Mitchell, deceased, by her Litigation Administrator, Mitchell et al. v. Her Majesty the Queen in Right of Ontario

[Indexed as: Mitchell (Litigation Administrator) v. Ontario]

66 O.R. (3d) 737

[2003] O.J. No. 3313

Divional Court File No. 311-02

Ontario Superior Court of Justice Divisional Court

Then J.

September 2, 2003

Appeal -- Leave to appeal -- Motion judge declining to strike allegations of negligence by public authorities and abuse of public office as disclosing no reasonable cause of action -- Motion judge assuming that he had to accept mere allegation of duty of care in negligence as proven -- Motion judge failing to apply appropriate test for abuse of public office -- Correctness of decision called into question -- Motion judge's decision conflicting with decisions of Supreme Court of Canada -- Motion judge's decision might open floodgates to lawsuits seeking to challenge policy decisions of Crown and might have profound resource and insurance implications for Crown -- Desirability and importance of granting leave to appeal were established -- Leave to appeal granted.

Torts -- Negligence -- Duty of care -- Motion judge assuming that judge presiding at motion to strike statement of claim as disclosing no reasonable cause of action must accept mere allegation of duty of care in negligence as proven -- Correctness of motion judge's decision to let allegation of negligence stand called into question -- Leave to appeal granted.

Torts -- Abuse of public office -- Motion judge declining to strike claim of abuse of public office on motion to strike statement of claim as disclosing no reasonable cause of action -- Motion judge failing to apply appropriate test for abuse of public office -- Omission calling into question correctness of his decision to let allegation stand -- Leave to appeal granted.

The infant plaintiff died in hospital. The plaintiffs alleged that her death was the result of a lack of proper treatment due to overcrowded hospital conditions, which were allegedly caused by the wrongful funding and restructuring decisions of a former Premier and a former Health Minister, for whose torts Ontario was vicariously liable. The plaintiffs brought an action against Ontario claiming that the infant plaintiff's death was caused, or materially contributed to, by the negligence, breach of contract, misfeasance, nonfeasance, abuse of public office and breach of fiduciary duty of the defendant and its representatives, employees, servants and agents. They also alleged that the former Premier and former Health Minister intentionally and/or recklessly used their policy and funding powers for political purposes. Finally, they alleged that the Crown breached the infant plaintiff's rights under ss. 7 and 12 of the Canadian Charter of Rights and Freedoms by failing to provide medically necessary health care services. The Crown moved under rule 21.01(1)(b) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 for an order striking the statement of claim as disclosing no reasonable cause of action. The motion judge struck out the breach of contract and Charter claims, as well as the paragraphs alleging the intentional and/or reckless and bad faith use of policy and funding powers for political purposes. He refused, however, to strike the remaining allegations of negligence, misfeasance, nonfeasance, abuse of public office and breach of fiduciary duty. The Crown brought a motion for leave to appeal that order.

Held, the motion for leave to appeal should be granted. [page738]

There was reason to doubt the correctness of the motion judge's orders with respect to the issues of negligence by public authorities and abuse of public office. He assumed that a judge presiding at a summary judgment motion must accept the mere allegation of duty of care in negligence as proven. It is not enough that the plaintiffs simply state that the defendants owe them a duty of care. Rather, the two-step analysis set out in Anns v. London Borough Council and adopted in Canada in Kamloops (City) v. Nielsen should be employed. The motion judge did not perform this analysis when making his determination that there was a reasonable cause of action. Furthermore, the motion judge did not consider the appropriate test for determining the elements of the tort of abuse of public office. The defendant must be a public officer. The defendant must be exercising power in his or her capacity as a public officer. There are two different forms of liability for the tort which depend on the state of mind of the defendant. The first is targeted malice by a public officer which involves bad faith in the sense of the exercise of public power for an improper or ulterior motive. The second form is where a public officer acted knowing that he or she had no power to do the act complained of and that the act would probably injure the plaintiff. The fact that the act was performed in reckless indifference as to the outcome is also sufficient to ground the tort in its second form. The plaintiffs had to prove that the public officer acted with a state of mind of reckless indifference to the illegality of his act. There are also the additional requirements of a duty to the plaintiffs, causation, damage and remoteness. The motion judge's failure to consider the appropriate test called into question the correctness of his decision to let the allegations stand in the statement of claim.

