IN THE SUPREME COURT OF BRITISH COLUMBIA

Citation:

BC Govt Serv. Empl. Union v. British Columbia (Minister of Health Services),

 

2005 BCSC 446

Date: 20050323
Docket: 04/0879
Registry: Victoria

Between:

British Columbia Government and Services Employees' Union

Petitioner

And:

The Minister of Health Services and The Medical Services Commission

Respondents

And:

Maximus BC Health Inc., Maximus BC Health Benefit Operations Inc.,
Maximus Canada, Inc. and Maximus Inc.

Respondents


Before: The Honourable Mr. Justice Melvin

Reasons for Judgment

Counsel for the Petitioner:

T.M. Rankin, Q.C. and C.J. Parker

Counsel for the Respondents:  The Minister of Health services and The Medical Services Commission

J.M. Walters and S. MacDonald

Counsel for the Respondents:  Maximus BC Health Inc., Maximus BC Health Benefit Operations Inc., Maximus Canada, Inc. and Maximus Inc.

D.G. Cowper, Q.C.

Date and Place of Trial:

20050314-20050318

 

Victoria, B.C.

[1]                In its initial petition issued February 23, 2004, the petitioner sought a declaration that the contracting out of services as proposed by the Minister of Health on July 29, 2003, is ultra vires.  Secondly, an order quashing any contracts which involve the quashing out of duties of the powers listed in s. 5 of the Medicare Protection Act, R.S.B.C. 1996, c. 286.  Thirdly, an order quashing contracts or agreements which involve the disclosure of personal information. 

[2]                On January 28, 2005, the petitioner amended that petition seeking the following relief:

1.         A declaration that the Master Services Agreement entered into between the Minister of Health Services and the Maximus companies dated November 4, 2004, is ultra vires;

2.         An order quashing the Master Services Agreement;

3.         Third, a declaration that the disclosure of sensitive personal information pursuant to the Master Services Agreement is contrary to the Charter and other relief.

[3]                In support of that amended petition the petitioner set forth the following grounds:

1.         That the contracting out of the duties and powers listed in s. 5(1) of the Medicare Protection Act to a private contractor is contrary to the requirement of public administration as set out in the Canada Health Act, R.S.C. 1985, C-6, and is thus ultra vires;

2.         That the Master Services Agreement will require disclosure of personal information in circumstances that will constitute a violation of the Freedom of Information and Protection of Privacy Act, R.S.B.C. 1996, c. 155 (FOIPPA), and is thus ultra vires;

3.         That the release of highly sensitive personal information pursuant to the Master Services Agreement contravenes ss. 7 and 8 of the Canadian Charter of Rights and Freedoms.

[4]                As the Maximus defendants were parties to the Master Services Agreement, they were added as respondents on the hearing of the petition on March 14, 2005.

HISTORY

[5]                In July of 2003 the Ministry of Health announced its intention to develop a new model for the delivery of medical services through a joint process commencing with the issuance of the request for proposals.  A number of private entities responded to the proposal, including the respondents Maximus.  In March 2004 Maximus was selected as the successful proponent of the joint solution process.  This selection was followed in April 2004 by a complaint by the petitioner to the Information and Privacy Commissioner under FOIPPA.  As a result, the Commissioner under FOIPPA announced that he would examine implications of the U.S. Patriot Act and call for submissions.

[6]                During this process the Government and Maximus carried out contract negotiations and the Government considered and did amend the provisions of FOIPPA.  In October 2004 the Commissioner issued his report.  Nevertheless, on November 4, 2004, the Master Services Agreement was executed which resulted subsequently in the amended petition. 

[7]                In the Commissioner's report of October 2004 he concluded that there was a reasonable possibility of disclosure.  However, the Commissioner did not have before him the concluded Medical Services Agreement nor the FOIPPA legislative changes which are now in existence.  It is important to note that throughout 2004 there were ongoing negotiations and revisions in relation to the Master Services Agreement between the parties and there were the statutory amendments to FOIPPA which have, as their purpose, privacy concerns.

