Depagie v Crawford & Co, 2017 ABQB 92

Court of Queen’s Bench of Alberta Citation: Depagie v Crawford & Co, 2017 ABQB 92 Date: Docket: 1403 08301 Registry: Edmonton Between: Bradley Depagie, Personal Representative for the Estate of Vernon Letendre, Deceased Plaintiff - and - Crawford & Company Inc, Administrator for the Pre-1986/Post-1990 Hepatitis C Settlement Agreement Defendant _______________________________________________________ Reasons for Decision of the Honourable Mr. Justice John T. Henderson _______________________________________________________ I.

INTRODUCTION [ 1 ] The Plaintiff seeks leave to commence an action against the Court appointed Administrator of the settlement of a Class Action which had been brought for the benefit of certain persons who had become infected with the Hepatitis C Virus (“HCV”) as a result of tainted blood transfusions. [ 2 ] Vernon Letendre (“Letendre”) was a member of the Class and received settlement funds which were paid through the Defendant. The Plaintiff now asserts that the Defendant breached its duties under the terms of the settlement agreement and also breached its common law duty of care which was owed to Letendre.

The breach is alleged to have occurred when the Defendant paid Letendre an amount under the settlement which was less than the amount which the Plaintiff now alleges was properly due. [ 3 ] The Defendant opposes the application on a number of grounds, including its assertion that the Plaintiff’s claim is simply without merit. Furthermore, the Defendant argues that the action cannot succeed in light of the limitation periods contained in the settlement agreement and the Limitations Act , RSA 2000 c L-12, s 3(1)(a).

Finally, the Defendant argues that as part of the settlement, a full and final release was signed by the Public Trustee on behalf of Letendre and that this release precludes a successful claim for damages. [ 4 ] For the reasons which follow, I conclude that the Plaintiff’s application for leave to commence the action against the Defendant is dismissed.

II. FACTS AND EVIDENCE [ 5 ] Letendre became infected with the Hepatitis C Virus (HCV) in or about 1979 after having received a blood transfusion in connection with a medical procedure following a gunshot wound which left him with a brain injury. He was disabled as a result of the injury and became a dependant adult whose affairs were administered by the Public Trustee for the Province of Alberta (the “Public Trustee”).

Letendre received AISH benefits from 1979 until his death in 2012. [ 6 ] Class Acton lawsuits were brought against numerous defendants in several jurisdictions across Canada for the benefit of claimants who had become wrongfully infected with HCV because of tainted blood transfusions. Various settlements were negotiated to resolve those Class Actions. One of the settlement agreements was executed in or about the month of January 2007 and related to claimants who had become infected prior to January 1, 1986 or after July 31, 1990 (the “Settlement Agreement”).

In Alberta, the Settlement Agreement was approved by an Order of the Honourable V.O. Ouellette filed June 19, 2007 (the “Alberta Order”). [ 7 ] The Settlement Agreement provided for compensation to be determined based upon the age of the claimant and also based on the seriousness of the disease arising from the HCV infection. Clause 2.04(2) of the Agreement specifically identified six different disease levels and defined the criteria which needed to be met for a claimant to be included in each disease level.

Particularly relevant to this motion are Disease Levels 2 and 3, the relevant portions of which are defined in the Settlement Agreement as: (b) “ Disease Level 2 ” means the HCV Infected Class Member has a positive PCR test; (c) “ Disease Level 3 ” means the HCV Infected Class Member has: ... (iii) has met or meets a protocol for HCV Drug Therapy notwithstanding that such treatment was not recommended or, if recommended, has been declined. [ 8 ] For a claimant of Letendre’s age, the compensation payable based on Disease Level 2 is $55,696 less than the compensation would have been payable if the claimant had met the criteria for Disease Level 3. [ 9 ] Kolthammer, Batchelor & Laidlaw LLP (“KBL”), an Edmonton law firm, was one of the Alberta Class Action counsel who assumed responsibility for negotiating the Settlement Agreement and seeking approval from the Court. [ 10 ] KBL also represented Letendre in relation to the Settlement Agreement.

To make a claim for Letendre’s portion of the settlement funds, KBL forwarded a letter dated September 15, 2009 to the Defendant. [ 11 ] The Defendant acknowledged the presentation of Letendre’s claim by letter dated September 17, 2009 to KBL.

In that correspondence, the Defendant advised that it would review the claim for “completeness and eligibility”. [ 12 ] The very next day, on September 18, 2009, the Defendant again wrote to KBL to advise that the materials originally submitted were deficient in two respects: first, KBL had not provided proof that they had been appointed to act on behalf of Letendre; and second, the “Form 2” had not been included as part of the materials to support the claim.

