IN THE SUPREME COURT OF BRITISH COLUMBIA
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Citation: |
McClelland et al. v. Dr. Stewart et al., |
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2003 BCSC 1292 |
Date: 20030820
Docket: S025180
Registry: Vancouver
Between:
Victoria McClelland, Robin Woods, Leslie MacGregor,
Candice Lanes, Emma Perrault, Diana Matilpi,
Patricia Parsley, Kelly Guthrie, Maureen Brinson,
Carol Pouliot, Dorita Dempster, Robin MacKenzie,
Rosanne Dejong, Judy White, Stephanie Ireland,
Anna Ferreira, Debra Hanson, Susan Garde
and Jana Allingham
PLAINTIFFS
And:
Dr. Mark W. Stewart, Dr. Philip W. Asplin, Dr. Kerry J. Baerg,
Dr. Paul K. Brown, Dr. Brian A. Carswell, Dr. Alan K. Hancock,
Dr. Phillip M. MacNeill, Dr. William H.G. Phipps,
Dr. Robert N. Ralston, Dr. Roger D. Ring, Dr. John R.H. Ross,
Dr. Florent Smit, Dr. Bruce Wood, Dr. Kenneth B. Duncan
on their own behalves and as a partnership doing business
as The Alder Medical Clinic, John W. Clark,
Cape View Management Ltd. and The College Of Physicians
and Surgeons Of British Columbia
DEFENDANTS
Before: The Honourable Madam Justice Lynn Smith
Reasons for Judgment
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Counsel for the Plaintiffs: |
G. Collette |
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Counsel for the Defendant College of Physicians and Surgeons of British Columbia: |
D. Martin |
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Counsel for the Defendants Dr. Philip W. Asplin, Dr. Kerry J. Baerg, Dr. Paul K. Brown, Dr. Brian A. Carswell, Dr. Alan K. Hancock, Dr. Phillip M. MacNeill, Dr. William H.G. Phipps, Dr. Robert N. Ralston, Dr. Roger D. Ring, Dr. John R.H. Ross, Dr. Florent Smit, Dr. Bruce Wood, Dr. Kenneth B. Duncan and John W. Clark:
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N. Fishman |
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Date and Place of Hearing: |
December 11, 2002 |
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Vancouver, BC |
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Written Submissions: |
January 6, 8, February 26, and March 4, 2003 |
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Further Oral Submissions: |
August 14, 2003 |
THE APPLICATION
[1] The College of Physicians and Surgeons of British Columbia (the “College”) seeks an order under Rule 19(24)(a) of the Rules of Court striking the claims against it on the basis that the pleadings do not disclose a cause of action.
NATURE OF THE CLAIM
[2] The 19 women who are plaintiffs in this action seek damages against the defendants with respect to sexual assaults allegedly committed on them by the defendant Dr. Mark W. Stewart between 1969 and 1996 in Campbell River. They each claim that they saw Dr. Stewart as his patient at the Alder Medical Clinic. The other defendant physicians were partners in that clinic. The clinic’s administrator and its management company, which owned the premises, are also defendants.
[3] The plaintiffs claim that they were sexually assaulted as a result of Dr. Stewart’s use of deception, coercion, manipulation and the abuse of power and trust involved in the physician/patient relationship. They say that Dr. Stewart had a pattern of sexually assaulting his female patients during the course of or under the guise of medical examinations.
[4] The plaintiffs make the following allegations relating to the College in their statement of claim:
38. The Defendant, College of Physicians and Surgeons of British Columbia is a professional body constituted pursuant to the Medical Practitioner’s Act, R.S.B.C. 1996 c. 285 …
52. The Defendant, College of Physicians and Surgeons of British Columbia, had knowledge of circumstances which ought to have put it on an inquiry relating to Dr. Stewart’s sexual assaults or inappropriate examinations of a sexual nature on his female patients and the Plaintiffs in particular and it failed in its duty to investigate the allegations against Dr. Stewart in good faith, and take appropriate and reasonable action.
53. The Defendant, College of Physicians and Surgeons of British Columbia, was reckless and grossly negligent in failing to investigate or adequately investigate the allegations and circumstances it was aware of respecting Dr. Stewart.
54. The Defendant, College of Physicians and Surgeons of British Columbia, failed to investigate the allegations and circumstances it was aware of respecting Dr. Stewart in good faith, wrongfully protecting the interests of Dr. Stewart over the protection of the public in general and the Plaintiffs in particular, leaving the public in general and the Plaintiffs in particular, vulnerable to sexual assaults by Dr. Stewart.
55. The Defendant, College of Physicians and Surgeons of British Columbia, failed to act in good faith in failing to take any or any adequate actions to prevent Dr. Stewart from sexually assaulting his female patients in general and the Plaintiffs in particular.
56. The Plaintiffs say Dr. Stewart fabricated clinical records to justify and cover-up his sexual assaults.
57. All of the sexual assaults committed by the Defendant, Stewart, on the Plaintiffs were during the course of his medical practice as a partner in the Alder Medical Clinic and while he was a registered member of the Defendant, College of Physicians and Surgeons of British Columbia.
58. The conduct of the Defendant Stewart and some or all of the other Defendants is of such a deliberate and outrageous nature as to be deserving of punishment.
[5] The plaintiffs also seek to amend their pleadings to add to the conclusion of paragraph 54 the words “and the plaintiffs claim damages for misfeasance in public office”, and to add to paragraph 53 the allegation that the College was recklessly indifferent to the consequences for the plaintiffs flowing from its failure to investigate. It is common ground that no limitation period has passed. Counsel for the College was not taken by surprise by this application to amend, and made full submissions on the relevant law. I will allow the plaintiffs to make those amendments.
[6] The plaintiffs seek punitive, aggravated or exemplary damages as well as general and special damages.
[7] The College applies for an order under Rule 19(24)(a) of the Rules of Court striking out the statement of claim against the College on the ground that it discloses no reasonable cause of action. No one appeared for Dr. Stewart, the Alder Medical Clinic or Cape View Management Ltd. at the hearing. The other defendants, for whom Mr. Fishman appeared, do not oppose this application.
PRINCIPLES TO BE APPLIED UNDER RULE 19(24)(A)
[8] Rule 19(24)(a) provides:
19 (24) At any stage of a proceeding the court may order to be struck out or amended the whole or any part of an endorsement, pleading, petition or other document on the ground that
(a) it discloses no reasonable claim or defence as the case may be,
…
and the court may grant judgment or order the proceeding to be stayed or dismissed and may order the costs of the application to be paid as special costs.
[9] The law regarding applications under Rule 19(24)(a) is clear. The issue must be decided on the basis of the pleadings as they stand or might be amended. No evidence is to be considered. The matter is to be decided on the premise that the allegations in the statement of claim are true. The issue is “whether there is a question fit to be tried, regardless of the complexity, or novelty, of that question”: Kripps v. Touche Ross & Co. (1992), 69 B.C.L.R. (2d) 62 (C.A.) at 68.
[10] In Hunt v.
Carey
Thus, the test in Canada governing the application of
provisions like Rule 19(24)(a) of the British Columbia Rules of Court is
the same as the one that governs an application under R.S.C.O. 18, r. 19:
assuming that the facts as stated in the statement of claim can be proved,
is it "plain and obvious" that
the plaintiff's statement of claim discloses no reasonable cause of action? As
in
[11] In Cooper v. Hobart (1999), 75 B.C.L.R. (3d) 54 (C.A.), aff’d [2001] 3 S.C.R. 537, Newbury J.A., on an appeal from a decision declining to strike a plaintiff’s claim in negligence, concluded that the Chambers judge had erred, stating at 83:
In reaching this conclusion, I have considered the argument that a court should be reluctant to strike out a cause of action and 'drive a plaintiff from the judgment seat' at this early stage of the proceeding. However, one does not always do justice to plaintiffs by allowing a hopeless action to proceed to months of trial, even where legal fees are covered by a contingent fee agreement.
[12] The
question is simply whether the action should be permitted to go to trial,
leaving the final determination of questions such as whether a duty of
care exists to be made at trial after the hearing of evidence and findings
of fact. In Haskett v. Equifax Canada Inc. (2003),
63 O.R. (3d) 577 (
On a Rule 21 motion, the court applies this two-stage analysis to the facts as pleaded in the Statement of Claim in order to determine not whether a duty of care will be recognized, but whether it is plain and obvious that no duty of care can be recognized. If it is not plain and obvious then the action can proceed and the issue will be determined at trial. See Hunt v. Carey …. In that context, the court may well recognize potential policy concerns at the second stage but should be circumspect in using those policy concerns to determine, without a Statement of Defence and without any evidence, that it is plain and obvious that there is no cause of action ….
ISSUES
[13] Counsel for the College, Mr. Martin, argued that it is plain and obvious that the plaintiffs’ claim against the College must fail because: (1) there is no separate tort of breach of statutory duty (R. v. Saskatchewan Wheat Pool, [1983] 1 S.C.R. 205); (2) the claim in negligence lacks foundation in that the College does not owe the plaintiffs a duty of care; and (3) the necessary material facts in support of the claim for misfeasance in public office have not been pleaded. Counsel for the plaintiffs, Mr. Collette, did not dispute the first point, but took issue with the second and third and argued that the College does owe a duty of care to his clients and that a claim for misfeasance in public office is supported by the pleadings as amended.
[14] Accordingly, the issues before me are whether it is plain and obvious that the plaintiffs have no cause of action against the College in negligence or for misfeasance in public office.
