Brownhall et al. v. Her Majesty the Queen in Right of Canada (Ministry of National Defence) [Indexed as: Brownhall v. Canada (Ministry of National Defence)]
87 O.R. (3d) 130
Ontario Superior Court of Justice, Divisional Court,
Cunningham A.C.J.S.C.J., Taliano and Swinton JJ.
August 9, 2007
Crown -- Actions against Crown -- Plaintiff bringing action against Crown for damages flowing from assault by fellow soldiers and from defendant's response to that assault -- Plaintiff receiving pension pursuant to Pension Act as result of PTSD resulting from assault -- Motion judge erring in dismissing defendant's motion to strike statement of claim -- Portions of claim relating to defendant's alleged misconduct leading up to and resulting in assault being barred by s. 9 of Crown Liability and Proceedings Act as plaintiff had already been awarded pension for PTSD -- Portions of claim relating to post-assault conduct not plainly and obviously barred by s. 9 and not struck -- Action not plainly and obviously barred by s. 8 of CLPA -- Action stayed pursuant to s. 111(2) of Pension Act pending exhaustion of plaintiff's remedies under Veterans Review and Appeal Board Act -- Crown Liability and Proceedings Act, R.S.C. 1985, c. C-50, ss. 8, 9 -- Pension Act, R.S.C. 1985, c. P-6, s. 111(2) -- Veterans Review and Appeal Board Act, S.C. 1995, c. 18.
The plaintiff alleged that he was physically and sexually assaulted by fellow soldiers in Afghanistan and in Canada. He was diagnosed with post-traumatic stress disorder and was awarded a disability pension pursuant to s. 21(1) of the Pension Act. He brought an action against the Crown for damages for intentional infliction of mental suffering, breach of fiduciary duty and negligence. He also alleged that the acts and omissions of the defendant breached his right to security [page131] of the person under s. 7 of the Canadian Charter of Rights and Freedoms. The defendant moved to strike the statement of claim on the basis that it disclosed no reasonable cause of action by virtue of the operation of ss. 8 and 9 of the Crown Liability and Proceedings Act ("CLPA") or that it was frivolous, vexatious or an abuse of process. In the alternative, the defendant moved for an order staying any parts of the action not barred by the operation of s. 9 of the CLPA pursuant to s. 111(2) of the Pension Act. The motion judge refused to strike the statement of claim and did not address the request for a stay pursuant to s. 111(2) of the Pension Act. The motion judge awarded costs to the plaintiff on a substantial indemnity basis. The defendant appealed.
Held, the appeal should be allowed.
Per Swinton J.A. (Cunningham A.C.J.S.C.J. concurring): The purpose of s. 9 of the CLPA is to bar double recovery. The question to be asked is whether the factual basis for the pension and the action is the same. Does the same loss or injury underlie both? If it is plain and obvious, on the facts as pleaded, that the same loss underlies both, the action is barred by s. 9. Clearly, a claim based on the defendant's responsibility for the assault was barred by s. 9, as the pension was awarded on the same factual basis as this aspect of the claim for damages. In addition, the claim relating to the failure to prevent hazing prior to the assault in Afghanistan was barred, as, presumably, the failure to prevent hazing led to the assault. However, a pension had already been awarded for the resulting PTSD. Therefore, it was plain and obvious that any claim relating to this alleged misfeasance prior to the assault was barred by s. 9. On the facts pleaded and on the basis of the sparse language of the decision letter awarding the pension, it was not plain and obvious that the injuries claimed in the action as a result of conduct following the assault were identical to the psychological injury for which the pension was awarded. Therefore, the motion judge did not err in refusing to strike that part of the statement of claim.
It was not plain and obvious that the action was barred by s. 8 of the CLPA. Whether the wrongs allegedly done to the plaintiff were actions taken "for the defence of Canada" or "maintaining the efficiency of the forces" was an issue that should be determined in a factual context at trial.
Section 111(2) of the Pension Act provides that an action not barred by s. 9 of the CLPA shall be stayed until an application for a pension in respect of the same disability or death has been made by the plaintiff, and a decision has been made and confirmed by the Veterans Review and Appeal Board that no pension is to be paid to the plaintiff in respect of the same disability or death. Pursuant to s. 111(2), the remaining parts of the action had to be stayed until the plaintiff had exhausted all his remedies under the Veterans Review and Appeal Board Act.
The motion judge erred in principle in awarding costs on a substantial indemnity basis based on the complexity of the motion and the fact that the plaintiff made an offer to settle on the basis that the defendant's motion would be dismissed with partial indemnity costs.