The “Form 2” referred to by the Defendant, was the “Treating Physician Form” which the Defendant required be completed by a medical doctor to certify certain medical information necessary to process the claim. [ 13 ] The Defendant followed up with KBL by letter dated October 13, 2009, which was identical to its letter dated September 18, 2009. [ 14 ] The Defendant sent further follow up letters to KBL on November 20, 2009, December 9, 2009 and January 6, 2010.

These letters were identical to the September 18, 2009 letter, with the exception that in the later letters the Defendant advised that in relation to the completion of “Form 2” it would not be necessary to provide the “transfusion record”.

The Defendant explained that Canadian Blood Services would attempt to confirm these records on Letendre’s behalf. [ 15 ] In or about the month of November 2009, KBL provided the Defendant with a report from the Provincial Laboratory of Alberta in relation to a blood test which had been taken from Letendre on September 1, 2009 and which established that Letendre’s blood was infected with HCV (the “Positive PCR Test”). [ 16 ] Letendre’s treating physician, Dr. Anne Draginda, wrote to KBL on February 18, 2010 and provided the medical information necessary to proceed with Letendre’s claim.

Included with that letter, was a “Form 2” which Dr. Draginda had completed. [ 17 ] The “Form 2” certifies that in the opinion of Dr. Draginda, Letendre qualified for “Disease Level 1” and Disease Level 2”. Thus, Dr. Draginda certified that Letendre had both the HCV antibody and also the HCV virus in his blood. Dr.

Draginda did not certify that Letendre qualified for “Disease Level 3”. [ 18 ] The “Form 2” was received by the Defendant on or about March 4, 2010. [ 19 ] On April 9, 2010, the Defendant wrote to KBL to advise that “your application for compensation under the Pre-1986/Post- 1990 Hepatitis C Settlement Agreement ... has been approved”. The letter also explained that: • Letendre’s approved compensation was set at “Disease Level 2” which would provide for a payment of $60,881.83, inclusive of indexing. • A “full and final release” was required before any payment could be made.

• Letendre had a right to appeal in accordance with s 16.01 of the Settlement Agreement which provided that: A person who has submitted a claim may appeal any decision of the Administrator as to eligibility, deficiencies or amount of compensation with respect to that claim.

Any appeal of the Administrator’s decision must be filed within 30 days of receipt of the decision appealed from, failing which the decision will be final and binding. (emphasis added) [ 20 ] By letter dated April 27, 2010, KBL responded to the Defendant, and provided a copy of the release which had been executed by the Public Trustee on behalf of Letendre.

The settlement funds were paid shortly thereafter. [ 21 ] No appeal has ever been brought from the decision of the Defendant in relation to “the amount of compensation” with respect to Letendre’s claim. [ 22 ] In or about the month of June 2010, a second payment was made to Letendre in relation to the Alberta portion of the settlement. [ 23 ] Following Letendre’s death, the Plaintiff was appointed as the Personal Representative of Letendre. The appointment was confirmed by Order of the Court dated September 12, 2012. [ 24 ] On June 5, 2014, the Plaintiff commenced the present action.

In the Statement of Claim the Plaintiff alleged that when the Defendant assessed Letendre’s claim in 2010, it had sufficient information available to support payment based on Disease Level 3 because: • The Defendant had received documented evidence, through the Positive PCR Test, that Letendre was infected with HCV; and • The Defendant was aware that the protocol for treatment of those infected with HCV (other than pregnant women), was HVC Drug Therapy. [ 25 ] The Plaintiff alleges that in these circumstances, nothing more is required and the criteria for Disease Level 3 have been met. [ 26 ] The Plaintiff alleges that the failure to pay Letendre on the basis of Disease Level 3 was a breach of the Settlement Agreement and was a breach of the Defendant’s duty of care to the Plaintiff. [ 27 ] Clause 39 of the Alberta Order mandates that leave of the Court be obtained before any action or proceeding can be brought against the Defendant.

The clause provides: THIS COURT ORDERS AND DECLARES that no Person may bring any action or take any proceeding against the Administrator , the Trustee, the Investment Advisor, the Court Monitor, Fund Counsel, or Appeals Officers, or their employees, agents, partners, associates, representatives, successors or assigns for any matter in any way relating to the administration or implementation of thus judgment except with leave of this Court. (emphasis added) [ 28 ] On July 24, 2104, the Plaintiff filed a motion seeking leave to proceed with the action.

The motion was originally returnable on September 18, 2014, but was not heard until January 18, 2017. III. ISSUES TO BE DECIDED [ 29 ] The issues which arise on this motion are the following: 1. What test should be applied when determining whether to grant or withhold leave to proceed with this action? 2. Does the proposed claim have a reasonable possibility of success? 3. Does s 3(1) of the Limitations Act provide an absolute defence to the action? 4. Did the Release signed by the Public Trustee on behalf of Letendre provide an absolute defence to the Defendant? IV. DISCUSSION 1.

