CITATION: McGee v. Farazli, 2020 ONSC 7066
DIVISIONAL COURT FILE NO.: 20-2575
DATE: 20201123
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
Swinton, J.A. Ramsay and Favreau JJ.
BETWEEN:
Fern McGee
Plaintiff/Appellant
– and –
Dr. Christiane Farazli and C. Farazli Medicine Professional Corporation
Defendants/Respondents
Anthony Tibbs and Evatt Merchant, for the Plaintiff/Appellant
Josh Hanet and Irina Samborski, for the Defendants/Respondents
HEARD: November 17, 2020 by videoconference
Favreau J.
Overview
[1] The appellant, Fern McGee, appeals the decision of Charbonneau J. dated November 28, 2019, refusing to certify this proposed class action.
[2] The motion judge denied certification on the basis that the appellant, the representative plaintiff, failed to establish that there was an identifiable class of two or more people. More specifically, the motion judge was not satisfied that there was some basis in fact that two or more people suffered any harm as a result of the allegations made against the respondents.
[3] The appellant argues that the motion judge improperly embarked on an assessment of the merits and that the proposed class proceeding meets all the criteria for certification. The appellant also seeks leave to appeal the motion judge’s cost decision.
[4] I agree with the appellant that the motion judge made a legal error in finding that there was no identifiable class of two or more people. This certification criterion does not require that the plaintiff demonstrate that there are two or more people who suffered harm, but only that the members of the class are identifiable and thereby capable of showing that they suffered harm. Given that the motion judge did not address the common issues and preferable procedure criteria, the appeal is granted and the matter is remitted to the motion judge to determine whether all criteria for certification are met.
Background
Claim against the respondents
[5] The respondents operated a medical clinic that performed endoscopies.
[6] In 2011, the College of Physicians and Surgeons of Ontario (the “CPSO”) inspected the clinic and found that the respondents did not always follow appropriate infection control and prevention protocols on endoscopic and biopsy equipment. The CPSO concluded that this was a “major infection lapse” that might have exposed patients to blood borne pathogens, including Hepatitis B, Hepatitis C and HIV.
[7] The CPSO reported this issue to Ottawa Public Health (“OPH”). OPH conducted its own investigation. Based on a risk analysis assessment, OPH found that there was a very low, but not absent, risk of transmission of Hepatitis B, Hepatitis C and HIV to patients who had undergone endoscopic procedures at the clinic between 2002 and 2011.
[8] OPH sent out notification letters to 6,800 patients and conducted a public media campaign. The letters reached 95% of patients treated in the relevant time period, and 75% of those patients underwent blood tests. OPH prepared a final report in which it concluded that “no transmission of Hepatitis B or C or HIV has been confirmed within the clinic where the lapse occurred”.
[9] The class action was commenced on November 3, 2011. Originally, there were two proposed representative plaintiffs, but the claim was amended in May 2016 to remove them and substitute Ms. McGee as the only representative plaintiff. The claim alleges negligence, breach of fiduciary duty and breach of the Charter. During the argument of the motion, we were advised that the appellant has abandoned the Charter claims. The claim alleges that class members suffered the following harm:
As a direct and immediate result of the Defendants’ acts or omissions the Class suffered:
(1) Inconvenience, embarrassment, being subjected to further medical testing, lost time, travel costs, worry, mental pain and anguish, anxiety, emotional distress, psychological distress or injury, knowledge that they could have been exposed to a communicable disease, injury or loss; and/or
(2) Injury resulting from being put at risk of contraction of a communicable disease such as HIV, Hepatitis B, Hepatitis C, or other illness, conditions, or injury.
Certification motion
[10] Originally, the appellant put forward the following proposed class definition:
All persons who had a test performed by Dr. Farazli to look at their gastrointestinal system between April 1st, 2002 and June 1st, 2011 (the “Primary Class”).
[11] By the time of the certification motion, the appellant added the two following proposed class definitions:
a) All persons who, after having aforesaid gastrointestinal test, were subsequently identified as having contracted Hepatitis B virus, Hepatitis C virus, Human Immunodeficiency Virus (“HIV”), or such other diseases and conditions that may have resulted from the aforesaid gastrointestinal test (the “Infected Subclass”); and
b) All persons who, by virtue of their relationship to a member of the aforesaid classes, are entitled pursuant to the Family Law Act to assert a derivative claim (the “Family Class”).
