COURT FILE NO.: 293/02
DATE: 20030724
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
THEN, SOMERS and GREER JJ.
B E T W E E N:
M.F.
Plaintiff
(Appellant)
- and -
Dr. N.S.
Defendant
(Respondent)
Susan M. Vella, for the Plaintiff (Appellant)
Ronald D. Manes for the Defendant (Respondent)
HEARD: May 20, 2003
SOMERS J.
[1] This is an appeal by the plaintiff (appellant) from the order of Mr. Justice Pitt dated October 10, 2001, dismissing her motion for summary judgment. The matter reaches this court pursuant to leave granted on August 7, 2002. The plaintiff says that the motions judge incorrectly applied the law governing the granting of summary judgments. The standard of review for such an appeal is whether or not the decision of the motions judge was "clearly wrong", that is, the judge must have acted on a wrong principle or disregarded or misinterpreted material evidence.
[2] This action was brought by the plaintiff to enforce the terms of minutes of settlement entered into between herself and the defendant (respondent) in an earlier action in this court, file no. 94-CU-80748 (the "first action").
[3] In the first action, the plaintiff claimed that between 1976 and 1986 she was a patient of the defendant, and that from April 1985 to 1987, she was his employee. She alleged that while a doctor/patient relationship was in existence, and later during the period of time the employer/employee relationship existed, the defendant sexually assaulted her and thereafter had repeated and continuous sexual intercourse with her. In so doing, the plaintiff alleged, the defendant was in breach of trust in the context of his position as her physician, and abused the position of power and control he exercised as her employer.
[4] At the same time, the plaintiff based on the same facts, lodged a complaint against the defendant to the Ontario College of Physicians and Surgeons (the "College").
[5] The defendant took the position throughout the first action that while there was admitted sexual intercourse between himself and the plaintiff, their relationship was a consensual, loving one for six years. The complaint to the College only came after their employment and consensual relationship had been terminated.
[6] Shortly before the hearing before the College was scheduled to be heard, the defendant sought and obtained the agreement of the plaintiff to attempt to settle all issues between them. After some negotiation, matters were settled and minutes of settlement were entered into on September 6, 1995. The settlement contemplated payment by the defendant to the plaintiff of the total sum of $500,000.00. Weekly payments in the sum of $1,000.00 each were to be made payable commencing October 16, 1995 and to continue until December 30, 1996. On January 7, 1997, the balance of $436,000.00 was to be paid in full. As security for these payments, the defendant agreed to turn over to the plaintiff a security in his interest in a limited partnership in a company known as Canadian Diversified Real Estate Partnership.
[7] The plaintiff, for her part in settling the first action, would agree to the dismissal of the action, to sign a release in favour of the defendant, and to a withdrawal of the proceedings before the College. The minutes of settlement, which were executed by both the plaintiff and the defendant in this action, stipulated that there had been no abuse, misuse, or improper conduct secondary to a doctor/patient relationship.
[8] Pursuant to these minutes of settlement, releases were exchanged, the action was dismissed, the security in the defendant's limited partnership was delivered to the plaintiff, and payments of the settlement amount were commenced. In addition, the proceedings before the College were withdrawn by the plaintiff. However, after paying some $56,000.00 in installments, the defendant discontinued the payments and has made none further since that time. This action was commenced March 24, 1997, seeking payment of the balance alleged to be outstanding of $444,000.00.
[9] The defendant has defended the present action on the basis that the settlement agreement was obtained from him through fraud and duress. The issue, therefore, is the enforceability of this agreement and the state of mind of the defendant when the agreement was reached. While there appears to be some overlap between the two in the circumstances of this case, the fraud referred to relates primarily to the plaintiff having alleged that the sexual relationship between herself and the defendant commenced and was carried on for a period of time when there continued to be a doctor/patient relationship between the two. Two formal steps were taken by her in furtherance of these allegations, namely, the complaint made to the College and the commencement of an action against him based on these allegations. His position is that the allegations are false and would not have supported a lawsuit. For reasons that were not made entirely clear in the proceedings before us, Dr. N.S. was convinced that he would not receive a fair hearing before the College and would probably be subjected to the severe penalty of having his registration cancelled. In addition, he felt that the resultant publicity in Pembroke, where he lived and carried on his practice, would ruin his reputation and adversely affect his marriage. In the face of this, he felt that he had, "a gun to my head", and no alternative but to settle for whatever it would cost him. His position is at odds with paragraph 11 of the minutes which reads as follows:
"11. The parties acknowledge that they have each received legal advice concerning the terms and ramifications of executing these Minutes of Settlement, that they understand the terms and ramifications herein, and that they are executing these Minutes voluntarily and without any duress or coercion."
Moreover, paragraph 10 (e) of the minutes dealing with any subsequent action brought to enforce the settlement and in particular any motion for judgment reads in part as follows:
"Dr. N.S. defence to any such motion(s) shall be limited to, (a) disputing the amount of the judgment(s) being sought; and (b) asserting defences pursuant to paragraph 6 of these Minutes of Settlement and/or paragraph 4 of the Full and Final Release executed by M.F. and Sylvie Leclair dated September 1995, prior to the event of default and should only consist of affidavits providing evidence with respect to these defences."
