Case information

Administrative law — Drug benefit program — Termination of electronic billing privileges for pharmacy operators — Whether program administrator’s decision creates system of absolute liability where pharmacy operators are liable for misconduct of their predecessors — Whether program administrator misapprehended evidence of which pharmacy operator was responsible for misconduct

Case summaries are prepared by the Office of the Registrar of the Supreme Court of Canada (Law Branch). Please note that summaries are not provided to the Judges of the Court. They are placed on the Court file and website for information purposes only.

Ontario permits pharmacy operators to directly bill its drug benefits program for products and services that they provide to eligible recipients. In order to do so, pharmacy operators must enter into subscription agreements with the program’s Executive Officer.

The applicant is a corporation that operates a pharmacy business. In 2020, the pharmacist owner of the applicant sold the corporation to a new pharmacist owner. The former owner continued to manage the applicant’s business for a transitional period after the sale. The sale prompted the Executive Officer to inspect the applicant’s compliance with the program. He discovered over $250,000 in billings that were unsubstantiated or otherwise did not comply with the program requirements. These transactions occurred during periods before and after the sale of the business, and under the supervision of both pharmacist owners.

The Executive Officer, after hearing submissions, was concerned about the management and supervision of the applicant’s use of the program, which is an honour-based system. He terminated the applicant’s subscription agreement.

The Divisional Court dismissed an application for judicial review. It held that the Executive Officer’s decision was reasonable and did not misapprehend the evidence. The Court of Appeal dismissed an appeal, holding that the Executive Officer did not misapprehend the evidence, create a system of absolute liability, or violate the provisions of the terminated subscription agreement.