[12] On the certification motion, the only direct evidence of class members who suffered harm came from Ms. McGee, the representative plaintiff, and from Peter Hopkins, who was identified as a potential class member.
[13] Ms. McGee swore two affidavits. In her first affidavit, Ms. McGee stated that she underwent an endoscopy at the respondents’ clinic in 2003. She received a notice letter from OPH in 2011. She then got tested, and received negative results for Hepatitis B, Hepatitis C and HIV. However, she says that she “experienced nervous shock and mental distress knowing that I may have been exposed to diseases”. In her second affidavit, Ms. McGee provides more information about the emotional trauma she suffered from knowing that she was exposed to unsanitary conditions and potential infection at the respondents’ clinic.
[14] In his affidavit, Mr. Hopkins stated that he underwent an endoscopy at the respondents’ clinic around 2004. In 2006, he started experiencing kidney disfunction, and in 2009 he was hospitalized for kidney failure. He now requires dialysis. At the time of the kidney failure, his doctors told him that the issue was likely caused by a secondary infection, but they were not able to identify the cause of the infection. In 2011, he received a notice letter about the respondents’ clinic. He went for blood tests, which showed that he had Hepatitis B antibodies in his blood. His doctor informed him that the antibodies showed that his body had resolved a Hepatitis B infection. He states that his “strong suspicion is that, the mysterious secondary infection which led to my kidney failure, was caused by Dr. Farazli and her failure to properly operate her clinic”.
[15] In response to Mr. Hopkins’s affidavit, the respondents filed an affidavit prepared by a nephrologist, Dr. Asad Merchant. Dr. Merchant reviewed Mr. Hopkins’s medical history and concluded that there was “no conceivable way” that his infection was related to the 2004 colonoscopy: “There is no biologically plausible scenario in which the two events could be related”.
[16] The appellant did not put forward any expert evidence in response to Dr. Merchant’s report.
[17] In response to the certification motion, the respondents conceded that the claim disclosed a cause of action and that Ms. McGee was an appropriate representative plaintiff. However, they did not agree that the claim met the identifiable class and common issues criteria in s. 5(1) of the Class Proceedings Act, 1992, S.O. 1992, c. 6 or that a class proceeding was the preferable procedure.
Certification decision
[18] In a decision dated November 28, 2019, the motion judge dismissed the motion for certification on the basis that the appellant failed to establish some basis in fact that there was an identifiable class of two or more people who suffered the harm alleged in the claim.
[19] Based on the evidence before him, the motion judge made a finding that there was no evidence that any class member, other than Ms. McGee, had suffered any harm or damages due to the potential contamination of the clinics. This led him to find that there was no identifiable class, reasoning as follows:
For the reasons below I disagree with the plaintiff’s statement that the affidavits filed demonstrate a basis in fact of the existence of a class of 2 or more. It is noteworthy that the plaintiff has failed to bring forward any evidence that there exists any other member of the “potential” class who has expressed an intention to participate in the litigation, nor any evidence of the existence of any person who claims to have suffered emotional trauma from having undergone an endoscopy at the hands of Dr. Farazli. There is rather very probative evidence that there was no outbreak of communicable disease emanating from the defendants’ clinic. Although this is not usually fatal to the plaintiff’s motion, in the context of the very long period of time which has elapsed in this case and the substantial public and private notices given to potential class members, it is certainly an element which must be taken into account in determining whether the plaintiff has brought forward evidence to establish that a basis in fact of the existence of a class of two or more persons.
It is well established that a motion seeking to have an action approved as a class action is procedural in nature and the merits of the claim asserted by the plaintiff is not in issue. Once the pleadings establish a cause of action, which is not in dispute here, the plaintiff must simply put forward sufficient evidence to show that there is at least a basis in fact that the other four (4) criteria set out in section 5 of the Act are present.
For the reasons mentioned above, in the context of the particular circumstances of this case, I conclude that the plaintiff has failed to adduce any evidence that there is a basis in fact that there is a class of two or more persons. When asked whether counsel had received any information of any potential class members other than Mrs. McGee and Mr. Hopkins counsel could not provide any. As for Mr. Hopkins, the plaintiff has not provided any expert evidence supporting the conclusion that Mr. Hopkins’ chronic kidney failure might have been caused by an infection by the HIV virus during the endoscopy which then caused his liver disease. Nor is there any evidence that the HIV infection originated from the defendants’ clinic. Simply providing the testimony of Mr. Hopkins of his belief that this is the case is not sufficient for a basis in fact on the facts of this case.
