Court File and Parties

NEWMARKET COURT FILE NO.: CV-16-126375-00 DATE: 20170530 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

Angela Collins and Elizabeth Hanson Plaintiffs – and – XYTEX Corporation, XYTEX Cryo International Ltd., Outreach Health Services Inc., XYTEX Consulting Inc., XYTEX Canada, Mary Hartley, James Todd Spradlin, John Doe #1, John Doe #2, John Doe #3, John Doe #4, John Doe #5, John Doe #6, John Doe #7, John Doe #8, John Doe #9, John Doe #10, John Doe #11 John Doe #12, John Doe #13, John Doe #14, John Doe #15, John Doe #16, John Doe #17, John Doe #18, John Doe #19, John Doe #20, John Doe #21, John Doe #22, John Doe #23, John Doe #24, and John Doe #25 Defendants

Counsel: James K. Fireman, for the Plaintiffs Eric Dolden and Matthew D. Miller, for the Defendants, XYTEX Corporation, XYTEX Cryo International Ltd., XYTEX Consulting Inc., Mary Hartley and James Todd Spradlin Roderick S. Winsor, for the Defendant, Outreach Health Services Inc.

HEARD: April 21, 2017

Reasons for Decision

SUTHERLAND J.:

Overview

[1] The defendants Xytex Corporation, Xytex Cryo International Inc., Mary Hartley and Dr. James Todd Spradlin (the moving defendants) bring a motion pursuant to rr. 21.01(3)(c) and 20.01(3) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 [1] for a dismissal of the action based on res judicata. The plaintiffs oppose the motion on the basis that res judicata does not apply in the circumstances.

[2] The moving defendants filed two volumes of affidavit material and the plaintiffs filed one volume. Since each filed affidavit material, I assume that consent was given to comply with r. 21.01(2)(a).

[3] For the reasons to follow, I grant the relief requested by the moving defendants and dismiss the action.

The Facts

[4] The plaintiffs are a common-law couple that reside in Ontario. In 2006, the plaintiffs purchased semen from Xytex Corporation and Xytex Cryo International Ltd. (the Xytex corporations). The purchase was through a fertility clinic in Ontario, the defendant Outreach Health Services Inc. The plaintiff, Angela Collins gave birth to a child on July 19, 2007.

[5] The semen donor was James Christian Aggles (Aggles). The action is based on the plaintiffs’ allegations that the defendants made numerous misrepresentations regarding Mr. Aggles. According to the plaintiffs, the defendants represented to the plaintiffs that Aggles was a neuroscientist seeking a Ph.D. in neuroscience engineering, and that he had a high IQ of 160. He was one of the most popular donors and that his child and adult photographs were authentic. Aggles was represented as a person with an excellent educational, social and health history. The fact, however, as alleged by the plaintiffs, was that Aggles was a college drop out with a felony conviction and diagnosed with schizophrenia, narcissistic personality disorder, a drug-induced psychotic disorder and significant grandiose delusions. He was, in effect, not what was represented to the plaintiffs.

[6] The plaintiffs are seeking damages in an action commenced in this court on April 13, 2016. The plaintiffs’ Statement of Claim sets out a variety of claims which includes misrepresentation, negligence, fraud, defective product, breach of warranty, battery, violation of Consumer Protection Act, 2002, S.O. 2002, c. 30, Sched. A [2], specific performance, and punitive and aggravated damages.

[7] The plaintiffs commenced an action in the State of Georgia alleging the same facts and almost identical relief. The parties, however, are not identical in the two actions.

[8] The plaintiffs’ action in the State of Georgia was dismissed by Judge Robert C.I. McBurney of the Fulton County Superior Court Atlanta Judicial Circuit on October 20, 2015.

[9] The plaintiffs appealed Justice McBurney’s decision. However, the Notice of Appeal was not filed with the appellate court in Georgia on time. A motion for leave to extend the time for filing was dismissed by the Court of Appeals of the State of Georgia on March 17, 2016. The plaintiffs withdrew their appeal at the Court of Appeals of Georgia on April 8, 2016.

[10] The decision of Judge McBurney to dismiss the action was based on the doctrine of unwanted birth. In his conclusion Judge McBurney states:

[11] The Plaintiffs’ complaint sets forth ten claims, each with a genesis rooted in the concept of wrongful birth, a claim not recognized under Georgia law. The Xytex Defendants’ motion to dismiss the Plaintiffs’ complaint and amended complaint is there GRANTED… [3]

[12] Interestingly, Judge McBurney wrote, at p. 5 of 14: Plaintiffs rightly highlight the public policy issues raised by this litigation and Xytex’s argument that no claims should stand. Science has once again—as it always does—outstripped the law. Plaintiffs make a compelling argument that there should be a way for parties aggrieved as these Plaintiffs are to pursue negligence claims against a service provider involved in preconception services. After all, the human life that makes the calculus so complicated has not yet begun when would-be parents are working with companies such as Xytex….

