Executive Summary: Key Legal and Evidentiary Issues

• Appellants challenged a Court of King's Bench decision striking their claim and, in the alternative, summarily dismissing it against Alberta Health Services for enforcement of COVID-19 closure orders.

• Statutory immunity provisions under the Public Health Act section 66.1 and Provincial Health Agencies Act section 22 shield AHS and its Executive Officers from liability for actions taken in good faith.

• CMOH Order 42-2020 requiring fitness facility closures was found ultra vires in July 2023, but was presumed valid at the time of the enforcement action.

• No evidence established that AHS or its Executive Officers acted with an absence of good faith in enforcing the closure order against Ape Parkour.

• Appellants' failure to appeal the Closure Order to the Public Health Appeal Board rendered their civil claim an impermissible collateral attack on that order.

• Third-party claims against HMTK were properly refused as they contravened procedural rules requiring such claims to be brought before judgment is entered against the defendant.

Background and the parties involved

Chad McDonald owned and operated Ape Parkour, a fitness centre specializing in parkour activities. In October 2020, Ape Parkour entered a 10-year lease with 1285486 Alberta Ltd. In response to the COVID-19 pandemic, the Chief Medical Officer of Health issued several orders in 2020. CMOH Order 42-2020 was issued in December 2020 and required the temporary closure of fitness facilities.

The enforcement action and subsequent litigation

Alberta Health Services Executive Officers inspected Ape Parkour on December 14, 2020 pursuant to section 59 of the Public Health Act and found it was in contravention of CMOH Order 42-2020. The investigating Executive Officer issued a verbal closure order on December 14, 2020 and a formal written closure order on December 15, 2020 pursuant to section 62 of the Public Health Act. On January 19, 2021, an AHS Executive Officer conducted a second investigation and determined that Ape Parkour had remained open to the public in contravention of the Closure Order and CMOH Order 42-2020. On February 23, 2021, CMOH Order 02-2021 came into force, which rescinded CMOH 42-2020 and lifted the mandatory closure of fitness facilities. On the same day, AHS rescinded the Closure Order, permitting Ape Parkour to reopen to the public.

The civil actions commenced by the parties

In February 2022, the appellants began Court of King's Bench Action No 2204-00128 (the "128 Action") against AHS and His Majesty the King in right of Alberta. The 128 Action alleged that Ape Parkour suffered financial losses resulting from AHS' enforcement of CMOH Order 42-2020 against it, which caused it to default on its contractual obligations to 1285486 Alberta Ltd. In September 2022, 1285486 Alberta Ltd began Court of King's Bench Action No 2204-00582 (the "582 Action") against the appellants for non-payment of rent. In October 2022, the appellants added AHS as a third-party defendant to that claim. The appellants later consented to a judgment in the 582 Action in April 2023.

Appellants' attempts to modify operations

The appellants submitted they implemented changes to Ape Parkour's business structure to comply with CMOH Order 42-2020. These changes included entering into lease agreements with Ape Parkour's clients to use single rooms of the facility at a given time, rather than offering memberships; posting signs on Ape Parkour's doors that the facility was closed to the public; changing the job description of coaches so that they were instead private contractors with the title of "janitor" and were responsible for sanitizing the building between clients; modifying Ape Parkour's policy about capacity to permit only one individual or individuals from one household to access the space at a time, and solely by appointment; and adding televisions and furniture to the space so clients could use it for activities aside from physical activity. The appellants argued AHS Executive Officers ignored these significant changes to their operation and unfairly targeted Ape Parkour, and were therefore acting in bad faith.

The chambers judge's findings

The chambers judge granted AHS' and HMTK's application to strike the 128 Action pursuant to rule 3.68(2)(b) and granted AHS' application to strike the third-party claim against it in the 582 Action. While the appellants suffered financially from COVID-19 restrictions, the chambers judge found that the pleadings did not contain a reasonable cause of action against AHS or HMTK. The chambers judge found in the alternative that even if it was an error to strike the claim, the respondents had also successfully illustrated that it should be summarily dismissed. He found that "AHS did not engage in bad faith when it deemed the facility to be captured by CMOH Order 42-2020, nor did it engage in bad faith when it sought compliance with the Order." The chambers judge also found that despite the changes made by the appellants, "[b]y their own admission, the only thing that changed about the operation after December 15, 2020, was the way fees were collected from the users of the gym and how those users would be permitted to use the facility."

Statutory immunity and the good faith standard

The Public Health Act section 66.1 and Provincial Health Agencies Act section 22 insulate AHS and AHS Executive Officers from liability for actions taken in good faith while exercising powers that are granted by the legislation. The Court of Appeal found the chambers judge did not err in finding that the appellants failed to establish that the conduct of AHS and AHS Executive Officers fell outside the scope of these provisions. Although CMOH Order 42-2020 was found to be ultra vires section 29 of the Public Health Act in Ingram v Alberta (Chief Medical Officer of Health), 2023 ABKB 453 in July 2023, the enforcement occurred before this determination, and the order was presumed to be valid at the time of the enforcement action. The chambers judge properly rejected the argument that the subsequent finding of invalidity supported a finding of bad faith on the part of AHS Executive Officers.

The ruling and outcome

The Court of Appeal of Alberta dismissed the appeal, finding no reviewable error in the chambers judge's analysis of summary dismissal in respect of the 128 Action against AHS. The court noted that the claim against AHS, in substance, seeks to challenge the validity of the Closure Order and avoid its effects. Section 5 of the Public Health Act grants the Public Health Appeal Board the authority to hear appeals of people who are directly affected by an order issued under section 62 of the Act, with individuals having 10 days to serve a notice of appeal upon receiving notice of an order. The appellants did not appeal the Closure Order to the Public Health Appeal Board; instead, they filed a civil claim. The court determined this amounted to an impermissible collateral attack on the Closure Order. While the court recognized that this must be frustrating for the appellants, it could not disregard the legislator's choice of a statutory appeal process for challenges to orders under section 62 of the Public Health Act. The court declined to deal with the other moot issues in the appeal, noting that since the chambers decision issued, the Court of King's Bench has certified a class proceeding against HMTK for liability to business owners affected by CMOH orders including CMOH Order 42-2020. The document does not specify any exact monetary amount.