
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[29] The purpose of judicial review is to ensure the legality of decisions made by the state. This purpose has been described by the Supreme Court of Canada in Highwood Congregation of Jehovah’s Witnesses (Judicial Committee) v. Wall, 2018 SCC 26 (“Wall”) as the means by which the courts are able to supervise the use of state power and to ensure those individuals exercising authority in government do not overstep their legal authority. The Supreme Court defined judicial review as a public law remedy in these terms:
[14] Not all decisions are amenable to judicial review under a superior court’s supervisory jurisdiction. Judicial review is only available where there is an exercise of state authority and where that exercise is of a sufficiently public character. Even public bodies make some decisions that are private in nature — such as renting premises and hiring staff — and such decisions are not subject to judicial review: Air Canada v. Toronto Port Authority, 2011 FCA 347, [2013] 3 F.C.R. 605, at para. 52. In making these contractual decisions, the public body is not exercising “a power central to the administrative mandate given to it by Parliament” but is rather exercising a private power (ibid.). Such decisions do not involve concerns about the rule of law insofar as this refers to the exercise of delegated authority.
[30] The Supreme Court in Wall confirmed that judicial review is only available where two fundamental conditions are present: first, where there is an exercise of state authority, and second, where that exercise of state authority is of a sufficiently public character. Justice Rowe stated in Wall that even public bodies make some decisions that are private in nature and that such a decision is therefore not subject to judicial review. Judicial review enables the court to protect the rule of law by ensuring that the exercise of state power is based on a legal source: Khorsand v. Toronto Police Services Board, 2024 ONCA 597, at para. 63.
Decision of a public authority or private entity
[31] In keeping with the principles in Wall on the availability of judicial review as a public law remedy, the first condition requires that the decision under review must be an exercise of state authority.
[32] Counsel for West Grey referred to the recent decision of the Nova Scotia Court of Appeal in Nova Scotia Health Authority v. Finkle and West, 2024 NSCA 87 on the availability of judicial review of decisions made in the field of health care management.
[33] The issue before the Court of Appeal in Finkle turned on whether the Nova Scotia Health Authority (“NSHA”) was acting under legislative authority when it acted on the hospital’s recommendation to sanction two doctors. If it had that legislative connection, its decision was of a public nature and was therefore judicially reviewable. The Court held that the NSHA was established under the Health Authorities Act and that it was therefore established as the “provincial health authority.” The Court held that sanctioning the doctors was not the exercise of a private power stemming from an employment relationship, as they were not employed by the NSHA. Instead, their hospital privileges were suspended by the NSHA as the public body enabled by statute to grant those privileges. The power to grant privileges and to take them away was therefore statutory, derived from the Health Authorities Act and its regulations.
[34] West Grey raises s. 30 of the Connecting Care Act, 2019 as the legislative “nexus” that establishes the obligation of SBGHC to consult with Ontario Health about decisions for the allocation of resources. Section 30 reads as follows:Integration
Identifying integration opportunities
30 The Agency and each health service provider and integrated care delivery system shall separately and in conjunction with each other identify opportunities to integrate the services of the health system to provide appropriate, co-ordinated, effective and efficient services. [35] It is clear from the language of s. 30 that the legislation requires Ontario Health and each hospital to identify opportunities for the integration of health-related services. The Connecting Care Act, 2019 does not provide that the transfer of hospital services from one hospital site to another in a health network constitutes an integration under the Act. The decision to transfer beds from Durham to other sites in the SGBHA was made on grounds particular to staffing and other operational issues, and not under s. 30 of the statute.
[36] The private nature of a hospital was examined by the Supreme Court in Stoffman v. Vancouver General Hospital, 1990 CanLII 62. It was held by the majority of the court that the hospital in that case was an autonomous body. Despite providing a public service, its operation did not qualify per se as a government function for the purposes of the Charter. The Court went on to hold that the Vancouver General Hospital did not form part of the “administrative branch” of government just because it was incorporated to provide health care services to the public.
[37] The Court in Stoffman drew the distinction between ultimate or extraordinary decisions, and routine or regular control over functions of the hospital. There are matters that are routine or regular in nature such as policy decisions. In Stoffman, the renewal of admitting privileges was controlled by the Board of the hospital and was not subject to government control, barring extraordinary circumstances.
[38] The first affidavit of Ms. Shaw was dated July 26, 2024 and describes how SGBHC was formed from the amalgamation of four hospitals pursuant to an Amalgamation Agreement dated January 1, 1998. Each of the four hospitals was a public hospital subject to the Ontario Public Hospitals Act. At the time, the Health Services Restructuring Commission that had been created by legislation in 1996 changed the landscape of public hospitals operating in Ontario through various mergers as well as closures to make the health care system in Ontario more efficient. Upon receiving the approval of the Minister of Health, SGBHC emerged as a private corporation governed by its own board of directors and has operated in that form for the past 26 years.
[39] From these guiding principles and the evidence given by Ms. Shaw, it is our view that SGBHC is a not-for-profit corporation having control of its own management. It is responsible for the allocation of its resources to meet the needs of the public it serves in Grey and Bruce counties.
Decision not of a sufficiently public character
[40] The Supreme Court in Wall recognized that private entities sometimes make decisions that have a broad impact on the public or have the appearance of a public character. The Supreme Court explained that this appearance does not transform the decision made by a private entity into an exercise of state power.
