COURT FILE NO.: CV-17-583054

DATE: 20200424

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

DR. FAY WEISBERG and FAY WIESBERG MEDICINE PROFESSIONAL CORPORATION

Plaintiffs

– and –

DR. MARJORIE DIXON and 2435665 ONTARIO INC.

Defendants

Arthur I. Yallen and James H. Lawson, for the Plaintiffs

Kevin O’Brien and Lauren Harper, for the Defendants

HEARD: December 2, 3, 4, 5 and 6, 2019 and January 10, 24, 31, 2020

JUSTICE S. NAKATSURU

1Sadly, a relationship of over two decades has ended up in court. On its face, this case is about a break-down of a business relationship. But delving deeper, it is also about very personal feelings of betrayal and injustice. The parties are both well-known, respected, and skilled fertility doctors. This case shows no one is immune to the vicissitudes that life brings.

2Dr. Fay Weisberg and Dr. Marjorie Dixon are the two fertility doctors. They have known each other for over 20 years. Fay G. Weisberg Medicine Professional Corporation and 2435665 Ontario Inc (“243 Inc.”) are their respective medical corporations. The doctors worked together in the same clinic, First Steps Fertility (“FSF”).

3In 2015 the Defendants were selected as an applicant to be a transfer payment recipient for funding by the Ontario Ministry of Health and Long-Term Care (the “Ministry”) for fertility procedures for Ontario patients. Up until then, fertility procedures were not generally publicly funded.

4Dr. Weisberg claims that Dr. Dixon received and deceptively completed the funding application solely for her company, 243 Inc. Dr. Dixon subsequently denied Dr. Weisberg access to the funding. Put differently, in an underhanded way, Dr. Dixon cut Dr. Weisberg out of the significant benefits of being chosen as a funded entity under the new public funding scheme for fertility procedures. Dr. Weisberg claims for compensation for losses sustained due to the Defendants’ breach of their fiduciary duty and/or their unjust enrichment.

5Dr. Dixon defends by submitting Dr. Weisberg knew and agreed with what Dr. Dixon did when the funding application was made. According to the Defendants, Dr. Weisberg had two opportunities to participate in that funding: 1) by investing in 243 Inc. as a shareholder and director; and 2) by joining Dr. Dixon and 243 Inc. at the new clinic. On both occasions, she made business decisions that she has come to deeply regret. Instead of accepting the consequences of her decisions, Dr. Dixon submits that Dr. Weisberg has brought this lawsuit in a misguided effort to recover losses that she herself caused.

6The legal issues are as follows:

a. Did Dr. Dixon breach a per se fiduciary duty which she had by virtue of her position as the Medical Director of FSF?

b. Did Dr. Dixon breach a fact based or ad hoc fiduciary duty to the Plaintiffs?

c. Were the Defendants unjustly enriched?

d. What is the appropriate assessment of damages in all of the circumstances?

I. FACTUAL BACKGROUND

7The following is largely taken from the Agreed Statement of Facts.

8Beginning in January 2008, Dr. Weisberg, Dr. Dixon, and a third colleague, Dr. Sonia Sierra, began operating FSF fertility clinic located at 4025 Yonge Street in Toronto (the “Yonge Location”). The clinic specialized in reproductive health medicine. In particular, it assisted patients conceive through Invitro-Fertilization (“IVF”) or Intrauterine Insemination (“IUI”). Dr. Weisberg, Dr. Dixon and Dr. Sierra were each officers and directors of First Steps Fertility Inc. (“FSF Inc.”) which was incorporated on December 3, 2007.

9In or around September 2011, Dr. Sierra left the clinic. Dr. Weisberg and Dr. Dixon remained practising out of the Yonge Location.

10Both Dr. Weisberg and Dr. Dixon have always conducted their IVF procedures at an off-site facility as the Yonge Location cannot offer IVF services on-site.

11In April 2014, the Ministry announced their intention to provide direct funding for IVF and IUI procedures to begin by the end of 2015. Prior to this, both fertility procedures were mostly paid for by the patients themselves.

12In September 2014, Dr. Dixon incorporated 243 Inc. Dr. Dixon had intended to name her new clinic First Steps Reproductive Health under 243 Inc. In April 2015, Dr. Dixon registered the business name “First Steps Reproductive Health” (“FSRH”), which was later renamed to Anova Fertility Reproductive Health.¹

13On December 5, 2014, the domain name firststepsfertility.com which was first registered in 2007, came up for renewal. The renewal was carried out by Tara McAteer, the operations manager at FSF. At that time, the administrator and technical contact for firststepsfertility.com and firststepsfertility.ca was changed to Ms. McAteer. The registrant was changed to Dr. Marjorie E. Dixon Professional Medicine Corporation.

14On May 28, 2015, Dr. Dixon entered into a lease for a space for her new clinic at 25 Sheppard Avenue West (the “new clinic” or “Sheppard location”) in Toronto.

15In spring 2015, Dr. Dixon offered Dr. Weisberg the opportunity to invest as a minority shareholder in 243 Inc. and Dr. Dixon and Dr. Weisberg (through their counsel) engaged in negotiations with respect to same.

16A cost sharing agreement between Dr. Dixon’s then existing professional corporation and Dr. Weisberg’s professional corporation dated February 11, 2015, was executed on or around May 22, 2015. Prior to this there was no written cost sharing agreement between them, but they did have informal cost sharing arrangements.

17On August 21, 2015, Dr. Weisberg advised Dr. Dixon that she would not be investing in 243 Inc.

18On August 28, 2015, Dr. Dixon applied to trademark “First Steps”.

19In October 2015, Dr. Dixon asked Dr. Weisberg to dissolve FSF Inc.

20On October 20, 2015, the Ministry sent out the funding applications for pre-selected clinics to apply for the Fertility Program by email. One of those clinics was FSF. The email attaching the application was received by Tara McAteer and Dr. Dixon on October 20, 2015.

21The applications were addressed to the clinic owner(s)/director(s).

22On October 20, 2015, Dr. Dixon sent an email with the Subject: “Re: Dissolving First Steps Fertility Inc.” Dr. Weisberg, Ms. McAteer and Cheryl Ninno were copied on that email.

23On October 21, 2015, the Ministry communicated by e-mail additional information about the IUI and IVF funding it had announced back in April 2014. It announced it would be holding two identical web-based information sessions about the Fertility Program and the application process. The e-mail was received by Ms. McAteer and Dr. Marjorie Dixon.

24Under the Fertility Program, payments would be made to clinics by the Ministry for IUI and IVF procedures by way of Transfer Payment Agreements (“TPAs”).

25The funding applications for the Fertility Program were due on October 28, 2015 at 5:00 p.m.

26On October 23, 2015, Dr. Weisberg went on vacation. Dr. Weisberg returned from her overseas vacation on October 31, 2015.

27Dr. Dixon advised Dr. Weisberg, by text message, on October 27, 2015 that: “Am working on the government application. 5 hours tonight and this morning. Will finish when I finish. 27 pages.”

28Dr. Dixon completed the funding application (the “TPA Application”) and submitted it on October 28, 2015. Dr. Dixon indicated the name of the applicant in the funding application as Dr. Marjorie Dixon, CEO. Dr. Dixon indicated the name of the clinic in the funding application as “First Steps Reproductive Health” and included in parentheses “(currently First Steps Fertility but we will be rebranding when we move our Clinic to our new IVF centre in March 2016)”. At several points in the funding application, Dr. Dixon indicated that First Steps Fertility was currently located at 4025 Yonge Street, but would be moving to a new location at 25 Sheppard Avenue West in March 2016. Dr. Dixon relied on Dr. Weisberg’s historic numbers of IVF, IUI, and FP cycles in response to the “Assessing Capacity and Historic Service Volumes” section of the funding application.

29On October 31, 2015, Dr. Dixon advised Dr. Weisberg, in a telephone conversation, that she had submitted the funding application.

30On Monday, November 2, 2015, on her return to the office from vacation, Dr. Weisberg received from Ms. McAteer a copy of the submitted funding application.

31On November 4, 2015, Dr. Weisberg sent an e-mail to HSB – the Fertility Program of the Ministry inquiring as to why a funding application was not sent to her.

32On November 11, 2015, FSF received a communication from the Ministry about the funding advising that 243 Inc had been selected as a funding recipient and advising of the amounts of funding that were approved in principle.

33On December 9, 2015, FSRH received formal approval of its TPA funding.

34On December 16, 2015, Dr. Weisberg confirmed to Dr. Dixon that it was her intention to move her practice to the new clinic on Sheppard Avenue West. Dr. Dixon sent Dr. Weisberg an “Agreement for Services and Fees for the Funded IUI and IVF program effective December 21, 2015”.

35On December 23, 2015, Dr. Weisberg signed the “Agreement for Services and Fees” for her provision of services at the new clinic. Dr. Weisberg indicated on the “Agreement for Services and Fees” that she executed that it “may be changed” as it pertained to the amount of remuneration she would receive for her services.

36On January 5, 2016, a Memo from FSF to Dr. Weisberg regarding the closing activities for FSF was sent. Dr. Weisberg did not execute this Memo.

37On January 11, 2016, a revised “Agreement for Services and Fees for the Funded IUI and IVF program effective December 21, 2015” was sent to Dr. Weisberg. Dr. Weisberg did not execute this agreement.

38On January 15, 2016, Dr. Weisberg sent an e-mail to the Ministry and had a phone call with a representative of the Ministry about obtaining TPA Funding. She was advised by the Ministry in an e-mail that all the TPA funding had been allocated.

39On January 20, 2016, a draft agreement between Dr. Dixon (the “Principal Physician”) and Dr. Weisberg (the “Associate”) was sent by Dr. Dixon to Dr. Weisberg. Dr. Weisberg did not execute this agreement.

40On February 4, 2016, Dr. Weisberg advised Dr. Dixon for the first time that she would not be moving with Dr. Dixon to her new clinic. Shortly after February 4, 2016, there was a breakdown in the professional relationship of Dr. Dixon and Dr. Weisberg.

41From December 21, 2015 to the summer of 2016, Dr. Weisberg was provided access for her patients to 49 funded IVF and 96 funded IUI cases under the TPA funding obtained by FSRH.

42Dr. Weisberg has not received any TPA funding from 243 Inc. since the summer of 2016.

43In June 2016, Dr. Dixon opened her new clinic at Sheppard Avenue West. She named the clinic “Anova Fertility & Reproductive Health”. Dr. Weisberg remained at the same clinic at the Yonge Location.

44By letter dated March 15, 2016 to the Ministry, Dr. Weisberg requested that the Ministry review the application for funding submitted by 243 Inc. and reallocate to her clinic the portion of the funding which was based on her practice. The Ministry responded, inter alia, that all the funds approved for this program had been allocated.

45On December 23, 2016, March 24, 2017 and November 28, 2017, Dr. Weisberg sent e-mails to the Ministry about obtaining TPA Funding. Dr. Weisberg continues to be advised by the Ministry that all the TPA funding has been allocated to participating clinics.

II. DID DR. DIXON BREACH A PER SE FIDUCIARY DUTY WHICH SHE HAD BY VIRTUE OF HER POSITION AS MEDICAL DIRECTOR OF FSF?

46The Plaintiffs submit that as a medical director, Dr. Dixon was in a per se fiduciary relationship with them. The Defendants respond that this relationship has never been before recognized as a fiduciary one.

47There are several established traditional fiduciary relationships that the law has recognized: Elder Advocates of Alberta Society v. Alberta, 2011 SCC 24, 2 S.C.R. 261, at para. 33. The relationship of a medical director to another physician with whom that medical director practices, has never been recognized as being fiduciary in nature.

48However, the traditional categories are not exhaustive: Hodgkinson v. Simms, 1994 CanLII 70 (SCC), [1994] 3 S.C.R. 377, at paras. 29-31.

49In determining whether this relationship merits recognition as a fiduciary one, Wilson J.’s analytical framework in Frame v. Smith, 1987 CanLII 74 (SCC), [1987] 2 S.C.R. 99, at p. 136, adopted in Hodgkinson, at para. 30, provides useful guidance. These are the three characteristics that assist in recognizing a fiduciary relationship:

a. The fiduciary has scope for the exercise of some discretion or power;

b. The fiduciary can unilaterally exercise that power or discretion so as to affect the beneficiary’s legal or practical interest; and

c. The beneficiary is peculiarly vulnerable to or at the mercy of that discretion or power.