Paragraph 6 of the minutes of settlement deals with Dr. N.S. continuing ability to earn an income from his medical practice and paragraph 4 of the full and final release requires Ms. M.F. to keep privileged and confidential the consideration for the release and settlement. Neither has any application to the defence now being raised by the defendant.
[10] The pleadings in the present action came before this court and subsequently the Court of Appeal on a prior occasion. The Court of Appeal decision was reported as M.F. v. Dr. N.S. (2000), 2000 5761 (ON CA), 188 D.L.R. (4th) 296 (C.A.). The statement of defence originally filed by the defendant in this action had made specific reference to the plaintiff's complaint to the College and her subsequent recantation of those allegations in the minutes of settlement. The judge of first instance applied section 36 (3) of the Regulated Health Professions Act 1991, S.O. 1991, c. 18, ruling that the documents referred to were documents prepared for a professional discipline proceeding against the doctor and hence, inadmissible in the civil proceeding. The majority of the panel hearing the appeal upheld the motions judge's ruling. Laskin J.A., speaking for the majority, said at paragraphs 41 and 42:
"Dr. N.S. has pleaded the defence of fraud in Ms. M.F.'s action for the balance owing under the settlement. He is entitled to maintain that defence, although, he cannot prove it by introducing in evidence Ms. M.F.'s complaint to the College or her subsequent sworn recantation."
Later at paragraph 44, he said:
"I have three qualifying comments. First, my reasons turn on my view that section 36 (3) of the RHPA is an absolute bar to the admissibility of the complaint and the sworn recantation in the civil action. Had I been of the view that either the complaint or the recantation might have been admissible despite the language of section 36 (3), I would have of course left their admissibility to be determined by the trial judge."
Further on in paragraph 46, he said:
"Third, my decision is not meant to preclude the trial judge from considering whether either Ms. M.F.'s complaint or her sworn recantation may be used to challenge her credibility on cross-examination."
[11] Following the execution of the minutes of settlement, the defendant made weekly payments of $5,000.00, totaling $56,000.00 up to the end of November 1996. He defaulted in his payments at that time and has paid nothing since. M.F. has sued for the balance of the money alleged to be owing to her.
[12] In support of the plaintiff's motion for judgment, counsel pointed out a number of factors for the judge of first instance to take into account. The minutes of settlement stipulate that the document was intended to obtain closure for all outstanding issues between the parties. It is comprehensive in its terms. Its terms were negotiated on both parties' behalf by counsel in their presence. It is clear and unambiguous on its face. No new facts, not known by the defendant at the time of execution of the minutes, were placed before the motions judge at the time the matter came on for hearing before him. The plaintiff for her part, after signing the minutes, consented to an order dismissing the action, signed a full and final release containing a confidentiality provision, and withdrew her complaint from the College. The plaintiff, therefore, takes the position that Dr. N.S. is estopped from challenging the validity of the settlement.
[13] On his part, the defendant indicated that in signing his name, he put the initials "UD" under his signature in such a way that they might fairly be mistaken for "MD". He testified that "UD" was meant to be short for "under duress". The Plaintiff, however, points to the fact that the defendant had experienced counsel advising him, when he signed a negotiated release and when he signed the agreement with full knowledge of all the facts. Moreover, the defendant failed to tell anyone involved that the initials were not "M.D.", and failed to say what they stood for. Further, based on all of this, the plaintiff had withdrawn her complaint from the College. The defendant says that he had to make his protestations in secret, because if he told his counsel, the agreement would be lost and the plaintiff would lie and ruin his reputation. His position is that he did what he could to protect himself.
[14] Shortly before he executed the minutes, the defendant says he wrote a statement "To Who It May Concern" proclaiming his innocence, and setting forth in strong language his main reason for settling, namely, his very real concern that he could lose his licence to practice unless he did. He sent this document to a lawyer not involved in the case at all. However, on cross-examination, he admitted that he would have continued to make the payments he had been making for the previous 13 months, had he not suffered a financial setback which made it impossible for him to continue doing so.
[15] Plaintiff's counsel says that the motions judge misapprehended the law governing the granting of summary judgment. She takes the position that in effect, the settlement was entered into by two adults represented by experienced counsel who knew what they were getting into, and pursuant to which, the defendant, unlike the plaintiff, received precisely what he had bargained for. In addition, plaintiff's counsel argued that although duress can have the effect of vitiating consent and thereby rendering an agreement obtained through duress voidable at the instance of the party subject to it, this contract was affirmed by the defendant having partially complied with its terms by making a number of the payments called for over a period of 13 months and by delivering the security agreed upon.
[16] The plaintiff says the motions judge erred in taking into account the plaintiff's failure to answer certain questions on cross-examination and in failing to apply the law of affirmation in his analysis of economic duress.