[41] Prior to Khorsand, the court would determine whether a matter fell within the scope of judicial review by applying the factors set out in Air Canada v. Toronto Port Authority, 2011 FCA 347. Those factors were set out in Air Canada for the court to apply when determining whether a decision was sufficiently of a public character to make it subject to judicial review:a. The character of the matter for which judicial review is sought;
b. The nature of the decision-maker and its responsibilities;
c. The extent to which a decision is founded in, and shaped by law as opposed to private discretion;
d. The body’s relationship to other statutory schemes or other parts of government;
e. The extent to which a decision maker is an agent of government or is directed, controlled or significantly influenced by a public entity;
f. The suitability of public law remedies;
g. The existence of a compulsory power; and
h. An exceptional category of cases where the conduct has attained a serious public dimension. [42] The Court of Appeal in Khorsand re-examined the applicability of the Air Canada factors when making that determination. In considering the approach for the courts to take in Ontario, Fairburn ACJO wrote that Wall does not preclude the use of the Air Canada factors for “teasing out” why the functional criteria of a decision are or are not met to determine if a decision is sufficiently public in nature. Fairburn ACJO accepted the view of the British Columbia Court of Appeal in Strauss v. North Fraser PreTrial Centre (Deputy Warden of Operations), 2019 BCCA 207 that the Air Canada factors are merely guidelines when deciding whether a decision made by a public official or tribunal has a sufficiently public character.
[43] The Court in Khorsand went on to conclude that the Air Canada factors do not provide a strict checklist, but instead play a helpful role to focus the attention of the court and its reasoning process. However, the Associate Chief Justice emphasized that this methodology is applied in the following context:[75] This is all subject to one important caveat. Wall cautions against using the Air Canada factors to transform a private decision into a public one on the basis that a decision impacts or is of significant interest to a broad segment of the public. Rowe J. said the following, at paras. 20-21:The problem with the cases that rely on Setia is that they hold that where a decision has a broad public impact, the decision is of a sufficient public character and is therefore reviewable: Graff v. New Democratic Party, 2017 ONSC 3578, 28 Admin. L.R. (6th) 294 (Div. Ct.)], at para. 18; West Toronto United Football Club v. Ontario Soccer Association, 2014 ONSC 5881, 327 O.A.C. 29 (Div. Ct.)], at para. 24. These cases fail to distinguish between “public” in a generic sense and “public” in a public law sense. In my view, a decision will be considered to be public where it involves questions about the rule of law and the limits of an administrative decision maker’s exercise of power. Simply because a decision impacts a broad segment of the public does not mean that it is public in the administrative law sense of the term. Again, judicial review is about the legality of state decision making.
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The proposition that private decisions of a public body will not be subject to judicial review does not make the inverse true. Thus it does not follow that "public" decisions of a private body – in the sense that they have some broad import – will be reviewable. The relevant inquiry is whether the legality of state decision making is at issue. [Emphasis added.] [76] This passage makes clear that it is wrong to apply the Air Canada factors to transform the decision of a private actor – such as a church, sports club, or other voluntary association – into a public decision. In my view, the passage also cautions against characterizing a decision of a public body as public in function simply because a broad segment of the public may be interested in or impacted by it. For instance, a government decision to enter into a contract to purchase property may be of significant interest to, and have an impact on, a broad segment of a community; however, that would not transform the contractual decision into a public one. In other words, it is important to distinguish between “public” in the generic sense and “public” in the sense that the legality of state decision making is at play. [44] Whether the Decision is “public” in the sense it calls into question the legality of state decision making is the live issue here. The determination that a decision is sufficiently public to attract judicial review and qualify for a public law remedy depends to a large degree on the nature of the decision itself.
[45] Of the factors listed in Air Canada, West Grey relies on the guideline that the more suitable a decision may be for public law remedies, the more the court will be inclined to regard it as public in nature.
[46] The intervenor Attorney General supports the principle recognized by this Court in cases such as Sprague v. Ontario (Ministry of Health), 2020 ONSC 2335 (Div. Ct.) and in Wise Elephant Family Health Team v. Ontario (Minister of Health), 2021 ONSC 335 (Div. Ct.) that decisions of hospital boards regarding the internal allocation of resources do not involve the legality of state decision-making. In Wise Elephant, the Minister of Health decided to terminate a health clinic’s funding agreement. This court held that the Minister’s decision to terminate the funding agreement was a private contractual matter and not subject to judicial review.
[47] The decision of this court in Sprague dealt with a challenge to the hospital’s visitor policy during the early days of the COVID-19 pandemic. This Court held that the decision was not of a sufficient public character to engage the application of public law.
[48] In O.N.A. v. Rouge River Valley System, 2008 CarswellOnt 6985, the hospital was a multi-site hospital operating as one corporate entity under the PHA. To reduce its operating deficit, the board decided to consolidate its mental health program and to close an inpatient mental health unit at one of its two sites. On a challenge of the decision, the Divisional Court held that the internal decisions of a board of a non-profit corporation seeking to address serious budgetary problems are not statutory decisions and are not subject to judicial review.
[49] The first affidavit of Nancy Shaw highlights the nature of each location of SGBHC where it provides medical services to the public. SBGHC is now a multi-site health care facility organized and operated by a board of directors who are responsible to know what resources the hospital has available to deliver that health and medical care, and to decide the best way to allocate them.
[50] The question of whether the Decision rises to the level of being sufficiently of a public character because it results in the transfer of inpatient beds within the same hospital system is, in our view, readily answered by the analysis in Khorsand. Despite the fact that the decision of the SGBHC will have an impact on the local community, the position taken by Dr. Pillisch that the transfer of those beds is essentially the thin edge of the wedge that presages total closure of the hospital in Durham is not supported by the record.
[51] The decision of the SGBHC to relocate the 10 beds from the Durham site to other sites in the hospital operated by SGBHC is a private decision. The Decision is not sufficiently of a public character to make it subject to judicial review under s. 2 of the JRPA.
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