Test For Leave to Commence Proceedings Against Administrator [ 30 ] The Alberta Order does not specify the test that should be applied when determining whether leave can or should be given under clause 39 of the Settlement Agreement. Furthermore, no prior applications for leave to commence proceedings have been brought in relation to this Settlement Agreement. [ 31 ] The Plaintiff argues that the test for granting leave should be low and that the merits of the action should only be assessed at trial. He proposes the test should be the same as that used for certification of class proceedings.

He therefore argues that leave should

be granted unless it is “plain and obvious” that the action cannot succeed. [32] Conversely, the Defendant asserts that the test should be more stringent. It refers me to leave applications to permit securitiesclass actions under the securities legislation and to the leave provisions in the bankruptcy context.

In both of those situations, a higherstandard is required to satisfy the Court’s gatekeeper function which ensures that only those actions which have a “reasonable possibilityof success” can proceed: Theratechnologies inc v 121851 Canada inc, 2015 SCR 18 at paras 36 to 39; Goldsmith v National Bank,2016 ONCA 22 at para 34. [33] In Endean v Canadian Red Cross Society, 2008 BCSC 78 , [2008] BCJ No 91, the British Columbia Supreme Courtheard an application for leave to commence proceedings against the Administrator of the 1986-1990 Hepatitis C Class Action settlementagreement.

In concluding that leave should not be granted, Justice Pitfield discussed the leave requirement at para 22: ... The leave requirement was incorporated into the approving orders to ensure that the process, as it pertains to decisions of theAdministrator, would be governed by the Settlement and not by an action in court. Relief from the adverse effect of any decision of theAdministrator, a Referee or the court which is alleged to be unsupportable, whether or not that as the fact in that case, is not somethingthat can be derived from an action against the Administrator. [34] Musyka v John E.

Callaghan LLP, [2008] OJ No 3588 was also an application for leave to commence an action against theAdministrator of the 1986-1990 Hepatitis C Class Action settlement agreement.

In dismissing the application, Justice Cullity of theOntario Superior Court of Justice endorsed the statement of Justice Pitfield (quoted above) and made the following additional commentsat para 14: The requirement of leave is intended to preclude proceedings that are no more than attempts to attack, and reopen, decisions made inaccordance with the Settlement procedures... [35] When a Class Action is settled with a detailed and comprehensive agreement in writing which is approved by one or moreCourts, the intention is to provide a mechanism for compensating hundreds or even thousands of claimants who have suffered damagesas a result of the conduct of one or more defendants.

A Class Action settlement is designed to streamline the process of resolvingcomplex claims, avoid a multiplicity of litigation, reduce the cost of litigation to both the claimants and the defendants and to providecertainty to the claimants and the defendants. The Settlement Agreement in this case was detailed and comprehensive. It sets out anextensive process for administration and implementation of the settlement.

It includes a specific appeal process which gives eachaggrieved claimant access to a Court of competent jurisdiction, including the Court of Queen’s Bench of Alberta, to review and considerthe appropriateness of the decisions of the Administrator. [36] As was noted in both Endean and Musyka, decisions of the Administrator should be dealt with in accordance with theprocedures outlined in the Settlement Agreement. Permitting other law suits to achieve compensation for HCV claimants would becounterproductive and inconsistent with the objectives which the settlement of the Class Action was designed to achieve.

For thisreason, I conclude that before granting leave a more critical analysis must be undertaken and the proposed plaintiff must meet a higherthreshold. In my view, the very low threshold proposed by the Plaintiff is simply not appropriate, because it fails to recognize thegatekeeper function of the Court in relation to its supervision of the Settlement Agreement. [37] However, a balance is required.

Where the evidence on a leave application shows circumstances that suggest an administratorhas misconducted itself or where the evidence on the motion clearly shows that the administrator’s duties have been breached, thenfurther litigation may be justified or even required. See for example, Bodnar v Cash Store Inc, [2011] BCCA 384. [38] I conclude that the “reasonable possibility of success” test should be applicable in relation to the present motion. In my view,this test strikes the appropriate balance and is consistent with other similar applications for leave in the securities and bankruptcycontexts. 2.

Does the Proposed Claim have a Reasonable Possibility of Success? [39] The Plaintiff argues that Letendre satisfied the criteria for Disease Level 3 but was compensated at Disease Level 2. [40] To satisfy the requirements for Disease Level 3, a medical doctor must certify that the claimant meets the protocol for HCVDrug Therapy, regardless of whether the therapy was actually recommended or taken. “Form 2” provided two specific options by whicha medical doctor can certify that a patient meets this requirement.

