



COURT OF APPEAL FOR ONTARIO

CITATION:
Pouget v. Saint
    Elizabeth Health Care, 2012 ONCA 461

DATE: 20120629

DOCKET: C53714

Feldman, MacPherson and Sharpe JJ.A.

BETWEEN

Julie Pouget

Appellant

and

Saint Elizabeth Health Care and Judy Davidson

Respondents

Paul J. Pape, for the appellant

Christopher M. Andree, for the respondents

Heard: March 5, 2012

On appeal from the judgment of
    Justice Terrence L.J. Patterson of the Superior Court of Justice, dated April
    13, 2011, with reasons reported at 2011 ONSC 1013.

Feldman
    J.A.:

Introduction

[1]

The appellant, Julie Pouget, was fired from her job as a nurse by the
    respondent, Saint Elizabeth Health Care (SEHC) in March 2003. Days later,
    SEHC reported the termination to the Ontario College of Nurses (the College),
    as it was obliged to do under the
Regulated Health Professions Act, 1991
,
    S.O. 1991, c. 18 (the Act).  Although a discipline proceeding was instituted
    by the College, ultimately no evidence was offered. In November 2008, more than
    five and a half years after the College received the complaint about Pouget,
    all of the charges against her were dismissed.

[2]

In 2009, Pouget issued a statement of claim against SEHC and her former
    manager, the respondent Judy Davidson. The action was principally styled as one
    for wrongful dismissal but Pouget also pleaded several claims alleging bad
    faith, including: malicious prosecution; negligent investigation; breach of
    fiduciary duty; and intentional infliction of mental distress. This second
    category of claims arose directly from SEHCs report to the College and the
    damages Pouget claims to have suffered in the resulting investigation and
    discipline proceedings.

[3]

The respondents moved before pleading to strike all of Pougets claims
    except the claim for wrongful dismissal. They argued that none of the bad
    faith claims could be advanced because all the information needed to prove
    them was privileged and inadmissible under s. 36(3) of the Act.   That section
    prohibits any report, document or thing prepared for or statement given in a
    discipline proceeding from being used in a civil proceeding. The motion judge
    agreed with the respondents and struck all of the claims except the claim for
    wrongful dismissal. He also dismissed the action in its entirety against the
    respondent Davidson.

Facts

[4]

As this appeal arises from a pleadings motion, the facts are taken from
    the statement of claim and the motion judges reasons.

[5]

Pouget became a registered nurse in 1997 and was hired by SEHC in 1998
    to provide home-based nursing care. In January 2003, Pouget was selected to
    become a member of SEHCs Web of Wisdom team for nurses with special
    expertise in wound care. This required additional training and travel on top of
    Pougets regular caseload.

[6]

On February 18, 2003, a client called SEHC to report that Pouget missed
    a scheduled visit the previous day. When SEHC followed up, the client also
    reported that Pouget had smelled strongly of alcohol on a previous visit.
    Another client apparently reported a missed visit on February 19, 2003. On
    Friday, February 21, Pougets father called her manager, Davidson, to advise
    that Pouget had suffered an emotional breakdown and to ask for a meeting to
    discuss the situation. In the course of arranging for Pougets clients to be
    seen by other nurses, Davidson determined that an investigation was required
    involving contacting all of Pougets clients.

[7]

Davidson met with Pouget and her father on Monday, February 24. Pouget
    confirmed that she was having mental health issues but denied any professional
    misconduct. She was put on paid then unpaid leave. Pouget was referred to a
    psychologist as part of SEHCs employee assistance program and was scheduled to
    either return to work or provide a status report on March 14. In her statement
    of claim, Pouget maintains that she did not know she was required to provide a
    doctors note clearing her to resume working at this time, but that she
    obtained such a note on March 19 and promptly informed Davidson.

[8]

On March 25, 2003, Pouget received a letter from Davidson advising her
    that she was terminated due to frustration of contract. Following the
    termination, Davidson continued her investigation.

[9]

On April 9, 2003, Davidson submitted a report to the College pursuant to
    s. 85.5(1) of the
Health Professions Procedural Code
, Schedule 2 to the Act
(the Code),
    which requires employers of regulated health professionals to inform the
    Registrar when an employee is terminated due to professional misconduct,
    incompetence or incapacity. That section further provides that notice of the
    dismissal to the Registrar must be in a written report setting out the
    reasons for termination.

