Canada

Following are this week's summaries of the Court of Appeal for Ontario for the week of January 30, 2023.

Levac v James is a medmal class action arising from an infectious disease outbreak at a pain management centre. The appellant doctor administered injections that resulted in serious infections, which was caused by inadequate Infection Prevention and Control. Following a five-week common issues trial, the trial judge found against the doctor on all common issues: negligence (duty of care, standard of care and breach, and causation), fiduciary duty, limitation period, entitlement to punitive damages and the Sanderson costs order made against him. The doctor's appeal was dismissed, however he has an opportunity to rebut theprima facieliability findings made against him at individual trials.

In Kemeny v. Callidus Capital Corporation, the respondent helped arrange a loan between the appellant and Esco Marine Inc. ("Esco"). Esco agreed to pay the respondent a consulting fee for his services in arranging the loan. The appellant agreed to an Irrevocable Direction directing it to pay the respondent's fee directly to him from the first advance of the loan to Esco. The loan proceeds were advanced, but the appellant did not pay the respondent his fee out of the first advance. Esco then went bankrupt. The respondent claimed damages from the appellant for breach of contract, breach of fiduciary duty, and breach of trust. The Court dismissed the appeal, and found the trial judge did not err in finding that the Irrevocable Direction created a contractual obligation on the part of the appellant, and that the appellant breached its contract and trust obligations to the respondent.

In J.N. v. C.G., the Court allowed an appeal by a parent who wished to have their children vaccinated against COVID-19. The motion judge had refused to permit the appellant to make the decision on whether the children would be vaccinated. The motion judge had placed the onus on the appellant father to show that the children should be vaccinated, and incorrectly relied on the respondent mother's evidence of risks with the vaccine. The Court disagreed with the motion judge, and found that he had made palpable and overriding errors. The Court clarified that where one party seeks to have a child treated by a Health Canada-approved medication, the onus was on the objecting party to show why the child should not receive that medication.

Civil Decisions

J.N. v. C.G.,2023 ONCA 77

Keywords: Family Law, Parenting, COVID-19, Office of the Children's Lawyer, Standard of Review, Evidence, Judicial Notice, Evidence Act, R.S.O. 1990, c. E.23, s. 25, Housen v. Nikolaisen, 2002 SCC 33, Sferruzzi v. Allan, 2013 ONCA 496, Van de Perre v. Edwards, 2001 SCC 60, Hickey v. Hickey, [1999] 2 S.C.R. 518, N.S. v. R.M., 2019 ONCA 685, R. v. Abbey, 2017 ONCA 640, ITV Technologies Inc. v. WIC Television Ltd., 2003 FC 1056, Sutton v. Sutton, 2017 ONSC 3181, White Burgess Langille Inman v. Abbott and Haliburton Co., 2015 SCC 23, I.S. v. J.W., 2021 ONSC 1194, A.B.S. v. S.S., 2022 ONSC 1368, Warren v. Charlton, 2022 ONSC 1088, Campbell v. Heffern, 2021 ONSC 5870, Dyquiangco Jr. v. Tipay, 2022 ONSC 1441, Rashid v. Ayanesov, 2022 ONSC 3401, Davies v. Todd, 2022 ONCJ 178, A.M. v. C.D., 2022 ONSC 1516, R. v. P.(A.) (1996), 109 C.C.C. (3d) 385 (Ont. C.A.), A.C. v. L.L., 2021 ONSC 6530, Finestone v. The Queen (1953), 107 C.C.C. 93 (S.C.C.), Decaen v. Decaen, 2013 ONCA 218, K.K. v. M.M., 2021 ONSC 3975, Chase v. Chase, 2020 ONSC 5083, Zinati v. Spence, 2020 ONSC 5231, A.C. v. L.L., 2021 ONSC 6530, Yohannes v. Boni, 2020 ONSC 4756, Gillespie v. Jones, 2020 ONSC 2558, A.T. v. V.S., 2020 ONSC 4198, R.S.P. v. H.L.C., 2021 ONSC 8362, R. v. Find, 2001 S.C.C. 32, O.M.S v. E.J.S., 2023 SKCA 8, R. v. Marquard, [1993] 4 S.C.R. 223

Kemeny v. Callidus Capital Corporation, 2023 ONCA 76

Keywords: Contracts, Interpretation, Debtor-Creditor, Defences, Estoppel, Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, Bridgepoint Financial Services Limited Partnership I v. Galamini, 2021 ONSC 6979, R. v. R.E.M., 2008 SCC 51, Farej v. Fellows, 2022 ONCA 254

Wilson v. Fatahi-Ghandehari, 2023 ONCA 74

Keywords: Civil Procedure, Vexatious Litigants, Abuse of Process, Rules of Civil Procedure, rr. 2.1, 2.1.01(1), 2.1.01(3), 59.06(2), Bell v. Fishka, 2022 ONCA 683, Wilson v. Fatahi-Ghandehari, 2018 ONCA 728,< em>Fatahi-Ghandehari v. Wilson, 2017 ONSC 6034, Fatahi-Ghandehari v. Wilson, 2018 ONSC 5579, Fatahi-Ghandehari v. Wilson, 2021 ONSC 3547, Wilson v. Fatahi-Ghandehari, 2022 ONCA 421, Lochner v. Ontario Civilian Police Commission, 2020 ONCA 720, Gao v. Ontario (Workplace Safety and Insurance Board), 2014 ONSC 6497, Saggi v. Grilone, 2021 ONSC 2276, Lamothe v. Ellis, 2022 ONCA 789

