COURT FILE NO.: 433/07

DATE: 20071210

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

B E T W E E N:

KATHRYN ANNE TAYLOR,

Plaintiff

(Respondent on the Motion)

• and -

THE ATTORNEY GENERAL FOR CANADA,

Defendant

(Applicant on the Motion)

• and -

UNIVERSITY HEALTH NETWORK (FORMERLY TORONTO GENERAL HOSPITAL) and DR. W. DOBROVOLSKY

Third Parties

Kirk Baert and Celeste Poltak, Counsel for the Respondent on the Motion

Paul J. Evraire, Q.C. and James Soldatich, Counsel for the Applicant on the Motion

HEARD at Toronto: November 27, 2007

REASONS: GREER J.:

1The Attorney General for Canada (the “Appellant” or the “AG”), on behalf of Health Canada, seeks an Order under section 19(1)(b), of the Courts of Justice Act, R.S.O. 1990, c.43, granting him leave to appeal the interlocutory Order of Mr. Justice Cullity made September 5, 2007, in which he certified the action of Kathryn Anne Taylor (“the Respondent”), as a class action within the meaning of the Class Proceedings Act, 1992, S.O. 1992, c.6 (“CPA”).

2Leave to Appeal shall not be granted under Rule 64.02(4) of the Rules of Civil Procedure 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.

3Leave is sought to appeal only the Rule 21 portion of the Judge’s decision, whereby he determined that under subsection 5(1)(a) of the CPA, it was not “plain and obvious” that the Respondent’s action had no reasonable prospect of success. The Appellant does not seek Leave to appeal the balance of the Judge’s findings with respect to the test for certification, pursuant to the CPA.

4The Respondent submits that Leave should be denied since the Appellant cannot demonstrate that there are conflicting decisions by another Judge or Court in Ontario or elsewhere, which activates subrule 64.02(4)(a). The Respondent further says that under Rule 64.02(4)(b) there is no good reason to doubt the decision of the Judge and that the proposed Appeal does not raise matters of sufficient public importance to engage the attention of the Divisional Court.

Some background facts

5The Respondent seeks to certify an action, pursuant to the CPA, against Her Majesty the Queen in Right of Canada, as represented by the Minister of Health and the Attorney General for Canada (Third Parties being the University Health Network, formerly the Toronto-General Hospital) and Dr. W. Dobrovolsky). She alleges that while under medical care, she received a Vitek Proplast™ TMJ implant and a Luhr Condylar head, as a result of which she has allegedly suffered catastrophic and irreversible biomedical consequences. She pleads that her injuries resulted from the negligence of the Crown servants in failing to properly exercise their powers and responsibilities with respect to these implants. She alleges that Health Canada, in allowing such implants to be imported and used, breached a private law duty of care owed to her and other members of the proposed class of individuals she seeks to represent.

6The claims in the action relate to only the conduct of the Crown’s servants in connection with the importation, sale and distribution of such implants. The claims advanced are for negligence, breach of fiduciary duty and breach of section 7 of the Charter of Rights and Freedoms. In paragraphs 57 and 58 of his Reasons, the Judge said it was not open to him to find that the pleading discloses a Charter right to damages for a breach of section 7. He held that the claims of the Respondent are, in his view, sustainable, “-if at all- only on the ground of the tort of negligence.” In paragraph 59, the Judge sets out the terms defining the class of persons the Respondent seeks to represent as a class.

7Section 19 of the Food and Drugs Act, R.S., c. F-27 (“FDA”) reads:

No person shall sell any device that, when used according to directions or under such conditions as are customary or usual, may cause injury to the health of the purchaser or user thereof.

8The implant device was imported or sold in Canada and the Appellant says as of December 18, 2006, Health Canada had issued over 72,100 medical device licences (representing approximately 681,250 individual devices identifiers), following licence applications by their respective manufacturers. The device in question, however, has been narrowed down to a Vitek Proplast™ TMJ implant and a Luhr Condylar head. The Respondent says that the class to be identified is much narrower than this generalized number put forward by the Appellant respecting all medical device licences, and the Respondent says it is a class of between 200 and 2500 persons.

The position of the Appellant AG

9The Appellant is not seeking Leave with respect to the Judge’s findings that the Respondent met the tests in all of the other subsections s.5(1)(b), (c), (d) and (e), as well as respecting the representative plaintiff and the litigation plan.

10The Appellant seeks Leave only with respect to s.5(1)(a) of the CPA and argues that the pleadings failed to disclose a cause of action against the government. The Appellant says that the Judge, in certifying this action as a class proceeding, “…erred in his conclusion that it was not plain and obvious that the Crown did not owe a private law duty of care to the plaintiff.”

11The Appellant, in looking at the first part of Rule 62.02(4)(a), says that the Judge’s decision conflicts with other decisions of Canadian courts dealing with the existence of a reasonable cause of action in the context of regulatory negligence. The Appellant says it is desirable, therefore, that leave be granted since there is good reason to doubt the correctness of the decision. The Appellant says the Judge erred in his analysis of the duty of care required by the Supreme Court of Canada in Cooper v. Hobart, 2001 SCC 79, [2001] S.C.J. No. 76 and Edwards v. Law Society of Upper Canada, 2001 SCC 80, [2001] 3 S.C.R. 562 and Odhavji Estate v. Woodhouse, 2003 SCC 69, [2003] 3 S.C.R. 263.

