Mylo Kathirgamanathan First PLAINTIFF And: Dr. M. Kathirgamanathan PMC (2012) Inc. Second PLAINTIFF And: Western Regional Integrated Health Authority First Defendant And: Darrell Boone Second Defendant, 2021 NLSC 89

court crest IN THE SUPREME COURT OF NEWFOUNDLAND AND LABRADOR GENERAL DIVISION Citation : Kathirgamanathan v. Western Regional Integrated Health Authority , 2021 NLSC 89 Date : June 23, 2021 Docket : 201901G3996 Between: Mylo Kathirgamanathan First PLAINTIFF And: Dr. M. Kathirgamanathan PMC

(2012) Inc. Second PLAINTIFF And: Western Regional Integrated Health Authority First Defendant And: Darrell Boone Second Defendant Before: Justice Alphonsus E. Faour Place of Hearing: St. John’s, Newfoundland and Labrador Date of Hearing: May 25, 2021

Summary:

The Defendants applied to strike out the Statement of Claim as relying on inadmissible evidence. The relevant evidence was protected bysection 8.1 of the Evidence Act which required that the proceedings of a Peer Review Committee in the provincial hospital system areprotected and are inadmissible in any civil proceeding. The Plaintiff argued that allegations of fraud should negate any such protections. The Court found that the allegations in the Statement of Claim did not constitute fraud.

Even if they amounted to fraud, there is noauthority to make an exception for fraud and permit such evidence to be used in the civil action. The Statement of Claim was struck out,with costs to the Defendants/Applicants. Appearances: Twila E. Reid Appearing on behalf of the Defendants/Applicants Bernard M. Coffey, Q.C. Appearing on behalf of the Plaintiffs/Respondents Authorities Cited: CASES CONSIDERED: Kathirgamanathan v. Western Regional Integrated Health Authority, 2020 NLSC 123; Atlantic Lottery Corp.Inc. v. Babstock, 2020 SCC 19; Hyrniak v. Mauldin, 2014 SCC 7; Kapelus v.

University of British Columbia, 2002 BCSC 741; Ontario v.Rothmans Inc., 2011 ONSC 2504; Tucker v. AXA General Insurance, 2014 NLCA 36; Nagase v. Entwistle, 2016 BCCA 257; Sinclair v.March, 2000 BCCA 459; Horne v. Queen Elizabeth II Health Sciences Centre, 2018 NSCA 20; Rosenhek v. Windsor Regional Hospital,2010 ONCA 13; Landerville v. Boucherville (Town), (SCC), [1978] 2 S.C.R. 801; Johnston v. Prince Edward Island,(1995), (NL SC), 128 Nfld. & P.E.I.R. 1, 1995 CarswellPEI 4 (S.C. (T.D.)); C.M. Callow Inc. v. Zollinger, 2020SCC 45; Lazarus Estates Ltd. v. Beasley, [1956] 1 Q.B. 702 (CA) (UK); Roncarelli v.

Duplessis, (SCC), [1959] S.C.R.121; F. (M.) v. Sutherland (2000), (ON CA), 188 D.L.R. (4th) 296, 2000 CarswellOnt 2301 (C.A.); Eastern RegionalIntegrated Health Authority v. Commission of Inquiry on Hormone Receptor Testing, 2008 NLTD 27 STATUTES CONSIDERED: Evidence Act, R.S.N.L. 1990, c. E-16; Patient Safety Act, S.N.L. 2017, c. P-3.01; Evidence Act, R.S.B.C.1996, c. 124;

Interpretation Act, R.S.B.C. 1996, c. 238;

Interpretation Act R.S.N.L. 1990, c. I-19; Public Inquiries Act, 2006, S.N.L.2006, c. P-38 RULES CONSIDERED: Rules of the Supreme Court, 1986, S.N.L. 1986, c. 42, Sch. D REASONS FOR JUDGMENT Faour, J.: INTRODUCTION [1] Dr. Mylo Kathirgamanathan (“Dr. Kathir”) has commenced this action claiming damages from the Western RegionalIntegrated Health Authority (“Western Health”) and Dr. Darrell Boone for their role in his losing surgical privileges at the Corner Brookhospital. Western Health has applied under Rule 14.24 to have the Statement of Claim struck out. [2] Dr.

Boone was appointed by Western Health to chair a Peer Review Committee (“PRC”) struck following receipt of severalcomplaints bearing on Dr. Kathir’s competence, and subsequently a decision by a group of anesthesiologists at the hospital to withdrawtheir services from Dr. Kathir arising allegedly from patient safety concerns. In response, Dr. Kathir brought three actions againstWestern Health, the doctors involved in the anesthesia group, and this action, involving Dr. Boone’s role as chair of the PRC.

The threeactions were the subject of an Order that they be heard together. (See written decision of Justice Khaladkar on September 8, 2020 –Kathirgamanathan v. Western Regional Integrated Health Authority, 2020 NLSC 123.) Justice Khaladkar summarized the backgroundto the three actions at paragraphs 2 – 5: 2 Dr.

Kathirgamanathan is a general surgeon who practiced medicine in the facilities provided by Western Health at its hospital inCorner Brook, Newfoundland and Labrador. 3 In February, 2016 a group of anesthesiologists decided to withdraw anesthesia services from the Plaintiffs allegedly in response topatient safety concerns.

As a result, on September 21, 2016, the Plaintiffs brought an action, K1, against Western Health alleging that itimproperly acquiesced in the actions of the anesthesiologists. 4 On February 14, 2018 the Plaintiffs brought an action, K2, against the eight individual anesthesiologists who had withdrawnanesthesia services from the Plaintiffs.

