Date: 20040603
Docket: T-436-03
Citation: 2004 FC 774
Toronto, Ontario, June 3rd, 2004.
Present: The Honourable Mr. Justice Campbell
BETWEEN:
CHRISTOPHER LEBLANC, JOANNE BEAULIEU, STEPHANIE BEAULIEU,
STEVEN FARROW by his Litigation Guardian Joanne Beaulieu
Plaintiffs
and
HER MAJESTY THE QUEEN, JO HAUSER, LILETH GERVAIS,
RANDALL KLOTZ
Defendants
REASONS FOR ORDER AND ORDER
[1] This is an appeal by way of motion from the Order of Prothonotary Mireille Tabib dated June 24, 2003 (2003 FCT 776), striking out the Plaintiffs' statement of claim filed March 18, 2003 (the "original statement of claim").
[2] During the oral hearing of the present appeal, I confirmed my view that Prothonotary Tabib's Order is not "clearly wrong", in that the Prothonotary based the exercise of her discretion on a wrong principle of law or upon a misapprehension of the facts (See Canada v. Aqua-Gem Investments Ltd., [1993] 2 F.C. 425 (F.C.A.)). As I made it clear to the Plaintiffs that I find no error in Prothonotary Tabib's decision, the focus of the appeal turned to an Amended Statement of Claim proposed by Counsel for the Plaintiffs.
[3] In the course of the hearing, Counsel for both sides agreed that I have jurisdiction on the present appeal to consider whether the Amended Statement of Claim filed March 15, 2004 can meet the test of survival of a motion to strike, that is, whether it is plain and obvious that the action based on the claim will fail (Attorney General of Canada v. Inuit Tapirisat of Canada, [1980] 2 S.C.R. 735).
[4] The original statement of claim which was the subject of Prothonotary Tabib's Order arose directly from an initial success by the Plaintiffs in an action commenced in the Superior Court of Justice of Ontario, but a subsequent loss before the Ontario Court of Appeal (Robb, Rintoul and Farrow v. Canadian Red Cross Society (CRCS), Ontario et al., (2001), 152 O.A.C. 60 (Ont. C.A.)). The original statement of claim was hooked directly to these two Ontario judicial determinations and, as a result, Prothonotary Tabib, rightly in my opinion, found it could not proceed. Therefore, in order to assess the Amended Statement of Claim under consideration in the present appeal, it is necessary to provide a contextual understanding of the two Ontario decisions, and that of Prothonotary Tabib.
[5] In the end result, for the reasons provided below, I find that the Plaintiffs' claims in the Amended Statement of Claim only partially correct the defects found by Prothonotary Tabib, but to the extent that they do, they will be allowed to stand.
A. Factual background
1. The Ontario decisions
[6] The main Plaintiff, Christopher LeBlanc, is a hemophiliac who received a manufactured blood factor concentrate called F-IX. He became infected with HIV. In the fall of 1984, it was demonstrated that the heat treatment of factor concentrates such as F-IX would inactivate HIV. LeBlanc's guardian, along with others, commenced a negligence action in Ontario ("the Ontario action") for damages against the Canadian Red Cross Society ("CRCS"), the Ontario Government ("Ontario") and the manufacturer of F-IX. In that action, the Plaintiffs claimed that they contracted HIV because the F-IX was contaminated, and argued that the Defendants breached their duty of care to the Plaintiffs by delaying the introduction into Canada of heat-treated F-IX, and by failing to warn users of the risks associated with using non-heated F-IX. The Plaintiffs alleged that CRCS unduly delayed the transition to heat-treated F-IX because it intended to exhaust its inventory of non-heated product.
[7] The Crown in right of Canada ("Canada") was not a defendant to the Ontario action, the Plaintiffs having accepted payments from Canada under the no-fault Extraordinary Assistance Program against a release of all claims they may have from all matters arising out of having been infected with HIV. CRCS and Ontario did, however, pursue third-party claims for contribution and indemnity against Canada for any liability they may have had to the Plaintiffs.
[8] Prior to the trial, the Plaintiffs sought leave to amend their statement of claim in the Ontario action to add, against Ontario, a claim based on the tort of spoliation of evidence, alleging that Ontario had ordered the Secretariat of the Canadian Blood Committee ("CBC") to destroy audiotapes and transcripts of meetings of the CBC in an attempt to cover-up wrong doing by government officials regarding Canada's blood program. The Plaintiffs did not seek to assert the claim of spoliation directly against Canada.