[8]                The Master Services Agreement is a contract entered into by the appropriate ministry with Maximus for the purpose of "outsourcing" certain functions previously performed by employees by the Province of British Columbia.  In the main, these services relate to the processing of accounts rendered to government by medical personnel for payment of fees and other charges which are covered by the Medicare Protection Act in the Province of British Columbia.  The schedule of fees and the activities covered are determined by government.  The mechanics of payment are pursuant to the contract to be carried out by Maximus.  According to the evidence, 98.5% of the account payment information will be computer driven.  There will be a small portion which may involve the intervention of an individual to assess whether or not the claim falls within the insured services either by way of description of the activity or a determination as to whether the patient or person receiving the medical attention is an insured within the meaning of the scheme.

[9]                It is important to note that the contract does not cover the delivery of medical services by health care professionals in the Province of British Columbia.  The purpose of the contract is to ensure payment of accounts rendered by medical health care professionals pursuant to the appropriate legislation and pursuant to the appropriate schedule of fees and services as determined by the Province.

[10]            Maximus, under the terms of the Master Services Agreement, does not determine fees, nor does it determine payment except entitlement to payment of fees in accordance with the policies and directives of the Province of British Columbia and the fee schedule that it has created.  On any review of the agreement the Province, through the Ministry of Health, has oversight of all aspects of the operation and power to intervene if and when it deems it necessary.

LEGISLATION - MEDICAL

[11]            The Ministry of Health Act, R.S.B.C. 1996, c. 301, provides as follows:

1          (1)        There is to be a ministry of the public service of British Columbia called the Ministry of Health.

            (2)        The minister is to preside over and be responsible to the Lieutenant Governor in Council for the direction of the ministry.

            (3)        The minister may establish branches or divisions of the ministry the minister considers advisable.

...

3          The minister may, for the purposes of any Act under the minister's administration, enter into agreements with any person.

[12]            A portion of the preamble and ss. 2 and 5(d) of the Medicare Protection Act read in part:

WHEREAS the people and government of British Columbia wish to confirm and entrench universality, comprehensiveness, accessibility, portability and public administration as the guiding principles of the health care system of British Columbia and are committed to the preservation of these principles in perpetuity;

...

2          The purpose of this Act is to preserve a publicly managed and fiscally sustainable health care system for British Columbia in which access to necessary medical care is based on need and not an individual's ability to pay.

...

5          (1)        The commission may do one or more of the following:

                        (d)        determine the manner by which claims for payment of benefits rendered in or outside British Columbia to beneficiaries are made; ...

            (2)        The commission must not act under subsection (1) in a manner that does not satisfy the criteria described in section 7 of the Canada Health Act (Canada) ....

[13]            A portion of the preamble and ss. 4, 5, 7 8(2)(a) and (b) of the Canada Health Act read as follows:

- that it is not the intention of the Government of Canada that any of the powers, rights, privileges or authorities vested in Canada or the provinces under the provisions of the Constitution Act, 1867, or any amendments thereto, or otherwise, be by reason of this Act abrogated or derogated from or in any way impaired;

...

AND WHEREAS the Parliament of Canada wishes to encourage the development of health services throughout Canada by assisting the provinces in meeting the costs thereof;

...

4.         The purpose of this Act is to establish criteria and conditions in respect of insured health services and extended health care services provided under provincial law that must be met before a full cash contribution may be made.

5.         Subject to this Act, as part of the Canada Health and Social Transfer, a full cash contribution is payable by Canada to each province for each fiscal year.

...

7.         In order that a province may quality for a full cash contribution referred to in section 5 for a fiscal year, the health care insurance plan of the province must, throughout the fiscal year, satisfy the criteria described in sections 8 to 12 respecting the following matters:

(a)        public administration;

(b)        comprehensiveness;

(c)        universality;

(d)        portability; and

(e)        accessibility.

...

8.         (2)        The criterion respecting public administration is not contravened by reason only that the public authority referred to in subsection (1) has the power to designate any agency

                        (a)        to receive on its behalf any amounts payable under the provincial health care insurance plan; or

                        (b)        to carry out on its behalf any responsibility in connection with the receipt or payment of accounts rendered for insured health services, if it is a condition of the designation that all those accounts are subject to assessment and approval by the public authority and that the public authority shall determine the amounts to be paid in respect thereof.

LEGISLATION - PROCEDURAL AND SUBSTANTIVE

[14]            The petitioner brings his petition within the provisions of the Judicial Review Procedure Act , R.S.B.C. 1996, c. 241 (JRPA), and in particular, s. 2 which is set out as follows:

2          (1)        An application for judicial review is an originating application and must be brought by petition.

