Court File and Parties

COURT FILE NO.: CV-14-507026 COURT FILE NO.: CV-17-567522 DATE: 2018/10/25 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

Elia Broutzas and Meagan Ware Plaintiffs – and – Rouge Valley Health System, C.S.T. Consultants Inc., Knowledge First Financial Inc., Global RESP Corporation, Nellie Acar, Shaida Bandali, Esther Cruz, Gavriel Edry, Polina Edry, Munish Sethi, Subramaniam Sulur, Jane Doe “A”, Jane Doe “B”, John Doe, Registered Education Savings Plan Corporation, and Jane Doe “C” Defendants

Counsel: Norman T. Mizobuchi and Nicholas Habets for the Plaintiffs Patrick Hawkins, Markus F. Kremer and Daniel Girlando for the Defendants Rouge Valley Health System and Scarborough and Rouge Hospital David S. Young for the Defendant C.S.T. Consultants Inc. Michael Arbutina for the Defendant Global RESP Corporation Catherine Beagan Flood and Nicole Henderson for the Defendant Knowledge First Financial Inc. Saba Ahmad for the Defendant Nellie Acar Brian N. Radnoff for the Defendants Gavriel Edry and Polina Edry Timon Sisic for the Defendant Esther Cruz

Proceeding under the Class Proceedings Act, 1992

HEARD: October 1-5, 2018

PERELL, J.

Reasons for Decision

[1] Pursuant to the Class Proceedings Act, 1992 [^1], in a companion motion, the Plaintiffs Elia Broutzas and Meagan Ware move for certification of this action as against Rouge Valley Health System, C.S.T. Consultants Inc., Knowledge First Financial Inc., Global RESP Corporation, Nellie Acar, Shaida Bandali, Esther Cruz, Gavriel Edry, Polina Edry, and Munish Sethi. This accompanying motion is brought pursuant to Rule 21 of the Rules of Civil Procedure, and it was argued as a part of the certification motion.

[2] In their Rule 21 motion, the Plaintiffs seek a declaration that because of an Order of the Information and Privacy Commissioner (PHIPA Order HO-013), Rouge Valley is estopped from denying that it is liable for the various statutory and common law causes of action advanced against it.

[3] The Plaintiffs’ statutory causes of action arise from PHIPA, the Personal Health Information Protection Act, 2004 [^2], which governs the privacy of medical records.

[4] The various common law and statutory causes of action arise because acting independently, in violation of PHIPA, and in contravention of their respective employment contracts, Ms. Bandali, Ms. Cruz, and Mr. Sethi, three employees of two public hospitals (subsequently merged into one hospital), accessed hospital records about patients who had given birth at the hospitals. Then, Mr. Sethi may have used the contact information to sell Registered Education Savings Plans [^3] (“RESPs”) for the newborns, and Ms. Bandali and Ms. Cruz sold the names and contact information to Ms. Acar, the Edrys, and Mr. Sulur, who were RESP sales representative of three RESP investment dealers registered under the Ontario Securities Act [^4]; namely: CST, Global, and Knowledge First, which, in turn, used the contact information to sell RESPs for the newborns.

[5] The Plaintiffs advance causes of action of: (a) intrusion on seclusion; (b) breach of PHIPA; (c) negligence; (d) breach of contract and warranty; and (e) vicarious liability. (They are abandoning a conspiracy claim and the remedy of waiver of tort.). The Plaintiffs claim damages in excess of $400 million.

[6] In this Rule 21 motion, the Plaintiffs seek to have the court declare that PHIPA Order HO-013 of the Information and Privacy Commissioner of Ontario is determinative of Rouge Valley’s liability.

[7] The factual background to this action and to this motion is set out in some considerable detail in the certification motion decision being simultaneous released with this decision. [^5] I incorporate by reference all of the factual detail set out in that decision and will not repeat them here.

[8] Res judicata, issue estoppel, and abuse of process, which are related and partially overlapping legal doctrines, are bars to litigation that preclude a party from re-litigating a claim, a defence, or an issue that has already been determined. Cause of action estoppel, which is a branch of res judicata, precludes a litigant from asserting a claim or a defence that: (a) it asserted; or (b) it had an opportunity of asserting and should have asserted in past proceedings, which is the rule from Henderson v. Henderson [^6]. Issue estoppel, another branch of res judicata, precludes a litigant from asserting a position that is inconsistent or contrary to a fundamental point already decided in a proceeding in which the litigant participated.

