The Court declined the Petitioner’s application for a stay of execution against the set-off by the Respondent Ministry of Health against monies allegedly owed by the Petitioner to the Respondent. The Respondent had determined that the Petitioner owed it the sum of $260,000 as a result of an audit by the Ministry of Health, Audit and Investigations Branch, in respect of unsupported or disallowed claims that had been previously paid by the Respondent. The Petitioner filed a petition for judicial review of the decision set out in the Respondent’s final audit report, seeking an interim stay pending the hearing of the petition. As a preliminary matter, the Court noted it had the jurisdiction to issue a stay of execution but declined to do so as the Petitioner had not met the onus of showing it would suffer irreparable harm that could not be compensated in damages if the stay was not granted.

[2014] B.C.J. No. 2771

2014 BCSC 2124

British Columbia Supreme Court

G.C. Weatherill J.

October 29, 2014

The Petitioner operates a pharmacy where 90% of its revenue was derived from claims to PharmaCare, a government funded program providing financial assistance for prescription drugs and medical supplies, which is administered by the Respondent Ministry of Health under the Pharmaceutical Services Act, SBC 2012, c.22 (the “PSA”). The Petitioner and Respondent had entered into a PharmaCare Enrollment Agreement (“PEA”), permitting audits of the PharmaCare claims submitted by the Petitioner and set off of any amounts found to be owed at audit which are not paid within 30 days of receipt of demand for payment. The Respondent issued a final audit report claiming that the Petitioner owed approximately $260,000.00 in respect of unsupported or disallowed claims, and then exercised its right of set-off against the debt after the Petitioner failed to pay the amount claimed by the deadline. The Petitioner filed an application for judicial review and sought, as an interim order, a stay of the set-off pending the hearing of its petition for judicial review.

The Court dismissed the application, finding that the Petitioner had not demonstrated irreparable harm. The Court was satisfied that it had jurisdiction to issue a stay of execution in respect of the proceeding. The Petitioner was seeking a declaration or injunction in relation to a purported exercise of statutory power in accordance with s. 2(2) of the Judicial Review Procedure Act, RSBC 1996, c. 241. The audit team, in performing the audit, applied practices under the PSA which was an exercise or purported exercise of a statutory power. With respect to the test for a stay of execution, it is the same as that for an injunction. While the Court was not satisfied that the Petitioner had established there is a serious question to be tried in respect of the claim that the Respondent had acted outside its authority, it did find that there is a serious issue to be tried with respect to whether the Respondent is entitled under the PEA to extrapolate an audit sample to calculate a total debt. However, the Petitioner failed to show irreparable harm that could not be compensated in damages if the stay was not granted. The Respondent raised sufficient question about the ability of the Petitioner to continue in business if the set offs continue to cast doubt on the Petitioner’s claim that it will be unable to stay in business.