5 On June 5, 2019 the Plaintiffs commenced an action, K3, against Western Health and Darrell Boone. In that action the Plaintiffs claimed that both Defendants were in breach of their public duty to fairly, and expeditiously, determine the Plaintiff's matter. In addition, it is alleged that Darrell Boone committed fraud by issuing a false document. [ 3 ] The issues in this application centre on the claim of Western Health that none of the evidence to support the allegations in the Statement of Claim is admissible because it involves matters before a PRC. It argues that the proceedings of a PRC are inadmissible by virtue of

section 8.1 of the Evidence Act , R.S.N.L. 1990, c. E-16 . The absence of admissible evidence means that the action cannot succeed, and therefore should be struck out at this stage before trial. [ 4 ] The Plaintiff does not take issue with the parameters around the issue of admissibility, but says they should not apply in this case, because the Statement of Claim raises allegations that imply fraud, or something analogous to fraud. The presence of conduct amounting to fraud, it argues, should negate the protections afforded by

section 8.1 . [ 5 ] That conduct arose from a series of events that precipitated the striking of the PRC, as outlined in the Statement of Claim. In December 2015 there were two allegations against Dr. Kathir which questioned his competence as a surgeon. These were brought to Dr. Kathir’s attention by Dr. Dennis Rashleigh, the vice-president of Medical Services. Dr. Kathir was informed formally about these two complaints in writing dated December 7, 2015. He was also advised that the allegations were being referred to a Peer Review Committee. (Statement of Claim at paragraph 7). [ 6 ] Dr.

David Blackwood, Chief of Surgery, met with Dr. Kathir at a restaurant on the same date. It appeared that the purpose of the meeting was to persuade Dr. Kathir that it would be in his interest to retire or resign from his work at the hospital. (Statement of Claim at paragraph 8). [ 7 ] On February 18, 2016, the Department of Perioperative Medicine at the hospital advised the withdrawal of all anesthesiology services for Dr. Kathir effective that date. It appeared that this action was occasioned by the complaints to which Dr. Rashleigh had referred earlier. The allegation was based on a concern that Dr.

Kathir’s treatment of the patients had not met the standard of care. (Statement of Claim at paragraph 9). [ 8 ] Western Health appears to have accepted the withdrawal of anesthesiology services. This had the effect of Dr. Kathir losing his admitting and operating privileges at the hospital. (Statement of Claim at paragraph 10). [ 9 ] Subsequently, Western Health, through Dr. Rashleigh, provided Dr. Kathir two lists of patients which it said supported the withdrawal of services. (Statement of Claim, paragraphs 13 and 14). [ 10 ] On June 13, 2016, Dr.

Rashleigh sent a letter to the College of Physicians and Surgeons of Newfoundland and Labrador, the licensing body for physicians in the Province, advising that the allegations relating to patient safety were being referred to a Peer Review Committee. Dr. Kathir was copied on this letter.

This was the formal beginning of the PRC process. (Statement of Claim, paragraph 15). [ 11 ] The Statement of Claim generally outlines the events that followed, including recitation of communications between various counsel, officials of Western Health, and the College of Physicians and Surgeons of Newfoundland and Labrador (the “College”). In particular, it alleges a failure on the part of both Dr. Boone and Western Health to follow the Peer Review Committee process as outlined in the applicable bylaws.

The allegation relates to the timing of the delivery of the final report of the PRC, and the fact that when delivered, it was not signed by all members. (Statement of Claim generally, and in particular, paragraphs 36-46, and paragraphs 47-48). [ 12 ] Finally, the Statement of Claim alleges in paragraphs 54 and 55 that both Western Health and Dr. Boone committed misfeasance in public office in relation to their conduct of the PRC process. This directly implicates Dr. Boone as Chair of the PRC.

Western Health is implicated through its acquiescence in the PRC process, and vicariously as the employer/supervisor of Dr. Boone. The Issues to Decide [ 13 ] The Defendant submitted that Rule 14.24 is the appropriate mechanism to deal with the question of striking out at this stage. It further submits that since the Statement of Claim relies on facts arising from the PRC process, any evidence to prove the allegations contained therein is inadmissible. It submits that

section 8.1 of the Evidence Act represents a complete prohibition preventing the introduction of such evidence. If there is no possibility of proving the allegations by admissible evidence, then the Statement of Claim should be struck out. [ 14 ] The Plaintiff does not take issue with the implications of

section 8.1 . However, it submitted that the Statement of Claim references conduct which amount to fraud, or is analogous to fraud. If fraud is present, and can be proven, then the Plaintiffs claim that the protections afforded by

section 8.1 are negated. Further, it is submitted that the Defendants were in the position of exercising a public duty, and without access to the evidence of their conduct in that regard there would be no public accountability. The existing mechanisms of review, for example the appeal process under the bylaws of Western Health, do not provide adequate assurances that those exercising a public duty can be held accountable. [ 15 ] The submissions of both sides provide a series of issues that must be addressed: 1) Is Rule 14.24 an appropriate mechanism to decide admissibility at this stage? 2) Should Leave be granted to enable the Plaintiff to cross-examine the deponents on their affidavits?

3) Is

section 8.1 of the Evidence Act applicable to this case? 4) Does the Statement of Claim allege facts which could support a finding of fraud? 5) Would the presence of fraud negate the protections contained in

section 8.1 of the Evidence Act ? 6) If applicable, should the Statement of Claim be struck in whole or in part? Applicability of Rule 14.24 [ 16 ] A party may apply to have a pleading struck out under this Rule. The Rule reads as follows: 14.24(1) The Court may at any stage of a proceeding order any pleading, affidavit or statement of facts, or anything therein, to be struck out or amended on the ground that (

a) it discloses no reasonable cause of action or defence; (

b) it is false, scandalous, frivolous or vexatious; (

c) it may prejudice, embarrass or delay the fair trial of the proceeding; or (

d) it is otherwise an abuse of the process of the Court, and may order the proceeding to be stayed or dismissed or judgment to be entered accordingly.

(2) Unless the Court otherwise orders, no evidence shall be admissible by affidavit or otherwise on an application under Rule 14.24(1) (a). [ 17 ] The normal procedure under such an application is to rely solely on the pleadings themselves. In particular, under Rule 14.24(1)(

a) it is accepted that no evidence would be taken, and the argument and court consideration would take place by an examination of the pleadings. In this case, the Defendant is also relying on paragraph 14.24(1)(

c) on the basis that pleading facts which are based on inadmissible evidence would “prejudice, embarrass or delay the fair trial . . .”. That raises the possibility that evidence could be taken. That issue will be addressed below when I consider the Plaintiff’s application for leave to cross-examine two deponents on their affidavits. [ 18 ] Rule 14.24 permits this Court, on a pre-trial application, to determine whether this action should proceed further to a full trial. The Supreme Court of Canada in Atlantic Lottery Corp. Inc. v.

