Supreme Court of Canada
Hôpital Bellechasse v. Pilotte, [1975] 2 S.C.R. 454
Date: 1974-05-27
Bellechasse Hospital Corporation (Defendant) Appellant;
and
Lomer Pilotte (Plaintiff) Respondent;
and
I.L. Wilchesky, Gilles Paquin, Arthur Lefebvre, Claude Sergerie, Marcel Aumont, Jacques Vallée, Sydney Feldman and André Rioux Mis-en-cause;
and
Attorney General of the Province of Quebec (Intervenor) Mis-en-cause.
1974: March 15; 1974: May 27.
Present: Judson, Pigeon, Dickson, Beetz and de Grandpré JJ.
ON APPEAL FROM THE COURT OF QUEEN’S BENCH, APPEAL SIDE, PROVINCE OF QUEBEC
Physicians and surgeons.—Suspension of privileges at hospital—Non-renewal of appointment—Order in Council No. 288 of January 31, 1969 adopted under the Hospitals Act, R.S.Q. 1964, c. 164—Applicability—Physician’s right to reinstatement—Damages.
Respondent joined appellant as a surgeon in 1962. His status as an active member of the medical staff in the Department of Surgery, with consulting privileges in that specialty, was renewed from year to year in accordance with the private regulations of the hospital, until July 31, 1969. As a consequence of problems which arose between the parties, appellant advised respondent that he was suspended from his privileges and activities at the hospital as of June 23, 1969, and in a second letter dated July 11, 1969, respondent was advised of the decision of the Board of Management not to renew his appointment as of July 31, 1969.
Respondent’s action was dismissed in the Superior Court, but he was awarded damages of $55,498 by the Court of Appeal. Appellant seeks review of this decision, on the basis that between April 1, 1969, the effective date of Order in Council No. 288, adopted under the Hospitals Act, and July 31, 1969, the expiry date of the agreements concluded between the parties before the adoption of the Order in Council, the procedure followed should be that of the hospi-
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tal’s internal regulations. In a cross-appeal respondent asks the Court to allow his conclusions in mandamus for his immediate reinstatement in view of the dismissal of these conclusions in the lower courts.
Held: The appeal and the cross-appeal should be dismissed.
From April 1, 1969 onwards, relations between the parties were governed by the Order in Council, and the existing contracts were affected as soon as the regulation came into effect. The objective of the Hospitals Act and the Regulations being clearly to unify and standardize the organization, administration and operations of hospitals, after the date on which the Order in Council became effective it was necessary, from the standpoint of discipline as much as of renewal of status, for a single, uniform rule to apply, namely that prescribed by the Regulations. However neither the suspension nor the termination of relations between the parties was done in accordance with the provisions of the Regulations, as appellant believed at all times that it was governed by its own internal regulations. This breach by appellant automatically gives rise to a remedy, in this case an award of damages. The behaviour of respondent, his language and his threats after his suspension do not deprive him of this remedy.
Concerning respondent’s conclusions in mandamus, requiring that respondent be reinstated in a situation where teamwork is a fundamental necessity for the patient’s welfare might lead to conflicts and difficulties, and the patient would be the first to suffer.
Seafarer’s International Union v. Stern, [1961] S.C.R. 682, distinguished; General Medical Council v. Spackman, [1943] A.C. 627; Ste-Jeanne d’Arc Hospital v. Garneau, [1961] S.C.R. 426; Kanda v. Government of the Federation of Malaya, [1962] A.C. 322, referred to.
APPEAL from a judgment of the Court of Queen’s Bench, Appeal side, allowing damages but rejecting motions for mandamus, consequent upon an outright dismissal by the Superior Court. Cross-appeal for mandamus. Appeal dismissed with interest; cross-appeal dismissed; the whole with costs.
F. Mercier, Q.C. for the appellant.
B. Lacombe, for the respondent.
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The judgment of the Court was delivered by
DE GRANDPRÉ J.—Appellant seeks review of a majority decision of the Court of Appeal of Quebec awarding respondent damages of $55,498, but dismissing his conclusions in mandamus; at first instance all of respondent’s conclusions were dismissed. In a cross-appeal respondent, for his part, asks the Court to allow his conclusions in mandamus as well as the award of damages.
