



COURT OF APPEAL FOR ONTARIO

CITATION: Endean v. St. Joseph's General Hospital, 2019 ONCA
    181

DATE: 20190308

DOCKET: C63751

Rouleau, van Rensburg and Zarnett JJ.A.

BETWEEN

Paulette M. Endean, Frank William Endean and
    Debbie Endean

Plaintiffs (Appellants/

Respondents by way of cross-appeal)

and

St. Josephs General Hospital

Defendant (Respondent/

Appellant by way of cross-appeal)

AND BETWEEN

Janet Hearsey by her Litigation Guardian Leslie
    Hearsey and Leslie Hearsey

Plaintiffs (Appellants/

Respondents by way of cross-appeal)

and

St. Josephs General Hospital

Defendant (Respondent/

Appellant by way of cross-appeal)

AND BETWEEN

Stephen Karam, Estate Trustee of the Estate of Andrew
    Karam

Plaintiff (Appellant/

Respondent by way of cross-appeal)

and

St. Josephs General Hospital

Defendant (Respondent/

Appellant by way of cross-appeal)

AND BETWEEN

Sherry Lind, Gino Deamicis, Lorraine Lind by her
    Litigation Administrator Crystal Lind, Lauri Lind, Crystal Lind, Donald Deamicis
    and Daniel Deamicis

Plaintiffs (Appellants/

Respondents by way of cross-appeal)

and

St. Josephs General Hospital

Defendant (Respondent/

Appellant by way of cross-appeal)

Brian Moher and Monica Zamfir, for the appellants/respondents
    by way of cross-appeal

Stephen Wojciechowski and Dawne Latta, for the
    respondent/appellant by way of cross-appeal

Heard: January 9, 2019

On appeal from the judgments of Justice F. Bruce
    Fitzpatrick of the Superior Court of Justice, dated April 27, 2017, with
    reasons reported at 2017 ONSC 2632, and from the costs order, dated December 1,
    2017, with reasons reported at 2017 ONSC 7190.

Zarnett J.A.:

Introduction

[1]

The appellants Paulette Endean, Janet Hearsey, Andrew Karam and Sherry
    Lind each had surgery at the respondent St. Josephs General Hospital (the
    hospital) in the mid 1980s. Each was implanted with a Vitek Proplast Teflon
    Interpositional implant (the implant), a device designed to replace a
    meniscus inside the temporomandibular joint (TMJ). The TMJ is a complex load
    bearing joint located between the skull and jaw which is central to, among
    other things, a persons ability to talk, chew, swallow, and yawn.

[2]

The implant caused injury to each of these individuals. It delaminated
    inside the TMJ, leaving particulate residue which, over time, caused
    degenerative bone loss. All four individuals had perforations in their skull in
    the area of their TMJ.

[3]

In 1996 and 1997, the appellants commenced actions against the hospital
    and the oral surgeons who actually did the implant surgery and follow up care (the
    Endean, Karam, Lind, and Hearsey Actions). The hospital and the oral surgeons
    cross-claimed against one another in all four actions.

[4]

In 2013, the appellants reached settlements with the oral surgeons. A Pierringer
    Order was made in each action, which affected the way the actions would
    continue against the hospital. The Pierringer Orders dismissed the actions
    against the oral surgeons and the cross-claims between the hospital and the
    oral surgeons. They provided that each of the appellants claims are
    restricted such that [the appellants] will only claim those damages, if any,
    arising from the actions or omissions of the Defendant Hospital.

[5]

The Pierringer Orders required the statement of claim in each action to
    be amended to limit the claim against the hospital to its several liability or
    proportionate share of joint liability to the appellants. The appellants recovery
    would be limited to the damages, costs and interest attributable to the hospitals
    several liability, or proportionate share of joint liability, as may be proven
    at trial. And the Pierringer Orders required the appellants to acknowledge, in
    their amended pleadings, that the court at trial had the authority to
    adjudicate upon the apportionment of fault among all defendants who had been
    named in each action, i.e., the hospital and the oral surgeons. The Pierringer
    Orders made specific provision for the obtaining and use of evidence by and
    about the oral surgeons at a trial between the appellants and the hospital.

[6]

In 2016, the actions came to trial together. The parties agreed at the
    outset to bifurcate the trial, dealing first with the issue of liability.

[7]

The trial judge:

a)

Dismissed the Endean, Karam,
    and Lind Actions on the basis that each had been commenced beyond the two year
    limitation period in the
Public Hospitals Act
(the
PHA
)
,
R.S.O. 1980 c. 410, s.
    28 and R.S.O. 1990, c. P.40, s. 31;

b)

Held that the Hearsey Action
    was not barred by the
PHA
limitation period, because Ms. Hearsey had
    received a follow up treatment at the hospital within two years of the
    commencement of her action;

c)

Found that the hospital was
    negligent in acquiring the implants and the oral surgeons were negligent in
    failing to take due care when assessing the viability of the implant and in the
    manner they followed up with patients after becoming aware of problems. He apportioned
    fault between them as follows: 5% of the fault to the hospital, 20% of the
    fault to the oral surgeons. He also apportioned 50% of the fault to the
    manufacturer of the implant, Vitek Inc., for making a defective product, and
    25% of the fault to the distributor of the implant, Instrumentarium, who
    purchased it from the manufacturer and sold it to the hospital without due
    enquiry as to whether it was an approved product. Neither the manufacturer nor
    the distributor were ever parties to the actions and both were bankrupt;

d)

Granted judgment in the
    Hearsey Action against the hospital for 5% of the damages that were to be
    assessed in the second phase of the trial; and

e)

Granted costs in favour of
    the hospital in each of the Endean, Karam and Lind Actions.