(2)        On an application for judicial review, the court may grant any relief that the applicant would be entitled to in any one or more of the proceedings for:

(a)        relief in the nature of mandamus, prohibition or certiorari;

(b)        a declaration or injunction, or both, in relation to the exercise, refusal to exercise, or proposed or purported exercise, or a statutory power.

[15]            In that respect, the petitioner seeks declarations as described in the amended petition.  As a result, the definition section becomes important as it relates to the definition of statutory power of decision and statutory power:

"statutory power of decision" means a power or right conferred by an enactment to make a decision deciding or prescribing

(a)        the legal rights, powers, privileges, immunities, duties or liabilities of a person, or

(b)        the eligibility of a person to receive, or to continue to receive, a benefit or licence, whether or not the person is legally entitled to it,

and includes the powers of the Provincial Court;

"statutory power" means a power or right conferred by an enactment

(a)        to make a regulation, rule, bylaw or order,

(b)        to exercise a statutory power of decision

(c)        to require a person to do or to refrain from doing an act or thing that, but for that requirement, the person would not be required by law to do or to refrain from doing.

(d)        to do an act or thing that would, but for that power or right, be a breach of a legal right of any person, or

(e)        to make an investigation or inquiry into a person's legal right, power, privilege, immunity, duty or liability;

...

FREEDOM OF INFORMATION AND PROTECTION OF PRIVACY ACT,
R.S.B.C. 1996, c. 165, as amended S.B.C. 2004 (FOIPPA). 

[16]            This statute contains provisions as specifying restrictions and the dissemination or disclosure of information of public entities and also penalties for breach.

[17]            Before outlining the issues that arise in the course of the hearing of this petition, it should be noted that the effective date for Maximus to carry out the obligations under the Master Services Agreement is April 1, 2005.  The corporate structure of the Maximus companies is important and is listed as follows:

1.         Maximus Inc. is a United States company carrying on business in the United States.  Its wholly owned subsidiary in Canada is Maximus Canada Inc.

2.         Maximus Canada Inc.'s subsidiary is Maximus BC Health Inc. (Technical Services) which in turn has a subsidiary called Maximus BC Health Benefit Operations Inc. providing services.

[18]            The latter three corporate entities are Canadian companies.  Maximus BC Health and Maximus BC Health Benefit Operations Inc. are incorporated in the Province of British Columbia and are restricted by the Articles of Association by operating within the Province of British Columbia.

[19]            In order to isolate those companies from Maximus Canada and Maximus Inc. (U.S.A.) the Master Services Agreement provides that the shares of Maximus BC Health Inc. will be held in trust by a trust company operating in the Province of British Columbia.  The beneficial interest in those shares is to be held by Maximus Canada.  The trust provision in the contract is one of the default remedies that the Province has in relation to a breach or prospective breach by Maximus.  In the event such an event occurs or will occur or is likely to occur, the trust company, who holds legal title to the shares, will deliver the shares to the Province of British Columbia who will be able to take ownership and act accordingly.  In the event the default or anticipated default is resolved, the process is to be reversed.  At all times material to the actions of Maximus BC Health and Maximus BC Health Benefit Operations are under the policy guidelines and oversight of the Province of British Columbia.

ISSUES

[20]            a.         Standing;

b.         Are the JRPA proceedings to quash a contract appropriate?

c.         Does the Master Services Agreement violate provisions of the Canada Health Act regarding public administration as referred to in the Medicare Protection Act?

d.         Does contracting out administration violate FOIPPA?

e.         Does contracting out administration violate ss. 7 and 8 of the Charter regarding rights to privacy?

PLAINTIFF'S SUBMISSIONS

[21]            The plaintiff's submissions may be summarized as a challenge to the decision to contract out the administration of most aspects of the health care insurance scheme of the Province of British Columbia.  In this respect the petitioners submit that such a contract is contrary to the requirements of the Health Insurance Plan be administered and operated by a public authority as stated in the Canada Health Act and referred to in the Medicare Protection Act

[22]            Secondly, the petitioners submit that contracting out services to the Maximus companies violates the Province's responsibilities under FOIPPA.  Thirdly, that such contracting out violates ss. 7 and 8 of the Canadian Charter of Rights and Freedoms.

