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Facts of the case
The appellants are dental surgeons certified as specialists in oral and maxillofacial surgery and partners in a private clinic, the Interface Centre for Oral and Maxillofacial Surgery, in Southwestern Ontario. For many years, they held appointments and hospital privileges at London Health Sciences Centre (LHSC), a large public teaching hospital governed by the Public Hospitals Act (PHA). Their appointments and privileges were limited to using LHSC operating rooms to perform oral surgery on patients of their private practice. OR time for these surgeons was allocated out of the oral surgery division of LHSC’s Department of Dentistry, which included both “private practice oral surgeons” and LHSC staff oral surgeons. The private practice surgeons used their allotted hospital OR time exclusively for their own clinic patients, not for hospital-based or on-call work.
LHSC is funded and governed in part through a Hospital Service Accountability Agreement (HSAA) with Ontario Health. The HSAA restricts the use of funding to “Hospital Services,” defined as clinical services and related operational activities, and requires LHSC to use the provincial Wait Time Information System (WTIS) to track patients and prioritize surgical access based on provincially defined priority levels. As part of LHSC’s internal accountability processes under the HSAA, the Office of Capacity Management reviewed OR utilization in 2023 and concluded that the practice of providing OR time to private-practice oral surgeons was not aligned with LHSC’s HSAA obligations and OR policies. The Office identified that OR time allocated to the Department of Dentistry was not being used as required under LHSC’s OR policy, and that the private practice surgeons were not using WTIS, not maintaining WTIS waitlists, and not scheduling cases through the standard, priority-based booking pathways used for all other hospital surgical services.
On September 19, 2023, the private practice oral surgeons were advised that their OR time at LHSC would end effective October 1, 2023. The appellants responded by retaining counsel and providing affidavits outlining their qualifications, their teaching roles, the clinical need for access to a public hospital OR for complex or vulnerable patients, their contributions to LHSC, the alleged insufficiency of capacity among staff oral surgeons to absorb their patient volume, and a history of perceived hostility within the Department of Dentistry that they believed had led to reduced OR allocations. They also commenced an application for judicial review on September 28, 2023, to restrain the cancellation of their OR access. In response, LHSC temporarily reinstated OR time while a more formal review was undertaken.
The Board’s decision and the hospital’s policy rationale
In November 2023, LHSC’s Strategic Redevelopment Committee prepared a detailed Briefing Note recommending that the Board of Directors: (i) cease providing OR time to private practice oral surgeons and reassign that time to “clinical priority tertiary, quaternary-level surgical cases,” and (ii) cancel the hospital privileges and revoke the appointments of those surgeons to the extent the privileges related to OR use for private-practice patients. The Committee’s analysis stressed that, unlike staff surgeons, the private practice oral surgeons were not required to treat hospital-admitted patients other than their own, did not perform on-call shifts for the Department of Dentistry, were not uniformly engaged in academic roles with the Schulich School of Medicine and Dentistry, and billed OHIP or patients directly for their services without reimbursing LHSC for OR facilities, staff, equipment, or supplies. The Committee concluded that reallocating OR time to higher-priority tertiary and quaternary cases would both better align with HSAA obligations and potentially increase funding and reduce wait times for those complex surgeries.
Crucially, the Briefing Note drew a sharp distinction between how the private practice surgeons’ cases were selected and booked and how all other hospital surgeries were managed. All other surgical service lines at LHSC followed a “standard pathway” in which community practitioners referred patients to hospital-based surgeons, who then assessed, prioritized using WTIS, and scheduled cases in accordance with provincial wait-time standards. By contrast, the private practice oral surgeons selected and booked their own private patients without using WTIS or tracking provincial priority levels; their waitlists were not captured in WTIS at all. This made their OR use an “outlier” from the perspective of hospital policy and HSAA accountability, and it was said to be misaligned with LHSC’s obligations regarding clinical prioritization and equitable use of scarce OR resources.
Relying on this analysis, the Committee invoked s. 44 of the PHA as the governing legal authority. That provision allows a hospital board that decides to cease operating a hospital or to “cease to provide a service” to revoke appointments and cancel or alter privileges of “any physician” associated with the affected service, and, crucially, to do so “without holding a hearing” (s. 44(3)) and without engaging the usual procedural protections in ss. 37–43. The Briefing Note advised that ending the practice of providing OR services through private practice oral surgeons and reallocating their OR time to higher priority, WTIS-based surgical services would fall within s. 44, provided the Board acted in good faith, which would also trigger statutory immunity under s. 44(5). It also asserted that patient interests would not be harmed because patients requiring hospital-based oral surgery could be referred to LHSC’s staff oral surgeons under the standard referral pathway used for other community practices.