Per Taliano J. (dissenting): It was not plain and obvious that the action was barred by s. 8 of the CLPA. It was also not plain and obvious that any part of the action was barred by s. 9 of the CLPA. The case law in this area is still evolving. There is case law that casts some doubt on whether or not a pension would be payable to a soldier who was the victim of deliberate misconduct or intentional infliction of harm on the part of a superior officer acting outside of the scope of his employment. In addition, given the broad basis for the plaintiff's claim and given the fact that the plaintiff's pension was based narrowly on the assault in Afghanistan and the diagnosis of PTSD, it was not clear whether the disability [page132] pension which was awarded to the plaintiff was awarded in respect to the numerous complaints that formed the basis for his alleged injuries and damages. The defendant failed to demonstrate that the plaintiff's claims for damages for breach of contract, breach of fiduciary duty, breach of Charter rights and malicious behaviour were all subsumed in the award or potential award of a disability pension. The action should be stayed pending the disposition of the plaintiff's application for a review of his entitlements under the Pension Act. The motion judge did not err in awarding costs on a substantial indemnity basis.
APPEAL from an order dismissing a motion to strike a statement of claim or to stay an action.
Cases referred to Sarvanis v. Canada, [2002] 1 S.C.R. 921, [2002] S.C.J. No. 27, 210 D.L.R. (4th) 263, 284 N.R. 263, 2002 SCC 28, apld Cross v. Sullivan (11 November 2006), Kingston 14244/02 (S.C.J.); Dumont v. Canada, [2004] 3 F.C.R. 338, [2003] F.C.J. No. 1857, 323 N.R. 316, 2003 FCA 475 (C.A.); Young v. McCreary (2001), 2001 4456 (ON CA), 53 O.R. (3d) 257, [2001] O.J. No. 1315, 198 D.L.R. (4th) 713, 143 O.A.C. 219, 8 C.C.E.L. (3d) 249, 5 C.P.C. (5th) 88, 104 A.C.W.S. (3d) 499 (C.A.), consd S & A Strasser Ltd. v. Richmond Hill (Town) (1990), 1990 6856 (ON CA), 1 O.R. (3d) 243, [1990] O.J. No. 2321, 45 O.A.C. 394, 49 C.P.C. (2d) 234, 24 A.C.W.S. (3d) 597, 1990 CarswellOnt 435 (C.A.), distd Other cases referred to Berneche v. Canada, 1991 13592 (FCA), [1991] F.C.J. No. 515, 133 N.R. 232 (C.A.); Celanese Canada Inc. v. Canadian National Railway Co., 2005 8663 (ON CA), [2005] O.J. No. 1122, 196 O.A.C. 60 (C.A.); Dionne v. Canada (2002), 2002 49481 (ON SC), 59 O.R. (3d) 566, [2002] O.J. No. 2012 (C.A.); Duplessis v. Canada, 2002 FCA 338, [2002] F.C.J. No. 1277, 293 N.R. 388 (C.A.), affg 2001 FCT 1038, [2001] F.C.J. No. 1455, 109 A.C.W.S. (3d) 147 (T.D.), affg 2000 16541 (FC), [2000] F.C.J. No. 1917, 101 A.C.W.S. (3d) 723 (C.A.); Foulis v. Robinson (1978), 1978 1307 (ON CA), 21 O.R. (2d) 769,[1978] O.J. No. 3596, 92 D.L.R. (3d) 134 (C.A.); Hainsworth v. Canada, [2003] O.J. No. 6162 (S.C.J.); Hamilton v. Open Window Bakery, [2004] 1 S.C.R. 303, [2004] S.C.J. No. 72, 235 D.L.R. (4th) 193, 316 N.R. 265, 2004 SCC 9, 40 B.L.R. (3d) 1; Housen v. Nikolaisen, [2002] 2 S.C.R. 235, [2002] S.C.J. No. 31, 219 Sask. R. 1, 211 D.L.R. (4th) 577, 286 N.R. 1, 272 W.A.C. 1, [2002] 7 W.W.R. 1, 30 M.P.L.R. (3d) 1, 2002 SCC 33, 10 C.C.L.T. (3d) 157; Hunt v. Carey Canada Inc., 1990 90 (SCC), [1990] 2 S.C.R. 959, [1990] S.C.J. No. 93, 49 B.C.L.R. (2d) 273, 74 D.L.R. (4th) 321, 117 N.R. 321, [1990] 6 W.W.R. 385, 4 C.C.L.T. (2d) 1, 43 C.P.C. (2d) 105 (sub nom. Hunt v. T & N plc); Kift v. Canada (Attorney General), 2003 11719 (ON SC), [2002] O.J. No. 5448 (S.C.J.); Lebrasseur v. Canada, [2006] F.C.J. No. 1088, 2006 FC 852; Levesque v. Canada (Attorney General), 2004 ABCA 43, [2004] A.J. No. 108, 346 A.R. 88 (C.A.); Lurtz v. Duchesne, 2005 5080 (ON CA), [2005] O.J. No. 354, 194 O.A.C. 119, 136 A.C.W.S. (3d) 1055 (C.A.); Marsot v. Canada (Minister of National Defence), [2003] F.C.J. No. 453, 303 N.R. 282, 2003 FCA 145; Murano v. Bank of Montréal (1998), 1998 5633 (ON CA), 41 O.R. (3d) 222, [1998] O.J. No. 2897, 163 D.L.R. (4th) 21, 41 B.L.R. (2d) 10, 22 C.P.C. (4th) 235, 5 C.B.R. (4th) 57 (C.A.); Mérineau v. Canada, 1983 164 (SCC), [1983] 2 S.C.R. 362, [1983] S.C.J. No. 77; Nash v. Ontario (1995), 1995 2934 (ON CA), 27 O.R. (3d) 1, [1995] O.J. No. 4043 (C.A.); Prentice v. Royal Canadian Mounted Police, 2005 FCA 395, [2005] F.C.J. No. 1954, [2006] 3 F.C. R. 135, 346 N.R. 201(C.A.); Scapillati v. A. Potvin Construction Ltd. (1999), 1999 1473 (ON CA), 44 O.R. (3d) 737, [1999] O.J. No. 2187,175 D.L.R. (4th) 169, 46 C.C.E.L. (2d) 16 (C.A.); Stopford v. Canada, [2003] F.C.J. No. 1255, 2003 FC 994, [2002] 1 F.C. 360 (T.D.); Sulz v. Canada (Attorney General), 2006 BCSC 99, [2006] B.C.J. No. 121, 263 D.L.R. (4th) 58 (S.C.); Swanson v. (Minister of Transport), 1991 8226 (FCA), [1991] F.C.J. 452, [1992] 1 F.C. 408 (C.A.); Walker v. Ritchie, [2006] 2 S.C.R. 428, [2006] S.C.J. No. 45, 2006 SCC 45, varg 2005 13776 (ON CA), [2005] O.J. No. 1600, 197 O.A.C. 81, 25 C.C.L.I. (4th) 60 (C.A.); Ward v. Manulife Financial, 2007 92626 (ON SC), [2007] O.J. No. 37, 25 B.L.R. (4th) 327, 46 C.C.L.I. (4th) 139 (S.C.J.) [page133] Statutes referred to Canadian Charter of Rights and Freedoms, ss. 7, 24(1) Crown Liability and Proceedings Act, R.S.C. 1985, c. C-50, ss. 3 [as am.], 8, 9 [as am.] Pension Act, R.S.C. 1985, c. P-6, ss. 3(1) "disability", 21, 111 [as am.] Veterans Review and Appeal Board Act, S.C. 1995, c. 18 Rules and regulations referred to Rules of Civil Procedure, R.R.O. 1990, Reg. 194, rules 21, 21.01(1), (3), 25.06(1), 49, 49.10 [as am.] Authorities referred to Hogg, P.W. and Patrick J. Monahan, Liability of the Crown, 3rd ed. (Toronto: Carswell, 2000)
Susan E. Healey, for plaintiffs (respondents in appeal). Joel Levine, for defendant (appellant).
1SWINTON J. (CUNNINGHAM A.C.J.S.C.J. concurring): -- This is an appeal from the order of Marchand J. dated January 17, 2006 dismissing a motion to strike the Statement of Claim or, in the alternative, to stay all or part of this action and awarding costs of $58,336.98 on a substantial indemnity basis. Leave to appeal was granted by DiTomaso J. in an order dated March 15, 2006.
2The main issue in this appeal is whether the motions judge erred in failing to find that the claim for compensatory damages of the plaintiff Glenn Brownhall was barred by ss. 8 and 9 of the Crown Liability and Proceedings Act, R.S.C. 1985, c. C-50 ("CLPA") or that the proceeding should be stayed pursuant to s. 111(2) of the Pension Act, R.S.C. 1985, c. P-6. There is a further issue as to whether the motions judge erred in awarding substantial indemnity costs.
Background Facts
Background Facts
3The Statement of Claim alleges that the respondent Mr. Brownhall, then a private in the Canadian Armed Forces, was deployed to Camp Julien in Afghanistan in November 2003. Shortly after his arrival, he was physically and sexually assaulted by two of his section members in an unprovoked attack. He sustained physical injuries, as well as fear for his physical safety, shock, degradation, humiliation, and pain and suffering.
4The respondent alleges that the next morning, he reported the attack to his section commander, and he sought medical attention. However, he alleges that senior officers mismanaged [page134] his report of the attack, and that he was degraded, belittled and exposed to further contact with the perpetrators. Although he requested a return to Canada, and medical personnel supported his return, his request was denied.
5The respondent was sent back to CFB Petawawa in February 2004. Fearing for his safety at Petawawa, he asked for a transfer to another base. Around March 14, 2004, he was physically assaulted and threatened in a bar in Petawawa by two individuals who claimed to be friends of the perpetrators of the assault in Afghanistan. He suffered further physical injuries.
