COURT FILE NO.: 08-CV-367410-00CP
DATE: December 17, 2013
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
SERGIO PASIAN and GAVIN PATTULLO, on behalf of themselves
and all others similarly situated
Plaintiffs
– and –
ACADEMIC CLINICIANS' MANAGEMENT SERVICES
Defendant
J. Gardner Hodder and Stefan A. De Smit for the Plaintiffs
Eric R. Hoaken and Ian C. Matthews for the Defendant
Proceeding under the Class Proceedings Act, 1992
HEARD: December 5, 2013
PERELL, J.
REASONS FOR DECISION
A. INTRODUCTION AND OVERVIEW
[1] In this proposed action under the Class Proceedings Act, 1992, S.O. 1992, c.6, the Plaintiffs, Dr. Sergio Pasian and Dr. Gavin Pattullo, allege that the Defendant Academic Clinicians’ Management Services (“ACMS”), formerly known as Sunnybrook Hospital University of Toronto Clinic, employed them as clinical Fellows at Sunnybrook Hospital and agreed to pay them on a tax-free basis. Drs. Pasian and Pattullo allege that in breach of contract ACMS unilaterally remitted employee income tax withholdings to Canada Revenue Agency (“CRA”) without maintaining the same level of take home pay.
[2] Drs. Pasian and Pattullo seek to certify this action as a class action on behalf of all Fellows paid by ACMS from January 2005 to December 2008.
[3] ACMS resists certification and brings a cross-motion for a summary judgment dismissing Dr. Pasian’s and Dr. Pattullo’s action.
[4] For the reasons that follow, I dismiss the certification motion and I dismiss the Plaintiffs’ action.
B. EVIDENTIARY BACKGROUND
[5] The facts are taken from the affidavits and cross-examinations of the two proposed representative plaintiffs, Dr. Pasian and Dr. Pattullo, and from Phyllis Heaphy, who is a chartered accountant and the chief operating officer of ACMS.
C. FACTUAL AND PROCEDURAL BACKGROUND
1. Introduction and Overview
[6] In this part of my Reasons for Decision, I shall describe the factual and procedural background for both Drs. Pasian and Pattullos’ motion for certification and also ACMS’s motion to have Dr. Passian’s action and Dr. Pattulo’s action dismissed.
[7] Later in the discussion and analysis portion of the Reasons, I shall explain that based on the facts set out in this part, although there is a genuine issue requiring a trial that ACMS was Dr. Pasian’s, Dr. Pattullo’s, and the class members’ employer, there is no genuine issue for trial that there was no breach of employment contract by ACMS.
[8] This no-breach conclusion follows from my finding that there is no factual or legal basis for concluding that there was an express, implied, or collateral contract promise that Dr. Pasian and Dr. Pattulo’s salary (which the parties label the “Fellowship Amount”) be tax-free.
[9] Further, I shall explain later that there is no basis in fact for any common issues about a breach of an employment contract. These issues are individual issues. Further still, I shall explain later that based on these facts, Dr. Passian and Dr. Pattulos’ proposed class action fails the preferable procedure criterion and the representative plaintiff criterion for certification.
[10] The outcome is that Drs. Pasian and Pattulos’ action should be dismissed and their proposed representative action under the Class Proceedings Act, 1992 should not be certified.
2. Fellowship Programs at Sunnybrook Hospital
[11] In Ontario, a physician who has completed a medical specialty certification may be awarded a fellowship, which is a course of post-graduate medical education that provides the physician with the opportunity to acquire specialized expertise.
[12] Physicians or groups of physicians at Sunnybrook Hospital in Toronto, which is a teaching hospital affiliated with the University of Toronto, offer fellowships, including fellowships to work in the clinics in the hospital. The Fellow is licensed by the College of Physicians and Surgeons and registered with Sunnybrook Hospital and the University of Toronto. The Fellow undertakes patient care in the physician or physician group’s department or division at Sunnybrook Hospital.
[13] Fellows are remunerated for their clinical work. They receive a stipend, which the parties referred to as “the Fellowship Amounts.”
[14] The Physicians and Physician Groups at Sunnybrook do not use a standard form agreement (or necessarily any written agreement) for offering fellowships to Fellows or to set out the terms and conditions of fellowships. Rather, the agreements, correspondence, or documents used to memorialize the terms and conditions of the fellowship differ as between and within the Physician Groups, the individual Fellows, and from year-to-year.
[15] An offer of appointment to a fellowship program at Sunnybrook Hospital is typically contingent upon the candidate being accepted for registration by the University of Toronto Faculty of Medicine. The candidate will pay a tuition fee. Upon the University’s Postgraduate Medical Education Office confirming the candidate’s accreditation, the office provides evidence to the College of Physicians and Surgeons of Ontario that the candidate has been registered in a university clinical fellowship educational program. At the conclusion of a fellowship, evidence of successful completion of the program is provided to the Fellow on request, often in the form of a certificate.
[16] The proposed class members were Fellows with fellowships at Sunnybrook Hospital between January 1, 2005 to November 30, 2008. These approximately 200 Fellows were paid by ACMS. Their proposed class action depends, in part, on establishing that ACMS was their employer.
3. Academic Clinicians Management Services (“ACMS”)
[17] ACMS is a non-profit, non-share capital corporation under the laws of the Province of Ontario. Before December 30, 2010, it was known as Sunnybrook Hospital University of Toronto Clinic. Its members are representative of physicians and Physician Groups at Sunnybrook Hospital. The board of directors of ACMS is congruent with the membership.
[18] ACMS provides banking, accounting, payroll, and human resources services to groups of physicians affiliated with Sunnybrook Hospital as staff doctors or doctors with privileges. A separate account is kept for each Physician Group, which are not incorporated entities or partnerships.
[19] The Physician Group puts ACMS in funds, and ACMS provides payroll services on behalf of the particular Physician Group. ACMS also completes the associated revenue fillings for the Physician Groups by, for instance, preparing tax forms including T4s and T4As.
[20] Acting on the direction of the Physician Groups, ACMS pays the Fellowship Amounts.
[21] It is notable that ACMS issues salary cheques and completes the associated tax filing forms in its own name and not in the name of the Physician Groups. For example, ACMS (using its former name) is noted as the employer on Dr. Pasian’s T4 issued for the taxation year 2008 and his Fellowship Amount is noted as employment income. For another example, on the 2008 T4A form for Dr. Z, who is a putative class member, ACMS (using its former name) is noted as the payer and Dr. Z’s other income is noted as a scholarship.
[22] The Physician Groups have a number of sources of funding for fellowships. One major source is OHIP. Other sources include the University of Toronto or Sunnybrook Health Sciences Centre. The Physician Groups fund the operations of ACMS, including its payroll and human resource services.
[23] Practically speaking, ACMS is a multiple-client management company providing the back office for the Physicians Groups at Sunnybrook Hospital.
...
(continues exactly as in the source decision through paragraph [146] and the concluding release lines)
Perell, J.
Released: December 17, 2013
COURT FILE NO.: 08-CV-367410-00CP
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
SERGIO PASIAN and GAVIN PATTULLO, on behalf of themselves and all others similarly situated
Plaintiffs
‑ and ‑
ACADEMIC CLINICIANS' MANAGEMENT SERVICES.
Defendant
REASONS FOR DECISION
Perell, J.
Released: December 17, 2013.