Certain persons taking part in the administration of appellant hospital were impleaded in the proceedings in all courts; at the hearing appellant and respondent advised the Court that the conclusions relating to these persons are not part of the appeal. Similarly, the hospital and Dr. Pilotte have agreed not to submit to the Court the question of the constitutional merits of Order in Council No. 288, January 31, 1969, adopted under the Hospitals Act, a question which was raised by the intervention of the Attorney General of the province of Quebec.
The action results from the suspension as of June 23, 1969, of respondent’s privileges in appellant hospital, and the decision of the Board of Management of that hospital not to renew respondent’s appointment as a member of the medical staff of the hospital as of July 31, 1969. These proceedings raise the following two questions for the Court:
(1) Are the relations between appellant and respondent governed by Order in Council No. 288, or by the regulations of the hospital, a private profit-making corporation established in April 1960?
(2) If Order in Council No. 288 does apply to the case at bar, is respondent entitled, in addition to the damages awarded him by the Court of Appeal, to be immediately reinstated in accordance with his conclusion in mandamus?
Before considering these two questions, the circumstances preceding issuance of the writ should be briefly summarized. As the facts of
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the case have been exhaustively analysed in the Court of Appeal by Lajoie J.A., it is not necessary to review them in detail. It will suffice to recall the general outline.
Respondent, a Doctor of Medicine of Laval University, a fellow of the Royal College of Canada and a certified specialist in surgery of the College of Physicians and Surgeons of the province of Quebec, joined the Bellechasse Hospital as a surgeon when it was founded in 1962. Since that time he has been attached to this hospital exclusively, until the date of his suspension and the non-renewal of his appointment in June and July, 1969. At all material times the hospital was administered by Messrs. Nadler and Teitelbaum, the majority shareholders in the Corporation. Respondent’s status was renewed from year to year in accordance with the private regulations of the hospital, and on August 1, 1968 appellant wrote a letter to respondent, the first paragraph of which reads as follows:
[TRANSLATION] At a recent meeting of the Board of Management approval was given to the renewal of your status as an “Active” member of the medical staff in the Department of Surgery, with consulting privileges in that specialty, for the period July 31, 1968 to July 31, 1969.
Problems arose between the parties, problems which need not be examined here, and on June 23, 1969 appellant wrote to respondent:
[TRANSLATION] Please be advised that as of June 23, 1969, you are suspended until further notice from all your privileges and activities at Bellechasse Hospital.
On July 11, 1969, pursuant to a decision by the Administration of appellant Corporation, respondent was advised in the following terms that his status was terminated:
Please take note that your services at the Bellechasse Hospital are no longer required, and your appointment will not be renewed at this hospital as of July 31st, 1969.
May I also remind you that you are not to enter or trespass the private property of the hospital as of this date.
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As representations and protests by respondent produced no result, proceedings were commenced in September 1969.
This very brief summary enables us to consider the first question, namely the application of Order in Council No. 288 to the case at bar. It was agreed in argument that if the Order in Council did govern relations between the parties, the procedure it provides was not followed, as appellant believed at all times that it was governed by its own internal regulations. The relevant sections of that Order in Council are Nos. 156-160 inclusive and Nos. 165-172. Their effect is clearly stated in the analysis of them by Lajoie J.A. of the Court of Appeal:
[TRANSLATION] In sum, renewal of each doctor’s appointment is done annually, in December, by the Board of Management on the recommendation of the Executive Committee of the Medical Board. If it does not recommend the renewal of a doctor’s privileges the Executive Committee must state its reasons and transmit them in writing to the doctor concerned. The latter may, within two weeks, be heard or represented before the Executive Committee or the Board of Management, which has the final say.
The procedure respecting discipline is set out in ss. 165-172 of the General Regulations. A doctor found guilty of an act derogatory to professional ethics, an infringement of hospital regulations or an act or omission deemed prejudicial to the interests of a patient or the hospital may have various penalties imposed on him by the Board of Management, including suspension or revocation, but only after the Board has received or solicited a recommendation by the Executive Committee. Immediate suspension may only be imposed in serious and urgent cases, and only by the medical director, the chairman of the Medical Board or the head of the service. The administrator has this power only in the event of absence or inaction by the persons above named.
The disciplinary machinery is brought into effect by a written complaint submitted to the chairman of the Medical Board, who refers it to the Executive Committee. The latter studies it and dismisses it or sets up a board of discipline which investigates, gives respondent an opportunity to be heard, and after study recommends the dismissal of the complaint or the application of one of the penalties provided by s. 165.