The motion judge's decision conflicted with decisions by the Supreme Court of Canada dealing with the assessment of whether a reasonable cause of action exists in the context of the negligence of public authorities.

The motion judge's decision in this case might open the floodgates to lawsuits that seek to challenge all manner of policy decisions of the Crown, especially funding and resourcing decisions involving public funds. It might have profound resource and insurance implications to the Crown, in terms of defending such lawsuits and making the very sorts of policy decisions that were challenged in this case. For these reasons, it was both desirable and important to grant leave to appeal.

APPLICATION for leave to appeal the decision of a motion judge refusing, in part, to strike out a statement of claim.

Anns v. Merton London Borough Council, [1978] A.C. 728, [1977] 2 W.L.R. 1024, 121 Sol. Jo. 377, 75 L.G.R. 555 (H.L.); Cooper v. Hobart, [2001] 3 S.C.R. 537, 96 B.C.L.R. (3d) 36, 206 D.L.R. (4th) 193, 277 N.R. 113, [2001] 11 W.W.R. 221, 2001 SCC 79, 8 C.C.L.T. (3d) 26 (sub nom. Cooper v. Registrar of Mortgage Brokers (B.C.) et al.); Decock v. Alberta (2000), 2000 ABCA 122, 79 Alta. L.R. (3d) 11, 186 D.L.R. (4th) 265, [2000] 7 W.W.R. 219 (C.A.); Edwards v. Law Society of Upper Canada, 2001 SCC 80, [2001] 3 S.C.R. 562, 56 O.R. (3d) 456n, 206 D.L.R. (4th) 211, 277 N.R. 145, 2001 SCC 80, 8 C.C.L.T. (3d) 153, 13 C.P.C. (5th) 35; Kamloops (City) v. Nielsen, 1984 21 (SCC), [1984] 2 S.C.R. 2, 66 B.C.L.R. 273, 10 D.L.R. (4th) 641, 54 N.R. 1, [1984] 5 W.W.R. 1, 29 C.C.L.T. 97, 26 M.P.L.R. 81; Odhavji Estate v. Woodhouse (2000), 2000 17007 (ON CA), 52 O.R. (3d) 181, 194 D.L.R. (4th) 577, 3 C.C.L.T. (2d) 226 (C.A.) (sub nom. Odhavji Estate v. Woodhouse, Odhavji Estate v. Metropolitan Toronto Police Force), consd Other cases referred to Ash v. Lloyd's Corp. (1992), 1992 7652 (ON SC), 8 O.R. (3d) 282 (Gen. Div.); Guerin v. R., 1984 25 (SCC), [1984] 2 S.C.R. 335, 59 B.C.L.R. 301, 13 D.L.R. (4th) 321, 55 N.R. 161, [1984] 6 W.W.R. 481, 20 E.T.R. 6, 36 R.P.R. 1; Hodgkinson v. Simms, 1994 70 (SCC), [1994] 3 S.C.R. 377, 97 B.C.L.R. (2d) 1, 117 D.L.R. (4th) 161, 171 N.R. 245, [1994] 9 W.W.R. 609, 16 B.L.R. (2d) 1, 22 C.C.L.T. (2d) 1, 57 C.P.R. (3d) 1, 95 DTC 5135, 5 E.T.R. (2d) 1; [page739] Just v. British Columbia, 1989 16 (SCC), [1989] 2 S.C.R. 1228, 41 B.C.L.R. (2d) 350, 64 D.L.R. (4th) 689, 103 N.R. 1, [1990] 1 W.W.R. 385, 1 C.C.L.T. (2d) 1, 18 M.V.R. (2d) 1; Metropolitan General Hospital and Minister of Health (Re) (1979), 1979 2058 (ON SC), 25 O.R. (2d) 699, 101 D.L.R. (3d) 530 (H.C.J.); Norberg v. Wynrib, 1992 65 (SCC), [1992] 2 S.C.R. 226, 68 B.C.L.R. (2d) 29, 92 D.L.R. (4th) 449, 138 N.R. 81, [1992] 4 W.W.R. 577, 12 C.C.L.T. (2d) 1; Rankin v. McLeod, Young, Weir Ltd. (1986), 1986 2749 (ON SC), 57 O.R. (2d) 569, 13 C.P.C. (2d) 192 (H.C.J.); Three Rivers District Council v. Bank of England (No. 3), [2000] 2 W.L.R. 1220, [2000] 3 All E.R. 1, [2000] H.L.J. No. 32 (QL) (H.L.); Walker v. Woodstock District Chamber of Commerce, [2000] O.J. No. 1994 (QL) (S.C.J.) Statutes referred to Canadian Charter of Rights and Freedoms, ss. 7, 12 Courts of Justice Act, R.S.O. 1990, c. C.43, s. 19(1)(b) Rules and regulations referred to Rules of Civil Procedure, R.R.O. 1990, Reg. 194, rules 21.01(1) (b), 62.02

