DATE: 20040727

DOCKET: C40179

COURT OF APPEAL FOR ONTARIO

ABELLA, CRONK and ARMSTRONG JJ.A.

B E T W E E N:

TASK SPECIFIC REHABILITATION INC. carrying on business as “TSR CLINICS”

Sydney L. Goldenberg, for the appellant

Plaintiff (Appellant)

• and -

RICHARD STEINECKE

Ian J. Roland, for the respondent

Defendant (Respondent)

Heard: December 19, 2003

On appeal from the order of Justice Paul S. Rouleau of the Superior Court of Justice dated May 12, 2003.

ARMSTRONG J.A.:

[1] The appellant, Task Specific Rehabilitation Inc. (“TSR”), appeals the order of Rouleau J. of the Superior Court of Justice dated May 12, 2003 dismissing its action against the respondent, Richard Steinecke, as disclosing no reasonable cause of action against him. TSR, if necessary, seeks leave to appeal the motions judge’s order as to costs and if leave be granted, requests that there be no costs of the motion.

BACKGROUND

[2] TSR was engaged in the business of providing occupational therapy assessments for insurance companies and others. It retained occupational therapists who evaluated the functional abilities of persons with disabilities. The College of Occupational Therapists of Ontario (the “College”) regulates the profession of occupational therapy in the province. The College is a statutory body and is subject to the provisions of the Occupational Therapy Act, 1991, S.O. 1991, c. 33; the Regulated Health Professions Act, 1991, S.O. 1991, c. 18 (the “RHPA”); and the Health Professions Procedural Code (the “Code”), which is Schedule 2 of the RHPA.

[3] Nichol Moore was an occupational therapist retained by TSR. The College received two complaints against Ms. Moore in respect of services she had provided while employed by TSR. The College carried out an investigation of these complaints and, as a result, charges of professional misconduct were referred to the College’s discipline committee. The respondent, Richard Steinecke, was retained by the College to prosecute the complaints against Ms. Moore.

[4] Counsel for Ms. Moore and Mr. Steinecke negotiated a plea agreement whereby they proceeded before the discipline committee on an agreed statement of facts and a joint submission on penalty.

[5] The agreed statement of facts contained admissions by Ms. Moore concerning her performance of assessments and evaluations of patients referred to her by TSR. In making these admissions, she made references to TSR which cast certain protocols and tools of TSR in a negative light. She also stated that she omitted subjective observations from her reports at the direction of TSR. The agreed statement contained the following:

Ms. Moore (Butt) accepted the information, opinions and conclusions of others at TSR even though she had not verified them as being her own. In fact, in some cases, the information, opinions and conclusions were not her own. She is not able to justify them. In short, Ms. Moore (Butt) permitted her employer to improperly interfere with her independent exercise of professional judgment.

[6] The joint submission as to penalty was accepted by the discipline committee. In the result, Ms. Moore was reprimanded and required to deliver a letter to every patient and client of TSR who received an evaluation done by her or a report signed by her that contained an evaluation done by others. The letter stated that she could not justify all of the conclusions in the reports. The letter advised the recipient how to obtain a copy of the decision of the College, which included a copy of the agreed statement of facts.

[7] The insurers who referred cases for assessment to TSR received copies of the letter sent by Ms. Moore in December 2001. The insurers then obtained copies of the discipline committee’s decision. TSR alleged that an insurer, who provided the major source of TSR’s referrals, discontinued its business with TSR. TSR further alleged that by February 2002, its revenues had decreased by over 50%.

[8] TSR requested Mr. Steinecke to convene a meeting of the discipline committee when it became aware of the letter sent to its clients. Mr. Steinecke advised TSR that it had no standing to make submissions to the discipline committee and no meeting was convened.

[9] In February 2002, TSR brought an application for judicial review against the College and its discipline committee in which it sought to quash the decision of the committee and other relief. The judicial review application was settled in April 2002. In return for TSR giving a full release, the College circulated a letter to the recipients of Ms. Moore’s letters. The College’s letter stated that the decision of the discipline committee was directed at Ms. Moore’s conduct and not that of TSR.

[10] In June 2002, TSR commenced this action against Mr. Steinecke. TSR alleged that Mr. Steinecke drafted the agreed statement of facts which was false as it related to TSR. In regard to the letters written by Ms. Moore, TSR alleged that 42 of 83 letters related to assessments or conclusions reached by senior therapists at TSR and not by Ms. Moore. TSR alleged that Mr. Steinecke, in requiring all 83 letters to be sent, was knowingly and recklessly using the discipline proceeding to injure TSR even though he knew that the discipline committee had no jurisdiction over TSR.