[10]

After
    meeting with College investigators, Davidson prepared a multi-count complaint
    against Pouget involving approximately 15 clients and alleging missed visits,
    billing irregularities, improper befriending of clients, alcohol dependency and
    improper financial dealings with clients. The College eventually withdrew some
    of the charges in June 2006 and the rest on the eve of the hearing in November
    2008. Four months later, Pouget brought her claim against SEHC and Davidson.

The Motion to Strike

[11]

SEHC
    and Davidson moved to strike all of Pougets claims except the one for wrongful
    dismissal. The motion judge granted the motion and dismissed the claim against
    Davidson in its entirety. He also dismissed Pougets motion to add certain
    parties (all SEHC employees) because the applicable limitation period had
    expired.

[12]

The
    motion judge based his analysis and conclusion on s. 36(3) of the Act, which
    provides:

No record of a proceeding under this Act, a health profession
    Act or the
Drug and Pharmacies Regulation Act
, no report, document or thing
    prepared for or statement given at such a proceeding and no order or decision
    made in such a proceeding is admissible in a civil proceeding other than a
    proceeding under this Act, a health profession Act or the
Drug and
    Pharmacies Regulation Act
or a proceeding relating to an order under
    section 11.1 or 11.2 of the
Ontario Drug Benefit Act.

[13]

The
    motion judge reasoned that because this provision prevented Pouget from proving
    any allegations involving the report to the College and the resulting fallout,
    those allegations must be struck out at the pleading stage. This encompassed
    all her bad faith claims against SEHC.

[14]

He
    also accepted the respondents position that the Code, which is a schedule
    under the Act, provides a complete code to Pougets claims except for wrongful
    dismissal. In particular, he noted that SEHC was mandated under s. 85.5(1)
    of the Code to report Pougets termination, and s. 85.6 of the Code provides
    immunity for reports made in good faith: No action or other proceeding shall
    be instituted against a person for filing a report in good faith under section
    85.1, 85.2 or 85.5. The motion judge observed that under s. 26(4) of the Code,
    a panel can choose not to proceed with a complaint if it is found to be
    frivolous, vexatious or made in bad faith or otherwise an abuse of process.
    Section 53 of the Code authorizes the panel to order the College to pay all or
    part of a members legal costs if it is of the opinion that the commencement of
    proceedings was unwarranted.

[15]

The
    motion judge explained, at paras. 41-42:

The allegation before the court is that SEHC did an incomplete
    investigation in preparing the report to the [College] and that they withheld
    information that was contained in their business records that would have
    exonerated Pouget.

This begs the question as to who has the responsibility for
    investigating any allegations. It appears to me that the provisions of the
    legislation clearly provide the investigatory role and the decision to proceed
    or not with the disciplinary procedures to be entirely in the hands of the
    [College].

[16]

The
    motion judge concluded that only the wrongful dismissal action was properly before
    the court.

[17]

Notably,
    he further held, at para. 44, that all business records, save and except as
    they pertain to the wrongful dismissal action, are not evidence that may be
    admitted pursuant to s. 36(3) of the Code.

The Appeal

[18]

Pouget
    appeals, seeking leave to amend her pleadings and asking this court to
    reinstate the action against Davidson. In oral argument, counsel advised that
    Pouget wished to abandon her appeal seeking to add parties as defendants.

[19]

On
    appeal, the parties agree on a few basic premises. First, Pouget should be
    allowed to proceed with her wrongful dismissal claim. Second, SEHCs written
    report to the College, submitted on April 9, 2003 pursuant to s. 85.5(1) of the
    Code, is inadmissible and cannot form part of Pougets claim. Third, s. 85.6 of
    the Code immunizes a person from being sued for filing a report in good faith
    under s. 85.5. Counsel did not agree on how to reconcile this provision with
    the documentary immunity from production accorded under s. 36(3).

[20]

The
    main point of contention between the parties boils down to whether or not
    Pouget can rely on documents, principally business records, that were created
    before SEHC made its report to the College, but that were subsequently referred
    to in the report or provided as part of the complaint.

