ONTARIO

SUPERIOR COURT OF JUSTICE

COURT FILE NO.: 05-0272
DATE: 20121123

BETWEEN:

Chloe Maraschiello-Basnett, a minor by her Litigation Guardian, Whitney Basnett, Nicholas Maraschiello, and the said Whitney Basnett personally
Plaintiffs

– and –

J. Ku, P. Howard, H. Yang, D. Handley, Clinidata Corporation, The Royal Victoria Hospital of Barrie, D. McLaughlin, M. Wall, S. Hodge, D. Van Scoy, S. Manser, J. Farrell, J. Waugh-Vieira, T. Gilder and S. White
Defendants

Hilik Y. Elmaliah and Richard J. Sommers, for the Plaintiffs

Deborah Berlach and Renée A. Kopp, for the Defendants, The Royal Victoria Hospital of Barrie, D. McLaughlin, M. Wall, S. Hodge, J. Farrell, J. Waugh-Vieira, and S. White

HEARD: November 14, 2012

REASONS FOR DECISION

EDWARDS j.

Overview

[ 1 ] The euphoria and joy of the birth of a newborn quickly turned to a mother’s and father’s worst nightmare. Chloe Maraschiello-Basnett (“Chloe”) was born on August 5, 2003, following what is described as an uneventful full term pregnancy. Chloe was described at that time as a normal newborn infant. Things changed however, and on November 17, 2003, Chloe was seen at the Huronia Urgent Care Centre by the defendant, Dr. Ku who diagnosed Chloe with a viral upper respiratory infection. Chloe’s condition did not improve and on November 21, 2003, Chloe was seen at the Emergency Department of The Royal Victoria Hospital of Barrie (the “Hospital”) by Dr. Ku. Chloe was diagnosed with fever and a viral syndrome and discharged home.

[ 2 ] Approximately ten hours after her discharge, Chloe’s condition had not improved and there were complaints of vomiting and irritability. Chloe’s parents brought her back to the Hospital where she was again seen at the Emergency Department. A diagnosis of meningitis was made and she was transferred by air ambulance to The Hospital for Sick Children. Chloe remained at The Hospital for Sick Children until January 13, 2004 when she was discharged with a diagnosis of meningococcal meningitis, severe neurological impairment, and seizure disorder.

[ 3 ] What then ensued was an action that is presently before this court.

[ 4 ] On October 12, 2012, counsel for the plaintiff wrote to the solicitors for the Hospital, as well as various nurses, named as defendants who were employees of the Hospital. I will collectively refer to the Hospital and the nurses as “RVH”. The letter of October 12, 2012 is reproduced in its entirety as follows:

Further to my letter of June 14, 2012 , I have instructions to consent to an Order dismissing the action as against The Royal Victoria Hospital of Barrie, D. McLaughlin, M. Wall, S. Hodge, J. Farrell, J. Waugh-Viera, T. Gilder and S. White on a without costs basis. (emphasis added)

The Issue

[ 5 ] The issue before this court is whether or not the letter of October 12, 2012 resulted in a settlement of the action as against RVH.

The Facts

[ 6 ] On June 14, 2012, counsel for the plaintiffs wrote to the solicitors representing all of the defendants and in the letter of June 14, 2012 indicated that he was prepared to “recommend” to his clients a consent dismissal of the action as against RVH on a without costs basis. The letter of June 14, 2012 went on to provide that such a recommendation had a proviso, the proviso being that:

… the remaining defendants undertake not to make any allegations of negligence in any shape or form as against these defendants at trial.

Position of Plaintiffs

[ 7 ] Plaintiffs’ counsel takes the position that the letter of October 12, 2012 had as a condition precedent to any settlement with RVH, a requirement that all of the remaining defendants provide an undertaking not to make any allegations of negligence “in any shape or form” as against RVH. Plaintiffs’ counsel takes the position that the condition precedent has not been met. Furthermore, counsel for the plaintiffs argues that even if the condition precedent has been met, the plaintiffs will find themselves in an impossible situation at trial, given the possibility of Dr. Ku escaping liability by saying that he did not receive a key piece of medical evidence from one of the nurses. In that regard, the position of the plaintiffs can be best understood by simply reproducing paragraph 14 and 15 of the affidavit filed by plaintiffs’ counsel on the motion before this court:

14. One of the central issues in this case is the Complete Blood Count investigation ordered by Dr. Ku on November 21, 2003 at or about 02:55 a.m. The laboratory report with respect of this investigation was significantly abnormal and was consistent with an ongoing bacterial infection. Attached hereto and marked as Exhibit “E” to this my affidavit is a true copy of the said laboratory report.

15. The defendant, Nurse Waugh-Vieira, testified, at her examination for discovery, that the report was concerning to her and she, therefore, “put it up for the doctor to come and take a look at it and reassess.” Dr. Ku, on the other hand, maintained, at his examination for discovery, that he only had part of the report available to him when he discharged Chloe home. He testified that the information at the bottom of the report under the heading “Scan” was never brought to his attention – neither before nor after Chloe was discharged home.

Position of RVH

[ 8 ] Counsel for RVH takes the position that there is a binding settlement between the plaintiffs and RVH. It is suggested that the letter of October 12, 2012 does not have contained in it a condition precedent. Counsel for RVH suggests that the letter of October 12, 2012 makes clear that plaintiffs’ counsel has instructions to consent to an order dismissing the action against RVH on a without costs basis. The letter of October 12, 2012 it is suggested does not say that those instructions are contingent upon the condition precedent found in the letter June 14, 2012.

