St. Luc Hospital v. Lafrance et al., [1982] 1 SCR 974

Supreme Court of Canada

St. Luc Hospital v. Lafrance et al., [1982] 1 S.C.R. 974

Date: 1982-06-23

St. Luc Hospital Appellant;

and

Roméo Lafrance and the Commission des affaires sociales Respondents.

File No.: 16329.

1982: February 24; 1982: June 23.

Present: Laskin C.J. and Ritchie, Dickson, Beetz, Estey, Chouinard and Lamer JJ.

ON APPEAL FROM THE COURT OF APPEAL FOR QUEBEC

Administrative law—Commission des affaires sociales—Jurisdiction—Writ of evocation—Hospital limiting privileges of physician - Decision reversed by the Commission—Non-renewal extraneous to grounds provided by Act—Whether Commission exceeded its jurisdiction—Reasonable interpretation of s. 92b of Act—Meaning of “having regard to the particular requirements of the hospital centre”—Code of Civil Procedure, art. 846—Act respecting health services and social services, 1971 (Que.), c. 48, as amended by 1974 (Que.), c. 42, ss. 92, 92a, 92b, 92c.

Physicians and surgeons—Hospital—Non-renewal of privileges—Non-renewal extraneous to grounds provided by Act—Code of Civil Procedure, art. 846—Act respecting health services and social services, 1971 (Que.), c. 48, as amended by 1974 (Que.), c. 42, ss. 92, 92a, 92b, 92c.

Respondent appealed to the Commission des affaires sociales from a decision by appellant’s board of directors limiting his general surgery privileges for 1977 to on call periods and emergency situations. The Commission allowed his appeal on the ground that there had been a refusal to renew the privilege, and that this refusal was not based on one of the criteria contained in s. 92b of the Act respecting health services and social services. The Superior Court found that the Commission had exceeded its jurisdiction by reviewing an administrative decision pertaining to the organization and development of medical services, and authorized a writ of evocation to be issued against the Commission’s decision. The Court of Appeal reversed this judgment and dismissed the motion for evocation.

Held: The appeal should be dismissed.

The Commission des affaires sociales did not exceed the power of review conferred on it by s. 92c of the Act.

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It did not interfere with the administrative powers of the hospital and made no finding on its organization plan. It limited itself simply to the question of whether respondent’s privileges had been reduced, and having decided that they were, whether the hospital had relied on one of the grounds authorized by s. 92b. The Commission also did not commit an error of law on the face of the record. Its interpretation of s. 92b (and more specifically of the words “change” and “having regard to the particular requirements of the hospital centre”) was not so patently unreasonable that its construction could not be rationally supported by the relevant legislation and so demanded intervention by the Court upon review.

Attorney General of Quebec v. Farrah, [1978] 2 S.C.R. 638; Canadian Union of Public Employees Local 963 v. New Brunswick Liquor Corporation, [1979] 2 S.C.R. 227; Services de santé—7, [1976] C.A.S. 460, referred to.

APPEAL from a judgment of the Court of Appeal of Quebec, [1980] C.A. 497, which reversed a judgment of the Superior Court, [1978] C.A.S. 361, directing that a writ of evocation issue against a decision of the Commission des affaires sociales, [1977] C.A.S. 750. Appeal dismissed.

Claude Tellier, Q.C., for the appellant.

Roger David, for the respondent Lafrance.

William J. Atkinson and Marie-Claude Lévesque, for the respondent the Commission des affaires sociales.

English version of the judgment of the Court delivered by

CHOUINARD J.—This appeal concerns the renewal of the privileges of a physician practising at a hospital centre, and involves interpreting s. 92b and c of the Act respecting health services and social services, 1971 (Que.), c. 48, as amended by 1974 (Que.), c. 42 (now R.S.Q. 1977, c. S-5, ss. 131 and 132). For a fuller understanding, reference may also be made to ss. 92 and 92a (now ss. 129 and 130). These sections read, at the relevant time:

92. A physician or dentist may practise his profession in an establishment upon his appointment by the board of directors; he shall have the status and privileges

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granted him by the board of directors after recommendation of the council of physicians and dentists, if any.

