Mount Sinai Hospital Center v. Quebec (Minister of Health and Social Services)

Mount Sinai Hospital Center v. Quebec (Minister of Health and Social Services)
Collection
Supreme Court Judgments
Date
2001-06-29
Neutral citation
2001 SCC 41
Report
[2001] 2 SCR 281
Case number
27022
Judges
McLachlin, Beverley; L'Heureux-Dubé, Claire; Gonthier, Charles Doherty; Iacobucci, Frank; Major, John C.; Bastarache, Michel; Binnie, William Ian Corneil
On appeal from
Quebec
Subjects
Administrative law
Notes
SCC Case Information: 27022
Decision Content
Mount Sinai Hospital Center v. Quebec (Minister of Health and Social Services), [2001] 2 S.C.R. 281, 2001 SCC 41
Minister of Health and Social Services Appellant
v.
Mount Sinai Hospital Center Respondent
and
Elliot L. Bier, Howard Blatt, Peter Erenyi,
Ruth Kovac, Mary Likoudis, Avrum P. Orenstein,
Charles Roth (in their capacity as directors of the
Mount Sinai Hospital Center) Respondents
and
Maimonides Hospital Geriatric Centre Respondent
Indexed as: Mount Sinai Hospital Center v. Quebec (Minister of Health and Social Services)
Neutral citation: 2001 SCC 41.
File No.: 27022.
2000: December 12; 2001: June 29.
Present: McLachlin C.J. and L’Heureux‑Dubé, Gonthier, Iacobucci, Major, Bastarache and Binnie JJ.
on appeal from the court of appeal for quebec
Administrative law – Judicial review – Ministerial discretion – Minister promising to issue modified permit upon Hospital Center’s relocation to Montreal – Minister subsequently refusing to issue modified permit – Whether ministerial discretion exercised – Whether exercise of ministerial discretion validly reversed – An Act respecting health services and social services, R.S.Q., c. S-5, ss. 138, 139.1.
Administrative law – Judicial review – Mandamus – Ministerial discretion – Minister promising to issue modified permit upon Hospital Center’s relocation to Montreal – Minister subsequently refusing to issue modified permit – Minister failing to act in accordance with prior exercise of discretion – Whether an order in the nature of mandamus appropriate – Code of Civil Procedure, R.S.Q., c. C-25, art. 100.
The Mount Sinai Hospital Center was originally established in Sainte‑Agathe, Quebec, as a long-term treatment facility dealing primarily with patients suffering from tuberculosis. During the 1950s, the Center began to introduce new programs and services and developed a general respiratory expertise in a setting with both long-term and short-term care facilities. This change in services was known to the government which throughout funded all of the Center’s activities. In 1984, negotiations between the Center and the Ministry of Health and Social Services to move the Center to Montreal began. At that time, the Center was operating under its original permit for 107 long-term care beds even though it had for 10 years been providing 57 long-term care beds and 50 intermediary or short-term care beds. The Center wanted its permit altered to reflect the reality of the services it offered. The Minister promised the Center that it would formally alter the permit once the Center moved to Montreal. The promise to issue the correct permit was reaffirmed on various occasions. Once the Center had moved to Montreal, in January 1991, it made a formal request to the Minister for a regularization of the permit. Without giving the Center an opportunity to make submissions on the issue, in October 1991, the Minister informed the Center that it would not receive the promised permit and would have to operate under the old unaltered permit. This was despite the fact that the services being offered still included short-term services funded by the government. The Center brought an action in mandamus before the Superior Court, requesting that the court order the Minister to issue the promised permit. Relying on the legitimate expectation created by the Minister’s conduct, the Superior Court allowed the mandamus application in part and ordered that the Minister hear the Center’s submissions before deciding whether the alteration of the permit was in the public interest. The Court of Appeal allowed the Center’s appeal. Applying the doctrine of public law promissory estoppel, the Court of Appeal ordered the Minister to issue the promised permit.
Held: The appeal should be dismissed.
Per L’Heureux-Dubé, Gonthier, Iacobucci, Major and Bastarache JJ.: It is unnecessary to decide whether the legitimate expectation created by the course of dealings between the Center and the Minister can result in a substantive remedy beyond the procedural protection provided by the right to be heard either within an expanded doctrine of legitimate expectations or under public law promissory estoppel. The facts of this case created a situation that cannot accurately be characterized as a renewal of an existing permit under s. 139.1 of the Act respecting health services and social services, R.S.Q., c. S-5. The purpose of s. 139.1 is to give the Minister a discretion that is confined to situations of permit renewal. Although s. 139.1 allows the Minister to change the category, class, kind or capacity indicated on the permit, these changes are confined to the context of a renewal application and are reserved for situations where the Minister is considering alterations that would be in the public interest at his or her own initiative. Since the entire mechanism of s. 139.1 does not apply to a situation where the change is raised by the party rather than the Minister, it does not apply in the present situation. Here, the Center’s request was to change its permit rather than renew it. This case falls to be decided under s. 138 of the Act which governs requests for a change to or alteration of an existing permit.
