ONTARIO

SUPERIOR COURT OF JUSTICE

COURT FILE NO.: 06-CV-312902CP[Toronto]
DATE: 20130708

B E T W E E N:

Robert Westland, on his own behalf and on behalf of

all former employees of the Ontario Blue Cross

who retired in or about 1992 and their survivors and dependents

Plaintiff

-and-

The Ontario Hospital Association

Defendant

Proceeding under the Class Proceedings Act, 1992

COUNSEL:

David Zarek and Paul Gemmink, for the Plaintiff

John C. Field and Rachel M. Arbour, for the Defendant

HEARING DATE: Motion in Writing

ENDORSEMENT

LAX J.

[1] This is a proposed class proceeding that was commenced in 2006 on behalf of a group of retirees. The claim relates to an early retirement program offered by Ontario Blue Cross in 1992. The defendant, the Ontario Hospital Association (“OHA”), sold Ontario Blue Cross in 1995, but retained the Ontario Blue Cross retiree group. The plaintiff, Robert Westland, was an employee of Ontario Blue Cross and the OHA for over 35 years, prior to his retirement in or about the fall of 1992.

[2] Commencing in 1992, Ontario Blue Cross offered an early retirement program. The plaintiff alleges that it was understood and agreed to by the retirees, that upon the death of the retiree, the retiree’s spouse would continue to receive 100% health coverage benefits until the time of the death of the spouse. Subsequently, it came to light that the defendant took the position that these benefits would terminate upon the earlier of the spouse’s remarriage or at the end of 12 months following the death of the retiree.

[3] The proposed class consists of a small group of employees who took early retirement. The proposed class action only involves claims for spouses of those retirees. The claim will only arise if the retiree predeceases his or her spouse.

[4] Mr. Westland’s spouse predeceased him on October 18, 2010. As a result, he is no longer a member of the proposed class. The plaintiff no longer has a cause of action as he outlived his spouse.

[5] Mr. Westland has been unsuccessful in finding another member of the proposed class to replace him. He deposes that most of the members of the proposed class are women and that of those with whom he has spoken, most had spouses with benefits of their own available. Others indicated they were not interested in representing the class. Putative class counsel have advised Mr. Westland that they do not believe the proposed class action is economically viable. On their advice, Mr. Westland is prepared to consent to a discontinuance of the action without costs. The defendant does not seek costs.

[6] Section 29(1) of the Class Proceedings Act, 1992 (CPA) requires leave of the court for an order granting a discontinuance. Where leave is sought, and particularly as here without notice, there must be full disclosure to the court and evidence to demonstrate that granting a discontinuance will not give rise to prejudice or unfairness to other members of the class on whose behalf the action was commenced.

[7] The court must aim to strike a balance between protecting the interests of absent class members and permitting the low cost resolution of marginal cases where the motion for leave to discontinue has been made in good faith and on reasonable grounds: Durling v. Sunrise Propane Energy Group Inc., [2009] O.J. No. 5969 (S.C.J.) at para. 18; Chopik v. Mitsubishi Paper Mills Ltd., [2003] O.J. No. 192 (S.C.J.) at para. 17. See also, Karabogdan v. Regent Holidays Limited, [2002] O.J. No. 5969 (S.C.J.).

[8] Here, the class is very small. There are approximately 19 Blue Cross retirees who took early retirement in 1992 who have not notified the insurance carrier of the death of their spouse. This group is largely female. There have been no steps taken to bring a motion for certification for many years and there is no evidence to suggest that any claims were withheld in reliance on this proceeding. To the knowledge of the parties, no spouses of a retiree have come forward since the commencement of the action in 2006. The economics of the litigation are marginal and it cannot proceed at all without a representative plaintiff. Despite Mr. Westland’s efforts, there does not appear to be anyone prepared to assume this role. This suggests that there is little interest among putative class members in pursuing this action as a class proceeding.

[9] For the above reasons, I am satisfied that this is a proper case for granting leave to discontinue without prior notice to the class. However, the class must be given notice of this discontinuance. I order that leave to discontinue this action is granted, but on the following terms:

(i) The discontinuance will be effective on October 31, 2013.

(ii) Within 30 days of release of this decision, co-counsel for the plaintiffs, counsel for the Ontario Hospital Association and the Ontario Hopsital Association shall post on their respective websites for a period of six months, a copy of this order and reasons.

(iii) Within 60 days of release of this decision, co-counsel for the plaintiffs and counsel for the Ontario Hospital Association are to use best efforts to notify the approximately 19 Blue Cross retirees who took early retirement in 1992 and have not notified the insurance carrier of the death of their spouse and to provide each retiree with a copy of this order and reasons. Unless otherwise agreed, the costs of this notice are to be shared equally.

LAX J.

Released: July 8, 2013