LEGAL PRINCIPLES
(1) Negligence and the Duty of Care
[15] The College’s assertion that it owes no duty of care to the plaintiffs rests primarily upon two recent decisions of the Supreme Court of Canada: Cooper v. Hobart, [2001] 3 S.C.R. 537 and Edwards v. The Law Society of Upper Canada (No. 2), [2001] 3 S.C.R. 562. It also rests upon earlier jurisprudence involving unsuccessful attempts to sue professional regulatory bodies for damages suffered by persons allegedly injured by members or former members of the professions regulated by those bodies.
The immunity provision
[16] The Medical Practitioners Act, R.S.B.C. 1996, c. 285 provides statutory authority for the College and creates immunity for the College from certain actions, stating:
70 (1) No action for damages lies or may be brought because of anything done or omitted in good faith in the performance or purported performance of any duty, or in the exercise or purported exercise of any power, under this Act by the college, the registrar, a deputy registrar, the special deputy registrar, an employee of the college, a member of the council, the executive committee or a committee appointed under this Act.
(2) No action for damages lies or may be brought against a person for making a report to the college in good faith concerning the conduct, mental condition, capability or fitness to practise of any member or former member.
(3) No action for damages lies or may be brought for anything done or omitted in good faith as a member or officer of the college or as a member of a patterns of practice committee, a peer review committee, a hospital or laboratory accreditation committee or another body to which the member or officer is nominated or appointed by the college or which functions, with the approval of the college, to improve health care or services in British Columbia.
Here, the plaintiffs have pleaded that there was an absence of good faith on the College’s part in its failure to investigate the conduct of Dr. Stewart and in its failure to take reasonable and appropriate action. Accordingly, the College’s position is not that s. 70(1) per se precludes this action. However, s. 70 is a factor to be considered in determining whether the College owes a duty of care to the plaintiffs.
Cooper v. Hobart
[17] In Cooper the issue was whether the Registrar of Mortgage Brokers, a statutory regulator, owed a duty of care to investors who had lost money as a result of the actions of a mortgage broker. An investor sought to bring a class action on behalf of some 3000 investors who had advanced money to the broker. She alleged that the Registrar had been aware of the broker’s serious violations of the governing legislation but had failed to suspend the broker’s licence or notify the investors in a timely way that the broker was under investigation. The Supreme Court of Canada (per McLachlin C.J. and Major J.) agreed with the Court of Appeal that the Registrar did not owe a duty of care to investors. The court affirmed that the framework set out in Anns v. Merton (London Borough Council), [1978] A.C. 728 and applied in Kamloops (City of) v. Nielsen, [1984] 2 S.C.R. 2 continues to be useful in analyzing whether a duty of care should be imposed in a new situation.
[18] It also affirmed that decisions to extend liability for negligence involve policy considerations and the balancing of interests. The court stated at 550-51:
In brief compass, we suggest that at this stage in the
evolution of the law, both in
Amplifying on the “proximity” analysis, the court referred at 552 to this statement by LaForest J. in Hercules Managements Ltd. v. Ernst & Young, [1997] 2 S.C.R. 165:
The label “proximity”, as it was used by Lord Wilberforce in Anns, supra, was clearly intended to connote that the circumstances of the relationship inhering between the plaintiff and the defendant are of such a nature that the defendant may be said to be under an obligation to be mindful of the plaintiff’s legitimate interests in conducting his or her affairs. [Emphasis in original]
The court then stated at 552:
Defining the relationship may involve looking at expectations, representations, reliance, and the property or other interests involved. Essentially, these are factors that allow us to evaluate the closeness of the relationship between the plaintiff and the defendant and to determine whether it is just and fair having regard to that relationship to impose a duty of care in law upon the defendant.
[19] The court noted at 553 that it is preferable to “develop categories of negligence incrementally and by analogy with established categories” and referred to the following categories in which proximity has been recognized:
(1) where the defendant’s act foreseeably causes physical harm to the plaintiff or the plaintiff’s property (extended to nervous shock);
(2) negligent misstatement;
(3) misfeasance in public office;
(4) failure to warn of the risk of danger;
(5) a duty to prospective purchasers of real estate where a municipality fails to inspect housing developments without negligence;
(6) governmental authorities which have undertaken a policy of road maintenance to do so in a non-negligent manner;
(7) relational economic loss (related to a contract’s performance) in certain situations.
[20] The court stated that at the second stage, which will arise generally only where the duty of care asserted does not fall within a recognized category of recovery, residual policy considerations fall to be determined. Those policy considerations are “not concerned with the relationship between the parties, but with the effect of recognizing a duty of care on other legal obligations, the legal system and society more generally” (at 554). The questions to be asked include:
Does the law already provide a remedy? Would recognition of the duty of care create the spectre of unlimited liability to an unlimited class? Are there other reasons of broad policy that suggest that the duty of care should not be recognized?
[21] The court stated that the distinction between government policy and execution of policy falls to be considered at this second stage. Liability is excluded with respect to policy decisions because it is inappropriate for courts to second-guess elected legislators on policy matters; similar considerations may arise where the decision in question is quasi-judicial.
[22] Regarding the issue before it, the court observed that the case was a novel one, outside of and not analogous to previously recognized categories, and stated that the question was whether a new duty of care should be recognized. The court began its analysis by addressing whether the first stage of the Anns test was met. McLachlin C.J. and Major J. wrote at 556-57:
It may be that the investors can show that it was reasonably foreseeable that the alleged negligence in failing to suspend Eron or issue warnings might result in financial loss to the plaintiffs. However, as discussed, mere foreseeability is not enough to establish a prima facie duty of care. The plaintiffs must also show proximity – that the Registrar was in a close and direct relationship to them making it just to impose a duty of care upon him toward the plaintiffs. In addition to showing foreseeability, the plaintiffs must point to factors arising from the circumstances of the relationship that impose a duty.
In this case, the factors giving rise to proximity, if they exist, must arise from the statute under which the Registrar is appointed. That statute is the only source of his duties, private or public. Apart from that statute, he is in no different position than the ordinary man or woman on the street. If a duty to investors with regulated mortgage brokers is to be found, it must be in the statute.
In this case, the statute does not impose a duty of care on the Registrar to investors with mortgage brokers regulated by the Act. The Registrar’s duty is rather to the public as a whole. Indeed, a duty to individual investors would potentially conflict with the Registrar’s overarching duty to the public.
After reviewing the statutory scheme, the court concluded that even though to some degree the legislation serves to protect the interests of investors, the overall scheme “mandates that the Registrar’s duty of care is not owed to investors exclusively but to the public as a whole” (at 559). It held that there was insufficient proximity between the Registrar and investors to ground a prima facie duty of care and stated at 559:
The statute cannot be construed to impose a duty of care on the Registrar specific to investments with mortgage brokers. Such a duty would no doubt come at the expense of other important interests, of efficiency and finally at the expense of public confidence in the system as a whole.
[23] The court then stated that even if a prima facie duty of care had been established under the first branch of the Anns test it would have been negated at the second stage, explaining at 560:
The decision of whether to suspend a broker involves both policy and quasi-judicial elements. The decision requires the Registrar to balance the public and private interests. The Registrar is not simply carrying out a pre-determined government policy, but deciding, as an agent of the executive branch of government, what that policy should be. Moreover, the decision is quasi-judicial. The Registrar must act fairly or judicially in removing a broker’s licence. These requirements are inconsistent with a duty of care to investors. Such a duty would undermine these obligations, imposed by the Legislature on the Registrar. Thus even if a prima facie duty of care could be posited, it would be negated by other overriding policy considerations.
The court added at 560-61 that other considerations also weighed against finding a duty of care: the distinction between government policy and the execution of policy; the spectre of indeterminate liability; and the impact on the taxpayers of finding a duty of care, which would effectively create a publicly-funded insurance scheme for investors.
Edwards v. Law Society of Upper Canada
[24] Edwards, supra, was decided at the same time as Cooper. It too was a class action. In Edwards, the issue was whether the Law Society should be liable in tort for damages suffered by persons as a result of the Law Society’s alleged failure, after it had commenced an investigation regarding improper use of a solicitor’s trust account, to monitor the trust account or to warn persons in the position of the plaintiffs that it had failed to do so. The court (per McLachlin C.J. and Major J.) applied the test described in Cooper and held that this was not a proper case in which to find a duty of care. The court noted that it was not alleged that the plaintiffs were clients of the solicitor: instead, they were victims of a gold delivery fraud in which they had been persuaded to pay funds into a solicitor’s trust account as part of the fraudulent scheme. The court referred to the governing statute, and to the fact that “[d]ecisions made by the Law Society require the exercise of legislatively delegated discretion and involve pursuing a myriad of objectives consistent with public rather than private law duties” (at 572). It referred to the Law Society’s Compensation Fund and the lawyers’ insurance scheme as additional safeguards for clients and concluded with the following at 573:
Finally, and perhaps most indicative of the Legislature’s intent, the Act provides statutory immunity in s. 9 of the Act which reads:
9. No action or other proceedings for damages shall be instituted against the Treasurer or any bencher, official of the Society or person appointed in Convocation for any act done in good faith in the performance or intended performance of any duty or in the exercise or in the intended exercise of any power under this Act, a regulation or a rule, or for any neglect or default in the performance or exercise in good faith of any such duty or power.
Section 9 precludes any inference of an intention to provide compensation in circumstances that fall outside the lawyers’ professional indemnity insurance and the lawyers’ fund for client compensation.
We conclude that no prima facie duty of care arose between the Law Society and the appellants who deposited money into a solicitor’s trust account, not as clients but as participants in a third person business promotion.
In light of this conclusion, it is unnecessary to examine the second stage of the Anns test. However, had we found the existence of a prima facie duty of care at stage one, such duty of care would have been negated by residual policy considerations outside the relationship of the parties. This was the conclusion in Cooper and this case is indistinguishable.
