A cardiologist (“Dr. Rosenhek”) was successful in establishing an entitlement to damages arising out of a denial of natural justice in the revocation of his hospital privileges

Administrative law – Decisions of administrative tribunals – Hospital Appeal Board – Hearings – Conduct of hearings – Hearing de novo – Physicians and surgeons – Hospital privileges – Judicial review – Procedural requirements and fairness – Natural justice – Evidence – Damages

Rosenhek v. Windsor Regional Hospital, [2007] O.J. No. 4486, Ontario Superior Court of Justice, July 24, 2007, J.G. Quinn J.

Dr. Rosenhek worked at two hospitals in Windsor starting in mid 1984. In the Fall of 1988, his privileges were revoked by one of the hospitals, and by the second hospital in March of 1989. His privileges were restored at one of the hospitals in 1996 pursuant to a decision of the Ontario Hospital Appeal Board. At that time, the parties consented to the Hospital Appeal Board conducting a hearing de novo. Counsel in the action for damages in respect of the revocation of privileges agreed that the findings of the Hospital Appeal Board were binding.

The Court first considered whether the Windsor Regional Hospital should be liable for revoking Dr. Rosenhek’s privileges. The Court held that while there was no contract of employment between the staff physicians and the Hospital, there was a denial of natural justice on the part of the Board of Governors in revoking Dr. Rosenhek’s privileges in the manner in which the revocation hearing was conducted. Specifically, Dr. Rosenhek was not given a notice of the Medical Advisory Committee (“MAC”) meeting at which his privileges were being considered, he was not given notice of the MAC’s recommendations to revoke his privileges and he was not given an opportunity to appeal before the Board of Governors when they revoked his privileges. He was given no opportunity to respond to the MAC recommendations and the written reasons on the issue of his privileges being revoked did not cite any recent acts or omissions on the his part consistent with past criticisms of him. The allegations against Dr. Rosenhek were limited to interpersonal difficulties and a personality issue only.

The Hospital Appeal Board, in reasons of the de novo hearing, stated: “But a hospital is not a fraternity, and fraternity notions of “fitting in” do not apply. The fact is that Dr. Rosenhek walked into a hornet’s nest, not of his own making…. The very purpose of his recruitment by the hospital left him on what turned out to be the losing side of the controversy”.

The Court indicated that when the Board of Governors considered Dr. Rosenhek’s privileges in March of 1999, it was acting in a quasi judicial manner. The hearing before it dealt with an issue that would effect Dr. Rosenhek’s livelihood and his reputation and therefore the MAC ought to have afforded him natural justice in that process. The Court adopted the Hospital Appeal Board’s finding that by making their decision without affording Dr. Rosenhek the opportunity to respond to the recommendations, they denied Dr. Rosenhek natural justice.

The Court held that this decision by the Board of Governors was not a “good faith error”. The Court found there was bad faith on the part of the Board of Governors in terminating Dr. Rosenhek’s privileges for a minor problem for which he might have been only partially responsible. The notion that he did not “fit in”, along with the evidence that the hospital did not do anything to resolve the apparent conflict among its own specialists, combined with the fact that he was not given an opportunity to respond, grounded the finding of bad faith.

The Court held that the defendant hospital was liable for damages sustained by Dr. Rosenhek on the grounds of this breach of the duty of good faith. The reason for revocation of the privileges and the manner in which the hearing was conducted were inappropriate.

The manner in which the Plaintiff’s privileges were revoked and the reasons for the revocation of privileges caused Dr. Rosenhek’s economic loss and that he was entitled to damages on that basis for the tort of intentional interference with economic relations.

Dr. Rosenhek’s claim was allowed in the amount of $3,000,000 plus pre-judgment interest.

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