Babstock , 2020 SCC 19 , ruled that an application to strike is an important mechanism to foster timely and affordable access to the justice system, citing its earlier decision in Hyrniak v. Mauldin , 2014 SCC 7 . At paragraphs 18-19 the Court noted: 18 . . . Where possible, therefore, courts should resolve legal disputes promptly, rather than referring them to a full trial . . . . This includes resolving questions of law by striking claims that have no reasonable chance of success.

Indeed, the power to strike hopeless claims is "a valuable housekeeping measure essential to effective and fair litigation" . . . . 19 Of course, it is not determinative on a motion to strike that the law has not yet recognized the particular claim. The law is not static, and novel claims that might represent an incremental development in the law should be allowed to proceed to trial. That said, a claim will not survive an application to strike simply because it is novel.

It is beneficial, and indeed critical to the viability of civil justice and public access thereto that claims, including novel claims, which are doomed to fail be disposed of at an early stage in the proceedings. This is because such claims present "no legal justification for a protracted and expensive trial"… [ 19 ] The purpose of Rule 14.24 is to eliminate actions which have no chance of success at an early stage, and avoid the sometimes protracted and costly process leading to a full trial.

In this matter, the Defendants submit that the Statement of Claim alleges facts which may not be proven by admissible evidence. Therefore, it is submitted, the claim cannot stand and must be struck out. [ 20 ] It was not in dispute that Rule 14.24 is an appropriate mechanism to consider striking out at this stage of the proceedings. The

Rule requires me to consider whether, in consideration of the elements of the pleadings, and the evidence to be presented, the action has a chance of success, even if that chance is remote. That is the procedure I will following in considering this application. Leave to Cross-Examine Deponents [ 21 ] Generally, an application under Rule 14.24 is heard without the presentation of evidence, and relies solely on the pleadings. In this case, the Plaintiff/Respondent applied for leave to cross-examine the deponents of affidavits submitted by the Defendant/Applicant.

Two affidavits were submitted in support of the Application. The first, by Dr. Peter Blackwood, the Chief of Surgery at the hospital, outlined the steps taken to constitute the Peer Review Committee to investigate the complaints of patient safety and competence that had been made against Dr. Kathir. The second, by Dr.

Dennis Rashleigh, who was the Vice-President of Medical Services at Western Health, set forth that several complaints had been received, and the PRC process he launched by reference to the regulations under the Medical Staff By-Laws approved by the Board of Trustees of Western Health on October 20, 2011 and revised April 28, 2016. [ 22 ] The Defendant/Applicant objected to the application to grant leave to cross-examine the deponents. It argued that leave is granted in interlocutory applications only in very circumscribed circumstances.

It pointed to the general rule that a striking application generally proceeds on the basis of the pleadings alone. If evidence is called, it runs the risk of being an inquiry on the merits, which is not appropriate at this stage. [ 23 ] If leave is granted, the scope of cross-examination on a striking application is much more limited than it would be in a discovery or at trial. In Kapelus v. University of British Columbia , 2002 BCSC 741 Justice Tysoe noted at paragraph 27: 27. . . .

The purpose of the cross-examination is to test the truthfulness of the statements contained in the affidavit and it is not intended as a forum for investigating matters which have not been deposed to by the affiant. [ 24 ] Cross-examination on an affidavit on an application under Rule 14.24(1)(

c) might be permitted if the statements in the affidavit were in dispute. In this case, there was nothing in the affidavits which contradicted the background set out in the Statement of Claim. While cross examination might have afforded the Plaintiff an opportunity to obtain other information, I was satisfied that it would not add anything to the issues arising in the Application and would only raise the prospect of questioning on matters outside the scope of the affidavits.

The statements in each of the affidavits were not controversial, and if leave were granted it was likely, in my view, that the examination would have strayed into matters more properly raised at discovery or trial. [ 25 ] A critical issue is whether the facts in the affidavit are in issue, or whether cross-examination is necessary to challenge the facts in the affidavit: See Tucker v. AXA General Insurance 2014 NLCA 36 at para. 27 , per White J.A. I may have been inclined to grant leave if Plaintiff’s counsel had taken issue with the facts in the affidavits.

In fact, the statements and allegations in the Statement of Claim are generally consistent with the circumstances outlined in both affidavits. [ 26 ] It is also clear that any such examination must be directly relevant to issues in the Application before the court. See Ontario v. Rothmans Inc. , 2011 ONSC 2504 at paras. 142-143 per Perell, J. Any questions must be relevant to the issues on the particular motion, or on the matters raised in the affidavit.

Since on the record there was no dispute on the contents of the affidavits, questioning would not add anything to the determination of issues in the application. [ 27 ] After hearing from both counsel, I was satisfied that it would be inappropriate to grant leave to cross-examine the deponents. There was no serious dispute on the facts set out in the affidavits. It also appeared to me that cross-examination in this matter would have opened the door to what would amount to be fact-finding, or the type of questioning that would more properly be left to discovery or other forms of disclosure and production.

Accordingly, I declined leave to cross-examine the deponents.

Section 8.1 of the Evidence Act [ 28 ] The basis for the Defendants’ application is that the evidence which could prove the allegations in the Statement of Claim are protected as being part of the Peer Review Committee process instituted by Western Health following receipt of complaints related to patient safety. The proceedings of a PRC are protected by

section 8.1 of the Evidence Act . It reads, in part, as follows: 8.1.

(2) This

section applies to the following committees: (

a) a quality assurance committee as defined under the Patient Safety Act ; (

b) a quality assurance activity committee as defined under the Patient Safety Act ; and (c) . . . .