[20] Given this finding, the motion judge did not address the common issues and preferable procedure criteria, and he denied certification.
[21] In a subsequent decision addressing costs, the motion judge dismissed an argument by the appellant that there should be no costs on the basis that this is public interest litigation. He awarded costs to the respondents of $58,375.80 for fees and $26,780.15 for disbursements.
Jurisdiction
[22] Pursuant to s.30(1) of the Act, as enacted at the time this action was commenced, an appeal lies to the Divisional Court from an order refusing to certify a class proceeding.
Standard of review
[23] The appellate standard of review applies to an appeal from a certification decision. The court will only intervene if the motion judge made an error of law or principle, or a palpable and overriding error of fact or mixed fact and law.
[24] Appellate courts have also held that substantial deference is owed to a motion judge’s application of the test for certification and determination of the common issues: Fehr v. Sun Life Assurance Company of Canada, 2018 ONCA 718, at para. 39.
Analysis
[25] The appellant argues that the motion judge erred in holding that the identifiable class criterion required her to provide evidence of two or more people who suffered damages as a result of the respondents’ alleged negligence. I agree.
[26] The motion judge’s finding that there was no identifiable class was based on his finding that the appellant did not put forward evidence that anyone other than Ms. McGee suffered any harm. In making this finding, the motion judge relied primarily on the Supreme Court of Canada’s decision in Sun-Rype Products Ltd. v. Archer Daniels Midland Co., 2013 SCC 58. In that case, at para. 67, the majority of the Court stated that “[a]llowing a class proceeding to go forward without identifying two or more persons who will be able to demonstrate that they have suffered loss at the hands of the alleged overchargers subverts the purpose of class proceedings…” [emphasis added]. In my view, the motion judge took this statement out of context. Reading the decision as a whole and other appellate decisions dealing with the identifiable class criterion, it is evident that, to meet this certification criterion, the plaintiff is not required to put forward evidence that two or more people have actually suffered the alleged harm.
[27] Sun-Rype was decided at the same time as Pro-Sys Consultants Ltd. v. Microsoft Corporation, 2013 SCC 57. In both cases, the Supreme Court took the opportunity to reinforce the importance that there be some basis in fact for all of the certification criteria with the exception of the cause of action criterion.
[28] In Pro-Sys, at para. 102, the Supreme Court emphasized that the “certification stage does not involve an assessment of the merits of the claim and is not intended to be a pronouncement on the viability or strength of the action; ‘rather, it focuses on the form of the action in order to determine whether the action can appropriately go forward as a class proceeding…’”. However, the Supreme Court also reaffirmed the importance of having a sufficient factual basis for certifying a class action:
[103] Nevertheless, it has been well over a decade since Hollick was decided, and it is worth reaffirming the importance of certification as a meaningful screening device. The standard for assessing evidence at certification does not give rise to “a determination of the merits of the proceeding” (CPA, s. 5(7)); nor does it involve such a superficial level of analysis into the sufficiency of the evidence that it would amount to nothing more than symbolic scrutiny.
[104] In any event, in my respectful opinion, there is limited utility in attempting to define “some basis in fact” in the abstract. Each case must be decided on its own facts. There must be sufficient facts to satisfy the applications judge that the conditions for certification have been met to a degree that should allow the matter to proceed on a class basis without foundering at the merits stage by reason of the requirements of s. 4(1) of the CPA not having been met.
[29] In Sun-Rype, at para. 57, the Court confirmed that the purpose of the class definition is to “(i) identify those persons who have a potential claim for relief against the defendants; (ii) define the parameters of the lawsuit so as to identify those persons who are bound by its result; (iii) describe who is entitled to notice of the action”.
