On October 27, 2008, the Divisional Court released its reasons in Ontario Nurses’ Association’s ("ONA") judicial review of Rouge Valley Health System’s ("RVHS" or the "Hospital") March 2008 decision to consolidate inpatient mental health services at one of its two sites.

For the first time, the Court interpreted provisions of the Public Hospitals Act ("PHA") regarding the involvement of a hospital’s Fiscal Advisory Committee ("FAC") in the decisions of a hospital’s Board of Directors. The applicant special interest group’s attempt to read an enhanced right to consultation into the statutory role of the FAC was rejected by the Court, which held that the legislation does not require the FAC to be consulted with respect to each and every decision made by a hospital Board. The Court also affirmed that the business decisions of a hospital’s Board of Directors are not statutory, administrative decisions and therefore are not subject to judicial review.

Overview

At a March 2008 meeting, RVHS’ Board of Directors approved a Deficit Elimination Plan which included the consolidation of its inpatient mental health program from its Ajax and Pickering site to its Centenary site. ONA argued that section 5 of the Hospital Management Regulation (the "Regulation") made under the PHA required the Board to seek recommendations from its FAC before approving the consolidation. ONA argued further that given that a statutory requirement had been violated, the Board’s decision was a statutory decision subject to judicial review.

The Court disagreed, finding that the decision under review was an internal hospital decision not subject to judicial review. The Court held that although some hospital decisions are public, administrative decisions subject to judicial review, the internal decisions of a hospital board addressing budgetary considerations are not subject to review by the Courts. The Court also disagreed with ONA’s interpretation of section 5 of the Regulation, finding that the PHA does not require that the hospital Board receive recommendations from the FAC before it can make decisions in respect of the operation, use and staffing of the hospital.

Despite the Court’s finding that it did not have jurisdiction to review the Board’s decision, it went on to consider whether it was reasonable for the Board to have made its decision in the absence of recommendations from the FAC. The Court held that it was reasonable for the Board not to have sought the FAC’s recommendations in respect of the mental health consolidation.

Based on these findings, ONA’s judicial review application was dismissed by the Court.

Key Findings

  • Apart from a few key areas, such as physician privileges, the decisions of a hospital Board are private decisions and are no different from the decisions of other private corporations incorporated pursuant to the Corporations Act; therefore, the internal business decisions of hospital Boards in Ontario are not generally subject to judicial review proceedings.
  • The Public Hospitals Act does not require that the Boards of Directors of Ontario public hospitals seek the recommendations of the hospital’s Fiscal Advisory Committee or consult with the FAC prior to making decisions with respect to operation, use and staffing.

In this case it was clear that the Hospital’s FAC was properly constituted and had held a comprehensive meeting touching on a number of relevant subjects in the months prior to the Board’s consolidation decision.

It is important to note that the requirements of section 5 of the Regulation must be complied with by Ontario public hospitals and therefore that hospitals must at all times have a properly constituted Fiscal Advisory Committee which meets on a regular basis.

You can access the Public Hospitals Act at: http://www.e-laws.gov.on.ca