Winning Combination Inc. v. Canada (Health), 2016 FC 381

The Plaintiff Winning Combination sought a Product Licence Application (PLA) for its natural health product RESOLVE, a smoking cessation aid. The Natural and Non-Prescription Health Products Directorate and its predecessor in Health Canada was said to have made two rejections: the first was a rejection based on safety and efficacy concerns; the second rejection a month later was made on the basis that it was not a natural health product but rather a drug that should be regulated under the Food and Drug Regulations.

Winning Combination alleged those denials were a result of individual and institutional bias and bad faith in addition to the decisions being unreasonable and subject to procedural unfairness.

The Court held that the evidence showed a serious breach of procedural fairness in classifying this product as a drug without affording an opportunity to comment, especially after three prior classification decisions had found it was a natural health product. The subsequent removal of the active ingredient from the Dictionary of Natural Products list of natural substances was also done without notice or warning to the Plaintiff.

The Court also found procedural fairness concerns on the first decision relating to safety and efficacy, as well as questions as to the reasonableness of the decision.

Although there was a reconsideration process, the Court held that an administrative decision made in the absence of procedural fairness cannot be cured by a reconsideration process. Such a decision is void ab initio. In any event, the reconsideration process that was taken was also found to lack procedural fairness and showed evidence of a reasonable apprehension of bias.

In the end the Court quashed the refusals, ordered mandamus to grant a PLA within 30 days, and awarded full indemnity costs for the application.