It cannot be said that the Center actually possessed the modified permit and that it was merely a matter of the wording of the permit that was at issue when it made the regularization request in January 1991. Being entitled to a permit is different than actually holding it. The Center was acting under its long-term care permit with the government’s acquiescence. The government’s behaviour, while not rising to the level of issuing an acquired or implied permit, did result in the exercise of the Minister’s discretion. Section 138 imputes to the Minister an exercise of discretion with respect to whether granting a particular temporary or permanent permit will be in the public interest. This discretion was exercised when the Minister promised the Center that it would receive the modified permit, encouraged the move to Montreal, endorsed the financing campaign focussed on the role of the Center as a long-term and short-term care hospital, and continued to fund the short-term care services despite the mismatch between those services and the Center’s permit. The specific conduct of the Minister in this case indicates that his discretion was exhausted and the Minister was bound when the Center made the request for the promised permit.
The evidence establishes that the Minister’s discretion under s. 138 was exercised by the date of the Center’s move to Montreal in January 1991. The decision to refuse to issue the modified permit in October 1991 was not a valid reversal of the exercise of the Minister’s discretion. First, the financial reasons cited for the Minister’s decision were groundless. Prior to the refusal, the issue of additional resources and funding had never been raised by ministerial officials. The evidence does not indicate that the Center would have to change any of its activities in order to satisfy the requirements of the permit it asked for, thereby requiring more funding. Second, the Minister’s behaviour since the October 1991 refusal of the permit modification is inconsistent with finding that the exercise of the discretion has in fact been genuinely reversed. The evidence indicates that, in his subsequent behaviour, the Minister has acted as if the original exercise of his discretion is what was actually in operation. Since the Minister decided that it was in the public interest for the Center to operate as a long-term and short-term care facility and having continued to see things this way even after the move, the Minister must issue the 1991-1993 permit recognizing the Center’s vocation as a provider of both long-term and short-term care. Where the Minister has failed to act in accordance with a prior exercise of his discretion, the criteria for the issuance of an order of mandamus are met and the Minister should be ordered to deliver the required permit. Although art. 100 of the Code of Civil Procedure provides that extraordinary remedies are not generally available against the Crown, this rule does not apply in circumstances where, as in this case, the Minister acts outside the limits of his competence.
Per McLachlin C.J. and Binnie J.: The appeal should be dismissed, but this conclusion should be reached by a different route. What is crucial to the Center’s case is not so much the Minister’s state of mind as the web of understandings and incremental agreements that came into existence with the concurrence, indeed encouragement, of successive Ministers. What began with an abstract notion of “the public interest” became, through private initiative and ministerial response, a specific embodiment of the public interest in terms of bricks and mortar, facilities and location. Not only did successive Ministers subscribe to this embodiment of the public interest, they encouraged the Center to act on it, and the Center did so.
Three hurdles must be surmounted in order for the Center to successfully obtain the requested permit: (1) the Minister’s decision not to issue the modified permit must be quashed; (2) the Minister is to be fixed with the conception of the public interest he and his predecessors agreed upon with the Center between 1984 and October 1991; and (3) based on that conception of the public interest, mandamus must be available to enforce the mandatory duty under s. 138 of the Act respecting health services and social services, R.S.Q., c. S-5, to issue the 1991‑1993 modified permit. The Minister’s power under s. 138 is framed as a broad policy discretion to be exercised “in the public interest”. This discretion, however broadly framed, is not unfettered.
The Minister’s failure to extend even minimal procedural fairness to the Center should result in the setting aside of his decision to refuse the application for a modified permit. The Center had no notice that the Minister was about to reverse his position, or the reasons for reversal, and no opportunity to present argument as to why the Minister’s earlier and long-standing view that the public interest favoured a modified Center should prevail.