The option on “Form 2” which is most relevant to this motion (“Option2”) provides that the protocol for HCV Drug Therapy can be established if the therapy is mandated by: The CASL (Canadian Association for the Study of the Liver) guidelines for HCV Drug Therapy (attach a consultation or other report ofa gastroenterologist, hepatologist, infectious disease specialist, or internist). [41] The Plaintiff argues that Letendre met the criteria for Disease Level 3 based on Option 2 because: • The Defendant received the completed “Form 2” in which Dr.

Draginda certified that Letendre met the medical criteria toqualify for Disease Level 2. • The certification by Dr. Draginda was confirmed by the Positive PCR Test. [42] The Plaintiff argues that nothing more is required to support compensation based on Disease Level 3 because, at the time thatthe claim was evaluated in early 2010, the then current medical protocol made it clear that Letendre qualified for HVC Drug Therapy. This position is summarised at para 19 of the Plaintiff’s Motion Brief: 19.

Under the new Guidelines since 2007, everyone who has a positive PCR, other than pregnant women, are qualified to receive

HVC drug therapy. [ 43 ] In support of this position, the Plaintiff relies on the Affidavit of Dr. Karen Doucette, the Director of Medicine – Division of Infectious Diseases at the University of Alberta, who is one of the authors of the 2007 CASL Guidelines. The Plaintiff and the Defendant agree that these Guidelines provide the treatment protocol for HVC patients. In the letter appended to her Affidavit, Dr. Doucette said the following: ...

As defined in the 2007 CASL Guidelines, essentially all individuals who are documented to have chronic Hepatitis C infection on the basis of appositive HCV RNA (as Letendre did) were eligible for consideration of therapy.

The only absolute contraindication to therapy, as noted in the Guidelines in Table 4 on page 27C, was pregnancy... [ 44 ] The evidence discloses that as early as September 2008, the Defendant had actual knowledge of the 2007 CASL Guidelines. [ 45 ] In those circumstances, the Plaintiff claims that the Defendant had a duty to advise Letendre or his counsel or the Public Trustee that the claim could be established on a Level 3 basis. The duty is said to arise out of the obligations which were imposed on the Defendant in the Settlement Agreement.

Those duties included the duty of “reviewing and evaluating all Claims”, “assisting in the completion of claims forms and attempting to resolve disputes with claimants” and “requiring any claimant to have a medical examination”. The Plaintiff argues that these duties made the Defendant much more than merely a processor of claims who performs a “rubber stamp” function.

He argues that the Settlement Agreement provides a broad scope which mandates that the Defendant facilitate the payment of the proper amount under the Settlement Agreement. [ 46 ] Because the Defendant did not advise Letendre that his claim could be compensated based on Disease Level 3, the Plaintiff argues that it is liable in damages. i. Did Disease Level 2 Merge with Disease Level 3? [ 47 ] The proposition which is fundamental to the Plaintiff’s argument is that Disease Level 2 has, for all practical purposes, merged with Disease Level 3. [ 48 ] The Affidavit of Dr.

Doucette and the 2007 CASL Guidelines clearly indicate that the treatment of Hepatitis C has evolved with the development of medical science. For example, Dr. Doucette explains that one the paths to prove the need for HCV Drug Therapy (via Option 1), is “out of date” given the new protocol. Thus, it may be possible to conclude from Dr. Doucette’s Affidavit and from the 2007 CASL Guidelines, that more patients meet the protocol for HCV Drug Therapy than had been the case prior to June 2007. [ 49 ] However, neither Dr.

Doucette’s evidence nor the 2007 CASL Guidelines support the Plaintiff’s broad statement that all patients with a positive PCR test meet the protocol for HVC Drug Therapy so as to qualify for Disease Level 3. On the contrary, the medical evidence establishes that there are many patients who have a positive PCR test who do not meet the protocol for HVC Drug Therapy. This is made clear from the Guidelines at Table 4 “Contraindications for treatment with Pegylated Interferon and Rivavirin”. The only “absolute contraindication” is pregnancy.

However, the “Relative contraindications” are identified as: • Major Depression • Major psychosis • Autoimmune disease • Injection Drug Use • Renal failure (including dialysis” [ 50 ] Table 4 also identifies “Strong but not absolute contraindications” as follows: • Alcohol abuse • Hepatic decompensation • Coronary artery disease • Solid organ transplantation (except liver) [ 51 ] The 2007 CASL Guidelines also clearly identify the need for careful medical assessment before reaching a conclusion that HVC Drug Therapy is warranted.