92a. A physician or dentist wishing to practise his profession in a hospital centre must send to the general manager a form of application for appointment in accordance with the by-laws.

The committee of examination of titles of the council of physicians and dentists, the composition of which is determined by by-law, shall consider the application of the candidate and shall report to the council of physicians and dentists within 30 days of the receipt of the application by the general manager.

The council of physicians and dentists shall then send a recommendation to the board of directors within the ensuing 30 days.

The board of directors shall send a written decision to the candidate within 90 days of the receipt of the original application by the general manager.

In the case of a hospital centre affiliated with a university, the board of directors shall take the decision after consultation with the university in accordance with the terms of the contract of affiliation.

Any refusal of candidature must be substantiated and be based only on criteria of qualifications, scientific competence or conduct, having regard to the particular requirements of the hospital centre.

92b. The renewal or non-renewal of appointment, the change of status or privilege, the reinstatement or the dismissal of a physician or dentist shall be decided by the board of directors after consultation with the council of physicians and dentists. In the case of an establishment affiliated with a university, the board of directors shall also consult the university in accordance with the terms of the contract of affiliation.

Any refusal of renewal of appointment, of status or of privilege, any refusal of reinstatement or any dismissal must be substantiated and be based only on a lack of qualification, on scientific incompetence, negligence, misconduct or non-observance of the by-laws, having regard to the particular requirements of the hospital centre.

92c. Any physician or dentist who is not satisfied with a decision rendered in his regard under section 92a or 92b may appeal to the Commission.

He may also appeal to the Commission if more than 90 and less than 180 days have elapsed since his application for appointment was sent in accordance with section 92a and if no decision has been sent to him.

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Respondent, Dr. Roméo Lafrance, appealed pursuant to s. 92c to the Commission des affaires sociales [social affairs commission] from a decision by the board of directors of the Hôpital St-Luc to renew his digestive surgery privileges for 1977, but limit his general surgery privileges [TRANSLATION] “to on call periods” and “to emergency situations”.

I should mention that Dr. Lafrance’s qualifications, scientific competence, conduct and behaviour are not in any way at issue. His qualifications and competence were admitted at the outset, and in its submission the hospital wrote: [TRANSLATION] “As appellant stated, this was true and continues to be true: no personal complaint was made against respondent Lafrance, …” That is not the issue.

Dr. Lafrance began practising in the hospital’s general surgery department on February 1, 1964.

Until 1977 his privileges were always recognized in the area of general surgery. For 1976 he was given the following status and privileges: [TRANSLATION] “an active member of the Council of Physicians and Dentists in the department of surgery with privileges in general surgery”. In 1965, however, the surgeons undertook on their own to practise in their individual specialties, without giving up general surgery. In the case of Dr. Lafrance it was established that before 1977 he practised digestive surgery 95 per cent of the time while continuing to handle other cases the remaining 5 per cent of his time.

In 1973 specialized practice brought about the creation of four services, officially recognized by the hospital’s board of directors, in the department of general surgery:

—liver and pancreas surgery service;

—digestive surgery service;

—oncological surgery service;

—thoracic and vascular surgery service.

The Act respecting health services and social services (supra) was amended in 1974, 1974 (Que.), c. 42, in particular by the addition of s.

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43a, b and c (now ss. 69, 70 and 71) and the amendment of s. 70 (now s. 105), imposing on the general manager of a hospital centre a duty to prepare and submit to the board of directors for approval an organization plan of the establishment, which was then to be submitted to the Minister of Social Affairs for approval. This plan was to describe the administrative structures of the establishment, its divisions, services and departments. Accordingly, on December 18, 1974 an organization plan was adopted replacing the general surgery department with an enlarged surgery department comprising the four services mentioned above and several other services.