Levac v. James, 2023 ONCA 73

Keywords: Torts, Negligence, Medical Malpractice, Breach of Fiduciary Duty, Duty of Care, Standard of Care, Causation, Damages, Punitive Damages, Civil Procedure, Class Proceedings, Common Issues, Liability, Rebuttable Inferences, Individual Trials, Limitation Periods, Discoverability, Concealment, Procedural Fairness, Adequacy of Reasons, Costs, Sanderson Orders, Class Proceedings Act, 1992, S.O. 1992, c. 6, s.31, Family Law Act, R.S.O. 1990, c. F.3., Limitations Act, 2002, S.O. 2002, c. 24, Sched. B, s. 5(1)(a), Rules of Civil Procedure, R.R.O. 1990, Reg. 194, r.49, Canada Labour Code, R.S.C. 1985, c. L- 2, Andersen v. St. Jude Medical, Inc., 2012 ONSC 3660, Housen v. Nikolaisen, 2002 SCC 33, Mustapha v. Culligan of Canada Ltd., 2008 SCC 27, Rumley v. British Columbia, 2001 SCC 69, White v. Canada (Attorney General), 2002 BCSC 1164, Armstrong v. Royal Victoria Hospital, 2019 ONCA 963, Fresco v. Canadian Imperial Bank of Commerce, 2022 ONCA 115, Cavanaugh v. Grenville Christian College, 2021 ONCA 755, Clements v. Clements, 2012 SCC 32, Moran v. Fabrizi, 2023 ONCA 21, Donleavy v. Ultramar Ltd., 2019 ONCA 687, Snell v. Farrell, [1990] 2 SCR 311, Hassen v. Anvari, 2003 CanLII 1005 (Ont. C.A.), Benhaim v. St-Germain, 2016 SCC 48, Rothwell v. Raes (1988), 66 OR (2d) 449 (H.C.), Farej v. Fellows, 2022 ONCA 254, R. v. G.F., 2021 SCC 20, Whiten v. Pilot Insurance, 2002 SCC 18, [2002] 1 SCR. 595, Performance Industries v. Sylvan Lake Golf and Tennis Club, 2002 SCC 19, Cavanaugh et al. v. Grenville Christian College et al., 2020 ONSC 1133, Gordon Dunk Farms Limited v. HFH Inc., 2021 ONCA 681, Grant Thornton LLP v. New Brunswick, 2021 SCC 31, Smith v. Inco Limited, 2011 ONCA 628, Zeppa v. Woodbridge Heating & Air-Conditioning Ltd., 2019 ONCA 47, Hamilton v. Open Window Bakery Ltd., 2004 SCC 9, Ruffolo v. Sun Life Assurance Company of Canada, 2009 ONCA 274, Moore v. Wienecke, 2008 ONCA 162, Taylor v. Canada (Attorney General), 2022 ONCA 892

Short Civil Decisions

Lacey v. Kakabeka Falls Flying Inc.,2023 ONCA 83

Keywords: Contracts, Real Property, Commercial Leases, Remedies, Declaratory Relief, Civil Procedure, Orders, Enforcement, Writs of Possession, Costs, Planning Act, R.S.O. 1990, c. P.13, Limitations Act, 2002, S.O. 2002, c. 24, Sched. B, s. 4, s. 16(1)(a), Real Property Limitations Act, R.S.O. 1990, c. L.15

Hibbert v. National Bank of Canada, 2023 ONCA 84

Keywords: Civil Procedure, Striking Pleadings, Appeals, Vexatious Litigants, Rules of Civil Procedure, r. 2.1

Warner v. Ahmadi, 2023 ONCA 71

Keywords: Breach of Contract, Real Property, Agreements of Purchase and Sale of Land, Remedies, Specific Performance, Civil Procedure, Summary Judgment

CIVIL DECISIONS

J.N. v. C.G., 2023 ONCA 77

[Tulloch, Thorburn and George JJ.A.]

COUNSEL:

J.N., acting in person

Pleet, J. Richardson and J. Herman, for the appellant

FACTS:

The appellant father and respondent mother were married for almost seven years, but are now separated. They have three children. The oldest child lives with the appellant and the two youngest (ages 10 and 12 at the time in 2022) live with the respondent. The issue surrounding this dispute is who would have decision-making authority in respect of the COVID-19 vaccine for the two youngest children.

The appellant brought a motion asking the court to grant him decision-making authority. The appellant advocated for the children to be vaccinated and relied on the fact that the vaccine was recommended for children ages 5 and older. The respondent was against the vaccination and argued that sufficient doubt had been cast on the vaccine's safety and efficacy.

Each party attached to their affidavit information in support of their respective positions. The appellant relied primarily on information from Health Canada and the Canadian Paediatric Society. The respondent relied on information obtained from the Internet, primarily from those who cast doubt on the vaccine. The respondent also attached to her affidavit Pfizer's Fact Sheet (which set out potential side effects) and various online medical articles. Both parties consented to the motion judge receiving this unsworn material.