Amani Oakley, for respondent. Jack Coop, for moving party.

1THEN J.: -- The defendant, Her Majesty the Queen in Right of Ontario ("the Crown"), brings a motion to appeal an interlocutory order by Mr. Justice Dyson dated May 21, 2002, refusing, in part, to strike out all of the plaintiffs' amended statement of claim.

THE FACTS

2The action concerns the infant plaintiff Effica Shameka Mitchell, who died while receiving care at the William Osler Health Centre in Etobicoke, Ontario. In their amended statement of claim, the plaintiff parents alleged that she was not properly treated as a result of the overcrowded conditions at the hospital, and that these conditions were caused by the wrongful funding and restructuring decisions of former Premier Michael Harris and former Health Minister Elizabeth Witmer, for whose torts Ontario is vicariously liable. The plaintiffs claimed that the death of Effica Mitchell was caused, or materially contributed to, by the negligence, breach of contract, misfeasance, nonfeasance, abuse of public office and breach of fiduciary duty of the defendant and its representatives, employees, servants and agents. They also alleged that Ms Witmer and Mr. Harris intentionally and/or recklessly used their policy and funding powers for political purposes. Lastly, they alleged that the Crown breached Effica Mitchell's rights under s. 7 and 12 of the Canadian Charter of Rights and Freedoms, Part I of the Constitution Act, 1982, being [page740] Schedule B to the Canada Act, 1982, c. 11, by failing to provide medically necessary health care services.

3The Crown moved, under rule 21.01(1)(b) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, before the Honourable Mr. Justice Dyson for an order striking the plaintiffs' amended statement of claim as disclosing no reasonable cause of action.

4Dyson J. struck out the breach of contract and Charter claims, as well as the paragraphs alleging the intentional and/ or reckless and bad faith use of policy and funding powers for political purposes. He refused, however, to strike the remaining allegations of negligence, misfeasance, nonfeasance, abuse of public office and breach of fiduciary duty.

THE PRESENT MOTION

5The Crown subsequently brought this motion for leave to appeal to the Divisional Court from the order of Dyson J. The basis for the motion is s. 19(1)(b) of the Courts of Justice Act, R.S.O. 1990, c. C.43:

19(1) An appeal lies to the Divisional Court from,

(b) an interlocutory order of a judge of the Superior Court of Justice, with leave as provided in the rules of court[.]

The relevant rule is rule 62.02(4) of the Rules of Civil Procedure. This rule provides that:

62.02(4) Leave to appeal shall not be granted unless,

(a) there is a conflicting decision by another judge or court in Ontario or elsewhere on the matter involved in the proposed appeal and it is, in the opinion of the judge hearing the motion, desirable that leave to appeal be granted; or

(b) there appears to the judge hearing the motion good reason to doubt the correctness of the order in question and the proposed appeal involves matters of such importance that, in his or her opinion, leave to appeal should be granted.

6The grounds for the motion before me involve both branches of rule 62.02.