On September 22, 1976 the hospital’s board of directors adopted the following resolution:

[TRANSLATION] Further to the recommendation of the executive committee of the Council of Physicians and Dentists, dated August 25, the board of directors approves the organization, in the surgery department, of the following four (4) services:

—liver and pancreas surgery service;

—digestive surgery service;

—oncological surgery service;

—thoracic and vascular surgery service.

The board of directors further accepts, while reserving the right subsequently to amend them if necessary, the recommendations of the executive that specific privileges be granted to the members of each of these services, and that the activities of surgeons in these services be limited exclusively to the functions of the service to which they belong, except for on call periods or emergency situations.

Then, on December 22, 1976, the board of directors adopted a resolution to determine the status and privileges of physicians for 1977. This resolution includes a list of names, with opposite each name the status of the member, the department and the privileges. Dr. Lafrance is listed as follows:

[TRANSLATION]
Name	Member	Department	Privileges
…
Lafrance, Roméo	Active	Surgery	Digestive surgery

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A note at the bottom of the list indicates that the general surgery privileges only apply during on call periods. As appears from the resolution of September 22, 1976, general surgery privileges also extend to emergency situations.

In accordance with the resolution of December 22, 1976, the general manager advised Dr. Lafrance in a circular letter of the privileges he was granted for 1977, and the latter appealed to the Commission des affaires sociales, alleging that his privileges in general surgery had been withheld without cause.

In accordance with the second paragraph of s. 92b, the Commission [1977] C.A.S. 750 concluded that there had been a refusal to renew the privilege, that this refusal was not based “on a lack of qualification, on scientific incompetence, negligence, misconduct or non‑observance of the by-laws, having regard to the particular requirements of the hospital centre”; it allowed the appeal and reversed the decision of the board of directors, ordering that the privileges held by Dr. Lafrance in the previous year should be renewed for 1977.

The hospital challenged this decision by a motion in the Superior Court for a writ of evocation pursuant to art. 846 C.C.P. which reads:

846. The Superior Court may, at the demand of one of the parties, evoke before judgment a case pending before a court subject to its superintending and reforming power, or revise a judgment already rendered by such court, in the following cases:

1. when there is want or excess of jurisdiction;

2. when the enactment upon which the proceedings have been based or the judgment rendered is null or of no effects;

3. when the proceedings are affected by some gross irregularity, and there is reason to believe that justice has not been, or will not be done;

4. when there has been a violation of the law or an abuse of authority amounting to fraud and of such a nature as to cause a flagrant injustice.

However, in the cases provided in paragraphs 2, 3 and 4 above, the remedy lies only if, in the particular case,

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the judgments of the court seized with the proceeding are not susceptible of appeal.

The Superior Court [1977] C.A.S. 361 found that the Commission des affaires sociales had exceeded its jurisdiction and it authorized a writ of evocation to be issued. The relevant passages of its judgment are as follows:

[TRANSLATION] WHEREAS the provisions of s. 92a, b and c of the Act are intended exclusively to prevent any wrongful and discriminatory action by the hospital towards a physician in the exercise of his authority, and the purpose of these provisions is not to limit the exercise of the administrative powers of a hospital;

WHEREAS the Commission des Affaires sociales does not have jurisdiction to hear and determine an appeal from an administrative decision of the hospital on matters pertaining to the organization and development of medical services;

WHEREAS respondent, the Commission, has by its decision reviewed an administrative decision pertaining to applicant, and in so doing has assumed a jurisdiction which it does not have, thereby committing a fundamental error of law which amounts to an excess of jurisdiction;

A majority of the Court of Appeal [1980] C.A. 497 reversed this judgment and dismissed the motion in evocation. None of the three judges accepted the argument based on excess of jurisdiction. Montgomery J.A., dissenting, was of the opinion that the Commission had committed an abuse of authority under para. 4 of art. 846 C.C.P. Bernier and Paré JJ.A. were of the view that the decision of the Commission could not be evoked under any of the paragraphs of art. 846.