[17] The respondent's response to this submission was that even though he continued to make payments until he suffered a financial set-back, he nevertheless felt he was acting under duress in doing so. It was his financial setback that brought this matter to a head. The defendant says that the agreement placed economic duress on him which falls within those parameters set out in Gordon v. Roebuck (1992), 1992 7443 (ON CA), 9 O.R. (3d) 1 (C.A.) at p. 3. With respect to these parameters, the defendant submits that he did protest, but that there was no alternative course open to him. When he was independently advised he did take steps to try to avoid the contract.
[18] The motions judge concluded that there was evidence submitted by the defendant which tended to support his position that the affair between the two parties was consensual. He also commented upon the evasive testimony of the plaintiff on cross-examination, which suggested to him that there was an issue of credibility to be tried. When taking all of this into account, one should bear in mind the high standard required of a motions judge on a motion seeking summary judgment. This is set out in the case in Agounie v. Galion Solid Waste Material Inc. (1998), 1998 954 (ON CA), 38 O.R. (3d) 161 (C.A.). The motions judge is required to assess the threshold issue of whether a genuine issue exists requiring a trial. That assessment includes a determination of whether the evidence raises genuine issues of credibility. On that basis and with reference to those decisions, the motions judge dismissed the application for summary judgment.
[19] In her reasons granting leave to appeal to this court, the judge on the leave application concluded that there was good reason to doubt the correctness of the motions judge's order. She did so based on the proposition that an issue of credibility precludes the granting of summary judgment only where the issue leads to a material fact. She concluded that the facts in issue here were not material. In particular, she mentioned the materiality of the nature of the relationship between the plaintiff and the defendant, especially in view of the Court of Appeal's decision limiting the ability of the defendant to rely on the documents evidencing what he alleges was the plaintiff's fraud. She referred to Stott v. Merit Insurance Corp. (1988), 1988 192 (ON CA), 63 O.R. (2d) 545 (C.A.), which held that the right of the party attacking the agreement arguing that it was obtained through duress may lose the benefit of that defence if he affirms the impugned contract when he is no longer a victim.
[20] The judge on the leave application also referred to the decision of International Corona Resources Ltd. v. LAC Minerals Ltd. (1989), 1988 4534 (ON SC), 66 O.R. (2d) 610 (H.C.J.), which held that a judgment allegedly obtained by fraud cannot be set aside if the defendant had full knowledge of the facts and evidence on which he subsequently purported to rely. In the result, leave to bring this appeal was granted.
[21] It should be remembered that there is no attempt at this stage to set aside a judgment based on fraud or duress. In the case before us, fraud and duress are raised not as a means of attempting to set aside a judgment, but as a defence to a new action. It is true that in that action there will be difficulty establishing fraud and duress without the benefit of being able to rely on the documents lodged with the College. It will not be an impossible task, however, since as Laskin J. A. pointed out in the earlier M.F. v. Dr. N.S. [supra] case, a trial judge at a new trial will not be precluded from considering whether or not the plaintiff's complaint or her sworn recantation can be used to challenge her credibility in cross-examination. Nor would defendant's counsel be prevented from relying on this defence generally.
[22] In our view, the question of whether or not the earlier steps taken by the plaintiff were fraudulent turns initially on the nature and duration of the relationship between the parties. There is an issue as to when the doctor/patient relationship was completely terminated. There is an issue as to whether or not the sexual relationship was consensual. The answers to these questions might well lead a judge to conclude that the lodging of a complaint to the College and the commencement of the action were done mala fides and with the express purpose of bringing the defendant to heel. There is an issue as to whether or not, as counsel for the plaintiff alleges, the continued payments made by the defendant were a continuation of the coercion under which the defendant felt he had to operate or an affirmation of the earlier agreement. All of these matters are, in our view, matters of fact, which ought to be heard and decided following a trial. Under these circumstances, we do not feel that this is a proper case for summary judgment. As Cronk J. A. said in the recent case in the Court of Appeal, Gutierrez v. Tropic International Limited (2002), 2002 45017 (ON CA), 63 O.R. (3d) 63 (C.A.) at page 69:
"The principles governing motions for summary judgment are well established. Summary judgment may only be granted where there is no genuine issue for trial, the proof of which lies upon the moving party. The role of a motions judge on such a motion is centered on the threshold question of whether a genuine issue exists requiring a trial. The determination of credibility issues, the weighing of conflicting evidence, the making of factual findings and the drawing of factual inferences, other than where one inference is reasonably available are matters reserved for the trier of fact."
[23] We agree with these principles, as set out in Gutierrez [supra]. In our view, they apply to the case at bar. We cannot see where the motions judge erred and we cannot find that he was clearly wrong. The appeal is therefore dismissed.
[24] The costs of the appeal are reserved to the judge finally hearing and determining this matter.
SOMERS J.
I agree: ___________________________
THEN J.
I agree: ___________________________
GREER J.
Released:
COURT FILE NO.: 293/02
DATE: 20030724
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
then, somers and GREER JJ.
B E T W E E N:
M.F.
Plaintiff
(Appellant)
- and -
Dr. N.S.
Defendant
(Respondent)
REASONS FOR JUDGMENT
Somers J.
Released: July 24, 2003