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The Order in Council provides that it will come into effect on April 1, 1969. At first sight, therefore, it would follow immediately that at the time of the problems between the parties their actions were governed by the Order. However, appellant vigorously maintains that such a conclusion is meaningless and impossible, since all appointments must be made on December 31 of each year, and moreover under the agreements entered into before the Order in Council was adopted relations between appellant and respondent terminated on July 31, 1969. In appellant’s submission the lapse between those two dates should be covered by following the procedure of the hospital’s by-laws, not of the Order in Council. The trial judge concluded that the relations between the parties after April 1, 1969 were governed by the Order in Council. That was also the view of the majority of the Court of Appeal, and in the opinion of Lajoie J.A., “existing contracts are affected as soon as the regulation comes into effect”.
However, Owen J.A. expressed a different view of the matter:
I have come to the conclusion that the regulations contained in Order-in-Council 288 did not apply in any event in connection with the non-renewal of Dr. Pilotte’s contract with the hospital which expired on the 31st July, 1969 and accordingly it is not necessary for me to consider whether Order-in-Council 288 applies to private hospitals, whether it is intra vires and whether its provisions were observed by the hospital.
He subsequently observed:
Broadly speaking these general regulations came into force on the 1st April, 1969. However the regulations with respect to renewal of appointments set out above, by their wording, could not come into force before the month of November 1969. They clearly dealt with the renewal of appointments expiring on the 31st December 1969.
And Owen J.A. concluded:
Accordingly subsequent to the 31st July, 1969 Dr. Pilotte had no claim against the hospital to have his appointment or contract renewed, or to be reappoint-
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ed or to be reinstated, or to claim damages from the hospital.
The opinion of Montgomery J.A., also dissenting in the Court of Appeal, was to the same effect:
I nevertheless agree with Mr. Justice Owen that there is nothing in the regulations that prevented the Hospital’s administration from refusing to renew the Plaintiff’s appointment when it expired on 31st July, 1969. Nothing in these regulations appears to have prolonged the duration of existing contracts with members of the medical staff until the end of that year. Was this an oversight or was it intended to give hospitals one last opportunity to rid themselves of unsatisfactory staff members?
Any doubt should, in my opinion, be interpreted in favour of the freedom of contract. Plaintiff accepted his appointment knowing that it was for one year only and might not be renewed. While the administration was not required to justify its refusal to reappoint him, in my opinion his threatening and abusive conduct after his suspension gives ample grounds for this refusal, as found by the trial judge.
Clearly, appellant wishes this Court to adopt the conclusions of Owen and Montgomery JJ.A. However, I cannot concur in those conclusions, as I feel the majority decision of the Court of Appeal is correct.
As Lajoie J.A. points out, the objective of the Hospitals Act and the Regulations is clearly to “unify and standardize organization, administration and operations of hospitals”. That objective would not be attained if, after the Order in Council of April 1, 1969 came into effect, different dates were to apply to contractual relations between doctors and hospitals. On the contrary, after that date it was necessary, from the standpoint of discipline as much as of renewal of status, for a single, uniform rule to apply, namely that prescribed by the Regulations. Any other conclusion would necessarily result in recognizing the existence of variations which for an indefinite period would largely render inoperative the legislator’s express deci-
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sion to standardize this whole area of health services. This necessarily leads to two conclusions:
(1) after April 1, 1969 all suspension proceedings had to be in accordance with the provisions of the Regulations;
(2) also after that date, all contracts between doctors and hospitals were to be automatically extended to December 31, 1969, thus enabling the appointment procedure prescribed by the Regulations to be carried out.
In the case at bar, as noted above, neither the suspension nor the termination of relations between the parties was done in accordance with the provisions of the Regulations. This breach automatically gives rise to a remedy. I am unable to accept the proposition put forward by the trial judge, that notwithstanding the breach by appellant of the provisions of the Hospital Regulations, plaintiff’s conduct, “his language and threats”, deprived him of the remedy he would ordinarily have enjoyed. Here again, I concur in the following paragraphs from the reasons for judgment of Lajoie J.A.
[TRANSLATION] With respect, I cannot agree with that reasoning. Once he had concluded that the suspension and dismissal was unlawful, and that the Act and the General Regulations had not been observed, the judge had no choice but to annul them. Otherwise, he would be substituting his own judgment for the judgment of those whom the law has made responsible for deciding these matters.