[11] TSR asserted three causes of action against Mr. Steinecke:

(a) misfeasance in public office;

(b) abuse of process; and

(c) reckless misstatement.

[12] Mr. Steinecke moved to dismiss the action against him on three grounds:

i. Section 36(3) of the RHPA prevents the plaintiff from quoting or relying on any documents used in disciplinary proceedings. As a result several paragraphs of the claim should be struck pursuant to Rule 25 and, since these paragraphs are essential to the claim, the balance of the claim should thereafter be struck pursuant to Rule 21 as disclosing no reasonable cause of action;

ii. The plaintiff is unable to show that the defendant had a duty of care to the plaintiff and, as a result, the action should be struck as disclosing no reasonable cause of action pursuant to Rule 21; and

iii. The claim, to the extent that it is based on misfeasance in public office, should be struck pursuant to Rule 21 since the defendant cannot be characterized as someone holding public office.

[13] The motions judge struck out the impugned paragraphs of the statement of claim and dismissed the action on the first ground above.

[14] TSR raised two issues in this appeal:

(i) does ss. 36(3) of the RHPA, as interpreted by this Court in M.F. v. Sutherland, (2000), 188 D.L.R. (4th) 296 (C.A.), render inadmissible in this action any documents prepared for the discipline proceeding, the record of that proceeding and the order or decision of the committee; and

(ii) even if the RHPA provision does not so apply, is it plain and obvious that the statement of claim discloses no cause of action?

ANALYSIS

Does section 36(3) of the RHPA render inadmissible the discipline proceeding documents?

[15] Section 36(3) of the RHPA provides:

Evidence in civil proceedings

36.(3) No record of a proceeding under this Act, a health profession Act or the Drug and Pharmacies Regulation Act, no report, document or thing prepared for or statement given at such a proceeding and no order or decision made in such a proceeding is admissible in a civil proceeding other than a proceeding under this Act, a health profession Act or the Drug and Pharmacies Regulation Act or a proceeding relating to an order under section 11.1 or 11.2 of the Ontario Drug Benefit Act.

[16] The case, as pleaded against Mr. Steinecke, is based upon documents (the “discipline documents”) prepared for the discipline proceeding against Ms. Moore and is therefore a proceeding to which s. 36(3) of the RHPA applies. The parties are ad idem that if such documents are inadmissible in this action, then the action cannot succeed.

[17] The motions judge held that the discipline documents were inadmissible and in so doing relied upon this Court’s decision in Sutherland. In that case, M.F. made a complaint to the College of Physicians and Surgeons alleging that Dr. Sutherland had sexually abused her. She also sued him for damages for sexual assault and breach of fiduciary duty. The civil action was settled and Dr. Sutherland agreed to pay M.F. $500,000 over time. On the settlement of the action, M.F. signed a sworn statement recanting her allegations of sexual abuse. The complaint before the College of Physicians and Surgeons was withdrawn. Dr. Sutherland then refused to make any further payments pursuant to the settlement. M.F. issued a statement of claim to enforce the settlement. Dr. Sutherland delivered a statement of defence and counter-claim in which he alleged that M.F.’s complaints of sexual abuse were made fraudulently and in bad faith and that the settlement was void. In his statement of defence, he referred to M.F.’s written complaint to the College and her subsequent recantation. Counsel for M.F. brought a motion to strike out that part of the pleading which referred to the complaint and subsequent recantation. The motions judge granted the motion, relying on s. 36(3) of the RHPA.

[18] The decision of the motions judge was upheld by the Divisional Court. On appeal in this Court, counsel for the doctor argued that s. 36(3) of the RHPA had no application where the allegations in a document are made fraudulently or in bad faith. In essence, counsel for Dr. Sutherland took the same position as counsel for TSR has taken in the case at bar. In Sutherland, Laskin J.A. concluded that the plain meaning of s. 36(3) made it clear that the complaint and recantation of M.F. were not admissible in the civil action and therefore the parts of the pleading referring to them could not stand.

[19] The appellant in this case submits that the majority in Sutherland failed to consider the legislative intent of s. 38 of the RHPA, i.e., that the administrators of the RHPA could be held liable for damage they caused by the exercise of their powers in bad faith. Section 38 provides as follows:

38. No action or other proceeding for damages shall be instituted against the Advisory Council, a College, a Council, or a member, officer, employee, agent or appointee of the Advisory Council, a College, a Council, a committee of a Council or a panel of a committee of a Council for an act done in good faith in the performance or intended performance of a duty or in the exercise or the intended exercise of a power under this Act, a health profession Act, the Drug and Pharmacies Regulation Act or a regulation or a by-law under those Acts or for any neglect or default in the performance or exercise in good faith of the duty or power.