6Around the time of this incident, he was diagnosed with post-traumatic stress disorder ("PTSD"). Because of that condition, he was awarded a disability pension of 60 per cent by the Department of Veterans' Affairs effective March 24, 2004. It was granted to him pursuant to s. 21(1) of the Pension Act, based on his having been on "special duty service" at the time that the disability arose. The notification letter dated April 14, 2004 states that the respondent's records confirm that he was assaulted while serving in Afghanistan. The decision to award a pension was based on a psychiatric report dated March 19, 2004, which established that the respondent had PTSD "related to those traumatic events during that service".
The Statement of Claim
The Statement of Claim
7The respondent states in para. 33 of the Statement of Claim that all of the appellant's actions and omissions pleaded, from the report of the assaults to the transfer from CFB Petawawa, constituted an intentional infliction of mental suffering on the part of the appellant. He also claims that the appellant owed him a fiduciary duty, and this duty was breached (para. 37). Finally, he alleges negligence on the part of the appellant (para. 38). The grounds underlying both those paragraphs are as follows:
(a) employing incompetent employees who were the plaintiff's superior officers;
(b) failing to release the plaintiff in a timely manner;
(c) failing to support the plaintiff in a competent and appropriate manner or at all;
(d) intimidating, harassing and providing misleading information to the plaintiff;
(e) failing to respond to or investigate the attack in a sensitive or competent manner; [page135]
(f) failing to ensure that the plaintiff's injuries and trauma were not exacerbated;
(g) failing to take steps to safeguard the plaintiff from further attacks;
(h) failing to follow the medical recommendation that the plaintiff be returned to Canada when he was found unfit for duty;
(i) failing to provide timely medical treatment to the plaintiff;
(j) failing to respond appropriately to the plaintiff's request to be transferred from CFB Petawawa; and
(k) failing to create or enforce policies that prohibited "hazing rituals".
8Relying again on these allegations, he also claims that the acts and omissions breached his right to security of the person in s. 7 of the Canadian Charter of Rights and Freedoms. In para. 1A of the Statement of Claim, he seeks compensatory damages for intentional infliction of mental suffering; sexual assault, assault and battery; breach of fiduciary duty; negligence; breach of s. 7 of the Charter and breach of statutory obligations. He also seeks punitive damages. The Statutory Framework
The Statutory Framework
9The appellant moved before the motions judge pursuant to rules 21.01(1)(b), 21.01(3)(d) and 25.06(1) [of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194] to strike the claim on the basis that it discloses no reasonable cause of action by virtue of the operation of ss. 8 and 9 of the CLPA, or that it is frivolous, vexatious or an abuse of process. Those sections of the CLPA provide:
Nothing in sections 3 to 7 makes the Crown liable in respect of anything done or omitted in the exercise of any power or authority that, if those sections had not been passed, would have been exercisable by virtue of the prerogative of the Crown, or any power or authority conferred on the Crown by any statute, and, in particular, but without restricting the generality of the foregoing, nothing in those sections makes the Crown liable in respect of anything done or omitted in the exercise of any power or authority exercisable by the Crown, whether in time of peace or war, for the purpose of the defense of Canada or of training, or maintaining the efficiency of, the Canadian Forces.
No proceedings lie against the Crown or a servant of the Crown in respect of a claim if a pension or compensation has been paid or is payable out of the Consolidated Revenue Fund or out of any funds administered by an agency of the Crown in respect of the death, injury, damage or loss in respect of which the claim is made. [page136]
10In the alternative, the appellant moved for an order staying any parts of the action not barred by the operation of s. 9 of the CLPA pursuant to s. 111(2) of the Pension Act, which reads:
111(1) In this section"action" means any action or other proceeding brought by or on behalf of
(a) a member of the forces,
against Her Majesty, or against any officer, servant or agent of Her Majesty, in which damages are claimed in respect of an injury or disease or aggravation thereof resulting in disability or death.
(2) An action that is not barred by virtue of section 9 of the Crown Liability and Proceedings Act shall, on application, be stayed until
(a) an application for a pension in respect of the same disability or death has been made and pursued in good faith by or on behalf of the person by whom, or on whose behalf, the action was brought; and
(b) a decision to the effect that no pension may be paid to or in respect of that person in respect of the same disability or death has been confirmed by an appeal panel of the Veterans Review and Appeal Board in accordance with the Veterans Review and Appeal Board Act.
11Subsections 21(1) and (2) deal with entitlement to a pension. The respondent obtained a pension pursuant to s. 21(1), which deals with special duty service. A member of the armed forces who suffers disability resulting from an injury or disease or an aggravation thereof that was "attributable to or was incurred during such military service" is entitled to a pension pursuant to that provision. Subsection 21(2) entitles a member of the forces to a pension in respect of peacetime service if he or she suffers disability resulting from an injury or disease or an aggravation thereof that "arose out of or was directly connected with such military service".