Other Authorities on Duty of Care
[25] In Rogers v. Faught (2002), 212 D.L.R. (4th) 366 (Ont. C.A.) the Ontario Court of Appeal, following Cooper and Edwards, found that neither the Royal College of Dental Surgeons of Ontario (“RCDSO”) nor the College of Dental Hygienists of Ontario owed a duty of care to a patient who claimed that she had suffered serious injuries as a result of negligent treatment by a dental hygienist. MacPherson J.A. for the court referred to the governing legislation, the Registered Health Professions Act, S.O. 1991, c. 18 (“the RHPA”) and stated at 374-75:
Registration under the RHPA involves a balancing of competing interests, including rights for the professional applicants and duties to the public interest as a whole: ss. 15-23 of the Code. There is a complaints and discipline process with detailed rules balancing the rights of the complainants, witnesses and the regulated members of the professions, with an overall objective of protecting the public interest as a whole: ss. 25-56 and 70-79 of the Code. In contrast to the public discipline process, there is a private process to deal with concerns about physical or mental incapacity of members of the profession: ss. 57-74 of the Code. The Colleges are required to operate non-punitive quality assurance programs to assure the quality of the practice of the professions and to promote continuing competence by their members: ss. 79.1-83 of the Code. The Colleges must establish patient relations programs to enhance relations between members and patients: ss. 84-85 of the Code. The Colleges are required to provide funding for counselling and therapy for patients who have been sexually abused by members: s. 85.7 of the Code. Finally, and importantly, s. 38 of the RHPA provides:
No action or other proceeding for damages shall be instituted against … a College … for an act done in good faith in the performance … of a duty or in the exercise … of a power under this Act, a health profession Act … or a regulation or a by-law under those Acts or for any neglect or default in the performance or exercise in good faith of the duty or power.
This immunity provision is virtually identical to the one which Major J. characterized in Edwards, as “perhaps most indicative of the Legislature’s intent” (p. 219) not to create a duty relationship between a regulatory body and clients of members of the regulated profession.
Based on this analysis of the RHPA and the Code, I conclude that their scheme is very similar to the schemes considered in Cooper and Edwards. Accordingly, the Colleges do not owe a duty of care to the patients of dentists and dental hygienists.
[26] With respect to a separate argument relating to the plaintiff’s allegations of bad faith against the RCDSO, the court stated at 375:
They assert that the immunity provision in s. 38 of the RHPA only shields the Colleges against a civil action for acts of the Colleges done “in good faith”. With respect to the RCDSO, the appellants allege that its failure to take adequate steps in the area of TMJ education and practice was done in bad faith. The bad faith claim is grounded in the assertion that RCDSO operates its own private insurance program for dentists, the Professional Liability Program. The appellants contend that there is a conflict of interest between this component of its activities (one aspect of which would be a desire to keep insurance rates low) and the education component of its activities which would require the College to provide comprehensive and visible instruction about potential risks in the treatment of patients.
I do not agree with this submission. Section 94(1)(y) of the Code specifically authorizes the Colleges to make by-laws “requiring members to have professional liability insurance that satisfies the requirements specified in the by-laws or to belong to a specified association that provides protection against professional liability”. I do not see how the creation of an insurance scheme specifically authorized by the regulatory statute can be deemed as a “bad faith” exercise of power by the RCDSO.
The court also considered the second branch of the Anns test at 375:
Finally, I note that in Cooper and Edwards the Supreme Court of Canada also held against potential liability in negligence of the regulators on the basis of the second stage of the Anns test, namely, the existence of policy reasons which negated any prima facie duty of care. The factors which the court relied on in this aspect of its analysis included the requirement in the governing statutes that the regulatory bodies balance public and private interests, the strong policy-making role of the regulators, the fact that some of their decisions were quasi-judicial in nature, the spectre of indeterminate liability and the impact on the taxpayer of judicial creation of a new and expensive insurance scheme in the absence of any indication that the legislature intended such a result. In my view, all of these factors are equally applicable to the scheme in issue in the present appeal; accordingly, the appellants cannot clear the hurdle of the second stage of the Anns test.
[27] In Jack v. Behrens, 2002 BCSC 1454, Edwards J. allowed an application by the College of Physicians and Surgeons of British Columbia to strike a claim against it by a plaintiff who alleged that the College had failed to “monitor, investigate and supervise the continued prescription of” medications to a deceased person of whose estate he was the executor. Mr. Justice Edwards characterized the allegations as ones of regulatory failure by the College. The statement of claim did not allege absence of good faith by the College and the plaintiff’s counsel indicated that there was no intention to amend it to make such an allegation. Accordingly, the court found that s. 70(1) was a statutory bar to the claim.
[28] The claim was also struck in Marble (Litigation Guardian of) v. Saskatchewan (2001), 208 Sask. R. 169 (Q.B.), where the court held that the College of Physicians and Surgeons of Saskatchewan did not owe a duty of care to a plaintiff who had been injured by the negligence of an uninsured doctor and who claimed that the College had an obligation to ensure that doctors had public liability insurance.
[29] In Lewis v. Emanuele, [2000] O.J. No. 1085 (Q.L.) (Sup. Ct.) the plaintiff brought an action for damages as the result of the death of his mother following a cervical manipulation performed by the defendant, a chiropractor. He joined to the action the Canadian Memorial Chiropractic College, the College of Chiropractors of Ontario and the Canadian Chiropractic Protective Association. Those defendants invoked the immunity provisions of the relevant legislation. The plaintiff was permitted to amend his statement of claim to allege bad faith, malice and conspiracy. Cavarzan J. referred to Edwards at the trial level ((1998), 37 O.R. (3d) 279 (Gen. Div.)) and held at ¶ 7-8:
… the College and Grod owe no duty to the plaintiff, that the plaintiff lacks standing to sue these defendants, that his conspiracy claim is wholly inadequate, that an alleged breach of a statutory duty is not a tort, and that the plaintiff never triggered the statutory scheme of oversight of the conduct of chiropractors by registering a complaint with the College.
[30] A distinction between cases involving simply economic loss and those involving physical harm has long been recognized. In Kripps, supra, Taylor J.A. for the court described the appeals as about “the scope of recovery in negligence for what may be called ‘pure economic loss simpliciter’ – loss suffered in circumstances in which there is no personal injury or physical property damage, nor any risk that anyone would suffer either, but loss only to pocket or estate” (at 65). Some 560 plaintiffs claimed to have lost a total of more than $10,000,000 in the failure of a mortgage company to which they had loaned money. They alleged that the Superintendent of Brokers had been reckless in accepting prospectuses and otherwise failing to enforce the Securities Act, R.S.B.C. 1979, c. 380.
[31] Taylor J.A. commented on the distinction between cases involving economic loss simpliciter and those involving personal injury or physical property damage. Referring to the statutory provisions limiting the liability of the superintendent, he stated that it was accepted on the present appeal “that if these defendants owe any duty of care to the plaintiffs, then only by proving reckless want of care amounting to want of good faith could the plaintiffs possibly establish their case against the superintendent and the Crown” (at 79). The court concluded that the superintendent had no private law duty of care to the plaintiffs. It held that the statutory scheme sought to maintain, or improve, the standard of offerings in the market generally, and stated at 87:
It would, in my view, be contrary to good sense, and also unfair having regard to the nature of the statutory scheme, that taxpayers generally be burdened with losses suffered by those who seek a particular level of interest by lending their money on securities such as those offered in this case. Their decision must be taken to be based on their own assessment of, or indifference to, the risks involved, and the return being offered as compensation for acceptance of those risks, and there can, in my view, be no justification for casting the burden of those risks on taxpayers who did not choose to take them, and stood no chance, therefore, of receiving the promised return had the transaction been profitable.
Commenting on the approach to be taken where the law is less than certain, Taylor J.A. said at 88:
A court might be tempted, at the present point in the development of the Canadian law of negligence, to permit every negligence claim to proceed to trial. But that would lead to a long and costly period of uncertainty, one particularly costly in the commercial world where certainty in the law is of considerable importance. It seems to me that the courts would fail in their duty to the community were they to decline to exercise jurisdiction under R. 19(24) simply because of the current state of the jurisprudence in this area of the law. It is, I think, important in some cases that the court make a decision at this stage concerning the extent to which recovery in negligence can be enlarged, and I believe this to be such a case.
Having considered the claims struck out below in detail, finding no authority which would support them, and being of the view both that there is no reasonable possibility of the law being extended so as to allow them and that further proceedings for exploration of the facts and the law could not assist in establishing them, I have concluded that we ought to uphold the decision striking out these claims.
[32] Similarly, in Schilling v. Certified General Accountants Association (British Columbia) (1996), 20 B.C.L.R. (3d) 144 (C.A.), leave to appeal to S.C.C. refused [1996] S.C.C.A. No. 397, Finch J.A. (as he then was), in a concurring judgment on an appeal from a decision on summary trial, held that the defendant Certified General Accountants Association did not owe a private law duty of care to a client of a former member where that member had been de-certified without publicity. He wrote at 154:
Counsel for the plaintiffs agreed, in answer to a question from the Court, that no other case in the Commonwealth had held a body like the defendant Association to owe a private law duty of care to clients of its members or former members.
This case addresses what Taylor J.A., in Kripps, above, called “pure economic loss simpliciter”. No one has suffered injury to person or physical damage to property, nor was there risk of such injury or property damage to anyone.
[33] The majority decided the case on the basis that there was no evidence that the plaintiffs had reasonably relied on the certification by the Association in that the plaintiffs were using the former member as an investment advisor, not as an accountant.