12The Appellant says that the requirement for “conflicting decisions” is satisfied when there is a difference in principle between two courts. In this case, says the Appellant, the Judge’s decision is in conflict with the approach of other courts in their application of the Anns test. This test is set out in Cooper v. Hobart, 2001 SCC 79, [2001] 3 S.C.R. 537 (S.C.C.), paragraph 30 at p. 551 as follows:

At the first stage of the Anns test, two questions arise:

(1) Was the harm that occurred the reasonably foreseeable consequence of the defendant’s act? and,

(2) Are the reasons, notwithstanding the proximity between the parties established in the first part of this test, that tort liability should not be recognized here? The proximity analysis involved at the first stage of the Anns test focuses on factors arising from the relationship between the plaintiff and the defendant. These factors include questions of policy, in the broad sense of that word. If foreseeability and proximity are established at the first stage, a prima facie duty of care arises.

At the second stage of the Anns test, the question still remains whether there are residual policy considerations outside the relationship of the parties that may negative the imposition of a duty of care.

13The Appellant says that while the Judge applied the first part of the Anns test, he did so incorrectly, in that he failed to consider and decide whether there is a relationship of sufficient proximity between Taylor and the federal government such as to give rise to a prima facie duty of care on the part of the government owing to her.

14Stage one of the Anns test, says the Appellant, requires a determination of forseeability of harm as well as proximity in the relationship between the parties in order to establish a prima facie duty of care. If proximity cannot be established, no duty of care can exist, he says.

15The Appellant further says that if a duty of care is to be found, it must be in the statute, and says that the Judge failed to restrict himself to the statute as the only possible source of duty of care. The Appellant further says that the Judge’s approach to stage two of the Anns test did not go far enough, in that he did not examine the residual policy considerations outside the relationship of the parties that ought to negate the imposition of such duty of care. Instead, says the Appellant, the Judge dismissed these considerations as “mere fanciful” by ignoring the “spectres of unlimited liability, interference with the policy decision of the government and the floodgates of litigation.”

16The Appellant relies on the Court’s decisions in Attis v. Canada (Minister of Health, [2007] O.J. No. 1722 (S.C.J.) and Drady v. Canada (Minister of Health), 2007 27970 (ON SC), [2007] O.J. No. 2812 (S.C.J.), and Klein v. American Medical Systems, Inc. et al. (2006), 2006 42799 (ON SCDC), 84 O.R. (3d) 217 (Div.Ct.) (Leave to Appeal). The Appellant says both Attis, supra, and Drady, supra, will be heard by the Court of Appeal in 2008. In Attis, supra, Mr. Justice Winkler, as he then was, held in paragraph 16 that the duty of care must be found in the statute. Further, he found that “proximity” was not sufficiently “grounded in the governing statute”, and the Motion for Certification was dismissed. In Drady, which also involved TMJ implants, the Statement of Claim was struck for reasons, which do not apply to Taylor, in the case before me. In these two cases, there was no duty of care found to be owed.

17The Appellant, in examining the second branch of the test in Rule 62.02(4)(b), says that the correctness of the Judge’s decision is open to very serious debate, and that the case at bar may have far-reaching consequences with respect to the expansion of the tort liability of Health Canada.

The position of the Respondent Taylor

18The Respondent points out that her claims relate only to the conduct of the Crown’s Servants in connection with the importation, sale and distribution of such implants among an identifiable class of between 200 and 2,500 persons in Canada. She says that the “plain and obvious test” found propounded by the Supreme Court of Canada in Hunt v. Carey Inc., 1990 90 (SCC), [1990] 2 S.C.R. 959, is to be applied, reading the pleadings generously and on the assumption that “…all facts alleged – other than those that are manifestly incapable of proof – will be proven at trial.”

19The Judge found in paragraphs 39 and 40 of his decision that Health Canada’s course of conduct in dealing with such implants, gave rise to a relationship of proximity with them, and it was “not plain and obvious” that Taylor’s Claim would not succeed.

20It is the position of the Respondent that the Appellant has failed to meet the applicable test for Leave to Appeal because there are no conflicting decisions on this matter, that there is no reason to doubt the correctness of the Judge’s Order, and the proposed Appeal does not involve matters of public importance. I agree with the Respondent’s analysis in this regard.

21The Respondent submits that the grounds asserted by the Appellant, in asking for Leave, do not satisfy the threshold criteria of Rule 62.02(4). She sees the Judge’s decision as being consistent, not conflicting, with such cases as Baric v. Tomalk, [2006] O.J. No. 890 (S.C.J.), Swinamer v. Nova Scotia, 1994 122 (SCC), [1994] 1 S.C.R. 445, and Sauer v. Canada (Attorney General), [2007] Q.J. No. 2443 (C.A.). There the Court did find that the Crown could owe a private duty of care where it had undertaken to execute a particular operation or scheme.