[9] The requirements for an issue estoppel are: (1) the parties must be the same; (2) the same question must be involved in the initial and subsequent hearing; (3) the question must have been actually litigated and determined in the first hearing and its determination must have been necessary to the result; and (4) the decision on the issue must have been final. [^7]

[10] Abuse of process is a doctrine that a court may use to preclude re-litigation of a cause of action or an issue. The court has an inherent jurisdiction to prevent the misuse of its process that would be manifestly unfair to a party to the litigation or would in some other way bring the administration of justice into disrepute, and the court can and has used this jurisdiction to preclude re-litigation when the strict requirements of res judicata or issue estoppel are not satisfied. [^8]

[11] In Danyluk v. Ainsworth Technologies Inc. [^9] and in Penner v. Niagara (Regional Police Services Board) [^10], the Supreme Court added a discretionary element to res judicata and to the flexible doctrine of abuse of process. The Supreme Court held that where a party establishes the pre-conditions for an issue estoppel or an abuse of process, a court must still determine whether, as a matter of discretion, issue estoppel ought to be applied. The court should stand back and, taking into account the entirety of the circumstances and consider whether an estoppel in the particular case would work an injustice.

[12] In Danyluk v. Ainsworth Technologies Inc. and in Penner v. Niagara (Regional Police Services Board) the Court recognized that there may be situations where re-litigation would enhance the integrity of the judicial system; for example: (1) when the first proceeding is tainted by fraud or dishonesty; (2) when fresh, new evidence, previously unavailable conclusively impeaches the original results; or (3) when fairness dictates that the original result should not be binding in the new context, -- and in these instances, the subsequent proceeding would not be an abuse of process.

[13] In the case at bar, there were fulsome arguments about: (a) whether and how Rule 21 of the Rules of Civil Procedure applied; (b) whether the preconditions for an issue estoppel could be found in the proceedings of the Information and Privacy Commissioner, which have been described as informal and highly discretionary; [^11] (c) whether the Commissioner made determinations that actually addressed the issues that arise for a perfected statutory claim; and (d) whether the Commissioner could or did made determinations that actually addressed the issues that arise in the intrusion on seclusion, negligence, breach of contract, and vicarious liability causes of action of the Plaintiffs.

[14] I shall not resolve these arguments, because standing back and taking into account the entirety of the circumstances, it would not be in the interests of justice to resolve a $400 million class action (over $450 million if a companion class action is taken into account) against a public institution, based on the decision of an informal proceeding before an administrative tribunal dealing with its own privacy law mandate and not the intricacies of a newly developing area of substantive civil law about the protection of privacy. Invoking any issue estoppels against a hospital defending itself from a claim of this magnitude is all of procedurally and substantive unfair. Indeed, it would egregiously unfair to invoke any issue estoppel.

[15] Moreover, invoking an issue estoppel is inimical to the due administration of justice because it would complicate the good work done by the Information and Privacy Commissioner. This follows because if exposed to issue estoppels with an attendant liability in the multi-millions of dollars, a respondent to a complaint, in what is intended to be an informal procedure, would be compelled to litigate and never settle the complaint with the Commissioner. In the immediate case, the hospital ultimately settled by improving its information technology.

[16] Accordingly, the Plaintiffs’ motion is dismissed.

[17] If the parties cannot agree about the matter of costs for this motion, they may make submissions in writing, beginning with the submissions of Rouge Valley within twenty days of the release of these Reasons for Decision, followed by the Plaintiffs’ submissions within a further twenty days.

Perell, J. Released: October 25, 2018

COURT FILE NO.: CV-14-507026 COURT FILE NO.: CV-17-567522 DATE: 2018/10/25 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

Elia Broutzas and Meagan Ware Plaintiffs – and – Rouge Valley Health System, C.S.T. Consultants Inc., Knowledge First Financial Inc., Global RESP Corporation, Nellie Acar, Shaida Bandali, Esther Cruz, Gavriel Edry, Polina Edry, Munish Sethi, Subramaniam Sulur, Jane Doe “A”, Jane Doe “B”, John Doe, Registered Education Savings Plan Corporation, and Jane Doe “C” Defendants AND BETWEEN: Anne Kouvas Plaintiff

• and - Scarborough and Rouge Hospital, Global RESP Corporation, Esther Cruz and Nellie Acar Defendant

Reasons for Decision

PERELL J. Released: October 25, 2018

Footnotes

[^1]: S.O. 1992, c. 6. [^2]: 2004, c. 3, Sched. A. [^3]: An RESP is a tax-deferred investment vehicle used by parents to save money for a child’s post-secondary education. Enrolling in an RESP makes the subscriber eligible to receive government education grants such as the Canada Education Savings Grant and the Canada Learning Bond. [^4]: R.S.O. 1990, c. S.5. [^5]: Broutzas v. Rouge Valley Health System 2018 ONSC 6315. [^6]: (1843), 67 E.R. 313, 3 Hare 100. [^7]: Danyluk v. Ainsworth Technologies Inc., 2001 SCC 44. [^8]: Toronto (City) v. C.U.P.E., Local 79, 2003 SCC 63, [2003] 3 S.C.R. 77; Canam Enterprises Inc. v. Coles (2000), 51 O.R. (3d) 481 at paras. 55-56, per Justice Goudge dissenting (Ont. C.A.), approved 2002 SCC 63, [2002] 3 S.C.R. 307. [^9]: 2001 SCC 44. [^10]: 2013 SCC 19. [^11]: Hopkins v. Kay, 2015 ONCA 112.