50The Plaintiffs argue that this “test”² is met in the case at bar:

a. Through her power and scope as Medical Director, Dr. Dixon had the authority to complete the TPA Application;

b. She unilaterally exercised that right to complete the TPA Application for her own benefit, thereby affecting Dr. Weisberg’s legal and practical interests; and

c. Dr. Weisberg was particularly vulnerable to Dr. Dixon exercising that power or discretion as she trusted Dr. Dixon and Dr. Dixon had access to Dr. Weisberg’s confidential information.

51The Plaintiffs submit that as Medical Director of FSF, Dr. Dixon owed a fiduciary duty to FSF and to Dr. Weisberg not to self-deal in breach of her per se fiduciary duty.

52I do not agree. I find that a per se fiduciary relationship has not been established.

53In my opinion, the Plaintiffs’ submissions conflate the per se fiduciary relationship with the ad hoc fiduciary duty. Put another way, the facts relied on by the Plaintiffs are not innate to the given relationship between the parties but arise out of the particular surrounding circumstances of the TPA Application.

54To start, the material relationship is the one between Dr. Dixon and Dr. Weisberg. It is not the relationship between Dr. Dixon and FSF. FSF is not a party to this lawsuit. In that regard, I agree with the Defendants that it has not been alleged that Dr. Dixon breached any fiduciary duty owed to the now defunct FSF: BCE Inc., Re, 2008 SCC 69, 3 S.C.R. 560, at para. 60. That said, equity’s reach cannot so simply be limited. All aspects of the relationship between Dr. Dixon and Dr. Weisberg should be considered.

55When I assess the evidence of their relationship against the indicators posited by Wilson J., while Dr. Dixon exercised some discretion or power, I find sufficient proof of influence over interests and an inherent vulnerability to be lacking.

56When FSF Inc. was established, Dr. Weisberg, Dr. Dixon and Dr. Sierra were equal shareholders, officers and directors of FSF Inc. Each maintained their own separate individual practices billing the Ontario Health Insurance Plan (“OHIP”) directly for the work performed, although certain revenues and expenditures were shared. When Dr. Sierra left in or around September 2011, Dr. Dixon and Dr. Weisberg stopped using the corporate vehicle of FSF Inc. They no longer pooled revenue or used a common bank account. They were independent physicians sharing office space, certain common expenses and the FSF brand. They had separate bank accounts and their own source of referrals. When other referrals came to FSF, they split those referrals. FSF Inc. was inactive from 2011 and no further tax returns were filed by FSF Inc. Dr. Dixon and Dr. Weisberg used their own medical corporations.

57In May of 2015, Dr. Dixon and Dr. Weisberg signed a cost sharing agreement. When FSF Inc. was initially set up, while attempts were made, no shareholder agreement was signed. There was just a professional understanding between the physicians. This cost sharing agreement merely put into writing what the practice had been. It was generally understood that things would continue as they were. In that cost sharing agreement, there was a specific provision permitting the doctors to freely compete.

58Dr. Weisberg is a senior specialist in her field with considerable experience in IVF and IUI. Dr. Dixon did her residency under Dr. Weisberg. Dr. Weisberg was a mentor. They worked together at Sunnybrook Hospital and Create Fertility Clinic for several years before FSF.

59In my opinion, based on these circumstances, at the time of the TPA Application, Dr. Dixon had little ability to unilaterally exercise any powers or discretion given to her that could affect Dr. Weisberg’s legal or practical interests. Essentially, these were two professionals working in a shared office space but, independently, using the brand FSF as it remained useful for them. Dr. Dixon had very little scope to unilaterally affect Dr. Weisberg’s interests. The nature and terms of the cost sharing agreement was consistent with that independent relationship. The fact that Dr. Dixon had the title “Medical Director” of FSF did not alter this fundamental nature of their relationship. I note that Dr. Dixon herself had a title of “Clinical Director” of FSF.

60Moreover, Dr. Weisberg was not peculiarly vulnerable to or at the mercy of any discretion wielded by Dr. Dixon. The history of their relationship, which often involved resorting to legal advice, shows that Dr. Weisberg was an experienced and capable physician and business person. She was the senior of the two. She had successfully operated her medical practice in various forms for a number of years. There were no unequal power dynamics. Dr. Weisberg did not significantly rely nor was she dependent on Dr. Dixon beyond what is normally expected of physicians working so closely together (i.e., covering patients). Dr. Weisberg had no physical or mental ailments. She is intelligent and strong-willed. Her testimony at trial supported this assessment of her abilities.

61In my view, the specific facts of this case do not establish a per se fiduciary duty. There is no dependence or vulnerability in the exercise of discretion by Dr. Dixon that merits the protection of equity. The hallmarks of a fiduciary relationship are missing.

62More generally, the evidence does not establish that a “Medical Director” per se owes fiduciary duties to others. In other words, that “Medical Directors” are a class to which fiduciary obligations should presumptively attach. On this broader point there is scant, if any, evidence of the duties, responsibilities, and interrelationships of those who might hold such a position in a medical setting. For example, I disagree with the Plaintiffs that the evidence establishes that such a “Medical Director” is akin to the position of a director of a corporation.

63In sum, Dr. Weisberg’s core complaint is not about something that arose from the innate character of the relationship she had with Dr. Dixon, but from the circumstances surrounding how the TPA Application was handled. This should be addressed under the ad hoc fiduciary duty analysis.

III. DID DR. DIXON BREACH A FACT BASED OR AD HOC FIDUCIARY DUTY TO THE PLAINTIFFS?

64The test for an ad hoc fiduciary duty is stated in Elder Advocates of Alberta Society, at para. 36, as having three elements that must exist:

a. An undertaking by the alleged fiduciary to act in the best interests of the alleged beneficiary;

b. A defined person or class of person vulnerable to the fiduciary’s control; and

c. A legal or substantial practical interest of the beneficiary that stands to be adversely affected by the alleged fiduciary's exercise of discretion or control.

65The Plaintiffs submit that this test for a finding of a breach of an ad hoc fiduciary duty has been met:

a. Dr. Dixon gave an undertaking to complete the TPA Application in the best interests of Dr. Weisberg and obtain TPA funding which included Dr. Weisberg;

b. Dr. Weisberg trusted Dr. Dixon and was vulnerable to Dr. Dixon’s exercising her discretion by the manner in which she completed the application; and

c. As a result of the Defendants taking all of the TPA Funding, Dr. Weisberg has been seriously, adversely affected, having lost out on millions of dollars of TPA Funding.

66The Defendants focus their arguments on two points: (1) Dr. Dixon never undertook, either expressly or implicitly, to subordinate her own interests in favour of Dr. Weisberg’s interests; and (2) alternatively, if a fiduciary duty was owed, Dr. Dixon did not breach it as she filled out the TPA Application honestly, transparently, and with Dr. Weisberg’s agreement and understanding.

67Regarding the first factor, the Plaintiffs rely on four sets of facts that they submit confirm Dr. Dixon gave an undertaking to complete the TPA Application for the benefit of Dr. Weisberg and therefore to act in her best interest.

a. Dr. Dixon gave an express undertaking stating that Dr. Weisberg would be included in the application, that they would be applying together, and that she would get funding for “our” clinic.

b. Dr. Dixon gave an implied undertaking in that:

i. The TPA Application came to Dr. Dixon as Medical Director of FSF. Dr. Weisberg was Clinical Director of FSF and had an equal entitlement to apply for funding.

ii. Dr. Dixon had access to Dr. Weisberg’s personal and confidential business information, which she used and relied upon in the TPA Application to ensure it was approved and to secure the most funding possible.

iii. Dr. Dixon concealed the fact that the TPA Application had arrived from Dr. Weisberg and only disclosed its contents to Dr. Weisberg after it had been submitted.

68In reply to the Defendants’ arguments, inter alia, the Plaintiffs argue that the law does not require Dr. Dixon to give up her own interest in the TPA funding in order to establish an undertaking. It only requires that her own self-interest should not have compromised her duty to Dr. Weisberg.

A. Was There an Undertaking Given?

69I agree with the Defendants’ position. No clearer expression of the law is stated than in Professional Institute of the Public Service of Canada v. Canada (Attorney General), 2012 SCC 71, 3 S.C.R. 600, at para. 124:

It is now definitely a requirement of an ad hoc fiduciary relationship that the alleged fiduciary undertake, either expressly or impliedly, to act in accordance with a duty of loyalty. It is critical that the purported beneficiary be able to identify a forsaking of the interests of all others on the part of the fiduciary, in favour of the beneficiary, in relation to the specific interest at issue.

70In that above noted case, it was alleged that the Government of Canada owed a fiduciary duty to the beneficiaries of a public pension plan. Rothstein J. disagreed. Given the prevailing context and the applicable legislation, he held that the government had not undertaken to forsake the interests of all others, including the taxpayer and public, in favour of the plan members regarding an actuarial surplus which was the specific interest at issue.

71A similar point was made in the earlier case of Galambos v. Perez, 2009 SCC 48, 3 S.C.R. 247, at para. 78, where Cromwell J. cites with approval the following academic commentary:

… Professor Smith writes in his comment on Hodgkinson, at p. 717 (echoing Dickson J.’s comments in Guerin, at p. 384, and Austin W. Scott, “The Fiduciary Principle” (1949), 37 Cal. L. Rev. 539, at p. 540):

The fiduciary must relinquish self-interest; that is an act which the fiduciary does, not an act which is done to the fiduciary. This was put slightly differently by Austin Scott, who said that “a fiduciary is a person who undertakes to act in the interest of another person.” [Emphasis in original.]

Also see Hodgkinson, at para. 58, per La Forest J.

72This holding that the forsaking of the interests of all others includes the forsaking by the alleged fiduciary of their own interests has been followed in other cases: Catalyst Capital Group Inc. v. Dundee Kilmer Developments Limited et al., 2016 ONSC 7365, at para. 65; Density Group Ltd. v. HK Hotels LLC, 2012 ONSC 3294, at para. 114 affirmed 2014 ONCA 605, at paras. 172, 174, 177, 185.

73Thus, what the Plaintiffs must point to is evidence that Dr. Dixon undertook to forsake all interests including her own when it came to the specific interest at issue, the TPA Application and public funds for fertility treatments that could be obtained through it.

74Of course, this undertaking may be express or implied in the particular circumstances of the parties' relationship. Relevant to the existence of an implied undertaking are considerations such as professional norms, industry or other common practices and whether the alleged fiduciary induced the other party into relying on the fiduciary’s loyalty: Galambos, at para. 79. But even as an implied undertaking, the fiduciary must undertake to relinquish their own self-interest.

i. Factual Determinations

75It is necessary to make some key factual determinations to resolve the issue of whether Dr. Dixon gave an undertaking. As well, those factual determinations will be important in assessing the second claim of unjust enrichment. Therefore, I will make those determinations at this point. Included in these determinations are credibility findings with respect to Dr. Weisberg and Dr. Dixon.

Dr. Weisberg planned to move her practice to the new clinic with Dr. Dixon before the TPA Application

76For a number of years, Dr. Dixon wanted to open a clinic with an IVF lab. She took numerous preparatory steps, incorporated 243 Inc., and leased the Sheppard location. In the spring of 2015, Dr. Dixon offered Dr. Weisberg a chance to invest in the new clinic and 243 Inc. as a minority shareholder. After lengthy negotiations, on August 21, 2015, Dr. Weisberg told Dr. Dixon that she would not invest due to personal reasons including that she was nearing retirement and had other personal expenses. However, she told Dr. Dixon that she would be content to do her IVF services at the new clinic. Dr. Dixon was surprised by that decision as she had counted on Dr. Weisberg’s investment.

77From that date into the fall of 2015, there is a conflict in the evidence regarding whether Dr. Weisberg, despite declining to invest in the new clinic, intended to move her practice from the Yonge Street location to the Sheppard location. In terms of the trial issues, this is relevant for several reasons including credibility. But primarily, it is important in that Dr. Dixon’s position is that in the events that followed including the TPA Application, she relied on Dr. Weisberg’s repeated representations that she was going to move her practice to the new location.

