Executive Summary: Key Legal and Evidentiary Issues

• PHAB failed to analyze whether AHS had statutory authority to issue closure and suspension orders based solely on obstruction.

• The Board did not engage in the required statutory interpretation of relevant Public Health Act provisions, including sections 61, 62, and 71.

• Evidence from an inspection conducted after the orders were issued was admitted without explanation of its relevance or weight.

• The nature of the PHAB appeal—whether it is de novo or based on the original record—was left unclear in the Board’s reasons.

• PHAB refused to admit evidence about the Applicant’s prior relationship with AHS officials, undermining the Applicant’s obstruction “defence.”

• Although the decision was found unreasonable, the Court declined to remit the matter because the orders were no longer in force.

Background and public health context

2248870 Alberta Ltd., operating as Stacey’s Happy Place, is a small, family-run business in Red Deer that sells books, prepackaged snacks, and beverages. It held a food handling permit issued by Alberta Health Services (AHS). On March 17, 2020, a public health emergency was declared in Alberta, and the Chief Medical Officer of Health (CMOH) issued various binding orders under the Public Health Act, RSA 2000, c P-37. In October 2021, these orders included indoor masking requirements, physical distancing, and prohibitions on indoor dining unless the business verified patrons’ vaccination status or a negative COVID-19 test result.

On October 6, 2021, AHS received a complaint that Stacey’s Happy Place was not complying with masking and vaccination verification requirements. On October 8, 2021, an AHS Inspector and Manager attempted to inspect the premises. Initially denied entry, they later entered but were confronted by the owners and forced to leave. The incident was recorded on video with audio.

On October 14, 2021, AHS issued two enforcement orders:

• A Closure Order, citing obstruction of an inspection as grounds for requiring the business to cease food and beverage service.

• A Suspension Order, issued under section 11(b) of the Food Regulation, Alta Reg 31/2006, based on ongoing noncompliance with CMOH orders and obstruction of an AHS executive officer contrary to section 71 of the Public Health Act.

The orders were served in person by the AHS Manager on October 15, 2021, with the assistance of the RCMP. Despite posting the Closure Order on the door, the Applicant was reported on October 19 and 26, 2021, to still be serving food and allowing indoor dining without verifying vaccination status or enforcing mask use. An inspection on October 28, 2021, confirmed that the Applicant was operating without a valid permit and staff were unmasked.

Appeal and judicial review

The Applicant appealed both orders to the Public Health Appeal Board (PHAB). The hearing took place over three days and concluded on February 9, 2022. On March 18, 2022, the Board confirmed the orders, with written reasons provided in April 2023.

The Applicant filed an Originating Notice for judicial review in December 2022. Although the Closure Order was lifted on June 13, 2022, and the Suspension Order on May 13, 2022, the Court chose to hear the case because of the public importance of the legal issues.

Legal arguments and statutory interpretation

The central legal issue was whether AHS could lawfully issue a closure or suspension order solely for obstruction without first applying to the Court of King’s Bench under section 61 of the Public Health Act. The Applicant argued that section 62 requires an inspection before an order can be issued, and that obstruction prevented such an inspection, thus requiring court intervention. AHS argued that obstruction itself is a contravention of section 71, and therefore satisfies the conditions for an order under section 62.

The Court found that while the Board confirmed the orders, it did not meaningfully engage with the interpretive question. The Board failed to analyze the relationship between sections 61, 62, and 71, nor did it provide reasoning to justify its implied conclusion that obstruction alone permits issuing such orders. As a result, the Court concluded that the Board’s decision was unreasonable.

Evidentiary inconsistencies and procedural fairness

The Court found the Board’s approach to evidence inconsistent and procedurally unfair. It admitted the AHS Director’s evidence from the October 28, 2021, inspection—conducted two weeks after the orders—despite objections from the Applicant. However, the Board failed to explain the relevance or weight of this evidence, leaving its role in the decision unclear.

At the same time, the Board excluded evidence the Applicant sought to introduce about prior interactions with the AHS Inspector and Manager, who were witnesses in a pending prosecution involving one of the business owners. The Applicant had asked AHS not to send those specific individuals to the premises without legal counsel present. The Board refused to consider this background, stating it was not relevant, even though the Applicant admitted to refusing entry but claimed they were justified in doing so.

The Court held that this exclusion was unreasonable, especially since the Board had admitted unrelated post-order evidence from AHS. It also noted that the Board's failure to address the Applicant’s potential “defence” to obstruction, or to weigh the competing evidence, undermined the reasonableness of its decision.

Outcome and final ruling

Justice Bonnie L. Bokenfohr granted the judicial review, concluding that the Board’s decision could not stand. However, she declined to order a rehearing, noting that the closure and suspension orders had already been lifted and a rehearing would not be an efficient use of public resources. The Court emphasized that clarification on the nature of PHAB appeals and their evidentiary standards is needed for future proceedings.

The Applicant was successful, but no monetary relief (costs, damages, or other awards) was granted or ordered by the Court.