CITATION: Drady v. Canada (Health), 2008 ONCA 659
DATE: 20080930
DOCKET: C47556
COURT OF APPEAL FOR ONTARIO
Lang, Juriansz and MacFarland JJ.A.
BETWEEN
Kevan Drady
Plaintiff (Appellant/Respondent by Cross-Appeal)
and
Her Majesty the Queen in Right of Canada as represented by the Minister of Health, The Attorney General of Canada
Defendant (Respondent)
and
Baxter Healthcare Corporation, Baxter International Inc., Inamed LLC, Dow Corning Corporation, DCC Litigation Facility Inc., Medtronic Xomed Surgical Products Incorporated, Smiths Medical Canada Ltd.., Bristol Myers Squibb Company, Religious Hospitallers of Saint Joseph of the Hôtel Dieu of Kingston, Dr. A.K. Wyllie
Third Parties (Respondents/Appellants by Cross-Appeal)
Kirk M. Baert, Celeste Poltak and John Legge, for the appellant/respondent by cross-appeal
Paul J. Evraire and James Max Soldatich, for the respondent, Her Majesty the Queen in Right of Canada as represented by the Minister of Health, the Attorney General
Patrick O'Kelly, for the respondent/appellant by cross-appeal, Medtronic Xomed Surgical Products Incorporated
S. Wayne Morris, for the respondent/appellant by cross-appeal, Dow Corning Corporation and DCC Litigation Facility Inc.
Christopher Wirth, for the respondent/appellant by cross-appeal, Inamed LLC
Laura F. Cooper, for the respondent/appellant by cross-appeal, Bristol Myers Squibb Company
Lisa M Constantine, for the respondent/appellant by cross-appeal, Dr. A.K. Wyllie
Barry L. Glaspell, for the respondent/appellant by cross-appeal, Religious Hospitallers of Saint Joseph of The Hôtel Dieu of Kingston
Mirilyn Sharp, for the respondents/appellants by cross-appeal, Baxter Healthcare Corporation and Baxter International Inc.
Robby Bernstein, for the respondent/appellant by cross-appeal, Smiths Medical Canada Ltd.
Heard: May 26, 2008
On appeal from the order of Justice Maurice C. Cullity of the Superior Court of Justice, dated July 17, 2007 and reported at 2007 27970.
Lang J.A.:
I. INTRODUCTION
[1] This appeal raises issues similar to those raised in Attis v. Canada (Minister of Health). The reasons in Attis are being released at the same time as the reasons in this appeal.
[2] In this case, the appellant, Kevan Drady, contends that he has pleaded the necessary elements to hold the respondent, Her Majesty the Queen in Right of Canada (Health Canada), liable in negligence for a breach of an alleged private law duty of care owed to recipients of silastic devices used in temporomandibular joints (TMJ implants). Such implants are medical devices under the Food and Drug Act, R.S.C. 1985, c. F-27 (the FDA or the Act) and the regulations under that Act.
[3] Under rule 21.01(1)(b) of the Rules of Civil Procedure, the motion judge, Cullity J., dismissed the appellant’s claim on the basis that it was plain and obvious that the claim disclosed no cause of action.
II. BACKGROUND
Facts
[4] Since about 1968, TMJ implants have been sold in Canada. In 1981, the appellant received such an implant. The appellant alleges the implant was unsafe and caused irreversible consequences that left him disabled and in pain. Since the device implanted in the appellant was unlabelled, he was unable to identify its manufacturer. In that circumstance, the appellant sued Health Canada in this proposed class proceeding under the Class Proceedings Act, 1992, S.O. 1992, c. 6 (the CPA). He seeks to represent all persons resident in Canada who suffered damages from TMJ implants (except residents of British Columbia or Quebec).
[5] Health Canada delivered a statement of defence. It also issued a third party claim against the potential manufacturers of the devices, the appellant’s surgeon and the hospital where the appellant received his implant.
[6] For reasons analogous to those given in Attis, and for the reasons that follow, it is my view that it is plain and obvious that the appellant’s pleadings do not and cannot establish that Health Canada owed him a private law duty of care. Accordingly, I would dismiss the appeal.
Nature of the claim
[7] As in Attis, the appellant’s pleadings consist of his statement of claim and his reply. The reply effectively served as an amended statement of claim.