ANALYSIS

Correctness - 62.02(4)(b)

7When considering the correctness of Justice Dyson's order, it is not necessary that I determine whether or not it was wrong or probably wrong, or whether I would have decided it otherwise. Instead, the threshold to be met in this first part of the rule is [page741] whether I am satisfied that the correctness of the order is open to very serious debate: Ash v. Lloyd's Corp. (1992), 1992 7652 (ON SC), 8 O.R. (3d) 282 (Gen. Div.), at p. 284 O.R., per Farley J. In other words, I must ascertain whether there is good reason to doubt the correctness of the order: Walker v. Woodstock District Chamber of Commerce, [2000] O.J. No. 1994 (QL) (S.C.J.), at para. 13, per Blair J.

8The Crown submits that there are a number of reasons to doubt the correctness of Justice Dyson's order in that he, inter alia,

(a) followed the Decock v. Alberta (2000), 2000 ABCA 122, 186 D.L.R. (4th) 265, 79 Alta. L.R. (3d) 11 (C.A.) decision of the Alberta Court of Appeal, and ruled that the mere pleading of a duty of care in negligence had to be accepted as proven, contrary to the rulings of the Supreme Court of Canada in Cooper v. Hobart, 2001 SCC 79, [2001] 3 S.C.R. 537, 206 D.L.R. (4th) 193, and Edwards v. Law Society of Upper Canada, 2001 SCC 80, [2001] 3 S.C.R. 562, 206 D.L.R. (4th) 211;

(b) failed to conduct the analysis of duty of care required by the Supreme Court of Canada in earlier decisions such as Kamloops (City) v. Nielsen, 1984 21 (SCC), [1984] 2 S.C.R. 2, 10 D.L.R. (4th) 641, and Just v. British Columbia, 1989 16 (SCC), [1989] 2 S.C.R. 1228, 64 D.L.R. (4th) 689, or in recent decisions such as Cooper and Edwards;

(c) failed to apply established Ontario case law, such as Re Metropolitan General Hospital and Minister of Health (1979), 1979 2058 (ON SC), 25 O.R. (2d) 699, 101 D.L.R. (3d) 530 (H.C.J.), which states that health funding decisions are unimpeachable by the courts;

(d) failed to strike out the tort of abuse of public office when the elements of the tort had not been pleaded or were incapable of proof, per the decision of the Ontario Court of Appeal in Odhavji Estate v. Woodhouse (2000), 52 O.R. (3d) 181, 2000 17007 (ON CA), 194 D.L.R. (4th) 577 (C.A.), appeal to S.C.C. heard and reserved February 17, 2003, [2001] S.C.C.A. No. 75;

(e) failed to strike out allegations of misfeasance and nonfeasance, which are not torts in and of themselves; and,

(f) failed to strike out allegations of breach of fiduciary duty allegedly owed by the Premier and the Minister to the infant plaintiff, when no fiduciary relationship was pleaded, nor is one capable of proof, per the decisions of the Supreme Court of Canada in Norberg v. Wynrib, 1992 65 (SCC), [1992] 2 S.C.R. 226, 92 D.L.R. (4th) 449, Hodgkinson v. Simms, 1994 70 (SCC), [1994] 3 S.C.R. 377, 117 D.L.R. (4th) 161 and Guerin v. R., 1984 25 (SCC), [1984] 2 S.C.R. 335, 13 D.L.R. (4th) 321. [page742]

A finding of merit with respect to only one of these reasons is sufficient to call the correctness of the decision into question.

9For the following reasons, I conclude that there is good reason to doubt the correctness of Dyson J.'s orders with respect to (a), (b) and (d) above.

(1) Negligence

10In order to determine the adequacy of the pleadings with respect to the negligence claim, Mr. Justice Dyson followed the approach employed by the Alberta Court of Appeal in Decock, supra. On this approach, a judge presiding at a summary judgment motion must accept the mere allegation of duty of care in negligence as proven.

11The facts in Decock were very similar to those in the present case. In Decock, the plaintiffs filed four separate sets of pleadings. Each claimed damages arising from injury and death resulting from negligent medical care, attention and treatment, as well as funding cutbacks in the health care system. All of the plaintiffs also named both the Premier of Alberta and the Minister of Health personally as defendants. Dyson J. observed at para. 11 of his reasons that, in fact, the pleadings in the present matter were virtually identical to those in Decock.