78Dr. Weisberg testified that she did not intend to move to the Sheppard location and that there was no discussion of FSF closing or rebranding as FSRH. She testified that she intended to stay at the Yonge Location and do her IVF only at the new clinic. Dr. Dixon testified that at some point, Dr. Weisberg made the decision to move her entire practice from the Yonge Location to Dr. Dixon’s new Sheppard location clinic. Dr. Dixon testified that she and Dr. Weisberg had agreed to both move once Dr. Dixon obtained her ultrasound licence. At that point in time, according to Dr. Dixon, the plans changed. No longer was it just an IVF lab to be set up in the new location.

79In September 2015, Dr. Dixon successfully obtained an ultrasound license for her new clinic. This was a very significant development. An ultrasound license, which is issued by the Ministry, is an extremely valuable asset for a fertility clinic. It allows a clinic to bill the Ministry for the technical component of OHIP billings for ultrasounds, creating a very lucrative revenue stream. There are only a limited number of such licenses made available. In the past, Dr. Weisberg and Dr. Dixon had unsuccessfully sought to obtain one for FSF.

80Dr. Weisberg was aware that Dr. Dixon had obtained the ultrasound license. Dr. Weisberg acknowledged that ultrasound licenses created a significant revenue stream for whoever has the licence, there were only a finite number of them and getting one was a “big deal because they’re very hard to get”. Without an ultrasound licence, Dr. Dixon and Dr. Weisberg were required to send their patients to True North Imaging, a medical imaging company in the same building as the Yonge Location. True North Imaging would perform their patients’ ultrasounds and bill OHIP directly.

81The Plaintiffs submit that Dr. Dixon should not be believed when she testified that getting the licence was the reason for a change in plans and that this was a reason that Dr. Weisberg decided to move. They submit that this testimony is a change in evidence from Dr. Dixon’s discovery evidence, a change from the pleadings, and the Defendants’ original theory of the case.

82I do not see it that way. I accept Dr. Dixon’s testimony on this issue. I prefer it to Dr. Weisberg’s. Albeit briefly, Dr. Dixon did refer to the issue of the ultrasound on examination-in-discovery. While I appreciate the point made by the Plaintiffs regarding the Defendants’ pleadings, I do not see any inconsistency in Dr. Dixon’s evidence. Her evidence was internally consistent. The fact that the ultrasound licence was not produced into evidence is of little moment. I have no doubt that it exists. Finally, the actual probative value of the specific reason why Dr. Dixon decided to move her whole clinic to the Sheppard location is of less import than whether Dr. Weisberg decided to join her there.

83On that point, while the ultrasound licence could have altered Dr. Dixon’s plans to move the entire clinic to the Sheppard location, it need not have affected Dr. Weisberg’s own plans.

84That said, I find the whole of the evidence supports the factual finding that Dr. Weisberg also intended to move her clinic to the new location.

85First, it made some professional sense for Dr. Weisberg to move to the new location. At the time, their relationship was still good. Dr. Weisberg would be joining a clinic that owned its own ultrasound licence. It made sense for both physicians to have Dr. Weisberg join in order to share expenses, professional support, and collegiality. The two had worked well together for many years.

86Second, in the TPA Application submitted on October 28, 2015, Dr. Dixon explicitly states numerous times that both physicians planned to move their practices to the Sheppard location. It makes no sense for Dr. Dixon to put that in the Application if that was not the agreed-to plan. If Dr. Weisberg intended to stay at the Yonge Location, once she reviewed the Application, she would see this significant error. Dr. Weisberg could then easily have corrected this, whether it was a misunderstanding or a deliberate falsehood, and informed the Ministry. Dr. Dixon would surely have appreciated that such a significant error or falsehood could well have led the Ministry to look unfavorably at her Application. This would have serious detrimental consequences for both physicians. Thus, I find it implausible that Dr. Dixon would have put this in the Application if it were not true. Had she just merely wanted to use the historical patient numbers of Dr. Weisberg, she could have made the same arrangements that other physicians such as Dr. Librach did in their TPA Application for other physicians who wanted to access public funding through their clinic, arrangements which will be discussed at greater length below. Put another way, Dr. Dixon could have used Dr. Weisberg’s numbers as a satellite clinic through which the public funding would flow.

87Third, Dr. Weisberg reviewed the TPA Application on November 2, 2015. If Dr. Weisberg is correct that she did not intend to move, she would have known at that time that what Dr. Dixon had written about her intention to move to the clinic was wrong. However, it was not until Dr. Weisberg wrote to the Ministry five months later, after her relationship with Dr. Dixon had broken down, that Dr. Weisberg took any issue with the description of this significant component of the Application and their joint plan as evidenced in that document. This delay in saying anything about it for that length of time speaks against Dr. Weisberg’s credibility on this point. I did not find her explanations as to why she delayed speaking of this matter plausible in light of the circumstances.

88Fourth, the events subsequent to the granting of the TPA funding show that Dr. Weisberg was going to move to the new clinic at that time. Dr. Weisberg admits this, although she gives different reasons for this change of heart. For my part, if Dr. Weisberg showed herself willing to move her practice at a future date, this is consistent with her intention to move at the material time before the TPA Application. These subsequent events will be further elaborated on below.

89On the other hand, as support for her position that she did not intend to move, Dr. Weisberg points to an email dated October 5, 2015, in which she raises the issue with Dr. Dixon of purchasing a new blood machine, as purported evidence that the parties were planning to stay, at least, in part, at the Yonge Location. In my view, I agree with the Defendants’ submission that this email does not support Dr. Weisberg’s version of events. First, this email does not discuss which location the machine was to be used at (i.e., the Yonge Location, the Sheppard location, or both). Dr. Weisberg testified that their old machine was outdated, and the new machine could perform tests that they could not run on the old blood machine. If the parties needed a new blood machine imminently, it could have been purchased for the Yonge Location pending the move to the new clinic. Second, this email was sent several weeks before the submission of the October 28, 2015 funding application, which repeatedly noted that both doctors were moving to the Sheppard location. Accordingly, even if Dr. Weisberg was not planning on moving to the new clinic by October 5, 2015, she could have changed her plans in the coming weeks before the TPA Application was submitted.

90In sum, I find that at the time of the TPA Application, Dr. Weisberg had agreed to move her clinic to the Sheppard location.

91In concluding this, I am well aware that there is no email, written document, contract, or other written confirmation that specifically supports Dr. Weisberg’s intention to move. However, based upon the evidence I have heard in this trial, it seems to me that much of what took place between Dr. Weisberg and Dr. Dixon was not committed to written documents. I find this understandable. They were both busy physicians. Dr. Dixon was also busy with the arrangements for the new clinic and the issue of potential TPA funding, which was very much in the air at the time, would also be distracting. Finally, given their past relationship and the history in how they dealt with each other, it seems that much of the interactions between the two physicians was done orally or informally and not through email, letter, or legal document like, for instance, the cost sharing agreement. Thus, I do not find it surprising that there is no document between the two parties that specifically spells out the intention on the part of Dr. Weisberg to move to the new location.

Dr. Weisberg knew that the TPA Application had come in and that the Application would be made for the Sheppard location clinic

92This is an important factual issue for which there is conflicting testimony. Dr. Weisberg testified that she had no idea that the TPA Application had been received by FSF or that it had been filled out by Dr. Dixon until the day it was due. Dr. Weisberg only got to review it on November 2, 2015, the Monday after she returned from her vacation. Dr. Dixon testified that before Dr. Weisberg left for vacation, the parties had a “hand-off” or “sign off” call which was standard when one doctor would be away and the other would cover their practice. During this call, Dr. Dixon testified that she discussed with Dr. Weisberg that the TPA Application had come in and that it was agreed to and understood by both of them that she would fill out the Application for both doctors on behalf of the Sheppard location to which they would both be moving.

93I accept Dr. Dixon’s testimony on this and prefer it over Dr. Weisberg’s. I do so for the following reasons.

94The events shortly before the TPA Application coming in showed that the Ministry was moving quickly on the TPA Program funding and that the Application would be coming soon. In August there was renewed noise about the funding. On September 15, 2015, Ms. McAteer, the operations manager of FSF, emailed both Dr. Dixon and Dr. Weisberg to discuss the recent government announcement to delist IUI and IVF from OHIP in preparation for public finding. On October 1, 2015, the Ministry announced that public funding for IVF would be coming by December 2015. On October 8, 13, 19, 2015, Dr. Dixon, as an appointed member of an implementation advisory working group including other physicians, met for the purposes of implementing the program.

95On October 20, 2015, at 8:42 a.m. Dr. Dixon advised Dr. Weisberg that the funding was coming imminently. Dr. Weisberg understood that the funding was going to start very soon.

96The same day, at 3:48 p.m. Dr. Dixon, as Medical Director of FSF, received the TPA Application by email. At the time, Dr. Dixon was at a conference for the American Society of Reproductive Medicine in Baltimore. She was there from October 20 to 22, 2015. The Application was due eight days later.

97Dr. Dixon testified that even before the Application arrived, Dr. Weisberg and she had talked about the arrival of the Program and agreed that Dr. Dixon would be the one filling in the Application. It was also agreed that it was going to be filled out for FSRH. Dr. Dixon testified that she did not forward the Application to Dr. Weisberg when it arrived because they had already spoken about it and agreed that she was the one who would complete it. This had been their general practice when it came to government submissions.

98On October 23, 2015, Dr. Weisberg left on an overseas vacation. It was before this that Dr. Dixon said she told Dr. Weisberg about the TPA Application being received during the “hand-off” call.

99Let me first say this. It is troubling that Dr. Dixon did not sooner advise Dr. Weisberg that the Application had come. There are emails and a text exchange from the time the Application was received and the time of the “hand-off” call where Dr. Dixon did not advise Dr. Weisberg about the receipt of the Application. For obvious reasons this is suspicious. However, I do appreciate that Dr. Dixon was out of town for a great part of that time at a conference. I further accept that she was busy. In addition, her delay in advising Dr. Weisberg must be viewed in the context of what had happened before. There were several discussions between the physicians about the TPA funding and the application that was about to happen. I accept that from these discussions Dr. Dixon viewed herself as the person tasked with the responsibility of completing the Application and submitting it and that Dr. Weisberg knew this to be the case. In this context, this makes the fact that Dr. Dixon did not speak with Dr. Weisberg until after her return from the conference in Baltimore more reasonable. In this context, Dr. Dixon not forwarding the Application right away to Dr. Weisberg is more plausible.

100Second, I appreciate that Dr. Dixon’s evidence about the “hand-off” discussion was not pleaded and that she was cross-examined on this issue and her discovery evidence. Of course, this should be considered in assessing her credibility. Ultimately, however, I did not find that it undermined her testimony on this point.

101At the end of the day, I have looked at the whole of the evidence and find that factually Dr. Weisberg knew about the TPA Application before she left on her vacation.

102First, I found Dr. Dixon to be a more credible witness than Dr. Weisberg.

103Second, I have no doubt that a “hand-off” call was conducted. Otherwise, it would be highly unprofessional for Dr. Weisberg to leave on vacation with Dr. Dixon expected to properly care for her patients in her absence.

104Third, while there was some reluctance on the part of Dr. Dixon to immediately advise Dr. Weisberg that the TPA Application had come in, I am satisfied that Dr. Weisberg did in fact know that the Application had arrived before the TPA Application was eventually submitted. The most likely time that this occurred was during the “hand-off” call.

105Fourth, the contemporaneous texts and emails at the time support this finding. They are reliable evidence. They do not suffer from bias or frailties of memory. They were composed at a time when there was no deterioration in the relationship. It is reasonable to draw the inference from them that Dr. Weisberg knew the Application had arrived.