The motion judge asked the Office of the Children's Lawyer ("OCL") to prepare a 'Voice of the Child Report'. According to the social worker who prepared the report, neither child wanted to be vaccinated against COVID-19.

The motion judge determined that it would not be in the children's best interests for the appellant to have decision-making authority over their COVID-19 vaccinations. The motion judge refused to take judicial notice of the safety and efficacy of the vaccine as, in his view, the available information about it was a "moving target" and there was "no consensus or consistency" as to its safety and effectiveness. The motion judge went on to cite Canada's history, such as the forced sterilization of Inuit women, stating that the courts should be reluctant to "take judicial notice that the government is always right".

The motion judge was especially critical of the appellant's characterization of the respondent's evidence, disagreeing that her sources had been "debunked". Then, the motion judge took the opportunity to weigh in on the discord over COVID-19, vaccinations to protect against it, and the resultant fissures in our society, by writing that "it would be helpful if, once and for all, the competing positions and science could be properly explored and tested in a public trial".

By contrast, the motion judge found that the respondent had "gone to extraordinary lengths to inform herself" and was satisfied that her sources were "qualified and reputable". He found that the respondent had "demonstrated a clear understanding of the science" and that she raised "legitimate questions and concerns" about the vaccine.

Lastly, the motion judge found support for the respondent's position in the Voice of the Child Report. The motion judge began his analysis by indicating that the children were not mature enough to decide this issue for themselves, but went on to write that "significant weight should be given to [their] stated views and requests" as this was a "deeply personal and invasive issue". In his view, "children may not have wisdom, but they have Charter rights and undeniable emotions". He held that the children's views were "strong[ly] held and independently formulated" and that the respondent had not inappropriately influenced them.

ISSUES:

Did the motion judge err by accepting and relying on the respondent's online resources as expert evidence and by finding that they raised legitimate concerns about the safety, efficacy and need for the COVID-19 vaccine?
Did the motion judge err by finding that the appellant's evidence (from public health authorities and other well-known sources) was credibly disputed?
Did the motion judge err by giving significant weight to the Voice of the Child Report and in finding that the children's views were independently held?
Did the motion judge err by placing the onus on the appellant to show that the children should be vaccinated?

HOLDING:

Appeal allowed.

REASONING:

(1) Yes

The Court found that few materials presented by the respondent met the criteria set out in the internet reliability cases, ITV Technologies Inc. v. WIC Television Ltd and Sutton v. Sutton, cited by the motion judge. The Court disagreed with the motion judge's characterization of the Doctors cited by the respondent and determined that the cited individuals were simply capable of creating websites and did not actually possess apparent or verifiable expertise.

In the Court's view, the motion judge erred by not assessing whether each document presented by the respondent was reliable, independent, unbiased and authorized by someone with expertise in the area. Instead of engaging in an analysis of the evidence presented, the motion judge embarked on a lengthy discussion about whose materials were more thought-provoking, which the Court found had no bearing at all on whether the respondent's materials were admissible and should be given any weight.

The Court noted that the motion judge also ignored the fact that, notwithstanding the well-known side effects, the vaccine had been approved for children ages 5 and older by all regulatory health agencies, including Health Canada and the Center for Disease Control and Prevention. The motion judge found justification for the respondent's position that the children should not be vaccinated because of Pfizer's knowledge about potential side effects, which, the Court clarified, Pfizer is required to disclose by law. By doing so, the Court found that the motion judge treated the respondent as an expert in assessing pharmaceutical disclosure, while essentially dismissing those who were in the best position to interpret the information - public health authorities. The Court held that this was a palpable and overriding error.

(2) Yes

The Court found that, instead of conducting a meaningful analysis of the appellant's material, the motion judge simply cited historical events as a reason to not place reliance on government sources generally. Moreover, the Court further found that the motion judge failed to consider whether the appellant's information was admissible under either Ontario's Evidence Act, or as a public document exception to the hearsay rule, nor did the motion judge apply the test for internet reliability, which he cited authority for when addressing the respondent's materials. The Court explained that the materials from the Canadian Paediatric Society - attached to the appellant's affidavit, which stated that the vaccine is safe and effective for children (and that its benefits outweigh its rare side effects) - met the criteria set out in the case law cited by the motion judge.

(3) Yes

The Court explained that when determining how much weight to give a child's wishes, a court is to consider: (1) whether the parents are able to provide adequate care; (2) how clear and unambivalent the wishes are; (3) how informed the expression is; (4) the age of the child; (5) the child's maturity level; (6) the strength of the wish; (7) how long they have expressed their preference; (8) the practicalities of the situation; (9) parental influence; (10) overall context; and, (11) the circumstances of the preference from the child's point of view.

The Court found that the motion judge ignored salient aspects of the report, such as the children's statements involving their mother's warnings regarding the vaccine. The Court found that the motion judge failed to consider how informed their expressions were and failed to even acknowledge the respondent's obvious influence. Accordingly, the Court explained that the motion judge appeared to have made no effort to understand the children's concerns about the vaccine.