[34] On the other hand, in Doe v. Metropolitan Toronto (Municipality) Commissioners of Police (1998), 39 O.R. (3d) 487 (Gen. Div.) there was an allegation of breach of duty leading to personal injury. A duty of care was found to exist. The plaintiff, who was the victim of a serial rapist, sued the Metropolitan Toronto Police Force for damages on the grounds that the police had conducted a negligent investigation and had failed to warn women of the risk of an attack by that rapist, who was using a particular modus operandi in a particular area of the city. The court held that the police are statutorily obligated to prevent crime and, at common law, owe a duty to protect life and property. Accordingly, they owed a duty of care to the plaintiff in this case. MacFarland J., at the trial, stated that the police were aware of a specific risk to a specific group of women but neither warned the women nor took steps to protect them, and concluded at 519:
In my view, the police failed utterly in their duty to protect these women and the plaintiff in particular from the serial rapist the police knew to be in their midst by failing to warn so that they may have had the opportunity to take steps to protect themselves.
[35] An application to dismiss the action for failing to disclose a cause of action known to law had earlier been denied ((1990), 74 O.R. (2d) 225 (Div. Ct.), leave to appeal to Ont. C.A. refused, 1 O.R. (3d) 416.) The judgment of the Divisional Court, per Moldaver J., referred to the Anns test and to the relevant legislation, with its imposition of duties on the police to preserve law and order within our society, including the protection of the public from those who would commit or have committed crimes. The court stated at 230-31:
The plaintiff alleges that the defendants knew of the existence of a serial rapist. It was eminently foreseeable that he would strike again and cause harm to yet another victim. The allegations therefore support foreseeability of risk.
The plaintiff further alleges that by the time she was raped, the defendants knew or ought to have known that she had become part of a narrow and distinct group of potential victims, sufficient to support a special relationship of proximity. According to the allegations, the defendants knew:
(1) that the rapist confined his attacks to the Church-Wellesley area of Toronto;
(2) that the victims all resided in second or third floor apartments;
(3) that entry in each case was gained through a balcony door; and
(4) that the victims were all white, single and female.
Accepting as I must the facts as pleaded, I agree with Henry J. that they do support the requisite knowledge on the part of the police sufficient to establish a private law duty of care. The harm was foreseeable and a special relationship of proximity existed.
[36] The Doe case was referred to and distinguished by Cameron J. at first instance in Rogers (2001), 5 C.C.L.T. (3d) 109 (Gen. Div.), in the context of the plaintiff’s argument that there was a breach of the Charter, at 132:
The difference between Doe and this case is the absence of a duty of care. In Doe there was found to be a private law duty of care owed by the police to the plaintiff based on the foreseeability of the harm and a special relationship of proximity. The duty, supported by the statutory obligation under the Police Act to preserve the peace, prevent crime and apprehend offenders, consisted of a positive duty to act by either warning the plaintiff or protecting her. The statutory duty could remove the defendants’ right to plead the defence that the decision was one of policy and not made arbitrarily, unreasonably and irresponsibly.
(2) Misfeasance in or Abuse of Public Office
[37] The principles governing the intentional tort of abuse of or misfeasance in public office have recently been reviewed by the British Columbia Court of Appeal in Powder Mountain Resorts Ltd. v. British Columbia (2001), 94 B.C.L.R. (3d) 14 (C.A.) and First National Properties Ltd. v. Highlands (District) (2001), 88 B.C.L.R. (3d) 125 (C.A.), leave to appeal to S.C.C. refused [2001] S.C.C.A. No. 365, and by the Ontario Court of Appeal in Odhavji Estate v. Woodhouse (2000), 52 O.R. (3d) 181 (C.A.) (appeal argued in the Supreme Court of Canada February 17, 2003, judgment reserved).
[38] In Powder Mountain, the appeal was from the dismissal of an action which included a claim that the former Premier of the province and four other officials had committed the tort of abuse of public office. Newbury J.A. stated at the outset of her reasons for judgment, in which Finch C.J.B.C. concurred at 17:
In 1959, in a case involving extreme misconduct on the part of the Premier of Quebec, the Supreme Court of Canada allowed a claim for damages for a tort that was little known in Canada - misfeasance in, or abuse of, public office (Roncarelli v. Duplessis [1959] S.C.R. 121). The cause of action then lay in relative obscurity in this country until recently. In the last few years, it has been re-asserted by plaintiffs as a means of obtaining tangible redress where the traditional remedies of certiorari or mandamus would provide only a Pyrrhic victory (see Jeremy McBride, "Damages as a remedy for unlawful administrative action", [1979] 38 Camb. L.J. 323) or where no duty of care in negligence is owed to the public or a class thereof by an official who has exceeded or misused public powers.
But for reasons that are perhaps obvious, the tort must be used cautiously. Otherwise, the courts risk straying into the arena of political decision-making, bypassing the normal restraints associated with judicial review, and becoming the arbiters of the personal thought processes of public officials. One recent commentator (Phillip Allott, "EC Directives and Misfeasance in Public Office", [2000] 59 Camb. L.J. 4) has written that the court should not, by means of the tort, take on the role of "ombudsman, a parliamentary committee, or an organ of public opinion in reviewing even egregious acts of maladministration, official incompetence, or bad judgement." (at 6.) To avoid dangers of this kind, a balance must be sought between curbing unlawful behaviour on the part of governmental officials on the one hand, and on the other, protecting officials who are charged with making decisions for the public good, from unmeritorious claims by persons adversely affected by such decisions. This appeal provides us with another opportunity to consider the tort and the striking of that balance.
The court accepted the approach taken to this tort by the House of Lords in Three Rivers District Council v. Bank of England (No. 3), [2000] 3 All E.R. 1. Newbury J.A. stated at 19:
Absent some ruling to the contrary by the Supreme Court of Canada, 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 8.) 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. The actionability of such conduct, based on “recklessness … used in an objective sense” was rejected by their Lordships in Three Rivers …. Perhaps the opinion of Lord Millett in Three Rivers sums up most succinctly the elements of the two branches of the tort:
… If the plaintiff can establish the official’s subjective intention to exercise the power of his office in order to cause him injury, he does not need to establish that the official exceeded the terms of the powers conferred upon him. If, on the other hand, the plaintiff can establish that the official appreciated that he was acting in excess of the powers conferred upon him and that his conduct would cause injury to the plaintiff, the inference that he acted dishonestly or for an improper purpose will be exceedingly difficult and usually impossible to rebut. Moreover …, the consequences of his actions will usually be obvious enough to the official concerned, who can then be taken to have intended the damage he caused. I also agree … that intention includes subjective recklessness, that is to say … ‘a conscious disregard for the interests of those who will be affected by’ the exercise of the power. [at 49]
[39] A recent decision of this court summarizing and applying the principles governing the tort of abuse of public office is D.E. (Guardian ad litem of) v. British Columbia, 2003 BCSC 1013. Madam Justice Wedge heard a summary trial of an action by eighteen persons who had been sexually sterilized while patients at Essondale Provincial Hospital between 1940 and 1968 pursuant to the now-repealed Sexual Sterilization Act, R.S.B.C. 1933, c. 59. The claim was based in part on alleged abuse of public office. Wedge J. stated at ¶ 90-93 that:
Abuse of public office is an intentional tort. Because the subjective intent of the public official is central to the tort, a two-pronged analysis has emerged in the case law to address the two different circumstances in which the complaint might be made. In the leading case of Powder Mountain Resorts Ltd. v. British Columbia … Madam Justice Newbury stated that a plaintiff who relies on this cause of action must establish one of two branches of the tort:
(1) The public official intentionally exercised the power of his office for the purpose of injuring the plaintiff; or
(2) The public official acted knowing that she had no power to do the act and that her conduct would probably injure the plaintiff.
In both branches of the tort, the subjective intent of the public official is a critical element. As such, the tort of abuse of public office is, in the words of Newbury, J.A., “an exception to the normal disinterest of the civil law in motive underlying conduct, as opposed to the conduct itself.”
Because this cause of action requires proof of bad faith or improper purpose, the conduct of the public official will to “most observers, carry the ‘stench of dishonesty’” and require clear proof commensurate with the seriousness of the wrong (Power Mountain …at para. 8).
The two branches of the tort are distinguishable from each other and different considerations arise from each. Under the first branch, the official performs an act that is otherwise within his powers but does so dishonestly or for a corrupt motive or improper purpose. Because the act was otherwise within the official’s statutory authority to perform, the threshold for dishonest intent under this branch is high. Under the second branch, the official knowingly or recklessly performs an act for which he has no statutory authority. The inquiry under this branch is whether there is a statutory instrument that grants the official the authority to do the act complained of.
[40] The court concluded that the requisite elements of the tort had not been established on the evidence in that case, and the action was dismissed.
[41] Odhavji Estate, supra, involved claims in negligence and for abuse of or misfeasance in public office against officers of the Metropolitan Toronto Police, the Chief of Police, the Police Services Board and the Province of Ontario. They arose out of the fatal shooting of Mr. Odhavji by police officers pursuing suspected bank robbers, and a subsequent alleged failure of the police officers to cooperate in the investigation of the death. In that case, the majority in the Ontario Court of Appeal per Borins J.A. adopted the approach taken by Lord Steyn in Three Rivers in defining the elements of the tort of misfeasance in public office. The majority held that the claims for misfeasance in public office should be struck, emphasizing the necessity for the plaintiffs to show that the police officers were engaged in the exercise of a statutory power at the time in question, and that a breach of duty is not the same as an abuse of power.
[42] Dissenting, Feldman J.A. would have permitted the claim of misfeasance in public office to proceed to trial. She stated at 206:
In my view, this is an important example of a case which should be allowed to proceed pursuant to the principles set out in Hunt v. Carey Canada Inc., [1990] 2 S.C.R. 959, 49 B.C.L.R. (2d) 273. The cause of action for misfeasance in public office is continuing to develop in the courts, most recently in the New Zealand Court of Appeal and in the English House of Lords. The cause of action addresses a serious public law issue. Misfeasance in public office, although fortunately not a frequent occurrence in this country, can take new and unforeseen forms. The delineation of the boundaries of those forms must be allowed to develop through the trial process and must not be closed off at the pleadings stage.