[30] Sun-Rype specifically addresses the factual basis required for a certification judge to find an identifiable class of two or more people. Sun-Rype was a class proceeding involving allegations of an illegal conspiracy to fix the price of high-fructose corn syrup (abbreviated to “HFCS” in the decision). The claim was brought on behalf of direct purchasers and indirect purchasers. The proposed class definition was “all persons resident in British Columbia and elsewhere in Canada who purchased HFCS or products containing HFCS manufactured by the defendants (collectively, the ‘class’) from January 1, 1988 to June 30, 1995 (the ‘Class Period’)”. The defendants objected to the inclusion of indirect purchasers because they argued that it was not possible to know whether or not any given indirect purchaser was a member of the class. The evidence established that individual purchasers of fruit drinks could not know if the drinks they purchased contained HFCS or not. It was in that context that the Supreme Court stated, at para. 67, as quoted above, that “[a]llowing a class proceeding to go forward without identifying two or more persons who will be able to demonstrate that they have suffered loss at the hands of the alleged overchargers subverts the purpose of class proceedings…” [emphasis added].
[31] Reviewing that portion of the Supreme Court’s decision, it is clear that the Court was not saying that the identifiable class criterion requires the representative to put forward evidence that more than one person has suffered a loss, but rather that there must be evidence that more than one person is capable of demonstrating that they have suffered a loss – in other words, the class definition allows potential members to show that they are in fact members of the class, which in turn puts them in the position of being able to prove a loss. This is evident from a careful review of the relevant portions of the decision.
[32] At para. 58, the Court stated that, in that case, while the class definition used objective criteria that did not turn on the merits of the claim, “there is insufficient evidence to show some basis in fact that two or more persons will be able to determine if they are in fact a member of the class” [emphasis added].
[33] Again, at para. 72, the majority of the Court emphasized that what the plaintiff must do to demonstrate some basis in fact that there is an identifiable class is to show that at least two people fit within the class definition:
A key component in any class action is that two or more persons fit within the class definition. If, as in this case, there is no basis in fact to show that at least someone can prove they fit within the class definition, the class cannot be certified because the criteria of “an identifiable class of 2 or more persons” is not met. No amount of expert evidence establishing that the defendants have harmed the class as a whole does away with this requirement. [emphasis added]
[34] In this case, the motion judge erred by focusing on whether there was some basis in fact for finding that anyone suffered harm other than Ms. McGee. Instead, the identifiable class inquiry should have focused on whether the class definition provided an objective basis on which individual class members could know whether they are or are not members of the class.
[35] There is no question that the Primary Class definition meets this requirement. The Primary Class consists of all persons who had a test performed by the respondents during a specified time period. The evidence on the motion demonstrated that there were at least 6,800 who fit within this definition consisting of the people contacted through OPH’s notification program. The class is defined objectively without reference to the merits, and the evidence establishes that it is possible to identify members of the class. This is all that is required to meet the identifiable class requirement.
[36] The motion judge made a legal error by requiring the appellant to put forward evidence that at least one person other than Ms. McGee had suffered any harm as a result of the unsanitary conditions at the clinic and subsequent public health notification. The lack of evidence in this respect may be relevant to whether the common issues criterion is met or whether a class proceeding is the preferable procedure. It would certainly be relevant to the individual claims of class members. But it is not relevant to the issue of whether there is some basis in fact for finding an identifiable class.
[37] This case is not like Taub v. The Manufacturers Life Insurance Co. (1998), 1998 14853 (ON SC), 40 O.R. (3d) 379, at p. 381 (Sup. Ct.)., a decision referred to by the Supreme Court in Sun-Rype. In that case, Sharpe J., as he then was, refused to certify a class proceeding alleging mould in a building on the basis that there was no evidence that anyone other that the plaintiff had found mould in their apartments. In making this finding, Sharpe J. held that evidence from other class members will not be needed in many cases: “Most class proceedings arise from situations where the fact of wide-spread harm or complaint is inherent in the claim itself.” In this case, the claim alleges that class members experienced “inconvenience, embarrassment, being subjected to further medical testing, lost time, travel costs, worry, mental pain and anguish, anxiety, emotional distress, psychological distress or injury, knowledge that they could have been exposed to a communicable disease, injury or loss”. Individual class members will have to prove that they suffered a compensable loss; but the evidence on the motion that at least 6,800 people were tested at the respondents’ clinic and were subsequently notified about the risk of infection is sufficient to establish that more than one person was affected by the events giving rise to the claim. This may not be a strong claim and the damages, if any, may be minimal, but the appellant has put forward an identifiable class.
