Court Confirmed Validity of Termination of Agreement to Operate a Residential Care Facility

26. October 2016 0

Injunction application in relation to the termination of agreement to operate a residential care facility pursuant to Health Authorities Act.

Administrative law – Decisions of administrative tribunals – Evidence – Government contracts – Health authorities – Injunctions – Judicial Review – Licence to provide health services – Notice requirements – Procurement process – Remedies – Terms of agreement

Burquitlam Care Society v. Fraser Health Authority, [2015] B.C.J. No. 1343, 2015 BCSC 1343, British Columbia Supreme Court, July 10, 2015, G.K. Macintosh J. (In Chambers)

The plaintiff Burquitlam Care Society operated a residential care facility.  The respondent Fraser Health Authority, a statutory agency of the provincial government, was authorized pursuant to the Health Authorities Act to implement a regional health plan and allocate funding for the delivery of health services in the “Fraser Health” region.

The parties entered into an agreement dated November 18, 1997, for Burquitlam to operate a residential care facility.  The agreement provided that it shall remain in force as long as Burquitlam continued to operate a health care facility, subject to either party giving the other 365 days’ written notice that the agreement is to end.

In 2012-13, Burquitlam submitted a bid pursuant to a request for a proposal process to build and operate a new residential care facility in the general vicinity of its existing facility.  Burquitlam was disqualified from the bidding process.  A third party was successful in the bidding process.  Fraser Health Authority determined it wanted to assign the beds allocated to Burquitlam to the third party and requested Burquitlam agree to a two year winding down of the operation at its facility.  Burquitlam wanted to continue to operate its facility. The Fraser Health Authority advised Burquitlam that it would be issuing a 365-day notice to terminate the agreement.

Burquitlam commenced an action against Fraser Health Authority and filed an injunction application.

The chambers judge held the injunction application turned on whether Burquitlam could establish a serious question to be tried with respect to the duty of honesty in contractual performance established in Bhasin v. Hrynew, 2014 SCC 71.

The chambers judge concluded he was unable to find a serious question to be tried that the Fraser Health Authority offended the principle in Bhasin that parties to a contract must not lie or otherwise knowingly mislead each other about matters directly linked to the performance of the contract.  The application, and Burquitlam’s claim generally, was not about whether the Fraser Health Authority was taking the best steps to meet the public’s needs pursuant to its statutory authority.  Instead, the application was about whether the Fraser Health Authority had lied to or knowingly mislead Burquitlam leading up to the intended termination of the agreement.  There was no evidence to support that assertion.  Burquitlam had, in fact, received two and a half years’ notice of the termination instead of one year as contemplated in the agreement.  The chambers judge noted that had there been a serious question to be tried, the balance of convenience would have favoured Burquitlam.  The preservation of the status quo, in this case, the continuing operation of Burquitlam’s facility, would have favoured the injunction.  Interference with the continuing operation of Burquitlam’s facility would have constituted irreparable harm, particularly where there would be potential to disrupt elderly residents in the course of winding down the Burquitlam facility.

The injunction application was dismissed.

This case was digested by Joel A. Morris of Harper Grey LLP.  If you would like to discuss this case further, please feel free to contact him directly at or review his biography at

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