The availability and content of procedural fairness are generally driven by the nature of the applicant’s interest and the nature of the power exercised by the public authority in relation to that interest. The doctrine of legitimate expectations, on the other hand, looks to the conduct of the public authority in the exercise of that power including established practices, conduct or representations that can be characterized as clear, unambiguous and unqualified. The expectations must not conflict with the public authority’s statutory remit. Although the doctrine of legitimate expectations is limited to procedural relief, it must be acknowledged that in some cases it is difficult to distinguish the procedural from the substantive. This distinction should be made on the basis of the underlying principle that broad public policy is preeminently for the Minister to determine, not the courts. On the facts of this case, the doctrine of legitimate expectations does not add to the relief otherwise available under the ordinary rules of procedural fairness.
Estoppel may be available to give substantive relief against a public authority, including a Minister, in narrow circumstances. The requirements of estoppel go well beyond the requirements of the doctrine of legitimate expectations. All the elements of private law promissory estoppel are present in this case. However, public law promissory estoppel requires an additional appreciation of the legislative intent embodied in the power whose exercise is sought to be estopped. Circumstances that might otherwise create an estoppel may have to yield to an overriding public interest expressed in the legislative text. The wording of the particular statutory power in question and the status of who wields it is important. Section 138 mandates the Minister in broad terms to act in the public interest, and if the public interest as he defines it is opposed to the award of the modified permit, then a court should not estop the Minister from doing what he considers his duty.
Decisions of Ministers of the Crown in the exercise of discretionary powers in the administrative context should generally be reviewable only on a standard of patent unreasonableness. The broad regulatory purpose of the permit in the context of the legislation designed to regulate the provision of health services “in the public interest” favours a high degree of deference as does the expertise of the Minister and his advisors, and the Minister’s position in the upper echelon of decision makers under statutory and prerogative powers. The exercise of the power turns on the Minister’s appreciation of the public interest, which is a function of public policy in its fullest sense. In this case, the Minister’s decision to refuse the modified permit was patently unreasonable in terms of the public interest as he and his predecessors had defined it over a period of seven years of consultation, encouragement and assurances to the Center, and in his total lack of regard for the implications for the Center of suddenly reversing his position and breaking his promises. While the Court ought to be and would be sensitive to any serious policy reason offered by the Minister for a redefinition of the public interest, no such policy reason was articulated in the Ministers’ decision.
In the result, in this case, there is a patently unreasonable decision reached by a procedure that was demonstrably unfair. The only option available to the Minister that is not patently unreasonable is to issue the 1991‑1993 modified permit based on the conception of the public interest espoused by the Minister and his predecessors up to that time. Once the present situation is regularized by the issuance of the 1991-1993 modified permit, the current status and entitlement of the Center can thereafter be assessed by the present Minister on the basis of the present law and the present circumstances.
Cases Cited
By Bastarache J.
Distinguished: Comeau’s Sea Foods Ltd. v. Canada (Minister of Fisheries and Oceans), [1997] 1 S.C.R. 12; referred to: Baker v. Canada (Minister of Citizenship and Immigration), [1999] 2 S.C.R. 817; C.W.C. v. Canada (Attorney General), [1989] 1 F.C. 643; Apotex Inc. v. Canada (Attorney General), [1994] 1 F.C. 742, aff’d [1994] 3 S.C.R. 1100; Morin v. Driscoll College Inc., [1979] R.P. 198; Procureur général de la province de Québec v. Laurendeau, [1985] R.D.J. 513; Charles Bentley Nursing Home Inc. v. Ministre des Affaires sociales, [1978] C.S. 30.
By Binnie J.