(4) Yes

The Court explained that most family court decisions related to the pandemic deferred to government recommendations that people, including children, get vaccinated against COVID-19. The Court held that the onus had consistently been placed on the party seeking the exception (e.g. the objecting parent). The Court provided the example of Dyquiangco Jr. v. Tipay, where the court held that vaccination itself was in the child's best interests (absent compelling reasons to the contrary), which placed the burden squarely on the objecting parent and not the one defending a public health measure.

While the motion judge was not obliged to adopt the reasoning in a court of coordinate jurisdiction, the Court stressed that it was important for the motion judge to cogently explain why he departed from decisions of the same level court that had already addressed health-related parenting decisions in this same context. The Court explained that judicial notice should be taken of regulatory approval, and regulatory approval should be a strong indicator of safety and effectiveness.

Kemeny v. Callidus Capital Corporation, 2023 ONCA 76

[Zarnett, Thorburn and Copeland JJ.A.]

COUNSEL:

Leslie and M. Mednick, for the appellant
P. Farace, for the respondent

FACTS:

Esco Marine Inc. ("Esco") was a Texas corporation engaged in ship and rig dismantling for scrap metal. The respondent was previously the Chief Financial Officer of Esco, and at the time of the events, he was an independent professional financial advisor and consultant. The appellant was an Ontario corporation engaged in lending to businesses that cannot obtain financing from traditional funding sources.

The respondent arranged a loan between the appellant and Esco, and Esco agreed to pay the respondent a consulting fee for its services in arranging the loan. The appellant agreed to an Irrevocable Direction ("Irrevocable Direction") directing it to pay the respondent's fee directly to him from the first advance of the loan to Esco.

After signing the Irrevocable Direction, the terms of the loan from the appellant to Esco were finalized and the agreement was executed on June 30, 2014. The loan agreement provided for the appellant to provide Esco with several credit facilities totalling approximately US$33,990,000. The loan proceeds were advanced, but the appellant did not pay the respondent his fee out of the first advance. The respondent claimed damages from the appellant for breach of contract, breach of fiduciary duty, and breach of trust.

The appellant took the position that the loan agreement provided for advances under the loan to be used to pay off all secured creditors of Esco to place the appellant in sole first priority secured position, and that having done so, there was no availability of loan funds to pay the respondent's fee out of the first advance of the loan. The appellant argued that Esco agreed to pay the respondent his fee, and only Esco was liable for the fee. The trial judge rejected the appellant's submissions and found that the appellant was liable to the respondent for his fee as set out in the Irrevocable Direction, both in contract and as a trustee. There was no dispute that the amount of the respondent's fee as set out in the Irrevocable Direction, 2% of the authorized amount of the loan, was US$679,800, and the trial judge awarded judgment to the respondent in that amount.

The appellant appealed the judgment. There was no dispute between the parties that Esco would be liable to pay the respondent's fee. But Esco was no longer in business, having been placed into insolvency in the courts of Texas sometime after the loan advances were made by the appellant. The issues raised in the appeal concerned whether the appellant was liable for failing to pay the respondent's fee from the first advance of the loan, pursuant to the Irrevocable Direction.

ISSUES:

Did the trial judge err in finding that the Irrevocable Direction created a contractual obligation on the part of the appellant?
Did the trial judge err in finding that the appellant breached its trust obligations to the respondent?
Did the trial judge err in rejecting the submission that the respondent was estopped from receiving his fee by his conduct subsequent to the signing of the Irrevocable Direction?

HOLDING:

Appeal dismissed.

REASONING:

(1) No

The appellant argued that the trial judge erred by treating the Irrevocable Direction as a guarantee by the appellant that it would pay the respondent's fee and that the trial judge erred by failing to consider the broader factual matrix underlying the Irrevocable Direction when interpreting it.

The Court found the trial judge interpreted the Irrevocable Direction and found that it placed a contractual obligation on the appellant to pay the respondent's fee out of the first advance of loan funds to Esco. The Trial judge did not find it to be a guarantee by the appellant of the respondent's fee.

The Court found that the appellant agreed pursuant to the Irrevocable Direction to follow the direction from Esco and pay the amount of the respondent's fee to him from the first advance of its loan to Esco. The Irrevocable Direction was not a guarantee by the appellant of the respondent's fee. The appellant was not required to pay the respondent's fee out of its own pocket, the funds were part of the loan to Esco. The Court noted that had loan funds not been advanced, the appellant would not have had any obligation. But as loan funds were advanced, the appellant was obliged to comply with its agreement in the Irrevocable Direction to pay the respondent his fee directly from the first advance of the loan funds.

Further, the Court was not persuaded that the trial judge failed to consider the factual matrix surrounding the Irrevocable Direction. The Court noted that the trial judge correctly instructed herself that in addition to considering the text, a contract should be interpreted in accordance with sound commercial principles and in the context of the factual matrix at the time the contract was executed. The trial judge then applied the correct law to the facts.

The appellant argued that the trial judge did not consider the terms of the later-finalized loan agreement between itself and Esco in interpreting the Irrevocable Direction. The Court disagreed, stating that the trial judge considered the appellant's argument and rejected it.