On November 29, 2023, the Board approved the Committee’s recommendations and resolved that LHSC would cease providing “operating room services” to the private practice oral surgeons, that their related hospital privileges would be cancelled, and that any dentist’s appointment tied solely to that OR service would be revoked. At a meeting on December 20, 2023, the Board fixed January 31, 2024, as the effective date for ceasing the OR services and for cancelling privileges and revoking appointments, thereby giving at least 30 days’ notice. The appellants were not notified of the Board meetings, given no opportunity to be heard, and their affidavits were not placed before or considered by the Board. They learned of the decision through letters dated December 22, 2023, which recited the HSAA and WTIS obligations, identified the misalignment of the Department of Dentistry’s allocation of OR time to non-WTIS-using private surgeons, and then set out the Board motions and the January 31, 2024 effective date for cancellation of their OR privileges and revocation of their professional staff appointments.
Statutory framework and policy terms at issue
The statutory and policy framework turned on the interaction of the PHA, its regulations, the Medicine Act, and the HSAA. Under the PHA, physicians’ appointments and privileges at public hospitals are normally governed by a detailed procedural scheme: ss. 37(3)–(7) and 38–43 require reasons, notice, a hearing, and internal appeal procedures whenever a hospital acts adversely with respect to appointments or privileges. Section 44, however, is an exception to that otherwise robust procedural regime. It applies in two relevant situations. First, where a hospital board determines or is ordered that the hospital “cease to operate,” s. 44(1.1) authorizes revocation or alteration of physicians’ appointments and privileges. Second, where a board determines or is ordered that the hospital “will cease to provide a service,” s. 44(1.2) triggers s. 44(2), which in turn permits the board to refuse applications for appointment or reappointment, refuse changes in privileges, revoke appointments, and cancel or substantially alter privileges, so long as the privileges in question “relate to the provision of that service.” Section 44(3) then provides that the Board “may make a decision under subsection (1) or (2) without holding a hearing,” and s. 44(4) excludes the usual procedural protections in ss. 37 and 38–43 when s. 44 is engaged. Section 44(5) grants immunity from damages for acts done in good faith under s. 44(1) or (2).
The PHA defines “physician” to include “a member of the College of Physicians and Surgeons of Ontario or another prescribed person,” with s. 32 authorizing regulations to prescribe such persons. The applicable regulation, Hospital Management, R.R.O. 1990, Reg. 965, provides that “physician” includes a person exempt from subsections 9(1) and (3) of the Medicine Act, 1991. Section 9 of the Medicine Act governs who may use titles such as “surgeon,” but s. 9(2) expressly exempts members of the Royal College of Dental Surgeons of Ontario from those title restrictions. Read together, these provisions effectively extend the term “physician” in the PHA to oral and maxillofacial surgeons who are dental specialists, thereby bringing them within the reach of s. 44(2).
On the policy side, the HSAA terms were important because they required LHSC to use the WTIS and to ensure that hospital resources funded under the agreement were used for Hospital Services organized and prioritized in accordance with provincial standards. The Committee and Board relied on the HSAA’s clinical prioritization and WTIS obligations to frame the private practice OR system as inconsistent with LHSC’s funding and accountability duties. The “service” they identified as being discontinued was not “all oral surgery” but, more specifically, the distinct mode of offering OR access to private practice surgeons’ own patients outside the standard WTIS-based referral and prioritization system.
Proceedings in the Divisional Court
Following the Board’s December 22, 2023 letters, the appellants amended their pending judicial review application to challenge the Board’s decision itself and sought to quash it and prohibit LHSC from cancelling their OR access and revoking their appointments. Before the Divisional Court, the parties agreed that the Board’s decision was reviewable on a standard of reasonableness. LHSC conceded that the appellants received no opportunity to be heard by the Board and that the Board had not considered the affidavits the appellants had supplied to the hospital beforehand. The appellants accepted, however, that if s. 44 applied, they were not entitled to notice or a hearing. The Divisional Court therefore framed the “focused question” as whether the impugned decision fell within s. 44—specifically, whether it was “a decision to cease a service” under s. 44(1.2), thereby triggering the no-hearing regime and the power to revoke appointments and privileges under s. 44(2).