The Decision Under Appeal
The Decision Under Appeal
12The motions judge dismissed the appellant's motion after a six-day hearing. Although the respondent had not raised the issue of the constitutionality of the legislative provisions relied upon by the appellant, the motions judge held that the claim should not be struck on the basis that it was scandalous, frivolous or vexatious because the constitutional issue had not yet been determined by the courts (reasons, para. 41).
13He also held that it would be premature to strike the Statement of Claim on the basis of s. 9 of the CLPA because the [page137] purpose of that provision is to prevent double recovery. He stated at para. 51:
It appears to this court that to grant the relief sought at this stage of the proceedings would deprive the plaintiff of his right to establish at trial, that the claim falls outside of the basis upon which his pension was awarded or could have been awarded.
Moreover, he held that a trial is required to determine whether the claim falls within the Pension Act. The motions judge does not appear to have addressed the appellant's alternative argument seeking a stay of the action pursuant to s. 111(2) of that Act.
14Subsequently, on January 16, 2006, the motions judge awarded costs to the respondent of $54,018 in fees plus GST and disbursements for a total of $58,336.98, payable forthwith. This was the total amount requested by respondent's counsel on a substantial indemnity basis.
15The motions judge noted that the motion was complex and important. He also considered what was fair and reasonable, as well as the respondent's offer to settle the motion on the basis that it would be dismissed with costs on a partial indemnity basis. After referring to jurisprudence on rule 49.10(1), he concluded at para. 15 of his reasons:
I find that in the case at bar, it would have been exceedingly difficult, if not impossible, to formulate an offer which would indicate an element of "compromise". Obviously, the plaintiff (respondent) could have offered a percentage of the "partial indemnity basis" that he otherwise would have expected. However, I find that it would be unreasonable and unexpected of him to make such an offer. Surely, the nature of the defendant's motion which brought into play so many federal statutes and regulations ought to have expected the cost consequences of its action. Having to prepare to respond to such complexity of submissions and number of court decisions, all of which were referred to during the hearing, ought to have prepared counsel for the moving party to expect costs being awarded on a substantial scale even though it might depart from the strict provisions of Rule 49.10(1). I find that in this situation, I should exercise my discretion in "ordering otherwise".
The Issues
The Issues
16This appeal raises the following issues:
(1) Did the motions judge err in refusing to strike the Statement of Claim as disclosing no reasonable cause of action, given s. 9 of the CLPA?
(2) Did the motions judge err in refusing to strike the Statement of Claim on the basis of s. 8 of the CLPA?
(3) Did the motions judge err in failing to stay the action pursuant to s. 111(2) of the Pension Act? [page138]
(4) Did the motions judge err in awarding costs on a substantial indemnity basis?
The Governing Principles
The Governing Principles
17The applicable test on a motion to strike a pleading under rule 21.01 is whether it is plain and obvious that the pleadings disclose no reasonable cause of action. A Statement of Claim should only be struck if the action is certain to fail because the pleading contains a radical defect (Hunt v. Carey Canada Inc., 1990 90 (SCC), [1990] 2 S.C.R. 959, [1990] S.C.J. No. 93, at para. 33; Nash v. Ontario (1995), 1995 2934 (ON CA), 27 O.R. (3d) 1, [1995] O.J. No. 4043 (C.A.) at p. 4 (QL)).
18Given the finality of such an order, the court's power to strike a pleading or dismiss an action without affording the plaintiff a chance to go to trial is to be used sparingly, and the onus on the moving party under this rule is a heavy one. In addition, it has been held that the court should not dispose of matters of law at this stage that are not fully settled in the jurisprudence (see Nash, supra, at p. 4 (QL)).
The Standard of Review
The Standard of Review
19The issues before the motions judge turned primarily on a determination whether the facts as pleaded, taken as true or capable of proof, disclose a reasonable cause of action. This is a question of law, and therefore, the standard of review is correctness (Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235, [2002] S.C.J. No. 31, at para. 8).
Issue No. 1: Did the motions judge err in refusing to strike the Statement of Claim as disclosing no reasonable cause of action, given s. 9 of the CLPA?
Issue No. 1: Did the motions judge err in refusing to strike the Statement of Claim as disclosing no reasonable cause of action, given s. 9 of the CLPA?
20The respondent is in receipt of a disability pension under s. 21(1) of the Pension Act for PTSD arising as a result of events during his military service in Afghanistan. Subsection 21(1) of that Act entitles a member of the Armed Forces, engaged in "special duty service", to receive a pension where the member "suffers disability resulting from an injury or disease or an aggravation thereof that was attributable to or was incurred during such military service" (emphasis added). "Disability" is defined in s. 3(1) as "the loss or lessening of the power to will and to do any normal mental or physical act".