[21]

Counsel
    for Pouget submits that any documents generated before Pougets dismissal on
    March 25, 2003  including activity logs and billing records she says will
    exonerate her of any wrongdoing  are not covered by s. 36(3) because they
    existed independently of any report to the College and were clearly not
    prepared for that purpose. He acknowledges that documents created between
    Pougets termination on March 25 and SEHCs report to the College on April 10
    would be inadmissible if they were created for the purpose of the report. He
    submits that the characterization of these documents is a question of fact that
    should be left to the trial judge. As noted above, counsel for Pouget accepts
    that the report itself and any information gathered in the resulting
    investigation are inadmissible under s. 36(3).

[22]

Counsel
    for SEHC submits that any document referred to in the report or appended to the
    report, as well as any information that touches on the substance of the report,
    is privileged under s. 36(3). This includes information generated before the
    report was contemplated if SEHC ultimately relied on that information in its
    report. In oral argument, counsel for SEHC took the position that documents
    created prior to dismissal would be admissible in a regular wrongful dismissal
    claim, but that those same documents would be inadmissible if the termination
    was accompanied by a report to the College.

Analysis

(a)     The Case Law

[23]

The
    interpretation and application of s. 36(3) has been discussed in three recent
    decisions of this court:
M.F. v. Sutherland
(2000), 188 D.L.R. (4th)
    296;
Task Specific Rehabilitation Inc. v. Steinecke
(2004), 244 D.L.R.
    (4th) 414; and
Ontario v. Lipsitz
, 2011 ONCA 466, 281 O.A.C. 67. Immunity
    provisions similar to s. 85.6 of the Code were discussed in these cases and in
    the Supreme Court of Canadas decision in
Finney v. Barreau du Quebec
,
    2004 SCC 36, [2004] S.C.R. 17. I will consider each in turn.

[24]

In
Sutherland
, Laskin J.A. writing for the majority explained, at para.
    36, that the purpose of s. 36(3) is to prevent not just patients but all participants
    in College proceedings from using documents generated for those proceedings in
    civil proceedings, in short to keep the two proceedings separate.  He held, at
    para. 40, that where a pleading pleads facts that cannot be proved at trial
    because it relies on documents that are inadmissible under s. 36(3), the
    pleading must be struck out under rule 25.11. He also held that s. 38 of the
    Act, which immunizes College administrators from liability for acts done in
    good faith does not connote a bad faith exception to the application of  s.
    36(3). In other words, s. 36(3) contains no exception for investigations done
    fraudulently or in bad faith.

[25]

However,
    Laskin J.A. went on to observe, at para. 45, that since s. 36(3) refers only to
    a report, document or thing, it does not prevent a party from pleading and
    proving the fact that a complaint was made in the first place.

[26]

In
Task
,

an occupational therapy clinic sued a prosecutor from the
    College of Occupational Therapists of Ontario after the prosecutor successfully
    negotiated a plea deal with one of the clinics former employees. As part of
    that deal, the employee sent letters to all her former clients containing
    information that reflected poorly on the clinic. The clinic alleged it lost
    more than 50% of its business as a result.

[27]

In
    bringing its action against the prosecutor, the clinic tried to reprise the
    argument made in
Sutherland
, namely, that s. 36(3) of the Act contains
    an implied exception where the prosecution by the College was done in bad faith.
    The plaintiff in
Task

argued that the majority in
Sutherland
had not appreciated that because s. 38 of the Act allows administrators of the
    Act to be held accountable for actions taken in bad faith, s. 36(3) must be
    interpreted to allow such an action to be proved using the documents prepared
    for the proceedings. The court in
Task
rejected that argument, holding
    that the issue had been clearly raised and decided in
Sutherland.


[28]

The
    court also referred to the Supreme Courts decision in
Finney
, which was
    released after the oral argument in
Task. Finney
involved an immunity provision
    in a Quebec statute for those involved in the discipline process for Quebec
    lawyers, which like s. 38 of the Act, grants immunity to regulatory
    investigators and prosecutors for acts done in good faith. The case discussed
    the scope of the concept of bad faith in the context of the section. As the
    case did not involve issues of proof or a section comparable to s. 36(3), the
    Court of Appeal in
Task
did not find
Finney
of assistance.

[29]

However,
    for the purpose of this case and the interpretation of s. 85.6 of the Code,
Finney
makes it clear that the good faith limitation on immunity is to be given effect
    by the courts. It follows, therefore, that where a claim asserts bad faith,
as
    long as it can be proved without running afoul of
s. 36(3)
, such a
    claim is not to be struck out at the pleading stage.