[20] TSR argues that if the motions judge’s order in this case stands, the ability to pursue remedies for wrongs suffered, arising from a discipline process under the RHPA, will be severely restricted. It further submits that the effect of the motions judge’s interpretation of s. 36(3) will be to limit or preclude a right of action which is expressly preserved by s. 38.

[21] TSR, in effect, seeks to read into s. 36(3) the bad faith exception which is expressly included in s. 38.

[22] It is my view that this issue was clearly decided by this Court in Sutherland. Laskin J.A. dealt in that case with both s. 36(3) and s. 38 of the RHPA. The following excerpts from his reasons in Sutherland are dispositive of this appeal:

The wording of s. 36(3) contains no exception for fraud or bad faith. To accept Dr. Sutherland’s argument would require the court to qualify the ordinary meaning of s. 36(3), to read words into the section to limit its application. I reject this argument.

I find no relevant indicators of legislative meaning to displace the presumption in favour of the ordinary meaning of s. 36(3). The purpose of s. 36(3) is to encourage the reporting of complaints of professional misconduct against members of a health profession, and to ensure that those complaints are fully investigated and fairly decided without any participant in the proceedings – a health professional, a patient, a complainant, a witness or a College employee – fearing that a document prepared for College proceedings can be used in a civil action. This purpose would be defeated by reading a fraud or bad faith exception into s. 36(3). The mere allegation of fraud or bad faith, however unfounded, could make the provision inapplicable.

Section 36(3) is one of a number of legislative provisions whose broad objective is to keep College proceedings and civil proceedings separate. Section 36(1) provides for the confidentiality of information that comes to the knowledge of College employees; and s. 36(2) provides that College employees cannot be compelled to testify in civil proceedings about matters that come to their knowledge in the course of their duties.

Moreover, another provision of the RHPA, s. 38, shows that had the Legislature intended a fraud or bad faith exception in s. 36(3) it would have said so expressly. Section 38 gives various College, Board and Council employees and committee members immunity from lawsuits for acts done in the performance of their duties as long as the acts are “done in good faith.”

[23] After the argument of this appeal, the Supreme Court of Canada released its judgment in Finney v. Barreau du Québec, 2004 SCC 36. We were invited to consider that judgment by counsel for the appellant. In that case, the plaintiff brought an action for damages against the Barreau for breach of its obligation to protect the public in the handling of complaints made by her against her former lawyer. At the heart of the case was the lack of diligence and delay in acting by the Barreau in an urgent situation in which a practising lawyer presented a real danger to the public.

[24] In the Barreau case, the court considered the scope of s. 193 of the Professional Code, R.S.Q., c. C-26 which provides:

The syndics, assistant syndics, corresponding syndics, the investigators and experts of a professional inspection committee, the members of the Office, of a Bureau, of a committee on discipline, of a professional inspection committee or of a committee of inquiry established by a Bureau, and the members of a tribunal hearing an appeal from a decision by a committee on discipline or by a Bureau, shall not be prosecuted for acts done in good faith in the performance of their duties.

[25] As can be seen, s. 193 of the Professional Code is generally similar in scope to the immunity provision in s. 38 of the RHPA. However, the Barreau case does not address the issue raised by s. 36(3) of the RHPA in the case at bar and, in my view, does not assist.

[26] Due to the conclusion I have reached with respect to the first issue on this appeal, it is unnecessary to address the second issue raised by TSR. I would therefore dismiss the appeal.

APPEAL AS TO COSTS AWARDED BY THE MOTIONS JUDGE

[27] The appellant seeks leave to appeal the order of the motions judge which fixed costs at $15,846.35 including Goods and Services Tax. I do not see any basis for interfering with the motions judge’s discretion in awarding costs. I would therefore dismiss the application for leave to appeal.

COSTS OF THE APPEAL

[28] The respondent is entitled to his costs of this appeal which I would fix on a partial indemnity scale at $8,000 including disbursements and Goods and Services Tax.

RELEASED:

“JUL 27 2004” “Robert P. Armstrong J.A.”

“RSA” “I agree R.S. Abella J.A.”

“I agree E.A. Cronk J.A.”