(2) No

The appellant argued that it did not breach its trust obligations under the Irrevocable Direction because no proceeds were available from the first drawdown of the loan to Esco after Esco's secured creditors were paid from the loan proceeds. The Court found the trial judge did not err in finding that the Irrevocable Direction did not place a qualification of sufficient "availability" of loan proceeds after other disbursements were made before the respondent could receive payment for his services. The Court found no error in the trial judge's conclusion that no such qualification was contained in the Irrevocable Direction.

(3) No

The appellant argued that even if the Irrevocable Direction bound it to pay the respondent's fee from the first advance of the loan, the respondent's subsequent conduct estopped him from receiving his fee. The appellant based this argument on the assertion that the respondent agreed that the Irrevocable Direction was of no force and effect during negotiations among Esco, the appellant, and the respondent conducted between June 27 and 30, 2014. The trial judge rejected this argument, and the Court found no basis to interfere with her finding that nothing in the record operated as an estoppel preventing him from recovering his fee for services successfully performed.

The Court found no palpable an overriding error in the trial judge's finding that the respondent was prepared to accept a reduced fee in fulfillment of the obligations under the Irrevocable Direction, but only if it was paid to him as part of the closing disbursements of the loan from the appellant to Esco. The appellant did not pay the reduced fee of US$400,000 to the respondent from the first advance of the loan. As a result, the respondent was entitled to the payment of his full fee as agreed to in the Irrevocable Direction.

The appellant also argued that the trial judge's reasons for finding that the respondent was not estopped from enforcing Irrevocable Direction were inadequate. The Court noted that reasons for judgment must be read as a whole and the trial judge's reasons were sufficient to show why she reached her decision on the estoppel issue and were sufficient to fulfil the purposes of reasons for judgment, including permitting meaningful appellate review. The Court found there was no merit to this ground for appeal.

Wilson v. Fatahi-Ghandehari, 2023 ONCA 74

[Paciocco, Sossin and Favreau JJ.A.]

COUNSEL:

S.W., acting in person

J.J.D. MacKenzie, for the respondent

Keywords: Civil Procedure, Vexatious Litigants, Abuse of Process, Rules of Civil Procedure, rr. 2.1, 2.1.01(1), 2.1.01(3), 59.06(2), Bell v. Fishka, 2022 ONCA 683, Wilson v. Fatahi-Ghandehari, 2018 ONCA 728, Fatahi-Ghandehari v. Wilson, 2017 ONSC 6034, Fatahi-Ghandehari v. Wilson, 2018 ONSC 5579, Fatahi-Ghandehari v. Wilson, 2021 ONSC 3547, Wilson v. Fatahi-Ghandehari, 2022 ONCA 421, Lochner v. Ontario Civilian Police Commission, 2020 ONCA 720, Gao v. Ontario (Workplace Safety and Insurance Board), 2014 ONSC 6497, Saggi v. Grilone, 2021 ONSC 2276, Lamothe v. Ellis, 2022 ONCA 789

FACTS:

SW and F-G have been in litigation for over more than seven years. In this time there have been more than 30 decisions relating to family, commercial and bankruptcy decisions within this conflict. Four decisions were unsuccessful attempted appeals by the respondent, SW.

On more than one occasion during the proceedings, SW has been found to be responsible for wasteful litigation. SW has deliberately and willfully breached court orders, including orders for disclosure, and has been found in contempt. His pleadings were struck in a family law case, which then proceeded undefended after the trial judge found that SW's right to appeal either the finding of contempt or the sentence had been exhausted. In addition, SW failed to pay multiple costs orders against him totaling over $175,000. SW also has a history of relitigating issues and again attempted to relitigate issues in response to this r. 2.1.01 application, and has re-raised issues in overlapping actions that had been previously disposed of.

The trial judge summarily dismissed SW's r. 59.06(2) motion to set aside the judgment on an undefended trial based on allegations that the respondent had obtained the judgment by fraud as an abuse of process.

ISSUES:

Was the respondent's appeal vexatious, frivolous or otherwise an abuse of process?

HOLDING:

Appeal dismissed.

REASONING:

Yes.

The Court held that it was plain on a review of the record that permitting the appeal would have been an abuse of the court's process and, further, that this was the clearest case for invoking the authority to summarily dismiss the appeal as an abuse of process pursuant to r. 2.1.01(1).

The Court found that SW's conduct, in particular his informal allegations of judicial bias against two judges and his fraud allegation against the respondent, was a potential hallmark of a vexatious litigant. The Court referred to a list of common characteristics typically found in vexatious litigants, citing Lochner v. Ontario Civilian Police Commission and Gao v. Ontario, to hold that SW readily displayed all such characteristics in this litigation. The Court also found that SW's appeal was evidently an attempt to participate in the underlying litigation, which he was not permitted to participate in.

Levac v. James, 2023 ONCA 73

[van Rensburg, Sossin and Copeland JJ.A.]

COUNSEL:

Cruz, E. Baron, E. Pellegrino, J. Klugsberg, and A. Jarvis, for the appellant
Harte and M. Damiano, for the respondent A.L.
Kotoulas, for the respondents SS, IG, EK, ATP, JN, EH, MA, RS, AM, AN, EP, RT, JF, JAF, PG, and GF
Bohm, for the respondent M.A.