12In Decock, at p. 297 D.L.R., Russell J.A. for the majority held that, in the absence of any evidence about the powers and duties of the government officials, and assuming that the facts and allegations as pleaded would be proven at trial, it could not be said that it was plain and obvious that the pleadings contained no reasonable cause of action against them. He consequently found that the chambers judge had erred in striking the claims against these parties and ordered that the claims be reinstated.

13In para. 14 of his decision, Dyson J. indicates that he relied on these reasons from Decock in dismissing the motion before him. There is, however, good reason to doubt the correctness of the approach employed by Dyson J., as it is inconsistent with more recent jurisprudence from the Supreme Court of Canada.

14In Cooper and Edwards, the Supreme Court of Canada set out the approach for how courts ought to assess whether pleadings disclose a reasonable cause of action in negligence with respect to the liability of public authorities. From these cases it is clear that it is not enough that the plaintiffs simply state that the defendants owe them a duty of care. The approach requires a two-step analysis to determine whether such a private law duty exists. The test was first set out by the House of Lords in Anns v. Merton London Borough Council, [1978] A.C. 728, [1977] 2 W.L.R. 1024 (H.L.) and adopted in Canada by the Supreme Court in Kamloops, supra. [page743]

15In Cooper, the court was dealing with a certification motion in respect of a proposed class action against the Registrar of Mortgage Brokers. The plaintiffs alleged that the Registrar breached a duty of care he owed to investors who provided funds to a particular mortgage broker by failing to suspend the broker's licence earlier and failing to warn investors that the broker was under investigation. Certification was granted by the trial judge on the basis "that it was not plain and obvious that the Legislature did not intend to create a private law duty of care owed by the Registrar in favour of investors" at p. 545 S.C.R. As a result, he concluded that the pleadings disclosed a cause of action in negligence. The British Columbia Court of Appeal reversed the trial judge's decision, applying the Anns/Kamloops test to hold that the pleadings did not disclose a cause of action. The Supreme Court of Canada upheld the Court of Appeal's decision, and applied and expanded upon the Anns/Kamloops test to establish a comprehensive framework for how courts ought to assess whether pleadings disclose a reasonable cause of action for negligence.

16The companion case of Edwards involved a motion to strike. Here, a class action was brought against the Law Society of Upper Canada for allegedly failing to ensure that a solicitor under investigation by the Society operated his trust account according to the regulations and for allegedly failing to warn class members when the Society abandoned its investigation. Both the trial judge and the Ontario Court of Appeal ruled in favour of the Society on its Rule 21 motion, applying the Anns/Kamloops analysis to find determine there was no reasonable cause of action in negligence.

17Both Cooper and Edwards make it clear that in lawsuits involving allegations of regulatory negligence against public officials, in determining whether a reasonable cause of action exists on the face of the pleadings, the court should assess the question of whether a private law duty of care exists in two stages:

First, one has to ask whether, as between the alleged wrongdoer and the person who has suffered damage there is a sufficient relationship of proximity or neighbourhood such that, in the reasonable contemplation of the former, carelessness on his part may be likely to cause damage to the latter -- in which case a prima facie duty of care arises. Secondly, if the first question is answered affirmatively, it is necessary to consider whether there are any considerations which ought to negative, or to reduce or limit the scope of the duty or the class of persons to whom it is owed or the damages to which a breach of it may give rise.

Anns, at pp. 751-52 A.C. (H.L.). See also Cooper, at para. 30. [page744]

18In order to make such a determination, it is necessary to carefully analyze the facts as pleaded, the regulatory regime in question and the statutory framework. In following Decock, it appears that Dyson J. did not perform such an analysis when making his determination that there was a reasonable cause of action. This difference in approach leaves the correctness of the order open to serious debate, as per Ash, supra.

(2) Abuse of public office

19Dyson J. refused to strike the plaintiffs' allegation of the tort of abuse of public office. The Crown submits that he was in error in so doing as the elements of this tort were not pleaded or are incapable of proof.