This Court, however, has “no authority to overrule or modify a decision of the Supreme Court of Georgia as the decisions of the Supreme Court of Georgia shall bind all other courts as precedent. The direction from the higher courts and the Legislature is clear—perhaps a half-step behind today’s science, but clear—and until changes, it controls the outcome of this case. Defendants’ motion to dismiss is GRANTED as to all counts. [Citation omitted.]

[13] I will be basing my decision on r. 20 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, given the material filed.

Legal Principles

Summary Judgment

[14] Pursuant to r. 20.01 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, the court must grant summary judgment if it is satisfied there is no genuine issue requiring a trial. In response to a summary judgment motion, one is not permitted to solely rely on allegations or denials in a statement of defence, but must provide affidavit material with the specific facts showing that there is a genuine issue requiring a trial.

[15] There will be no genuine issue requiring a trial when a court is able to reach a fair and just determination on the merits. A fair and just determination on the merits is achieved when:

1. The process allows the judge to make necessary findings of facts;
2. The process allows the judge to apply the law to the facts; and,
3. It is a proportionate and more expeditious and less expensive means to achieve a just result. [4]

[16] On a summary judgment motion, the court must first determine if there is a genuine issue requiring a trial based on the evidence given on the motion. If there appears to be a genuine issue requiring a trial, the court would then determine if the need for a trial can be avoided using the powers under r. 20.04(2.1) by weighing the evidence, evaluating the credibility of the deponents and drawing any reasonable inference from the evidence, unless it is in the interest of justice for these powers to be exercised only at a trial. [5] These powers are presumptively available to the judge to give effect to the goals of timeliness, affordability and proportionality in review of the litigation as a whole. [6]

[17] By extension, the responding party must put their “best foot forward” or risk summary judgment being awarded against them. The evidentiary burden is on the responding party to present affidavit material or other evidence to support the allegations or denials in their pleading. Absent this evidence, an adverse inference can be drawn. [7]

Positions of the Parties

[18] The moving defendants submit that there is no genuine issue requiring a trial. The action has been decided by a court of competent jurisdiction. The plaintiffs chose their forum, the Superior Court of Georgia. Judge McBurney decided all the issues concerning the action of the plaintiffs. The plaintiffs attempted to appeal the decision of Judge McBurney. The plaintiffs withdrew their appeal. The plaintiffs’ action in this court is almost identical to the action decided in Georgia. The plaintiffs cannot get a second kick at the can. The plaintiffs may not like the decision of Judge McBurney but that is his decision, and that decision has not been overturned by the appellate court. The plaintiffs’ action in this court cannot continue.

[19] The plaintiffs do not disagree with the facts presented. There are no credibility issues. The plaintiffs contend that the plaintiffs’ action in Georgia was not determined on its merits. The Court of Appeal of Georgia did not adjudicate the plaintiffs’ appeal on its merits. The appeal was dismissed on procedural grounds. The plaintiffs withdrew their appeal based on these procedurals grounds. The plaintiffs are entitled to a hearing of their action on its merits in this court.

Issue

[20] The issue for this court to decide is whether there is an issue requiring a trial; that is, should the plaintiffs’ action commenced in this court be dismissed on the basis of res judicata namely, cause of action estoppel, issue estoppel or abuse of process?

Analysis

[21] There is no issue that the substance of the action in Georgia is the same as the action commenced by the plaintiffs in Ontario. The plaintiffs have conceded that the actions are in substance the same, even though the parties in both actions are not identical.

[22] The principles of res judicata are described in Cobbs v. Holding Lumber Co. Ltd. [8] as follows:

1. Where a given matter becomes the subject of litigation the law requires the parties to bring forward their whole case.
2. This applies where the issues sought to be litigated anew was not pursued in the first action either through negligence, inadvertence or even accident and covers every point belonged to the first action.
3. In special circumstances one party may be allowed to pursue the same matter in a second action but only if he can show that new facts he has discovered could not have been ascertained by reasonable diligence on his part and presented by him in the first action.
4. The burden lies upon the party who brings the second action to at least allege the new facts could not have been ascertained by reasonable diligence in the first instance. [9]

[23] The Ontario Court of Appeal in Bear Island Foundation, et al. v. Ontario [10] reviewed the principle of res judicata. In discussing the principles of res judicata, Laskin J.A. wrote as follows: Before dealing with these issues, I will briefly discuss the reach of the principle of res judicata. The principle of res judicata is well-established in our law. It applies by aboriginal peoples against the Crown in the same way as it applies in other cases. Res judicata is a form of estoppel. It means that any action or issue that has been litigated and decided cannot be retried in a subsequent lawsuit between the same parties or their privies. The object of res judicata is finality. Two reasons are commonly put forward for the principle: no person should be sued more than once for the same claim, and our law should not tolerate needless litigation. [11]

[24] The practical and public policy for the principle of res judicata is simple. Parties cannot endlessly forum shop. If a party is not successful in one court they cannot try another. Litigation would never end. There must be finality. Once a party picks their forum, the party is bound to the finding.