[8]

The appellants appeal, raising the following grounds:

a)

The trial judge erred in
    dismissing the Endean, Karam and Lind Actions on the basis of the
PHA
limitation period. They raise two points under this issue. First, they say that
    the two year limitation period in the
PHA

did not apply, because the limitation period related only
    to actions for negligence in the admission, care, treatment or discharge of a
    patient. The trial judge, they argue, situated the negligence of the hospital
    in its purchase of the implant, which should have been subject to the six year
    limitation period in the former
Limitations Act
, R.S.O. 1990, c. L.15. Second,
    they argue that even if the
PHA
applied, the trial judge should have
    found that the limitation period was extended under the doctrine of fraudulent
    concealment.

b)

The trial judge erred in
    rejecting their argument that the hospital was liable for breaching a duty to
    recall patients once it was advised of problems with the implant. They say that
    if this theory of liability were accepted, it would affect the apportionment of
    liability and the limitation period.

c)

The trial judge erred in
    apportioning fault to the manufacturer and the distributor, and thus restricting
    recovery in the Hearsey Action (and the other actions if they were improperly
    dismissed) to only 5% of the damages to be assessed.

[9]

The hospital cross-appeals. It argues that the Hearsey Action should
    also have been dismissed on the basis of the
PHA
limitation period. What
    the trial judge relied upon to bring the action within time was not treatment,
    but simply a diagnostic test. Second, it argues that the trial judge erred in
    failing to include HST in the cost awards made in its favour in the Endean,
    Lind, and Karam Actions.

[10]

For
    the reasons that follow I would allow the appeal in part. I would not disturb
    the trial judges finding that the Endean, Karam, and Lind Actions were barred
    by the
PHA
limitation period. In my view, the trial judge did not err in
    applying that limitation period or in rejecting the argument of fraudulent
    concealment. Nor did the trial judge err in rejecting the argument that the hospital
    breached a duty to recall. The trial judge did err, however, in apportioning
    fault to the manufacturer and distributor and reducing the recovery of the
    appellants in the Hearsey Action as a result of that apportionment. I would
    vary the judgment in the Hearsey action as described below.

[11]

I
    would dismiss the cross-appeal. Contrary to the assertions of the hospital, in
    the circumstances of this case Ms. Hearseys follow up appointment should not
    be ignored in determining when her treatment ceased and thus when the
PHA
limitation period commenced to run. Nor is there an error in principle in the
    trial judges award of costs.

Analysis

[12]

In light of the nature of the grounds of appeal
    the facts relevant to determining the issues (other than those in the outline
    above) are set out in relation to each issue discussed below.

(1)

The Limitation Period Issues

The Approach of
    the Trial Judge

[13]

Because
    of the dates the actions were commenced, the argument about limitation periods
    concerns provisions which are not currently in force but were at the relevant
    times.

[14]

The
PHA
limitation period applied by the trial judge provided as follows:

Any action against a hospital or any nurse or person employed
    therein for damages for injury caused by negligence in the admission, care,
    treatment or discharge of a patient shall be brought within two years after the
    patient is discharged from or ceases to receive treatment at the hospital and
    not afterwards.

(Between 1985 and 1990 this was s. 28 of the
PHA
,
    R.S.O. 1980, c. 410. From 1990 forward, this was s. 31 of the
PHA
,
    R.S.O. 1990, c. P.40. The limitation period provision was repealed in 2004, as
    a result of the enactment of the
Limitations Act,

2002
, S.O.
    2002, c. 24.)

[15]

The
    trial judge rejected the appellants argument the
PHA
limitation period
    is subject to a discoverability principle. Thus, it was irrelevant that the
    appellants had no idea anything was wrong with them until 1994 at the earliest
    and commenced their actions within two years of knowing the implant had failed
    and caused them damage. For the non-applicability of the discoverability
    principle to the
PHA
, the trial judge relied upon:
Von Cramm Estate
    v. Riverside Hospital of Ottawa
(1986), 32 D.L.R. (4th) 314, 17 O.A.C. 218
    (C.A.);
Hay v. Canadian Red Cross Society
,
[2004] O.J. No. 2887
    (S.C.); and
Purtell v. Royal Ottawa Hospital
, [2005] O.J. No. 2965
    (S.C.), affd 2007 ONCA 367, leave to appeal denied, 2007 S.C.C.A. No. 362.

[16]

In
Von Cramm
,
Cory J.A.
    (as he then was) made it clear that the discoverability principle did not apply
    to the
PHA
. He noted the harshness of applying a limitation period in a
    situation where, as was the case in
Von Cramm
and is the case here, a
    plaintiff could not have known or reasonably known of the negligence of the
    hospital until after any limitation period had expired. But that result was the
    product of the clear wording of the
PHA
. The limitation provision was enacted
    to protect public institutions. Any amelioration of the harshness of it
    expiring before a cause of action was discoverable was required to come from
    the Legislature, not the courts: see p. 318.

[17]

Although
Von Cramm
was decided before
Peixeiro v. Haberman
, [1997] 3
    S.C.R. 549,

in my view the trial judge was correct to find that the
    discoverability principle did not apply to the
PHA
.
Peixeiro
approved the application of the discoverability principle to limitation
    provisions which, properly interpreted, turned in some way on the injured
    persons knowledge for their commencement: see pp. 562-566. But the courts in
    both

Hay
and
Purtell

held that
Peixeiro
did not make the discoverability principle applicable to the
PHA
,
    because its limitation period runs from a fixed event unrelated to either the
    plaintiffs knowledge or the basis of the cause of action: see
Hay
, at
    paras. 14-16, and
Purtell
,
at paras. 36-37. In this court, the appellants did not challenge the conclusion
    that the discoverability principle was inapplicable to the
PHA
.

[18]

The
    trial judge then considered when a person ceases to receive care or
    treatment for the purpose of determining when the
PHA
limitation
    period commenced. The trial judge held that the appellants treatment or care
    ceased upon their being discharged on the last occasion each attended for a TMJ
    implant issue. He reasoned that where a later treatment in a hospital can be
    connected to the one about which negligence is alleged, the time limit runs
    from the date of the latest treatment, following
Fiorelli v. St. Marys
    General Hospital
, [1995] O.J. No. 631 (C.A.).