106On October 23, 2015, Dr. Clifford Librach, the founder of another fertility clinic in Toronto (Create Fertility Centre) who had also received an Application, emailed both Dr. Dixon and Dr. Weisberg. Dr. Librach was seeking to use Dr. Dixon and Dr. Weisberg’s historical volumes of IVF procedures as part of his Application, in an effort to increase the potential funding his clinic would receive (which he would then agree to share with Dr. Weisberg and Dr. Dixon until their “move” to the new clinic). His email stated:

Hi guys

We need to know how many cycles retrievals and transfers you did at TCART 2013, 2014 and so far 2015 up to sept 30th. We have to make sure your cycles can be transferred to us to increase our allotment until you move or whether you get the funds for your cycles directly (I don’t think so). This is very important to confirm. This is all crazy. Thanks.

107Dr. Dixon replied and copied Dr. Weisberg:

Hey Cliff

Those cycles are coming to our center. I have ensured that this is the case. If the cases are a Create satellite center, then you must submit a separate application for each site yourself. We will negotiate an embryology fee for funded cycles with each center directly. Cheers

108I find that these emails make it clear that the TPA Applications had come in and were being completed. Dr. Weisberg was copied on them. I agree with the Defendants that this directly contradicts Dr. Weisberg’s evidence that she did not even know the Application had arrived until the day it was due and that she was not planning on moving. Had Dr. Weisberg truly been surprised that the Application was in, and if it had not been agreed between the parties that Dr. Dixon would be filling it out for both of them, she clearly would have raised this issue at that time. She did not.

109Moreover, the fact that Dr. Dixon sent this email copying Dr. Weisberg shows that she had no reluctance in responding about the Application. There is no concealment of the Application. If that was her intent, as the Plaintiffs argue, Dr. Dixon would not have copied Dr. Weisberg or would not have responded in the way she did.

110Faced with this evidence at trial, Dr. Weisberg’s explanation was that the email must not have “downloaded” to her phone while she was overseas, and that she only saw it for the first time a few weeks before trial. I did not find her explanation convincing. No reason was given for such a series of events. Dr. Weisberg appeared most uncomfortable in giving this as a reason. It is implausible that she would have only gained knowledge of the texts just before trial. This diminished her credibility.

111Dr. Weisberg also testified that even if she had received these emails, she would not necessarily have understood that Dr. Dixon had received the Application or that she was filling it out on behalf of the new clinic. Again, this statement is not plausible and seems self-serving. At the very least, she knew the Application was in and that Dr. Dixon was completing it. Even if she found it confusing or opaque, surely, she would have responded in some fashion to it. Dr. Weisberg could have contacted Dr. Dixon as she had left Dr. Dixon with an international number she was using on vacation.

112On October 23, 2015, the same day as the exchange with Dr. Librach, the Ministry held an information session about the Application. Dr. Dixon testified that Dr. Weisberg knew about the session before she left on vacation, but Dr. Weisberg was unable to attend due to her flight time.

113On October 27, 2015, Dr. Weisberg texted Dr. Dixon to check in and to thank her for covering while she was away. Dr. Dixon replied: “No problem. Actually brutal. Will text later.” A few hours later, Dr. Dixon texted “I'm working on the government application, five hours tonight and this morning, will finish when I finish. 27 pages.” Again, Dr. Dixon’s message makes clear the parties both knew the Application was in and being completed by Dr. Dixon. Again, the content of the text supports Dr. Dixon’s testimony that this had all been agreed to in advance. It does not read as if Dr. Dixon was telling Dr. Weisberg something that was novel or new. It reads as if Dr. Weisberg already knew of this previously and would empathize with Dr. Dixon’s predicament.

114In a similar vein, notwithstanding her evidence that she did not even know the Application was in, Dr. Weisberg does not respond to Dr. Dixon expressing any surprise or concern with Dr. Dixon’s text. To the contrary, on October 28th at 11:23 a.m., Dr. Weisberg forwarded Dr. Dixon a message from Dr. Librach who was trying to get in touch with one or both of them to discuss the Application. The message from Dr. Librach to Dr. Weisberg read: “Hi Fay. I’ve been trying to reach Marjorie but no reply Can you give me a call or have her call me. It’s really important regarding the TPA Application. Thanks! Cliff.”

115It is unclear when Dr. Librach sent Dr. Weisberg this message. However, this was the third communication Dr. Weisberg received prior to the Application being submitted where the Application was being discussed. Importantly, Dr. Weisberg never expressed any surprise at this fact in this communication either. I infer from the fact Dr. Weisberg simply just passed Dr. Librach’s message on, that Dr. Weisberg already knew about the TPA Application. Further, this is circumstantial evidence that Dr. Weisberg was well aware that it was Dr. Dixon who was doing the Application. This inference is strong since the inquiries of Dr. Librach were simply passed on to Dr. Dixon without comment by Dr. Weisberg.

116After forwarding Dr. Librach’s text on October 28th, Dr. Dixon replies to Dr. Weisberg at 1:44 p.m., “Thanks. I’ve talked to him several times in the past days. Deadline is 5 p.m.” Later at 5:14 p.m., Dr. Dixon writes to Dr. Weisberg “I hope that you’re having a good holiday. We need to talk about this past week. When are you back?” On October 29th at 11:07 p.m. Dr. Weisberg replies “What happened? I am leaving Tel Aviv this a.m. Any chance you are up to tell me. Not a great text to get.”

117Dr. Weisberg did not deny receiving these last few messages. Her explanation as to why she did not respond to them expressing any surprise or concern was that she somehow felt it was too late to raise an objection or express her disagreement because “the application was probably submitted”.

118This is simply not credible. It is simply implausible that Dr. Weisberg, who realized how important government funding would be for her practice, would not express any issue with what Dr. Dixon was doing. Unless, of course, that is exactly what the parties had earlier agreed upon. The contemporaneous written record entirely supports that conclusion. The cross-examination of Dr. Weisberg on these communications had an impact.

119When I look at these messages, their content and their flow, they lend naturally to the inference that Dr. Weisberg knew about the TPA Application and that there was a prior understanding of how the Application was to be completed. Dr. Dixon was communicating to Dr. Weisberg as if she did have that knowledge and understanding. Dr. Weisberg, in her lack of response or objection, responded as if she did. Given that she had already consented to Dr. Dixon filling out the Application, Dr. Weisberg’s lack of response is made even more understandable by the fact she was on holidays.

120Finally, I will point out that the conduct after Dr. Weisberg returned from her vacation, up until the deterioration of the relationship in 2016, also supports this conclusion. This includes events immediately after her return. On October 31, 2015, Dr. Weisberg returned from her holiday. She and Dr. Dixon had a discussion by phone about the Application. Dr. Dixon and Dr. Weisberg provide conflicting views on how that phone call went. Importantly though is the email sent by Dr. Weisberg to Dr. Dixon after the call-in which Dr. Weisberg contemporaneously states that she was caught off guard with all the news but thanks Dr. Dixon for doing all the work that she did. She then asks some questions and provides information such as that she would work to December 24th during the holidays. She signs off “Happy Halloween.”

121I agree with the Defendants that at no point in this email did Dr. Weisberg raise a single issue with how the Application had been filled out or the fact that she would need to join the new clinic. If what Dr. Weisberg’s testimony about how Dr. Dixon concealed the Application and betrayed her by what she uncovered is to be believed, it is implausible to me that Dr. Weisberg would not have objected, expressed a concern, or have said more. Given the circumstances, Dr. Weisberg’s explanation that she was in shock or having some form of out of body experience is not credible. She is an intelligent and accomplished professional. It is not plausible that she would not have done more at the time if it was true that she was unaware of what had transpired in her absence on vacation. I cannot accept Dr. Weisberg’s explanation that she was so overwhelmed and worried about the situation that she was unable to raise any issues.

122It is true that Dr. Weisberg’s comment that she was totally caught off guard by the news is consistent with her evidence. However, in my view, it may also simply support the fact that Dr. Weisberg had not fully appreciated the Application process and was beginning to digest the news after her return from holidays. What I find more important though is the lack of any specific objection to how Dr. Dixon completed the TPA Application. The other matters raised by Dr. Weisberg in the email show that she was not feeling betrayed as she contended in her testimony.

123The Plaintiffs rely upon the emails between Dr. Dixon and Ms. McAteer discussing the October 31st email from Dr. Weisberg. I agree with the Plaintiffs that at least in one part it supports their position that Dr. Dixon had said that Dr. Weisberg was now going to work for her. However, that could simply be how Dr. Weisberg understood the discussion and not what Dr. Dixon exactly told her. This evidence may not be reliable. Put another way, Dr. Weisberg’s memory on this may not be the best. Overall, I find those emails are not all that probative. That said, even accepting Dr. Dixon’s testimony that she was just joking and venting frustration to a work colleague, I find Dr. Dixon’s email to be unprofessional, insulting, and tone-deaf. Nonetheless, this does not undermine my acceptance of Dr. Dixon’s testimony on the material points that matter in this litigation.

124On November 2, 2015, Dr. Weisberg returned to the office and reviewed the submitted Application and the Ministry Guidelines. On November 4th, she wrote to the Ministry asking why she did not receive her own application. Notably absent in this request to the Ministry was any complaint by Dr. Weisberg that Dr. Dixon improperly filled out the TPA Application contrary to her understanding or agreement. In my opinion, if Dr. Weisberg felt the way she testified she felt by the betrayal, it is implausible that she would not have said something regardless of her state of mind at the time. She was told by the Ministry that only specific clinics were invited to apply. Thereafter, Dr. Weisberg did not raise a complaint to the Ministry until some months later. Indeed, for that period of time, Dr. Weisberg and Dr. Dixon conducted themselves and communicated on the basis that Dr. Weisberg was indeed going to move to the new clinic.

125In sum, based upon my acceptance of Dr. Dixon’s evidence, I find that she filled out the TPA Application honestly and transparently with the knowledge and agreement of Dr. Weisberg. This included the use of Dr. Weisberg’s experience and historical Electronic Medical Records data. In my view, the parties agreed either expressly or implicitly that Dr. Weisberg’s information, confidential or not, would have to be provided.

Events subsequent to the TPA Application and the breakdown in the relationship

126On November 11, 2015, Dr. Dixon received a communication from the Ministry advising that the TPA Application was approved in principle. 243 Inc was to receive $2.4 million of annual IVF funding and $800,000 of annual IUI funding. This funding was discussed between Dr. Dixon, Dr. Weisberg and Ms. McAteer in November and December of that year. There are emails exchanged that show Dr. Weisberg actively participating in these discussions without any objection about how the TPA Application was submitted or how the funding was allocated. The tone of the communications from Dr. Weisberg was cooperative and congenial.

127On December 10, 2015, Dr. Dixon sent an email to Dr. Weisberg outlining what the closing activities of FSF had to be in order to organize for the move to the Sheppard location, including agreements that needed to be put into place at the new clinic. Dr. Dixon testified that this was part of the ongoing discussions that they shared since the summer. These discussions in Dr. Dixon’s view were taking forever which was not how she liked functioning.

128At this point in time, Dr. Weisberg testified that she was now intending to move to the new clinic. On December 16, 2015, she wrote to Dr. Dixon confirming that she intended to move. In that email Dr. Weisberg asked for her own secretary at the new place. Legal documents that needed to be worked out were also discussed. Dr. Weisberg admitted that from November 2015 to February 2016, she was trying to see if she and Dr. Dixon could work something out.

129On December 23, 2015, Dr. Weisberg executed an “Agreement for Services and Fees” in order to set out the terms and rates which she would be paid for her services performed under the TPA Agreement. With respect to the fee schedule, Dr. Weisberg wrote a handwritten “may be changed” amendment to it on the basis that she wanted to reserve her right to further negotiate the fees in the future. Dr. Weisberg testified she signed this agreement in order to be paid for her work since December 21, 2015 and so her patients could qualify for public funding.

130On January 11, 2016, a revised “Agreement for Services and Fess” was sent to Dr. Weisberg. Although the rates had been increased, she did not sign this revised agreement. Both parties agree that the agreement had not been finalized and that they were still negotiating the terms.

131On January 19, 2016, Dr. Dixon emailed Dr. Weisberg saying that she, Dr. Dixon, was excited about the move and asked Dr. Weisberg for her “wish list” about what she wanted for the set up and operation at the new clinic.