[9] The trial judge in the Ontario action held that the CRCS was negligent for failing to do everything possible to facilitate the transition to heat-treated F-IX and for delaying its introduction into Canada. The CRCS was ordered to pay each Plaintiff damages, and Canada was ordered to indemnify the CRCS to the extent of 25 per cent. The trial judge also determined that the audiotapes and transcripts of the CBC meetings were not proven to have been in Ontario's control, that the Secretariat of the CBC was comprised of employees of Canada, and that there was, therefore, no evidence that Ontario spoliated evidence. The Plaintiffs' claims against Ontario and the manufacturer of F-IX were dismissed.
[10] Appeals and cross-appeals were taken from the trial decision. By that time, the Ontario Court of Appeal determined in Spasic Estate v. Imperial Tobacco (2000), 49 O.R. (3d) 699 that a claim for damages based on the independent tort of spoliation should be permitted to proceed to trial. The Plaintiffs were permitted to include in their cross-appeals specific claims for the tort of spoliation against Ontario.
[11] The trial judge's finding of liability on the part of the CRCS and Canada was reversed on appeal. The Court of Appeal held, inter alia, that there was no undue delay in making heat-treated F-IX available to the Plaintiffs; that any intention the CRCS might have had to delay the transition to heat-treated F-IX in order to exhaust existing stocks of non-heated product did not, in fact, cause any delay in the availability of heat-treated F-IX; and that the Plaintiffs had failed to prove the dates upon which they became infected. Accordingly, even if the trial judge's findings of negligence on the part of CRCS had been upheld, without evidence to establish the dates of infection, the Plaintiffs could not establish that such negligence caused them to contract HIV. The trial judge's findings with respect to spoliation of evidence were upheld.
[12] Leave to appeal to the Supreme Court of Canada from the Ontario Court of Appeal was denied (Robb v. St. Joseph's Health Care Centre, [2002] S.C.C.A. No. 44).
2. The original statement of claim
[13] In an attempt to overcome the loss in the Court of Appeal, the Plaintiffs filed their original statement of claim which claimed that, but for the destruction of the CBC audiotapes and transcripts, they would have been able to sustain the Ontario trial decision in the Ontario Court of Appeal. They sought damages, equal to the award of damages made by the Ontario trial judge, against the three individual Defendants for the torts of misfeasance in public office, trespass and negligence and/or for breach of fiduciary duty. The Plaintiffs also sought damages against Canada, as a member of the CBC, and vicariously for the acts of the individual Defendants.
3. Prothonotary Tabib's order
[14] Prothonotary Tabib struck out the Plaintiffs' original statement of claim. The conclusions of Prothonotary Tabib relevant to the issues considered herein can be summarized as follows:
1. The Federal Court lacks jurisdiction on the claims against the individual Defendants as the Plaintiffs has no cause of action arising out of federal law in respect of the individual Defendants;
2. Irrespective of her conclusion as to the Court's jurisdiction over the claims against the individual Defendants, the Plaintiffs' claims against Canada are properly within the jurisdiction of the Court by virtue of the Crown Liability and Proceedings Act;
3. Given the judgment of the Ontario Court of Appeal, the Plaintiffs' original statement of claim discloses no reasonable cause of action and is an abuse of process on the grounds of issue estoppel; and
4. The Plaintiffs are estopped from challenging the findings on causation made in the Ontario action.
[15] The Court of Appeal determined that, regardless of any intention the CRCS might have had to delay the distribution of heat-treated F-IX until the depletion of existing stocks of non-heated F-IX, in fact, the heat-treated F-IX was distributed without undue delay. This determination meant that evidence of an intention to delay the introduction of heat-treated F-IX, allegedly to be found in the destroyed records, would not have assisted the Plaintiffs in establishing that they had evidence of all elements needed to sustain a favourable verdict against CRCS. Prothonotary Tabib concluded that the issues as to what caused the delay in the introduction of heat-treated F-IX in Canada and whether the Plaintiffs' infection occurred at a time where delay could have been avoided were identical in the Ontario action and in the original statement of claim.
[16] Significantly, Prothonotary Tabib did not consider causation and damages in the context of the claim for the tort of misfeasance in public office as against Canada, nor did she draw any conclusion with respect to the Plaintiffs' claim for damages for breach of fiduciary duty on the part of Canada.
B. The Amended Statement of Claim
[17] As was the case with the original statement of claim, the Amended Statement of Claim names the same Plaintiffs and the same Defendants. There are three distinct aspects to the Amended Statement of Claim: loss of chance related to the Ontario action; misfeasance in public office; and breach of fiduciary duty. In the analysis which follows, each of these aspects is addressed.