The Divisional Court held that LHSC’s actions did fall within s. 44. It reasoned that by allocating OR time and resources to private practice oral surgeons for use exclusively with their own clinic patients, LHSC had been providing a distinct service to the community: a route to hospital-based care that bypassed the normal referral processes and provincial wait-time standards. Ending that arrangement was therefore reasonably characterized as a decision to “cease to provide a service.” The court further concluded that LHSC’s actions were taken in good faith to meet HSAA obligations, and it accepted that s. 44(3) permitted the Board to proceed without a hearing. The application for judicial review was dismissed.
Issues and arguments on appeal
On appeal to the Court of Appeal for Ontario, the appellants no longer disputed that reasonableness was the correct standard of review but argued that the Divisional Court applied it improperly in four main ways. First, they contended that the Board had unreasonably interpreted s. 44(3) by treating it as allowing the Board to make the threshold decision to cease to provide a service without a hearing. In their view, s. 44(3) applies only to the implementing decisions listed in s. 44(2)—such as canceling privileges and revoking appointments—not to the earlier determination that the hospital will cease to provide a service, which they said remained subject to ordinary duties of procedural fairness.
Second, they asserted that the Board had adopted an unreasonable interpretation of “cease to provide a service” in s. 44(1.2). They argued that this phrase must mean discontinuing an entire service (for example, all dentistry or all oral surgery) rather than altering the way a subset of providers deliver that service. Because LHSC continued to provide oral surgery and dentistry through its staff oral surgeons after the appellants’ OR access ended, they said the hospital had not “ceased” any service within the meaning of s. 44(1.2), and therefore the s. 44(2) powers, including the no-hearing regime, could not lawfully be used.
Third, the appellants contended that s. 44(2) could not apply to them because they are dentists, not “physicians.” They argued that the term “physician” in s. 44(2) should be confined to members of the College of Physicians and Surgeons and that it was unreasonable to extend it to dental surgeons.
Fourth, they criticized the Divisional Court for conducting its reasonableness review on the basis of the record that had actually been before the Board—essentially, the narrative set out in the Committee’s Briefing Note—without taking account of the appellants’ affidavits. Those affidavits, they said, contained materials the Board ought to have considered and that painted a more complex factual picture of their clinical contributions, patient needs, and departmental dynamics. They argued that omitting these materials from the reasonableness analysis allowed an incomplete and unbalanced factual foundation to stand.
The Court of Appeal’s application of the reasonableness standard
The Court of Appeal began by reaffirming the framework set out in Canada (Minister of Citizenship and Immigration) v. Vavilov. A decision is reasonable if it displays internally coherent reasoning and is justified in light of the relevant legal and factual constraints, including the statutory scheme, principles of interpretation, evidence actually before the decision maker, parties’ submissions, and the impact on affected individuals. The reviewing court’s task is to assess the decision actually made, not to substitute its own view or conduct a fresh, correctness-style analysis of the statutory provisions.
Because the Board itself had not issued formal written reasons, the Court of Appeal treated the Strategic Redevelopment Committee’s Briefing Note—which the Board effectively adopted by approving its recommendations—as the functional set of reasons, supplemented by the December 22, 2023 notification letters. It held that, in the institutional context of a hospital board acting on the advice of its internal committee, this was an appropriate way to reconstruct the Board’s reasoning for the purposes of reasonableness review.
Interpretation of s. 44(3): the no-hearing provision
On the first legal issue, the Court rejected the appellants’ argument that s. 44(3) applies only to implementation decisions under s. 44(2). By its express wording, s. 44(3) allows the Board to make “a decision under subsection (1) or (2) without holding a hearing unless a hearing is required by or under this Act.” The Court concluded that the reference to “subsection (1)” must be read contextually to include both subsections 44(1.1) and 44(1.2), which deal with decisions to cease operating a hospital and to cease providing a service. Otherwise, there would be an implausible mismatch: the law would exempt decisions to close a hospital from any hearing requirement but would not exempt the related decisions under s. 44(1.1) implementing the closure, and would allow implementation decisions regarding cessation of a service to proceed without a hearing while still requiring a hearing for the antecedent determination to cease the service itself. The Court found it reasonable, and indeed textually and contextually sound, to interpret s. 44(3) as covering both the threshold decisions under s. 44(1.1) and 44(1.2) and the follow-on implementation decisions under s. 44(2). That interpretation aligned with the structure and purpose of s. 44 as an exception triggered by certain organizational decisions, and with existing case law that already read parallel language in s. 44(5) broadly.