21The appellant submits that s. 9 of the CLPA bars this action by the respondent, since the action arises primarily from an assault committed on him while he was engaged in military service in Afghanistan, and he is in receipt of a pension for PTSD [page139] resulting from the assault and events in Afghanistan. Most of the acts complained of in the Statement of Claim occurred while he was on special duty service in Afghanistan, except for the refusal to transfer the respondent to another base following his return to Canada, which then exposed him to the second assault.
22The appellant relies primarily on the decision of the Supreme Court of Canada in Sarvanis v. Canada, 2002 SCC 28, [2002] 1 S.C.R. 921, [2002] S.C.J. No. 27 together with related decisions set out below. In Sarvanis, an inmate in a federal penitentiary was seriously injured while at work. As a result, he received a disability pension under the Canada Pension Plan ("CPP"). The Crown then took the position that s. 9 of the CLPA barred his tort action for damages for the injuries suffered.
23The Supreme Court of Canada held that the tort action against the Crown was not barred by s. 9 of the CLPA. Iacobucci J., writing for the court, held that the bar applies only if there is an identity between the loss creating an entitlement to a pension and the loss giving rise to the action (at para. 27). In his words, an action will be barred if a pension is made "on the same factual basis as the action thereby barred". Section 9 of the CLPA is meant "to prevent double recovery for the same claim where the government is liable for the misconduct but has already made a payment in respect thereof" (at para. 28). He went on to say (at para. 29):
All damages arising out of the incident which entitles the person to a pension will be subsumed under s. 9, so long as that pension or compensation is given "in respect of", or on the same basis as, the identical death, injury, damage or loss.
In other words, the heads of damages need not be the same in the pension decision and the tort claim, so long as the same event underlies both proceedings.
24Applying those principles, the court concluded that the Crown was not entitled to summary judgment dismissing the action. Section 9 of the CLPA "contemplates payments in some manner contingent on the occurrence of 'death, injury, damage or loss'". CPP disability benefits, in contrast, are conditional on the status of the applicant as disabled within the meaning of the CPP (at para. 31), and they are not payable in respect of death, injury, damage or loss.
25The court noted that a pension payable under s. 111 of the Pension Act forecloses an action for damages, because eligibility for the pension rests on the occurrence of "death, injury, damage or loss . . . that was attributable to or was incurred during military service" (at para. 35). In other words, such a pension is paid on the same basis as a tort claim. The court went on to state (at para. 38): [page140]
Simply put, s. 9 of the Crown Liability and Proceedings Act establishes Crown immunity where the very event of death, injury, damage or loss that forms the basis of the barred claim is the event that formed the basis of a pension or compensation award.
26The Ontario Court of Appeal applied Sarvanis in Dionne v. Canada (2002), 2002 49481 (ON SC), 59 O.R. (3d) 566, [2002] O.J. No. 2012 (C.A.). There, a member of the Armed Forces had injured his knee during the course of his duties, and he received a pension pursuant to s. 21(2) of the Pension Act. He then brought an action in tort claiming damages for the permanent disability of his knee, alleging that negligent mistreatment by medical officers aggravated his initial injury (unreported decision of the Ont. S.C.J., dated September 28, 2001). The motions judge granted summary judgment and dismissed the claim. His decision was upheld by the Court of Appeal on the basis that the pension granted pursuant to s. 21(2) of the Pension Act had been awarded as a result of an injury arising out of or directly connected to military service. Therefore, s. 9 of the CLPA foreclosed a tort action for the same injury.
27Sarvanis was more recently applied by the Federal Court of Appeal in Dumont v. Canada, 2003 FCA 475, [2003] F.C.J. No. 1857, [2004] 3 F.C.R. 338 (C.A.). In that case, the motions judge had stayed the claims of two former members of the Canadian Armed Forces until each made a formal application under the Pension Act. In both cases, the individuals were in receipt of partial pensions as a result of their military service as peacekeepers, but they alleged that their injuries had been exacerbated on their return to Canada by the negligent or deliberate conduct of their military peers and superiors. The Federal Court of Appeal held that their claims, other than a claim under s. 7 of the Charter, were barred by s. 9 of the CLPA, because any loss or damage claimed gave entitlement to a pension. Therefore, their claims in negligence and fiduciary duty were struck (at para. 73):
. . . even if the appellants rely on the fiduciary relationship of the Crown, their actions are essentially tort actions. These actions are prohibited under section 9 of the Act because any loss or damage that is claimed gives entitlement to payment of a pension. These actions must be struck because it is "plain and obvious beyond a reasonable doubt" that they cannot succeed.