1. Loss of chance
[18] The Plaintiffs claim damages for the destruction of the CBC audiotapes and transcripts which they argue caused a "loss of chance of success at the Ontario Court of Appeal". At pages 15-16 of their Amended Statement of Claim, the Plaintiffs claim as follows:
(12) Loss caused by Defendants: loss of a chance to win at the appeal court
35. Some secondary evidence, including the Record of Decision which warned that the old stock would have to be "dealt with", was available that pointed to this decision to use up the old stocks. That secondary evidence did not cover enough ground to persuade the Court of Appeal of the Plaintiffs [sic] theory of liability. There was a real, not fanciful, chance that the verbatim records would have filled the gap and persuaded the appeal court, and this motivates the claim at bar.
36. The Plaintiffs say that:
(a) the absence of the verbatim records caused some level of impairment to the Plaintiffs ability to prove their underlying claim and to uphold the trial verdict at appeal.
(b) The Plaintiffs underlying claim was at some threshold level meritorious.
(c) Losing in the Court of Appeal caused the Plaintiffs to suffer the collapse of the chance of recovering damages in the underlying claim and to suffer the collapse of the chance of winning the costs claims...
[19] With respect to the original statement of claim, Prothonotary Tabib found that the Plaintiffs were estopped from challenging the findings on causation made in the Ontario action. I find that there is no material difference between the Amended Statement of Claim and the original statement of claim on this issue.
[20] During the course of oral argument, I expressed my view that the Plaintiffs' present attempt to hook the Amended Statement of Claim to the Ontario action cannot succeed, just as Prothonotary Tabib determined that hooking the original statement of claim to the Ontario action cannot succeed. The Plaintiffs argue that the spoiled records could have made a difference to the Ontario Court of Appeal if the content was known. However, the following significant finding of the Ontario Court of Appeal (Robb, Rintoul and Farrow v. Canadian Red Cross Society (CRCS), Ontario et. al. (2001), 152 O.A.C. 60 (Ont. C.A.)) at paragraph 109 gives the argument no chance of success:
Finally, and perhaps more importantly, regardless of any statement of intention that may have been made in December 1984 with respect to depleting the existing unheated inventory, in actual fact the CRCS did not choose this course of action when heat-treated F-IX finally became available.
Thus, in the opinion of the Court of Appeal, the content of the destroyed records was irrelevant and, thus, by extension, the content of the records could have no impact on the outcome of the Ontario action, and could not have caused a lost chance of success in the Ontario Court of Appeal.
[21] Therefore, I find that the paragraphs of the Amended Statement of Claim that relate to loss of chance must be struck.
2. Misfeasance in public office
[22] The Plaintiffs' claim misfeasance in public office arising from Odhavji Estate v. Woodhouse, [2003] 3 S.C.R. 263, a case decided subsequent to Prothonotary Tabib's decision. In Odhavji, Justice Iacobucci, speaking for the Court, canvassed the nature of the tort of misfeasance in public office in the following paragraphs:
¶ 22 What then are the essential ingredients of the tort, at least insofar as it is necessary to determine the issues that arise on the pleadings in this case? In Three Rivers, the House of Lords held that the tort of misfeasance in a public office can arise in one of two ways, what I shall call Category A and Category B. Category A involves conduct that is specifically intended to injure a person or class of persons. Category B involves a public officer who acts with knowledge both that she or he has no power to do the act complained of and that the act is likely to injure the plaintiff. This understanding of the tort has been endorsed by a number of Canadian courts: see for example Powder Mountain Resorts, supra; Alberta (Minister of Public Works, Supply and Services) (C.A.), supra; and Granite Power Corp. v. Ontario, [2002] O.J. No. 2188 (QL) (S.C.J.). It is important, however, to recall that the two categories merely represent two different ways in which a public officer can commit the tort; in each instance, the plaintiff must prove each of the tort's constituent elements. It is thus necessary to consider the elements that are common to each form of the tort.
¶ 23 In my view, there are two such elements. First, the public officer must have engaged in deliberate and unlawful conduct in his or her capacity as a public officer. Second, the public officer must have been aware both that his or her conduct was unlawful and that it was likely to harm the plaintiff. What distinguishes one form of misfeasance in a public office from the other is the manner in which the plaintiff proves each ingredient of the tort. In Category B, the plaintiff must prove the two ingredients of the tort independently of one another. In Category A, the fact that the public officer has acted for the express purpose of harming the plaintiff is sufficient to satisfy each ingredient of the tort, owing to the fact that a public officer does not have the authority to exercise his or her powers for an improper purpose, such [page282] as deliberately harming a member of the public. In each instance, the tort involves deliberate disregard of official duty coupled with knowledge that the misconduct is likely to injure the plaintiff.