Later, at 211, Feldman J.A. summarized:
In my view, it is clear both from the analysis of the New Zealand Court of Appeal as well as from the procedural course of the case, that the tort of misfeasance in public office can be based on a failure of a public officer to carry out a duty and is not limited to abusive exercises of statutory power, or to purporting to exercise a power that the officer does not possess. In my view, the key is the malicious intent of the public official.
Madam Justice Feldman concluded that the claims for misfeasance in public office should not be struck.
(3) The Statutory Provisions
[43] The duties and objects of the College are set out in s. 3 of the Medical Practitioners Act:
3 (1) It is the duty of the college at all times
(a) to serve and protect the public, and
(b) to exercise its powers and discharge its responsibilities under all enactments in the public interest.
(2) The college has the following objects:
(a) to superintend the practice of the profession;
(b) to govern members according to this Act and the rules;
(c) to establish, monitor and enforce standards of education and qualifications for registration of members;
(d) to establish, monitor and enforce standards of practice to enhance the quality of practice and reduce incompetent, impaired or unethical practice amongst members;
(e) to establish and maintain a continuing competency program to promote high practice standards amongst members;
(f) to establish a patient relations program to seek to prevent professional misconduct of a sexual nature;
(g) to establish, monitor and enforce standards of professional ethics amongst members;
(h) to require members to provide to an individual access to the individual’s health care records in appropriate circumstances;
(i) to inform individuals of their rights under this Act, the rules and the Freedom of Information and Protection of Privacy Act;
(j) to administer the affairs of the college and perform other duties through the exercise of the powers conferred by this Act or the rules.
[44] Section 21 states:
21 (1) The council must designate a person appointed under section 20(3) as the special deputy registrar.
(2) The special deputy registrar must
(a) receive and investigate complaints of sexual misconduct made to the college,
(b) on completion of an investigation of a complaint of sexual misconduct, review the findings of the investigation and recommend the action the sexual misconduct review committee should take under section 28(2)(d), and
(c) perform other duties as directed by the sexual misconduct review committee or the registrar.
(3) With the prior approval of the sexual misconduct review committee, the special deputy registrar may authorize an inspector to complete an investigation under this section under the supervision of the special deputy registrar.
(4) The special deputy registrar may attempt to resolve a complaint of sexual misconduct informally if the complainant consents and
(a) the circumstances warrant informal resolution of the complaint in the opinion of the special deputy registrar, or
(b) a direction has been made under section 28(2)(d)(iii) to make the attempt.
[45] Section 28(1) provides that the council of the College must appoint a sexual conduct review committee composed of at least three persons of whom at least one-third must have been appointed by the minister, and s. 28(2) provides that the sexual misconduct review committee must:
(a) establish and maintain the procedures by which the college deals with complaints of sexual misconduct that it receives,
(b) establish the patient relations program referred to in section 3(2)(f),
(c) develop and coordinate, for the college, educational programs on sexual misconduct for members and the public,
(d) consider the recommendations made under section 21 by the special deputy registrar at the conclusion of an investigation and, as circumstances require, must
(i) direct the special deputy registrar to have a further investigation conducted, under section 21, into the complaint,
(ii) refer the complaint to the council, executive committee or a committee appointed under section 26 to be dealt with by that council or committee,
(iii) direct the special deputy registrar to attempt to resolve the complaint informally,
(iv) appoint an investigating committee to act under section 51,
(v) appoint an inquiry committee to act under sections 53 and 60, or
(vi) take no further action in the matter at that time, and
(e) monitor and periodically evaluate the operation of the procedures established under paragraph (a).
Subsection 28(3) goes on to provide that the sexual misconduct review committee must, if the complainant so requests, proceed a second time under subsection (2)(d) regarding a complaint if the committee has directed an attempt to resolve the complaint informally or has decided to take no further action.
POSITIONS OF THE PARTIES
[46] Briefly, the College’s position is that the statutory scheme embodied in the Medical Practitioners Act imposes duties on the College not to individual patients, but rather to the public as a whole, and that there is no duty of care to individual patients even when the College or its employees have failed to act in good faith. The plaintiffs’ position is that the scheme does contemplate a duty of care in some circumstances, in particular, when the College has failed to act in good faith to investigate and to take steps to protect patients despite having received information regarding sexual misconduct by a practitioner.
[47] Specifically, counsel for the College, Mr. Martin, pointed to s. 70(1) of the Medical Practitioners Act, the immunity clause, which is very similar in its terms both to s. 38 of the RHPA at issue in Rogers and to s. 9 of the Law Society Act at issue in Edwards. Mr. Martin submitted that s. 70(1) gives a strong indication that the College does not owe a private law duty of care to patients of its members. He argued that broad duties to protect the public as a whole may be inconsistent with the existence of a duty to protect individual members of the public. He pointed to the similarities between the claims made in Cooper and Edwards and the claim made in this case, all flowing from an alleged failure of a regulatory body to investigate the conduct of a member. Mr. Martin further argued that even if a prima facie duty of care had been established, there are residual policy considerations that justify denying liability: the requirement that the College balance public and private interests; the strong policy-making role of the College; the fact that the College, in making decisions, must exercise discretion and pursue a myriad of objectives consistent with public rather than private law duties; the quasi-judicial nature of the College’s decisions regarding investigations and disciplinary proceedings; and the spectre of indeterminate liability.
[48] The College’s position is that Doe is distinguishable because it turns on the statutory duty imposed upon the police to prevent crime, the foreseeability of harm to the plaintiff and the proximate relationship between the plaintiff and the police in the particular circumstances of that case. Mr. Martin also argued that because the Doe case was decided three years before the Supreme Court of Canada decisions in Cooper and Edwards and is an Ontario decision, it should not be viewed as authoritative.
[49] In addition, Mr. Martin argued that it is significant that the pleadings here do not state that there were previous complaints to the College regarding Dr. Stewart and do not provide particulars of the alleged bad faith.
[50] With respect to the plaintiffs’ claim for damages for misfeasance in public office, the College’s position is that the pleadings do not disclose the material facts in support of such a claim. Mr. Martin argued, first, that the plaintiffs have not cited any authority finding that professional regulatory bodies such as the College are “public officers” for the purposes of this tort. Second, he submitted that the plaintiffs have not pleaded facts in support of either a finding that the College acted with “targeted malice” (that is, that it acted with specific intent to injure the plaintiffs) or a finding that the College knowingly acted beyond its jurisdiction in a manner that it knew would probably inure the plaintiffs. He argued that one or the other of those mental elements is a necessary condition for maintaining an action for misfeasance in public office. He submitted that the courts in Canada have not accepted that the tort of misfeasance in public office can be established by simply proving reckless indifference to the fact that injury is likely to result unless there is also one of those mental elements. Third, he submitted that, following the distinction made by the majority of the Ontario Court of Appeal in Odhavji Estate, the College did not have a power in this case, but a duty – a general duty to the public.
[51] The plaintiffs’ position is that the College’s application should be dismissed because under the law as enunciated by the Supreme Court of Canada this is a case in which a duty of care should be recognized and in any event it is not “plain and obvious” that the College owes no duty of care to the plaintiffs.
[52] With respect to s. 70 of the Medical Practitioners Act, Mr. Collette argued that its effect is to raise the bar, requiring proof of gross negligence or of bad faith, rather than to preclude all actions.
[53] The plaintiffs’ position is that Doe strongly supports the conclusion that the College arguably owed the plaintiffs a private law duty of care.
[54] Mr. Collette argued that the circumstances of this case are different from those in the authorities referred to by Mr. Martin. He emphasized that here the plaintiffs, as female patients of Dr. Stewart, were foreseeably at risk of physical harm when the College, having received information that Dr. Stewart was sexually assaulting his patients in the course of medical examinations, took no steps to prevent further such assaults or to warn his patients.
[55] Mr. Collette argued that none of the leading cases is comparable to the case at bar in that many of them are concerned with pure economic loss, rather than physical harm, or with general, sweeping allegations or policy concerns rather than the type of allegations made here. He pointed out that Edwards did not concern the claims of a client. Conceding that there is no precedent for finding a duty of care on a professional body in a situation such as this, he argued that the Supreme Court of Canada has made it clear that each case is to be decided on its own circumstances and in the context of the specific applicable legislation.
[56] Counsel for the plaintiffs urged that the Medical Practitioners Act can be construed to impose a specific duty of care on the College with respect to sexual assaults by physicians on their patients. He argued that the Medical Practitioners Act states a policy to protect patients against sexual abuse by physicians, and that the allegations in this case essentially relate to negligence and bad faith in the manner in which that policy was executed or carried out in the case of Dr. Stewart.
[57] Mr. Collette submitted that these duties do not come at the expense of other important interests such as efficiency, protecting the market, or public confidence in the system as a whole as was the concern in Cooper. Arguing that a duty to protect individual women from sexual assault is quite consistent with the duty to serve and protect the public as a whole, he urged that the College, when failing to act upon the knowledge it had, was not making a policy decision regarding sexual assaults by physicians on patients or making quasi-judicial decisions, but instead was failing to execute a pre-determined policy of preventing sexual assaults on patients by their doctors. He argued that there is no “spectre of indeterminate liability” if a duty of care is recognized: the College would only be liable to patients of doctors who sexually assaulted them, when those sexual assaults could have been averted if the College had executed its policy in good faith. Mr. Collette submitted that prevention of sexual abuse of patients by physicians is an important interest of the College which does not conflict with or come at the expense of other important interests of the College, and that women rely on the College when they put themselves in the care of a physician where they are vulnerable to sexual abuse. He submitted that it would only have been because Dr. Stewart was a member of the College, a licensed physician, that the plaintiffs submitted to sometimes intimate examinations by him. He argued that, in this context, the College must owe them a duty of care.