[19]

The
    trial judge made the following findings on the limitation issue:

a.

Ms. Lind received care and
    treatment from the hospital on June 17, 1985, June 5, 1986 and November 26,
    1991. This included the placement and removal of the implant, and the removal
    of certain debris from the TMJ that had been at the site of the implant.
    Although there was evidence that she had attended at the hospital on a number
    of occasions thereafter, the trial judge made a factual finding that these attendances
    related to other issues, not the implant or care or treatment of its effects.
    These findings are not challenged on appeal. Accordingly, the trial judge used
    November 26, 1991 as the date Ms. Lind ceased to receive care or treatment from
    the hospital, and thus as the date the
PHA
limitation period began to
    run. He held that her claim became statute barred on November 27, 1993. The
    Lind Action, commenced on August 20, 1996, was thus out of time.

b.

Ms. Endean attended the hospital
    only once, for her implant surgery, on October 8, 1985. The removal of the
    implant was done elsewhere and there were no other treatments at the hospital related
    to the implant or its effects. Accordingly, the trial judge held that October
    8, 1985 was the commencement of the
PHA
limitation period, and it
    expired on October 9, 1987. The Endean Action, commenced July 11, 1997, was
    thus out of time.

c.

Mr. Karam attended the hospital
    only once, for his implant surgery, on November 21, 1985. The removal of the
    implant was done elsewhere and there were no other treatments at the hospital
    related to the implant or its effects. The trial judge found that November 21,
    1985 was the commencement of the
PHA
limitation period, which expired on
    November 22, 1987. The Karam Action, commenced on March 14, 1997, was therefore
    out of time.

d.

Ms. Hearsey had her implant
    surgery on March 5, 1986, but attended the hospital for a follow up radiological
    procedure - a tomogram - on June 9, 1994. The trial judge found the tomogram
    was related to the failure of the implant, and thus was related to the original
    treatment she received in 1986. Although no negligence was alleged against the
    hospital for the way it conducted the tomogram, it was done as a result of the
    original implant and therefore was clearly connected to the negligence alleged.
    The trial judge held the tomogram was treatment, and therefore the
PHA
limitation
    period commenced on June 9, 1994 and did not expire until June 10, 1996. The
    Hearsey Action, commenced on March 21, 1996, was thus in time.

[20]

The
    trial judge considered and rejected the argument that the limitation period
    should be extended by operation of the doctrine of fraudulent concealment. He observed
    that the issue was raised late and not referred to in the appellants pleadings.
    But he went on to state that:

[M]ost importantly, I am not persuaded that
    the evidence at this trial has proven, or even suggested, that the Hospital was
    an unscrupulous defendant or that the acts or even failings of any of its
    employees or directors or agents came anywhere close to what any reasonable
    person could describe as constituting fraud or a fraudulent concealment.

The Limitation
    Period Appeal regarding the Endean, Karam and Lind Actions

[21]

The
    appellants attack the trial judges limitation period conclusions that led him
    to dismiss the Endean, Karam and Lind Actions on two bases.

[22]

First,
    they argue that the
PHA
limitation period does not apply to the wrong
    found to have been committed by the hospital; they contend it was not negligence
    in the care, treatment or discharge of the appellants. They argue that the
PHA
limitation period, a provision that restricts rights of action, must be
    strictly interpreted:
Fenton v. North York Hydro-Electric Commission

(
1996)
,
    29 O.R. (3d) 481, 92 O.A.C. 53 (C.A.), at pp. 11-12. The trial judge found the
    only negligence of the hospital was its decision to purchase the implants, at a
    time when they were not approved for sale or use in Canada, without enquiring
    whether they had received any such approval. For example, the trial judge
    stated I agree with the argument of counsel for the plaintiffs that a
    reasonable person would think maybe we should check to see if the device is
    approved before it was acquired. The appellants argue that if one gives the
PHA
a strict reading, the hospitals decision to purchase the implants was not
    negligence in the treatment or care of a patient, but negligence in a
    purchasing decision, made before the surgeries of the appellants were even
    contemplated. That negligence, they argue, would be subject to the limitation
    period in the former
Limitations Act
, and its overlay of
    discoverability.

[23]

The
    difficulty with this argument is that the negligence of the hospital in
    purchasing the implants was not actionable by any of the appellants on its own.
    It was only actionable because the implants were made available for use by oral
    surgeons for surgeries performed on Ms. Endean, Ms. Hearsey, Mr. Karam and Ms.
    Lind at the hospital. The appellants had a claim for negligence against the hospital
    only because each became a patient of the hospital, receiving treatment and
    care (that is, a surgical procedure), using devices that had been negligently
    acquired by the hospital for just such a use.

[24]

The
    trial judges findings are illustrative of the integral connection between the
    purchase of the implants, the appellants care and treatment, the appellants
    injuries and the negligence of the hospital. The trial judge found that:

Given that the device at issue would be placed
    in a persons body potentially for life and given that there was a government
    regulatory regime in place allowing or not allowing distribution of a device by
    manufacturers, failing to inquire about the use of the device is evidence of
    negligence.

And he found that the negligence in the purchase caused
    damage to the appellants exactly because [b]ut for the acquisition of the
    device, the oral surgeons could not have done the procedure, at least not at [the
    respondent] Hospital.

[25]

In
    my view, giving the
PHA
the strict reading contemplated by cases like
Fenton
does not alter the conclusion that the
PHA
limitation provision
    applies here. A negligent act by a hospital before a patient receives care or
    treatment, which becomes actionable only because it enables a treatment at the hospital
    that causes injury, is negligence in the care or treatment of the patient
    within the meaning of the
PHA
limitation provision.