[30]

The
    third and most recent case of this court to discuss the scope and effect of s.
    36(3) of the Act is
Lipsitz
.
In that case, Lipsitz sued both
    Crown employees and employees of the College of Physicians and Surgeons for
    their role in inspecting and assessing his sleep disorder clinics under s.
    75(a) of the Code. In response, the College argued that s. 36(3) made the claim
    regarding its investigation of Lipsitz unprovable at trial. The motion judge
    agreed and struck out that portion of Lipsitzs claim.

[31]

In
    dismissing Lipsitzs appeal on this point, this court again referred to the
Sutherland
decision for two propositions. First, a plea of facts that cannot be proved at
    trial should be struck out under rule 25.11 of the
Rules of Civil Procedure
.
    Second, although the documents referred to in s. 36(3) are inadmissible in a
    civil proceeding, the fact of a complaint or of the commencement of an
    investigative proceeding may be proved at trial.

[32]

The
Lipsitz
case also briefly considered another immunity provision with a
    good faith exception, in that case, s. 38(1) of the
Independent Health
    Facilities Act
, R.S.O. 1990, c. I. 3. That section grants immunity to
    administrators under that statute for acts or omissions in the performance or
    exercise in good faith of any duty, function, power or authority under the
    Act. The court in
Lipsitz

acknowledged, at para. 61, that the
    immunity provided by this section is limited: Thus, acts or omissions are only
    protected under s. 38(1) if the person or entity acted in good faith.

(b)     Application of the case law to
    this case

[33]

Applying
    these principles to this case, Pouget is not precluded from asserting claims against
    SEHC based on bad faith, which has been pleaded, as long as those claims can be
    proved without using any document referred to in s. 36(3). The fact of a
    complaint and of an investigation can be proved at trial.

[34]

The
    case law reviewed above, including
Sutherland
, does not support the
    respondents position that documents created in the normal course of business
    automatically become inadmissible under s. 36(3) if those documents are later
    referenced in, or appended to, a report to the College.  Such an interpretation
    of s. 36(3) is not supported by the clear language of the provision, which
    speaks of a report, document or thing
prepared for
or a statement
given
    at
a proceeding.  It would also yield the absurd result that while Pouget
    has a claim for wrongful dismissal, she would have no meaningful way to prove
    that claim if documents such as her appointment schedule and billing records
    for February 2003 became immune from production because they later formed part
    of the narrative of SEHCs report to the College.

[35]

The
    exclusion from evidence of the complaint will clearly pose a practical problem
    for Pougets bad faith claim. She will have to prove bad faith without being
    able to refer to the contents of the complaint itself except to the extent that
    the substance of the complaint can be inferred from the background documents.
    That, however, is a practical problem of proof and not a legal barrier that
    would justify dismissing the action at the pleading stage.

Remedy

[36]

In
    my view, the appropriate remedy on this appeal, as requested by the appellants
    counsel, is for the appellant to be granted leave to amend her claim in
    accordance with these reasons. Since she abandoned the portion of her appeal
    dealing with the addition of parties, I would dismiss that portion of the
    appeal.

[37]

The
    motion judge granted summary judgment dismissing the action against Davidson on
    the ground that her involvement in preparing the report and related
    involvement with the [College] is inadmissible (para. 55). As I have
    explained, the motion judge erred in ruling that documents predating SEHCs report
    to the College are protected under s. 36(3). These documents may relate not
    only to the wrongful dismissal claim, but also to the bad faith claims against
    Davidson. I would allow the appeal on this issue and reinstate the action
    against Davidson.

Conclusion

[38]

I
    would allow the appeal to the extent that the appellant is granted leave to
    amend her claim in compliance with the principles set out in these reasons. I
    would also allow her claim against Davidson to be reinstated, again in
    compliance with the principles I have set out above. I would dismiss the
    portion of the appeal seeking the addition of parties. As the appellant
    achieved partial success on the appeal, I would award partial costs of the
    appeal to the appellant fixed at $15,000 inclusive of disbursements and H.S.T.

Signed:           K. Feldman J.A.

I agree J. C.
    MacPherson J.A.

I agree Robert J.
    Sharpe J.A.

RELEASED:  KF JUNE 29, 2012