In this Court appellant repeated essentially the same arguments, namely excess of jurisdiction on the one hand and on the other an error on the face of the record.

Taking excess of jurisdiction first, I would say that this argument, which was accepted by the Superior Court, and rejected by the three Court of Appeal judges, was in my opinion properly rejected.

Appellant made a lengthy review of the extensive powers of administration of a board of directors, including the duty which it has to adopt an organization plan describing “the administrative

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structures of the establishment, its divisions, services and departments and any other element required by the law or the regulations”, and maintained that the Commission des affaires sociales had committed two excesses of jurisdiction.

First, it argued, the Commission did not have jurisdiction because the decision appealed from by Dr. Lafrance is not a decision “in his regard” within the meaning of the first paragraph of s. 92c of the Act respecting health services and social services (supra). Second, the Commission had interfered in areas that were strictly a matter of hospital policy.

Appellant argued that the decision had not been rendered with regard to respondent Lafrance but was a general hospital policy decision affecting all physicians. Consequently, by its intervention the Commission exceeded the power of review conferred on it by art. 92c.

None of the parties denies the administrative powers of the hospital or disputes their scope. What is at issue is the effect which the exercise of those powers may have on the existing and recognized privileges of physicians on the staff.

Respondent, Dr. Lafrance, admitted the powers of the board of directors. In his submission, he stated: [TRANSLATION] “We in no way dispute the right of a board of directors to formulate a policy for the granting of privileges to practise surgery.” I would further note that it was Dr. Lafrance himself who suggested to the board of directors on December 18, 1974 that an organization plan be adopted. This in no way indicates that he was thereby waiving the privileges he enjoyed at that time.

In fact, as the Commission des affaires sociales observed:

[TRANSLATION] One thing emerges clearly from these documents: Dr. Lafrance, who had formerly enjoyed privileges in general surgery in the surgery department, was in 1977 given privileges in digestive surgery and, in on call periods, in general surgery. The official documents accordingly indicate that beginning in 1977 there was a reduction in the privileges of Dr. Lafrance.

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It is hard to reconcile the dual objective apparently sought by the legislator, namely conferring wide administrative powers on the board of directors while at the same time providing protection for the privileges enjoyed by physicians. This is the conflict referred to by Montgomery J.A. when he states:

There may be a conflict between the right of the board of directors to administer the affairs of a hospital, and specifically to determine “the status and privileges” of a physician practicing his profession in the hospital, and the right of a physician not to have his application to practice refused or restricted, except for the reasons set forth in the Act, “having regard to the particular requirements of the hospital centre”.

These two interests were clearly recognized by the Commission des affaires sociales:

[TRANSLATION] Without denying that the board of directors has a right to adopt structures of organization or development for medical services provided by the hospital, under the Act respecting health services and social services, the Commission nonetheless has jurisdiction to hear an appeal brought by a physician who is dissatisfied with a decision that may affect his status or privileges and which is made in his regard.

The Commission realizes that ss. 92 to 92c may complicate the process of administering a hospital, but it is the legislator himself who has attached a number of rights to practise of the medical profession in a hospital, although the board of directors is free to impose its own requirements as to qualifications, competence and so on under s. 92a and b.

The Commission cannot make any finding as to the advisability or the merits of introducing and consolidating surgical services provided by the hospital; but it must determine whether the failure to renew the privileges of one physician in particular was based on one of the criteria contained in the Act.

In the case at bar, in my opinion, the Commission did not interfere with the authority of the hospital, limiting itself simply to the question of whether Dr. Lafrance’s privileges had been reduced, and having decided that they were, whether the hospital had relied on one of the grounds authorized by s. 92b, which it answered in the negative. The Commission made no finding on the hospital’s organization plan; it simply reversed

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the decision of the board of directors regarding the failure to renew Dr. Lafrance’s privileges for 1977 and directed that those privileges be renewed for the year in question.