[23]            The basis of these latter two submissions is based on the assertion that the administration of the public health insurance scheme involves access to highly sensitive personal information which is provided to the Province in order to allow the beneficiaries to participate in health care coverage. 

Standing

[24]            The petitioner is a union operating in the Province of British Columbia under employment contracts with the Government of the Province of British Columbia.  In this respect, its employees are actively engaged in the health care system in the Province of British Columbia.  Under the overall agreements between the parties Maximus will become a successor employer within the meaning of the labour law of the Province of British Columbia.  Consequently, the employees presently employed by the Province and members of the petitioner will become employees of Maximus under the terms of their existing labour contract.  As a result of this process and the Master Services Agreement, the petitioner and its members are directly affected by the contracting out question.

[25]            In my opinion the petitioner has raised a serious question as to the validity of the legislation and the contract and is directly affected by it regarding the change in employer.  As a result, the petitioner has a genuine interest in the validity of the legislative scheme under consideration.  No doubt other interested parties could commence this litigation and seek similar relief.  However, it is difficult to identify an organization that could be more directly affected than the petitioner.  I am satisfied that the criteria for standing set forth and The Canadian Council of Churches v. Canada (1992), 1 S.C.R. 236, is satisfied.  Namely, there is a serious question as to validity.  Secondly, the petitioner is directly affected by the legislation or, if not, it has a genuine interest in its validity.  Thirdly, an alternative reasonable or an effective way to bring the issue before the court would involve litigation by individuals or organizations who were not directly involved as are the petitioners.  Consequently, I am satisfied that the petitioner has standing to bring these proceedings.

JUDICIAL REVIEW PROCEDURE ACT (JRPA)

[26]            In order to fall within s. 2(2)(b) the petitioner must find that there has been a failure with reference to a statutory power, although it may be argued that that portion of the petitioner's claim is based on relief in the nature of certiorari.  Insofar as certiorari is an application to quash, it would be on the basis of lack of jurisdiction.  In other words, lack of jurisdiction of the Minister to enter into a contract, such as in the case at bar, pursuant to the legislation which is in effect from time to time in the Province of British Columbia. 

[27]            The definition of statutory power is restrictive.  None of the language in the definition (a) through (e) in my opinion contemplates quashing of a contract.  Section 3 of the Ministry of Health Act authorizes the Minister to enter into agreements with any person.  It is pursuant to this power that the Minister has acted.  The jurisdiction exercised by courts under the JRPA is to determine whether or not the body in question has acted within its jurisdiction.  The question then may be asked in the case at bar as follows:  Did the Minister (Government) have the power to enter into the contract in question?  The petitioner's submission is that the contract violates the provisions in the Medical Health Protection Act and the Canada Health Act and as a result the Minister acted without jurisdiction.

[28]            Although it may be submitted that exercising authority to enter into an agreement (contract) pursuant to the s. 3 of the Ministry of Health Act is the exercise of statutory power, it does not meet the criteria in the definition of that expression in the statute.  I accept the submission of the respondent that a decision to negotiate and enter into a contract does not fall within the definition of statutory power.  The decision involves consideration of government power regarding government services and government funds.  Consequently the petitioner does not come within the provisions of the statute with reference to the relief it seeks and the petition is dismissed.

[29]            Nevertheless, in my view, in light of the submissions it is important to consider the other issues raised on behalf of the petitioner.

PUBLIC ADMINISTRATION

[30]            It is submitted on behalf of the petitioners that in order to comply with the Canada Health Act and the Medicare Protection Act public administration is an essential component and that the contracting out of the services pursuant to the contract is a violation of that provision. 

[31]            The program criteria established by the Canada Health Act identifies five factors which must be satisfied in order that a province may qualify for a full cash contribution.  Public administration is the first of those five.  On any analysis of the Canada Health Act it is obvious that it is not to set the standards for medical care except that the criteria set forth in s. 7 must be met for funding, namely:

a.         Public administration;

b.         Comprehensiveness;

c.         Universality;

d.         Portability; and

e.         Accessability.

The purpose of that legislation is to provide the criteria in order that a province may receive cash contributions from the federal government. 