[26]

Accordingly,
    I would not give effect to this ground of appeal.

[27]

Second,
    the appellants argue that the trial judge erred in rejecting their argument of
    fraudulent concealment. They point to the hospital having become aware of
    problems with the implants five years before the appellants. The trial judges error,
    they say, flowed from his having approached the issue as though what was
    required was conduct that was fraudulent in the common law sense.

[28]

I
    agree with the appellants that the doctrine of fraudulent concealment does not
    require common law fraud. As the Supreme Court of Canada said in
Guerin v. The
    Queen
, [1984] 2 S.C.R. 335, at p. 390:

[W]here there has been a fraudulent concealment of the
    existence of a cause of action, the limitation period will not start to run
    until the plaintiff discovers the fraud, or until the time when, with
    reasonable diligence, he ought to have discovered it. The fraudulent
    concealment necessary to toll or suspend the operation of the statute need not
    amount to deceit or common law fraud.

[29]

I
    also agree with the appellants that the doctrine of fraudulent concealment
    could apply to the
PHA
limitation period. In this courts decision in
Zeppa
    v. Woodbridge Heating & Air-Conditioning Ltd.
, 2019 ONCA 47, the
    majority held that the doctrine of fraudulent concealment has no room to
    operate where the provisions of the
Limitations Act, 2002
, which are
    subject to a codified discoverability test, apply: see para. 71. But, at para. 64,
    the majority did not question the applicability of the doctrine of fraudulent
    concealment to other statutes:

This court has held that the principle of fraudulent
    concealment is available in cases involving limitation periods contained in statutes
    other than the (
Limitations Act, 2002
) including: s. 38(3) of the
Trustee
    Act
, R.S.O. 1990, c. T.23:
Giroux Estate
;
Roulston v. McKenny
,
    2017 ONCA 9, 135 O.R. (3d) 632; the limitation period under the
Real
    Property Limitations Act
, R.S.O. 1990, c. L.15:
Anderson v. McWatt
,
    2015 ONSC 3784, at para. 77, appeal dismissed 2016 ONCA 553; and the limitation
    period created by s. 82(2) of the former
Employment Standards Act
,
    R.S.O. 1990, c. E.14:
Halloran v. Ontario (Employment Standards Act
    Referee)

(2002), 217 D.L.R. (4th) 327 (C.A.), at para. 35.

[30]

However,
    I disagree with the appellants that the doctrine applies in the circumstances
    of this case. In
Zeppa
, the majority adopted the following description
    of the doctrine at para. 62:

A succinct, but comprehensive, summary of the elements of the
    principle is found in the decision of Perell J. in
Colin v. Tan
, 2016
    ONSC 1187, 81 C.P.C. (7th) 130 at paras. 44-47:

Fraudulent concealment will suspend a limitation period
    until the plaintiff can reasonably discover his or her cause of action.

The constituent elements of fraudulent concealment are
    threefold: (1) the defendant and plaintiff have a special relationship with one
    another; (2) given the special or confidential nature of the relationship, the
    defendant's conduct is unconscionable; and (3) the defendant conceals the
    plaintiff's right of action either actively or the right of action is concealed
    by the manner of the wrongdoing.

Fraudulent concealment includes conduct that having regard
    to some special relationship between the parties) concerned is unconscionable.
For fraudulent concealment, the defendant must hide, secret,
    cloak, camouflage, disguise, cover-up the conduct or identity of the wrongdoing
.
    [Emphasis added.]

[31]

The
    trial judges findings of fact preclude any conclusion that the hospital was
    hiding, secreting, cloaking, camouflaging, disguising or covering up anything.
    The appellants point to the hospitals receipt of a notification in May, 1990
    from the Emergency Care Research Institute (ECRI) that indicated that the
    implant can contribute to progressive bone degeneration, should not be used
    anymore, existing stocks of the implant should be returned to the manufacturer,
    and persons who had received the implant required monitoring and follow up.
    They also point to the hospital, in August of 1990, having received
    correspondence from the distributor recalling the implants and asking for the names
    of oral surgeons who had patients with the implants, so that safety information
    could be provided by the distributor to the oral surgeons.

[32]

The
    facts found by the trial judge, which are referred to in the section below on
    the duty to recall, show that the hospital contacted the oral surgeons to
    ensure they knew about the issue with the implants. The hospital was advised
    that the oral surgeons were aware of the issue, and the hospital had the
    reasonable expectation that any follow up with patients would be done by the
    oral surgeons. The hospital was also in touch with the distributor and was advised
    that it already had the names of the oral surgeons for further communication.
    Those facts are not consistent with the hospital hiding, secreting, cloaking,
    camouflaging, disguising or covering up anything. In other words, they are not
    consistent with concealment in the sense required by the doctrine.

[33]

Accordingly
    I would reject this ground of appeal.

The Limitation Period Cross-Appeal regarding the
    Hearsey Action

[34]

By
    cross-appeal, the hospital argues that the trial judge erred in not dismissing
    the Hearsey Action as barred by the
PHA
limitation period. It argues
    that the diagnostic procedure that Ms. Hearsey had in 1994, the tomogram, was
    not treatment. In the hospitals view, the trial judge erred in using it to
    determine the start date of the limitation period for the Hearsey Action. The
    hospital concedes, per
Fiorelli
, that it is the most recent treatment
    that is the operative commencement of the limitation period, as long as it has
    a connection to the care or treatment in which the negligence is alleged to
    have occurred. The hospital also concedes that the tomogram was connected to
    the implant surgery. Its point is that a diagnostic procedure is not treatment.

[35]

I
    would reject this argument. Nothing in the
PHA
limitation provision supports
    the distinction between a diagnostic procedure and treatment the hospital seeks
    to make, especially if one reads the provision so as to minimize the extent to
    which it interferes with rights of action, as cases such as

Fenton
require. Treatment is a term that encompasses investigation necessary to
    determine a future course of care and treatment, as well as investigation to
    monitor the effect of previous care and treatment. The tomogram in these
    circumstances was treatment.