The Guideline says: Whether treatment is offered should be decided by weighing the risks and the benefits for a particular patient. This decision is complex and should consider risk of disease progression to end stage, probability of a favourable response to therapy, risk of adverse effects with therapy and comorbid conditions...

The assessment for suitability for therapy should include a review of the patient’s history for past or current psychiatric disease, seizures, cardiac or renal disease, autoimmune disease, and alcohol or drug addiction. [ 52 ] On the medical evidence before me, I conclude that not all patients who present with a positive PCR test, and who thus have the presence of HCV, meet the criteria for HCV Drug Therapy.

As a result, despite the advancements in medical science in relation to the treatment for HCV patients, there continues to be a clear distinction between those claimants who qualify for Disease Level 2 and those that qualify for Disease Level 3. The Plaintiff’s contention that there has been essentially a merger between Disease Level 2 and

Disease Level 3 is simply not supportable on the medical evidence. [ 53 ] The conclusion which I have reached is consistent with the decision of The Honourable D. McGillis, who was acting as an Appeals Officer hearing an appeal from the Administrator’s decision in relation to the Settlement Agreement. The decision related to Claim file 07-02408 and is dated August 9, 2016. In that appeal, the estate of the class member appealed from a decision of the Administrator that approved and paid the claim based on Disease Level 2, but refused to approve the claim based on Disease Level 3.

As in the present case, the argument before the Appeals Officer was that “...once a chronic HCV patient has a positive PCR, they qualify for HCV Drug Therapy”. This argument was rejected by the Appeals Officer who made it clear that to qualify for Disease Level 3 under Option 2, it is mandatory that the claimant submit a specialist’s consultation report demonstrating that the criteria for HCV Drug Treatment is met.

Absent such a consultation report, the requirements of the Settlement Agreement are not met and the claimant cannot qualify for compensation based on a Disease Level 3. [ 54 ] For these reasons, the Plaintiff’s argument that he satisfied the requirements of Disease Level 3 because he satisfied the criteria for Disease Level 2 is simply not supported based on the evidence before me. ii.

Duty to Advise of Potential Level 3 [ 55 ] Even though I have concluded that a clear distinction continues to exist between Disease Level 2 and Disease Level 3, I will nevertheless consider whether the Defendant owed a duty to Letendre to advise that he could potentially have qualified for compensation based on Disease Level 3 if he provided a “consultation or other report” from a specialist, as contemplated in “Option 2”. [ 56 ] The Plaintiff argues that the Settlement Agreement specifically requires that the Defendant take an active role in determining the proper compensation which should be applicable to each claimant.

He argues that the duties of the Defendant require much more than simply processing the paper, “rubber stamping” and paying claims. He argues that in the present case the Defendant was active in the assessment and the administration of the claim as evidenced by the numerous letters from the Defendant to KBL in late 2009 and early 2010. In these letters, the Defendant advised KBL regarding various deficiencies in the documentation submitted in support of the claim and also advised KBL that it would review the claim for “completeness and edibility”.

In these circumstances, the Plaintiff argues that the Defendant owed a duty to Letendre to advise of the potential for qualifying for compensation based on Disease Level 3 and to recommend that a specialists report be obtained as contemplated by “Option 2”. [ 57 ] The Settlement Agreement does impose a number of obligations on the Defendant. Those obligations are set out in clause 8.01.

The most relevant portions of that clause describe the obligations as: b. developing, installing and implementing systems and procedures for receiving, processing, evaluating and making decisions respecting Claims including making all necessary inquiries (including consulting medical personnel) to determine the validity of any Claim and requiring any claimant to have a medical examination; ... f. receiving and reporting to all enquires and correspondence respecting Claims, supplying claim forms, reviewing and evaluating all Claims, making decisions in respect of Claims, giving notice of its decision, receiving compensation payments on behalf of the Class Members out of the Trust Fund and forwarding the compensation in accordance with the provisions of the Compensation Plan within a reasonable period of time and communicating with a claimant, in either English or French, as the claimant elects; ... g. assisting in the completion of claim forms and attempting to resolve any disputes with claimants; [ 58 ] While the duties of the Defendant are broad, they must be viewed in the overall context of the settlement.

The role of the Defendant was to assess the information provided to determine its accuracy and to pay the claims where appropriate. Furthermore, while clause 8.01(

g) does require the Defendant to assist with the “completion of claim forms”, the Settlement Agreement does not impose an obligation on the Defendant to provide medical or legal advice to the claimants. [ 59 ] Specifically with respect to whether a claimant met the protocol for HCV Drug Therapy, it is important to consider the CASL Guidelines which mandate that a physician must assess “the risks and the benefits for a particular patient” before reaching a conclusion that the patient is a candidate for HCV Drug Therapy.

