Guest Contributor Evelyn Perez Youssoufian is a partner at O’Connor MacLeod Hanna LLP, Oakville, Ontario. She has 20 years’ experience in employment law and litigation including civil/commercial, estate, municipal, real estate. She was an associate of Ellyn Law LLP from 2007 to 2015.
ONTARIO – Contract law – Contracts – Breach of Contract – Duty of Good Faith, Conversion, Breach of Confidence, Breach of Fiduciary Duty – Non-competition covenants — Torts — Independent Contractor Agreements- SEE CASE #0143P
Coscarella Dentistry Professional Corporation v. Harvey
2025 ONCA 118 (February 18, 2025)
Ontario Court of Appeal (Tulloch C.J.O., Paciocco and Nordheimer JJ.A.)
Background
The case involves a legal dispute between the Appellants Dr. Franco Coscarella, his son Dr. Gennaro Coscarella, and Coscarella Dentistry Professional Corporation against the Respondents Dr. Clifford Harvey and his dental corporation. Dr. Harvey had worked as an independent contractor at Coscarella’s dental clinic in Windsor, Ontario, under a simple oral agreement where he would receive 50% of his billings in exchange for using the clinic’s facilities and support. They also served
In 2018, Dr. Harvey decided to relocate his practice after Dr. Franco’s son, Dr. Gennaro Coscarella, took over ownership of the clinic. Before leaving, Dr. Harvey accessed patient records, took photographs of them, and sent out undated letters to his own patients informing them of his new practice location. Some of the clinic’s employees also resigned and joined Dr. Harvey’s new practice.
Facts
Dr. Harvey had been working as an independent contractor at the clinic for years, with an oral agreement that he would receive 50% of his billings.
Before leaving, Dr. Harvey took photos of patient files for patients he treated within the past two years and sent out letters informing them of his new location. Dr. Harvey also had employees from the clinic resign to work for him at his new location.
The Appellants (Dr. Franco and Dr. Gennaro) filed a claim alleging Dr. Harvey engaged in improper solicitation of patients and employees, misappropriated confidential information, and breached fiduciary duties.
Issues om the Appeal
The Appellants raised the following issues:
- Did Dr. Harvey improperly solicit patients and employees from the Coscarella clinic?
- Did Dr. Harvey misuse confidential information when he accessed patient records?
- Did Dr. Harvey have, and therefore breach, a fiduciary duty to the Coscarellas?
- Should regulatory restrictions on solicitation be implied into the contractual relationship between Dr. Harvey and the Coscarellas?
Analysis and Law
The Court of Appeal made the following findings on the issues raised on appeal:
Mischaracterization of the Central Issue
The appellants argued that the trial judge focused too much on the fact that patients do not have proprietary rights and that Dr. Harvey was allowed to contact his own patients about his new practice location. They believed that the trial judge should have first determined the nature and scope of the relationship between Dr. Harvey and the appellants.
The Court rejected this argument, affirming that the trial judge did, in fact, address the nature of the relationship and based her decision on the independent contractor arrangement. This included recognizing that Dr. Harvey was entitled to contact his own patients and that no confidentiality attached to patient records in this context.
Confidentiality of Patient Information
The appellants argued that the trial judge failed to adequately explain why the patient information accessed by Dr. Harvey was not confidential.
The Court upheld the trial judge’s reasoning, confirming that Dr. Harvey was required to maintain patient records as part of his professional obligations. The judge concluded that accessing these records to contact his own patients was not a breach of confidentiality.
Fiduciary Duty Claim
The appellants contended that Dr. Harvey breached a fiduciary duty by using confidential information. The trial judge found that Dr. Harvey did not owe a fiduciary duty to the appellants, as the relationship did not involve the necessary discretion or power to impact the appellants’ interests.
The Court affirmed this finding, rejecting the appellants’ claim and emphasizing that Dr. Harvey’s access to patient records did not establish fiduciary responsibility.
Good Faith Obligation
The appellants argued that the trial judge erred by not considering whether Dr. Harvey acted in good faith when soliciting patients.
The Court rejected this argument, stating that since there were no contractual duties limiting Dr. Harvey’s actions, the question of good faith was irrelevant.
Conversion Claim and Solicitation of Patients
The appellants tried to argue that Dr. Harvey wrongfully solicited patients, not by claiming property in the patients themselves, but in the clinic’s “goodwill.” The Court rejected this as an attempt to acquire property rights over the patients.
The Court held if what Dr. Harvey did was “solicitation”, a proposition of which they were sceptical but did not need to decide, he could not have “solicited” his own patients. The Court also agreed that there was no evidence that any of the employees were solicited.
Additionally, the Court rejected the argument that solicitation of one’s own patients is automatically actionable, stating that Dr. Harvey was within his rights to contact his patients.
Admissibility of Evidence
The appellants raised concerns about the trial judge admitting a report from the Royal College of Dental Surgeons of Ontario (RCDSO) into evidence. The Court found that this issue was raised too late and that the document had been jointly submitted by both parties. The trial judge had not relied on the document for her decision, and its admission did not cause any prejudice.
Conclusion and Remedy
The Court of Appeal dismissed the appeal, affirming the trial judge’s findings. Dr. Harvey was entitled to notify his patients about his new location, there was no breach of confidentiality, fiduciary duties did not apply, and the trial judge had properly addressed all legal issues. The appellants’ arguments were largely rejected, and the appeal was dismissed with costs.
The respondents (Dr. Harvey and his dental corporation) were awarded costs for the appeal, fixed at $40,000, which included disbursements and HST.
Key Takeaways
The outcome of this case would likely have been different if Dr. Harvey had been employed by the Appellant corporation, or if the parties had a written independent contractor agreement. The Court or Appeal held absent a contractual obligation, there is no prohibition on soliciting one’s own patients.
Evelyn Perez Youssoufian