(3) The following shall not be disclosed in or in connection with a legal proceeding: (

a) a report, statement, evaluation, recommendation, memorandum, document or information, of, or made by, for or to, a committee to which this

section applies; and

(b) . . . . [ 29 ] The

section specifically refers to a quality assurance committee under the Patient Safety Act, S.N.L. 2017, c. P-3.01 . Such a committee includes a peer review established for the purposes of the Patient Safety Act ( paragraph 2 (p)). Given that both sides agreed on this point, I am satisfied that the Peer Review Committee established by Western Health in this case falls under the quality assurance regime established by that Act . Therefore, anything which was associated with the Peer Review Committee would be protected by

section 8.1 . [ 30 ] It is important to understand the policy behind the protections afforded the Peer Review Process. In Nagase v. Entwistle , 2016 BCCA 257 a physician brought a defamation action against other physicians. He sought records which were part of a hospital committee examining the allegations. The action was struck out on the basis that it was founded on privileged material. The Plaintiff physician argued for an

interpretation of a provision similar to

section 8.1 in the Evidence Act in this Province that would have permitted tendering of that material in the civil action. The Court of Appeal in British Columbia disagreed, and found that the legislation was designed to protect the process, which is analogous to the peer review process in this case. It said, at paragraphs 62 and 63: 62. The effect of adopting the

interpretation proposed by Dr. Nagase would be to permit production of records relating to the initiating phase of the discipline process while protecting only communications created at the more formal and serious stage of discipline. In my view, this

interpretation is premised on a literal reading of the words of the statute divorced from the context in which they are used. It would result in a construction of the provision that is not consistent with the objects of the legislation or the stated purpose of the provision. In the debate on the bill at the committee stage, the then Attorney General, the Honourable B.R.D.

Smith, stated that the purpose of the provision was to protect the "sanctity" of the peer review process in hospitals ( Sinclair at para. 24 ): ...It simply protects the sanctity of a peer review process in the hospitals so that we'll get adequate and proper peer review without people looking over their shoulders. 63. As Donald J.A. notes in Sinclair , s. 51 represents the Legislature's clear choice in favour of a hospital's interest in confidentiality, rather than a balancing of interests (at para. 26). [ 31 ] The BC Court referred to Sinclair v. March , 2000 BCCA 459 , in its decision in Nagase .

That case also involved an

interpretation of

section 51 of the Evidence Act , R.S.B.C. 1996, c. 124 in the context of a demand for production of documents by a plaintiff where the evidence was related to a similar process as the PRC in this case.

Section 51 is similar to

section 8.1 of the Evidence Act in this Province. In that case the parties argued over the scope of the protection. The Defendant argued that only matters directly before the committee were to be protected. However, the Court found that the appropriate

interpretation was to focus on the objects of the provision and took a broader view. At paragraph 26, the Court in Sinclair noted: 26. It can be seen from this analysis that the Legislature intended to protect this area of hospital activity by preventing access by litigants. Rather than striking a balance of interests, the Legislature made a clear choice in favour of one interest, hospital confidentiality. In the course of deciding an issue under s. 51 a court should give the language of the enactment its full force and effect with the object in mind: . . [ 32 ] It referred to the direction contained in the

Interpretation Act , R.S.B.C. 1996, c. 238 which uses wording similar to that found in

section 16 of our

Interpretation Act , R.S.N.L. 1990, c. I-19 : 16. Every Act and every regulation and every provision of

an Act or regulation shall be considered remedial and shall receive the liberal construction and

interpretation that best ensures the attainment of the objects of the Act, regulation, or provision according to its true meaning. [ 33 ] In many matters before this court a balancing of interests is required before a conclusion may be reached. The British Columbia Court of Appeal opted for an alternate approach, in saying that the legislation makes a positive choice clearly in favour of protecting the confidentiality of the Peer Review Process. It confirmed that there should not be a balancing of interests.

Section 8.1 provides similar direction. [ 34 ] The enactment of

section 8.1 of the Evidence Act was meant to provide a mechanism to protect efforts by those within the health system, in particular in hospitals, to ensure the maintenance of high standards of patient care and professional competency. The objects of this provision are to ensure the requisite degree of confidentiality that permits a full and open examination of the issues that may come before bodies such as Peer Review Committees. The legislature, by enacting

section 8.1 , has declared that the importance of the maintenance of quality standards in the health care system takes precedence over any other interest. [ 35 ] Both parties agree that the Peer Review process in this case was contemplated by the legislation. The Plaintiff did not take issue with the fact that the Statement of Claim depends on proving allegations by reference to “information . . . .” etc., prohibited by the Act . However, the Plaintiff argues that the circumstances in this case allege either fraud, or conduct analogous to fraud, which should negate the protection afforded by

section 8.1 . Does the Statement of Claim allege Fraud? [ 36 ] In this part of the analysis I must determine whether the Statement of Claim actually alleges facts which support a finding of fraud, bad faith conduct, or something analogous. The Plaintiff agrees that

section 8.1 was designed to protect the Peer Review process that is the subject of this action. However, it submits that the Statement of Claim makes allegations which amount to fraud, and such conduct should negate that protection. [ 37 ] There are three allegations in the Statement of Claim which support the Plaintiffs’ claim of fraud. The first is found in paragraphs 7 and 8. Paragraph 7 refers to allegations against Dr. Kathir with respect to his competence as a surgeon which were brought

to his attention on December 7, 2015. Then Paragraph 8 outlines a meeting between Dr. Blackwood and Dr. Kathir on the same datefollowing the disclosure to Dr. Kathir of the allegations about competence. I reproduce the paragraph in its entirety as follows: 8. Later on 7 December 2015, Dr. Kathir met with Dr. Blackwood at Dr. Blackwood’s request at a restaurant in Corner Brook. Duringthe meeting, Dr. Blackwood asked Dr. Kathir why he would not resign or retire from Western Health and do locums instead. Dr.Blackwood said that doing so would allow Dr. Kathir to “spend more time with his kids”, and that Dr.

Kathir was in a “no winsituation.” When Dr. Kathir objected, Dr. Blackwood said it was going to be difficult for Dr. Kathir, but if Dr. Kathir resigned then Dr.Blackwood (and others) could make the allegations against Dr. Kathir “go away.” Dr. Blackwood told Dr. Kathir that if Western Healthreferred the allegations against him to the College, the College would suspend or remove Dr. Kathir’s medical license. Dr. Blackwoodalso said that if Western Health made such a referral, the College might require Dr. Kathir to undergo additional training and/or workunder the supervision of other physicians. Dr.

