Court of Appeal Decision of the Week

With Clinical Precision: Court of Appeal Grants Surgeon’s Stay Pending Appeal Application

Case: Modry v Alberta Health Services, 2015 ABCA 328 (CanLII)

Keywords: Stay Pending Appeal Application; RJR-MacDonald Inc. v Canada (Attorney General), [1994] 1 SCR 311; Section 40 of the Supreme Court Act, RSC 1985, c S-26; Public Importance; Irreparable Harm; Balance of Convenience

Synopsis:

Interesting case here from Alberta on mandatory injunctions. Three things:

  • book Injunctions by Meehan (yup, me) and Currie (now Vice-Dean, U of Ottawa) by Carswell 1996 — 2 years after RJR came out (why we did the book) — here’s the hyperlink if you want it
  • Justice Bielby, who wrote the decision herein, refers to “Brown JA (as he then was)”— he’s now on the S.C.C. of course
  • the case (in para. 1) specifically refers to an application for Leave to the S.C.C. — would be interested to see if the court (ie. the S.C.C.), after 21 years, is game to go back for another look-see/recalibration — even if it’d mean Currie and I would likely end up having to pen another edition of Injunctions.

The Applicants, Dr. Dennis Modry and Dennis Modry Professional Corporation, obtain mandatory injunctive relief reinstating surgical privileges and ordering the restoration of weekly payments of $20,000.00 by the Respondents, Alberta Health Services (AHS).

August 21, 2015, the Alberta Court of Appeal sets aside this mandatory injunction. The Applicants therefore seek the following relief from the Court:

1) A stay of the August 21, 2015 judgment pending the hearing of their application for leave to appeal to the Supreme Court of Canada and, should that leave be granted, that the stay be extended pending the hearing of the resulting appeal; or

3) If the above stated relief is not granted, that AHS be required to reinstate weekly payments of $20,000.00 to the Applicants; or

4) An order that the Applicants not be required to pay any of the $1.64 million they would otherwise be required to repay to AHS as per the August 21, 2015 judgment; or

5) A stay of the August 21, 2015 judgment pending the resolution of their application for summary judgment in the underlying litigation.

The Court of Appeal finds the Applicants have not established a reasonable likelihood of succeeding in the application as it relates to a stay pending the conclusion of their summary judgment application – the August 21, 2015 decision strongly suggests the need for a full trial of the underlying matter.

That being said, with respect to the test for a stay pending appeal, the Court of Appeal grants the Applicants a stay – but only narrowly as it relates to the payment of any portion of the $1.64 million, or interest on that sum, or costs in relation to the August 21, 2015 decision until April 15, 2016.

Importance:

The Court of Appeal, citing RJR-MacDonald Inc. v Canada (Attorney General), [1994] 1 SCR 311 at 334 [RJR-MacDonald] articulated the test for stay pending appeal.

The Applicants must show:

1) That there is a serious question to be considered;

2) That irreparable harm will result if the stay is not granted between now and the date of the hearing of their application for leave to appeal to the Supreme Court of Canada and, if that leave is granted, until the hearing of the appeal proper; and

3) That the balance of convenience favours Dr. Modry and his professional corporation.

1) Serious Question to be Considered

To meet the first requirement of the RJR-MacDonald test, that there is a serious question to be considered, the Applicants established an argument sufficient (in the Court of Appeal’s estimation) to meet the Supreme Court of Canada’s requirements to grant leave under Section 40 of the Supreme Court Act, RSC 1985, c S-26.

Leave to appeal applications are generally granted where, “…There is an arguable issue of public importance, an important issue of law or mixed law and fact, or that the matter is otherwise of such a nature and significance as to warrant a decision by the Supreme Court” (Minister of Community Services v BF, 2003 NSCA 125 (CanLII) at para 11, 219 NSR (2d) 67).

The Applicants argued their appeal raised a number of issues of public importance. These include the extent to which natural justice and procedural fairness must be respected in a multi-stage disciplinary process, and whether employment law principles apply to relationships between health authorities and physicians – the right of a physician to seek reinstatement by court order when privileges are improperly terminated.

The relative strength of the prima facie case against the respondents did not preclude the Court of Appeal from finding an arguable case for the Supreme Court to grant leave. Therefore, the Court found the Applicants met the first branch of the test

2) Irreparable Harm

Irreparable harm is somewhat esoterically defined by the Court of Appeal as “whether the refusal to grant relief could so adversely affect the applicant’s own interests that the harm could not be remedied…”

The Court of Appeal explained that irreparable harm refers to the nature, rather than the magnitude of the harm – that it is harm which cannot be quantified in monetary terms or cannot be cured (typically because one party cannot collect damages from the other).

The Applicant, Dr. Modry, argued that, if not permitted to return to practice immediately, his professional reputation, skills, and contacts would be permanently damaged (leading to a financial loss that would be difficult to quantify).

The Court rejected this argument – finding that a failure to grant the stay would not damage Dr. Modry’s reputation and professional contacts beyond what had already occurred to date.

At this stage, the Court concluded that the applicants met the burden of proving irreparable harm but only in relation to the requirement that they repay the $1.64 million prior to the disposition of their leave application.

In order to repay AHS the $1.64 million, Dr. Modry would effectively be required to sell assets (including his home) and forego real-estate development opportunities. Here, the Court of Appeal agreed that damages would be difficult to quantify or establish.

3) Balance of Convenience

The Court of Appeal concluded that, although AHS has an obligation to attempt recovery of public funds if these are improperly paid, that obligation could be respected without requiring that Dr. Modry sell his home at this time – especially in light of the short delay expected until the Supreme Court renders its leave decision.

The application was therefore dismissed with the narrow exception of a limited stay relating to the Applicant’s obligations to repay $1.64 million to AHS. For this part of the application, all three elements of the test in RJR-MacDonald were satisfied.

Counsel for the Applicants: Harold Veale Q.C., Rod Wasylyshyn, and Amber Poburan (Ogilvie LLP, Edmonton)

Counsel for the Respondents: Jonathan Faulds Q.C. and Mark Raven-Jackson (Field Law, Edmonton)

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Posted: Tuesday, November 03, 2015