The Province of New Brunswick is appealing a Court of King's Bench decision to uphold a $2-million payout to the fired head of Horizon Health Network, Dr. John Dornan.

It contends Justice Kathryn Gregory "erred in fact and law" on four grounds last month when she dismissed the province's application to quash a labour adjudicator's decision in Dornan's case.

Dornan served as president and CEO of Horizon for only four months of his five-year contract when Premier Blaine Higgs announced his firing during a news conference July 15, 2022, following the death of a patient in the waiting room of the Dr. Everett Chalmers Regional Hospital's emergency department in Fredericton.

It was part of a larger shakeup of New Brunswick's health-care leadership that saw the health minister replaced and the boards of both Horizon and Vitalité removed.

Dornan filed for unjust dismissal under the Public Service Labour Relations Act, and in February, adjudicator George Filliter awarded him special damages of about $1.8 million, representing the value of lost salary, pension contributions and health benefits, plus $200,000 in aggravated damages for "breach of the employer's implied obligation to act in good faith when dismissing him."

It was the largest employment compensation award in the province's history, according to Dornan's lawyers.

Lawyers for the province filed the notice of appeal with the Court of Appeal of New Brunswick in Fredericton on Monday. (CBC)

Filliter ruled Dornan was entitled to the amount he would have earned over the remainder of his five-year contract. He also ruled that the 12-month cap on severance added to his written contract after an employment agreement was already reached was unenforceable "due to a lack of consideration," meaning no additional benefit in exchange for signing the modified agreement, and that Dornan did not have a duty to mitigate his losses by attempting to find a new job, as "duty to mitigate" does not apply to fixed-term contracts.

In April, the province requested a judicial review of Filliter's decision, but in a written decision filed with the court Dec. 19, Gregory ruled she was "not persuaded that the adjudicator issued an unreasonable decision," nor did she find any errors relating to procedural fairness or jurisdiction. 

She awarded Dornan costs of $4,000, plus HST, and "reasonable disbursements."

Cost of legal battle not disclosed

The province, as represented by the Department of Health and Horizon, wants the Court of Appeal to reverse Gregory's decision and is seeking costs.

In its notice of appeal, filed with the court Monday, the province argues Gregory "erred in fact and law in her application of the standard of review" by upholding the adjudicator's decision that Dornan's written contract was unenforceable due to a lack of consideration and by upholding the adjudicator's decision to award damages for lost wages and benefits, without considering future mitigating income.

In addition, the province argues Gregory erred in fact and law by holding that the adjudicator complied with the rules of natural justice and procedural fairness by awarding damages, "despite the fact that the claim for aggravated damages was not raised until the close of evidence by both parties," and by upholding the adjudicator's decision to award aggravated damages and "assessing the quantum as $200,000."

Dornan declined to comment. His Saint John-based lawyer Kelly VanBuskirk did not immediately respond to a request for comment.

Department of Justice and Public Safety spokesperson Sarah Bustard declined to comment on the case.

Asked how much the province has spent on the legal battle to date, Bustard did not respond.