[8] In essence, the appellant alleges that Health Canada failed to properly regulate the TMJ industry as a whole. He pleads that Health Canada, in the course of implementing a comprehensive regulatory scheme, failed to ensure the implants’ safety and regulatory compliance. He alleges that scientific staff at Health Canada knew about the danger posed by the implants, including their unsuitability for prolonged implantation. In those circumstances, the appellant alleges that members of Health Canada’s senior staff were negligent in failing to prohibit the devices and to warn the public and users about their risks. The appellant argues that, by its negligence, Health Canada increased the risk of harm to implant users. The appellant pleads that Canadian residents hold a reasonable expectation that all medical devices comply with the regulatory scheme. Accordingly, he argues, Health Canada owed consumers, including the appellant, a private law duty of care.
[9] The claim focuses on Health Canada’s alleged negligence in its dealings with Vitek Inc. (Vitek), an implant manufacturer. The appellant alleges that, from 1983, Health Canada failed to require Vitek to obtain a Notice of Compliance for its implants and, pending such a Notice, to prevent the sale of, or issue warnings about, the implants.
[10] According to the appellant’s pleadings, in 1987, Vitek applied for a Notice of Compliance. Health Canada rejected Vitek’s application, requested further data and issued a direction prohibiting the sale of Vitek implants. In response, Vitek argued that a Notice of Compliance was only needed for “new” devices and, since its devices predated the 1983 regulatory amendments, they were “grandfathered”. Nonetheless, Vitek filed a revised submission in 1988. At that time, Health Canada asked Vitek for safety and efficacy test results. Health Canada also listed Vitek implants in its database as though they had received a Notice of Compliance. Health Canada compounded the mistake in its 1989 newsletter where it listed Vitek as compliant. The appellant pleads that, when Health Canada recognized its mistakes, it took no steps to inform the medical profession or the public about Vitek’s non-compliant devices. In addition to Health Canada’s specific dealings with Vitek, the appellant pleads that Health Canada negligently regulated all TMJ implants.
[11] The appellant relies on other allegations of negligence. In 1990, Instrumentarium Inc., a Canadian distributor, issued a recall of Vitek’s TMJ implants and notified surgeons about the recall. The same year, the U.S. authorities notified Health Canada that it was recalling Vitek implants. In 1991, Health Canada asked specific voluntary professional associations to publish and disseminate information about Vitek implants. Yet, the appellant pleads that Health Canada did not make the same request of professional regulatory authorities or hospitals, and waited until 1994 to issue a National Import Alert to prevent entry of the implants into Canada. Finally, the claim pleads, Health Canada never disseminated any information about the implants to the public.
[12] The appellant alleges Health Canada negligently failed to prohibit, test, assess, monitor and warn about the devices. He also alleges that Health Canada was negligent in applying a risk-benefit analysis to all implants, including Vitek implants. As well, the appellant alleges negligence on the part of Health Canada in grandfathering old devices; in failing to enforce the Act and regulations, including labelling requirements; and in failing “to respond to requests for information made by members of the public concerning devices”. The appellant also alleges Health Canada was negligent in failing to provide an information package to the public regarding all TMJ implants and in allowing a recall of implants without informing the recipients about their risks. The appellant argues a proximate relationship based on Health Canada’s implementation of policies by “partial” and “inadequate” measures, which, he alleges, created a “relationship of dependency by members of the public” on Health Canada. The appellant argues that this negligence, which is alleged to be gross negligence, was operational in nature.
[13] In his factum, the appellant summarizes his claim concisely, saying that he, as well as all users of the implants and medical professionals, reasonably expected that all implanted medical devices had been approved by Health Canada in accordance with its statutory scheme. Accordingly, he argues, in the absence of any warning from Health Canada, he was entitled to assume the TMJ implant was an approved and compliant device. Since Health Canada allegedly knew that the device was unsuitable, dangerous and unlabelled, it was under a duty to stop the sale and to warn individual consumers.
[14] I note that the claim in this case is solely against Health Canada. The appellant makes no claim against the parties named in Health Canada’s third party claim, including the TMJ manufacturers. Finally, according to the pleadings, the appellant’s factum, and the undertaking of appellant’s counsel, the claim is only for Health Canada’s “several” liability, which the appellant intended to be a claim only for damages caused by Health Canada, and not for those caused by any of the third parties.
