Rosenhek v. Windsor Hospital,

• Jurisdiction: Ontario
• Judge: Doherty, Moldaver and Epstein, JJ.A.
• Neutral Citation: 2010 ONCA 13
• Citation: (2010), 257 O.A.C. 283 (CA),2010 ONCA 13,[2010] OJ No 129 (QL),257 OAC 283,257 O.A.C. 283,(2010), 257 OAC 283 (CA),[2010] O.J. No 129 (QL)
• Date: 02 December 2009
• Court: Court of Appeal (Ontario)

Rosenhek v. Windsor Hospital (2010), 257 O.A.C. 283 (CA)

MLB headnote and full text

Temp. Cite: [2010] O.A.C. TBEd. JA.029

Dr. I.S. Rosenhek (plaintiff/respondent/appellant by way of cross-appeal) v. Windsor Regional Hospital (defendant/appellant/respondent by way of cross-appeal)

(C47611; 2010 ONCA 13)

Indexed As: Rosenhek v. Windsor Regional Hospital

Ontario Court of Appeal

Doherty, Moldaver and Epstein, JJ.A.

January 18, 2010.

Summary:

In March 1989, the Board of Governors of the defendant community hospital summarily revoked the privileges of Dr. Rosenhek, a specialist in cardiology, some two months into his three-month renewal. Dr. Rosenhek appealed to the Hospital Appeal Board. In January 1994, the Appeal Board found that the hospital had complied with its statutory obligations but had failed to give Dr. Rosenhek adequate notice. A new hearing took the form of a de novo appeal. The Appeal Board set aside the revocation order. Dr. Rosenhek sued the hospital, alleging that the Board of Governors acted in bad faith. His $6,731,480 claim was based on loss of income for the ten years he was denied privileges.

The Ontario Superior Court, in a decision unreported in this series of reports, found that the Board of Governors acted in bad faith. However, the court was critical of the lack of evidence put forward to quantify the loss of income, and awarded $3 million. The hospital appealed liability and damages. Dr. Rosenhek cross-appealed damages.

The Ontario Court of Appeal dismissed the appeal and cross-appeal. The Board of Governors, in bad faith, exercised its decision-making function for an ulterior purpose and not for the public good, in circumstances where it had to know that its conduct would likely injure Dr. Rosenhek. The tort of misfeasance in a public office was made out. As to damages, while Dr. Rosenhek had adduced enough evidence to prove a significant loss, there was no evidence as to the income he could have made by working full time at the hospital.

Administrative Law - Topic 8345

Administrative powers - Review of discretionary powers - Bad faith - Dr. Rosenhek claimed that the Board of Governors of the defendant community hospital acted in bad faith when it summarily revoked his privileges - The hospital appealed from the finding of liability - It argued that the trial judge erroneously equated a failure to comply with the rules of natural justice in the process surrounding the revocation, with bad faith by the Board - The Ontario Court of Appeal began its analysis by stating that "[t]here is a distinction between the failure of an entity such as the Board to abide by statutory or other procedural requirements and a finding that the Board acted in bad faith in the exercise of its statutory powers. A failure to comply with the requirements of the statute or the dictates of natural justice may well give rise to a remedy on review of that decision but will not, in and of itself, give rise to a private cause of action" - The court found that the trial judge's reasons demonstrated that he was alive to the distinction - See paragraph 24.

Administrative Law - Topic 8345

Administrative powers - Review of discretionary powers - Bad faith - Dr. Rosenhek claimed that the Board of Governors of the defendant community hospital acted in bad faith when it summarily revoked his privileges - The hospital appealed from the finding of liability - It argued that the trial judge erroneously equated a failure to comply with the rules of natural justice in the process surrounding the revocation, with bad faith by the Board - The Ontario Court of Appeal held that the trial judge correctly considered the Board's failure to accord procedural fairness to Dr. Rosenhek as part of the overall evidentiary picture - "The manner in which the Board treated Dr. Rosenhek during the process, including its failure to give him fair notice of the revocation, could inform the trial judge's assessment of whether the Board acted in bad faith in revoking Dr. Rosenhek's privileges" - See paragraph 25.

Damages - Topic 1210

Nominal damages - Insufficient evidence to assess amount of loss - [See Hospitals - Topic 350 ].

Hospitals - Topic 342

Operation - Doctors - Restriction or revocation of hospital privileges - Authority for - Dr. Rosenhek claimed that the Board of Governors of the defendant community hospital acted in bad faith when it summarily revoked his privileges - The hospital appealed from the finding of liability - The Ontario Court of Appeal began its analysis by stating that a bad faith exercise of a statutory public power could, in law, provide a basis for a tort claim against the hospital - "The Board's power to revoke Dr. Rosenhek's privileges is found in s. 33(c) of the Public Hospitals Act. That power, in turn, is part of a comprehensive statutory scheme governing the operations of public hospitals ... A purposive reading of the statutory provisions relating to the power to revoke privileges demonstrates that it is exercised having regard to various public-interest factors ... [T]he exercise of the revocation power is properly characterized as public in nature" - The court noted that the hospital accepted that a bad faith exercise by the Board of its statutory revocation power would give rise to a personal cause of action, and that Dr. Rosenhek did not disagree that bad faith required more than a demonstration that the Board failed to comply with applicable statutory or common law procedural requirements, or that the Board's decision was wrong on the merits - See paragraphs 21 and 22.