Blackwood told Dr. Kathir he did not want Dr. Kathir to end his career like that becausehe was a great surgeon who did a lot of good over the years. Dr. Blackwood told Dr. Kathir he was just the messenger communicatinginformation (and a message) from the administration of Western Health. Dr. Blackwood told Dr. Kathir not to “waste time with legalaction.” [38] Dr. Kathir submits that the meeting to which paragraph 8 refers was an effort by Western Health to remove him from hissurgical position. He says the PRC process was another.

In these allegations, he is alleging that the health authority and the variousphysicians involved in the PRC process exercised bad faith to destroy his career. It points to cases involving physicians in otherjurisdictions where allegations of bad faith were found. In Horne v. Queen Elizabeth II Health Sciences Centre, 2018 NSCA 20 aphysician successfully sued the health authority for defamation when the relationships among several physicians had deteriorated.

TheCourt of Appeal upheld the finding of the jury that the Defendant’s physicians had dealt with the Plaintiff with bad faith motivated byanimosity. [39] In Rosenhek v. Windsor Regional Hospital, 2010 ONCA 13 the plaintiff cardiologist sued when his hospital privileges wererevoked. He alleged bad faith and received a damage award. Both the trial court and the Court of Appeal agreed that there was evidenceof bad faith. From the decision of the Court of Appeal at paragraphs 35-36: 35. In

summary, there was ample evidence before the trial judge to support his finding that the Board acted in bad faith. That findingstands. 36. The Board, in bad faith, exercised its decision-making function for an ulterior purpose and not for the public good, incircumstances where it had to know that its conduct would likely injure the plaintiff.

We are satisfied that the tort of misfeasance in apublic office was made out . . . . [40] While it is the case that bad faith has been found in circumstances somewhat analogous to the current case, that fact alone doesnot support the Plaintiff’s contention that he was the victim of bad faith conduct. Paragraph 8 does not, in outlining the proceedings atthe meeting between the two men, allege circumstances which amount to fraud. If proven, evidence of the meeting could demonstrate aclumsy way to deal with a problem of competence that had arisen.

Encouraging someone to retire does not amount to fraud, especiallywhen it is in the context of receipt of allegations which questioned competence bearing on patient safety. The Statement of Claim doesnot refer to facts which allege bad faith or animosity on the part of the Defendants. [41] In addition, the Horne and the Rosenhek cases did not involve the tendering of evidence that was protected by a process similarto the PRC process in this case.

So they are not helpful to the Plaintiff in any measure, other than to demonstrate that there areoccasionally cases involving physicians who claim bad faith. [42] The Plaintiff submits two further allegations in the Statement of Claim which it says amount to fraud. Following itsdeliberations, the Peer Review Committee chaired by Dr. Boone did not submit its report in accordance with the Bylaws. It is allegedthat the failure to diligently finalize the report amounts to fraud.

It makes two allegations in support. [43] First, it alleges there was not full adherence to the provisions of the Bylaws related to the timing of submission of the report. The Bylaws of the Defendant provide, at Article 48(1), that the report of a Peer Review Committee shall be delivered within 10 businessdays of completion of its deliberations. The allegations in the Statement of Claim indicated significant delay in the submission of thereport.

The inclusion of communications between the parties in paragraph 26 seem to indicate that deliberations were likely completedsometime in late 2017 or early 2018. (See sub-paragraph 26(xxxv) in which counsel for Dr. Kathir was advised on December 12, 2017that the report would be delivered before the end of the year.) The Statement of Claim alleges that the report was not delivered untilJuly, 2018. [44] Second, that when the report was finally provided to counsel for Dr. Kathir on January 28, 2019, it did not contain thesignatures of the three members of the PRC.

Paragraphs 47 and 48 of the Statement of Claim assert that the submission of an unsigneddocument amounted to improper conduct analogous to fraud. [45] While these allegations point to irregularities in the PRC process, do they rise to the level of allegations of fraud? In theauthorities submitted by the Plaintiff, fraud seems to require something more. In Landerville v. Boucherville (Town), (SCC), [1978] 2 S.C.R. 801, the Town expropriated property of the Plaintiff. The argument against the expropriation was the actions ofthe Town which were found to be abusive and of bad faith.

Its conduct was sufficient to vitiate the substance of its expropriationdecision. The Supreme Court of Canada reversed the decision of the Court of Appeal, and restored the decision of the Superior Court ofQuebec. At paragraph 42, Justice Beetz said: 42. Fraud, dishonesty, bad faith, extortion and bribery form a special category of causes of nullity, which transcends all others.

Fraud unravels everything. The Court is careful not to find fraud unless it is distinctly pleaded and proved; but once it is proved, itvitiates judgments, contracts and all transactions whatsoever... Lord Denning in Lazarus Estates Ltd. v. Beasley, (1956) 1 Q.B. 702, at p. 712. [46] More recently, the Prince Edward Island Supreme Court discussed the elements of bad faith, including fraud.

In Johnston v.Prince Edward Island, (1995), (NL SC), 128 Nfld. & P.E.I.R. 1, 1995 CarswellPEI 4 (S.C. (T.D.)), anotherexpropriation case, the Plaintiffs argued that the Province exceeded its constitutional jurisdiction in enacting legislation to regulate andcontrol major retail development. It was argued that the Province exercised bad faith in legislating against the Plaintiffs’ development,in direct competition with the interests of the Province in respect of its extensive landholdings.

In discussing the concept of bad faith,Justice DesRoches said at paragraph 236: 236 It has been said the concept of bad faith eludes precise definition, but in relation to the exercise of statutory powers, it may be saidto comprise dishonesty (or fraud) and malice (see J.M. Evans, de Smith's Judicial Review of Administrative Action, 4th ed. (London:Stevens & Sons, 1980)). A helpful definition is found in Black's Law Dictionary, 6th ed. (St. Paul, Minn.: West Publishing Co., 1990): Bad faith.

The opposite of "good faith," generally implying or involving actual or constructive fraud, or a design to mislead or deceive another, or aneglect or refusal to fulfill some duty or some contractual obligation, not prompted by an honest mistake as to one's rights or duties, butby some interested or sinister motive.