[36]

Accordingly,
    I would not give effect to this ground of the cross-appeal.

(2)

The Duty to Recall

[37]

The
    appellants argue that the trial judge failed to give effect to the correct duty
    of care. Although he criticized the oral surgeons for their delay in calling
    back patients after becoming aware of implant problems, the appellants say the
    trial judge should have recognized that when the hospital received the 1990
    ECRI warning and the August 1990 letter from the distributor, it owed a duty of
    care to contain the risks. In oral argument, this was sometimes called a
    duty to warn, but before the trial judge, in their factum in this court, and
    in the substance of their oral argument before this court, it was articulated as
    more than a simple duty to give the appellants some sort of warning or notification.
    Rather, it was framed as an obligation on the part of the hospital to notify
    the appellants of the need for follow up care and to provide that follow up
    care  independently of anything the oral surgeons were doing. The trial judge
    properly described the contended for duty as a duty to recall the patients.

[38]

In
    my view, on the facts he found, the trial judge did not err in rejecting this theory
    of liability.

[39]

The
    trial judge found that upon receiving the 1990 ECRI warning and the
    distributors letter, the hospital contacted the oral surgeons to ensure both
    that they did not book any further implant surgeries and to confirm that they
    knew about the warning. He found that the oral surgeons advised the hospital
    that they were aware of the warning, and he found that the oral surgeons were
    aware of the problems with the implant by 1990. He also found that the hospital
    had contacted the distributor and confirmed in 1991 that the distributor was
    aware of and had been directly in touch with the oral surgeons  one of the
    requests in the distributors letter.

[40]

The
    appellants were the patients of the oral surgeons. The trial judge accepted the
    evidence of the CEO of the hospital that a recall of patients was something to
    be initiated only by the oral surgeons, given their medical training, ability
    to order tests, and ability to treat patients. The trial judge also accepted expert
    evidence that there was no precedent for any hospital in Canada self-initiating
    a recall of patients. He accepted evidence that the hospital could not order an
    oral surgeon to do any procedure on a patient or call people in for treatment;
    nor could it write orders for tests or book patients for treatment absent a
    physicians approval. He held that it was reasonable for the hospital to assume
    that the distributor and the oral surgeons, who had knowledge superior to that
    of the hospital about the implant and about what to do for patients if the
    implant failed, would deal appropriately with the issue. He concluded that there
    was no basis to elevate the hospital to an oversight role over the oral
    surgeons. These findings are entitled to deference. In light of them, the
    appellants proposition that a duty to recall existed and was breached by the
    hospital must be rejected.

[41]

In
    my view, the trial judge also did not err in determining that the decision in
Pittman
    Estate v. Bain
(1994), 112 D.L.R. (4th) 257 (Gen. Div.) did not assist the
    appellants.
Pittman
held that a hospital that undertakes a program to
    notify patients of a problem must do so without negligence. That proposition is
    not applicable here, given that the hospital did not undertake any notification
    program. On the trial judges findings of fact, nothing in
Pittman
requires a different conclusion to the one he reached.

[42]

Accordingly
    I would reject this ground of appeal.

(3)

Apportionment

[43]

The
    appellants argue that the trial judge erred by apportioning 75% of the
    liability to two non-parties. This limited the recovery of the appellants whose
    claims were not barred by a limitation period - that is, the Hearsey appellants
    - to 5% of their assessed damages. The manufacturer, who the trial judge found
    to be 50% at fault, and the distributor, held to be 25% at fault, were never
    parties to the action, were never the subject of third party proceedings by the
    hospital, and were both bankrupt. As such, the appellants say that apportionment
    of fault to them in a way that reduced the appellants recovery from the hospital
    was improper.

[44]

The
    hospital supports the trial judges approach.

[45]

There
    were two planks to the hospitals argument, (a) the Pierringer Order and the
    resulting amended statement of claim; and (b) this courts decision in
Taylor
    v. Canada (Health)
, 2009 ONCA 487, 95 O.R. (3d) 561. In my view, neither
    supports the trial judges approach.

[46]

In
    order to understand why I reject the hospitals argument, it is important to
    review some principles which set the background for consideration of both the
    Pierringer Order and the consequential amendment to the statement of claim, and
    the decision in
Taylor
.

Concurrent Liability and Pierringer Orders

[47]

At
    law, where more than one wrongdoer has caused or contributed to the plaintiffs
    injury, they are each liable to compensate the plaintiff in full, subject only
    to the rule that the plaintiff cannot recover more than 100% of their damages:
    see
Athey v. Leonati
, [1996] 3 S.C.R. 458, at para. 25. In practical
    terms, this means the plaintiff can recover 100% of their losses from any
    defendant who caused or contributed to the particular injury regardless of the
    degree of fault of that defendant, and regardless of whether others, parties or
    non-parties, were also at fault.

[48]

Pursuant
    to s. 1 of the
Negligence Act
, R.S.O. 1990, c. N.1, wrongdoers have a
    right of contribution from each other. In other words, although each remains jointly
    and severally liable to pay the plaintiff 100% of the plaintiffs damages, each
    can exercise the statutory right to have fault apportioned among the wrongdoers
    so that each wrongdoer will indemnify the others in accordance with the share
    of fault apportioned to them. Thus, if a defendant found 50% at fault pays the
    plaintiff 100% of their damages, that defendant can recover the 50% overpayment
    from the other wrongdoer(s) to whom the other 50% of fault was apportioned: see
Martin v. Listowel Memorial Hospital
(2000), 192 D.L.R. (4th) 250, 138
    O.A.C. 77 (C.A.), at paras. 34-35.