The Guidelines also caution that the decision is complex and can only be made after fully assessing the stage of the patient’s HCV disease and his or her overall medical history. These are assessments which can only be made by a patient’s medical practitioner, and which the Defendant was neither qualified for nor entitled to participate in making. [ 60 ] Letendre was represented by a sophisticated trustee, the Public Trustee, who, in turn, retained KBL, to act as legal counsel.

KBL were Class Counsel and can be presumed to have known as much or more about the Settlement Agreement and the process of dealing with claims than any other person. As a result, both the Public Trustee and KBL were knowledgeable and sophisticated advisors to Letendre. The “Form 2” was completed for Letendre by Dr. Draginda, a properly qualified medical doctor who had been treating Letendre for approximately 4 years at the time that the claim was submitted to the Defendant. [ 61 ] In these circumstances, I conclude that the Defendant had no duty to second guess the work of the Public Trustee, or KBL or Dr.

Draginda. The Defendant had no duty to advise that additional medical information should be obtained which might have permitted Letendre to be assessed at a higher disease level. On the contrary, the medical information which was available on “Form 2” shows that Letendre had a history of “alcohol abuse” which is one of the “Strong but not absolute contraindications” to HCV Drug Therapy. Thus, on the medical information available in this case, there was no reason to question the accuracy of the medical assessment contained on

“Form 2” that had been submitted on behalf of Letendre. [ 62 ] I conclude that the duties imposed on the Defendant did not include the duty to advise Letendre to attempt to accumulate additional medical information from a specialist so that he could potentially qualify for compensation based on Disease Level 3. iii. Merits of the Proposed Claim - Conclusion [ 63 ] Letendre, prepared and presented his claim to the Defendant with the assistance of his trustee, the Public Trustee, his legal counsel, KBL and his medical doctor, Dr. Draginda.

Letendre sought to be compensated based on Disease Level 2 and the claim was promptly paid by the Defendant on that basis. [ 64 ] I conclude that, on this motion, the Plaintiff has failed to demonstrate that there is a reasonable possibility of success in an action against the Defendant. On the contrary, the foundation of the cause of action pled in the Statement of Claim is without merit.

The evidence on this motion does not suggest that Letendre qualified for Disease Level 3 and the Defendant owed no duty to advise Letendre or his trustee or his professional advisors that they should attempt to accumulate additional medical information to potentially support a claim based on Disease Level 3. [ 65 ] On this ground alone, I would decline to grant the Plaintiff leave to proceed with the action against the Defendant. 3. Does the Limitations Act Prevent a Successful Action [ 66 ] The Limitations Act RSA 2000 c L-12, s 3(1) provides that: 3(1) Subject to

section 11, if a claimant does not seek a remedial order within a) 2 years after the date on which the claimant first knew, or in the circumstances ought to have known, (

i) that the injury for which the claimant seeks a remedial order had occurred, (ii) that the injury was attributable to conduct of the defendant, and (iii) that the injury, assuming liability on the part of the defendant, warrants bringing a proceeding, or b) 10 years after the claim arose, whichever period expires first, the defendant, on pleading this Act as a defence, is entitled to immunity from liability in respect of the claim. [ 67 ] The Defendant argues that the limitation period began to run at the time of the execution of the release and payment of the claim in April or May of 2010, more than 6 years ago and more than 4 years prior to the commencement of this action by the Plaintiff’s present counsel.

For this reason the Defendant argues that the Limitations Act entitles it to “immunity from liability in respect of the claim”. [ 68 ] Conversely, the Plaintiff argues that the limitation period did not begin to run until July 30, 2012, when his present counsel became aware that the Positive PCR Test had been provided to the Defendant as part of the claim package in 2009.

He argues that this is the first time that Letendre or his personal representatives first became aware of the potential liability of the Defendant. [ 69 ] The date on which the Plaintiff’s present counsel had actual knowledge that the Positive PCR Test had been provided to the Defendant has no bearing on when the limitation period began to run. Letendre had legal counsel and other professional advice long before the Plaintiff’s present counsel was retained. Those professional advisors had all of the information regarding Letendre’s medical condition by early 2010.

Specifically, they had actual knowledge of the Positive PCR Test in late 2009. On the basis of that medical information a claim was submitted seeking payment based on Disease Level 2. A limitation period cannot be extended simply by retaining a new lawyer, who only later becomes aware of objective evidence which was at all times in the hands of earlier legal advisors. As a result, the limitation period did not begin to run on July 30, 2012, as argued. [ 70 ] When the limitation period commenced must be determined by assessing each of the three criteria set out in s 3(1)(

a) of the Limitations Act :

a) Knowledge that Injury Occurred [ 71 ] In this case, the “injury” complained of is the payment of Letendre’s claim based on a Disease Level 2 rather than a Disease Level 3. I conclude that this was immediately known to Letendre, or his trustee, the Public Trustee and his legal advisors KBL when the claim was paid. The claim was submitted as Disease Level 2 based on the “Form 2” that had been prepared by Dr. Draginda. Furthermore, the Defendant explicitly told KBL in its letter dated April 9, 2010, that the claim was approved based on Disease Level 2.