FACTS:

A class action arose from an infectious disease outbreak at the Rothbart Centre for Pain Care Ltd. ("the Rothbart Centre"). The appellant, Dr. J, was an anesthesiologist who administered epidural injections for pain relief treatment. After receiving an injection, some patients subsequently developed infections. The outbreak was discovered by Toronto Public Health ("TPH") officials in November 2012.

An investigation found that the outbreak was caused by poor Infection Prevention and Control ("IPAC") used for the injections, referring to practices and procedures that are intended to prevent or reduce the risk of transmission of microorganisms in health care settings. No specific deficiency could be scientifically demonstrated to have caused the spread of infection. However, the rate of infection associated with Dr. J's epidural injection practice was much greater than reported risk of infection for such procedures generally. Further, Dr. J was found to be colonized with a rare strain of Staphylococcus aureus ("Staph A") bacteria, that matched the bacteria infecting six of his patients.

The respondent, AL, one of the patients who suffered an infection sued in September 2014, pursuant to the Class Proceedings Act, 1992, on behalf of about 20 former patients of the Rothbart Centre who received injections from Dr. J ("the Class" or "Class Members") between 2010 and 2012 ("the Class Period"). The claim alleged that Dr. J, along with the Rothbart Centre, its medical director, and nursing staff, caused the outbreak by implementing substandard IPAC, failing to report or investigate the infections, and failing to remediate IPAC after learning of the initial infections.

The Class is limited to patients who developed signs clinically compatible with bacterial meningitis, epidural abscess, or cellulitis of a bacterial origin and/or bacteremia after receiving injections administered by Dr. J. There are 2 subclasses: (1) Patient Class Members who were infected by Staph A bacteria genetically matched to bacteria that colonized Dr. J (the "Genetically Linked Patients"); and (2) Patient Class Members who received injections more than two years prior to the issuance of the claim (the "Presumptively Untimely Claims").

Twelve common issues were certified and proceeded to trial relating to negligence, causation, fiduciary duty, the limitation period defence and the issue of punitive damages. After a 5-week common issues trial, the trial judge found against Dr. J on all issues: negligence (duty of care, standard of care and breach, and causation), fiduciary duty, limitation period, and entitlement to punitive damages. The trial judge concluded that causation was proven in respect of the Genetically Linked Patients. For the remaining patients, he drew a rebuttable inference that Dr. J's breach of the standard of care for IPAC caused the infections, based on the statistical evidence that he exposed patients to a risk of infection that was 49 or 69 times higher than for patients not exposed to his care. The trial judge awarded costs payable by Dr. J to AL and the successful nurse defendants, who are respondents on appeal ("the nurses").

ISSUES:

(1) Did the trial judge err by making findings applicable to the entire Class over the entire Class Period which were not open to him on the evidence?

(2) Did the trial judge err by finding the appellant breached the standard of care?

(3) Did the trial judge err by finding the appellant's breaches of the standard of care caused the injuries suffered by the Class?

(4) Did the trial judge err by providing insufficient reasons which failed to address factual and legal arguments raised by the appellant and breached procedural fairness?

(5) Did the trial judge err by finding the appellant breached his fiduciary duties to the Class and that these breaches caused the injuries suffered by the Class?

(6) Did the trial judge err by finding punitive damages were available as a remedy for the appellant's breaches?

(7) Did the trial judge err by finding that the claims by the Class were not statute-barred by virtue of the applicable limitation period?

(8) Did the trial judge err in the award of costs against the appellant?

HOLDING:

Appeal dismissed.

REASONING:

(1) No

The Court held that it was misplaced to suggest that it was not open to the trial judge to make determinations on Class-wide issues. The Court looked to the common issues as the point of departure and stated that the very purpose of certifying common issues was to enable a trial judge to make common findings applicable to every Class Member if there was evidence presented to warrant them. The Court held that the common issues were certified in relation to duty of care, standard of care, and both general and specific causation. Dr. J did not contest owing a duty of care to patients but contested the trial judge's findings with respect to standard or care and causation.

(2) No

The Court held that in a medical malpractice case, the court must determine what a reasonable physician would have done in order to meet the standard of care. The Court noted that the trial judge, relying on expert evidence, evidence of nurses who worked with Dr. J, and Dr. J's own evidence, was entitled to conclude that Dr. J breached the standard of care by not consistently using an aseptic technique (IPAC). The Court held that while there may have been some variation in individual experience, it did not preclude answering the question in common given the finding that IPAC is always required.

The Court held that Dr. J's failure to adhere to the required IPAC standards in all cases exposed his patients to a common risk of harm. Whether this breach led to the infections was a question for the causation analysis. Direct evidence from every Class Member was not required where the plaintiff's theory, and the trial judge's findings, were based on other evidence of systemic practices.

The Court addressed Dr. J's argument that the trial judge erred in finding that Dr. J breached the standard of care by failing to report, investigate, and remediate the source of potential infections in his practice as they became known to him, beginning in August 2010. He submitted that the trial judge incorrectly relied heavily on the failure to report based on the Out of Hospital Premises Standards published by the College of Physicians and Surgeons of Ontario ("the OHP Standards"), which were not in place at the start of the Class Period, and did not apply until 2011.