Term "bad faith" is not simply bad judgment or negligence, but rather it implies the consciousdoing of a wrong because of dishonest purpose or moral obliquity; it is different from the negative idea of negligence in that itcontemplates a state of mind affirmatively operating with furtive design or ill will. Stath v. Williams, Ind. App., 367 N.E.2d 1120, 1124. [47] More recent cases would appear to expand the definition of fraud beyond direct falsehoods. The Supreme Court of Canadaadopted a different view on the duty of honesty in the performance of contracts in C.M. Callow Inc. v. Zollinger, 2020 SCC 45.

It isargued that dishonesty could include omission, and perhaps the law is not closed on this issue. In Zollinger, the Court said at paragraph91: 91. At the end of the day, whether or not a party has "knowingly misled" its counterparty is a highly fact-specific determination, andcan include lies, half-truths, omissions, and even silence, depending on the circumstances.

I stress that this list is not closed; it merelyexemplifies that dishonesty or misleading conduct is not confined to direct lies. … [48] The Plaintiff submitted this supports its argument that fraud was present in this case, and should justify an exception to theabsolute prohibition on disclosure. It argued that the law may evolve in this direction, and therefore it should not be excluded from thecourt. It seeks an opportunity to prove that fraud was present, and that, in the words of Lord Denning in Lazarus Estates Ltd. v.

Beasley,[1956] 1 Q.B. 702 (CA) (UK), “fraud unravels everything”. [49] As the Supreme Court pointed out in Zollinger, determining the existence of fraud or dishonesty is highly fact-specific. In allof the cases canvassed, the allegations of fraud were quite specific. Any discussion of the existence of fraud arises in connection withconcepts like “dishonesty, bad faith, extortion and bribery” as used in the Landerville case. In order to argue that the conduct of theDefendants amounted to fraud, allegations of animosity, maliciousness or something analogous, would be required.

The allegations inthe Statement of Claim do not rise to that level. At worse, they may be evidence of inefficient or sloppy management on the part of theadministration, but they do not amount to fraud. In the context of complaints touching on competency of a physician, none of theallegations in the Statement of Claim in my view amount to fraud, or even something analogous to fraud. [50] As a consequence, I find nothing in the Statement of Claim that would raise a suspicion of fraud, dishonesty or maliciousconduct. Would the Presence of Fraud Negate

Section 8.1 of the Evidence Act? [51] Even though I have found that the Statement of Claim does not contain allegations that could amount to fraud, I will, in anyevent, address the issue of whether the presence of fraud could negate the protections afforded by

section 8.1 of the Evidence Act. [52] This analysis will require an examination of authorities which consider the extent of the protection. Peer review committees ina medical or hospital context have attracted significant special status in recent years through legislation similar to

section 8.1. This is toenable a free examination of allegations against hospital staff, including physicians, which bear on patient safety. [53] The Plaintiff takes the view, based on a strong line of cases dealing with arbitrary or malicious conduct, that the presence offraud should nullify any such protection. As previously noted, the oft-quoted statement of Lord Denning in the Lazarus case bears onthis issue – that “fraud unravels everything”.

The Defendants accept that the presence of fraud may give rise to significantconsequences, but it does not make the inadmissible, admissible. [54] In respect of the exercise of authority by a public body, the Plaintiff cites Roncarelli v. Duplessis, (SCC),[1959] S.C.R. 121, in which the Supreme Court of Canada made a strong statement about the use of statutory powers by the executivewhere fraud is present. At paragraph 41 Justice Rand said: 41. In public regulation of this sort there is no such thing as absolute and untrammelled "discretion", that is that action can be taken on

any ground or for any reason that can be suggested to the mind of the administrator; no legislative Act can, without express language, betaken to contemplate an unlimited arbitrary power exercisable for any purpose, however capricious or irrelevant, regardless of the natureor purpose of the statute. Fraud and corruption in the Commission may not be mentioned in such statutes but they are always implied asexceptions.

"Discretion" necessarily implies good faith in discharging public duty; there is always a perspective within which a statute isintended to operate; and any clear departure from its lines or objects is just as objectionable as fraud or corruption. Could an applicant berefused a permit because he had been born in another province, or because of the colour of his hair?

The ordinary language of thelegislature cannot be so distorted. [55] In the Roncarelli case, the Plaintiff, a member of the Jehovah’s Witnesses faith, was denied a licence for the sale of liquor inhis restaurant based, apparently, on factors which had nothing to do with the policies behind the issuance of the licences. It is a well-known authority for the premise that arbitrary action by the executive will not be tolerated. The Plaintiff in this case cites Roncarelli assupporting his argument that the protections under

section 8.1 of the Evidence Act may not be used to mask arbitrary action. [56] A recent articulation of the policy behind this protection is found in the Ontario Court of Appeal case of F. (M.) v. Sutherland(2000), (ON CA), 188 D.L.R. (4th) 296, 2000 CarswellOnt 2301 (C.A.). The case is authority for the proposition thatthe protection afforded Peer Review Committees will withstand even fraud, or in the Sutherland case, allegations of sexual assault.

Inthat case, the Court found that allegations which arose from a professional discipline proceeding against a physician were inadmissible ina civil action for sexual assault by a former patient. [57] The court said that notwithstanding the allegations of sexual abuse, documents prepared for analogous proceedings are alwaysinadmissible in civil proceedings. Justice Laskin wrote for the majority. He described the nature of the exception to the rule which wassought by the Plaintiff: 26. Dr. S. wants to rely on Ms.

F.'s complaint and recantation to support his defence in the civil action that the settlement wasobtained by fraud. He submits that s. 36(3) would apply in this case only if Ms. F.'s complaint were filed in good faith. He argues that s.36(3) does not apply when allegations in a document are made fraudulently or in bad faith. 27. The wording of s. 36(3) contains no exception for fraud or bad faith. To accept Dr. S.'s argument would require the court toqualify the ordinary meaning of s. 36(3), to read words into the

section to limit its application. I reject this argument. 28. A basic principle of statutory

interpretation is that the court should adopt the ordinary meaning of a legislative provision absent agood reason to reject it.