[25] This principle applies to causes of action or issues within an action. Re-litigation of the same issue or subject matter is not permitted. [12]

[26] There is no question that the plaintiffs commenced their action in Georgia. There is no question that the plaintiffs were not successful. Judge McBurney dismissed their action. The Georgia Court of Appeals dismissed their appeal for want of jurisdiction on procedural grounds. The plaintiffs then withdrew their appeal. Does the dismissal of the appeal on procedural grounds translate to the plaintiffs not having a final decision, and thus, their action was not adjudicated on the merits? [13] Does the plaintiffs’ inability to argue their appeal on procedural grounds translate to the plaintiffs not having a final judgment of their action on the merits? I find no.

[27] The plaintiffs, for whatever reason, decided to commence their action in the State of Georgia. The plaintiffs had a full hearing. The plaintiffs’ arguments were heard clearly by the Superior Court of Georgia. The reasons of Judge McBurney are clear and concise. The failure of the plaintiffs to comply with the rules of procedure in Georgia does not, in my opinion, lessen the hearing they had on the merits in front of Judge McBurney. The plaintiffs made their choice on the forum. The decision of Judge McBurney was a decision on the merits. The failure of the plaintiffs to appeal within the time period for appeals in the State of Georgia does not transform the decision of Judge McBurney to a non-final judgment. On the reasoning of the plaintiffs any decision of a court that is not heard by an appellate court on procedural grounds is not a final decision.

[28] Further, the question is not whether this court would have come to a similar decision. It is not for this court to substitute its findings of equity and fairness to the plaintiffs over that of Judge McBurney.

[29] In the end, the plaintiffs’ argument goes against the principle of finality and opens the door to needless litigation. I do not accept this argument.

[30] Barring special circumstances, I find that the plaintiffs had a full hearing of their action on the merits.

[31] Are there special circumstances to permit the action commenced in this court to proceed? Are there new facts that the plaintiffs could not have discovered at the time of the hearing in Georgia that permit the plaintiffs to continue with their action in this court?

[32] The plaintiffs have not directed this court to any new facts. The plaintiffs have not indicated that there are special circumstances that permit them to continue with their action in this court. The plaintiffs have conceded that the substance of the action in Georgia and in this court are the same, regardless that the parties are not identical.

[33] I find, therefore, that the principle of res judicata applies in the circumstances of this action.

[34] Accordingly, I find that there is no issue requiring a trial and grant the relief requested by the moving defendants.

[35] As an aside, I do agree with the statements of Judge McBurney that perhaps science has outstripped the law. I do have much sympathy for the position of the plaintiffs, if the allegations put forth by them are substantiated. Lawmakers, I suggest, should carefully examine the issues submitted by the plaintiffs and ascertain if such claims do require some form of relief.

Disposition

[36] For the reasons given, I order that the action of the plaintiffs be dismissed.

[37] If the parties cannot agree on costs, the defendants to serve and file their submissions of costs within twenty-one days from the date of this decision, and the plaintiffs will have twenty-one days thereafter to serve and file their submissions. The submissions to be no more than three pages, double spaced, exclusive of any cost outline, case law and offers to settle. Submissions are to be filed with the court. If no submissions are received within the time period set out herein, an order will be made that there will be no costs.

Justice P.W. Sutherland Released: May 30, 2017

Footnotes

[1] R.R.O. 1990, Reg. 194. [2] S.O. 2002, c. 30, Sched. A. [3] Affidavit of Thomas E. Lavender III, exhibit R, Final Order Granting Defendants’ Motion to Dismiss p. 355 (at p. 13 of 14). [4] Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87, at para. 49. [5] Canaccord Genuity Corp. v. Pilot, 2015 ONCA 716, at para. 31. [6] Hryniak, supra note 4, at para. 45. [7] Vincorp Financial Ltd. v. Hope’s Holdings Inc., 2010 ONSC 6819, at para. 17. [8] (1977), , 79 D.L.R. (3d) 332 (B.C. S.C.). [9] Ibid. at p. 334. [10] . [11] Ibid at para. 29. [12] Nicholls v. Court and Court, 2004 NBQB 270; and Manolopoulos v. Paniffe, [1930] 2 D.L.R. 169 (NSSC). [13] AGR Canadian Equity Fund v. Transamerica Commercial Finance Corp. Canada (1993), 14 O.R. (3d) 161 (ONSC); and Vancouver Island Helicopters Ltd. v. Borg-Warner Corporation et al..