[58] Responding to Mr. Martin’s argument that the pleadings are non-specific, Mr. Collette argued that the pleadings are sufficient to disclose a cause of action. He submitted that although the plaintiffs do not claim to know the College’s reasons for failing to act, if, as the plaintiffs plead, those reasons were a preference for the interests of Dr. Stewart over those of the plaintiffs, there would not be a good faith basis for refraining from taking action.
[59] In response, Mr. Martin for the College argued that even if there had been complaints to the College regarding Dr. Stewart, there is insufficient proximity to found a duty of care. He also submitted that it is irrelevant that the College has set up procedures to deal with sexual misconduct. Such procedures are aimed at the protection of the public as a whole, which includes individuals, and do not, he argued, translate into a private law duty of care.
[60] With respect to the College’s assertion that the claim for misfeasance in public office must fail, Mr. Collette argued that although the plaintiffs concede that there was no intent to injure the plaintiffs in this case, they have alleged in their pleadings that the College wished to protect Dr. Stewart. He submitted that that allegation, together with the allegation that the College was recklessly indifferent to the consequences for the plaintiffs in its failure to act, is sufficient to found a claim for misfeasance in public office.
[61] Mr. Collette also argued that there is an independent actionable wrong of failure to act in good faith disclosed by the pleadings.
[62] In response, Mr. Martin argued that there is no authority in support of the proposition that such a cause of action exists.
ANALYSIS
(1) Threshold Issues
[63] I begin with two threshold matters.
[64] First, I note that although counsel for the plaintiffs made certain factual assertions in his submissions which were not in the pleadings, I have not considered those or taken them into account in my decision.
[65] Second, the plaintiffs do not specifically plead that the defendant College owed them a duty of care. However, the plaintiffs plead that the College “had knowledge of circumstances which ought to have put it on an inquiry relating to Dr. Stewart’s sexual assaults or inappropriate examinations of a sexual nature on his female patients and the Plaintiffs in particular and it failed in its duty to investigate the allegations against Dr. Stewart in good faith, and take appropriate and reasonable action”. Although the pleading is imperfect, it embodies an implicit allegation that the College owed the plaintiffs a duty of care. In addition, the plaintiffs claim that the College “failed to act in good faith in failing to take any or any adequate actions to prevent Dr. Stewart from sexually assaulting his female patients in general and the Plaintiffs in particular”, “failed to investigate the allegations and circumstances it was aware of respecting Dr. Stewart in good faith, wrongfully protecting the interests of Dr. Stewart over the protection of the public in general and the Plaintiffs in particular” and “was reckless and grossly negligent in failing to investigate or adequately investigate the allegations and circumstances it was aware of respecting Dr. Stewart”. The absence of particulars of the nature of the information about Dr. Stewart in the hands of the College or of the alleged bad faith do not in themselves provide a basis for concluding that the statement of claim fails to disclose a cause of action although they could provide a basis for an application for further and better particulars.
(2) Duty of Care
[66] I turn to the question whether, assuming the allegations in the statement of claim are true, it is plain and obvious that the plaintiffs are certain to fail in their claim in negligence.
[67] As described above, in Cooper and Edwards the Supreme Court of Canada revisited the test for whether a duty of care exists, prescribing an approach in which different policy considerations come into play at each of the two stages and in which new categories of negligence are developed incrementally, by analogy with existing ones. Cooper and Edwards have been seen as moving toward the approach taken by the English courts, and have led to considerable academic commentary: see L.N. Klar, “Judicial Activism in Private Law” (2001) 80 Can. Bar Rev. 215; L. Klar, “Foreseeability, Proximity and Policy” (2002) 25 Advocates’ Quarterly 360; N. Rafferty, “Developments in Contract and Tort Law: The 2001-2002 Term” (2002) 18 S.C.L.R. (2d) 153; S. Pitel, “Negligence: Canada Remakes the Anns Test” (2002) 61 Cambridge L.J. 252; J. Neyers, “Distilling Duty: The Supreme Court of Canada Amends Anns” (2002) 118 L.Q.R. 221; B. Feldthusen, “The Anns/Cooper Approach to Duty of Care for Pure Economic Loss: The Emperor Has No Clothes” (2002), 18 C.L.R. (3d) 67.
[68] Counsel for the College asserts in written argument that in Cooper and Edwards “the Supreme Court of Canada affirmed that in no circumstance does a regulatory body such as the college owe a duty of care to individual members of the public such as the Plaintiffs” (emphasis added). The Supreme Court of Canada did not explicitly state such a categorical conclusion; nor, I think, does such a conclusion necessarily follow from the two decisions.
[69] First, I observe that the manner in which the court stated the issues, tying them into the specific facts of the cases, does not support Mr. Martin’s broad reading of the cases. In Cooper the issue is stated at 547:
Does a statutory regulator owe a private law duty of care to members of the investing public for (alleged) negligence in failing to properly oversee the conduct of an investment company licensed by the regulator?
In Edwards the issues are set out at 570:
1. Does the Law Society of Upper Canada owe a duty of care to persons who deposit money into a solicitor’s trust account in respect of losses resulting from misuse of the account?
2. If there is such a duty, are there grounds rooted in policy which would limit or negate the finding of a duty?
[70] Second, I see several pertinent differences between both the facts alleged and the relevant legislation in Cooper, Edwards and Rogers on the one hand, and the plaintiffs’ claim in this action on the other hand.
[71] The first distinction is that this claim involves personal injury rather than pure economic loss. Cooper and Edwards were both economic loss cases. Claims for pure economic loss have long been dealt with differently than those in which a plaintiff has allegedly been physically harmed. In Kripps, Taylor J.A. stated at 69:
It is plainly impossible that a right to recovery under the principle in Donoghue v. Stevenson based on a general duty to take care to avoid causing foreseeable damage can arise in cases where the only foreseeable damage is pure economic loss simpliciter. The necessary element of “neighbourhood” or “proximity” cannot be found in cases of this sort, as it normally is in cases of personal injury and physical property damage, solely because the loss was a direct, foreseeable result of the defendant’s act or omission. Something else will be required, in addition to the fact that the loss suffered was a direct and foreseeable result of the defendant’s conduct, in order to establish the necessary relationship of proximity or neighbourhood. …
[72] Professor Feldthusen, in the paper referred to above, comments at 67:
Interestingly and perhaps significantly, Cooper itself involved a claim for pure economic loss. A private investor unsuccessfully sought to establish that he was owed a duty of care by a statutory regulator of mortgage brokers. The regulator had allegedly failed to suspend promptly a broker known to have been in violation of the governing statute. The majority of the appellate decisions cited in Cooper are also economic loss cases.
And at 68:
Judicial history aside, the actual conclusion in Cooper is a welcome one. With physical damage, where something of social value is destroyed permanently, it makes sense to base a prima facie duty on foreseeability alone. So many pure economic losses are not true social losses. They are merely transfers of wealth, some objectionable and some not. In the realm of economic loss, it makes no sense to base a prima facie duty of care on foreseeability alone.
[73] Rogers involved a personal injury claim rather than one based on pure economic loss. However, the court in Rogers proceeded on the basis that the Supreme Court of Canada in Edwards had laid down a rule barring all claims against regulatory bodies by clients of the members of the regulated professions, whether for economic loss simpliciter or for physical harm. (See also Morgis v. Thomson Kernaghan & Co., [2003] O.J. No. 2504 (C.A.)). However, with respect I am not confident that the Supreme Court did lay down such a rule. Instead, as I read Cooper and Edwards, they outline an approach for the determination of duty of care issues. That approach requires consideration of the closeness of the relationship between the plaintiff and the defendant. And, as the Supreme Court of Canada said in Cooper at 552, “[t]he factors which may satisfy the requirement of proximity are diverse and depend on the circumstances of the case.”
[74] Further, the circumstances alleged in this case, that the College had received information regarding a specific physician’s sexual assaults on patients during medical examinations and, in bad faith, did not take appropriate steps, are very different from those alleged in Rogers, where the claim was based on an alleged general failure to set standards and provide education regarding proper dental hygiene procedures.
[75] The second difference is that these plaintiffs were patients of the doctor, the defendant Mark Stewart, who was a member of the College, while in Edwards the plaintiffs were not clients of the lawyer who was a member of the Law Society. The Chief Justice and Mr. Justice Major noted that fact more than once in their reasons for judgment. For example, as discussed above, at 573 the court referred to the statutory immunity provision in s. 9 of the governing legislation and then stated:
Section 9 precludes any inference of an intention to provide compensation in circumstances that fall outside the lawyers’ professional indemnity insurance and the lawyers’ fund for client compensation.
We conclude that no prima facie duty of care arose between the Law Society and the appellants who deposited money into a solicitor’s trust account, not as clients but as participants in a third person business promotion. (Emphasis added)
As well, the Supreme Court of Canada indicated its essential agreement with the reasons of the Ontario Court of Appeal below. Finlayson J.A. had expressed doubt that a sufficient relationship of proximity existed between the appellants and the Law Society given that the appellants were not involved with the lawyer in a traditional lawyer-client relationship but rather dealt with him as part of an investment scheme. McLachlin C.J. and Major J. wrote at 571-72:
An examination of the governing statute, the Law Society Act, does not reveal any legislative intent to expressly or by implication impose a private law duty on the Law Society in the facts of this case. It is noteworthy that, as Finlayson J.A. observed, it was not expressly alleged that the appellants, or any members of the class that they propose to represent, were “clients” of Mills in the traditional sense. Instead, the appellants alleged that the duty of the Law Society went beyond a concern for the protection of clients in the traditional sense and extended to the public in general.
