A.G. for British Columbia et al. v. Parklane Private Hospital Ltd., [1975] 2 SCR 47

Supreme Court of Canada

A.G. for British Columbia et al. v. Parklane Private Hospital Ltd., [1975] 2 S.C.R. 47

Date: 1974-05-27

Attorney-General for British Columbia (Defendant) Appellant;

and

Parklane Private Hospital Ltd. (Plaintiff) Respondent.

and

The Corporation of the City of Vancouver (Defendant).

The Corporation of the City of Vancouver (Defendant) Appellant;

and

Parklane Private Hospital Ltd. (Plaintiff) Respondent;

and

Attorney-General for British Columbia (Defendant).

1973: October 31, November 1; 1974: May 27.

Present: Martland, Judson, Spence, Pigeon and Dickson JJ.

ON APPEAL FROM THE COURT OF APPEAL FOR BRITISH COLUMBIA

Contracts—Quantum meruit—Private hospital providing services for social assistance patients—Action brought for difference between amounts claimed by hospital and amounts actually paid by city—Whether hospital’s entitlement barred by certain Orders in Council—Hospital Act, R.S.B.C. 1960, c. 178, s. 37(2)—Social Assistance Act, R.S.B.C. 1960, c. 360—Residence and Responsibility Act, R.S.B.C. 1960, c. 340, s. 3—Orders in Council 3103, 4399, 4400.

The respondent, P, owned and operated a private hospital in Vancouver in which social assistance patients and others received hospital care. P brought an action against the City of Vancouver for the difference between the amounts claimed by P to be payable by the city and the amounts actually paid, for provision by P of hospital care for social assistance patients during the period March 1, 1968, to January 31, 1972. Prior to March 1, 1968, P, pursuant to an agreement with the city, provided care and accommo-

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dation for social assistance patients at the rate of $245 per patient per month or $8.05 per patient per day, but the agreement was terminated by a letter dated January 12, 1968, in which P gave the city notice that as of March 1, 1968, the rate which would be charged by P in respect of social assistance patients would be the same as the minimum rate for other patients, $9.05 per day. Subsequent to March 1, 1968, the city continued to send to, and authorized the care and accommodation of further social assistance patients in, the respondent hospital and the latter accepted and cared for such patients. The rates per patient claimed by P varied during the period in question as did the rates per patient paid by the city.

On September 18, 1970, by O.C. 3103, a regulation was passed under the Hospital Act, R.S.B.C. 1960, c. 178, by the Lieutenant-Governor in Council, pursuant to powers conferred by amendments to s. 37 of the Hospital Act. O.C. 3103 required each private hospital to provide one-third of its beds to social assistance patients for which the private hospital was to be paid at the rate for the time being established under the Social Assistance Act, R.S.B.C. 1960, c. 360.

On December 1, 1971, O.C. 4399 and O.C. 4400 were passed under the Residence and Responsibility Act, R.S.B.C. 1960, c. 340. O.C. 4399 purported to limit the responsibility of local authorities to pay a private hospital for care of social assistance patients to the sum of $310 per month or the rate or rates payable from time to time under the Social Assistance Act, whichever was less. O.C. 4400 purported to limit the responsibility of local authorities to pay a private hospital for the care of social assistance patients that had already been given to the rate or rates payable from time to time under the Social Assistance Act.

The trial judge awarded $57,524.95 to P. An appeal by P was allowed and the British Columbia Court of Appeal increased the judgment to $92,437.70. Cross-appeals by the city and the Attorney-General for British Columbia, intervenor, were dismissed. The city and the Attorney-General for British Columbia then appealed to this Court.

Held: The appeals should be dismissed.

P had a quantum meruit action upon a quasi-contract in respect of which there had been no agreement as to remuneration. In these circumstances the city was obligated to pay reasonable rates and the city

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conceded the rates claimed by P were reasonable. P’s entitlement to recovery was not barred by any of the above-mentioned Orders in Council.

The invocation of O.C. 3103 could only operate to inhibit private hospitals in the rates they may charge if lower rates have been “established under the Social Assistance Act”. The Social Assistance Act did not contain any express power to fix rates or amounts of social assistance and no regulations had been made under the Act for that purpose.

The aim of the Residence and Responsibility Act, under the authority of which O.C. 4399 purported to be made, was to determine as between municipalities who is responsible for whom, to delineate responsibilities of local authorities inter se and to limit responsibility of local authorities to persons seeking social assistance. The Act had nothing to do with any commitments of local authorities to others, more particularly it was not intended to limit the liabilities of local authorities toward those providing services to those on social assistance.