[38] The motion judge seemed to be influenced by the lack of evidence of anyone other than the appellant being interested in pursuing the claim. He said that this was not fatal, but was relevant given the passage of time. However, as held by the Court of Appeal in Keatley Surveying Ltd. v. Teranet Inc., 2015 ONCA 248, at para. 71, “[w]here the existence of multiple claims is not apparent, some evidence that multiple claims exist may be required”. However, the Court went on to state, at para. 72, that the interest of other potential class members in pursuing the litigation is irrelevant:
I agree with the Divisional Court that a distinction must be drawn between the existence of multiple claims and the subjective wishes or intentions of individual class members to assert a claim. It is in the very nature of class actions that many, if not most, individual class members lack the motivation or the will to commence proceedings. The access to justice and behavior modification goals of class proceedings will often depend upon a representative plaintiff taking the initiative in circumstances where other members of the class would be ignorant of their loss or acquiesce because of disinterest, lack of resources or fear of an adverse costs award. If multiple claims exist, the representative plaintiff does not have to conduct a referendum to determine how many class members want to sue. Ontario’s class action regime features an opt-out procedure which affords class members who do not wish to have their claims advanced the right to disassociate themselves from the action. There is no corresponding requirement to establish a willing class.
[39] The issue is different when it comes to the Infected Subclass. There was no evidence on the motion that anyone was infected as a result of conditions at the respondents’ clinic. As reviewed above, the OPH final report concluded that “no transmission of Hepatitis B or C or HIV has been confirmed within the clinic where the lapse occurred”. While Mr. Hopkins speculated that he was infected at the clinic, the respondents’ expert evidence on this point stated unequivocally that there was “no conceivable way” that Mr. Hopkins was infected at the clinic. There was also no evidence that, by this point, it would be possible to trace back any type of infection to the clinic. Under the circumstances, for reasons similar to those in Sun-Rype and Taub, there is no basis in fact for certifying the Infected Subclass.
[40] Accordingly, I find that the motion judge made a legal error in determining that the appellant failed to establish there was an identifiable class. As reviewed above, on a proper analysis, the Primary Class definition meets the identifiable class requirement and the appeal should therefore be allowed.
Conclusion
[41] Unfortunately, having found that there was no identifiable class, the motion judge dismissed the certification motion without assessing the common issues and whether a class proceeding is a preferable procedure. Given my conclusion that the Primary Class meets the identifiable class criterion, these issues now remain to be decided. During the argument of the motion, the appellant urged the panel to make these determinations, relying on this Court’s decision in Keatley Surveying Ltd. v. Teranet Inc., 2014 ONSC 1677, at para. 38, where the Court found that, in that case, judicial economy and access to justice favoured deciding whether to certify a class proceeding where the plaintiff had recast the common issues after the motion judge denied certification. However, in this case, the Court does not have the benefit of any reasons on the common issues and preferable procedure criteria which are at the heart of a class proceeding and fall within the recognized expertise of class proceedings judges. In these circumstances, the criteria not yet decided by the motion judge should be decided at first instance on a comprehensive review of the evidence relevant to those issues. It is not the role of this court to do so de novo in the context of an appeal.
[42] Accordingly, the appeal is allowed, the order of the motion judge respecting certification and costs is set aside, and the certification motion is remitted to the motion judge to decide whether the balance of the certification criteria are met, and whether the action should be certified as a class proceeding.
[43] Given that the appeal is allowed, it is not necessary to decide whether leave should be granted on the costs award made by the motion judge. His costs order is set aside, given the outcome of the appeal. It will be the task of the motion judge to determine the costs of the certification motion after that motion is fully determined.
[44] With respect to the costs of this appeal, as agreed between the parties, the appellant is entitled to costs of $15,000 all inclusive.
Favreau J.
I agree _______________________________
Swinton J.
I agree _______________________________
J.A. Ramsay J.
Released: November 23, 2020
CITATION: McGee v. Farazli, 2020 ONSC 7066
DIVISIONAL COURT FILE NO.: 20-2575
DATE: 20201123
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
Swinton, J.A. Ramsay and Favreau JJ.
BETWEEN:
Fern McGee
Plaintiff/Appellant
– and –
Dr. Christiane Farazli and C. Farazli Medicine Professional Corporation
Defendants/Respondents
REASONS FOR JUDGMENT
Favreau J.
Released: November 23, 2020