The Court held that the OHP Standards "codified" the existing reporting obligation, which the trial judge accepted formed part of the standard of care based on the expert evidence, and was part of Rothbart Centre's own policies. The Court concluded that it was open to the trial judge to make this finding.

(3) No

The trial judge outlined the "but for" test for causation, but then referred to the "material contribution to risk" test in Clements v. Clements. Dr. J argued that the trial judge erred in stating the test for causation and applied the spent doctrine of res ipsa loquitor by accepting and relying on statistical evidence of causation in order to make Class-wide negligence findings, thereby reversing the burden of proof.

The Court noted that the trial judge's decision found that Dr. J's breach of IPAC need not be the sole cause of the infections, but a "contributing" one under the "but for" analysis, rather than applying the material contribution test that is theoretically available in situations where proof of causation is otherwise impossible. The Court concluded that this did not affect the outcome and did not amount to a reversible error, as causation was otherwise proven.

The Court saw no error in the trial judge's conclusion that causation was proven in respect of the Genetically Linked Patients, based on the match between the strain colonizing Dr. J and the infected patients as there was no other viable explanation for causation. Regarding the remaining patients, the Court held that the trial judge treated the statistical evidence as a basis to infer causation in negligence. The Court held that scientific certainty is not required for legal proof. The trial judge had the benefit of extensive expert evidence on the relationship between proper IPAC and infection rates and accepted that the statistical evidence was "so overwhelming that it cannot be ignored."

The Court held that the trial judge's common finding on specific causation included the important caveat, "absent sufficient evidence to the contrary." Thus, the trial judge recognized that the ultimate determination of whether a Class Member was infected because of Dr. J's breaches remained an individual issue. The Court noted that this did not shift the onus or burden of proof and at individual trials, each Class Member still must prove their case on a balance of probabilities.

Furthermore, although the prima facie finding was made on a Class-wide basis, it remained open to Dr. J to rebut this inference in respect of individual non-Genetically Linked Patients, where such evidence exists. The Court saw no error in the trial judge's reliance on statistical evidence in drawing a Class-wide, rebuttable inference that Dr. J's substandard IPAC caused the infections.

Lastly, the Court disagreed that even if Dr. J breached the standard of care, the trial judge erred in drawing the rebuttable inference that these breaches caused the infections of the non-Genetically Linked Patients after August, 2010. Dr. J argued that there was no evidence that a material change in outcome would have occurred had he reported the first infection of which he became aware. The Court noted that had Dr. J reported the first infection, it was likely that the medical director would have addressed the issue as he did when the TPH investigation was launched. The Court stated that the medical director would have very likely caused Dr. J to improve his IPAC making it unlikely that subsequent infections would have occurred. The Court held that this conclusion was open to the trial judge on the record.

(4) No

Dr. J argued that the trial judge's reasons failed to consider key factual and legal arguments raised in his defence. The Court provided that the adequacy of reasons must be determined functionally based on whether they permit meaningful appellate review. If so, then an argument that the reasons are inadequate fails, despite any shortcomings. Adequacy is contextual, and includes the issues raised at trial, the evidence adduced, and the arguments made before the trial judge. In general, reasons are to be read as a whole.

The Court held that Dr. J mistook length for thoroughness. The trial judge's reasons addressed the certified common issues and disclosed the path he took to address those issues. The Court found the trial judge's reasons sufficient.

Dr. J argued that the trial judge failed to engage with the expert evidence favourable to him and explain why he preferred one expert over another. The Court rejected this argument, stating that the trial judge considered the relevant evidence including Dr. J's own evidence, along with that of expert witnesses at trial, that engaging in non-aseptic techniques fell below the acceptable standard of IPAC.

Further, Dr. J argued that the trial judge failed to consider alternative theories of causation. On this point, the trial judge concluded that, "Dr. J produced no evidence that contradicted or cast serious doubt" on the conclusion that the genetic match between the strains was the result of his substandard IPAC. The Court held that a trial judge is not obliged to consider potential non-negligent causes where there is no evidentiary foundation to do so. Accordingly, the trial judge did not err in concluding that Dr. J presented no evidence to cast doubt on this conclusion for purposes of the common issues trial.

Finally, Dr. J challenged an adverse inference drawn by the trial judge based on Dr. J's failure to call witnesses to corroborate his evidence that he spoke with other physicians about the infections. Dr. J argued that his evidence was uncontradicted, and so these witnesses were unnecessary. The Court concluded that the trial judge clarified it was not relevant to his finding and held that the reasons were sufficient and there was no breach of procedural fairness.

(5) No

The Court held that it was open to the trial judge to find, on the evidence, that Dr. J had obscured the level of risk to his patients after becoming aware of the first infection. The Court noted that there was ample basis for the trial judge to find that Dr. J's failure to report, investigate, and remediate rose to the level of a breach of fiduciary duty. It was also open to the trial judge to conclude that these breaches of fiduciary duty caused the Class Members' injuries.

(6) No

The Court held that the trial judge considered the test governing punitive damages and his conclusion that Dr. J's conduct constituted "a marked departure from ordinary standards of decent behaviour" was a finding of mixed fact and law entitled to deference. The Court reasoned that the trial judge properly characterized this class proceeding as rooted in a "systemic wrong" rather than an individualized one directed at a particular patient. The trial judge found that general deterrence was particularly important with respect to a physician's duty to report.