[76] It is a fair inference that the court meant to allow for the possibility that there would be sufficient proximity to found a duty of care in a different case, where a solicitor-client relationship did exist.
[77] In Rogers, the Ontario Court of Appeal seemed to accept that Cooper and Edwards do preclude any finding of a private law duty of care by regulatory bodies to patients or clients of members of the regulated professions. In Rogers, MacPherson J.A. for the court referred to the statutory scheme governing dentists and dental hygienists and concluded with a reference to the immunity provision in the legislation, which he described at 374 as:
…virtually identical to the one which Major J. characterized in Edwards, as “perhaps most indicative of the Legislature’s intent” (p. 219) not to create a duty relationship between a regulatory body and clients of members of the regulated profession.
[78] With respect, I disagree with that characterization of what the Supreme Court of Canada stated in Edwards, where (as I have set out above) the Chief Justice and Major J. made a point of referring to the fact that the plaintiffs were not clients of members of the regulated profession. Thus, the court may have intended to leave the door open to possible claims by members of a regulated profession against the body that regulates that profession, considering that persons in such a position might be able to establish sufficient proximity to pass the first stage of the Anns test.
[79] The third difference between this case and Edwards is that it was not argued by counsel for the College that patients of physicians can resort to a compensation fund or to a mandatory insurance scheme when they claim injury due to sexual assault by their physicians. On the other hand, the fact that clients of solicitors could resort to a compensation fund and possibly benefit from the mandatory insurance scheme in the case of the legal profession was referred to by the Supreme Court of Canada in Edwards at 572-73:
Safeguards, in addition to a private law duty of care, exist to ensure the protection and compensation of clients as members of the public. These safeguards are expressly provided by the Legislature as a means to compensate for economic loss. Examples include a public insurance and/or compensation scheme funded by the profession itself. In this case, the Law Society maintains a Compensation Fund … to compensate for losses sustained as a result of dishonesty by lawyers. The Lawyers’ Professional Indemnity Company provides insurance for claims by clients against their lawyers for negligence.
[80] The fourth possible distinction is that here, the plaintiffs have alleged bad faith on the part of the College while such a claim was not at issue in the Supreme Court of Canada in Cooper and Edwards.
[81] In Edwards, it does not appear that there was ever an allegation of bad faith. In his reasons for the court ((2000), 48 O.R. (3d) 329), Finlayson J.A. wrote at 347:
A lack of bona fides on the part of the Law Society has not been pleaded in the case in appeal. The above passage reinforces the conventional proposition that the appellants would have to plead a total misuse of the Law Society’s discretion to follow up on the complaint it received amounting to bad faith before being able to claim damages against the Law Society for its failure to shut down the operations of its member Mills. That leads to the conclusion that this claim, which neither explicitly nor implicitly pleads bad faith, does not disclose a cause of action.
[82] The court in Edwards emphasized the existence of the immunity provision in its conclusion that the regulatory scheme did not contemplate a private law duty of care by the Law Society to the plaintiffs. The terms of the immunity provision there are very similar to those of s. 70(1) of the Medical Practitioners Act, which I repeat for ease of reference:
70(1) No action for damages lies or may be brought because of anything done or omitted in good faith in the performance or purported performance of any duty, or in the exercise or purported exercise of any power, under this Act by the college, the registrar, a deputy registrar, the special deputy registrar, an employee of the college, a member of the council, the executive committee or a committee appointed under this Act.
The section precludes actions based on negligence in the good faith performance of duties under the legislation. However, it does not preclude actions for damages when the College or its employees fail to act in good faith.
[83] In Cooper, the plaintiffs initially claimed that the Registrar acted in bad faith (see the reasons of Newbury J.A. in the Court of Appeal for British Columbia, supra, at 65.) The immunity provision at issue in Cooper was slightly different in its wording, but similarly did not preclude actions for things done in bad faith. The two concurring judgments in the Court of Appeal discussed the allegation of bad faith. Newbury J.A. (Southin J.A. concurring) wrote at 84-85:
It will be recalled that s. 20 of the Act provides that the Registrar is not liable for anything done in "intended or supposed pursuance" of the Act "unless it was done in bad faith." Having found that the Registrar owed no duty of care in negligence to the plaintiff, I need not consider s. 20 in connection with that cause of action. However, it will be recalled that the plaintiff also pleaded that Mr. Hobart had not acted in good faith or was "reckless and grossly negligent" in failing to suspend Eron's registration earlier than he did. When questioned as to what was intended by this, Mr. Church for the plaintiff advised the Court that the plaintiff had not intended to allege an intentional wrong such as breach of public duty or misfeasance in public office as was found in Roncarelli v. Duplessis, [1959] S.C.R. 121. (See also Farrington v. Thomson, [1959] V.R. 286 (S.C.); Northern Territory of Australia v. Mengel (1995), 129 A.L.R. 1 (H.C.); and Bourgoin S.A. v. Ministry of Agriculture, Fisheries and Food (1984), [1986] Q.B. 716 (Eng. Q.B.), the leading English case, all discussed in Stenner v. British Columbia (Securities Commission), supra, at 127-8; and most recently, Three Rivers D.C. v. Bank of England (No. 3), [2000] 2 W.L.R. 15 (Eng. C.A.), which involved a claim of malfeasance against a financial regulator in connection with the collapse of a bank.) Had this type of tort been pleaded in this case, the matter of Mr. Hobart's liability (and therefore that of the Province) would have had to proceed to trial on that narrow ground and on the question of "bad faith" as that term is used in s. 20 - absent, I suppose, a ruling like that made in Three Rivers D.C., supra, dismissing the claim.
[84] The Supreme Court of Canada in Cooper did not refer to the allegation of bad faith or to that aspect of the decision of the Court of Appeal.
[85] There was a claim of bad faith in Rogers against the RCDSO but the nature of that claim was different from that made by the plaintiffs here. The plaintiffs in Rogers claimed that the RCDSO had acted in bad faith in that it was in conflict of interest, it had failed to take risk management measures or to institute professional standards or professional education steps “for the wrongful, private and collateral purpose of attempting to avoid or limit loss exposure to future catastrophic TMJ injury claims” and that such guidelines as existed were “deliberately limited and restricted for the collateral purpose of establishing a standard of practice which would allow oral surgeons to avoid civil liability … and therefore affect the loss experience of the [Professional Liability Insurance Program] to the profit of the [College]” (described in the judgment at trial (2001), 5 C.C.L.T. (3d) 109 at 119). Commenting on that claim, MacPherson J.A. stated that he could not see how the creation of an insurance scheme specifically authorized by the statute could be deemed as a “bad faith” exercise of power.
[86] Counsel before me agreed that “bad faith” can mean different things in different contexts, but that in the context of a negligence claim it can refer to gross negligence or recklessness.
[87] Mr. Martin’s position was that the Court of Appeal in Cooper had made it clear that where there is no duty of care, the addition of a claim that the defendant was in “bad faith” in the sense of gross negligence or recklessness does not enhance the plaintiff’s position. Thus, if the College owes no duty of care to the plaintiffs in negligence, neither does it owe a duty of care for “negligence in bad faith”.
[88] If negligence claims were the only possible claims against the College, it might be argued that the interpretation of the authorities advanced by Mr. Martin would give no meaning to the terms of the immunity provision, contradicting the apparent legislative intention that claims may be brought where the College or its officials have acted other than in good faith. However, of course negligence claims are not the only possibility and a want of “good faith” may be relevant in actions not based on negligence such as wrongful dismissal or abuse of public office, or in judicial review applications.
[89] In my view, Cooper in the Court of Appeal does support the position urged by counsel for the College on this point. I conclude that although the plaintiffs’ allegation that the College acted in bad faith means that the College cannot rely on the immunity clause, that allegation does not change the onus on the plaintiffs to establish that the College owes them a duty of care for ordinary negligence. If they do so, their allegations of gross negligence and recklessness will come into play; otherwise, not. I find no support in the authorities for Mr. Collette’s argument that failing to act in good faith may itself be an actionable wrong.
[90] Thus, this fourth distinction between the case before me and the circumstances in Cooper and Edwards may have little significance.
[91] To summarize, with respect to the claim in negligence, the Supreme Court of Canada and appellate authorities I have referred to, finding a want of duty of care on the part of statutory regulatory bodies, have all been claims for pure economic loss (with the exception of Rogers). The leading cases, Cooper and Edwards, were both class actions involving investors. Edwards involved a claim by non-clients of the practitioner and there was reference to the ability of clients to resort to a compensation fund or to a mandatory insurance scheme.
[92] Taking all of the above into account, I do not find that the existing jurisprudence compels the conclusion that the College owes no duty of care to the plaintiffs in this case, who were patients of the doctor and whose claims allege personal injury rather than pure economic loss.
[93] As I have found that the jurisprudence does not preclude finding a duty of care, it is necessary, applying the framework set out by the Supreme Court of Canada in Cooper, to determine whether in this case it is plain and obvious that no duty can exist. In applying the framework, I am assuming, as must be done in applications under Rule 19(24)(a), that the allegations in the pleadings are true.
[94] The initial question is whether the circumstances pleaded disclose reasonably foreseeable harm and proximity sufficient to establish a prima facie duty of care.
[95] If the College had notice that Dr. Stewart was sexually assaulting patients in the course of medical examinations, and failed to take steps to prevent such assaults in the future, it may have been reasonably foreseeable that patients would be sexually assaulted on future occasions.