¶ 24 Insofar as the nature of the misconduct is concerned, the essential question to be determined is not whether the officer has unlawfully exercised a power actually possessed, but whether the alleged misconduct is deliberate and unlawful. As Lord Hobhouse wrote in Three Rivers, supra, at p. 1269:
The relevant act (or omission, in the sense described) must be unlawful. This may arise from a straightforward breach of the relevant statutory provisions or from acting in excess of the powers granted or for an improper purpose.
...
¶ 25 Canadian courts also have made a deliberate unlawful act a focal point of the inquiry. In Alberta (Minister of Public Works, Supply and Services) v. Nilsson (1999), 70 Alta. L.R. (3d) 267, 1999 ABQB 440, at para. 108, the Court of Queen's Bench stated that the essential question to be determined is whether there has been deliberate misconduct on the part of a public official. Deliberate misconduct, on this view, consists of: (i) an intentional illegal act; and (ii) an intent to harm an individual or class [page283] of individuals. See also Uni-Jet Industrial Pipe Ltd. v. Canada (Attorney General) (2001), 156 Man. R. (2d) 14, 2001 MBCA 40, in which Kroft J.A. adopted the same test. In Powder Mountain Resorts, supra, Newbury J.A. described the tort in similar terms, at para. 7:
... it may, I think, now be accepted that the tort of abuse of public office will be made out in Canada where a public official is shown either to have exercised power for the specific purpose of injuring the plaintiff (i.e., to have acted in "bad faith in the sense of the exercise of public power for an improper or ulterior motive") or to have acted "unlawfully with a mind of reckless indifference to the illegality of his act" and to the probability of injury to the plaintiff. (See Lord Steyn in Three Rivers, at [1231]. Thus there remains what in theory at least is a clear line between this tort on the one hand, and what on the other hand may be called negligent excess of power -- i.e., an act committed without knowledge of (or subjective recklessness as to) its unlawfulness and the probable consequences for the plaintiff.
Under this view, the ambit of the tort is limited not by the requirement that the defendant must have been engaged in a particular type of unlawful conduct, but by the requirement that the unlawful conduct must have been deliberate and the defendant must have been aware that the unlawful conduct was likely to harm the plaintiff.
¶ 26 As is often the case, there are a number of phrases that might be used to describe the essence of the tort. In Garrett, supra, Blanchard J. stated, at p. 350, that "[t]he purpose behind the imposition of this form of tortious liability is to prevent the deliberate injuring of members of the public by deliberate disregard of official duty." In Three Rivers, supra, Lord Steyn stated, at p. 1230, that "[t]he rationale of the tort is that in a legal system based on the rule of law executive or administrative power 'may be exercised only for the public good' and not for ulterior and improper purposes." As each passage makes clear, misfeasance in a public office is not directed at a public officer who inadvertently or negligently fails adequately to discharge the obligations of his or her office: see Three Rivers, at p. 1273, per Lord [page284] Millett. Nor is the tort directed at a public officer who fails adequately to discharge the obligations of the office as a consequence of budgetary constraints or other factors beyond his or her control. A public officer who cannot adequately discharge his or her duties because of budgetary constraints has not deliberately disregarded his or her official duties. The tort is not directed at a public officer who is unable to discharge his or her obligations because of factors beyond his or her control but, rather, at a public officer who could have discharged his or her public obligations, yet wilfully chose to do otherwise. [Emphasis added]
[23] The Plaintiffs submit that the three individual Defendants, who were members of the Secretariat of the CBC, engaged in deliberate and unlawful conduct in their capacity as public officers when they destroyed the audiotapes and transcripts. The Plaintiffs point to two statutes, the Access to Information and Privacy Act and the National Archives of Canada Act, as the body of law creating a duty to preserve the CBC records. Moreover, the Plaintiffs claim damages arising from mental distress they suffered as result of the destruction of the records.
