The Respondent Ministry of Community, Family and Children’s Services (the “Ministry”) terminated the funding and directed another agency to take over the programs of the Applicant, St. Catharines Association for Community Living (“SCACL”), a non-profit charitable organization providing services to disabled persons. SCACL’s application for judicial review of this decision was allowed, and the Ministry’s decision to terminate the funding, seize the property, and authorize a third party to operate the agency was quashed as illegal. The standard of review was that the decision was patently unreasonable. Although the Minister was entitled to terminate a contractual relationship where there has been a fundamental breach, there was no evidence of an inability by SCACL to protect its clients, there was no evidence of any weighing of considerations pertinent to the objects of the administration. The decision was therefore patently unreasonable.

Administrative law – Charitable organizations – Governance and funding – Powers of government – Decisions of administrative tribunals – Ministerial orders – Jurisdiction – Judicial review – Procedural requirements and fairness – Compliance with legislation – Standard of review – Patent unreasonableness

Byl (Litigation guardian of) v. Ontario, [2003] O.J. No. 3436, Ontario Superior Court of Justice Divisional Court, September 8, 2003, Lane, Meehan and Linhares de Sousa JJ.

The Applicant, St. Catharines Association for Community Living (“SCACL”), a non-profit charitable organization providing services to disabled persons, was funded by the Respondent Ministry of Community, Family and Children’s Services (the “Ministry”). Following two deaths and one injury of SCACL’s residents, only one of which involved the fault of SCACL, the Ministry terminated the funding and directed another agency to take over the programs and property held by SCACL. SCACL sought judicial review of the decision, arguing it was made without notice and for improper reasons. The Ministry argued that the decision to terminate the funding was not an exercise of statutory power and therefore not subject to judicial review as the Ministry had not designated SCACL an agency subject to control of the Ministry of Community and Social Services Act, R.S.O. 1990, c.M.20 (the “Act”), which provided under section 13 that the Lieutenant Governor in Council might make regulations governing the operation and activities of charitable organizations.

The application for judicial review was granted. The Ministry’s failure to proceed under section 13 of the Act and obtain a regulation from the Lieutenant Governor in Council cannot produce the benefit of evading judicial review. The purported exercise by the Minister of a power to appoint a third party to operate and manage SCACL and to occupy its premises for that purpose without an order in counsel is an error in law, a decision made without jurisdiction and void.

The standard of review of the Minister’s decision is that of patent unreasonableness. The evidence did not disclose that the Ministry had any financial interest in SCACL’s property that would entitle it to deal with the property as it did. The Ministry was not entitled to terminate the contractual relationship on the basis that there had been a fundamental breach. There was no evidence of an inability to protect disabled individuals. There was no evidence of a weighing of considerations pertinent to the object of the administration. The decision offends the principles of Roncarelli v. Duplessis (1959), 16 D.L.R. (2d) 689, and was patently unreasonable.

As well, the Ministry breached its duty of fairness to SCACL. There was no evidence SCACL received any fair warning. They had no reasonable opportunity to make representations nor did they have timely and full disclosure of the reasons. There was as well an abuse of discretion in announcing the decision in advance to the media before advising SCACL.

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