132In my opinion, these communications and the course of conduct between the parties clearly establish that since the signing of the TPA Agreement, it was Dr. Weisberg’s intent to move to the new location. While I appreciate Dr. Weisberg’s testimony that she was in shock and just trying to see where things stood for her, I cannot accept that testimony. When cross-examined on this area, Dr. Weisberg’s evidence did not fare well. When I look at the whole of the evidence, including the course of conduct from the summer of 2015 and into 2016, this evidence supports the fact that it was always Dr. Weisberg’s communicated intention to move to the new clinic. This is as Dr. Dixon testified to.

133That said, ultimately things did not sit well with Dr. Weisberg. Over time, I find that she became more concerned about the ramifications of the move to the new clinic and what her relationship with that clinic and Dr. Dixon would be like. Put another way, Dr. Weisberg was having serious second thoughts. This all came to a head when Dr. Dixon sent to Dr. Weisberg on January 20, 2016, a draft “Senior Associate Agreement”. In that Agreement, Dr. Dixon was the principal physician and Dr. Weisberg was to join as an associate. The Agreement had terms that Dr. Weisberg found insulting and confirmed in her mind that she could not go and work for Dr. Dixon at the new clinic. That draft agreement had a covering email where Dr. Dixon noted that she had hoped Dr. Weisberg would have provided the first draft but seeing that she had not, Dr. Dixon’s lawyer had prepared one as a starting point. The covering email stated:

Here's what I've had my lawyer draft. I wanted to let your peeps draft something so that you could put in your terms as you see fit so this document is a version of a plausible senior associate agreement sent in order to accelerate the process of finalizing our agreement to work together at FSRH. You will notice that I have left the details blank as this will allow you to say what you are wanting as a starting point. We can begin discussions from there.

134Dr. Weisberg did not negotiate or send back any counter-offer. She testified she believed it was pointless since in her view, Dr. Dixon did not compromise. Dr. Dixon testified that she was open to negotiation and that in her view, Dr. Weisberg would be a Senior Associate unlike the other physicians in the new clinic as Dr. Weisberg was coming with a full practice and she could ask for whatever benefits or resources she wanted and bring her ideas for the new clinic to the table.

135Soon thereafter, Dr. Weisberg decided that she was not going to move to the new clinic. On February 4, 2016, Dr. Weisberg advised Dr. Dixon that she would not be moving and that she would be staying at FSF. This was an emotional conversation. Dr. Weisberg advised that she was willing to work out an agreement to do her IVF at the new clinic. Likewise, Dr. Dixon testified that she was also so willing. However, Dr. Dixon testified that Dr. Weisberg never asked to do her IVF in a “satellite” clinic relationship and if she had, Dr. Dixon would have worked it out with her as she has done with other satellite clinics. I accept that evidence.

136The fallout of this conversation quickly led to the breakdown in their professional relationship. Lawyers became involved. The environment at the Yonge Street clinic where they continued to share space until Dr. Dixon moved was frosty and hostile. Effective May 30, 2016, Dr. Weisberg was advised through counsel for Dr. Dixon that she would have no further access to TPA funding that was controlled by the Defendants.

137I find that ultimately it was Dr. Weisberg’s decision not to move to the new clinic despite consistently expressing her intention to Dr. Dixon to do so. In cross-examination, Dr. Weisberg testified it was due to personal and professional pride:

Q. You said you were angry because you found yourself in a professional position you did not want to be in...

A. Yes.

Q. ...correct? Where you had to make a choice about going to work for Dr. Dixon's new clinic or figuring something else out, entirely?

A. Yes.

Q. And you said, a reason you decided not to come over, it was a matter of pride, correct?

A. Yes.

Q. Personal and professional pride.

A. Yes.

Q. You felt you would lose your identity?

A. Yes.

While Dr. Weisberg gave other reasons as well, such as her lack of trust in her colleague and the fact that she would have to give up her soul if she agreed to move, the bottom-line is that these were choices that she made.

Additional Findings

138Overall, I found Dr. Dixon to be straightforward, plausible, and had a good recollection. Her testimony was internally consistent. Any alleged inconsistencies were relatively minor. Importantly, as noted above, I found her testimony was confirmed by some significant contemporaneous emails and documents. While there were aspects of her cross-examination that left me somewhat not completely satisfied, i.e., when crossed on why she sent the email to Ms. McAteer, over-all, her testimony on the key areas of dispute was such that I accept it.

139Regarding Dr. Weisberg, while she too testified in an honest manner, as I have analyzed, I am not able to accept her testimony on the key factual matters where it differed from Dr. Dixon. Her memories have to be assessed in light of her subjective feelings of betrayal. In addition, given the interests at stake and the emotional impact of these events on her, while perhaps not deliberate, there is a strong likelihood by her of some reconstruction of the events. This antagonism of Dr. Weisberg is illustrated by the March 15, 2016 letter whereby Dr. Weisberg advised the Ministry that she had only learned that the Application was submitted on behalf of Dr. Dixon’s new clinic after the funding was granted. She also said that Dr. Dixon never shared the details of the funding amounts with her. These statements were not correct. The cross-examination of Dr. Weisberg on these inconsistencies found her at points evasive and it adversely affected her credibility.

140Lastly, I find the Plaintiffs’ theory implausible that Dr. Dixon deviously, manipulatively, and dishonestly planned what is essentially a fraud over a number of months, along with perhaps a co-conspirator, Ms. McAteer, to deny Dr. Weisberg access to TPA funding or to grant it to her on unacceptable terms in order to subordinate her. It would be contrary to the nature of their relationship and the nature of who Dr. Dixon is. It is contrary to the written record that exists when assessed as a whole. Contrary to Dr. Weisberg’s conduct before and after the TPA Application. Contrary to the evidence that I accept.

ii. Analysis and Conclusion on Undertaking

141Based on these findings, I conclude that there was no undertaking made by Dr. Dixon. Looking at the whole of the evidence, Dr. Dixon applied for TPA funding for as much, if not more, her own self-interest as well as for Dr. Weisberg. This was apparent to Dr. Weisberg. While Dr. Weisberg may have trusted Dr. Dixon to look after Dr. Weisberg’s interest as well, it is clear that Dr. Dixon did not either expressly or implicitly undertake to do so to the exclusion of her own self-interest. Put another way, while Dr. Dixon completed the Application for their mutual benefit, she did not undertake to act in accordance with a duty of loyalty to Dr. Weisberg.

142The Plaintiffs submit that Dr. Dixon made an express undertaking. Dr. Dixon testified that she was going to include Dr. Weisberg in the TPA Application. The Plaintiffs point to Dr. Dixon’s evidence where she said their center was to get the funding and Dr. Weisberg would be included in the application. She described the Application as making them shine as the brightest penny ever. In my view, that testimony must be assessed in context. This was not an express undertaking as required to establish a fiduciary duty. Rather, it was an expression of Dr. Dixon’s intent to create a compelling Application for the benefit of all involved.

143I find the evidence establishes on a balance of probabilities that Dr. Dixon undertook to fill out the Application for both Dr. Dixon and Dr. Weisberg’s benefit. In this case, given the pressure of the timeline, the past practice of the two whereby Dr. Dixon took the administrative initiative, and the fact Dr. Weisberg was soon to go on vacation to Israel, it was reasonable for Dr. Dixon to fill out the TPA Application. However, in doing so, she never undertook expressly to forgo her own self-interest and act only in Dr. Weisberg’s best interest. There is no doubt that Dr. Dixon agreed to have Dr. Weisberg included in the Application. However, this is not equivalent to Dr. Dixon undertaking to forsake the interests of all others including herself for Dr. Weisberg in the Application and subsequent funding received.

144In the alternative, the Plaintiffs submit that there was an implied undertaking. They point to past practices where the physicians co-founded FSF, worked side by side for seven years, and shared referrals and opportunities. The Plaintiffs argue that the TPA Application came to Dr. Dixon as the Medical Director of FSF and Dr. Weisberg had the same right to TPA Funding as Dr. Dixon. In addition, Dr. Dixon used Dr. Weisberg’s confidential patient information and used that information in making the TPA Application. Finally, Dr. Dixon concealed the TPA Application from Dr. Weisberg.

145I have found the facts otherwise. In my opinion, the Plaintiffs have not proven an implied undertaking.

146This is not a case where Dr. Weisberg because she was otherwise unable, due to her trip, gave a discretion to Dr. Dixon to apply for funding in Dr. Weisberg’s own right, for example, whereby the allocation of funding went directly to Dr. Weisberg, leaving herself at Dr. Dixon’s discretion, and Dr. Dixon undertaking to do so but then taking that opportunity for her own benefit. In this case, Dr. Dixon was applying for funding for her own clinic but on the mutual understanding that Dr. Weisberg would be joining her at the new clinic and thereby availing herself of the funding in that way, if the funding came. The terms and conditions of that future arrangement was yet to be established. In this situation, Dr. Dixon was not undertaking to act only in Dr. Weisberg’s interest. Dr. Dixon was essentially acting in her own interest, using Dr. Weisberg’s information to benefit not only Dr. Weisberg, so that she could later access the funding, but to increase the overall funding allocation of the clinic in general. There is a significant difference between the two situations.

147I just find it difficult to accept that Dr. Weisberg, given who she is, would not have raised greater objection if she really did not know about the TPA Application and generally the manner in which Dr. Dixon was going to make the Application. I appreciate her testimony that she was surprised and perhaps in shock. But this was not something of little importance to her career-wise. If she had her trust breached in such a fundamental way early on, there is a puzzling lack of any expression or conduct that would be consistent with something of this magnitude happening.

148Moreover, the overall course of conduct of Dr. Weisberg and Dr. Dixon supports the Defendants’ position. When Dr. Weisberg returned and found the Application on her desk, not only was there no vociferous objections, but aside from the expected inquiries about details of what the future relationship would entail, Dr. Weisberg conducted herself as if she was going to be a part of the new clinic and access public funding through the Defendants. This included negotiating a potential employment agreement with the Defendants. If she had always intended to be independent and operating on her own, the whole course of conduct whereby she participated in the interactions regarding her move and her association with FSRH does not make sense. It does make sense if one concludes that she was in fact intending to move but later changed her mind. A conclusion I so find.

149Looking at what transpired, Dr. Dixon did not induce Dr. Weisberg to rely upon her loyalty. Dr. Weisberg knew and consented to the arrangement in the TPA Application. This was transparent although not well formalized. It is unreasonable to conclude that given the relationship of these two equal and sophisticated physicians, that Dr. Dixon would have given an undertaking to subordinate her interests to that of Dr. Weisberg in the circumstances of applying for and receiving the public funding.

150Regarding Dr. Weisberg’s position that the TPA Application should have been filled out in the name of FSF Inc. and not Dr. Dixon’s corporation, 243 Inc., I do not find that Dr. Dixon made an express undertaking to do so. Nor could it be implicitly undertaken. At the time of the TPA Application, FSF Inc. had been inactive for years and one of its shareholders had left the clinic. FSF was essentially an informal brand name. The Application had to be filled out in the name of a legal entity capable of entering into an agreement with the Ministry. The TPA Application stated that the Applicant should use the “[f]ull and complete name of Applicant exactly as set out in Articles of Incorporation or other applicable legal document” [emphasis in original]. It further noted that if the applicant was not incorporated, “please use a separate sheet of paper to provide any information on the legal status of your clinic (i.e., limited partnership, general partnership, etc.). Dr. Dixon testified that she did not fill out the Application for anything other than the new clinic as it was her understanding that Dr. Weisberg was moving to the new clinic. For that reason, even if it was possible to have sent in two applications, one for Yonge Street and another for Sheppard, she did not do that. Based on this understanding as well, she did not complete the Application such that Dr. Weisberg could be on the Application as a satellite clinic.

151I can accept that Dr. Weisberg feels betrayed. Especially after she received the draft Senior Associates Agreement. While this was drafted by a lawyer and was open for negotiation, the terms could easily be perceived as insensitive to the past relationship of Dr. Dixon and Dr. Weisberg, and Dr. Weisberg’s status as a senior physician. This insensitivity is further evidenced in the email of Dr. Dixon to Ms. McAteer dated October 31, 2015. But those feelings of betrayal are not justifiably based upon a failure by Dr. Dixon to abide by any undertaking, express or implicit, that she gave to forsake all interests but Dr. Weisberg’s.

