DATE: 20031205

DOCKETS: C39589, C39630 and C40018

COURT OF APPEAL FOR ONTARIO

RE: S. JOYCE ATTIS and A. TESLUK (Plaintiffs) - and - HER MAJESTY THE QUEEN IN RIGHT OF CANADA AS REPRESENTED BY THE MINISTER OF HEALTH, THE ATTORNEY GENERAL FOR CANADA, REGULATORY INSTITUTION 1, REGULATORY INSTITUTION 2, JOHN DOE and JANE DOE (Defendants/ Respondents) - and - HER MAJESTY THE QUEEN IN RIGHT OF THE PROVINCE OF ONTARIO, AS REPRESENTED BY THE MINISTER OF HEALTH AND LONG-TERM CARE (AN UNNAMED PARTY SUBROGATED TO THE PLAINTIFFS’ CAUSE OF ACTION PURSUANT TO THE HEALTH INSURANCE ACT, R.S.O. 1990, c. H.6, as amended) (Appellant) - and - DOW CORNING CORPORATION, DOW CORNING WRIGHT and DOW CORNING CANADA INC. (Added Parties/Respondents) - and - BAXTER INTERNATIONAL INC., BAXTER HEALTH CARE CORPORATION AND BAXTER CORPORATION, COOPER SURGICAL INC., MEDICAL ENGINEERING CORPORATION AND ZIMMER OF CANADA LIMITED, McGHAN MEDICAL CORPORATION, CUI CORPORATION and INAMED CORPORATION (Added Parties)

BEFORE: CATZMAN, SIMMONS and GILLESE JJ.A.

COUNSEL: John Legge and Grace Tsang for the plaintiffs

Christopher A. Amerasinghe, Q.C., Suzanne Duncan and James Max Soldatich for the defendant (respondent) Her Majesty the Queen in Right of Canada as represented by the Minister of Health and the Attorney General of Canada

James M. Newland for the appellant Her Majesty the Queen in Right of the Province of Ontario

S. Wayne Morris and Delora Deravi for the added parties (respondents) Dow Corning Corporation

HEARD: November 24 and 25, 2003

On appeal from the order of Justice Warren K. Winkler of the Superior Court of Justice, dated January 27, 2003.

E N D O R S E M E N T

[1] For convenience, we deal with these appeals in the order in which they were argued.

THE OHIP APPEAL

[2] OHIP appeals from the motions judge’s order striking its claim. The motions judge did so on the basis that the Dow Settlement Agreement (the “Dow Agreement”) fully compromised and settled OHIP’s subrogated claim in respect of all insurable medical expenses, past, present and future, incurred by members of the plaintiffs’ class. We agree.

[3] Although we accept the submission that clauses 6.5 and 11.5 of the Dow Agreement reserve the rights of the plaintiffs’ class against other wrongdoers, the motions judge found that the OHIP claim was fully satisfied. The plaintiffs’ claim, as it is asserted in this action, is broader than that of OHIP. There is nothing left to the OHIP claim for expenses associated with health care provided to the plaintiffs as a result of the breast implants, whereas the plaintiffs in the present action are asserting new claims including, for example, several damages for regulatory negligence.

THE MOTION AND CROSS-MOTION RELATING TO ADMISSION OF FURTHER EVIDENCE

[4] The motion (by Dow Corning) and the cross-motion (by OHIP) were directed to an issue raised by OHIP for the first time on appeal. There is no suggestion that the plaintffs’ counsel did not have the authority to execute the Dow Agreement, which included the settlement of OHIP’s subrogated claims. In light of our conclusion, above, we do not need to decide the motion and cross-motion.

THE ATTORNEY GENERAL’S APPEAL

[5] The Attorney General appeals the motions judge’s order dismissing its motion to dismiss the plaintiffs’ action in its entirety.

[6] We agree with the motions judge’s determination of this issue and with the reasons he gave. He dismissed the Attorney General’s motion because he did not accept that the Settlement Agreements were “subject matter releases” that barred any proceeding of any nature or kind against any person or entity based on the breast implants. He concluded that the Settlement Agreements barred any proceeding against any released party but did not bar any proceeding asserting a several liability claim against another party who might then seek to add a released party as a third party. He ordered the plaintiffs to amend their statement of claim to limit their claim to the several liability of the Attorney General, failing which their claim would be struck. As he noted, if there are no several damages, that matter may be dealt with after a trial or on a motion differently constituted on a full record.

[7] The Attorney General submitted that it was a third party beneficiary to the Dow Agreement and ought to be able to rely on its provisions. We agree with the motions judge that there is no basis to support an inference that the Dow Agreement was intended to protect the Attorney General.

[8] The Attorney General argued that it was an abuse of process for the plaintiffs to settle all claims relating to the breast implants and thereafter elect to sue the government regulator for the same damages. In our view, the answer is that the cause of action asserted in the present case is different in nature and kind from the claim that the plaintiffs settled in the previous proceedings. For the same reason, we reject the submission that it was an abuse of process for the plaintiffs to have failed to sue the Attorney General in the prior proceedings and that it was an abuse of process for the plaintiff Attis, who made a claim against Dow in the Chapter 11 proceeding in the United States, to make the claim asserted in the present action against the government regulator in Canada.

THE DOW APPEAL

[9] Dow’s main argument is very similar to the first argument of the Attorney General for Canada: that the advancement of the claims in the present action is a violation of the Dow Agreement in which the plaintiffs waived all of their claims relating to breast implants.

[10] For the reasons given above, we disagree. The causes of action advanced in the present action differ in nature and kind from those asserted in the prior proceedings, and the plaintiffs’ agreement to indemnify Dow with respect to any award relating to defective breast implants is not tantamount to an agreement not to sue anyone, including a claim for several liability against the government regulator.

[11] Dow argues that Attis attorned to the jurisdiction of the Bankruptcy Court in the United States by filing her claim there and that she is bound by the terms of the waiver and release of Dow implant claims in that proceeding. We have not been referred to any such waiver and release but, in any event, the causes of action in the two proceedings are different and Attis is not disentitled from bringing the present action by reason of the claim she has filed in the American proceeding.

DISPOSITION

[12] All of the appeals against the motions judge’s order are dismissed. The plaintiffs are entitled to their costs against the Attorney General, in the amount of $10,000, and against Dow, in the amount of $5,000. The Attorney General is entitled to costs of $2,500 against OHIP. Dow is entitled to costs of $1,500 against OHIP. All figures are inclusive of fees, disbursements and G.S.T. and include costs reserved to this panel of the motion and cross-motion for leave to admit further evidence.

Signed: “M.A. Catzman J.A.”

“Janet Simmons J.A. “E.E. Gillese J.A.