O.C. 4400, if intra vires, would serve to extinguish retrospectively the entire claim of P, but it failed to have that effect. The Lieutenant Governor in Council was empowered to enact regulations for the purposes of carrying into effect the provisions of the Act, but nothing expressly or by necessary implication contained in the Act authorized the retrospective impairment by regulation of existing rights and obligations.

King George Highway Hospital Ltd. v. District of Surrey, [1971] S.C.R. vi, applied.

APPEALS by the City of Vancouver and the Attorney-General for British Columbia from a judgment of the Court of Appeal for British Columbia[1], allowing an appeal by the plaintiff hospital, and dismissing the cross-appeals of the City of Vancouver and the Attorney-General for British Columbia, from a judgment of Berger J. Appeal dismissed.

Ronald C. Bray and Robert G. Ward, for the Attorney-General of British Columbia.

Terrance R. Bland and Raymond G. Harvey, for the City of Vancouver.

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Duncan W. Shaw and Irwin G. Nathanson, for the plaintiff, respondent.

The judgment of the Court was delivered by

DICKSON J.—Parklane Private Hospital Ltd. owns and operates a private hospital in the City of Vancouver in which social assistance patients and others receive hospital care. Parklane brought an action against the City of Vancouver for the difference between the amounts claimed by Parklane to be payable by the city, and the amounts actually paid, for provision by Parklane of hospital care for social assistance patients during the period March 1, 1968, to January 31, 1972. The action came on for trial before Berger J. who awarded Parklane $57,524.95. An appeal by Parklane was allowed (Branca J.A. dissenting) and the British Columbia Court of Appeal increased the judgment to $92,437.70. Cross-appeals by the city and the Attorney-General for British Columbia, intervenor, were dismissed. The city and the Attorney-General for British Columbia have now appealed to this Court.

On December 21, 1967, the Department of Social Welfare of British Columbia advised all municipalities in the Province that effective January 1, 1968, the Government of the Province would share with municipalities on a 90 per cent-10 per cent basis an adjustment in the cost of boarding home care and private hospital care, the maximum rate thenceforth for hospital care to be $245 per month or $8.05 per day. Prior to March 1, 1968, Parklane, pursuant to an agreement with the city, provided care and accommodation for social assistance patients at the rate of $245 per patient per month or $8.05 per patient per day, but the agreement was terminated by a letter dated January 12, 1968, in which Parklane gave the city notice that as of March 1, 1968, the rate which would be charged by Parklane in respect of social assistance patients would be the same as the minimum rate for other patients, $9.50 per day. By the same letter

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Parklane notified the city that if the new rates were not acceptable the city was to remove all the social assistance patients from the hospital on or before February 29, 1968, failing which Parklane would take action to collect from the city at the new rates. The city made no reply and continued payments to Parklane at the rate of $8.05 per day. A statutory duty is imposed upon the city by Vancouver Charter “to make suitable provision for its poor and destitute.” Both the city and Parklane appreciated that in all humanity Parklane could not reasonably require the patients to leave the hospital; the city did not remove the patients then receiving care and has continued to send social welfare patients to the hospital.

On January 27, 1970, Vancouver City Council passed a resolution stating that the city was not prepared to pay any amount in excess of the authorized Provincial Government per diem rate for welfare or social service cases in hospitals or nursing homes. In response Parklane, through its solicitors, advised the city it was not prepared to accept the Government rate as full payment for services rendered. By a later letter to the city, Parklane noted that the City Welfare Department was continuing to refer patients to the hospital and cautioned that acceptance of patients should not be construed as acceptance of the rates set by the Government. The city did not reply to either letter. On March 4, 1970, the Department of Rehabilitation and Social Improvement of British Columbia distributed a serial letter stating that, effective April 1, 1970, the monthly maximum rate for nursing home care would be increased to $280 per month or $9.25 per day. Parklane gave the city notice that as of June 1, 1970, the rate for the care and accommodation of social welfare patients in the Parklane Hospital would be $11.50 per patient per day and if the city was not prepared to pay the new rate, all social welfare patients were to be removed by the end of June 1970, failing which the courts would be asked to enforce

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payment of a reasonable rate of $11.50 per patient per day. There was no reply by the city. On November 2, 1971, the Department advised municipalities that the social allowance rates for private hospital care would be increased to $310 per month or $10.35 per day.