[ 9 ] As a secondary argument, counsel for RVH takes the position that even if the letter of October 12, 2012 should be read as providing for a condition precedent, that the condition precedent has now been fulfilled by the remaining co-defendants. Specifically, it is argued that correspondence subsequent to October 12, 2012 from counsel for the co-defendants makes clear that the condition precedent has been fulfilled. In that regard, reference can be made to correspondence dated November 8, 2012 from counsel for the defendant Clinidata Corporation, which provides:

We write further to your letters dated November 5 and 6, 2012 advising that the plaintiffs’ intend to proceed with their claim against the Royal Victoria Hospital and its nurses as the conditions set out in your letter of June 14, 2012 not been satisfied.

As outlined in our letter of October 12, 2012, we have instructions to consent to a without costs dismissal of my clients’ cross claims as against the Royal Victoria Hospital and its nurses (on the basis that the other defendants took the same position, which was confirmed by physicians’ counsel). While we have never been directly asked for any further assurances, we can further advise that we do not intend to call any evidence to allege negligence on the part of the Hospital or its nursing staff.

[ 10 ] Counsel for the defendant, Dr. Ku, wrote to all counsel on November 9, 2012 and stated:

I write further to Mr. Elmaliah’s recent correspondence in which he advised that he intends to proceed against the Royal Victoria Hospital and its nurses.

We provided our consent to the dismissal of the action as against all of Ms. Kopp’s clients on October 12, 2012. Although we have not been asked for any form of undertaking directly from Mr. Elmaliah, we do not intend to call evidence to allege negligence against Ms. Kopp’s client at trial. We also wish to advise that we intend to call the nurses as witnesses at trial.

[ 11 ] On the basis of the aforesaid letters from counsel for the co-defendants, counsel for RVH maintains that the condition precedent set forth in the letter June 14, 2012 has now been met, in that counsel for the co-defendants has provided an undertaking not to call any evidence to allege negligence on the part of RVH.

Conclusion

[ 12 ] I do not accept that the letter of October 12, 2012 as suggested by counsel for RVH does not have in it a condition precedent. While the letter of October 12, 2012 could have been made more clear, I am prepared to conclude that it is implicit, if not explicit, that the instructions to consent to an order dismissing the action as against RVH were contingent upon the co-defendants providing the undertaking reflected in the letter of June 14, 2012. That said, however, I am of the view that the undertaking requested in the letter of June 14, 2012 has now been fulfilled by both counsel for the remaining co-defendants. A settlement has therefore been concluded between counsel for the plaintiffs and counsel for RVH that will, subject to court approval, result in an order dismissing the action as against RVH.

[ 13 ] As to the secondary argument of plaintiffs’ counsel that Dr. Ku may testify at trial (as he did at his examination for discovery) that he had not seen a crucial part of the lab report, this potential predicament is in no way referenced or dealt with in any of the correspondence from plaintiffs’ counsel, dealing with the question of whether or not the action as against RVH should be dismissed on a without costs basis. It was open to plaintiffs’ counsel to somehow provide for this eventuality. It may be that counsel believed that in obtaining the undertaking from the remaining co-defendants not to make allegations of negligence as against RVH that he had dealt with this eventuality. That may or may not be the case but the undertaking has been provided and a settlement has been concluded between the plaintiffs and RVH.

[ 14 ] There remains, however, the question of whether or not the settlement will be approved by this court. As all counsel agreed during the course of argument, there are two steps that need to be dealt with in relation to the issue that has been raised by counsel for RVH. The first question is whether there is a settlement. The second question is whether or not that settlement is in the best interests of Chloe. The action of all plaintiffs with the exception of Chloe, as against RVH, will be dismissed on a without costs basis. The question of whether the settlement is in the best interest of Chloe remains to be decided. In that regard, reference must of course be made to Rule 7.08(1) and (2) of the Rules of Civil Procedure , which essentially provide that any settlement as against a party under disability is not binding on that party without the approval of a judge. This court will therefore require material in accordance with Rule 7.08(4) to be filed forthwith, which material shall address the question of whether the settlement is in the best interests of Chloe such that it should be approved by this court.

[ 15 ] Counsel for RVH suggested during the course of argument that with respect to that part of the motion dealing with the approval of the settlement, she wished to make further submissions. As to whether Rule 7.08 contemplates a party having any standing other than the party under disability, I am prepared to entertain further submissions. With respect to the motion to approve the settlement, I am going to direct that notice be provided to the Children’s Lawyer and require that the motion for the approval of the settlement be dealt with in open court. As special arrangements had been made for the trial to commence on November 19, 2012 through February 11, 2013, the determination of whether or not there was a settlement impacted on the timing of the commencement of trial. All counsel agreed that given the possibility of an appeal with respect to my order and the fact that counsel for RVH may have been lulled into a false sense of security and therefore not prepared for trial, it was agreed that the commencement of this trial could not take place as scheduled. The ultimate determination as to whether or not the settlement is in the best interest of Chloe still has to be decided by this court. In the interests of ensuring that this matter proceeds in an expeditious fashion, I am directing that the motion that will ultimately determine whether the court will approve the settlement, is to be heard on notice in open court at some mutually convenient court on or before December 15, 2012.

[ 16 ] As to the costs of this motion, I intend to reserve on those costs, pending the ultimate determination of whether the settlement is in Chloe’s best interest.

Justice M.L. Edwards

Released: November 23, 2012