152Moreover, even if there is an element of selfishness by Dr. Dixon in her dealings with Dr. Weisberg over the material time, this does not change matters. The lack of sensitivity may have been a result of Dr. Dixon’s own feelings after Dr. Weisberg suddenly reversed her decision to invest in the new clinic. But the fact Dr. Dixon was primarily concerned about her own interests does not in itself create a fiduciary duty. The following comments by Sopinka J. (dissenting in part) in Lac Minerals Ltd. v. International Corona Resources Ltd., 1989 CanLII 34 (SCC), [1989] 2 S.C.R. 574, at pp. 600-601, are apropos:

Two caveats must be issued. First, the presence of conduct that incurs the censure of a court of equity in the context of a fiduciary duty cannot itself create the duty. In Tito v. Waddell (No. 2), [1977] 3 All E.R. 129, at p. 230, Megarry V.-C. said:

If there is a fiduciary duty, the equitable rules about self-dealing apply: but self-dealing does not impose the duty. Equity bases its rules about self-dealing upon some pre-existing fiduciary duty: it is a disregard of this pre-existing duty that subjects the self-dealer to the consequences of the self-dealing rules. I do not think that one can take a person who is subject to no pre-existing fiduciary duty and then say that because he self-deals he is thereupon subjected to a fiduciary duty.

Second, applying the same principle, the fact that confidential information is obtained and misused cannot itself create a fiduciary obligation. No doubt one of the possible incidents of a fiduciary relationship is the exchange of confidential information and restrictions on its use. Where, however, the essence of the complaint is misuse of confidential information, the appropriate cause of action in favour of the party aggrieved is breach of confidence and not breach of fiduciary duty.

153Alternatively, even assuming that the Plaintiffs’ position on the law is correct, I find that they have not proven their case. The Plaintiffs submit that the undertaking only required that Dr. Dixon forsake her interests only to the extent that those interests interfered with any fiduciary obligations, for instance, in refraining from being in a conflict of interest or otherwise profiting from the beneficiary. In short, the Plaintiffs submit that Dr. Dixon misused the confidential information of Dr. Weisberg and compromised her duty to Dr. Weisberg by not giving Dr. Weisberg the funding. I do not find this misuse established on the facts. I find that Dr. Dixon did what she and Dr. Weisberg had agreed to. That is essentially fill out the TPA Application as she did, based upon the understanding that Dr. Weisberg was going to move and join Dr. Dixon at the new clinic. This is based upon my factual findings noted above.

B. Did Dr. Dixon Breach Any Fiduciary Duty?

154Given my above conclusion, it is not necessary to deal with the Defendants’ alternate submission that if a fiduciary duty existed, Dr. Dixon did not breach such a duty.

155That said, I have preferred Dr. Dixon’s testimony over Dr. Weisberg’s. I have also found that Dr. Dixon had acted honestly and did what the parties had agreed to when it came to the TPA Application process.

IV. Were the Defendants Unjustly Enriched?

156The Defendants submit that unjust enrichment is not a stand-alone cause of action. The Plaintiffs submit that it is. In my view, the Plaintiffs are correct: Moore v. Sweet, 2018 SCC 52, 3 S.C.R. 303, at paras. 37-38.

157There are three components to a claim for unjust enrichment:

1. The defendant obtains an enrichment;

2. The plaintiff incurs a corresponding deprivation; and

3. There is no juristic reason for the defendant's enrichment.

See Garland v. Consumers’ Gas Co., 2004 SCC 25, [2004] 1 S.C.R. 629, at para. 30. At the heart of this doctrine is the concept of restoring a benefit which justice does not permit someone to retain: Peel (Regional Municipality) v. Canada, 1992 CanLII 21 (SCC), [1992] 3 S.C.R. 762, at p. 788.

A. Proof of an Enrichment and a Corresponding Deprivation

158A straightforward economic approach is taken to the first two elements of enrichment and corresponding deprivation: Kerr v. Baranow, 2011 SCC 10, 1 S.C.R. 269, at para. 37. In that case, Cromwell J. defined these two elements thusly at paras. 38-39:

For the first requirement — enrichment — the plaintiff must show that he or she gave something to the defendant which the defendant received and retained. The benefit need not be retained permanently, but there must be a benefit which has enriched the defendant and which can be restored to the plaintiff in specie or by money. Moreover, the benefit must be tangible. It may be positive or negative, the latter in the sense that the benefit conferred on the defendant spares him or her an expense he or she would have had to undertake (Peel, at pp. 788 and 790; Garland, at paras. 31 and 37).

Turning to the second element — a corresponding deprivation — the plaintiff’s loss is material only if the defendant has gained a benefit or been enriched (Peel, at pp. 789-90). That is why the second requirement obligates the plaintiff to establish not simply that the defendant has been enriched, but also that the enrichment corresponds to a deprivation which the plaintiff has suffered (Pettkus, at p. 852; Rathwell, at p. 455).

159The Plaintiffs submit the Defendants used Dr. Weisberg’s confidential information, reputation, billings, and FSF’s goodwill, to obtain TPA Funding directly through them rather than through FSF or Dr. Weisberg. In the first full year of the program, the Plaintiffs submit that the Defendants enriched themselves by receiving $3.22 million in funding. The Plaintiffs submit that as a result, they were deprived by not having access to IVF and IUI funding from the government.

160The Defendants’ position is that Dr. Dixon has not been enriched to the detriment of Dr. Weisberg. Regarding the IUI funding, they submit that the Defendants have not been enriched. The Defendants have simply received a government allocation that gave them an opportunity to perform services that could entitle them to payment. Dr. Dixon was unable to use 50% of her funding as she did not have enough patients. Thus, she was not enriched. Further, regarding the IUI funding, as Dr. Dixon did not use the funding, Dr. Weisberg was not deprived of anything. Further, regarding the IVF funding, Dr. Weisberg did not suffer any “corresponding” deprivation. Irrespective of any actions of Dr. Dixon, Dr. Weisberg could not have applied for IVF funding because she did not own an IVF clinic and the guidelines stated that only clinics who could perform IVF procedures onsite could apply for IVF funding. Moreover, the fact that she could have taken her numbers for IVF procedures and bundled them with another clinic that was applying for funding does not assist her claim. Had she done so, she would have been in the same position as she could not access the funding without the participation of another clinic.

161In my view, the issue is not whether the Defendants were somehow enriched by the TPA Application and the award of funding. The issue is whether the Defendants were enriched at the Plaintiffs’ expense. Put another way, the Defendants’ gain corresponded to the Plaintiffs’ loss, that there was a transfer of a tangible benefit or relief from a negative from Dr. Weisberg to Dr. Dixon. Has some benefit moved from one to the other?

162To properly assess these elements, the core of the claim needs to be analyzed. When I do so, I find that Dr. Weisberg was deprived of an opportunity to access publicly funded fertility services. She gave to Dr. Dixon what was required for Dr. Dixon to secure additional public funds, whether it be the name and good will of FSF or her historical data; this was a tangible benefit that enriched Dr. Dixon, regardless of whether Dr. Dixon later received public funding based upon this or used the funding that was allocated to her based upon it. What Dr. Weisberg lost was this opportunity to otherwise access the funds in some other way, perhaps through another clinic. This is the benefit that flowed through to Dr. Dixon that Dr. Weisberg wishes restored to her.

163Thus, the Plaintiffs have proven these two elements on a balance of probabilities.

B. Absence of Juristic Reason

164The Plaintiffs must finally show that there is no reason in law or equity for their retention of the benefit conferred on the Plaintiffs, making the retention unjust in the circumstances of the case. A two-stage analysis is conducted under the juristic reason element: Garland, at para. 41-46.

165The first stage requires the plaintiff to demonstrate that the defendant’s retention of the benefit at the plaintiff’s expense cannot be justified on the basis of any of the “established” categories of juristic reasons: a contract, a disposition of law, a donative intent, and other valid common law, equitable or statutory obligations.

166If the plaintiff shows that none of the established categories of juristic reasons applies, then they have established a prima facie case. At the second stage, the defendant has an opportunity to rebut the plaintiff’s prima facie case by demonstrating that there is some residual reason to deny recovery. The de facto burden of proof falls on the defendant to show why the enrichment should be warranted. This is determined having regard to the parties’ reasonable expectations and public policy.

167While the Plaintiffs have responded to a number of juristic reasons found in the pleadings and evidence, in their final submissions the Defendants have relied on only one. The Defendants submit that Dr. Weisberg’s agreement that Dr. Dixon fill out the TPA Application on behalf of the new clinic that Dr. Weisberg would be joining, along with her decision not to invest or move to the new clinic, was the juristic reason for the enrichment and corresponding deprivation. Had she not made these decisions, she would not have suffered the deprivation. Thus, it is submitted that Dr. Dixon’s enrichment is not unjust.

168The Plaintiffs reply to this by arguing it was Dr. Dixon’s dishonest conduct and her reliance on Dr. Weisberg’s contributions to FSF in order to be selected as a TPA recipient that form the underpinnings of the unjust enrichment claim. The Plaintiffs submit that Dr. Weisberg could have received funding without Dr. Weisberg having to move to the new clinic or her being associated with that clinic. Any agreement as to how the TPA Application was to be completed is not a juristic reason to deny her funding. Dr. Weisberg tried to work something out with Dr. Dixon, but Dr. Dixon terminated the relationship.

169In effect, the Defendants have conceded that stage one is met. Put another way, the Plaintiffs have proven that no established category of juristic reason justifies the retention. Given this, it is not strictly necessary for me to determine whether the Plaintiffs have proven stage one. That said, it remains an open question whether disposition of law is a juristic reason for the IVF funding. In this case, under the funding program, Dr. Weisberg could not have directly applied for IVF funding. By operation of law, that funding was given to the Defendants. While Dr. Weisberg was under the belief that she could obtain funding through the Defendants, a belief that later did not come to fruition due to the deterioration of the relationship between Dr. Weisberg and Dr. Dixon, nonetheless, the funding provided based upon FSF and Dr. Weisberg’s information was one sanctioned by the program: Richardson (Estate Trustee of) v. Mew, 2009 ONCA 403, 96 O.R. (3d) 65 cited in Moore, at para. 69.

170Putting stage one aside, I will now address the second stage and the Defendants’ specific reliance on the circumstances of the TPA Application. Under this stage of the juristic reason analysis, the Defendants must show there is some residual reason to deny recovery to rebut the prima facie case. Here, considerations like the parties’ reasonable expectations and moral and policy-based arguments come into play. This includes how the parties organized their relationship.

171It is the mutual or legitimate expectations of both parties that must be considered and not simply the expectations of either the claimant or the defendant.

172Dr. Weisberg chose not to invest in 243 Inc. on August 21, 2015. At that point, Dr. Weisberg could only expect that if she was to perform IVF procedures at the new clinic, she would have to enter into some form of an agreement with Dr. Dixon to do so. This much was obvious. She had a similar arrangement with the Toronto Center for Advanced Reproductive Technology at the time.

173Here, on the facts, I have found both Dr. Weisberg and Dr. Dixon expected that Dr. Weisberg would receive funding for both IUI and IVF through FSRH. However, both parties could not reasonably expect that the receipt of that funding was unconditional. Put another way, Dr. Weisberg was not the direct recipient of the funding and she had no ownership or control of the FSRH. It was expected that she was going to move into the new clinic. But there was no contractual agreement about those terms and conditions of her association at the clinic completed. This was to be negotiated. Both physicians were aware of this and understood the consequences of this.

174Dr. Weisberg has taken the position in this lawsuit that she believed the TPA Application should have been filled out in the name of FSF and not Dr. Dixon’s corporation (243 Inc.). I agree with the Defendants that this after-the-fact position is not only not credible but was not possible.

175FSF is a brand name. The Application had to be filled out in the name of a legal entity capable of entering into an agreement with the Ministry. The Application stated that the Applicant should use the “[f]ull and complete name of Applicant exactly as set out in Articles of Incorporation or other applicable legal document” [emphasis in original]. It further noted that if the applicant was not incorporated, to “please use a separate sheet of paper to provide any information on the legal status of your clinic (i.e., limited partnership, general partnership, etc.).