Referred to: Calgary Power Ltd. v. Copithorne, [1959] S.C.R. 24; Nenn v. The Queen, [1981] 1 S.C.R. 631; Canada (Attorney General) v. Purcell, [1996] 1 F.C. 644; Canadian Superior Oil Ltd. v. Paddon-Hughes Development Co., [1970] S.C.R. 932; Gilbert Steel Ltd. v. University Construction Ltd. (1976), 12 O.R. (2d) 19; Hill v. Nova Scotia (Attorney General), [1997] 1 S.C.R. 69; Cleveland Board of Education v. Loudermill, 470 U.S. 532 (1985); Perry v. Sindermann, 408 U.S. 593 (1972); Mathews v. Eldridge, 424 U.S. 319 (1976); Barry v. Barchi, 443 U.S. 55 (1979); Roncarelli v. Duplessis, [1959] S.C.R. 121; Padfield v. Minister of Agriculture, Fisheries and Food, [1968] A.C. 997; Cardinal v. Director of Kent Institution, [1985] 2 S.C.R. 643; Nicholson v. Haldimand-Norfolk Regional Board of Commissioners of Police, [1979] 1 S.C.R. 311; Old St. Boniface Residents Assn. Inc. v. Winnipeg (City), [1990] 3 S.C.R. 1170; Reference re Canada Assistance Plan (B.C.), [1991] 2 S.C.R. 525; Baker v. Canada (Minister of Citizenship and Immigration), [1999] 2 S.C.R. 817; Bendahmane v. Canada (Minister of Employment and Immigration), [1989] 3 F.C. 16; Sous-ministre du Revenu du Québec v. Transport Lessard (1976) Ltée, [1985] R.D.J. 502; Aurchem Exploration Ltd. v. Canada (1992), 91 D.L.R. (4th) 710; Apotex Inc. v. Canada (Attorney General), [1994] 3 S.C.R. 1100, aff’g [1994] 1 F.C. 742; Re Webb and Ontario Housing Corp. (1978), 22 O.R. (2d) 257; Hutfield v. Fort Saskatchewan General Hospital District No. 98 Board (1986), 49 Alta. L.R. (2d) 256, aff’d (1988), 52 D.L.R. (4th) 562; Knight v. Indian Head School Division No. 19, [1990] 1 S.C.R. 653; Gingras v. Canada, [1990] 2 F.C. 68; Bloomfield v. Saskatchewan (Minister of Health), [1986] S.J. No. 675 (QL); R. v. Secretary of State for the Home Department, ex parte Khan, [1984] 1 W.L.R. 1337; R. v. Secretary of State for the Home Department, ex parte Ruddock, [1987] 2 All E.R. 518; R. v. Ministry of Agriculture Fisheries and Food, ex parte Hamble (Offshore) Fisheries Ltd., [1995] 2 All E.R. 714; R. v. North and East Devon Health Authority, ex parte Coughlan, [2000] 3 All E.R. 850; Webb v. Ireland, [1988] I.R. 353; Attorney-General (NSW) v. Quin (1990), 64 A.L.J.R. 327; Administrator, Transvaal v. Traub, 1989 (4) SA 731; R. v. Inland Revenue Commissioners, ex parte M.F.K. Underwriting Agents Ltd., [1990] 1 W.L.R. 1545; Haoucher v. Minister for Immigration, Local Government and Ethnic Affairs (1990), 19 A.L.D. 577; Minister of State for Immigration and Ethnic Affairs v. Teoh (1995), 183 C.L.R. 273; Martineau v. Matsqui Institution Disciplinary Board, [1980] 1 S.C.R. 602; Apotex Inc. v. Canada (Attorney General), [2000] 4 F.C. 264; Canada (Attorney General) v. Canada (Commissioner of the Inquiry on the Blood System), [1996] 3 F.C. 259; Bawolak v. Exroy Resources Ltd., [1993] R.D.J. 192; Comeau’s Sea Foods Ltd. v. Canada (Minister of Fisheries and Oceans), [1997] 1 S.C.R. 12; Re Multi-Malls Inc. and Minister of Transportation and Communications (1976), 14 O.R. (2d) 49; Kenora (Town) Hydro Electric Commission v. Vacationland Dairy Co-operative Ltd., [1994] 1 S.C.R. 80; Robertson v. Minister of Pensions, [1949] 1 K.B. 227; Lever Finance Ltd. v. Westminster (City) London Borough Council, [1971] 1 Q.B. 222; North Western Gas Board v. Manchester Corp., [1963] 3 All E.R. 442; Office of Personnel Management v. Richmond, 496 U.S. 414 (1990); United States v. Pennsylvania Industrial Chemical Corp., 411 U.S. 655 (1973); United States v. Asmar, 827 F.2d 907 (1987); Maracle v. Travellers Indemnity Co. of Canada, [1991] 2 S.C.R. 50; St. Ann’s Island Shooting and Fishing Club Ltd. v. The King, [1950] S.C.R. 211; The King v. Dominion of Canada Postage Stamp Vending Co., [1930] S.C.R. 500; Granger v. Canada (Canada Employment and Immigration Commission), [1989] 1 S.C.R. 141, aff’g [1986] 3 F.C. 70; Associated Provincial Picture Houses, Ltd. v. Wednesbury Corp., [1948] 1 K.B. 223; MacMillan Bloedel Ltd. v. Minister of Forests of British Columbia, [1984] 3 W.W.R. 270; Lazarov v. Secretary of State of Canada, [1973] F.C. 927; Re Stora Kopparbergs Bergslags Aktiebolag and Nova Scotia Woodlot Owners’ Association (1975), 61 D.L.R. (3d) 97; Canadian National Railway Co. v. Fraser-Fort George (Regional District) (1996), 140 D.L.R. (4th) 23; Maple Lodge Farms Ltd. v. Government of Canada, [1982] 2 S.C.R. 2; Re Sheehan and Criminal Injuries Compensation Board (1975), 52 D.L.R. (3d) 728.
