The petitioner, a pharmacy, in a judicial review petition for an interlocutory injunction, sought two orders in the nature of certiorari quashing the decision of the Ministry of Health: (i) that the petitioner owes $1,392,405.85 to the Province of BC and (ii) to refuse to enroll the pharmacy in the PharmaCare program pursuant to the Pharmaceutical Services Act (“PSA”).

[2015] B.C.J. No. 2919

British Columbia Supreme Court

R.J. Sewell J. (In Chambers)

November 16, 2015

The petitioner pharmacy has a unique system of providing prescriptions and other services to its clients including delivering medications to its patients and assisting some patients in administering prescriptions and medications. The pharmacy was enrolled in PharmaCare (a program established pursuant to the PSA, to inter alia, pay for a portion for the cost of eligible medications for persons who qualify for benefits under the PharmaCare plan) historically via a contractual agreement with the PharmaCare authority. However effective June 1, 2015, the legislation provided that pharmacies that wished to continue to participate in the PharmaCare program must be approved by the Ministry of Health for enrollment in that program and that payments to the pharmacies must be pursuant to such enrollment. Pursuant to the PSA, the Minister has a broad discretion as to whether to enroll a pharmacy in the program.

Prior to June 1, 2015, the petitioner pharmacy made an application to enroll in the new program pursuant to the new scheme.

In 2015, the Ministry conducted an audit of the petitioner’s billings to it for the period January 1, 2013 to December 31, 2014. On May 1, 2015, the petitioner was provided notice that it would not be enrolled in the new PharmaCare program because interim findings of the draft audit report concluded that the pharmacy engages in inappropriate business practices and it would therefore not be in the public interest for the pharmacy to be enrolled as a provider. Pursuant to the audit report, the Ministry: (i) sought to recover $1,392,405.85 from the petitioner to the Province of BC, and (ii) refused to enroll the pharmacy pursuant to the PSA.

The petitioner responded to the notice by raising a number of concerns about the process adopted by the Ministry and in particular taking the positon that the process adopted was substantially unfair to the petitioner. Notwithstanding these submissions, the Ministry confirmed its decision that the petitioner would not be enrolled in the PharmaCare program. The petitioner then commenced proceedings before the Court. The parties agreed that the petitioner would remain enrolled in the PharmaCare program until the hearing of the interim injunction.

The parties further agreed that the petitioner's application should be governed by the principles set out in RJR-MacDonald Inc. v. Canada (Attorney General), [1994] 1 SCR 311.

Regarding the first prong of the RJR MacDonald test, the Court was satisfied that the petitioner raised a fair question to be decided. The focus of the petitioner’s complaint was on the process, conclusions and fairness of the audit process. The petitioner argued that the Minister acted unreasonably in basing his decision not to enroll on a fundamentally flawed audit. The Court accepted that this was a fair question based on the evidence.

Regarding the second prong, the Court also satisfied that the petitioner would suffer irreparable harm if its enrollment in PharmaCare was terminated and the audit is enforced before the petition is heard. The Court was satisfied that the enforcement of the audit alone could deprive the petitioner of its ability to meet its financial obligations generally as they fall due. While it was noted that the petitioner could recover any amounts collected pursuant to the audit that should not have been assessed, it would have no recourse if the deprivation of cash flow caused it to go out of business.

The Court noted that the real contest rested with the third prong; whether the balance of convenience lay in favour of the petitioner or the respondent. The Court held that it was satisfied by the evidence that the petitioner would effectively be put out of business if it was deprived the ability to access PharmaCare benefits for its clients and deprived of the revenue for PharmaCare. The Court was satisfied that the petitioner would suffer very grave inconvenience if the relief it sought was denied. The Court did not think that temporarily maintaining the petitioner’s enrollment in PharmaCare and staying enforcement of that decision based on the audit report would have any material effect on the proper functioning of the PharmaCare program.

The Court also took into account that there was only a relatively short period of time between the date of the interim injunction and the date set for the hearing of the petitioner. For all these reasons, the Court found the balance of convenience favoured the granting of the relief sought.

However, the Court declined to grant an open ended injunction; a condition of granting the injunction was that the petitioner must be held and required to proceed with the petition hearing on the date scheduled. The Court also commented that this limitation would not preclude the petitioner from making a further application for relief if the hearing did not proceed as scheduled.