Is the effect of this to paralyze development of the hospital, as the latter contended? It may undoubtedly “complicate the process of administering a hospital”, as the Commission des affaires sociales noted, or, as Professors Lajoie, Molinari and Auby observed in their Traité de droit de la santé et des services sociaux, 1981, at p. 1034, note 1180, mean [TRANSLATION] “that hospitals cannot implement certain aspects of their organization plans until after certain physicians or dentists have resigned, retired or died”. However, that is a matter for the legislator, not for the courts.

I adopt the following passage from Bernier J.A., dismissing the argument of appellant based on excess of jurisdiction:

[TRANSLATION] Like my brother judges, I am of the view that s. 92c (now 132), of the Act respecting health services and social services (S.Q. 1971, c. 48 as amended, now R.S.Q. 1977, c. S-5) empowered the Commission des affaires sociales (Act respecting the Commission des affaires sociales, S.Q. 1974, c. 39, ss. 20 et seq., now R.S.Q. 1977, c. C-34, ss. 21 et seq.) to hear the appeal from the decision of respondent’s board of directors. In fact, when appellant’s appointment was to be renewed for 1977, the status and privileges previously granted to him were reduced.

Appellant’s second argument cited an error of law on the face of the record.

Appellant argued, first, that the privative clause contained in the Social Affairs Commission Act, 1974 (Que.), c. 39, as amended by 1975 (Que.), c. 64 (now R.S.Q. 1977, c. C-34), leaves intact the remedy in evocation under art. 846 C.C.P. This is apparent simply from reading s. 13 (now s. 14) of that Act, since art. 846 is not mentioned in it:

No extraordinary recourse contemplated in articles 834 to 845 of the Code of Civil Procedure shall be exercised and no injunction granted against the Com-

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mission, its members or assessors acting in their official capacity.

It follows that evocation is possible not only in cases of want or excess of jurisdiction, but in the case of paras. 2, 3 (which do not apply in the case at bar) and 4 of art. 846 C.C.P., which I cite again:

846. …

4. when there has been a violation of the law or an abuse of authority amounting to fraud and of such a nature as to cause a flagrant injustice.

This is the paragraph on which the dissent of Montgomery J.A. in the Court of Appeal was based.

Appellant argued that the error “on the face” of the record falls within the scope of para. 4. This argument has long been recognized in Quebec law (see Attorney General of Quebec v. Farrah, [1978] 2 S.C.R. 638, per Pratte J., at pp. 647 et seq.). It should also be noted that the interpretation must be “so patently unreasonable that its construction cannot be rationally supported by the relevant legislation and demands intervention by the Court upon review”, to use the expression of Dickson J., speaking for the Court, in Canadian Union of Public Employees Local 963 v. New Brunswick Liquor Corporation, [1979] 2 S.C.R. 227, at p. 237.

Professors Pépin and Ouellette, in their textbook Principes de contentieux administratif 1979, wrote in this regard at p. 223:

[TRANSLATION] The concept of an error of law on the face of the record is a flexible one and can be widely extended: its content can vary depending on judicial interpretation and discretion. It can to some extent be regarded as an attack on the law, a significant, gross or intolerable error that must be checked by the courts, otherwise administrative authority could flout the law with impunity.

Appellant alleged that the Commission committed two errors. It summarized its position as follows:

[TRANSLATION] In brief, the decision of the Commission is tainted by two errors of law on the face of the record:

(a) in treating a change of privileges like a denial;

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(b) in giving the words “having regard to the particular requirements of the hospital centre” a limiting and unjustified interpretation.