Meaning of “cease to provide a service” and characterization of OR access
On the second issue, the Court held that the Board’s interpretation of “cease to provide a service” in s. 44(1.2) was not unreasonable. The PHA does not define “service,” and there was no binding authority limiting the term to the termination of an entire clinical discipline (e.g., all dentistry). It was open to the Board to view the combination of who was treated (only private-practice patients), how they were selected and booked (outside WTIS, with no provincial priority tracking), and how OR resources were allocated (contrary to the hospital’s OR policy and HSAA obligations) as a distinct “service,” separate from ordinary hospital-based oral surgery. On that view, ending the practice of providing OR time and resources through private practice oral surgeons for their own patients amounted to ceasing to provide a discrete service, even though other oral surgery services at LHSC continued. The Court noted that an analogy sometimes made in case law—such as closing an urgent care centre—illustrates how a service can be defined by its organizational and prioritization features, not merely by the type of clinical acts (e.g., prescribing medications or suturing wounds) that occur there.
Dentists as “physicians” under s. 44(2)
On the third issue, the Court found nothing unreasonable in treating the appellants as “physicians” for the purposes of s. 44(2). The PHA’s definition of “physician” expressly anticipates expansion by regulation to “another prescribed person.” The Hospital Management regulation extends the term to persons exempt from the title-use prohibitions in s. 9(1) and (3) of the Medicine Act, and s. 9(2) in turn allows members of the Royal College of Dental Surgeons of Ontario to use the title “surgeon.” When these provisions are read harmoniously, oral and maxillofacial surgeons who are dental specialists fall within the extended definition of “physician” in the PHA. Consequently, the Board’s application of s. 44(2)—authorizing revocation of appointments and cancellation or alteration of privileges for “any physician” whose privileges relate solely to the discontinued service—could reasonably include the appellants.
Use of the factual record on judicial review
On the fourth issue, the Court addressed whether the Divisional Court erred by limiting its review to the record the Board had actually considered, instead of bringing into the analysis the appellants’ affidavits that were before the Divisional Court but not the Board. The Court emphasized that Vavilov ties reasonableness review to the evidence and factual matrix “before the decision maker.” If s. 44 had not applied and the Board had been under a duty of procedural fairness, then the Board’s reasons would have had to engage with the appellants’ concerns and evidence, and a reviewing court could fault the Board for failing to do so. But here, everyone accepted that if s. 44 applied there was no legal requirement to afford notice or a hearing. The Board therefore had statutory authority to determine both what information it needed and what record it would consider.
Allowing a reviewing court to import additional factual material that the Board itself did not see, then to use those materials to undermine the Board’s reasoning, would effectively convert a no-hearing regime into a hypothetical-hearing evaluation: the court would be speculating about what a reasonable decision would have been if a hearing had been held. The Court of Appeal held that such an approach is inconsistent with Vavilov’s direction that reasonableness must be assessed against the record actually before the administrative decision maker. The Divisional Court was therefore correct to confine itself to the evidence and general factual matrix the Board had in fact considered when deciding to terminate the private practice OR service and to invoke s. 44.
Outcome and significance
The Court of Appeal concluded that the Board’s decision, as understood through the Committee’s Briefing Note and related materials, was reasonable in light of the statutory text, context, and purpose of s. 44 of the PHA and the factual circumstances facing LHSC. It upheld the Divisional Court’s judgment dismissing the application for judicial review and confirmed that LHSC’s Board was entitled, without a hearing, to determine that it would cease providing the distinct OR service for private practice oral surgeons’ own patients, and to revoke the appellants’ appointments and cancel the associated privileges under s. 44(2).
As a result, the appeal was dismissed. London Health Sciences Centre, as the respondent, was the successful party. The Court of Appeal awarded LHSC its costs of the appeal, including the motion for leave to appeal, fixed at $50,000 all-inclusive, and no other monetary awards or damages were ordered; beyond this quantified costs award, no further amount in favour of LHSC can be determined from the decision.
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