176The only legal entity to which both doctors were a part of was FSF Inc., which had been defunct for several years, and of which Dr. Sierra was still technically a shareholder. Further, Dr. Dixon had been trying to have FSF Inc. formally dissolved since Summer 2015 on the advice of a trademark lawyer and had regularly communicated with Dr. Weisberg about it. Dr. Weisberg could not have reasonably expected (and, in fact, did not expect) that the Application would be filled out in the name of FSF Inc.

177In any event, Dr. Weisberg never raised any issue with who the applicant was when she reviewed the Application. Accordingly, her after-the-fact evidence that it should have been filled out differently is not credible.

178Thus, the parties could not reasonably have expected that the public funding would have gone to some entity other than FSRH. The TPA Application and the public funding based upon it, met both parties’ reasonable expectations. The fact the funding did not, except for a few months when there was an agreement in place, ultimately flow from the Defendants to the Plaintiffs could be the only objectively reasonable outcome of the parties given the ending of the relationship. This is such as Dr. Weisberg had not moved to FSRH, no agreement had been reached in terms of her employment, and no agreement was ever reached as to how she could otherwise access the public funding that was given.

179From a moral and policy-perspective, Dr. Weisberg had the opportunities to invest in FSRH, to move to the new clinic, and/or access public funding through FSRH. In exercising her individual autonomy, she chose not to. There is nothing in Dr. Dixon’s conduct that unfairly influenced these choices. Rather, Dr. Weisberg for reasons of her own chose not to do so. By making these decisions, she placed herself in the position that resulted in a situation where she could not directly apply for or access the funding. She would have been in a similar position had she given her information to other clinics like Create. It would have been prudent from a business standpoint to have more formally structured this relationship before she consented to Dr. Dixon’s use of the information and the FSF brand. However, given the timing and circumstances, this did not happen. Thereafter, when the negotiations to pursue this arrangement was commenced, it was Dr. Weisberg who decided not to pursue the negotiations, pulling out after receiving a draft employment contract, one that was expressly left open for negotiation. In these circumstances, I see little injustice in Dr. Dixon finally deciding to terminate their relationship which, by the time of termination, from the evidence was hostile and inimical to any ongoing business arrangement.

180In the meantime, it was Dr. Dixon who took the initiative and made the effort to apply for the public funding despite the tight timelines and her own busy schedule. Moreover, it was Dr. Dixon who took the initiative and the risk of setting up the new clinic providing the foundation for receiving the public funding for IVF. Even then, given that the clinic had not been operating at the time and thus not meeting the initial criteria for eligibility, Dr. Dixon had to go further with the Ministry who were not going to fund her clinic, to advocate for the funding through legal representation. It was Dr. Dixon’s own not inconsiderable efforts that achieved the public funding that is at dispute in this case.

181Had Dr. Dixon not included Dr. Weisberg’s information, Dr. Weisberg would not have had practically speaking, any way to access the funding given her circumstances existing at the time of the application process. It is true that she could have applied through another clinic to get access to the funding. But at the time she chose the vehicle with which to pursue this, the Defendants. Moreover, having chosen to do so, she could have gained access to that funding had she seriously attempted to negotiate a suitable agreement with Dr. Dixon regarding her position as a “Senior Associate” or in some other way like a satellite clinic. I do not accept that Dr. Dixon wrongfully denied Dr. Weisberg access to the funding obtained based upon Dr. Weisberg’s information. I accept that Dr. Dixon was prepared to allow Dr. Weisberg to do so. However, Dr. Weisberg chose not to and has decided that she preferred to access the TPA funding in her own right, without having to negotiate or cooperate with Dr. Dixon. She has been unable to do so given the funding has been allocated and no further funding is contemplated at this time. Given the centrality of the autonomous decisions Dr. Weisberg made that lead to the enrichment, it is not unjust for Dr. Dixon to retain the benefit she obtained from using Dr. Weisberg’s information and the FSF brand and history.

182Thus, morally, Dr. Dixon’s claim to the enrichment is not at all tenuous. There is no wrong-doing by her that she is profiting from. It was effectively decisions made by Dr. Weisberg that have led to the situation where she is unable to access funding through FSRH.

183It is all true that Dr. Weisberg could have applied for IUI funding directly from the Ministry. Furthermore, Dr. Weisberg did not have to move to the new clinic and did not have to sign an associate’s agreement in order to access public funding if she had come to a form of agreement with Dr. Dixon. However, Dr. Weisberg embarked on the path that she did by agreeing to move and leaving it up to future events to negotiate a suitable working arrangement. The latter did not come to pass. These matters could have been formalized earlier on. The parties chose not to, in keeping with the largely informal relationship they mainly had, most of it as a result of Dr. Weisberg’s attitude and conduct at the time and not Dr. Dixon who favoured more formalized structures.

184Looking at the whole of the circumstances, from the reasonable expectations of the parties and policy-based considerations, there is a case-specific juristic reason to permit the enrichment. I find that the Defendants have proven a juristic reason for the enrichment.

185Due consideration must be given to the autonomy of the parties. Dr. Weisberg and Dr. Dixon are professionals, equal in stature and ability, who should be expected to order their relationship in the manner that they choose. In the course of doing so, as in all human affairs, choices made may be later regretted. I find that this is what happened here.

186It is not strictly speaking necessary to deal with the Defendants’ arguments relating to acquiescence, although I will say that given the relatively short delay, I did not find that defence persuasive.

V. DAMAGES

187In the event that my findings on liability are incorrect, I assess the damages suffered by the Plaintiffs in the following manner.

188Based upon the position of the parties at trial, the evidence, and legal issues, regardless of whether liability is established by breach of a fiduciary duty or unjust enrichment, the proper award is compensatory damages. While I recognize that equitable remedies are flexible with a full gamut of remedies at my disposal, this form of damages is just in all the circumstances of the case: Kerr, at para. 71. I find that the conduct of the Defendants, even assuming liability, was not such that a remedy consistent with a prophylactic and restitutionary purpose as argued for by the Plaintiffs, to be the appropriate remedy. Hence, mitigation should be considered.

189A preliminary argument is made by the Defendants that the Plaintiffs are not entitled to any damages relating to IVF funding. They argue that since Dr. Weisberg could never have applied for IVF funding on her own and would have had to apply to another clinic to which she would have been beholden in the same fashion as to Dr. Dixon, she did not suffer any damages by the wrongdoing of the Defendants. I find this argument unpersuasive. On either ground of liability, Dr. Weisberg suffered damages through wrongdoing that cost her the opportunity to arrange her affairs in such a way as to have access to the public funding. Thus, a causal connection exists. The fact she could not have accessed IVF funding on her own does not alter this state of affairs.

190In this case, the parties have offered two experts, both business evaluators, who offered expert opinions to assist in the calculation of damages: Ian Wintrip on behalf of the Plaintiffs and Jacob Dwhytie on behalf of the Defendants. Both experts quantified the losses to the Plaintiffs under the same six categories of damages: (a) past lost profits related to funded IUI treatments; (b) past lost profits related to funded IVF treatments; (c) past lost profits for private services for unsuccessful funded IVF Treatments; (d) past lost profits related to medication for IVF treatments; (e) past lost profits related to optional IVF services; and (f) future losses for each category.

A. Past Losses Related to Funded IUI Treatments

191Under the TPA Agreement, clinics received $725 for a complete IUI treatment performed and $400 for an incomplete IUI treatment. Dr. Weisberg’s claim is based on the fact that for the relevant loss period she performed a number of IUI procedures without access to public finding. Both Mr. Wintrip and Mr. Dwhytie calculated the past losses in a relatively straightforward manner based on an assumed number of IUI cases performed multiplied by the fees clinics can receive under the TPA Agreement. While Mr. Wintrip did not initially take mitigation into account at all, an amended calculation as found in his November 27, 2019 letter did. As I have said, it is appropriate to take mitigation into account. In other words, the damages award should deduct the amounts that Dr. Weisberg actually received under TPA funding from either Dr. Dixon’s clinic or another clinic.

192The key difference in the opinions is the rate used by the experts. Mr. Dwhytie’s calculation differs from Mr. Wintrip’s calculation in that he applied a blended rate of $680 dollars for every IUI treatment on the assumption that Dr. Weisberg would have completed 86% of her IUI treatments, based on the historical treatments conducted at FSRH by Dr. Weisberg. Mr. Dwhytie agreed on cross-examination that there was no evidence to support the conclusion that Dr. Weisberg actually completed only 86% of her IUI treatments for the past loss period subsequent to May 31, 2016. Mr. Wintrip calculation is based on $725 per funded IUI treatment during the past loss period. Dr. Weisberg’s evidence is that she only performed complete IUI’s.

193There is evidence to the contrary that Dr. Weisberg only performed complete IUI’s. This comes from evidence that Dr. Weisberg’s procedures under Dr. Dixon’s TPA Agreement had a 12.5% incompletion rate. The historic rate of incompletion at FSRH was 14%. Given these indicators that incomplete IUI are not rare events, and the fact there were some credibility issues with Dr. Weisberg’s testimony, some allowance must be made to the $725 rate used to calculate these damages given that there must have been some incomplete procedures. That acknowledged, I am prepared to accept that Dr. Weisberg’s actual rate of incompletion may be lower due to her experience and skill. Put another way, Dr. Weisberg’s testimony can be given some but not full weight as admissible evidence to base the calculation on. Given that exactness of damages cannot be expected in these circumstances, I assess the proper amount of damages to be awarded for past IUI losses to be $300,000.

B. Past Losses Related to Funded IVF Treatments

194Mr. Wintrip calculates past losses for funded IVF to be $1,066,800 on the basis that had Dr. Weisberg received TPA funding for IVF procedures, she would have been allocated 42% of that funding given that she did that percentage of FSF’s private pay IVF cases when both Dr. Weisberg and Dr. Dixon were operating out of the Yonge Location. On the other hand, Mr. Dwhytie quantifies the losses as ranging from $8,173 to $94,731. In their calculations both experts estimated how many IVF cases Dr. Weisberg would be entitled to and multiplied those numbers by the payment per IVF procedure in the TPA Agreement.

195The reason for the stark difference in their opinions comes mainly from the fact that Mr. Dwhytie took issue with Mr. Wintrip’s simple calculation in assuming that because Dr. Weisberg did 42% of the FSF IVF cases that she should be entitled to 42% of the IVF funding allocated to Dr. Dixon’s clinic. This ignored the fact that because she did not have an IVF lab, Dr. Weisberg could never have applied for such funding. Thus, Dr. Weisberg would have been dependant on FSRH, or some other qualified clinic, for funded IVF cases. As such, Mr. Dwhytie calculated the losses on the basis that Dr. Weisberg would have had to access the funding on terms similar to Dr. Dixon’s other associate physicians who were presently working at FSRH.

196I am not persuaded that Mr. Dwhytie is right in that assumption. First, the criteria he uses from FSRH would not most likely fit Dr. Weisberg. Even using the number of TPA funded IVF cases done by the most productive physician, excluding Dr. Dixon, at FSRH would not likely be equivalent to what Dr. Weisberg could have performed at the clinic. Dr. Weisberg is experienced, skilled, with a longstanding reputation, and no doubt a network of referrals she could rely on. Her numbers would most certainly be higher, likely on par with Dr. Dixon. Moreover, Mr. Dwhytie assumed that Dr. Weisberg would have had to come to some form of arrangement with a clinic which would have reduced her access for publicly funded treatments. On this point, I agree with the Plaintiffs that this assumption would be counter to the finding of liability since what she lost was an opportunity to gain access to the funding that did not lead to a significant reduction in her abilities to obtain full benefit from the new program. For instance, Dr. Weisberg could have accessed Dr. Librach’s system where he awarded TPA funding to physicians that let him use their IVF numbers on a pro-rated basis. Dr. Dixon’s own evidence was that she was open to such arrangements.

197Thus, I find that the figure of 42% to be a fairer basis to calculate these losses than the two scenarios used by Mr. Dwhytie.