[24] The Defendants submit that the Court lacks jurisdiction on the claims against the three individual Defendants because there is no body of federal law nourishing a statutory grant of jurisdiction. However, it is admitted that Canada can still be held liable under s.9 of the Crown Liability and Proceedings Act if a duty can be proved. The Defendants argue that the Plaintiffs have failed to plead all the elements of misfeasance in public office. They submit that, at the time the records were destroyed, the individual Defendants were not "public officers" as they possessed no executive or administrative powers by virtue of their employment. The Defendants take the position that the Plaintiffs cannot satisfy the first necessary element of the tort of misfeasance in public office and it is, therefore, plain and obvious that their Amended Statement of Claim should be struck.
[25] In my opinion, it is not plain and obvious that the members of the CBC secretariat were not acting in their capacity as public officers when they destroyed the records, nor is it plain and obvious that the two pieces of legislation cited by the Plaintiffs could not create a duty. Prothonotary Tabib found that the Access to Information and Privacy Act and the National Archives of Canada Act did not bring the Plaintiffs' claim against the individual Defendants within the jurisdiction of this Court. The matter considered herein, however, deals with an action for damages in the context of a claim for the tort of misfeasance in public office as against Canada; this was not under consideration in Prothonotary Tabib's decision.
[26] Moreover, I find that the Plaintiffs have a chance of success in the argument that, where, as here, a party pleads facts that show the intention to injure required for the tort of misfeasance in public office, no specific duty to the Plaintiffs must be proved under the above noted statutes or otherwise; it is enough that the breach is of a kind that is part of the general duty imposed by Parliament and owed to the Crown or to the public by a federal employee. I also note that misfeasance in public office was never raised or adjudicated in the Ontario action. The allegation of mental distress suffered by the Plaintiffs is simply a matter of proof at trial.
3. Fiduciary duty
[27] In their Amended Statement of Claim, the Plaintiffs argue that, as they placed their trust and confidence in the CBC respecting the delivery of blood products, the members of the CBC owed a duty to the Plaintiffs, which included a fiduciary duty to preserve records of its operations, so their performance as a fiduciary could be reviewed. In the Amended Statement of Claim, the Plaintiffs allege that this duty was breached, and argue that, as Canada was a member of the CBC, Canada is directly, as well as vicariously, responsible.
[28] I find that it is not plain and obvious that a properly framed claim for damages arising from a fiduciary duty has no chance of success.
[29] Under both the tort of misfeasance in public office and fiduciary duty, punitive damages are claimed. I can find no reason why these claims should not proceed.
ORDER
I dismiss the Plaintiffs' appeal motion respecting the Order of Prothonotary Tabib dated June 24, 2003, but given the conclusions reached in Section B above, leave is hereby granted to the Plaintiffs to refile the Amended Statement of Claim as the "Second Amended Statement of Claim", but deleting the claim of loss of chance, and further clarifying, as necessary, the claims of misfeasance in public office and breach of fiduciary duty.
As the success on the Amended Statement of Claim is shared by both the Plaintiffs and the Defendants, I make no award as to costs on the present appeal motion.
"Douglas R. Campbell"
J.F.C.
FEDERAL COURT
Names of Counsel and Solicitors of Record
DOCKET: T-436-03
STYLE OF CAUSE: CHRISTOPHER LEBLANC, JOANNE BEAULIEU, STEPHANIE BEAULIEU, STEVEN FARROW by his Litigation Guardian Joanne Beaulieu
Plaintiffs
and
HER MAJESTY THE QUEEN, JO HAUSER, LILETH
GERVAIS, RANDALL KLOTZ
Defendants
PLACE OF HEARING: TORONTO, ONTARIO
DATE OF HEARING: MAY 4, 2004
REASONS FOR ORDER
AND ORDER BY: CAMPBELL J.
APPEARANCES BY:
Mr. Kenneth Arenson
FOR THE PLAINTIFFS
Mr. John C. Spencer
Mr. James Gorham
Ms. Julie L. De Marco
FOR THE DEFENDANTS
SOLICITORS OF RECORD:
Mr. Kenneth Arenson
Toronto, Ontario
FOR THE PLAINTIFFS
Morris Rosenberg
Deputy Attorney General of Canada
Toronto, Ontario
FOR THE DEFENDANTS
FEDERAL COURT
Date: 20040603
Docket: T-436-03
BETWEEN:
CHRISTOPHER LEBLANC, JOANNE BEAULIEU, STEPHANIE BEAULIEU,
STEVEN FARROW by his Litigation Guardian Joanne Beaulieu
Plaintiffs
and
HER MAJESTY THE QUEEN, JO HAUSER, LILETH GERVAIS, RANDALL KLOTZ
Defendants
REASONS FOR ORDER AND ORDER