[49]

It
    is important, however, to note that the right of indemnity is not something
    which affects the plaintiff. The entire risk that a wrongdoer, liable to pay
    100% of the plaintiffs damages while not 100% at fault, will be able to
    actually recover indemnity from another wrongdoer, is on that first wrongdoer 
    not the plaintiff. If the second wrongdoer is not pursued by cross-claim, third
    party action or separate action, or if the second wrongdoer pursued is not creditworthy
    or insured, the first wrongdoer will still have to pay 100% of the plaintiffs
    damages and recover no indemnity: see
Taylor
, at paras. 18-20.

[50]

Before
    the Pierringer Order in the Hearsey Action, the hospital and oral surgeons were
    defendants and had cross-claimed against each other. The hospital and the oral
    surgeons were each at risk to the Hearsey appellants, if found at fault to any
    degree, of having to pay 100% of any damages. But, each had the right to
    recover from the other for the latters proportionate share of any fault. So if,
    for example, the hospital paid the plaintiff more than its proportionate share,
    the hospitals out of pocket expense, assuming the oral surgeons were
    creditworthy, would be reduced by obtaining indemnity from the oral surgeons
    for their proportionate share of fault, and vice versa.

[51]

In
    addition, before the Pierringer Order in the Hearsey Action the hospital and
    the oral surgeons had no proceeding pending to claim indemnity from the
    manufacturer or distributor for their proportionate share of any fault, and they
    had no practical means of collecting any indemnity even if they had claimed it,
    as each of the manufacturer and distributor was bankrupt. So if, for example, the
    hospital paid 100% of the damages of the Hearsey appellants, as it would be
    liable to do no matter the degree of fault attributed to it, it could recover
    nothing from either the manufacturer or the distributor.

[52]

This
    brings us to the Pierringer Order in the Hearsey Action. Named after
Pierringer v.
    Hoger
, 124 N.W. 2d 106, 21 Wis. 2d 182 (U.S. Wis. S.C. 1963), the
    purpose of a Pierringer Order is to facilitate a settlement between a plaintiff
    and a defendant who wishes to settle (a settling defendant), while maintaining
    a level playing field for the remaining (non-settling) defendant against whom
    the plaintiff wishes to proceed to trial: see
Sable Offshore Energy Inc. v.
    Ameron International Corp.
, 2013 SCC 37, [2013] 2 S.C.R. 623, at paras. 6, 23-26.
    It does this by certain essential provisions:

(1) The settling defendant settles with the plaintiff;

(2) The plaintiff discontinues its claim [against] the settling
    defendant;

(3) The plaintiff continues its action against the non-settling
    [defendant] but limits its claim to the non-settling defendant's several
    liability (a 'bar order');

(4) The settling defendant agrees to co-operate with the
    plaintiff by making documents and witnesses available for the action against
    the non-settling defendant;

(5) The settling defendant agrees not to seek contribution and
    indemnity from the non-settling defendant; and

(6) The plaintiff agrees to indemnify the settling defendant
    against any claims over by the non-settling defendants.

Handley Estate v. DTE Industries Limited
, 2018 ONCA 324,
    421 D.L.R. (4th) 636, at para. 39, citing Paul M. Perell & John W. Morden,
    The Law of Civil Procedure in Ontario, 3d ed. (Toronto: LexisNexis Canada,
    2017), at p. 762.

[53]

These
    essential provisions of a Pierringer Order are informed by the discussion of
    liability above. The non-settling defendant will have cross-claimed against a
    settling defendant because it wants to recover the settling defendants share
    of fault from it as indemnity, should the non-settling defendant have to pay more
    than its proportionate share of the plaintiffs damages. The non-settling
    defendants need to do so disappears under a Pierringer Order, because it
    requires the plaintiff to effectively put the non-settling defendant in the
    same economic position as if it paid the plaintiff in full and recovered any
    indemnity from the settling defendant. It does this by requiring the plaintiff
    to reduce its recovery from the non-settling defendant by the percentage of
    fault to be attributed to the settling defendant, and thus by the amount the non-settling
    defendant would have been able to recover from the settling defendant as
    indemnity: see
M.(J.)

v. Bradley
(2004), 71 O.R. (3d) 171, 187
    O.A.C. 201 (C.A.), at paras. 30-31.

[54]

To
    use an example, suppose defendants A and B were each creditworthy and cross-claimed
    against each other for indemnity. Suppose each is found liable at trial and
    fault was apportioned 50% to each. The plaintiff makes A pay 100% of the damages.
    But A recovers from B, on a cross-claim, for Bs 50% proportionate liability as
    indemnity. At the end of the day, As net payment is only 50%, commensurate
    with As liability.

[55]

Now
    suppose the plaintiff settled with B before trial. In the Pierringer Order
    situation, the plaintiff reduces their recovery from A (who did not settle) by
    the amount it is determined that B is at fault. At trial, A and B are each
    found to be 50% at fault. The plaintiff reduces their claim against A by the
    amount of fault attributed to B. As net payment is the same 50%.

The Pierringer Order in the Hearsey Action Did Not
    Authorize Reduction of Recovery Due to Fault of Persons Other Than the Oral
    Surgeons

[56]

The
    Pierringer Order in the Hearsey Action is similar to the example above in so
    far as the hospital and the oral surgeons were concerned. For ease of
    reference, that Pierringer Order is attached as Schedule A to these reasons.
    The hospitals cross-claim against the oral surgeons in the Hearsey Action had
    been made so that the hospital could obtain indemnity from the oral surgeons if
    it was obliged to pay the plaintiffs full damages. To the extent fault was
    attributed to the oral surgeons, the hospital could recover indemnity from them
    and thus reduce its net out of pocket expenditure. The Pierringer Order
    dismissed the cross-claim of the hospital against the oral surgeons. It did not
    prejudice the hospital by doing so, as it required the Hearsey appellants to
    reduce their claim against the hospital by the amount of fault that would be
    apportioned at trial to the oral surgeons, and it provided procedures whereby
    that determination could be made at trial. If that was all the Pierringer Order
    in the Hearsey Action did, it would meet the objectives generally ascribed to a
    Pierringer Order discussed above.