Statutes and Regulations Cited
Act respecting health services and social services, R.S.Q., c. S-4.2, ss. 81, 83, 119 [am. 1992, c. 21, s. 70], 126 [idem], 437 to 443, 441, 442.1, 444.
Act respecting health services and social services, R.S.Q., c. S-5 [now R.S.Q., c. S‑4.2], ss. 136, 137, 138, 139 [repl. 1981, c. 22, s. 92], 139.1 [ad. 1981, c. 22, s. 92], 140.
Code of Civil Procedure, R.S.Q., c. C-25, art. 100, 844.
Permits for Establishments (Issue and Renewal) Regulation, O.C. 1373-84, (1984) 116 G.O. II, 2370.
Authors Cited
Brown, Donald J. M., and John M. Evans. Judicial Review of Administrative Action in Canada. Toronto: Canvasback, 1998 (loose‑leaf updated January 2001).
Davis, Kenneth Culp, and Richard J. Pierce, Jr. Administrative Law Treatise, 3rd ed., vol. 2. Boston: Little, Brown, 1994.
de Smith, Stanley A. Judicial Review of Administrative Action, 5th ed. By Lord Woolf and Jeffrey Jowell. London: Sweet & Maxwell, 1995.
Ferland, Denis, et Benoît Emery. Précis de procédure civile du Québec, vol. 1, 3e éd. Cowansville, Qué.: Yvon Blais, 1997.
Forsyth, Christopher. “Wednesbury protection of substantive legitimate expectations”, [1997] Pub. L. 375.
Gendreau, Paul-Arthur, et autres. L’injonction. Cowansville, Qué.: Yvon Blais, 1998.
MacLauchlan, H. Wade. “Transforming Administrative Law: The Didactic Role of the Supreme Court of Canada” (2001), 80 Can. Bar Rev. 281.
McDonald, Patrick. “Contradictory Government Action: Estoppel of Statutory Authorities” (1979), 17 Osgoode Hall L.J. 160.
Mullan, David J. Administrative Law. Toronto: Irwin Law, 2001.
Mullan, David. J. “Canada Assistance Plan -- Denying Legitimate Expectation a Fair Start?” (1993), 7 Admin. L.R. (2d) 269.
Mullan, David J. “‘Confining the Reach of Legitimate Expectations’ Case Comment: Sunshine Coast Parents for French v. School District No. 46 (Sunshine Coast)” (1991), 44 Admin. L.R. 245.
Roy, Claudine. La théorie de l’expectative légitime en droit administratif. Cowansville, Qué.: Yvon Blais, 1993.
Schønberg, Søren J. Legitimate Expectations in Administrative Law. New York: Oxford University Press, 2000.
Stewart, Cameron. “Substantive Unfairness: A New Species of Abuse of Power?” (2000), 28 Fed. L. Rev. 617.
Wright, David. “Rethinking the Doctrine of Legitimate Expectations in Canadian Administrative Law” (1997), 35 Osgoode Hall L.J. 139.
APPEAL from a judgment of the Quebec Court of Appeal, [1998] R.J.Q. 2707, 9 Admin. L.R. (3d) 161, [1998] Q.J. No. 2982 (QL), affirming a judgment of the Superior Court, J.E. 92-1815. Appeal dismissed.
Patrice Claude, Anne-Marie Brunet and Jean-François Jobin, for the appellant.
Gilles Poulin and Elliot L. Bier, for the respondents Mount Sinai Hospital Center and Elliot L. Bier et al.
No one appeared for the respondent Maimonides Hospital Geriatric Centre.
The reasons of McLachlin C.J. and Binnie J. were delivered by
1 Binnie J. – I agree with my colleague Justice Bastarache that this appeal should be dismissed. I also agree with his rejection of the respondents’ claim that they already possessed the modified permit at the time of the Mount Sinai Hospital Center’s move from Sainte-Agathe to Montreal and that all that remained was to bring the wording of the permit into line with the legal reality. As my colleague points out in para. 97, “being entitled to the permit is different than actually holding it”. In government, nothing is done until it is done.
2 My colleague, Bastarache J., puts the focus on the Minister of Health and Social Services and concludes that the Minister had in fact exercised his discretion under s. 138 of the Act respecting health services and social services, R.S.Q., c. S-5 (now s. 441 of the Act respecting health services and social services, R.S.Q., c. S-4.2),
culminating in the Center’s move to Montreal in January 1991 (para. 105). The various actions and communications by the Minister with the respondents are considered as evidence of how and when the discretion was exercised (para. 101). The issue, on this view, is whether the original exercise of the s. 138 discretion was validly reversed in the October 3, 1991 decision to deny the modified permit (para. 107).