198However, one point made by Mr. Dwhytie makes more sense. Applying the 42% to the entire funding allocation of the TPA funding received by FSRH does not seem reasonable. The TPA Application was for four physicians and currently the clinic has seven physicians. Put another way, the historical percentage is being applied to a pool of funding for a greater number of physicians working at the clinic than were working at FSF. On the surface, to apply the 42% to this pool of funds does not seem reasonable. However, as pointed out by the Plaintiffs the number of IVF cases given to the Defendants was 216 cases by the Ministry. In the full year preceding the TPA Application, the number of cases performed at FSF by Dr. Weisberg and Dr. Dixon was 206. This number is clearly less that the 750 optimal annual volume of Funded IVF cases requested in the TPA Application. Thus, there is a correlation between the historical percentages at FSF and the amount of cases funded by the Ministry. That said, given the disparity in the numbers, I have no compelling evidence as to why the Ministry made the funding allocations that it did, and with the common-sense appeal of Mr. Dwyhtie’s opinion, some adjustment may be necessary to the award of damages in order to take this factor into account. However, I find that it should be relatively minor.

199Finally, the figure of Mr. Wintrip does not take mitigation into account. This is another reason for the disparity in the opinions of the experts. The calculation of this loss should take into account mitigation. Thus, the more appropriate award of damages, after deducting the amounts Dr. Weisberg received from FSRH and other clinics for the TPA treatments that she did in the loss period, is found in Mr. Wintrip’s letter of November 27, 2019, which is $640,100. Adjusted for the factor mentioned above, I award damages in the amount of $600,000.

C. Past Loss for Private Services for Unsuccessful Funded IVF Treatments

200Under the TPA Program, eligible patients are only allowed one funded IVF cycle. If the first cycle is unsuccessful, patients can receive additional cycles to become pregnant but must pay for those cycles themselves. The Plaintiffs submit that the loss of privately paid additional cycles should be taken into consideration as a loss. Put another way, had Dr. Weisberg been allocated publicly funded first IVF cycles, she would also have received amounts privately paid by patients who would seek additional cycles. Mr. Wintrip calculated the loss by estimating the number of TPA funded IVF cycles allocated to Dr. Weisberg during the past loss period. He then assumed a 40.4% first cycle success rate. Of the estimated unsuccessful cycles, he assumed that those patients would proceed with an additional two IVF cycles. Then he applied Dr. Weisberg’s fee of $12,500 per private cycle to arrive at an estimate of the incremental revenue from the private IVF cycles. As a part of his calculations under this head of damages, Mr. Wintrip also included past loss optional services and other fees not covered by TPA Funding.

201Evidentiary problems arise from the assumptions Mr. Wintrip made.

202Initially, Mr. Wintrip relied upon medical sources to come up with the 40.4% first cycle success rate. Mr. Dwhytie relied upon the figure of a first cycle success rate of 88.2%. He received this information from Dr. Dixon. The issue of the admissibility of these first cycle success rates arose at trial. While these two experts could rely upon hearsay evidence in coming to their opinions and testify about them, if such hearsay evidence was not established at trial, then their opinions based upon the hearsay would have little or no weight: R. v. Abbey, 1982 CanLII 25 (SCC), [1982] 2 S.C.R. 24, at p. 45.

203Dr. Dixon did not testify about her first cycle success rate. It was hearsay.

204The articles relied upon by Mr. Wintrip were also hearsay. Mr. Wintrip was not qualified as a medical or scientific expert in this field. He is an expert business valuator. The first cycle success rate of 40.4% was not otherwise proven in evidence at the time and the articles themselves were not brought into evidence through an appropriately qualified expert witness and through testimony that properly accepted the opinions in the article: R. v. Marquard, 1993 CanLII 37 (SCC), [1993] 4 S.C.R. 223.

205In light of the issue arising in this way at trial (after both Dr. Weisberg and Dr. Dixon testified), both parties then agreed to an admission of fact. They agreed that Dr. Weisberg’s testimony would have been that her first cycle success rate is 40.4% and that Dr. Dixon testimony would have been that her first cycle success rate at her clinic was 88.2%. Thus, there is admissible evidence that gives weight to the opinions of the two expert business valuators.

206The problem is that I have great difficulty in determining what the appropriate first cycle success rate should be in terms of assessing the expert opinions. I disagree with the Plaintiffs that I should prefer Dr. Weisberg’s given her number is consistent with the articles referred to by Mr. Wintrip. Those articles are still hearsay and cannot be used for that substantive purpose in the absence of qualified expert evidence. Moreover, while I see no reason why Dr. Weisberg would give misleading evidence regarding this, I did have some credibility issues regarding her testimony. Of course, neither physician was cross-examined on this evidence. Neither party have presented any confirmatory records or data supporting their figures.

207There may be valid reasons why the first cycle success rates are so dramatically different. But I cannot determine this based on the evidence that I have heard. The reasons for the difference may affect the appropriate first cycle success rate one should use in calculating damages.

208The other significant problem is how both experts assumed the number of times an unsuccessful TPA-funded patient would come back for additional private pay cases. Mr. Wintrip assumed that the patient would return for two more private IVF cycles for every unsuccessful initial cycle. Mr. Dwhytie assumed the patient would return for 1.7 additional cycles. Both based their assumptions upon the same source of information, a Rachel Gurevich article entitled “The Chances for IVF Pregnancy Success.”

209Both expert opinions suffer from the same fatal flaw identified above. This article is not properly in evidence. Nor did a qualified expert testify about this. There was no admissible evidence from either Dr. Weisberg or Dr. Dixon about the number of patients who returned for additional private IVF procedures. Unlike above, there were no admissions made.

210Private IVF procedure and associated medications, services, and fees are very expensive. Just using common sense, not every patient will decide to or even be able to afford to do additional procedures beyond the initial publicly funded one if the first IVF cycle is not successful.

211I must keep in mind my gate-keeping role when it comes to expert evidence. This role is engaged not only on the admissibility stage but also in determining the use and weight of the expert evidence. While it is a reasonable possibility that some patients would go on and have additional privately funded IVF procedures, to be able to say what number or percentage with sufficient precision to properly award damages are not possible on this record.

212To award damages for this loss category really amounts to a speculative exercise given the conflict in the evidence about first cycle success rates and the absence of admissible evidence regarding the number of patients who would have sought additional private IVF procedures. I have come to this conclusion fully appreciating Mr. Dwhytie’s opinion and the Defendants’ position on this head of damages.

213As a result, I find that the Plaintiffs have failed to discharge their onus of proof when it comes to this head of damages. No damages will be awarded for past losses for private services for unsuccessful TPA funded IVF treatments.

D. Past Losses Related to IVF Medication

214Medication is a part of IVF treatment but is not covered by the TPA Program. Patients must pay for it themselves. Fertility clinics earn a margin on those medications. Mr. Wintrip calculated the loss of profits from medication based upon his estimate of the IVF cycles that Dr. Weisberg lost from the TPA allocation and the associated private IVF cycles that may have resulted from unsuccessful TPA funded IVF cycles. With mitigation accounted for, Mr. Wintrip estimated the loss for past medication to be $674,928.

215I have agreed with the Plaintiffs that approximately 42% is a reasonable method of calculating the percentage that Dr. Weisberg should be awarded for the TPA funded IVF.

216However, since I have decided that the number of associated private IVF cycles cannot be determined, the loss of IVF medication associated with them must be deducted. Thus, the amount that should be awarded is $303,717.

E. Past Losses Related to Optional IVF Services

217Aside from items funded by the TPA Program for IVF treatments, there are optional services a patient may choose as part of their treatment and other fees that are not covered by TPA funding that a patient must pay. These include genetic testing and screening, ultrasounds, donor egg fees, freezing, etc. Mr. Wintrip estimated these during the loss period based upon the historical relationship between revenue from these items and private IVF treatment revenue earned by Dr. Weisberg that would have been eligible for TPA funding under certain service codes based upon the records of her practice. This was calculated for what would be losses for TPA funded treatments. With mitigation accounted for, Mr. Wintrip estimated loss for past optional IVF services to be $574,333.

218I have generally agreed with the Plaintiffs about their percentage for funded IVF cycles. I have disagreed with the scenarios used by Mr. Dwhytie.

219Thus, the amount that should be awarded is $574,333.

F. Future Losses Related to IUI and IVF Treatments and Associated Medication, Services, and Fees

220In terms of future losses related to IUI treatments, I find no damages should be awarded. Dr. Weisberg has been able to secure TPA funding for IUI treatments through another clinic as of April 30, 2019 and has therefore mitigated her losses. I do not see any valid reason why this mitigation should not be given full effect.

221For future IVF related losses, Mr. Wintrip calculated the Plaintiffs’ future losses to be: (i) $1,727,202 to 1,839,470 for TPA funded IVF treatments; (ii) $4,182,000 to 4,453,830 for private-pay IVF treatments; (iii) $2,652,654 to $2,825,077 for optional IVF services and (iv) $1,938,000 to $2,063,970 for IVF medication.

222For the reasons I have given, no award of damages should be made for private-pay IVF treatments or related medications and optional services and fees.

223With respect to TPA funded IVF treatments and optional IVF services, the Defendants’ position is Mr. Dwhytie’s calculation of no future losses is correct since Dr. Weisberg has received TPA Funding for IVF treatments from other TPA funded clinics and it appears that she has the ability to continue to mitigate any losses by partnering with other clinics. While this is true, this mitigation has limited applicability. While Dr. Weisberg has so partnered and gained access, this is only to TPA funding that is left unused. The evidence is that there are only a few cases each month that she can mitigate. In addition, while there is always a possibility that more funding can be instituted by the Ministry that Dr. Weisberg can access, for the moment that seems remote given that for a few years Dr. Weisberg has been told that all funding has been allocated. On the other hand, Dr. Weisberg is a respected and talented physician whose diligence will allow her to continue to mitigate her losses. Just as an example, since April of 2019 Dr. Weisberg was able secure IUI funding through a doctor who retired from practice. It is not inconceivable that a similar opportunity would arise for IVF funding. So, while I cannot agree with the Defendants that she has mitigated all her future losses, the award of damages should take into account the strong likelihood of continuing and significant mitigation. I note that the evidence shows Dr. Weisberg’s practice is becoming more and more successful.

224There is no exact way to calculate these future damages. There are a few factors to consider. Some of those are the ones that were taken into account in the past losses Dr. Weisberg has suffered. However, I find it would not be just to simply mathematically multiply those past losses for what could be her working life and by applying a capitalization multiple. As I have said, I find there to be a strong likelihood of significant mitigation.

225In my opinion, a fair and just award of future losses for TPA funded IVF treatments, medication, and optional IVF services and fees is $800,000.

226Finally, Mr. Wintrip included in his damages figure a future value for Dr. Weisberg selling her practice, which was based on her having access to TPA funded IVF cases that she could sell. Conversely, Mr. Dwhytie’s opinion is that Dr. Weisberg would suffer no loss, since IVF TPA funding is allocated to clinics, not to physicians. Dr. Weisberg had and continues to have no direct access to IVF funding. Hence, she would have no asset to sell as it pertained to IVF. I agree with the position of the Defendants and Mr. Dwhytie. If she is placed in the same position had the wrongdoing not taken place, the value of her practice is unaffected. When she sells her practice, she could not sell public funding for IVF as a potential asset owned by her practice. It is not like a licence that can be easily transferred with her business. Any physician purchasing her practice would have to make an independent arrangement with a qualified clinic that receives TPA funding. As a result, I award no damages for this head.

VI. CONCLUSION

227For these reasons I dismiss the Plaintiffs’ claims.

228In the alternative, if liability is established, I would give judgment in the amount of $2,578,050 together with pre-judgment and post-judgment interest.

229I encourage the parties to resolve the issue of costs between them. If the issue of costs cannot be resolved between the parties, I will entertain written submissions, each one limited to two pages not including any attachments like the Bill of Costs. The Defendants shall file within ten days of this decision. The Plaintiffs shall file within seven days thereafter. There will be no reply submissions without leave of the court.

Footnotes

1. 1FSRH eventually was named Anova Fertility Reproductive Health when it opened up at the Sheppard Avenue address. However, in this decision FSRH will be used to refer to the new clinic however named at the time, at the Sheppard location.
2. 2Although the Plaintiffs refer to this as a “test”, Hodgkinson, at para. 30 makes clear that it is a rough and ready guide to recognize new categories of fiduciary relationships rather than ingredients that define it.