Parklane continued to charge the city at the from time to time rates it advised it would charge. These are the same as, or less than, the rates charged private patients in the hospital. It is conceded by the city and by the Attorney-General for British Columbia that the rates claimed from time to time by Parklane were reasonable for the services rendered. None the less the city has continued to pay Parklane at the lower rates. The difference has been substantial, amounting to $92,437.70 during the period March 1, 1968, to January 31, 1972. The case is much like that which came before this Court in King George Highway Hospital Limited v. The Corporation of the District of Surrey[2]. In that case the hospital’s claim was made on two bases, an express contract to pay at the new rate demanded by the hospital or alternatively upon quantum meruit. Chief Justice Wilson in the Supreme Court of British Columbia found there was a contract as alleged to pay at the rates claimed by the hospital and it became unnecessary for him to deal with the alternative claim upon a quantum meruit. The municipality appealed on the ground that on the evidence there was no consensus to support such a contract. After counsel had completed his submission in the Court of Appeal, counsel for King George Hospital rose to reply and stated that he had not argued an express contract before the learned Chief Justice but only quantum meruit and would not attempt to support the judgment upon the reasons given in the Court below. In the opinion of Chief Justice Davey the essential findings of fact on the hos-

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pital’s alternative claim based on quantum meruit were not possible from the state of the record and he would have sent the case back for a new trial. Branca J.A., with whom Nemetz J.A., as he then was, agreed, held there was no implied promise on the part of the municipality to pay fair and reasonable remuneration and the hospital’s action was dismissed. An appeal by the hospital to this Court was allowed. Martland J. said orally for the Court:

We are all agreed that this appeal should succeed. Upon the evidence there was created an obligation on the respondent to pay the appellant at a per diem rate of $ 11 per patient from and after April 1, 1968.

The appeal is allowed and the judgment at trial is restored. The appellant is entitled to its costs in this Court and in the Court of Appeal.

On the present appeal a question arose as to whether the obligation to pay which the Court recognized in the King George case arose out of contract or in quantum meruit. Reference to the factums filed will disclose that argument was solely on quantum meruit and I think it must be taken that the case was decided on that footing. The right of the hospital to recover, in that case and in this, is independent of the original contract between the parties. It is important in the present appeal that subsequent to March 1, 1968, the City of Vancouver continued to send to, and authorized the care and accommodation of further social assistance patients in, Parklane Hospital and the latter accepted and cared for such patients. Parklane has a quantum meruit action upon a quasi-contract in respect of which there has been no agreement as to remuneration. In these circumstances the city must pay reasonable rates and the city concedes the rates claimed by Parklane are reasonable. Parklane is

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entitled to recover unless barred by one of the Orders in Council to which I will now refer.

Order in Council 3103

In the submission of the city and the Attorney-General for British Columbia, the Regulation passed under the Hospital Act, R.S.B.C. 1960, c. 178, by Order in Council 3103 extinguishes from the date of its passage on September 18, 1970, Parklane’s claim for remuneration at its own rates. A statute encroaching on private rights or purporting to do so should be interpreted restrictively and the burden rests on those who seek to establish that the Legislature intended to take away the private rights of individuals. On April 6, 1968, s. 37(2) of the Hospital Act dealing with the power of the Lieutenant-Governor in Council to make regulations under that Act was amended by the Statute Law Amendment Act, 1968 (B.C.), c. 53, s. 9, to read:

(2) The power to make regulations under this section extends to prescribing, in respect of any hospital, as defined under any of the provisions of this Act,

(a) the proportion of the accommodation therein which shall be used as public or standard-ward accommodation;

(b) the number or proportion of persons who, being persons in receipt of social assistance as defined in the Social Assistance Act, are to be provided with the necessary care and accommodation therein at the rates payable for the time being under that Act,

and, where such regulations are made,

(i) each hospital to which the regulations are applicable shall observe the regulations; and

(ii) the person having charge of admissions to a hospital to which any regulations made pursuant to clause (b) are applicable shall, if the number or proportion of such persons to whom that clause refers for the time being accommodated in that hospital is less than the number or proportion so prescribed, give preference of admission to such persons.

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Pursuant to s. 37 of the Hospital Act, Regulation 10, of which clauses (a) and (d) are quoted below, was made by Order in Council 3103, approved September 18, 1970:

10. (a) Each private hospital which is licensed under Part II of the Act shall provide the necessary care and accommodation therein for not less than a number of persons who are in receipt of social assistance as defined in the Social Assistance Act, which number shall be equivalent to one-third of the maximum number of patients which the said hospital is permitted to accommodate under its private hospital licence.