[32]            It is important in that respect to consider the preamble.  The Parliament of Canada recognized that it is not its intention to abrogate or derogate or in any way impair the rights, privileges or powers of the provinces under the Constitution Act.  Under s. 92 of the Constitution Act health is a matter reserved exclusively to the province.  Consequently, the only method by which the Canadian Federal Government can influence provincial health policy is by the control of financial resources.

[33]            As to the public administration criteria, Parliament has defined that in s. 8 as previously stated.  This definition, it is submitted by counsel for the petitioners, is incorporated in the Medicare Protection Act by virtue of s. 5(2) which obliges the Medical Services Commission to not act in a manner that does not satisfy the criteria in s. 7.  If the Medical Services Commission or the Province generally does not satisfy the criteria of the Canada Health Act, it is open of course to the Government of Canada to refuse to make full or even partial payment to the province for purposes of its medical services plan.

[34]            The petitioner, however, submits that there is an incorporation by reference of the public administration criteria and definition in the Canada Health Act under the Medicare Protection Act.

[35]            In my opinion, the identification of the criteria described in s. 7 by the Province of British Columbia in the Medicare Protection Act is a direction to the Commission that when it acts in accordance with the powers given to it under the provisions of subsection (1) of s. 5 it must not violate the criteria described in s. 7 of the Canada Health Act.  The purpose is to ensure funding.  In other words, the Commission is reminded statutorily that to violate the provisions of s. 7 of the Canada Health Act may place federal funding at risk.  Under those circumstances, in my view there is not a statutorily created incorporation by reference which requires the Province to comply with s. 7.  Legally, the Province under s. 92 of the Constitution Act can exercise its powers, in my opinion, regardless of the imposition of terms imposed by the Government of Canada with reference to payment. 

[36]            However, as others may disagree, the question arises then, what is meant by the language of public administration.  Parliament has defined it in relation to certain activities under s. 8.  However, administration generally involves management or executive duties as distinguished from clerical.  See Black's Law Dictionary and the Shorter Oxford English Dictionary.

[37]            With reference to the Master Services Agreement it is to be noted that the Ministry has charge of all matters with reference to policy, fees, etc., and Maximus is subject to the Minister's or Government's control in carrying out its administrative functions as described in the contract.  In my view that is not inconsistent with public administration in the general definition of that expression.  

[38]            Moreover, the Canada Health Act provides for a definition of public administration and it specifically provides for designation of an agency to carry out certain activities.  In my opinion, subsection (b) of s. 8(2) covers exactly what the Province of British Columbia purports to do in relation to these contractual arrangements.

[39]            The language of s. 8(2)(b) is important as the criteria respecting public administration is not contravened as the public authority has the power to designate any agency "(b) to carry out on its behalf any responsibility in connection with the receipt or payment of accounts rendered for insured health services ..." (my emphasis).  This is conditional, however, to the accounts being subject to assessment and approval by the public authority and the public authority is to determine the amounts to be paid.  That condition, in my opinion, has been satisfied by the Master Services Agreement and, as a result, s. 8(2)(b) clearly applies to the contractual arrangements entered into between the Province and Maximus.  In my opinion, there has been no violation of the public administration component.

FREEDOM OF INFORMATION AND PROTECTION OF PRIVACY ACT (FOIPPA)

[40]            Because of the issues raised by the petitioner with the Commissioner under FOIPPA, contractual provisions were negotiated in the hopes of addressing concerns and FOIPPA was amended in 2004.  Without cataloguing all of the sections and, in particular, ss. 30, 30.1, 30.2, 30.3, 30.4, 31.1, 33.1, 33.2, etc., it is clear that the Province has acted within its legislative authority to control the confidentiality of information that it has in its possession.

[41]            Section 30 requires the government, the public body, to make reasonable security arrangements against unauthorized access, collection, use, disclosure or disposal.  In addition, the material must be kept in Canada.  In the event there is a foreign demand for disclosure, there must be an immediate notification to the minister responsible for the Act.

[42]            The Legislature has also established that disclosure requirements apply to employees, officers, directors of a public body, and in the case of an employee that’s a service provider, all employees and associates of the service provider.  In this respect, a service provider means a person retained under a contract to perform services for a public body.  In this instance, it would apply to Maximus and its employees in the Province of British Columbia.