The combined effect of these two errors amounts to altering the law itself, since:

(a) the general and very wide powers of a board of directors to administer the hospital’s affairs are to an extent very limited;

(b) in particular, the board of directors cannot now alter the privileges of a physician without being in a position to establish that the physician is incompetent or acting improperly.

On the first point, appellant relied on the differences in wording between the first and second paragraphs of s. 92b. Whereas the first paragraph speaks of a change of privileges, the second speaks only of a refusal to renew privileges.

The first paragraph gives the board of directors the power to make changes in privileges. The second, which determines the grounds on which this may be done, refers only to the refusal to renew privileges. The board of directors can therefore make changes without this constituting a refusal to renew, and without it providing a basis for application of the second paragraph. This is what in appellant’s submission the board of directors did, and it had full authority to do so.

To this respondent Lafrance replied that the word “change” found in the first paragraph has a wider meaning than refusal to renew, and also covers an extension of privileges. The board of directors can thus change privileges, by extending or limiting them, but in the latter case the second paragraph becomes applicable and thereby the remedy under s. 92c comes into play. In my view, this argument disposes of the question.

On the second point, namely that the Commission des affaires sociales committed an error of law on the face of the record “in giving the words ‘having regard to the particular requirements of the hospital centre’ a limiting and unjustified interpretation”, the Commission interpreted these words as follows in another case Services de santé—7, [1976] C.A.S. 460, at pp. 464—65:

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[TRANSLATION] These concluding words, “having regard to the particular requirements of the hospital centre”, were added by the amendments of January 1975. Did the addition of these few words radically alter the situation prevailing until that time? As counsel for the respondent submitted, did the legislator by adding these words add a fourth criterion not connected to the three others, which allows hospital centres to refuse an application for admission solely on the basis of requirements?

The Commission does not believe that this was the meaning of the amendment. Such an interpretation would result in divesting this section of the Act of its content, as the last portion of the sentence would for all practical purposes cancel out the criteria stated previously.

The Commission considers rather that the last portion of the sentence should be interpreted in conjunction with the three criteria which precede it, and that it can have no other effect than that of allowing a hospital centre to have particular requirements as to the qualifications, scientific competence or conduct of persons requesting admission to the Council of Physicians and Dentists. The existence in the context of the statute of the words “only” and “having regard” leads necessarily to this interpretation.

The word “only” which precedes the list of three criteria, qualifications, scientific competence and conduct, clearly indicates that there are no others.

Moreover, the phrase “having regard to” links the “particular requirements” of the hospital centre to these three “sole” criteria. All the dictionaries consulted give this expression, “having regard to”, the usual meaning of “taking into account”.

The Commission therefore shares the view taken by counsel for the appellant on this matter, namely that “the particular requirements” of a hospital centre must be seen in conjunction with the criteria of qualifications, scientific competence and conduct.

This passage refers to s. 92a, regulating the admission of a physician to a hospital centre, not to s. 92b, which applies to the privileges of a physician on the staff. This Court is not required to decide on s. 92a, which has since been amended. At the time, however, there was no substantial difference between the last paragraph of s. 92a and the second paragraph of s. 92b, that could affect the meaning to be given to the words “having regard to the particular requirements of the hospital centre”. For my part, I adopt with regard

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to s. 92b this passage already cited by Bernier J.A. in the Court of Appeal.

In any event, with respect, the interpretation suggested by respondent Lafrance and applied by the Commission des affaires sociales and the majority of the Court of Appeal does not, in my view, constitute an interpretation that is “so patently unreasonable that its construction cannot be rationally supported by the relevant legislation and demands intervention by the Court upon review”.

For these reasons, I would dismiss the appeal with costs.

Appeal dismissed with costs.

Solicitors for the appellant: Desjardins, Ducharme & Associés, Montreal.

Solicitors for the respondent Lafrance: Geoffrion & Prud’homme, Montreal.

Solicitors for the respondent the Commission des affaires sociales: William J. Atkinson and Marie-Claude Lévesque, Ste-Foy.