(d) The payment to the operator of a private hospital for providing necessary care and accommodation to a person in receipt of social assistance as aforesaid shall be made at the rate for the time being established under the Social Assistance Act. Where payment has been made to the operator of a private hospital as provided therein, it shall be deemed to be payment in full for the provision of necessary care and accommodation, notwithstanding any agreement or contract to the contrary, and any person seeking to recover any additional payment shall be guilty of an offence under the Hospital Act.

The invocation of Order in Council 3103 can only operate to inhibit private hospitals in the rates they may charge if lower rates have been “established under the Social Assistance Act”, R.S.B.C. 1960, c. 360, and the position in that respect is far from clear. The Social Assistance Act does not contain any express power to fix rates or amounts of social assistance and no regulations have been made under the Act for that purpose. Section 3 of the Act states that social assistance may be granted out of funds appropriated by the Legislature for the purpose to individuals or families who are unable to provide necessities essential to a reasonably normal and healthy existence but the Act is silent as to who decides the rate or amount of social assistance. Section 4 provides that financial aid may be granted to any municipality to defray the costs of social assistance but the Act is silent on the determination of the amount of such grants. Section 11 charges the Department of Social Welfare with the administration of the Act and states there shall be in that Department an officer known as the “Director of Social

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Welfare” who, under the Minister of Social Welfare, shall administer the provisions of the Act. Subject to the approval of the Minister, the Director is empowered by s. 13(d) to establish regulations and formulate policies not inconsistent with the Act for the administration of social assistance throughout the Province as a whole and for the local administration thereof. These are broad words, but I do not read them as giving the Director rate-making powers affecting private hospitals. If the Director can control charges for hospital services, can he control charges for groceries? I agree with Mr. Justice Robertson when he said in the British Columbia Court of Appeal:

Clause (d) is the only one that authorizes the establishment of regulations, but those regulations can only be established for the administration of social assistance throughout the Province as a whole and for the local administration thereof. I cannot distil from this language a power to impose rates of the kind in question here. The administration of social assistance is a matter internal to the department referred to in s. 11(1) and to municipal authorities of the kind referred to in clause (b) of s. 13. To my mind, if it had been the intention of the Legislature to empower the director to legislate as to the rates to be charged by private hospitals for accommodation, light, heat, food, drink, linen, nursing services and so on—a power the exercise of which could, as here, result in a loss to the hospital in the nature of a tax or confiscation—very clear words would have been required. See Maxwell on Interpretation of Statutes, 12th ed., pp. 256‑259 and cases there cited; and Abell v. County of York (1920), 61 S.C.R. 345 at p. 351. The making of regulations of the kind in question is entirely outside the ambit of the Social Assistance Act.

Even conceding that the power to establish regulations for the administration of social assistance comprehended the power to establish hospital rates for social assistance patients in private hospitals, there is no evidence that any

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regulation for this purpose was established by the Director. There was no direct communication between Department and hospitals. Circulars setting forth maximum rates for nursing home care were forwarded by the Department to municipalities under dates of December 21, 1967, March 4, 1970, and November 2, 1971, but one does not establish statutory regulations by circulars. The circulars were mere notifications to various municipalities of the assistance they could expect from the Government of British Columbia. The rates were stated for cost-sharing purposes and affected rights and obligations as between Province and municipalities but not as between municipalities and suppliers. A request by counsel for Parklane for a copy of the minute or document or regulation authorizing the rates was answered by the Deputy Minister in these words:

There are no specific minutes respecting the setting of rates for nursing and boarding homes. This is purely a matter of government policy.

When the rate change is authorized the Director of Social Welfare is advised to notify the persons concerned.

In the Court of Appeal Mr. Justice Taggart made the following observations with which I am in full agreement:

…It seems to me the circulars are no more than notification to the City that the Province of British Columbia, through the agency of the Director of Social Assistance, will pay only up to a fixed amount of the remuneration paid to the private hospitals for the services rendered to social assistance patients. The circulars are not directed to Parklane, the party primarily affected and one of the parties the Legislature must have had in mind in enacting the amendment to s. 37(2) of the Hospital Act; rather the circulars are directed to the City and it seems to me, advise the City of the extent to which the Director of Social Assistance is prepared to share in the cost incurred by the City in caring for the social assistance patients for whom the City has the primary responsibility. The City could, if it wished, pay the rates requested by Parklane and the other private hospitals,

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but if it did so, it could not look to the Director of Social Assistance for any greater remuneration than that set out in the circulars.

While they are no doubt effective as notices by the Director of Social Assistance to the City, I cannot construe the circulars as “establishing a rate” which prevents Parklane from recovering reasonable remuneration.

