Court Quashes Public Health Appeal Board Decision Over COVID Inspection Dispute

This judicial review application challenged the decision of the Alberta Public Health Appeal Board to uphold orders issued by Alberta Health Services against a business for obstructing a COVID-19 inspection. The Court found PHAB’s decision unreasonable for failing to engage in necessary statutory interpretation, clarify the nature of its appeal process, or address relevant evidence regarding the business’s rationale for refusing inspection. Although the orders were no longer in effect, the Court heard the case due to its public importance but declined to order a rehearing, citing judicial economy.

Administrative law – Decisions reviewed – Health authorities; Judicial review – Procedural requirements and fairness – Compliance with legislation – Evidence – Standard of review – Correctness – Reasonableness; Hearings – Hearing de novo.

2248870 Alberta Ltd. (c.o.b. Stacey’s Happy Place) v. Alberta Health Services, [2025] A.J. No. 497, Alberta Court of King’s Bench, May 7, 2025, B.L. Bokenfohr J.

This judicial review concerns a small family-run business, 2248870 Alberta Ltd., operating as “Stacey’s Happy Place” (the Applicant), which challenged the enforcement actions of Alberta Health Services (AHS) under the Public Health Act (PHA) during the COVID-19 pandemic. AHS issued a Closure Order and a Suspension Order against the Applicant in October 2021 for alleged noncompliance with public health orders and obstruction of a public health inspection. These orders were upheld by the Public Health Appeal Board (PHAB), prompting the Applicant to seek judicial review.

Justice Bokenfohr of the Alberta Court of King’s Bench found that PHAB’s decision was unreasonable, primarily because it failed to engage in the required statutory interpretation, did not clarify the nature of its appeal process, and refused to consider potentially relevant evidence. While the review was technically moot (since the Orders had been lifted), the Court exercised discretion to proceed given the issues’ public importance.

Background:  The Applicant is a small business that sells books, prepackaged snacks, and beverages. The Applicant has a food handling permit issued by AHS to sell snacks and beverages.

In response to Alberta’s COVID-19 public health emergency, the Chief Medical Officer of Health (CMOH) issued a series of orders (CMOH 44-2021 through 46-2021) imposing measures like indoor masking, distancing, and restrictions on indoor dining without verification of vaccination. AHS was tasked with enforcement of these orders.

On October 6, 2021, AHS received a complaint from the pubic alleging that the Applicant was not following the masking requirements and was not verifying vaccination status prior to allowing individuals to dine indoors.

On October 8, 2021, AHS personnel attempted to inspect the Applicant’s premises. The owners denied entry, and the AHS was unable to complete an inspection.

On October 14, 2021, AHS issued two orders against the Applicant on the grounds that the Applicant had obstructed AHS from conducting an investigation of their premises and that there was ongoing noncompliance with public health orders:

A Closure Order, requiring the Applicant to immediately halt food and beverage service; and A Suspension Order.

The Applicant appealed these orders to the PHAB. On March 18, 2022, the PHAB issued a decision upholding the orders. Thereafter, the Applicant applied for judicial review of the PHAB decision, seeking a declaration that the decision was unreasonable and reached in a manner that was procedurally unfair.

In May 2022 the suspension order was lifted; in June 2022 the closure order was lifted. Although the issues were moot by the time of the judicial review hearing, the Court elected to proceed with judicial review as the issues were of public importance.

Legal Issues:  On judicial review, the standard of review applicable to the merits of PHAB’s decision was reasonableness. The standard of review applicable to the procedural fairness of PHAB’s decision was correctness.

The Court focused on three key issues:

1.  Whether the Closure Order could legally be issued solely for obstruction under the PHA;

2.  The nature of an appeal to PHAB—whether it is a de novo hearing or a review of the decision at the time it was made;

3.  Whether the PHAB’s refusal to consider evidence about the relationship between the Applicant and AHS officials was unreasonable or procedurally unfair.

1.  Issuance of Closure Order for Obstruction Alone:  The Applicant argued that AHS could not issue a Closure Order solely for obstruction. They pointed to section 61 of the PHA, which allows AHS to seek a court order if inspection is obstructed. They argued this meant AHS could not unilaterally issue closure orders in such cases, they must prove their allegation before the Court and allow the Court to determine the appropriate relief.

In the PHAB appeal, the PHAB had upheld the Closure Order, implicitly agreeing with AHS that:

Obstruction, as defined in section 71, constitutes a contravention of the PHA.

Section 62 permits an executive officer to issue a closure order when there is a contravention.

However, upon judicial review, the Court held that PHAB failed to engage in any statutory interpretation or provide reasons supporting this position. This failure to address the Applicant’s key legal argument made the decision unreasonable.

Justice Bokenfohr emphasized that reasonableness requires the decision-maker to demonstrate awareness of interpretive issues and provide coherent reasoning, citing Vavilov, 2019 SCC 65. Vavilov requires that where the meaning of a statutory provision is in dispute, the administrative decision maker’s reasons must demonstrate that the decision maker was alive to the interpretive issue. PHAB’s silence on the interplay between sections 61, 62, and 71 rendered its decision legally deficient.

2.  Nature of the PHAB Appeal:  There was confusion over whether PHAB conducted a de novo hearing or simply reviewed whether AHS had reasonable grounds at the time of issuing the Orders.

PHAB admitted evidence from a subsequent inspection (October 28, 2021), two weeks after the Orders were issued. Yet, it failed to specify what weight or relevance this new evidence had. This was problematic because:

PHAB previously stated it would determine the relevance and weight of such evidence.

PHAB’s decision suggested it was only reviewing whether AHS had reasonable grounds at the time of issuing the Orders.

The lack of clarity undermined the transparency of the decision and made it impossible to assess its reasonableness.

Justice Bokenfohr held that this ambiguity concerning the appeal’s nature—coupled with the Board’s failure to articulate its reasoning—also rendered the decision unreasonable.

3.  Exclusion of Evidence Regarding AHS Inspector Conflict:  The Applicant attempted to argue that they had a “defence” to the obstruction, namely that they were justified in refusing to allow the AHS personnel to inspect their premises because the AHS Inspector and Manager involved were also witnesses in a pending prosecution against one of the business’s owners. They stated that they had advised the AHS in advance of their request for alternative inspectors and legal counsel’s presence.

PHAB refused to admit this evidence, deeming it irrelevant. However, this refusal was inconsistent with PHAB’s acceptance of post-order evidence from AHS. Justice Bokenfohr found this inconsistency troubling, especially given that the Applicant’s evidence could be relevant to assessing whether their obstruction was justified or mitigated.

PHAB’s failure to consider the Applicant’s rationale for obstructing the inspection, or to provide reasons for dismissing it, was held to be both procedurally unfair and unreasonable.

Remedy:  Although the usual remedy for an unreasonable administrative decision is a remittal for rehearing, Justice Bokenfohr declined to order one in this case because the the Closure and Suspension Orders were no longer in effect, therefore a rehearing would not serve a practical purpose and would consume public resources unnecessarily.

Conclusion:  Justice Bokenfohr allowed the judicial review and quashed PHAB’s decision, though declined to remit it for a rehearing. The Court’s decision reinforces the importance of:

Reasoned decision-making by administrative bodies; Clarity on the nature of administrative appeals; and Procedural fairness, especially where potentially relevant evidence is excluded.

The ruling is significant for future public health enforcement actions, especially concerning the legal consequences of obstruction and the limits of administrative authority.

This case was digested by Emma Jerrott of Harper Grey LLP.  If you would like to discuss this case further, please feel free to contact her directly at [email protected].