22The Respondent says that the fact that two courts might exercise their discretion differently, does not constitute a “conflicting decision” within the meaning of Rule 62.02(4). One must look, she says, to cases where different legal principles are employed.

23The Respondent and Appellant agree, however, that every decision, which considers the issue of Crown liability, employs the Anns test, as noted earlier in this decision. The Respondent says the Judge properly applied the test.

24In order for this Court to find there is good reason to doubt the correctness of the Order being appealed, says the Respondent, that decision must be open to very serious debate and “substantial doubt” must be shown. The Respondent says that the Judge’s reasons for certifying

the action are, “…well reasoned, unassailable and far from open to a ‘serious debate’ ”. The Respondent says the Judge properly relied on Cooper, supra, when analyzing the test for the determination of the existence of a duty of care.

25The Respondent also outlines other cases where the Supreme Court of Canada has rejected the notion that there can be no private law duty of care owed to individuals by a statutory authority. She says even if the Judge , in applying the Anns analysis, showed that there was any doubt as to whether the Crown’s conduct was properly characterized as operational, as opposed to policy based, in order to create sufficient proximity, the Judge was required, as a matter of law, to permit the actions to proceed to trial. It was open to him to find that it was not possible to separate completely an inquiry into the question of proximity from policy considerations. The Judge did this in his decision.

26The Respondent says that the policy considerations raised in the certification Motion by the Appellant were so broadly based and unspecific to the facts in this case, that if adopted, would mean the Crown would always be immune from liability.

27The Respondent further says that even if there is reason to doubt the correctness of the Judge’s Order, the Appellant must still show that the proposed appeal involves a matter of public importance, one which transcends the interests of the particular parties. See: Greslik v. Ontario Legal Aid Plan (1988), 1988 4842 (ON SCDC), 28 C.P.C. (2d) 294, 65 O.R. (2d) 110 (Div.Ct.). The mere potential that Crown liability is engaged, does not of itself necessarily mean that a matter of public importance is at issue.

Analysis

28While the Appellant argued strongly that the Judge erred in not finding that it was plain and obvious under subsection 5(1)(a) of the CPA that there was no reasonable prospect of success that this claim would succeed, I see no such error on the Judge’s part. In my view, the Appellant does not meet either part of the test in subrules 62.02(4)(a) and (b) and Leave, therefore, cannot be granted.

29It is clear that there are decisions at the Supreme Court of Canada level relied on by each party to support their opposite propositions. I agree, however, with the Respondent that the cases must employ different legal principles to be conflicting, and that it is not sufficient to meet the test if two Courts have simply exercised their discretion differently. In Baric, supra, the very same TMJ implant device was in issue and similar arguments by the Appellant were before Madam Justice Pierce on that Motion. The Court of Appeal in Sauer, also found it was not plain and obvious that the Plaintiff’s claim would fail. I adopt that reasoning.

30It also said that the Court should be circumspect at this early state in the action in determining that the residual policy considerations make it plain and obvious there is no duty of care. These principles were applied by the Judge in reaching his decision. He also said that the question of “proximity”, should be left to Trial. In my view, it is not desirable that Leave be granted. Therefore, even if another Court found that there were conflicting cases on the plain and obvious test, it is not desirable that Leave to Appeal should be granted. The action is still at the pleadings stage and is one which appears to be much more narrow in scope than the Appellant says it is.

31With respect to the second branch of the test, I do not see that there is good reason to doubt the correctness of the decision. Neither do I see that this case involves matters of such importance that Leave should be granted. There is no longer absolute Crown immunity from such action. Therefore, the Appellant’s position that such certification will open the floodgates of such litigation, and is therefore of such public importance, that Leave should be granted, does not really apply.

32The matter is not of such importance that Leave should be granted. The matter is confined to a small group of people affected by these specific implant devices, and such a case does not appear to me to open the doors to litigation respecting all devices allowed into Canada by Health Canada. Neither is it relevant to the development of the law and the administration of justice.

33The Judge’s Reasons, at paragraphs 31 through 41, show that the Judge considered and properly applied the first branch of the Anns test, and there is no reason to doubt the correctness of his decision. He also relied on the Supreme Court of Canada’s decision in Cooper, supra, with respect to issue of proximity.

34I cannot see where the Judge erred in his analysis of the statutory framework in which this action arose. While, he found that there are no provisions of the FDA that expressly purport, “to impose either public or private duties on Health Canada”, he went on to find where it takes steps to implement policy in the FDA, including “enforcement of its provisions by inspectors” and “discretionary powers relating to enforcement,” it may be “liable for the manner in which it executes or carries out the policy.” Therefore, a private law duty of care could exist. See: para. 29 of the Reasons.

35Having met neither branch of the test for Leave in Rule 62.02(4), the Appellant’s Motion is dismissed.

36Costs of the Respondent are fixed at $7,500 plus disbursements plus GST payable forthwith.

Greer J.