[57]

However,
    the effect the hospital argues for goes much further. According to the hospital,
    the effect of the Pierringer Order was to also reduce the Hearsey appellants recovery
    from the hospital by the amount of fault the trial judge might attribute to the
    manufacturer and the distributor. These were entities against whom the hospital
    had not claimed indemnity under the
Negligence Act
, and from whom the
    hospital had no practical ability to recover indemnity even if claimed. The Pierringer
    Order, if so interpreted, would do more than maintain a level playing field for
    the hospital compared to its pre-Order position. The effect of the
    interpretation the hospital seeks is to put the hospital in a
better
position
    than it was in before the Pierringer Order. Before the Pierringer Order, the hospital
    was at risk, if found at fault to any degree, to pay all of the Hearsey
    appellants damages without the ability to obtain indemnity from the
    manufacturer and distributor. This risk was on the hospital, regardless of the
    degrees of fault of the concurrent tortfeasors. As interpreted by the hospital,
    the Pierringer Order would free the hospital of that risk. The hospital would
    be placed in as good a position as it would have been had it claimed indemnity from
    the manufacturer and distributor and had the manufacturer and distributor been
    creditworthy and able to pay indemnity, rather than being bankrupt. No reason
    why this should be the case was suggested.

[58]

The
    Pierringer Orders language, including that incorporated into the amended statement
    of claim, does not, taken as a whole, support this broader interpretation. Paragraph
    5 of the Pierringer Order provides that the Plaintiffs will only claim from
    the Defendant Hospital those damages, if any, arising from the actions or
    omissions of the Defendant Hospital, and refers to the Defendant Hospitals several
    liability, or proportionate share of joint liability, as may be proven against
    it at trial. But that must be read in light of the context and the other
    provisions of the Pierringer Order, which demonstrate that this was only
    intended to ensure the Hearsey appellants claim and recovery from the hospital
    did not include anything for the fault that may be attributed to the oral
    surgeons.

[59]

The
    Pierringer Order was made in the context of an action that included the oral
    surgeons and the hospital as defendants  no one else. It was made in the
    context of a settlement by the appellants with the oral surgeons against whom
    the hospital had cross-claimed. It dismissed the hospitals cross-claim against
    the oral surgeons. It expressly provided that the court at trial may apportion
    fault among all
Defendants named in the Statement of Claim


(emphasis
    added), which meant only the hospital and the oral surgeons. It did not refer
    to apportionment of fault to anyone else. And it provided procedures, including
    for the obtaining and use of evidence from and about the oral surgeons, clearly
    aimed at assisting the parties to present their cases on what fault should be
    apportioned to the oral surgeons. It provided no similar procedures regarding
    the fault of any other entities.

[60]

We were not referred to evidence that any of the appellants had
    made an agreement, as a result of settlements with the manufacturer or
    distributor, that claims the appellants might pursue against the hospital,
    would be reduced by the percentage fault that would be attributed to the
    manufacturer or distributor.

[61]

In his reasons, the trial judge referred to the manufacturer
    having gone bankrupt shortly after it ceased to make the implant in 1988. No
    reference is made to any settlement with the manufacturer or recovery from it,
    let alone to the terms on which that may have occurred.

[62]

The trial judge also referred to a settlement between the
    distributor on the one hand, and the appellants and many others who received
    the implant on the other. The record included a settlement agreement of class
    actions against the distributor. Accepting that the appellants were members of
    the class and may have benefitted from that settlement, my review of that agreement
    does not reveal any term whereby the appellants would reduce their claims
    against persons who were not parties to the class actions, such as the
    hospital, by the distributors percentage fault. Rather, the settlement agreement
    provides:

Except as otherwise provided herein, nothing in this Settlement
    Agreement shall prejudice or in any way interfere with the rights of the
    Settlement Class Members to pursue all of their other rights and remedies
    against persons and/or entities other than the Defendant and Released Parties.
    Nevertheless, Settlement Class Members further agree that in the event the
    Settlement Class Member commences or continues litigation or pursues a claim
    or-makes a claim against any person or entity arising from, arising out of, or
    connected directly or indirectly with the distribution and insertion of a Vitek
    Proplast TMJ implant, including all claims for non-pecuniary, punitive,
    aggravated, and consequential damages, then the Settlement Class Member
    expressly agrees not to include in respect of any such claim any right to
    recover from such person or entity any such amounts as have been paid under the
    terms of this Settlement Agreement to the Settlement Class Member or Settlement
    Class Members.

[63]

This provision requires the appellants to reduce their claims against
    the hospital to take into account the amount they
recovered
from the
    distributor under the class action settlement. If applicable, this credit would
    occur in the damages phase of the trial. It does not require or justify, on the
    question of apportionment, reducing the appellants recovery by the
    distributors percentage fault, as the trial judge did.

[64]

In
    my view, taken as a whole against the evidentiary background, the Pierringer
    Order and the amended statement of claim in the Hearsey Action do not require
    the appellants to reduce their claims against the hospital by the percentage
    fault of the manufacturer and the distributor, and thus improve the position of
    the hospital.

The Trial Judge Erred in Relying on
Taylor

[65]

The
    trial judge relied on this courts decision in
Taylor
as authority to
    apportion fault to non-parties. He stated that
Taylor
expressly
    determined that a court can apportion fault to a person who is not a party to
    an action. But the issue is not whether a court may do so, but under what
    circumstances a court should do so. The circumstances in
Taylor
were
    substantially different than those in the case at bar.