3 There is, of course, a distinction between the making of a decision and the documentation of it, but to apply that distinction here raises serious practical problems. When, precisely, did the Minister cross the boundary between deliberation and decision? How is the citizen and, importantly, how is the Minister to know when his or her decision-making power has been exercised? Is the allegation of an exercised power sufficient to expose the Minister to pre-trial discovery on his state of mind? How much mental commitment by the Minister will be held to be enough to lock in a “decision”?
4 I prefer the approach of the Quebec Court of Appeal which rested its decision on an analysis of the relationship between the respondents and the Minister. The communications from the Minister are not simply evidence of the state of the Minister’s mind, but are the source of the respondents’ entitlement. In other words, if the successive Ministers had gone through the same cogitations and deliberations as they did between 1984 and 1991, but kept their thoughts to themselves, I think it unlikely the respondents would succeed in obtaining the order they seek.
5 What is crucial to the respondents’ case is that successive Ministers not only communicated their view that the Center’s change of operations to include short-term care was in the public interest (in terms which amounted to a promise that the modified permit would be issued) but the respondents relied on those representations and communications. Inexplicably, once the respondents applied for the modified permit as promised, the ministerial wind shifted without notice. The Minister simply announced that short-term beds must be coupled with enhanced diagnostic and treatment facilities which the respondents had not proposed and which the Minister, despite his insistence, was not prepared to fund. This is what the Minister wrote:
[translation] The excellence achieved by this hospital in so-called intermediate care of respiratory illnesses was developed within the framework of a permit for 107 long-term beds. If 50 of those beds were now reclassified to become short-term beds, as you are asking, it would be necessary to strengthen the establishment’s capacity to deal with more acute and more complex clinical problems than at present. It would be necessary for that purpose to grant it additional resources, something which the Government is not able to do.
The review of the case conducted by my Department concludes that Mount Sinai Hospital’s permit should remain what it is, namely 107 long-term beds, an opinion which I share.
6 It is evident on the face of the letter that no weight whatsoever was placed by the Minister on the implications for the respondents of the broken promises.
I. The Legal Issues
7 The wording of s. 138 of the old Act is crucial:
138. Every person applying for a permit must send his application to the Minister in accordance with the regulations.
The Minister shall issue a permanent permit or a temporary permit if he considers that it is in the public interest. [Emphasis added.]
Accordingly, if the Minister forms the opinion, as a matter of policy, that the public interest would be served by the modified facility, then he shall (mandatory) issue the permit. There are thus three stages to the respondents’ challenge: (1) the October 3, 1991 decision is to be quashed; (2) the Minister is to be fixed with the conception of the public interest he and his predecessors agreed upon with the respondents between 1984 and October 2, 1991; and (3) based on that conception of the public interest, mandamus is to issue to enforce the mandatory duty under s. 138 (“shall”) to issue the modified permit.
8 This case is not the simple scenario of an application for a permit followed by a refusal “in the public interest”. From 1984 onwards the respondents worked closely with Ministry regulators. A web of understandings and incremental agreements came into existence with the concurrence indeed encouragement of successive Ministers. What perhaps began with an abstract notion of “the public interest” became, through private initiative and ministerial response, a specific embodiment of the public interest in terms of bricks and mortar, facilities and location. Not only did successive Ministers subscribe to this embodiment of the public interest, they encouraged the respondents to act on it. If this were a private law situation there would likely be a breach of contract. This is not, of course, a private law situation.
II. The Case for the Appellant Minister
9 Counsel for the Minister emphasized that s. 138 clearly shows a legislative intent that the public interest is to be determined by the Minister, not by the courts. The validity of the legislation is unchallenged. The Minister was entirely familiar with the Center and over the course of seven years had heard whatever the respondents had to say. Ministerial decisions in such circumstances command deference: Calgary Power Ltd. v. Copithorne, [1959] S.C.R. 24; Nenn v. The Queen, [1981] 1 S.C.R. 631; Canada (Attorney General) v. Purcell, [1996] 1 F.C. 644 (C.A.). The Minister says that neither the doctrine of legitimate expectations nor estoppel operates to entitle the respondents to substantive relief, i.e., the modified permit. Estoppel can only be used as a shield, not a sword: Canadian Superior Oil Ltd. v. Paddon-Hughes Development Co., [1970] S.C.R. 932, at pp. 937-39; Gilbert Steel Ltd. v. University Construction Ltd. (1976), 12 O.R. (2d) 19 (C.A.), at p. 23.