The legislative scheme
[15] The applicable legislative scheme is the same one discussed in Attis, including the Department of Health Act, S.C. 1996 c. 8 and the FDA. The regulations under the FDA were, initially, the Food and Drug Regulations, C.R.C. (1955) (the FDR). The FDR later became the Medical Devices Regulations, currently SOR/98-282 (the MDR). Section 18 under the earlier version of the FDA (S.C. 1952-53, c. 38), later s. 19 of the FDA, provides that “[n]o 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.”
[16] Section 20 of the FDA prohibits labelling, packaging, treating, processing, selling, or advertising any device in a manner that is misleading regarding the item’s “design, construction, performance, intended use, quantity, character, value, composition, merit or safety”. A similar provision was contained in s. 19 of the earlier version of the FDA. The FDA further provides, under s. 21 (previously s. 20), that where a standard has been prescribed for a device, no person shall label, package, sell or advertise any article in such a manner that it is likely to be mistaken for such device, unless the article complies with the prescribed standard.
[17] The version of the MDR in force when the appellant received his implant required the manufacturer to notify Health Canada within ten days of the first sale of a medical device (s. 24(1)). The notification was required to include the device’s name, its manufacturer and distributors, its model designation, its recommended purpose, its directions for use and a copy of any label and package inserts. Under the version of the MDR (R.R.C. c. 871, s. 6(1)) in force during the period when the appellant received his implant, manufacturers continued to be required to label devices in accordance with the regulations.[^1] Labels were required to include information such as: (a) the name of the device; (b) the name and address of the manufacturer, distributor or importer of the device; (c) the lot number or serial number of the device; (d) the model designation of the device, if applicable; (e) the precise nature of the benefits claimed to be obtainable through the use of the device; (f) directions for use of the device; (g) information as to whether the device is sterile; and (h) the expiration date of the device, if applicable.
[18] As noted in Attis, after 1982 a manufacturer of an implantable medical device was required to submit safety and efficacy tests to Health Canada regarding “new” devices (C.R.C., c. 871, SOR/82-914). If satisfied with the results, Health Canada would issue a Notice of Compliance. Devices already on the market were excluded from this requirement. In 1998, the regulations were amended to provide for a licensing scheme.
[19] At no time have the regulations required or authorized Health Canada to issue warnings to consumers. However, the appellant in this case pleads that ss. 10, 11, and 15 of the current version of the MDR, which provide that the manufacturer must reduce the risk of injury as much as possible, contravene the FDA, which “prohibits injury to the patient.” He also challenges the regulations’ provisions for recalls, arguing that the stated purpose of the legislation required that recalls be mandatory, not voluntary.
The motion judge’s decision
[20] In concluding that the appellant’s pleadings did not raise a tenable cause of action in negligence, the motion judge reasoned, at para. 20, that the FDA and the regulations were not geared to protecting private interests and that a cause of action could not be established against Health Canada for “not obtaining regulations, or not regulating in a particular manner”.
[21] The motion judge also concluded that the appellant’s inability to name the manufacturer of his implant was fatal to his claim. This conclusion was premised on the basis that the appellant could not demonstrate a proximate relationship with Health Canada when the appellant could not show he had received a device from a manufacturer regulated by Health Canada. In the absence of an identified manufacturer, the motion judge determined that there was a lack of the necessary “causal connection between the plaintiff, the device and its vendor” (para. 24). The motion judge concluded that this problem was not cured by the appellant’s allegation that it was Health Canada’s negligence that led to the device being unlabelled. On this basis, the motion judge concluded that the appellant’s claim disclosed no reasonable cause of action against Health Canada in negligence.
The motion judge’s decision in Taylor v. Canada
[22] Two months after the release of his reasons in Drady, the motion judge released his reasons in Taylor v. Canada (Minister of Health) (2008), 2007 36645 (ON SC), 285 D.L.R. (4th) 296, leave to appeal refused (2008), 2007 55708 (ON SCDC), 289 D.L.R. (4th) 567 (Div. Ct.). In that case, the motion judge dismissed Health Canada’s motion to strike on the basis that it was not plain and obvious that the Taylor claim disclosed no cause of action. Taylor was also a proposed class proceeding that involved allegations of negligence in Health Canada’s regulation of TMJ implants. In his reasons in Taylor, the motion judge observed that the Taylor allegations were “virtually identical” to those in Drady (para. 9).