The fact that the ultimate decision would probably have been the same if it had been arrived at through the required procedure does not make the decision at issue valid or lawful, or call for the substitution of a judgment of the Court, which is not authorized by any legislative enactment.
It suffices to mention the leading cases on this point: General Medical Council v.
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Spackman[1]; Hôpital Ste-Jeanne d’Arc v. Garneau[2], Kanda v. Government of the Federation of Malaya[3].
In my view, therefore, this breach by appellant of the requirements of Order-in-Council 288 gives rise to at least an award of damages. This award was made by the Court of Appeal in the total sum of $55,498, and I see no reason to vary that decision.
The behaviour of respondent will be taken into consideration, as it must be, in connection with the second question before the Court, raised in this instance by the cross-appeal of respondent, concerning his entitlement to mandamus. I agree with him that in theory the injured party can obtain both reinstatement and damages in proceedings related thereto. In the case at bar, however, I do not think such a conclusion is justified. The views of Lajoie J.A. on the point are summarized in the following extract from his reasons:
[TRANSLATION] Appellant’s motion is allegedly based on Arts. 844 et seq C.C.P., and contains conclusions which are those of a mandamus. The Hospital challenged his right to this remedy. In each of the four cases to which mandamus applies it is essential that the act which plaintiff seeks to compel an individual to perform by order of the Court shall not be purely private in nature; under para. 2 of Art. 844 it is not sufficient that a corporation neglects or refuses to “reinstate those who have been removed without lawful cause”.
The fact remains, however, that a writ was issued and served with a motion, which is equivalent to a statement, and that there is before the Court an action the basis for which may lie in Art. 1065 C.C., and in which plaintiff is seeking performance of the obligation itself, the voiding of what was done contrary to that obligation and damages.
It is only necessary for the purposes of this action to decide as to the illegality and nullity of the Hospital’s decisions to suspend Dr Pilotte and then revoke his privileges, and this is justified by the pleadings and the evidence. I would not go so far as to allow the conclusions in mandamus.
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Though sharing the view taken by the Court of Appeal, I would prefer not to base my conclusion on the fact that relations between the parties may have been “purely private in nature”. That phrase may require analysis which in my view is not necessary in the circumstances.
In support of his cross-appeal the respondent in this Court relied mainly on our decision in Seafarer’s International Union v. Stern[4]. It need only be observed that in the Stern case the Union’s decision which the courts reversed had the effect of preventing respondent, for all practical purposes, from earning a living. It was therefore important for the courts to return to Stern the wherewithal to resume his activities in his proper field, while awarding him compensation equivalent to the damages already suffered.
The situation is quite different in the case at bar, as respondent clearly has the wherewithal to carry on his profession with some other institution. The damages awarded to him attempt so far as possible to approximate the position he would have occupied had there been no termination or suspension, and the position imposed on him by the decision of appellant.
It must be borne in mind that a hospital, even with all the precautions taken by the legislator to open its doors to the greatest possible number of doctors, allowing for all relevant factors such as professional skill, is still a place where teamwork is a fundamental necessity for the patient’s welfare, and that welfare is really the decisive consideration, which must not be lost sight of. Requiring that respondent be reinstated in a situation of that nature might lead to conflicts and difficulties, and the patient would be the first to suffer.
Again, the situation in Stern was quite different. It was observed earlier that respondent had been deprived of his customary method of earning a living. Furthermore, his field of operation was geographically much wider and his rein-
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statement could not have led to the difficulties which, in all probability, would result from a reinstatement order in the case at bar.
Taking all the circumstances into consideration, and bearing in mind the discretion which the courts must exercise in such cases, I do not consider that the reinstatement of respondent would be an appropriate remedy here.
For all these reasons, I would affirm the judgment of the Court of Appeal, ordering appellant to pay respondent the sum of $55,498 with interest since the date of service, and I would dismiss the cross-appeal, the whole with costs.
Appeal dismissed with interest; cross-appeal dismissed; the whole with costs.
Solicitors for the defendant, appellant: Stikeman, Elliott, Tamaki, Mercier & Robb, Montreal.
Solicitors for the plaintiff, respondent: Martineau, Walker, Allison, Beaulieu, Phelan & MacKell, Montreal.