28The court also ordered the actions stayed to the extent that they relied on s. 7 of the Charter, but only until the conditions in s. 111(2) of the Pension Act were met (at para. 79). The court noted that the appellants did not explain how s. 7 had been infringed, but concluded that if a trial judge found that s. 7 rights had been infringed, it was not certain that s. 9 of the CLPA would preclude an appropriate remedy under s. 24(1) of the Charter. [page141]
29More recently, the Federal Court of Appeal in Prentice v. Canada (Royal Canadian Mounted Police), 2005 FCA 395, [2005] F.C.J. No. 1954, 264 D.L.R. (4th) 742 (C.A.) dealt with the action of a police officer who had served as a peacekeeper. He based his action on s. 7 of the Charter, but the court nevertheless held that the action was "in reality an action by an employee against his employer seeking damages for harm allegedly suffered in the course of his employment" (at para. 69). Therefore, it was barred by ss. 8 and 9 of the CLPA.
30The appellant submits that Dumont has effectively overruled an earlier line of decisions on which the respondent relies, such as Stopford v. Canada, [2003] F.C.J. No. 1255, 2003 FC 994 (T.D.), Marsot v. Canada (Ministry of National Defence), [2003] F.C.J. No. 453, 2003 FCA 145 (C.A.), and Duplessis v. Canada, 2002 FCA 338, [2002] F.C.J. No. 1277, 293 N.R. 388 (C.A.). The respondent, in contrast, submits that the law respecting the application of s. 9 is not settled because of the competing lines of cases.
31The respondent submits that while the appellant relies on Dumont, the Federal Court of Appeal in that case did not take into account its earlier decision in Duplessis, supra. In that case, the court had dismissed an appeal from the motions judge, who held that it was not plain and obvious that the plaintiff's claim would fail. There, the plaintiff was a former peacekeeper, who had received a pension for PTSD. In his action, he alleged he suffered further injuries because of the treatment he received from the Armed Forces on his return to Canada. The motions judge was of the view that the claims were separate and distinct from his PTSD (2001 FCT 1038, [2001] F.C.J. No. 1455, 109 A.C.W.S. (3d) 147 (T.D.), at para. 20). In dismissing the appeal, the Federal Court of Appeal made no reference to the decision of the Supreme Court of Canada in Sarvanis.
32The respondent also relies on Stopford, supra. That decision turned on whether there was a genuine issue for trial with respect to a claim for negligence and breach of fiduciary duty arising out of the plaintiff's treatment after his return to Canada from peacekeeping duties (at para. 32).
33In Marsot, supra, the Federal Court of Appeal gave brief reasons dismissing an appeal from the determination of a motions judge that summary judgment should not be granted. The court agreed that the Crown had provided insufficient evidence to establish that the basis on which the plaintiff was awarded a pension was in respect of the same injury, damage or loss as the basis for her claims. Sarvanis is mentioned, but not applied.
34The respondent also relies on Mérineau v. Canada, 1983 164 (SCC), [1983] 2 S.C.R. 362, [1983] S.C.J. No. 77, where the Supreme Court held that s. 9 did not bar an action for medical malpractice brought [page142] against the Crown as a result of treatment at the National Defence Medical Centre. The lower courts had held that the action was barred because the plaintiff was entitled to a pension for an injury incurred as a result of his military service. The Supreme Court held that the action was not barred, since the damage was not directly connected to his military service, as required for entitlement to a pension.
35Similarly, in Berneche v. Canada, 1991 13592 (FCA), [1991] F.C.J. No. 515, [1991] 3 F.C. 383 (C.A.), the Federal Court of Appeal held that a trial judge erred in striking a Statement of Claim alleging negligent medical treatment by medical officers. Citing Mérineau, the court held that it was not beyond doubt that the aggravation of the plaintiff's injury was too tenuously linked to his military service to be barred by then s. 111 of the Pension Act.
36The respondent submits that the proper interpretation of s. 9 of the CLPA is uncertain, and therefore, the motions judge correctly refused to strike the action. However, in my view, there must be caution in relying on the decisions preceding Sarvanis relied on by the respondent. Sarvanis is a significant decision on the interpretation of s. 9 of the CLPA, and it has been applied by the Ontario Court of Appeal in Dionne and the Federal Court of Appeal in Dumont.
37Sarvanis makes it clear that the question to be asked is whether the factual basis for the pension and the action is the same. Does the same loss or injury underlie both? If it is plain and obvious, on the facts as pleaded, that the same loss underlies both, the action is barred by s. 9 of the CLPA.
38The respondent further submits that the scope of s. 9 is unsettled, because there are cases that suggest it does not bar an action for damages for intentional misconduct. Here, he claims damages for intentional infliction of mental suffering and breach of fiduciary duty, based on deliberate acts. Therefore, he submits, it is not plain and obvious that s. 9 bars his claim.
39The respondent relies on a decision of the Superior Court of Justice, Cross v. Sullivan (11 November 2006), Kingston 14244/02 (S.C.J.), where the motions judge dismissed a motion for summary judgment, commenting on the fact that there were allegations of deliberate wrongdoing by superior officers (at para. 110). He also relies on the Court of Appeal decision in Young v. McCreary (2001), 2001 4456 (ON CA), 53 O.R. (3d) 257, [2001] O.J. No. 1315 (C.A.). There, the plaintiff brought an action for defamation against two Crown servants in their personal capacity, and they sought to shield themselves from liability by relying on s. 9 of the CLPA. The Court of Appeal held that the motions judge erred in granting them relief, as one cannot determine whether the section applies [page143] to bar an action without a factual determination as to the nature of the allegations against the Crown servants and the capacity in which they were operating at the time of the alleged wrong (at paras. 13-14).