[43]            In addition, FOIPPA has created offences and individuals who violate the provisions of the statute are subject to penalties.

[44]            Any examination of FOIPPA leads to the conclusion that the government, as previously stated, has done all within its powers to control the dissemination of information and to ensure that the receipt of information by a public body is reasonably secure in the sense that proper precautions have been made to ensure privacy and confidentiality.

[45]            This statute applies to the two Maximus companies that operate in the Province of British Columbia and their employees.  Consequently, my view of the entering into the contract in and of itself does not result in a breach of the statute as the contract in and of itself does not violate any of the statute's provisions.  Consequently, I reject the submission that there is a breach of FOIPPA which may result in the Master Services Agreement being declared inoperative.

THE CHARTER, ss. 7 and 8:

[46]            The Charter of Rights and Freedoms is part of the Constitution of Canada and is overriding in respect of its applicability to provincial or federal legislation.  It is designed, of course, to be a counter balance to government authority.

[47]            Section 7 of the Charter is as follows:

Everyone has the right to life, liberty and security of the person and the right not to be deprived thereof and except in accordance with the principles of fundamental justice.

Section 8 of the Charter is as follows:

Everyone has the right to be secure against unreasonable search or seizure.

[48]            For the purposes of these reasons, I accept that in Canada there is a right to privacy encompassed by s. 7 of the Charter.  It is to be remembered in this context that the documentation or record which is to be administered by Maximus is the medical professionals’ fee document which is currently sent to the government for payment of the medical professionals’ accounts.  The patients’ file in the doctor’s office does not go to the government.  The coding system and operation identifies or describes the doctor and the activity with regard to the patient in order to fit the fee structure created by the Province.  For example, the coding may include an office visit, diagnosis, or treatment, and may be coded in that respect.

[49]            As a result, those in receipt of the claim for payment of medical professional fees will know the name of the patient, know when the patient saw the medical professional, what the patient saw the medical professional for and what diagnosis was made and what treatment, if any, administered.

[50]            It is this type of information that the petitioner submits will, pursuant to the Medical Services Agreement, be no longer under the direction and control of the Province and the employees of the Province, but will be in the hands of the employees of Maximus.  In the result, there is a greater risk of disclosure.

[51]            A patient who participates in the Provincial medicare system impliedly, if not expressly, consents to the doctor or other medical professional providing the government with billing information.  This information of necessity must provide sufficient detail to fall within the insured service, whether coded or not.

[52]            The government is responsible to ensure that the information received will remain confidential and should be protected.  The patient expects no less.  However the Legislation, Canada Health Act, and the Medicare Protection Act contemplate agencies under the government control, accessing the information for purposes of the medical health care scheme as described in those statutes, and as limited by those statutes.

[53]            When such an agency as contemplated by s. 8(2) of the Canada Health Act has been designated to carry out functions in accordance with that statute, that agency, subject to oversight, must take precautions to ensure the information it receives in respect to privacy rights.

[54]            As previously stated, s . 30 of FOIPPA specifies that the obligation is to make reasonable security arrangements.  In this respect, the petitioner’s submission is that the sceptre of a United States of America Patriot Act order looms large.

[55]            The question under these circumstances is whether the statutory provisions and the contractual obligations and restrictions satisfy the concerns expressed by the Supreme Court of Canada, in R. v. Oslin (1993), 4 S.C.R. 595, where the court stated in the context of a criminal case that "there are concerns that persons in need of medical care might be deterred from seeking valuable and needed treatment if the exchange of information were routine and easily available".

[56]            I note as well in R. v. Plant (1993), 3 S.C.R. 281, the court stated that:

…it is fitting that section 8 of the Charter should seek to protect a biographical core of personal information which individuals, in a free and democratic society, would wish to maintain and control from dissemination to the state.  This would include information which tends to reveal intimate details of the lifestyle and personal choices of the individual.

[57]            Accepting the essential requirement of confidentiality with reference to the information that Maximus will receive under the Master Services Agreement, it is necessary to consider the legislation (FOIPPA), the contract, and the obligations of Maximus and its employees.

[58]            Maximus U.S. will not be operating the scheme within the Province of British Columbia.  Maximus Canada will not be operating the scheme in the Province of British Columbia.  The actors in this respect are Maximus B.C. Health and Maximus B.C. Health Benefits Operations.  These are B.C. corporations restricted to operating in the Province of British Columbia.