[96] “Proximity”, however, is a different question; it addresses whether the relationship between the plaintiffs and the College was sufficiently “close and direct” to ground a prima facie duty of care. In other words, the question of proximity requires consideration of whether the relationship between the plaintiff and defendant is of such a nature “that the defendant may be said to be under an obligation to be mindful of the plaintiff’s legitimate interests in conducting his or her affairs” (per La Forest J. in Hercules, supra at 187). Defining that relationship involves looking at expectations, representations, reliance, and the interests involved. It involves asking whether there are reasons that tort liability should not be recognized here. The relevant factors are those which arise from the relationship between the plaintiff and defendant and include questions of policy, broadly understood. The Supreme Court of Canada stated in Cooper at 552:
Essentially, these are factors that allow us to evaluate the closeness of the relationship between the plaintiff and the defendant and to determine whether it is just and fair having regard to that relationship to impose a duty of care in law upon the defendant.
[97] Given that categories of negligence are to be developed incrementally and by analogy with established categories, an important question is whether this case falls within one of the existing categories in which proximity has been recognized, or is analogous to one of them. The Supreme Court of Canada referred to two existing, possibly analogous categories in which a duty of care has been found: where the defendant’s act foreseeably causes physical harm to the plaintiff or the plaintiff’s property, and failure to warn of danger. The plaintiffs’ claim is that the defendant College’s negligent and bad-faith failure to respond to information regarding Dr. Stewart’s conduct with his female patients, including its failure to warn other patients, caused physical harm to the plaintiffs. The Doe case (decided before Cooper and Edwards but not referred to by the Supreme Court of Canada) is analogous in that respect although it involved police rather than a statutory body regulating a profession. Other cases with some possible analogy are those involving claims against churches based on allegations of physical or sexual abuse in schools or camps (such as W.R.B. v. Plint (2001), 93 B.C.L.R. (3d) 228 (S.C.); M.T. v. Poirier, [1994] O.J. No. 1046 (Gen. Div.); W.K. v. Pornbacher (1997), 32 B.C.L.R. (3d) 360) although in those cases, there is frequently also an allegation of breach of fiduciary duty and the defendant is again not a statutory body regulating a profession. Counsel for the plaintiffs conceded that there appears to be no previous case in which a duty of care has been found to exist on the part of a regulatory body to individual members of the public.
[98] I will proceed, therefore, to consider whether this is a situation in which possibly a new duty of care should be recognized. As the Ontario Court of Appeal stated in Haskett, supra, at 586:
The first part of the test includes both reasonable foreseeability of harm and the concept of “proximity”. The court stated that the term proximity is used to characterize “the type of relationship in which a duty of care may arise”, and that “sufficiently proximate relationships are identified through the use of categories” (para. 31). The categories are not closed and new ones may be identified as they arise. The use of categories provides certainty on the one hand, but on the other hand also allows the law to evolve with the introduction of new categories to fit novel situations as they arise.
[99] The factors giving rise to proximity, if they exist, must arise from the Medical Practitioners Act. It provides that the College has the duty to serve and protect the public, and to exercise its powers and discharge its responsibilities under all enactments in the public interest. It sets out objects for the College. These include establishing, monitoring and enforcing standards of practice, establishing a patient relations program to prevent professional misconduct of a sexual nature, and establishing, monitoring and enforcing standards of professional ethics amongst members. It provides for a sexual misconduct review committee and for a special deputy registrar whose duties include receiving and investigating complaints of sexual misconduct. The professional body is mandated by statute to set standards of competence and of ethical conduct, to investigate alleged breaches of those standards and to discipline members who are found to have transgressed them. The scheme mandates the College to make decisions about investigations of alleged misconduct, to devise appropriate responses to allegations and to apply disciplinary procedures, which inherently require the balancing of competing interests. The statute precludes actions for damages arising from anything done or omitted in good faith.
[100] I have concluded, as stated above, that it may have been reasonably foreseeable that the College’s failure to act against Dr. Stewart would lead to sexual assaults on other patients. With respect to proximity, looking at the factors and the broad policy considerations bearing on the relationship between the patients and the College, including expectations, reliance and the nature of the interests involved, I conclude that the relationship may be sufficiently close that it would be just and fair to find that there is a prima facie duty of care on the College. The allegations relate to specific circumstances and a specific doctor, whose misconduct was allegedly known to the College. The circumstances are analogous to those in other cases in which the defendant’s act or omission has foreseeably caused physical harm to the plaintiff, such as Doe. The statute imposes duties on the College relating to the prevention of sexual misconduct by the regulated professionals. Patients may reasonably expect the College to act in good faith in responding to information about practitioners and in taking appropriate steps to prevent sexual assault, and may rely on the College to do so. The interest of patients in being able to seek medical care without risking sexual assault is an important one.
[101] For those reasons, I find that a prima facie duty of care might be established.
[102] At the second stage, residual policy considerations fall to be considered, related to the projected effect of recognizing a duty of care in this case on other legal obligations, the legal system and society more generally. In Cooper the court stated at 555:
The second step of Anns generally arises only in cases where the duty of care asserted does not fall within a recognized category of recovery. Where it does, we may be satisfied that there are no overriding policy considerations that would negative the duty of care. In this sense, we agree with the Privy Council in Yuen Kun Yeu that the second stage of Anns will seldom arise and that questions of liability will be determined primarily by reference to established and analogous categories of recovery. However, where a duty of care in a novel situation is alleged, as here, we believe it necessary to consider both steps of the Anns test as discussed above. This ensures that before a duty of care is imposed in a new situation, not only are foreseeability and relational proximity present, but there are no broader considerations that would make imposition of a duty of care unwise.
[103] I turn to the kinds of policy considerations at the second stage referred to by the Supreme Court of Canada in Cooper and Edwards.
[104] First, it is not apparent that the law already provides a remedy.
[105] Second, there was no evidence supporting the conjecture of unlimited liability to an unlimited class if a duty of care is recognized here. I am not prepared to assume that there would be very many cases involving health care professionals abusing patients sexually during medical examinations where the College (in bad faith) failed to act. This is not a class action as were Cooper and Edwards, although it is an action by 19 plaintiffs.
[106] Third, other reasons of broad policy should be considered. Mr. Martin argued that the College would be hampered in its ability to fulfil its statutory mandate if it were to owe a private law duty of care to persons who might consider that it had acted too quickly, or not quickly enough, or imperfectly, in dealing with allegations or complaints against its members: the College must be able to balance competing interests and act in the broad public interest, which includes a regime of fairness and due process for doctors against whom complaints are made. Mr. Martin also emphasized the quasi-judicial nature of the College’s disciplinary proceedings.
[107] These policy considerations are relevant and important, but they are not necessarily of overwhelming force in these circumstances. It is not obvious how the College’s duty to the public as a whole, or its need to balance competing interests and to conduct quasi-judicial disciplinary proceedings with fairness, would conflict with a private law duty to act in good faith in dealing with allegations that a physician had sexually abused his patients. Indeed, on its face, a duty to act in good faith in dealing with such allegations would seem to coincide with the College’s duty to the public as a whole, with its obligation to act fairly and judicially, and with the legislative direction set out in the Medical Practitioners Act.
[108] In this respect, the situation is different from that in Cooper, where the court stated at 558-59:
The regulatory scheme governing mortgage brokers provides a general framework to ensure the efficient operation of the mortgage marketplace. The Registrar must balance a myriad of competing interests, ensuring that the public has access to capital through mortgage financing while at the same time instilling public confidence in the system by determining who is “suitable” and whose proposed registration as a broker is “not objectionable”. All of the powers or tools conferred by the Act on the Registrar are necessary to undertake this delicate balancing. Even though to some degree the provisions of the Act serve to protect the interests of investors, the overall scheme of the Act mandates that the Registrar’s duty of care is not owed to investors exclusively but to the public as a whole.
In the case at bar, there does not appear to be a comparable mandate to that referred to in Cooper – to ensure the efficient management of a market – or a realistic concern that imposing private liability to one group would operate to the detriment of another.
[109] I find that broad policy considerations do not require a conclusion at this stage that there is no duty of care in these circumstances.
[110] While recognizing, as the Court of Appeal has indicated (for example in Cooper and Kripps), that cases should not be permitted to proceed to trial where there is no realistic possibility of success, I also note the statement by Wilson J. in Hunt that the novelty of the cause of action and the potential for the defendant to present a strong defence should not drive a plaintiff from “the judgment seat”.
[111] The question before me is whether it is plain and obvious that the plaintiffs’ claim is certain to fail. I have concluded that it is not plain and obvious. If the plaintiffs establish what is alleged in the pleadings, the law as it stands permits the conclusion that there is the close and direct relationship between the plaintiffs and the defendant College that is sufficient to ground a duty of care, and that a private common law duty of care can co-exist with the College’s general obligation to protect the public interest. Accordingly, I find that the plaintiffs’ claim in negligence is not certain to fail. It will of course be for the trial judge to determine whether, on the facts as then proved, a duty of care exists.
(3) Misfeasance in Public Office
[112] I turn to the plaintiffs’ claim based on misfeasance in public office. Even if it is assumed that the College is a “public officer”, and taking as proven the facts that the plaintiffs have pleaded, the question is whether the essential elements for this intentional tort may be established on those facts. The plaintiffs neither allege “targeted malice” nor a knowingly illegal act by the College. The leading cases from this province and from Ontario require, for this tort to be established, proof either that the public official intentionally exercised his or her power in order to injure the plaintiff, or that the public official acted knowing that he or she had no power to do the act and that the conduct would probably injure the plaintiff. Proof of “reckless indifference” on its own does not suffice. It is plain and obvious that the plaintiffs’ claim that the College was guilty of misfeasance in public office is bound to fail.
CONCLUSION
[113] The College’s application to strike the claim against it in negligence is dismissed; its application to strike the claim against it based on misfeasance in public office is allowed.
[114] If counsel wish to speak to the question of costs, they may do so at a time arranged through Trial Division.
“Lynn Smith, J.”
The Honourable Madam Justice Lynn Smith