[23] However, since the plaintiff in Taylor was able to identify the implant manufacturer as one regulated by Health Canada, Taylor did not fail on the ground of an inability to identify the manufacturer. Thus, the motion judge proceeded to consider whether the Taylor pleadings raised a reasonable cause of action. He concluded that they did, based on the Taylor pleading that Health Canada “took a lead role in alerting the public to safety concerns with medical devices” and represented that a Notice of Compliance meant Health Canada was satisfied with the reasonable probability of the safety of the devices (para. 29).
[24] In Taylor, the motion judge acknowledged that proximity considerations belong at the first stage of the analysis prescribed by the House of Lords in Anns v. Merton London Borough Council, [1978] A.C. 728, while broader policy considerations, such as the distinction between policy and operational decisions, belong at the second stage. However, he concluded that he could not separate the policy/operational considerations from the proximity analysis.
[25] Although the motion judge recognized that Health Canada’s statutory enforcement powers were discretionary, and only gave rise to an immune public law duty of care, he was also of the view that the pleadings raised operational decisions on the part of Health Canada. Those decisions included the dissemination of erroneous information about the issuance of a Notice of Compliance. Such decisions, he concluded, “could only have encouraged the importer/distributor to believe that it could ignore” its obligations with impunity. He determined at para. 39 that this could arguably support a finding that Health Canada’s conduct “increased the risk to the health of the plaintiff and other potentials recipients” (emphasis added). This, he decided, would give rise to a relationship of proximity.
[26] In support of this determination, the motion judge relied on Sauer v. Canada (Attorney General) (2008), 2007 ONCA 454, 225 O.A.C. 143 (C.A.), leave to appeal refused, [2007] S.C.C.A. No. 454, Swanson Estate v. Canada (1991), 1991 8226 (FCA), 80 D.L.R. (4th) 741 (F.C.A.), his own decision in Williams v. Canada (Minister of Health) (2006), 2005 29502 (ON SC), 76 O.R. (3d) 763 (S.C.) and the Supreme Court of Canada’s decision in Childs v. Desormeaux, 2006 SCC 18, [2006] 1 S.C.R. 643.
III. ISSUES
[27] The determinative issue on this appeal is whether the motion judge erred in concluding that it was plain and obvious that the appellant’s pleading did not, and could not, disclose a duty of care sufficient to sustain a cause of action.
IV. STANDARD OF REVIEW
[28] The parties do not disagree that correctness is the appropriate standard of review on appeal and that, as discussed in Attis, the moving party under rule 21.01(1)(b) must demonstrate that it is plain and obvious that the claim cannot succeed.
V. ANALYSIS
[29] The appellant argues that the motion judge erred in basing his decision in a pleadings motion on a credibility finding. The appellant argues that the following sentence from the motion judge’s reasons discloses the impermissible credibility finding: “I do not believe the allegation that the plaintiff's inability to [name the device] was caused, or contributed to, by the Crown’s failure to require all implants to be labelled, and information to be provided, in accordance with regulations under the FDA materially alters the situation” (para. 25).
[30] In my view, this sentence does not mean that the motion judge made a credibility finding about the appellant’s allegation. Rather it means only that the appellant’s allegation that the Crown failed to require labelling did not “materially alter” the trial judge’s conclusion because that inability, not the cause of the inability, was itself fatal to the appellant’s claim. In the motion judge’s view, the scope of any duty on the part of Health Canada did not extend to those who did not receive a Vitek implant. However, the motion judge was also of the view that the appellant could not lay the blame for his inability to name the manufacturer on Health Canada because any duty on Health Canada to ensure proper product labelling was not owed to the appellant or the individual user. Any such duty was owed only to the public at large. Thus, the motion judge decided that the appellant’s inability to establish a private law duty of care to ensure labelling was fatal to his cause of action against Health Canada.
[31] I agree with the motion judge that the duty to require labelling is a public duty. However, in my view, the motion judge erred to the extent that he based his decision on the non-identification of the manufacturer. I take this view because the pleadings allege regulatory negligence far beyond that of a duty to ensure labelling.