[59]            Counsel for the petitioners, however, raises the concern that the United States Patriot Act may have impact on activities in British Columbia through Maximus U.S and as a result, the police agencies may receive information in the hands of Maximus B.C. Health and Maximus B.C. Health Benefits.

[60]            There is no doubt that Maximus U.S. is subject to the United States Patriot Act, and especially s. 215 thereof.  That section purports to authorize an order requiring the production of any tangible thing by a person or corporation to whom it is directed.  A tangible thing would include books, records, etc.

[61]            The application under s. 215 of the U.S. Patriot Act is brought by the Federal Bureau of Investigation.  The application is made without notice to the entity to whom the order may be directed.

[62]            Both parties filed expert opinion regarding the reach of the order made under the U.S. Patriot Act by the Federal Intelligence and Surveillance Act (FISA) Court acting under s. 215.  I am satisfied that a FISA court could order a United States based company to produce records in its possession or subject to its control and access based on the expert opinion which has been introduced as evidence.

[63]            The expert opinions differ as to the effect of such an order on medical records in British Columbia under the control of the British Columbia subsidiary, and the contract and British Columbia law.

[64]            As previously stated, Maximus U.S. contractually has no direct access to information in possession of its B.C. subsidiaries.  The corporate structure has previously been set forth.  Maximus Health Benefits Operations provides technological service and equipment.  Maximus B.C. Health Inc. provides the service.

[65]            Accepting that a FISA court in the United States, acting under s. 215 of the Patriot Act, would order Maximus U.S. to produce records and further accepting that the order would have extra territorial application in respect of Maximus U.S. subsidiaries, the issue still is which records are under control of Maximus U.S. and does Maximus U.S. have access?  The opinions differ.  However, I accept that the contractual provisions, the corporate structure, and the legislative provisions provide more than reasonable security with respect to records in British Columbia.

[66]            The following factors among others are important:

1.         The trust provisions – if a risk of disclosure occurs the Province obtains the shares and operates the system until the risk disappears.

2.         Restrictions on use and control of electronic equipment and devices by employees.

3.         A $35M penalty if there is a breach of confidentiality by Maximus.

4.         Whistle blowing requirements and protection, contractually and legislatively (FOIPPA).

5.         Employee training in respect of their legal duties, disclosure suspected.

6.         Extensive FOIPPA provisions to ensure records kept in private and kept in British Columbia.

7.         Pursuant to s. 18.8 of the Master Services Agreement, all of the information remains the property of the Province.

8.         The contractual provision in clause 17.8 prohibiting disclosure of provincial data.

9.         Section 9.4 where Maximus expressly acknowledges and agrees that it is subject solely to the laws of British Columbia and Canada.

[67]            Although the experts’ evidence differs as to whether or not there is a likelihood of a U.S. Patriot Act application and order under s. 215 in relation to Maximus U.S. or any of its Canadian subsidiaries, and the effect of that order, in my opinion when one analyzes the contract and the legislation it is clear that parties to this arrangement have taken all reasonable steps to ensure the confidentiality of the information which Maximus will receive in order to discharge its contractual obligations.  Privacy is not absolute.

[68]            The importance of the right of privacy as it emerges for consideration in s. 7 and s. 8 of the Charter cannot be minimized.  These fundamental rights are contained in the Charter for the benefit of all Canadians.  However those rights, as previously stated, are not absolute.  There is a reasonable expectation of privacy (see R. v. O’Connor) and the language of s. 8 emphasizes that individuals should be secure against unreasonable search and seizure.  The latter provisions, since Hunter v. Southam, may be equated to legal searches and seizures. 

[69]            In the case at bar, the Canada Health Act, the Medical Protection Act and the Health Act authorize contractual arrangements.  The Master Services Agreement, I am satisfied, complies with those provisions.  The reasonable expectations of privacy are satisfied by statute and by contract.  I find no basis to conclude that a s. 215 Patriot Act order may violate s. 7 or 8 of the Charter as it relates to the records under consideration in British Columbia.

[70]            Consequently, I reject the submission that the contract under consideration constitutes a deprivation of liberty.  A reasonable expectation of privacy is protected.