The ordinary meaning is presumed to be the intended or most appropriate meaning unless the context, or thepurpose and scheme of the legislation, or the consequences of adopting the ordinary meaning suggest otherwise. … [58] Justice Laskin went on to describe the nature of the policy behind the enactment, at paragraph 30: 30 Ensuring that documents prepared for College proceedings are always inadmissible in civil proceedings is especially important incases, like this one, of alleged sexual abuse.

Indeed, a fraud or bad faith exception to the application of s. 36(3) would be inconsistentwith s. 1.1 of the Health Professions Procedural Code.

Section 1.1 of the Code provides that "[t]he purpose of the provisions of this Codewith respect to sexual abuse of patients by members is to encourage the reporting of such abuse ..." Without the absolute protection givenby s. 36(3) patients might be discouraged from, not encouraged to, report complaints of sexual abuse. Gans J. made the same point in B.(J.L.) v. Dr. B. (E.J.) (1997), 13 C.P.C. (4th) 206 (Ont. Gen.

Div.) at 209: The Code is designed to encourage the reporting of alleged acts of sexual abuse (s. 1.1), to provide assistance to those subjected to thesame, and to eradicate this conduct on the part of the profession.

If the proceedings are not clothed with an aura of confidentialitythroughout, even if terminated before a hearing and ultimate decision, in my view, the underlying policy of the Code would be thwarted. [emphasis added] [59] The Sutherland case emphasizes that there is an over-riding public policy interest in the reporting of incidents for peer reviewin a medical context, and to permit free and frank examination of such incidents in the context of quality assurance in healthadministration. The legislature has given a clear direction to respect the confidentiality of these processes.

There is no legislatedexception for fraud, or conduct analogous to fraud. The importance of protecting the sanctity of the Peer Review processes militatesagainst any relaxing of the rule, even for fraud. [60] The Plaintiff submitted that this case was analogous to several other cases in which a court permitted reports to be disclosed. InEastern Regional Integrated Health Authority v. Commission of Inquiry on Hormone Receptor Testing, 2008 NLTD 27 (the “HormoneReceptor case”) Justice Dymond found that the protections in

section 8.1 did not apply. In that case, a commission constituted under thePublic Inquiries Act, 2006, S.N.L. 2006, c. P-38.1 sought production of documents prepared by external reviewers in relation tolaboratory testing of cancer patients. [61] However, Justice Dymond specifically found that the reports were not prepared for a process analogous to the PRC. He said,at paragraph 87: 87. … The situation before the Court does not appear to fit within that type of committee report. In this case one has a wholedepartment being investigated. No one individual is singled out for review.

Everything in the IHC Lab is being looked at. No one ispointing the finger at any one individual, so it certainly would not fit into a Peer Review as set out by the Policies that Eastern Healthwere following and had adopted through the Health Care Corporation of St. John's back in 2004. [62] Because he determined that the reports were prepared for a process that was not similar to the PRC in this case, he found that

there was, therefore, no protection afforded by

section 8.1 . So there was no need to consider whether there should be an exception to the general rule that such proceedings were protected. [ 63 ] The Plaintiff cited several cases where it argued that actions grounded in bad faith were able to proceed. In the Horne case, bad faith was the basis for a claim for damages on the part of a physician. However, in that case, there was no process analogous to the PRC that would justify confidentiality. [ 64 ] In Rosenhek the Plaintiff cardiologist sued when his hospital privileges were revoked. He alleged bad faith and received a damage award.

Both the trial court and the Court of Appeal agreed that there was evidence of bad faith. From the decision of the Court of Appeal at paragraphs 35-36: 35. In

summary, there was ample evidence before the trial judge to support his finding that the Board acted in bad faith. That finding stands. 36. The Board, in bad faith, exercised its decision-making function for an ulterior purpose and not for the public good, in circumstances where it had to know that its conduct would likely injure the plaintiff. We are satisfied that the tort of misfeasance in a public office was made out . . . . [ 65 ] However, like the Horne case, this is not helpful to the Plaintiff’s argument.

There was no contest in either case between the admissibility of evidence of bad faith and the confidentiality afforded proceedings of a committee analogous to the PRC. [ 66 ] Finally, the Plaintiff referred back to the Sutherland case, where Justice Borins wrote a dissenting opinion. He said, at paragraph 89: 89. This submission suggests that there are two conflicting or competing principles of fundamental justice in this appeal that require definition. The first is the right of Dr. S. to make full answer and defence to Ms. F.'s claim. The second is the limited right to privacy provided to Ms. F. by s. 36(3).

It seems to me that the right to defend a civil action should include the right of access to evidence without which the search for truth inherent in the trial process would be frustrated. Public interest in the administration of justice is promoted through full access of litigants to relevant information.

The right to defend is implicated where, as in this case, information contained in a document has potential probative value that is very high and its production is necessary in the interests of justice, and where the interests of justice would outweigh any prejudice that would result if s. 36(3) were found not to apply. … [ 67 ] Justice Borins has articulated very well the competing interests at play in a contest between the right of a litigant to have access to probative evidence, and the policy requiring confidentiality of proceedings analogous to a PRC.

However, it remains that the majority decision was not appealed, and has never been rejected or overruled in Ontario or any other province. Accordingly, it is the most complete statement of the law presented to this court respecting the near-absolute protection afforded these committees. [ 68 ] I am satisfied that even where fraud was clearly made out, there is no authority for an exception to the protection contained in

section 8.1 of the Evidence Act . If, as in Sutherland an allegation of fraud arising from sexual assault was not justification for an exception, then in this case, where the Statement of Claim has made allegations which fall short of fraud, no exception is justified. [ 69 ] There is a common sense foundation to this approach. If the protection could be defeated merely by allegations amounting to fraud, then the direction of the legislature could not be preserved.

The requirement to release the information so that it could be admissible in a civil action would expose the PRC process to a disclosure that is not contemplated under the legislation, even if there was no foundation to the allegations of fraud. [ 70 ] In my view, in the interests of following the direction of the legislature that such committees are to be protected, a prohibition on disclosure is required even for fraud, without legislated authority. I have found above that there are no allegations analogous to fraud contained in the Statement of Claim.

