Court enjoins administrative body from enforcing newly enacted rule pending outcome of judicial review

29. November 2023 0

Court enjoins administrative body from enforcing newly enacted rule pending outcome of judicial review.

Administrative law – Decisions reviewed – Insurance Council –  Remedies – Interlocutory injunctions

FS Insurance Brokers, Inc. v. Insurance Council of British Columbia, [2023] B.C.J. No. 1345, 2023 BCSC 1190, British Columbia Supreme Court, July 11, 2023, F.M. Kirchner J.

The petitioner insurance broker applied for an interlocutory injunction to enjoin the Insurance Council of British Columbia (the “Council”) from enforcing a newly enacted rule prohibiting insurance brokers from engaging in insurance businesses for strata corporations managed by an entity with a common ownership with the insurance broker.

The insurance broker’s business model was to provide services solely to entities with common ownership with it that manage strata corporations. The insurance broker did not know whether or not the Council viewed its services as violating the new rule, as the Council had not determined that issue in the context of the insurance broker’s business. The insurance broker sought judicial review of the Council’s decision to enact the new rule.

The Court found the first issue raised by the insurance broker – whether the services it provided violated the new rule – was not a serious issue for adjudication on the petition, because the Council had not decided that issue. The Court held the petition asked the Court to rule on the correct interpretation of the new rule and the correct application of that new rule to the insurance broker’s business; however, the Council was entitled to decide those questions first, and have its decisions reviewed on a standard of reasonableness.

The Court found, however, that the second issue raised by the insurance broker – whether the new rule was ultra vires the Council – was a serious issue for adjudication on the petition. An administrative body cannot enact rules that are not within this statutory mandate or that conflict with the authorizing statute. That issue met the substantive requirement for an interlocutory injunction.

The Court found there was a risk of irreparable harm and the balance of convenience favoured a limited injunction enjoining the Council from enforcing the new rule pending the hearing of the petition for judicial review.

This case was digested by Joel A. Morris, and first published in the LexisNexis® Harper Grey Administrative Law Netletter and the Harper Grey Administrative Law Newsletter.  If you would like to discuss this case further, please contact Joel A. Morris at [email protected].

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