III. The Case for the Respondents
10 The respondents do not dispute the general principle of deference to ministerial discretion. They rely, however, on the web of relationships developed in the seven years preceding the October 3, 1991 rejection. Their legal position may be rationalized in several different ways:
(1) They had a right to the modified permit to “regularize” the hospital bed situation brought about by the mutual agreement with the Minister. The Court should consider as done that which ought to have been done;
(2) Procedural fairness dictated that the application for a modified permit should have been granted;
(3) While there may have been no right as such to a modified permit, the respondents had a reasonable and legitimate expectation that the modified permit would issue. The Minister had so promised, it was within his statutory power to keep his promise, and there was no overriding public interest that might justify the promise being broken;
(4) The Minister was estopped by his representations from insisting on an unfettered discretion in October 1991 to grant or withhold the modified permit. Too much water had gone under the bridge. The representations, and conduct of successive Ministers from 1984 onwards, led the respondents to modify their operations to include short-term care, launch a fundraising campaign and move to a new facility in Montreal. The Minister could not belatedly escape this history on October 3, 1991. The discretion which he otherwise might have possessed was fettered;
(5) The ministerial decision should be set aside on one ground of abuse of discretion. The dealings of successive Ministers with the respondents between 1984 and 1991 reflected a considered view of the public interest which was repudiated on October 3, 1991 without any regard for a very relevant consideration, namely the implications of that decision for the respondents. If the Minister were to decide consistently with the view of the public interest he had previously espoused, the modified permit would issue. No plausible reason was given for the breach of the promise of a modified permit. The decision of October 3, 1991 was, in the circumstances, patently unreasonable.
11 It will be noted that most of these claims would lead, if anywhere, to procedural relief. That is not, as stated, the respondents’ ultimate objective. While in some cases a litigant relies on a substantive claim to justify procedural protection, in this case the respondents rely to some extent on the alleged violation of their procedural rights to nourish the claim to a substantive remedy.
12 I will address each of these legal arguments in turn.
A. Do the Respondents Possess an Acquired Right to a Modified Permit?
13 In oral argument it was suggested that perhaps the respondents could bring themselves within the principle applied in Hill v. Nova Scotia (Attorney General), [1997] 1 S.C.R. 69. In that case a farm had been bifurcated by a new provincial highway. The farmer claimed that when expropriating his land for that purpose 27 years earlier, the province had included as part of the compensation package an equitable easement permitting him to move cattle and equipment across the highway from one side of his farm to the other. Both the farmer and the province had clearly acted on that basis for the previous 27 years. The province eventually repudiated the understanding contending that it had never acknowledged the interest in the land in writing as required by s. 21 of the Public Highways Act, R.S.N.S. 1954, c. 235. Our Court concluded that there had been “part performance” by the province, and “[q]uite simply equity recognizes as done that which ought to have been done. A verbal agreement which has been partly performed will be enforced” (per Cory J., at paras. 11-12).
14 Hill involved an equitable interest in land. In the present case the respondents cannot be said to have a “right” much less a proprietary right to the award of a permit. The mere expectation of a favourable outcome to the application (when eventually made), fuelled by ministerial statements and conduct, is still no more than an expectation. The respondents had not even applied for the modified permit until they relocated to Montreal in 1991.
15 In the United States a broad interpretation is sometimes given to the notion of “property” for the purposes of the due process clause (e.g., Cleveland Board of Education v. Loudermill, 470 U.S. 532 (1985) (state employment); Perry v. Sindermann, 408 U.S. 593 (1972); Mathews v. Eldridge, 424 U.S. 319 (1976) (right to social security disability benefits); and Barry v. Barchi, 443 U.S. 55 (1979) (renewal of horse trainer’s licence)), but even the U.S. cases seem to contemplate the possession and expected continuation of an existing permit or benefit, not the hoped-for acquisition of a new one.