Even if fraud could be found in the pleadings, the evidence associated with the Peer Review Committee is inadmissible, in accordance with the direction contained in

section 8.1 . Strike out in whole or in part? [ 71 ] The statement of Claim makes a number of allegations which arose before the commencement of the PRC process. Those paragraphs enumerated in the prayer for relief set out in the Defendants’ application demonstrate a number of steps taken before the PRC was formally struck. It is argued that these allegations should evade the protection of

section 8.1 and be permitted to stand. [ 72 ] However, the PRC, of necessity, would have to consider matters which arose before it commenced its work. In the Nagase case the British Columbia Court of Appeal made it clear that the initiating phase of the process was covered by the confidentiality protection as well as the more formal stage.

This is noted at paragraph 62 of the decision, reproduced above. [ 73 ] The Defendant also argues that even if I permit some portions of the Statement of Claim to stand, the remaining provisions would not disclose a reasonable cause of action without reference to the PRC process. As a consequence, it submits that the entire document should be struck. [ 74 ] Pleadings that rely on inadmissible facts or evidence should be struck. In the Sutherland case, Justice Laskin summarized the basis for this proposition at paragraphs 40 and 43: 40 . . .

If a paragraph in a party's pleading pleads facts that cannot be proved at trial or pleads documents that cannot be admitted at trial, that paragraph may be struck out on a motion.

. . . . 43 Rule 25.11 permits the court to strike out any part of a pleading that may prejudice or delay the fair trial of an action. A pleading of documents that are inadmissible at trial will prejudice or delay the fair trial of the action. The pleading is irrelevant to the action. [ 75 ] In this case, the Defendant has argued that the Plaintiff is unable to prove any of the allegations in the Statement of Claim without reference to inadmissible evidence. It has referred specifically to a number of provisions of the Statement of Claim that it says rest on information prepared for, or presented to, the PRC.

It has, however, summed up its argument by reference to paragraphs 54 and 55 of the Statement of Claim. They read as follows: 54. Western Health through its officials and agents committed the tort of misfeasance in public office by exercising statutory authority or prerogative power, in the exercise of which they as a public officer owed a duty of care to Dr.

Kathir, and by making wrongful and unlawful decisions and associated refusals with knowledge or with reckless indifference or with willful blindness that the said decisions and associated refusals were wrongful and unlawful by reason of being beyond their legal powers or by reason of the said wrongful and unlawful decisions and associated refusals knowingly being made without lawful authority or being made with reckless indifference or with willful blindness to the said decisions and associated refusals being made without legal authority and/or based on irrelevant considerations, and with knowledge or with reckless indifference or with willful blindness that Dr.

Kathir would probably be harmed by the said decisions and associated refusals. Western Health’s commission of the tort of misfeasance in public office caused Dr. Kathir to suffer damages, including harm to his professional reputation and loss of income. Western Health is vicariously liable to Dr. Kathir for the aforesaid commission of the tort of misfeasance in public office. 55. Dr. Boone committed the tort of misfeasance in public office by exercising statutory authority or prerogative power, in the exercise of which he as a public officer owed a duty of care to Dr.

Kathir, and by making wrongful and unlawful decisions and associated refusals with knowledge or with reckless indifference or with willful blindness that the said decisions and associated refusals were wrongful and unlawful by reason of being beyond his legal powers or by reason of the said wrongful and unlawful decisions and associated refusals knowingly being made without lawful authority or being made with reckless indifference or with willful blindness to the said decisions and associated refusals being made without legal authority and/or based on irrelevant considerations, and with knowledge or with reckless indifference or with willful blindness that Dr.

Kathir would probably be harmed by the said decisions and associated refusals. Dr. Boone’s commission of the tort of misfeasance in public office caused Dr. Kathir to suffer damages, including harm to his professional reputation and loss of income. [ 76 ] These paragraphs represent the core claims of the Statement of Claim: that Dr. Boone committed a tort; and that he and Western Health are either directly or vicariously liable for the consequences of that tort.

I agree with the Defendants, that nothing in these paragraphs, or anything else in the Statement of Claim alleging wrongdoing, can be proven except by presenting evidence which is covered by

section 8.1 of the Evidence Act . Since a Statement of Claim based on inadmissible evidence cannot stand, the entire claim will be struck out.

Summary [ 77 ] This application required me to address several issues raised by the parties. I was satisfied that Rule 14.24 was an appropriate mechanism to decide admissibility at this stage, and its impact on the entire action. This was not in dispute. [ 78 ] I decided that the Plaintiff should not be granted leave to cross-examine the deponents on their affidavits. This was disputed, but I was satisfied that such examination would not be appropriate given the lack of disagreement with the matters contained in the affidavits. [ 79 ] I decided that

section 8.1 of the Evidence Act was applicable to this case. This was not in dispute. The main issue in this matter was whether there could be an exception to the protection set out in

section 8.1 for fraud or something analogous to fraud. [ 80 ] The Statement of Claim contained allegations which the Plaintiff argued amounted to fraud or something analogous to fraud. A review of the document found that the allegations did not rise to the level of fraud. [ 81 ] Even if fraud had been present, I found nothing in the authorities submitted which would have permitted me to find that there was an exception for fraud. Other than a dissent in the Sutherland case, not one authority submitted would have found an exception to the protections afforded by

section 8.1 . [ 82 ] Finally, having found that the proceedings of the PRC were inadmissible in this action, the only question remaining was whether the Statement of Claim should be struck in whole or in part. I agreed with the Defendants, that matters which arose before the PRC was formally commenced, but were properly a part of the initiating phase of the process, were covered by the protection. I was satisfied that striking parts of the Statement of claim covered by

section 8.1 would leave no cause of action remaining. Therefore the entire Statement of Claim is struck and the action is dismissed. Disposition [ 83 ] The Application of the Defendants to strike the Statement of Claim is allowed. The action is therefore dismissed. [ 84 ] As costs follow the cause, the Defendants shall have their costs on Column 3 of the Scale of Costs set out in in the Appendix to Rule 55 of the Rules of the Supreme Court, 1986, S.N.L.1986, c. 42 Sch. D .

_____________________________ Alphonsus E. Faour Justice