Tuesday, 3 September 2013

Interim Orders and Legitimate Expectations in Judicial Review in Canada

The power of courts to order interim remedies in judicial review proceedings was squarely in issue in Amalorpavanathan v. Ontario (Health and Long-Term Care), 2013 ONSC 4993. The subsequent decision on the merits (given orally: 2013 ONSC 5415) involved an interesting application of the doctrine of legitimate expectations.
A group of physiotherapy clinics are to be excluded from Ontario's public healthcare system. The regulation effecting the exclusion was to come into force on August 1. Before that date, the applicants sought judicial review. But a hearing on the merits could not be arranged in time. Accordingly, it fell to Lederer J. to determine whether interim relief should be granted in favour of the applicants.

The applicants' case was that they had a legitimate expectation that they would be consulted prior to the introduction of the regulation excluding them from the public healthcare system. Ontario has a general regulatory policy (Ontario Regulatory Policy) which provides in part:
Proposed regulatory amendments or new regulations that are considered to affect business are required to be posted for consultation purposes on the government’s Regulatory Registry for a mandatory 45-day minimum time period. The Regulatory Registry is a website…where businesses can find out about Ontario government regulatory proposals and approved regulations that affect business. The Regulatory Registry is linked to the Twice Annual Effective Dates initiative where regulations affecting business come into effect on January 1st and July 1st of each year.
No consultation period was provided for in respect of the regulation. Moreover, the regulation was not to come into effect on one of the dates mentioned in the Policy.

Lederer J. was satisfied that, prima facie, the Policy applied to the regulation. Apparently an exemption to the Policy had been made in respect of the regulation, but the basis for it was not revealed to Lederer J. (see para. 12). Accordingly, he proceeded to consider whether it would be appropriate to order interim relief.

Applying the familiar three-part test for interim relief, Lederer J. granted "a declaration suspending the operation" of the Regulation (see para. 30). I am not sure quite what this is: it could be a declaration intended to have binding effect (though that is not how one typically understandings declaration), or an order of a stay. Whatever the nature of the order, the province complied with it.

First, there was a serious issue to be tried as to whether the Policy could create a legitimate expectation of consultation prior to the introduction of delegated legislation. This seems correct. Traditionally, primary legislation has benefitted from a categorical exclusion from the duty of procedural fairness. But no such categorical exclusion exists in respect of delegated legislation.

Second, there was irreparable harm:
[27]           ...It is difficult to see where there will be irreparable harm to the Province of Ontario if, for a brief period, there is a declaration staying the effect of the new regulation. Counsel for the respondent submitted there will be chaos. There is a new funding regime made up of contractual arrangements between the government and providers of physiotherapy services. Evidently, some of the clinics that are party to this application have entered into these arrangements. Which regime will apply to which provider? Based on the evidence and the submissions that have been made, there will be two operational regimes available. The clinics that have not made new arrangements will be permitted to continue while these issues are resolved. It will have to be determined which regime will apply to those that are party to the new agreements. Whether it is left to the clinics to choose or whether, through negotiations or otherwise, some other accommodation can be made, is for the parties to resolve. There will be administrative difficulties. It would be far more complicated to allow the new regime to be implemented on August 1, 2013 and, then, expect the change to be unravelled if the applicants are successful on the judicial review and a new process engaged in to develop the future funding model. There would be an egg. It would have to be unscrambled...
Third, the balance of convenience favoured the applicants:
[29]           Counsel for the respondent says the requirements of this paragraph have been met and that the balance of convenience lies with the public interest represented by the actions taken in promulgating the new regulation and, presumably, undertaking the new funding formula. The issue is more complicated. The public interest is also served by the process adopted in the preparation and promulgation of regulations. In these circumstances, that process is the root issue that is raised. Given that I have found that the issue of irreparable harm lies to the benefit of the applicants, this consideration does not serve to set aside or overbalance that consideration or the determination that there is a serious issue to be tried.
One could perhaps quibble with the treatment of the three criteria, but the decision is nonetheless remarkable. After all, it is not every day that government is prevented from introducing delegated legislation. The statutory power to "make such interim order as [the Court] considers proper pending the final determination of the application" is a broad one. Although injunctive relief against ministers is a last resort, here the minister sought to rely on a statutory power to introduce the regulation. The case for ordering a stay was accordingly stronger here than it would have been in a case involving the exercise of non-statutory powers. Yet presumably the province would have complied with an interim declaration, so Lederer J.'s allusion to binding force may have been unnecessary. Interestingly, the Divisional Court made a point of stating that it did not endorse Lederer J.'s approach (see para. 18).

On the merits the applicants were unsuccessful. Here is what the Divisional Court had to say about the legitimate expectations argument:
[10]           The applicants’ reliance on the Ontario Regulatory Policy as basis for establishing a legitimate expectation fails to meet either of the two requirements of that doctrine.  For one, the policy is not a representation that was made directly to the applicants individually or as a specific group.   The policy is one of general application made to all of the citizens of the Province. 
[11]           For another, the policy does not constitute a “clear, unambiguous and unqualified” representation.  The policy expressly provides for exceptions.  Indeed, it contains a non-exhaustive list of possible exceptions.  In this case, the Ministry of Health and Long-term Care obtained an exemption from the policy for Regulation 138/13.  The exception relied upon was the exception for “situations where, as a consequence of a legislative requirement, the publication would adversely affect the administration or operation of a government program”.
The trend elsewhere, however, has been to recognize that an undertaking to the community at large can give rise to a legitimate expectation. This is surely the better view. If the government has published a policy which it undertakes to follow, it is fair and reasonable to enforce compliance with it. The Court cites to Mavi (para. 68), a case involving representations to individuals, but not to the broader formulations in Mount Sinai Hospital (para. 28) and the Retired Judges Case (para. 131).

Whether the existence of an exception prevents a legitimate expectation from arising is a separate question. The applicants argued that because the grounds for the exception had been withheld the province could not claim the benefit of it:
[12]           On this point, the applicants complain that they attempted to inquire of the Ministry in the process leading up to this application what the basis was for the exception being granted but that the Ministry refused to provide that information.  The applicants assert that the Ministry ought not to be permitted to rely on the exception to the policy when it has refused to provide information on how the exception was obtained.  I do not agree with that assertion for three reasons.  First, the applicants have not directly challenged the granting of the exception within this application and, in any event, it is not clear to me that the applicants had any right to inquire into the basis for the exception.  Second, there is enough on the evidentiary record to establish that this regulation did qualify for the exception that was obtained.  Third, and in any event, the relevance of the exception is not the reason why it was given but the fact that the policy allows for exceptions.  That fact demonstrates why the policy is not the type of “clear, unambiguous and unqualified” representation to which the legitimate expectations doctrine applies.
The point is well-made: if the policy is shot through with exceptions, it cannot be sufficiently clear to give rise to a legitimate expectation. And yet if the policy is otherwise sufficiently clear and by its public nature creates a legitimate expectation, any claim that an exception applies should also be made public. Otherwise, the decision-maker would be allowed to commit itself to a clear standard in public but withdraw from it in private. To permit this is to offend against the principles of good administration and the rule of law.

In  any event, the Court held that requiring consultation in this case would be pointless because the province knew the applicants' position and had already rejected it:
[16]           It would elevate form over substance to quash the Regulation in the present situation where the position of the applicants is well-known to the Ministry and the Ministry has decided to move in a direction than is different from that which the applicants prefer.  This is especially so where the issue in question is clearly a matter of government policy including the manner in which public funds are expended.
Despite the spirited challenge, the regulation will come into effect and defund the clinics, though an appeal is possible.

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