20The leading Ontario case on the tort of misfeasance in public office is the Ontario Court of Appeal decision of Odhavji, supra. In this case, the court clarified the elements of this tort in the context of a motion under rule 21.01(1)(b) to strike out the claim as not disclosing a reasonable cause of action.

21The Court of Appeal, at para. 22, adopted the elements of this tort as stated by Lord Steyn in Three Rivers District Council v. Bank of England (No. 3), [2000] 2 W.L.R. 1220, [2000] 3 All E.R. 1 (H.L.):

(1) The defendant must be a public officer.

(2) The defendant must be exercising power in his or her capacity as a public officer.

(3) There are two different forms of liability for the tort which depend on the state of mind of the defendant.

a. The first is targeted malice by a public officer which involves bad faith in the sense of the exercise of public power for an improper or ulterior motive.

b. The second form is where a public officer acted knowing that he or she had no power to do the act complained of and that the act would probably injure the plaintiff. The fact that the act was performed in reckless indifference as to the outcome is also sufficient to ground the tort in its second form. The plaintiff had to prove that the public officer acted with a state of mind of reckless indifference to the illegality of his act.

There are also the additional requirements of a duty to the plaintiff, causation, damage and remoteness.

22A review of Dyson J.'s reasons reveals that the Odhavji test for determining the element of the tort of abuse of public office was not considered. This omission calls into question the correctness of Dyson J.'s decision to let these allegations stand in the statement of claim. [page745]

Conflict - 62.02(4)(a)

23In their factum, the plaintiffs canvassed a number of cases that stand for the proposition that an exercise of discretion that has led to a different result because of different circumstances or because of a different weighing of legal principles, does not meet the requirement for a "conflicting decision". Instead, it is necessary to demonstrate a difference in the principles chosen as a guide to the exercise of such discretion. The plaintiffs argue that here, the difference between these cases is the result of different exercise of discretion as opposed to different legal principles.

24I disagree. As discussed above, the decision of Dyson J. conflicts with decisions by the Supreme Court of Canada dealing with the assessment of whether a reasonable cause of action exists in the context of the negligence of public authorities.

25Dyson J. followed the approach of the Alberta Court of Appeal in Decock, according to which the mere allegation of a duty of care in the pleadings has to be accepted as proven. This conflicts with the two-step test for determining a private law duty of care required by the House of Lords in Anns and by the Supreme Court of Canada in Kamloops, Cooper, and Edwards. It is obvious that the difference between these approaches is one of principle, and not merely judicial discretion.

Desirability and Importance of Granting Leave

26I have found that there is good reason to doubt the correctness of Dyson J.'s decision and that there are conflicting decisions on the approach to regulatory negligence. However, in order to complete the analysis under rule 62.02, it is necessary that I consider the desirability and importance of granting leave to appeal.

27It is clear from the case law that in order to satisfy the "matter of importance" requirement, a party seeking leave must show not that the matter is important as between the parties, but that it transcends their immediate interest and involves a question of general or public importance which requires resolution by higher judicial authority: Rankin v. McLeod, Young, Weir Ltd. (1986), 1986 2749 (ON SC), 57 O.R. (2d) 569, 13 C.P.C. (2d) 192 (H.C.J.), at pp. 573-75 O.R.

28For the following reasons, I find that it is both desirable and important to grant leave to appeal the decision of Dyson J.

29First, his decision may open the floodgates to lawsuits that seek to challenge all manner of policy decisions of the Crown, especially funding and resourcing decisions involving public funds, contrary to the direction of the Supreme Court of Canada in Cooper and Edwards. [page746]

30Second, it may have profound resource and insurance implications to the Crown, in terms of defending such lawsuits and making the very sorts of policy decisions that have been challenged.

31Third, the within proposed appeal raises the same issues that the Supreme Court of Canada deemed of sufficient importance in Decock to grant leave to appeal to the Supreme Court of Canada.

DISPOSITION

32Leave is granted to the defendant, Her Majesty the Queen in Right of Ontario, to appeal the decision of Dyson J., dated May 21, 2002, to the Divisional Court.

33The costs of the application are reserved to the panel of the Divisional Court which will hear the appeal.