16 Putting aside, then, the initial challenge based on Hill, the other arguments that are marshalled in support of the respondents’ position proceed from very general propositions (e.g., the availability of procedural fairness) to narrower propositions that are highly specific to the dealings between the parties in this case (e.g., estoppel). Under whatever label, however, the steady drumbeat of the respondents’ complaint is that they were treated by the Minister in an unfair and high-handed manner. It is true, as the appellant points out, that the Minister’s power under s. 138 is framed as a broad policy discretion to be exercised “in the public interest”. Yet the discretion, however broadly framed, is not unfettered. At the very least the Minister must exercise the power for the purposes for which it was granted: Roncarelli v. Duplessis, [1959] S.C.R. 121, at p. 140; Padfield v. Minister of Agriculture, Fisheries and Food, [1968] A.C. 997 (H.L.), at p. 1030. The Minister must observe procedural fairness in dealing with the respondents’ interests in their application for a permit: Cardinal v. Director of Kent Institution, [1985] 2 S.C.R. 643; Nicholson v. Haldimand-Norfolk Regional Board of Commissioners of Police, [1979] 1 S.C.R. 311. Other limitations are more controversial. Where, as here, the Minister makes representations by word or conduct that someone will receive or retain a benefit, or that some procedural right will be afforded before a decision is taken, the availability and/or content of procedural fairness may be enlarged under the doctrine of legitimate expectation: Old St. Boniface Residents Assn. Inc. v. Winnipeg (City), [1990] 3 S.C.R. 1170; Reference re Canada Assistance Plan (B.C.), [1991] 2 S.C.R. 525; Baker v. Canada (Minister of Citizenship and Immigration), [1999] 2 S.C.R. 817; Bendahmane v. Canada (Minister of Employment and Immigration), [1989] 3 F.C. 16 (C.A.); C. Roy, La théorie de l’expectative légitime en droit administratif (1993). Where the representations were known to and relied upon by an individual affected, and such reliance would result in a detriment to that person if the Minister were to backtrack on his earlier representations, there is arguably (unless the statute or an overriding public interest dictates a contrary result) an estoppel: Sous-ministre du Revenu du Québec v. Transport Lessard (1976) Ltée, [1985] R.D.J. 502 (C.A.); Aurchem Exploration Ltd. v. Canada (1992), 91 D.L.R. (4th) 710 (F.C.T.D.). Moreover, if in light of the foregoing constraints, whether implied by law or self-imposed by the Minister, the resulting decision is patently unreasonable, it may be quashed (Baker v. Canada, supra) and an order in the nature of mandamus may be granted to require the Minister, again in the absence of an overriding public interest to the contrary, to issue the modified permit (Apotex Inc. v. Canada (Attorney General), [1994] 3 S.C.R. 1100, aff’g [1994] 1 F.C. 742 (C.A.)). The list of limitations is not exhaustive.
17 At the end of the day, the respondents’ main hurdle is that they do not seek procedural relief. They want the Court to grant substantive relief. They don’t want a hearing or more consultation. The events in question took place 10 years ago. The world has moved on. They want the Court to order the Minister to issue the 1991-1993 modified permit.
B. The Minister Failed to Observe Procedural Fairness
18 If the respondents did not have a “right” to a modified permit, they nevertheless had a direct financial interest in the outcome of their application sufficient to trigger the duty of procedural fairness. They were, after all, existing permit holders. Their request was for permit modifications. As stated by Le Dain J. in Cardinal v. Director of Kent Institution, supra, at p. 653:
This Court has affirmed that there is, as a general common law principle, a duty of procedural fairness lying on every public authority making an administrative decision which is not of a legislative nature and which affects the rights, privileges or interests of an individual. . . .
19 The respondents were entitled to procedural fairness irrespective of the existence of representations and pieces of correspondence from the Minister. The nature of the respondents’ interest was sufficient: Re Webb and Ontario Housing Corp. (1978), 22 O.R. (2d) 257 (C.A.), per MacKinnon A.C.J.O., at p. 265; Hutfield v. Fort Saskatchewan General Hospital District No. 98 Board (1986), 49 Alta. L.R. (2d) 256 (Q.B.), at pp. 262-64, aff’d on other grounds (1988), 52 D.L.R. (4th) 562 (Alta. C.A.). Moreover,
[c]ontemporary administrative law takes a very broad view of the range of the rights, privileges and interests that will attract a right to procedural fairness.
(D. J. M. Brown and J. M. Evans, Judicial Review of Administrative Action in Canada (loose-leaf) vol. 2, at p. 7-31)
20 Once triggered, the content of procedural fairness is generally a function of (i) the nature of the decision to be made, (ii) the relationship between the decision maker and the individual, and (iii) the effect of the decision on the individual’s rights: Knight v. Indian Head School Division No. 19, [1990] 1 S.C.R. 653, at p. 669.
21 Even minimal procedural fairness was not extended to the respondents in this case. They had no notice that the Minister was about to reverse his position, or the reasons for the reversal, and no opportunity to present argument as to why the Minister’s earlier and long-standing view that the public interest favoured a modified Mount Sinai Hospital Center should prevail. These defects enable the respondents to achieve the first of their objectives, namely the setting aside of the Minister’s October 3, 1991 decision. However, as stated, they want m