The decision of the Respondent Deputy Minister of Health to terminate Pharmacy Participation Agreements made between PharmaCare and the Petitioner pharmacies was the exercise of a statutory power of decision; it did not arise from the common law powers that the Crown enjoys as a natural person. The Petitioners were entitled to seek judicial review of the decision under the British Columbia Judicial Review Procedure Act. The duty of procedural fairness owed to the Petitioners was not met by the Respondent. Certiorari was granted, the decision to terminate the Pharmacy Participation Agreements was quashed and the matter was remitted to the Respondent for reconsideration.

Administrative law – Pharmacists – Decisions of administrative tribunals – Ministerial orders – Policies – Statutory provisions – Pharmacy Participation Agreements – Judicial review – Procedural requirements and fairness – Legislation – Compliance with legislation – Statutory interpretation – Standard of review – Reasonableness simpliciter – Remedies – Certiorari

Delivery Drugs Ltd. (c.o.b. Gastown Pharmacy) v. British Columbia (Deputy Minister of Health), [2006] B.C.J. No. 893, British Columbia Supreme Court, April 20, 2006, Neilson J.

The Petitioners sought judicial review of the decision of the Respondent Deputy Minister of Health to terminate Pharmacy Participation Agreements made between PharmaCare and each of the two pharmacies. The agreements permitted those Petitioners to participate in PharmaCare, a program administered by the Ministry of Health. Both pharmacies had had Pharmacy Participation Agreements with PharmaCare since their inception. In June 2005, the Respondent Deputy Minister decided to terminate those agreements effective August 18, 2005. The reasons for the termination included the fact that certain directors and officers of the pharmacies had been involved in criminal activities related to pharmaceutical practice.

The Petitioners sought judicial review of these decisions on the grounds that they were based on irrelevant considerations and were made without regard to the duty of fairness owed to them.

The Respondent argued that judicial review was not available to the Petitioners as the dispute between the parties was simply a contractual matter. The Petitioners, however, argued that the decision to terminate the Pharmacy Participation Agreements was an exercise of a statutory power under the Continuing Care Act, R.S.B.C. 1996, c.70 and the Continuing Care Programs Regulation.

The Court found that on the plain wording of the Act and the Regulation, the prescription of PharmaCare programs as continuing care was intended to bring the administration of those programs under the legislative framework of the Act. It followed that section 4 governed the contractual relations between the Minister and the operators who provided PharmaCare as continuing care. The Court held that section 4 was intended to provide a complete code to govern the Minister’s contractual relations with those pharmacies that participated in PharmaCare. The Minister’s right to contract at common law with such pharmacies had been displaced by section 4 and agreements between these parties must instead be made in conformity with that legislation. Accordingly, section 4(5) governed the termination of the Pharmacy Participation Agreements of the Petitioner pharmacies and the decision of the Deputy Minister to terminate them was thus the exercise of a statutory power of decision. The Petitioners were therefore entitled to seek relief by way of judicial review under the British Columbia Judicial Review Procedure Act, R.S.B.C. 1996, c. 224.

The Court then noted that the Respondent’s decision to terminate the Pharmacy Participation Agreements was an administrative decision affecting the rights of the Petitioners. As such, a duty of procedural fairness applied to that decision. The Court held that the duty of procedural fairness owed to the Petitioners in this case lay at the lower end of the spectrum. However, the Petitioners were entitled to know the grounds upon which the Respondents planned to terminate the Pharmacy Participation Agreements and they had a right to be heard. In this case, the Petitioners were given no notice of the Respondent’s intention to terminate the Pharmacy Participation Agreements and no opportunity to be heard before the decision had been made. There was therefore a breach of the duty of procedural fairness which rendered the Respondents’ decision invalid. Certiorari was granted, the decision to terminate the Pharmacy Participation Agreements of the Petitioners was quashed and the matter was remitted to the Respondent for reconsideration.

With respect to the Petitioners’ assertion that the Minister abused his discretion by considering irrelevant or inappropriate considerations in deciding to terminate the Pharmacy Participation Agreements, the Court concluded that the fact of Mr. R’s criminal conviction provided a sufficient basis for the decision to terminate the Pharmacy Participation Agreements of both pharmacies. The Petitioners’ claim for certiorari, mandamus or prohibition based on abuse of discretion was dismissed.

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