[71]            At the hearing counsel for the petitioner sought an injunction restraining the respondents from proceeding with the implementation of the Master Services Agreement on April 1, 2005.  The reason for the application for the injunction was to allow for time for reasons for judgment to be issued on the petition itself.  As I advised counsel during the course of the proceedings, I would rather consider the merits of the petition than the merits of an injunction which could result on the postponing of the decision of the petition.  Consequently, the application for the injunction is dismissed.

[72]            By notice of motion issued March 15, 2005, counsel for the respondent, Minister of Health Services and Medical Services Commission, applies for an order that upon judgment the registry file and the material filed therein be kept confidential until the parties consent for the court order.  Alternatively, an order that disclosure of provisions of the Master Services Agreement shall not affect exemptions that the respondents may rely on with respect to requests for information pursuant to FOIPPA.  Thirdly, that Exhibit "A" to the affidavit of Reimer #5 and Exhibit "C" to the affidavit of Connell #1 shall be kept confidential and may only be utilized by counsel for the petitioner with reference to these proceedings.

[73]            Rule 64(1) of the Supreme Court Rules states:

(1)        Unless otherwise provided by an enactment, a person may, on payment of the proper fees, obtain from the registry a copy of a document on file in a proceeding.

[74]            There is no doubt that "openness" and "transparency" are essential to the functioning of a court in a free and democratic society.  In MacIntyre v. Attorney General of Nova Scotia (1981), 1 S.C.R. 175 (S.C.C.), Dickson J., as he then was, stated as follows, as paras. 59 and 70:

59        Many times it has been urged that the "privacy" of litigants requires that the public be excluded from Court proceedings.  It is now well established, however, that covertness is the exception and openness the rule.  Public confidence in the integrity of the Court system and understanding of the administration of justice are thereby fostered. As a general rule the sensibilities of the individuals involved are no basis for exclusions of the public from judicial proceedings.  The following comments of Laurence J. in R. v. Wright, 8 T.L.R. 293, are apposite and were cited with approval by Duff J. in the Gazette Printing Co. v. Shallow (1909), 41 S.C.R. 339 at p. 359:

Though the publication of such proceedings may be to the disadvantage of the particular individual concerned, yet it is of vast importance to the public that the proceedings of courts of justice should be universally known. The general advantage to the country in having these proceedings made public more than counterbalances the inconveniences to the private persons whose conduct may be the subject of such proceedings.

...

70        Undoubtedly every Court has a supervisory and protecting power over its own records. Access can be denied when the ends of justice would be subverted by disclosure or the judicial documents might be used for an improper purpose. The presumption, however, is in favour of public access and the burden of contrary proof lies upon the person who would deny the exercise of the right.

[75]            In the course of submissions counsel did not point to any enactment, as referred to in Rule 64(1).  Nevertheless, it may be argued that the court retains a common law discretion to seal a file.  Under the circumstances in the case at bar, there are no compelling reasons to deny the public access to a document which has been entered into and filed in support of the proceedings in open court and considered by the court in the course of reasons for judgment.  This is not a commercial contract between two private companies or individuals who may have competitors who might benefit from disclosure of contractual dealings.  There is no competitor to the provision of the health care scheme in the Province of British Columbia.  The health care scheme and the manner in which it operates are of great interest to the residents of the Province of British Columbia.  Consequently, I see no public interest justifying sealing of the court file.

[76]            Consequently, the application by the respondents in their notice of motion of March 15, 2005, is dismissed in its entirety.

[77]            In conclusion, I am satisfied that the petitioner has standing to bring this petition.  However, in my opinion the petitioner does not fall within the provisions of the Judicial Review Protection Act and their petition must fail as a result.  In addition, I am satisfied that there is no breach of the provisions of the Medicare Protection Act or the Canada Health Act in relation to public administration.  Consequently, the petition fails on that basis as well.

[78]            Finally, I am satisfied that there has not been a breach of either ss. 7 or 8 of the Charter or of The Freedom of Information and Protection of Privacy Act.  Consequently, the petition fails on that basis as well.

[79]            If counsel wish to make arrangements to speak as to costs, they may contact the trial co-ordinator and arrange a suitable time for that at their convenience.

“F.A. Melvin, J.”
The Honourable Mr. Justice F.A. Melvin