After execution of the release by the Public Trustee, the claim was paid in April or May of 2010. At that time, the “injury” complained of had occurred.

b) Knowledge that Injury Attributable to Defendant [ 72 ] In his own materials, the Plaintiff referred to the correspondence from the Defendant to KBL in late 2009 and early 2010, acknowledging receipt of the claim and explaining that it would be assessing the claim for “completeness and eligibility”. By April or May 2010, Letendre, through his trustee, the Public Trustee and KBL were aware that the decision to pay the claim based on Disease Level 2 had been made by the Defendant. As a result, by late April or early May 2010, Letendre or his agents had actual knowledge that the Defendant had caused the “injury”.

c) Knowledge that the Injury Warrants Bringing a Proceeding [ 73 ] The most significant issue in relation to the limitation period relates to when the Plaintiff knew, or ought reasonably to have known, that the “injury” warranted the commencement of proceedings. [ 74 ] Letendre is now deceased and therefore cannot provide any evidence in relation to his state of knowledge regarding this issue. The Public Trustee or Letendre’s former lawyers, KBL, may have some information which would be of assistance in attempting to determine what actual knowledge was attributable to Letendre.

However, no evidence from either the Public Trustee or KBL is before me. As a result, I can come to no conclusion on this motion as to when, or if, Letendre ever had actual knowledge that the injury warranted bringing a proceeding. [ 75 ] It remains necessary to consider when Letendre “ought to have known” that a proceeding was warranted. [ 76 ] Letendre, the Public Trustee or KBL, clearly knew of the Positive PCR Test evidencing the presence of HCV. These test results were provided by KBL to the Defendant in November 2009.

While not stated in precisely these terms, the Plaintiff argues that knowledge of the Positive PCR Test and an awareness of the 2007 CASL Guidelines was necessary to permit a conclusion that a proceeding was warranted. [ 77 ] The 2007 CASL Guidelines on which the Plaintiff relies were described in a paper titled “Management of Chronic Hepatitis C: Consensus Guidelines”. The paper was published at Can J Gastroenterol Vol 21 Suppl C June 2007 . [ 78 ] This paper was therefore public knowledge commencing in June 2007.

KBL submitted the claim to the Defendant on behalf of Letendre in late 2009 and the claim was paid in early 2010, more than 2 years after the 2007 CASL Guidelines were published. [ 79 ] While it is true that Letendre suffered from a disability and was very likely unaware of the Guidelines, he was represented by the Public Trustee and competent legal counsel, KGL.

His medical doctor was also directly involved in providing medical assessment and treatment as well as participating in the claims process through the completion of the “Form 2”. [ 80 ] The Public Trustee and KGL were both knowledgeable and sophisticated parties specifically in relation to the Hepatitis claims process. I conclude that Letendre, through his trustee, the Public Trustee or his legal advisors ought to have known of the 2007 CASL Guidelines at or before the claim was made in late 2009. Similarly, I conclude that Dr.

Draginda knew or ought to have known of the Guidelines at the time she completed the “Form 2” in early 2010. [ 81 ] Therefore, assuming the correctness of the Plaintiff’s position that the Positive PCR Test and the 2007 CASL Guidelines are alone sufficient to meet the Disease Level 3 criteria, Letendre or his advisors had sufficient information available when the claim was paid in 2010 to know that a cause of action existed. [ 82 ] However, whether an injury warrants bringing a proceeding involves more than simply knowing that a cause of action exists.

The Alberta Court of Appeal in Gayton v Lacasse , 2010 ABCA 123 considered this issue in detail and said at para 32: ... The test under section 3(1)(a)(iii) as to what matters must be considered when determining when a claimant knew, or in the circumstances, ought to have known that a proceeding is warranted is an important one and one on which there is a paucity of precedent.

Kozens and Novak suggest that a judge would have to consider a number of factors when making an assessment under section 3(1)(a) (iii), such as a claimant's ongoing relationship with a defendant, the possible costs and strains of litigation, given her injuries, and, most fundamentally, her understanding of the true scope and significance of her injuries - which included the permanent brain injury. How high the threshold should be set is a matter to be made in a full factual context. [ 83 ] Gayton involved unusual facts which are much different than those before me.