Hospitals - Topic 350

Operation - Doctors - Restriction or revocation of hospital privileges - Measure of damages for wrongful revocation - The plaintiff, a specialist in cardiology, made several claims against the defendant community hospital, contending that the Board of Governors acted in bad faith when it summarily revoked his privileges - His $6,731,480 damage claim was based on loss of income for the ten years he was denied privileges - The trial judge was critical of the lack of evidence to quantify that loss and awarded damages that were significantly less ($3 million) - The hospital appealed; the plaintiff cross-appealed - The Ontario Court of Appeal dismissed the damages appeals - The trial judge's assessment followed the principle that nominal damages were not appropriate where a substantial loss had been demonstrated, even if evidence proving quantum was lacking - There was evidence to support the trial judge's acknowledgment of the magnitude of the loss - Further, the evidence of the plaintiff's expert constituted at least some evidence that the income loss was sizeable - As to the plaintiff's cross-appeal, there was no evidence as to the income he could have made by working full time at the hospital - Where he had not adduced the evidence that was justifiably expected and readily available, he had only himself to blame for the lower assessment - See paragraphs 37 to 42.

Hospitals - Topic 356

Operation - Doctors - Restriction or revocation of hospital privileges - Appeals and judicial review - [See Torts - Topic 9162 ].

Practice - Topic 1988

Pleadings - Particulars - Particulars of particular matters - Allegation of fraud or bad faith - Dr. Rosenhek claimed that the Board of Governors of the defendant community hospital acted in bad faith when it summarily revoked his privileges - The hospital appealed from the finding of liability - It argued that Dr. Rosenhek (who drafted the pleadings), did not plead bad faith in his statement of claim - The Ontario Court of Appeal held that the pleadings posed no bar to the trial judge's finding of bad faith - The pleadings "leave much to be desired", but did refer to a breach of statutory duty and a breach of the duty to act fairly, and described those breaches as "malicious" - The bad faith allegation was before the trial judge and was central to the dispute - The hospital did not argue in its factum that it did not have adequate notice of the bad faith allegation at trial; the argument took shape only in the course of counsel's reply submissions - Whatever inadequacies there were in the pleadings, they caused no prejudice to the hospital - See paragraph 23.

Torts - Topic 9157.2

Duty of care - Particular relationships - Claims against public officials, authorities or boards - Public health authorities - [See both Administrative Law - Topic 8345 , Hospitals - Topic 342 and Torts - Topic 9162 ].

Torts - Topic 9162

Duty of care - Particular relationships - Claims against public officials, authorities or boards - Misfeasance in or abuse of public office - In March 1989, the Board of Governors of the defendant community hospital summarily revoked the privileges of Dr. Rosenhek, some two months into his three-month renewal - Dr. Rosenhek appealed - The 1996 Appeal Board released detailed reasons setting aside the revocation order - Dr. Rosenhek sued the hospital, alleging that the Board of Governors acted in bad faith - The conclusions of the Appeal Board were central to the trial judge's finding of liability - The Ontario Court of Appeal rejected the hospital's main submission that the evidence could not support a finding of bad faith - The trial record, particularly the reasons of the Appeal Board, provided an "ample" basis for the finding - The timing and manner of the revocation decision also informed the bad faith finding - The evidence also pointed to the existence of an ulterior purpose for the revocation, and not for the public good - Specifically, Dr. Rosenhek found himself at odds with those specialists who had opposed plans to establish a critical care unit - "That difference of opinion, and interpersonal differences, made Dr. Rosenhek an outsider" - In the result, the court was satisfied that the tort of misfeasance in a public office was made out - See paragraphs 26 to 36.

Cases Noticed:

Harris v. Law Society of Alberta, [1936] S.C.R. 88, refd to. [para. 21].

Brown v. Waterloo Regional Board of Commissioners of Police (1983), 43 O.R.(2d) 113 (C.A.), refd to. [para. 21].

Odhavji Estate et al. v. Woodhouse et al., [2003] 3 S.C.R. 263; 312 N.R. 305; 180 O.A.C. 201; 2003 SCC 69, refd to. [para. 21].

Freeman-Maloy v. Marsden et al. (2006), 208 O.A.C. 307; 79 O.R.(3d) 401 (C.A.), leave to appeal refused [2006] 2 S.C.R. ix; 359 N.R. 391, refd to. [para. 21].

Roncarelli v. Duplessis, [1959] S.C.R. 121, refd to. [para. 21].

Welbridge Holdings Ltd. v. Greater Winnipeg, [1971] 1 S.C.R. 957, refd to. [para. 24].

Three Rivers District Council et al. v. Bank of England, [2000] 2 W.L.R. 1220; 257 N.R. 1 (H.L.), refd to. [para. 36].

Martin v. Goldfarb et al. (1998), 112 O.A.C. 138; 163 D.L.R.(4th) 639 (C.A.), refd to. [para. 37].

Statutes Noticed:

Public Hospitals Act, R.S.O. 1980, c. 410, sect. 33(c) [para. 21].

Counsel:

Steven Stieber and Jacinthe I. Boudreau, for the appellant/respondent by way of cross-appeal;

Paul J. Pape, David S. Steinberg and Shantona Chaudhury, for the respondent/appellant by way of cross-appeal.

This appeal was heard on December 2, 2009, by Doherty, Moldaver and Epstein, JJ.A., of the Ontario Court of Appeal. The court delivered the following judgment and reasons for judgment, released on January 18, 2010.