[32] Health Canada conceded on appeal that the device came into Canada under its auspices, regardless of the manufacturer, and Health Canada acknowledged its responsibility to regulate the device. Since it is alleged that a component of Health Canada’s negligence was a failure to properly regulate all TMJ implants in a number of respects, in my view, it was an error to strike the claim on the basis of the non-identification.
[33] The appellant argues that, but for this error, the motion judge would have dismissed the motion to strike on the basis of the reasons in Baric v. Tomalk (2006), 38 C.C.L.T. (3d) 300 (Ont. S.C.), as well as on the basis of the motion judge’s subsequent reasoning in Taylor. In Attis, I have discussed my reasons why Baric cannot assist a plaintiff in establishing a claim against the government for negligent regulation of a medical device.
[34] In addition, I am unable to agree with the motion judge’s analysis in Taylor because that analysis began by addressing whether the alleged conduct reflected operational or policy decisions. In my view, this distracted the analysis from the proper first-stage consideration of proximity. The Supreme Court of Canada has specifically instructed that the question of proximity must be addressed first. This is because proximity depends on the relationship between the parties. In the absence of a proximate relationship, there is no duty of care and no need to consider second-stage policy considerations. The Supreme Court of Canada has clearly instructed that the question of whether the challenged decision was of an operational or policy nature belongs at the second stage: see Cooper v. Hobart, 2001 SCC 79, [2001] 3 S.C.R. 537 and Edwards v. Law Society of Upper Canada, 2001 SCC 80, [2001] 3 S.C.R. 562. At para. 38 of Cooper, McLachlin C.J. and Major J. explained that government immunity from liability for policy decisions, as contrasted with operational decisions, is provided “because of considerations outside the relationship for policy reasons -- more precisely, because it is inappropriate for courts to second-guess elected legislators on policy matters.” Thus, immunity for policy decisions is not dependent on the relationship between the parties. The analysis must proceed as mandated by the Supreme Court of Canada.
[35] Accordingly, it is necessary to re-visit the appellant’s pleadings to determine whether they could support a prima facie duty of care. The companion case of Attis discusses the approach required to determine whether a duty of care will be recognized in a given case on a pleadings motion. Specifically, Attis reviews the duty of care test on a motion to strike and the current state of the jurisprudence with regard to the test set out in Anns and in the Supreme Court of Canada’s subsequent decisions of Kamloops (City) v. Nielsen, 1984 21 (SCC), [1984] 2 S.C.R. 2, Cooper, Edwards, Finney v. Barreau du Québec, 2004 SCC 36, [2004] 2 S.C.R. 17, and, most recently, Holland v. Saskatchewan, 2008 SCC 42, [2008] S.C.J. No. 43 (see also the earlier Supreme Court of Canada decision of The Queen in Right of Canada v. Saskatchewan Wheat Pool, 1983 21 (SCC), [1983] 1 S.C.R. 205 regarding breach of statutory duty). Attis also reviewed other relevant cases, such as Sauer, Eliopoulos v. Ontario (Minister of Health and Long-Term Care) (2007), 2006 37121 (ON CA), 82 O.R. (3d) 321 (C.A.), and Klein v. American Medical Systems, Inc. (2007), 2006 42799 (ON SCDC), 84 O.R. (3d) 217 (Div. Ct.).
[36] The sole issue in this case regarding the first stage of the analysis is proximity. Was the appellant in such a close and direct relationship with Health Canada to make it fair and just that Health Canada be held liable?
[37] As I observed in Attis, the legislative scheme in place at the time does not support a finding of proximity. The scheme was aimed at regulating devices with the cooperation of the industry. It required manufacturers, distributors and importers to take responsibility for product safety and to comply with certain requirements, including providing proper labels, product monographs and requested safety information. Manufacturers and distributors were required not to sell non-compliant devices.
[38] While the FDA and its regulations provided mechanisms for Health Canada to enforce compliance, enforcement was entirely discretionary. It was not mandatory. Moreover, the legislative scheme envisaged no relationship between Health Canada and the consumer of the medical devices. It follows that a private law duty of care to the individual consumer cannot be inferred from the regulatory scheme. While undoubtedly Health Canada owed a public law duty of care to the residents of Canada generally, the law is clear that a breach of such a public law duty does not give rise to a private law cause of action.