That case involved complex issues of causation in relation to whether the plaintiff’s medical condition was attributable to an initial assault in 2005. It was not until Ms. Gayton was seen by a medical specialist in 2007 that she was diagnosed with a permanent brain injury. She then commenced the action 2008. The Court of Appeal concluded that in those circumstances, there were genuine issues of fact and law that had to be assessed at trial to determine when Ms.

Gayton knew or ought to have known that a proceeding was warranted. [ 84 ] The Plaintiff does not suggest that Letendre had any personal circumstances which might have affected the issue of when a proceeding was warranted: • Letendre was disabled but his affairs, including the claim for benefits under the Class Action settlement, were administered by the Public Trustee.

KGL were retained by the Public Trustee to provide legal assistance with the settlement of Letendre’s claim. • There was no ongoing relationship between Letendre and the Defendant after May 2010. • There is nothing complex about the claim for benefits based on Disease Level 3. On the contrary, the Plaintiff argues that the entitlement to payment based on Disease Level 3 is obvious given the 2007 CASL Guidelines. • There was never any misunderstanding of the true scope or significance of Letendre’s HVC status. His status was clearly

confirmed by the Positive PCR Test prior to the claim being submitted to the Defendant. [ 85 ] Thus, I conclude that Letendre or his agents ought to have known that a proceeding was warranted in or about April or May 2010, at the time that the claim was paid. They knew that payment had been made based on Disease Level 2 and not based on Disease Level 3. They ought to have known of the 2007 CASL Guidelines which the Plaintiff asserts satisfies the Disease Level 3 criteria. As a result, I conclude that the limitation period commenced in or about May 2010 and expired 2 years later.

The present action was commenced well after the expiration of the limitation period. [ 86 ] For this reason, the Plaintiff has also failed to establish that the action has a reasonable possibility of success in defeating a defence based on the Limitations Act . 4.

Does the Release Prevent a Successful Action? [ 87 ] The Defendant argues that at the time the settlement funds were paid, the Public Trustee, on behalf of Letendre, executed a “full and final release” which is sufficiently broad to operate as a release of the proposed action. [ 88 ] The language of the release is very broad and specifically extends to the following: “Releases” means, individually and collectively,

a) Canada

b) Each of the past, present, and future ministers and employees of Canada,

c) Each of the past and present agents of Canada,

d) The Canadian Blood Agency,

e) The Canadian Blood committee and its members, Including their respective, past, present, and future parent, subsidiary and affiliated corporations, employees, agents, officers, directors, shareholders, volunteers, representatives, executors administrators , successors and assigns. (emphasis added) [ 89 ] The Defendant argues that because the release is broad and because there is specific reference to “administrators” in the release that it should apply to the Defendant, who was the “Administrator” of the Settlement Agreement. [ 90 ] There is no specific reference to the Defendant in the Release.

Furthermore, the reference to “administrators” in the release is not a reference to the “Administrator” (the Defendant) who was specifically defined in the Settlement Agreement. [ 91 ] The Defendant was appointed by the Court and not by Canada or any of the other parties to the litigation. In these circumstances it cannot be said that the Defendant is an agent of any one of the parties to the litigation, including Canada or the Canadian Blood Agency. Nor is the Defendant an agent of the Class members.

The Defendant was and continues to be independent of the members of the Class and Canada and the other parties to the Settlement Agreement. As a result there is no reason to strain the word of the release to extend the scope of the release to provide protection to the present Defendant. [ 92 ] In these circumstances, the execution of the release by the Public Trustee, on behalf of Letendre, would not prevent the present Plaintiff from having a reasonable possibility of success in the action. V.

CONCLUSION [ 93 ] The Plaintiff has failed to demonstrate that he has a reasonable possibility of success in the proposed action against the Defendant. On the merits of the action, the Plaintiff has failed to demonstrate a reasonable possibility of establishing an entitlement to compensation based on Disease Level 3 taking into consideration the material submitted on behalf of Letendre at the time of the original claim.

Furthermore, the Plaintiff has failed to demonstrate a reasonable possibility of success in establishing that the Defendant owed a duty to Letendre to offer advice regarding the potential of compensation based on Disease Level 3 if additional medical information was provided. Finally, the Plaintiff has failed to demonstrate that he has a reasonable possibility of defeating a defence based on the Limitations Act . [ 94 ] I therefore dismiss the Plaintiff’s application for leave to commence the present action against the Defendant. Heard on the 18 th day of January, 2017.

Dated at the City of Edmonton, Alberta this 10 th day of February, 2017.

John T. Henderson J.C.Q.B.A. Appearances: Allan M.G. Botan for the Plaintiff Ward K. Branch, Q.C. and Luciana P. Brasil for the Defendant