The Ontario Court of Appeal allowed the appeal of the Medical Advisory Committee (“MAC”) and overturned the decision of the Ontario Superior Court. The Ontario Superior Court held that the arbitrator had erred in deciding the dispute between the MAC and the Respondent Physician. The Court of Appeal held the arbitrator’s decision was subject to judicial review on the reasonableness standard and the decision was reasonable.

Administrative law – Decisions of administrative tribunals – Medical Advisory Committee – Physicians and Surgeons – Hospital privileges – Arbitration Board – Judicial review – Standard of review – Reasonableness simpliciter

Smyth v. Perth and Smiths Falls District Hospital, [2008] O.J. No. 4752, Ontario Court of Appeal, November 26, 2008, J.C. MacPherson, E.A. Cronk and P.S. Rouleau JJ.A.

The Respondent Physician (“Dr. Smyth”) was part of the medical staff at Perth and Smiths Falls District Hospital (the “Hospital”) and his appointment to the medical staff was renewed every year from 1999‑2006.

The Medical Advisory Committee of the Hospital (the “MAC”) is given the authority to provide recommendations to the Board of the Hospital (the “Board”) about the reappointment of medical staff members. The Board is not bound by the MAC’s recommendation when deciding whether to reappoint a member of the Hospital’s staff.

In the spring of 2006, a dispute arose at the Hospital regarding several issues with Dr. Smyth including his refusal to provide on-call services and his alleged verbal abuse of other staff members at the Hospital. The MAC hired a consultant to review these issues and the consultant recommended that Dr. Smyth be referred to an anger management evaluation and attend a course on communication skills. In late 2006, the Board passed a resolution directing that Dr. Smyth participate in a conflict resolution program as a precondition to his reappointment.

In April 2007, the MAC reviewed Dr. Smyth’s application for reappointment and recommended the Board reject it because he had not complied with the resolution and because he had not complied with the MAC’s requirement that Dr. Smyth agree to perform a minimum of one in four on-call services.

On June 15, 2007, Dr. Smyth, the MAC and the Hospital entered into binding arbitration and the arbitration agreement referred to the two above-noted matters at issue between the parties. However, the agreement also stated that “it is hereby agreed that this arbitration will be the full and final determination with respect to Dr. Smyth’s reapplication for privileges at the Hospital…”.

The arbitrator ruled that Dr. Smyth could resign from the Hospital staff or his application for reappointment should be rejected. Dr. Smyth applied to the Court to set aside the ruling on the basis that the arbitrator’s decision dealt with a dispute the agreement did not cover. The application judge concluded the agreement limited the arbitrator to considering only the two specific issues and the arbitrator heard evidence and made his decision based on other matters. The application judge set aside the arbitrator’s decision.

The MAC appealed the application judge’s decision and the Court of Appeal allowed this appeal. The application judge had applied the correctness standard without analyzing the appropriate standard. The correctness standard was appropriate because the issue was a jurisdictional one.

On the merits, the Court of Appeal concluded that the arbitration agreement gave the arbitrator more power than merely considering the two specific issues. This was the case because of the broad passage quoted above.

The Court of Appeal then continued to consider whether the arbitrator’s decision was reasonable and concluded that it was reasonable in light of the evidence before the arbitrator.

This case was digested by Scott J. Marcinkow of Harper Grey LLP. If you would like to discuss this case further, please feel free to contact him directly at smarcinkow@harpergrey.com or review his biography at http://www.harpergrey.com.

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