The Court held that Dr. J's failure to report, investigate, and remediate the infections as he learned of them arising in his practice and then failing to take any action was precisely the type of conduct for which a deterrent message should be broadcasted to the medical profession through punitive damages.

(7) No

The Court confirmed that under s. 5 of the Limitations Act, 2002, a claim is discovered on the earlier of the date when the plaintiff knew or ought to have known that an incident occurred that resulted in a loss, and that, having regard to the nature of the injury, loss, or damage, a court proceeding is an appropriate means to seek a remedy. A plaintiff need not know the exact act or omission by the defendant that caused the loss, but rather must have knowledge of the material facts upon which a "plausible inference of liability" can be drawn.

The Court stated that discoverability involves an inquiry into the individual claimant's state of knowledge, courts have generally been hesitant to certify common limitations issues in class proceedings. Where such an issue is certified, the plaintiff must prove that no class member knew or ought to have known the material facts in issue prior to the presumptive discovery date.

The Court held it was open to the trial judge to find that material facts grounding both the claims in negligence and breach of fiduciary duty were not discoverable by any Class Member prior to the TPH investigation. The Court noted that since Dr. J did not report any of the infections, his concealment of material facts resulted in a lack of actual or objective knowledge by Class Members preventing discovery until the date the concealed facts were revealed. Thus, the claims were not statute barred.

(8) No

Dr. J argued that as the Class had not established complete liability against him, a costs order was premature. The Court held that the general rule that costs follow the event. While liability may ultimately be rebutted in respect of individual Class Members, the common findings finally resolved the certified common issues in favour of the Class. The costs of individual trials can be dealt with in those proceedings.

Dr. J further argued that the trial judge erred in principle by ordering him to pay the costs of the co-defendant nurses. The Court responded that the trial judge relied on Moore v. Wienecke, which confirmed that in a multiple-defendant case where the plaintiff succeeds against some defendants but not others, the "normal course" is for the unsuccessful defendant to pay the plaintiff's costs and the plaintiff to pay the successful defendant's costs. Deviations from the norm may be justified where it was reasonable for the plaintiff to sue multiple defendants in the same action and where it is fair to shift costs from the plaintiff to the unsuccessful defendant.

Dr. J argued such a deviation was not warranted since he never attempted to shift the blame for the Class Members' injuries onto the nurses; the trial judge mistakenly accepted that Dr. J had brought the nurses into the action through a third party claim, when in fact AL had claimed against the generic "Nurse Doe" beforehand; the nature of the allegations against Dr. J and the nurses differed significantly and there was no evidence that the Class would be unable to pay the costs of the nurses.

The Court rejected these argument and held that the trial judge considered and applied the relevant factors and determined what costs arrangement was fair and reasonable. The Court found that it was open to him to conclude that Dr. J was driving the case against the nurses and was primarily responsible for their remaining in the action in considering costs.

Finally, Dr. J contended that the amount of the costs awards in favour of the nurses was unreasonable and unsupported. He argued that, since the nurses' counsel did not provide detailed dockets, their overall costs should be reduced since there way no way to know if costs were reasonable. He also asserted that there was no basis for awarding costs on a substantial indemnity basis.

The Court held that the trial judge found the amounts claimed were modest, and so it was not necessary to evaluate their hourly rate. The trial judge accepted that all of the nurses had offered to settle the third party claims and crossclaims on a dismissal without costs basis early in the action. The trial judge was satisfied that the nurses' claim for costs was reasonable, and clearly explained the basis for awarding costs on a substantial indemnity basis. In light of the deference afforded to trial judges in their assessment of costs, the Court saw no error that would have justified granting leave to appeal the costs award.

SHORT CIVIL DECISIONS

Lacey v. Kakabeka Falls Flying Inc., 2023 ONCA 83

[Huscroft, Miller and Nordheimer JJ.A.]

COUNSEL:

Cupello, for the appellants
Lester and N. Wainwright, for the responden

Keywords: Contracts, Real Property, Commercial Leases, Remedies, Declaratory Relief, Civil Procedure, Orders, Enforcement, Writs of Possession, Costs, Planning Act, R.S.O. 1990, c. P.13, Limitations Act, 2002, S.O. 2002, c. 24, Sched. B, s. 4, s. 16(1)(a), Real Property Limitations Act, R.S.O. 1990, c. L.15

Hibbert v. National Bank of Canada, 2023 ONCA 84

[Huscroft, Miller and Nordheimer JJ.A.]

COUNSEL:

H., acting in person
Arseneault and G. Cyr, for the respondent

Keywords: Civil Procedure, Striking Pleadings, Appeals, Vexatious Litigants, Rules of Civil Procedure, r. 2.1

Warner v. Ahmadi, 2023 ONCA 71

[Fairburn A.C.J.O., Simmons and Zarnett JJ.A.]

COUNSEL:

Literovich, for the appellant

S.S Taylor, for the respondent

Keywords: Breach of Contract, Real Property, Agreements of Purchase and Sale of Land, Remedies, Specific Performance, Civil Procedure, Summary Judgment

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be ought about your specific circumstances.

Court Of Appeal Summaries (January 30, 2023 – February 3, 2023)

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