A party wishing to bring an action for damages arising out of a hospital privileges issue must first proceed by way of a statutory route to establish the basis for sustaining the claim in damages. To permit Applicants to commence actions for damages on a hospital privileges issue without following the statutory process, would result in a system whereby a dissatisfied party would be able to bypass the specialised tribunal, a result that is not permitted under the Act.

Administrative law – Physicians and surgeons – Hospital privileges – Damages – Statutory provisions – Decisions of administrative tribunals – Appeal process – Compliance with legislation – Jurisdiction of court

Beiko v. Hotel Dieu Hospital St. Catharines, [2007] O.J. No. 331, Ontario Superior Court of Justice, January 26, 2006, G.B. Morawetz J.

The Plaintiffs brought an action for breach of contract and negligent misrepresentations, notwithstanding a failure to follow the statutory appeal route set out in the Public Hospitals Act (the “Act”). The Plaintiffs submitted that they were induced into entering into an agreement whereby the Plaintiffs, who were members of the Service of Ophthalmologists for the Defendant hospital, were required to hire a new ophthalmologist under the promise that the hospital would not reduce the Plaintiffs’ existing operating room time. The Plaintiffs hired a new ophthalmologist. Subsequently, the hospital advised that a portion of the Plaintiffs’ operating room time would be reduced. The Plaintiffs appealed to the Medical Advisory Committee for a determination of the OR time allotment. The MAC ruled against the Plaintiffs and the decision of the MAC was later affirmed by the hospital’s Board of Trustees. The Plaintiffs initiated, but later withdrew, an appeal of that decision to the Appeal Board pursuant to s. 41 of the Act.

The Court outlined the statutory procedure for reviewing hospital privileges under the Act. It was only after the Appeal Board made its decision that a party could complain to the Divisional Court. The Court found that in establishing such a comprehensive code to deal with issues of privileges, it was not open for the Court to conduct a hearing independent from the process as set out in the Act, since it lacked jurisdiction to do so. The Court determined that in the circumstances of this case, the allocation of OR time was a matter of privileges, which was determined under the regime set out in the Act. The Court can determine claims for damages arising out of this loss of privileges, but such determination has to take into account that the issues relating to the privileges have been determined.

Accordingly, the Court struck out the Plaintiffs’ claim as against the hospital, but stayed the Order for 30 days so that the Plaintiffs could apply for leave to amend their pleadings in the manner required to comply with the Act. The Court ruled it was conceivable that the Plaintiffs may have an independent cause of action against the former CEO of the hospital, and refused to strike that claim.

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