[66]

Taylor
concerned an attempt, by a defendant to a class action, to add third parties from
    whom the defendant wished to claim contribution and indemnity on the basis that
    their fault had contributed to each class members injury. In other words, due
    to the risk it could be made to pay 100 percent of the damages it wished to seek
    indemnity from the third parties for their proportion of fault. The plaintiff,
    however, made it clear by an amendment to the claim that the exposure of the
    defendant was limited to damages for which it could have no right of
    contribution, because all that was claimed were the damages that would be
    apportioned to the defendant given its relative degree of fault: see paras. 4
    and 11. This was done specifically to preclude the defendants attempt to
    assert a third party claim and with the intention that [t]he possibility of
    third party claims will be obviated: paras 9 and 10. Thus in
Taylor
the
    plaintiff amended her statement of claim to specifically state that she was not
    suing the defendant for anything other than the defendants proportionate share
    of fault, in circumstances that made it clear she was prepared to reduce the
    claim by the proportion of fault that would be attributed to the proposed third
    parties.

[67]

It
    was in that context that the court in
Taylor
held that fault could be
    apportioned at trial to the proposed third parties even though they were
    non-parties. This was essential to the courts holding that the third party
    claim was unnecessary. To protect the defendant, the reductions in the
    plaintiffs claim due to the fault of the proposed third parties would have to
    be calculated by determining their degree of fault. As the court in
Taylor
noted, considerations of encouraging settlements with non-parties or of simply
    allowing a plaintiff to streamline litigation by obviating third party claims,
    favoured an interpretation of the courts powers to apportion fault that is
    broad enough to permit apportionment to non-parties: see paras. 26 to 28.

[68]

The circumstances in
Taylor
were
    not present in the case at bar in so far as the manufacturer and distributor
    are concerned. As discussed in the section above, the settlement with the oral
    surgeons which gave rise to the Pierringer Order contemplated an apportionment
    of fault to, and a corresponding reduction of the claim for the fault of, the
    oral surgeons, not the manufacturer and distributor. The class action
    settlement with the distributor also does not contemplate such an apportionment
    and reduction. Nor did the appellants evince an intention to streamline the
    litigation by indicating they would reduce their claim for the fault of the
    distributor and manufacturer, as the plaintiff did in
Taylor
.

[69]

Taylor
does not stand for a proposition that is so broad that it would entitle the
    court in any case to apportion fault to non-parties, and reduce the plaintiffs
    recovery by that apportioned share of fault. That would be inconsistent with
    what the Supreme Court of Canada said in
Athey
and with s. 1 of the
Negligence
    Act
: namely, the general rule is that a wrongdoer is liable for 100
    percent of a plaintiffs injuries and wrongdoers are liable to contribute
between themselves
in accordance with their relative shares
    of fault. The approach in
Taylor
was context specific. And that
    context is not present here.

[70]

Accordingly,
    it was an error of law for the trial judge to apply
Taylor
as he did.

Conclusion on Apportionment

[71]

The
    appellants argued that if we agreed there was an error in the apportionment of
    fault to the manufacturer and distributor and the reduction of the appellants
    recovery as a result, we should remit that matter back to the trial judge. The hospital
    argued that if we found such an error, fault should be reapportioned 20% to the
    hospital and 80% to the oral surgeons. In other words, the relative assessment
    of fault as between the hospital and oral surgeons found by the trial judge
    should be maintained. The trial judge found the oral surgeons four times more
    at fault than the hospital.

[72]

I
    agree with the result proposed by the hospital. As discussed above, the
    underlying theory of contribution and indemnity is that a wrongdoer should be
    able to recover indemnity from another when the first has paid the plaintiff
    more than its proportionate share, assessed by their relative degrees of fault.
    Both the hospital and the oral surgeons were at risk before the Pierringer
    Order that one or the other would have to pay all of the appellants damages.
    They each had cross-claimed for indemnity from the other. And they were both in
    the same situation vis-à-vis the manufacturer and distributor  they had no
    claim or ability to recover indemnity from them regardless of their degree of
    fault.

[73]

The
    Pierringer Order was designed to protect the hospital from paying more than its
    proportionate share to the same degree as its prior cross-claim for indemnity
    against the oral surgeons. Given the findings of the trial judge, the hospital
    would be paying more than its proportionate share if it paid more of the total
    damages than its relative share of fault compared to the fault of the oral
    surgeons: namely, more than one fifth of the total fault attributed to the
    hospital and the oral surgeons combined. The judgment in the Hearsey Action
    should therefore be varied to reflect this.

(4)

The Costs Cross-Appeal

[74]

I
    would not give effect to the hospitals cross-appeal on costs. The hospital
    argues that an amount for HST is not included in the costs awards which the
    trial judge made after dismissing the Endean, Karam, and Lind Actions. In my
    view, the trial judge did not limit himself to a mechanical calculation of
    costs dependent on the inclusion or lack of inclusion of any specific item. In
    his reasons on costs, he stepped back to determine whether the amounts he
    calculated were reasonable given the magnitude of the matter and other relevant
    considerations: see para. 72. He was satisfied the amounts he awarded were
    reasonable. There is no error in principle justifying appellate intervention.

Conclusion

[75]

Accordingly,
    I would dismiss the appeals in the Endean, Lind and Karam Actions. I would allow
    the appeal in the Hearsey Action and vary para. 1 of the judgment in that
    action by replacing 5% with 20%. I would dismiss the hospitals cross-appeal.

[76]

The
    Hearsey appellants should have their costs of the appeal and cross-appeal fixed
    at $20,000 inclusive of HST and disbursements.

[77]

Success
    was divided between the hospital and the Endean, Karam and Lind appellants. I would
    not award any costs in the appeals or the cross-appeals in those actions.

Released: March 8, 2019 (P.R.)

B. Zarnett J.A.

I agree. Paul Rouleau J.A.

I agree. K. van Rensburg
    J.A.




SCHEDULE A