I am accordingly of the opinion that the right of Parklane to charge reasonable rates for its hospital services is not obstructed by Order in Council 3103.

Order in Council 4399 and Order in Council 4400

Order in Council 4399 passed on December 1, 1971, reads as follows:

THAT, pursuant to the Residence and Responsibility Act and all other powers thereunto enabling, the responsibilities of local authorities, under the Municipal Act or under any Act of the Legislature or the regulations made under any Act, to contribute towards the costs of social assistance that may be given to any persons (in the form of institutional care provided for any person in any institution that is a private hospital within the meaning of the Hospital Act or a community care facility within the meaning of the Community Care Facilities Licensing Act wholly or partially at public expense) shall be defined and limited, in part, as follows:—The responsibility aforesaid means and shall be limited to the contribution of an amount towards the costs of social assistance given to each such person which contribution shall not exceed an amount of Three Hundred and Ten Dollars ($310.00) per month or an amount or amounts equal to the rate or rates payable for the assistance prescribed pursuant to the Social Assistance Act from time to time, whichever is less.

If intra vires, the Order in Council would limit the liability of the city for the cost of social assistance given to indigent patients by Parklane after December 1, 1971, to the rates referred to in the Provincial circulars. This Order in Council purports to be made under the authority of the Residence and Responsibility Act, R.S.B.C.

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1960, c. 340, and it is argued that it was authorized by s. 3 of that Act which reads in part:

3. Where, under any Act of the Legislature or the regulations made under any Act, the authority of a local area is required to grant social assistance to any persons or to contribute towards the costs of social assistance that may be given to any persons, the persons in question shall be limited to those who are residents of that local area, and the responsibility of the local authority in respect of those persons under that Act shall be further defined and limited by the terms of this Act. Without limiting the generality of the foregoing, the provisions of this Act and of the regulations made under this Act shall define and limit the responsibilities of local authorities under any of the following Acts, notwithstanding any provision to the contrary contained in that Act or in any regulation made under that Act:—

The aim of the Act is to determine as between municipalities who is responsible for whom, to delineate responsibilities of local authorities inter se and to limit the responsibility of local authorities to persons seeking social assistance. The Act has nothing to do with any commitments of local authorities to others, more particularly it is not intended to limit the liabilities of local authorities toward those providing services to those on social assistance. I am accordingly of the opinion that the enactment of Order in Council 4399 was not authorized by the provisions of the Residence and Responsibility Act.

Order in Council 4400 is in these words:

B.C. Reg. 283/71

RESIDENCE AND RESPONSIBILITY ACT

Regulation Made by Order in Council 4400,

Approved December 1, 1971

THAT, pursuant to the Residence and Responsibility Act and all other powers thereunto enabling, the responsibilities of local authorities, under the Municipal Act or under any Act, to contribute toward the

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costs of social assistance that have been given to any persons (in the form of institutional care provided for any person in any institution that is a private hospital within the meaning of the Hospital Act or a community care facility within the meaning of the Community Care Facilities Licensing Act wholly or partially at public expense) shall be defined and limited, in part, as follows: The responsibility aforesaid, as of the date of approval of this Order, means and shall be limited to the contribution of an amount toward the costs of social assistance given to each such person, which contribution shall not exceed an amount or amounts calculated at the rate or rates payable for the assistance as prescribed pursuant to the Social Assistance Act from time to time, less any amount or amounts already contributed in respect of such person.

If intra vires, Order in Council 4400 would serve to extinguish retrospectively the entire claim of Parklane, but in my view it fails to have that effect. The Lieutenant Governor in Council is empowered to enact regulations for the purposes of carrying into effect the provisions of the Act, but nothing expressly or by necessary implication contained in the Act authorizes the retrospective impairment by regulation of existing rights and obligations.

The Attorney-General for British Columbia sought to address an argument to the Court whether, assuming Parklane has a claim which is not barred by any of the Orders in Council, Parklane could recover for amounts claimed from and after the date of issuance of the writ, February 28, 1969. This point was raised for the first time in this Court and by an intervenor. The Court declined to hear argument on the point.

I would, accordingly, dismiss the appeals with costs.

Appeals dismissed with costs.

Solicitors for the defendant, appellant, Attorney-General for British Columbia: Bouck & Co., Vancouver.

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Solicitor for the defendant, appellant, Corporation of the City of Vancouver: C.S.G.C. Fleming, Vancouver.

Solicitors for the plaintiff, respondent: Davis & Co., Vancouver.