[39] Accordingly, largely for the reasons given in Attis, I would dismiss the appellant’s claim insofar as it alleges a breach of statutory duty, including a failure to enact preventative regulations, the enactment of regulations that failed to fulfill the objectives of the FDA, the enactment of regulations ultra vires the legislative framework, and a failure to enforce regulations.
[40] In the absence of a duty based solely on the statutory framework, I will consider whether Health Canada assumed a proximate relationship with the appellant rooted in the interactions between the parties. According to the authorities discussed in Attis, if the parties’ reasonable expectations, representations or reliance demonstrate a close and direct relationship, there may be a basis to conclude that it is fair and just to impose liability.
[41] A relationship of direct interaction was the basis for the conclusion in Finney that the Barreau owed a private law duty of care to the plaintiff, who had repeatedly complained to the Barreau about a lawyer’s conduct. As LeBel J. noted at para. 46, proximity arose from the Barreau’s relationship with a clearly identified complainant.
[42] Proximity was also adequately pleaded in Sauer on the basis of the many express public representations by the government that it was acting for the explicit purpose of protecting the commercial cattle farmers. These representations supported the plaintiffs’ allegation that the government assumed a private law duty to act on behalf of the farmers.
[43] In Swanson, the Federal Court of Appeal held the government regulator liable in negligence. However, that case involved specific complaints to the regulator. More importantly, Swanson focused on the operational/policy distinction without first considering the issue of proximity. In my view, that focus no longer survives the subsequent direction in Cooper and Edwards that this distinction is properly considered at the second stage, and not the first stage, of the analysis. Thus, Swanson cannot be read to support the appellant’s argument concerning proximity.
[44] In my view, Taylor also does not assist the appellant in demonstrating a proximate relationship. In Taylor, the motion judge relied on Childs for his conclusion that increasing risk to a complainant can be the proper foundation for a proximate relationship.
[45] At paras. 31-40 of Childs, McLachlin C.J., in considering the distinction between misfeasance and non-feasance, discussed the factors that bring those who are otherwise strangers into proximity. In that context, at para. 37, citing Dunn v. Dominion Atlantic Railway Co. (1920), 1920 470 (SCC), 60 S.C.R. 310, Jordan House Ltd. v. Menow, 1973 16 (SCC), [1974] S.C.R. 239 and Doe v. Metropolitan Toronto (Municipality) Commissioners of Police (1998), 1998 14826 (ON SC), 39 O.R. (3d) 487 (Gen. Div.), McLachlin C.J. referred to the duty of those who exercise a public function or offer a service to the general public that includes “implied responsibilities to the public at large” together with “attendant responsibilities to act with special care to reduce risk.” At para. 39, McLachlin C.J. observed that “the law does not impose a duty [on third parties] to eliminate risk”, except where those third parties “have a special relationship to the person in danger or a material role in the creation or management of the risk”. However, whether such a duty arises depends on the reasonable reliance and expectations of the parties (Childs at para. 40).
[46] In my view, neither Childs, nor the cases referred to in Childs, assist the appellant in this case. Dunn involved the liability of a railway company where a railway conductor ejected a drunken passenger in an isolated area late at night. The passenger was later found dead on the railway tracks. The passenger’s estate succeeded in a claim against the railway company in negligence for leaving the passenger at risk when he was not able to take care of himself. Thus, a relationship of proximity is readily demonstrated on the facts of the case.
[47] Similarly, Jordan House Ltd. dealt with a proximate relationship where a commercial host, a tavern, was found negligent for continuing to serve and then evicting a patron who was too intoxicated to care for himself. The relationship in that case was held to be that of invitor/invitee and, accordingly, was proximate.
[48] Finally, Doe involved the relationship between the police and the plaintiff, who was one of a discrete group of potential victims of a known rapist. Not only did the police fail in their duty to warn Doe of her vulnerability, they decided not to do so in order to use her as bait to apprehend the perpetrator. MacFarland J. also noted the statutory context of s. 57 of the Police Act, R.S.O. 1980, c. 381, which specifically charged members of police forces with the duty of preventing crimes. There is no such statutory context in this case.
[49] In contrast to Doe, neither the enabling legislation of the FDA nor the parties’ reasonable expectations and reliance focused responsibility for product safety on Health Canada. Instead, both the statutory framework and the parties’ reasonable expectations placed the responsibility for product safety on the medical devices industry.
[50] Accordingly, I do not read the relevant portions of Childs as creating a new ground for a relationship of proximity. It appears that the concept of “material implication” in the creation or management of risk (para. 38 of Childs) is simply another way of engaging the proximity factors of representation, expectation and reliance. I find support for this interpretation in para. 40 of Childs where McLachlin C.J. recognizes that the theme of “reasonable reliance” unites all examples of liability.
[51] Moreover, subsequent decisions of the Supreme Court of Canada reference Childs, but apply the Cooper proximity test: see Design Services Ltd. v. Canada (2008), 2008 SCC 22, 293 D.L.R. (4th) 437, Hill v. Hamilton Wentworth Police Services Board, 2007 SCC 41, [2007] 3 S.C.R. 129, and Syl Apps Secure Treatment Center v. B.D., 2007 SCC 38, [2007] 3 S.C.R. 83.
[52] I conclude that the motion judge erred to the extent he assumed that, without more, conduct that increases risk creates a relationship of proximity.
[53] It is therefore necessary to turn to the appellant’s pleadings about his expectations, representations, and reliance on Health Canada regarding the safety of the TMJ implants. The pleadings do not contain, and there is no suggestion they could contain, any allegations of direct interaction or communication with particular Health Canada employees or the receipt of, or reliance upon, some assurance regarding the safety of the implants. However, the pleadings include three allegations that distinguish the claim from that in Attis. The first is that “Health Canada represented that it monitored the effectiveness of recalls by manufacturers and took a lead role in alerting the public of recalls and safety concerns.” The second is that, in 1983, Health Canada issued an information letter explaining that the issuance of a Notice of Compliance “meant that Health Canada was satisfied that the manufacturer had carried out tests and had submitted appropriate results to Health Canada to demonstrate a reasonable probability of safety of the devices and effectiveness of the devices in humans.” The third is that Health Canada failed “to respond to requests for information made by members of the public concerning devices”.
[54] The pleadings do not allege that any of the three communications came to the appellant’s attention or to the attention of any specific member of the public. Nowhere does the appellant plead a specific representation made to him by Health Canada. Moreover, nowhere does the appellant assert reliance, other than by pleading that members of the public generally relied on Health Canada to implement its public law duties. In the absence of a specific representation or reliance on Health Canada regarding the safety of the implant, in my view, it is plain and obvious that the appellant cannot establish a direct and close relationship of proximity that makes it just and fair to impose a private law duty of care on Health Canada.
[55] In concluding, I note that the appellant relied on Health Canada’s 2007 website in his factum as providing direct representations about product safety. In argument, the appellant conceded that the website was neither pleaded nor was it material to the allegations in his pleading. Accordingly, I have not considered any representations made by Health Canada outside those alleged in the pleading.
[56] Since the appellant has not suggested any manner in which he might amend his pleadings to support a relationship of proximity, I agree with the motion judge that there is no purpose in granting leave to amend.
[57] I agree with the motion judge that, had there been a finding of proximity, the negligence in this case, particularly a dissemination of a list including non-compliant devices, could be characterized as operational error: see Just v. British Columbia, 1989 16 (SCC), [1989] 2 S.C.R. 1228. In those circumstances, it would have been necessary to consider the other second stage residual policy considerations to determine whether they raise sufficient reason to negative the imposition of liability. However, it is unnecessary to consider those issues in light of the conclusion I would reach on the issue of proximity.
VI. CONCLUSION
[58] In the absence of proximity, it is plain and obvious that the action cannot succeed. In light of this conclusion, it is unnecessary to consider the other issues raised on the appeal and cross-appeal. Accordingly, I would dismiss the appeal.
VII. COSTS
[59] The respondent, Health Canada, is entitled to the costs of the appeal, which I would fix at $35,000, inclusive of disbursements and Goods and Services Tax. The cross-appeal did not require consideration and I would decline to make any order regarding its costs.
RELEASED: Sep. 30, 2008
“SEL” “S.E. Lang J.A.”
“I agree R.G. Juriansz J.A.”
“I agree J. MacFarland J.A.”
[^1]: Although the regulations originally had no labelling requirements for devices, in August 1969, Part K of the regulations was introduced to provide that no person shall sell a device that is not labelled as required by the regulations.