40In the present case, I note that the claims are not solely based on intentional acts, as there is a claim in negligence as well. More importantly, the language of s. 9 of the CLPA does not restrict its application to negligent acts. Nor does the Young case stand for the proposition that s. 9 does not bar an action based on intentional acts. The Court of Appeal in that case was dealing with the extent to which Crown servants are immunized from civil liability by s. 9, holding that it may not protect them where they were acting outside the scope of their employment. The case does not say that s. 9 is inapplicable to intentional torts.
41In the present case, the respondent has sued only the Crown and not the individual officers. The liability of the Crown pursuant to s. 3 of the CLPA turns on whether there was a tort committed by a servant of the Crown, whether intentional or not, in the course of employment.
42The respondent also submits that this is not an appropriate case to dismiss the claim, because it is not plain and obvious that the action concerns the same injuries for which the pension was awarded. He submits that the section does not necessarily immunize the Crown from tort liability where an individual has received benefits pursuant to a pension paid out of the Consolidated Revenue Fund. The purpose of s. 9 is to bar double recovery. Therefore, a person in receipt of a pension can sue the Crown, provided that the action does not concern the same injuries for which a pension has been awarded, and he submits that is the case here. He also submits that he claims damages for injuries not associated with his military service and not covered by the pension, relying on Marsot, supra.
43In contrast, the appellant argues that all claims but the Charter claim are barred. The respondent was awarded a pension for the PTSD caused by the assault and events in Afghanistan. That injury clearly arose from his military service, since a pension is payable for an injury suffered during special duty service attributable to or incurred during military service. Relying on Dumont, supra, the appellant submits that the claim for breach of fiduciary duty is essentially the same as in tort, and both claims for damages are barred by s. 9 of the CLPA.
44Section 9 of the CLPA requires a determination whether the respondent's pension is paid "in respect of . . . injury, damage or loss in respect of which the claim is made". Applying Sarvanis in the context of a Rule 21 motion, the question to be [page144] asked is whether it is plain and obvious that the factual basis for the pension and the claims in the civil action is the same. On the facts of this case, there are three time periods underlying the claims: the assault, the actions and failures to act by other members of the Armed Forces in Afghanistan, and the conduct of members of the Armed Forces after the respondent returned to Canada.
45It is undisputed that the respondent obtained a pension because of PTSD suffered as a result of the assault and "traumatic events" in Afghanistan. Sarvanis held that s. 9 prohibits double recovery for a claim when the government has made a payment in respect of the same misconduct.
46In para. 1A(b) of the Statement of Claim, the respondent claims damages for sexual assault, assault and battery, and in para. 42, he claims loss of income based, inter alia, on the sexual assault, assault and battery. He also alleges, in relation to breach of fiduciary duty and negligence, that military officers should have prevented hazing rituals -- apparently, because he would not have been assaulted had they done so.
47Clearly a claim based on the appellant's responsibility for the assault is barred by s. 9, as the pension was awarded on the same factual basis as this aspect of the claim for damages. To allow the respondent to proceed with this aspect of the claim would lead to double recovery. Indeed, the respondent's counsel, in oral submissions, stated that the claim is not about the assault, but rather the response of his superior officers to the assault. Therefore, it is plain and obvious that the claim for relief on the basis of the assault is barred by s. 9, and the motions judge erred in failing to so order.
48In addition, it would appear that the claim relating to the failure to prevent hazing prior to the assault in Afghanistan is barred. Presumably, the failure to prevent hazing led to the assault. However, a pension has been awarded for the resulting PTSD. Therefore, it is plain and obvious that any claim relating to this alleged misfeasance prior to the assault is barred by s. 9.
49The respondent submits, however, that it is not plain and obvious that the balance of his claim must fail, because the loss and injuries otherwise claimed in the action are not clearly identical to the psychological injuries for which the pension was awarded. The respondent's remaining claim is for damages for intentional infliction of mental suffering, breach of fiduciary duty, breach of s. 7 of the Charter and negligence, all arising from the actions or inactions of his superior officers in Afghanistan and back in Canada after the assault occurred. Without a better factual basis, he submits, one cannot be satisfied that the PTSD for [page145] which he receives his pension arose out of the response of Crown agents and employees to his reporting of the assault.
50In Sarvanis, the Supreme Court observed that all damages arising out of an incident that entitles a person to a pension are barred by s. 9, if the pension is given on the same basis as the injury or damage giving rise to the claim. In Dionne, supra, the claim was dismissed on a summary judgment motion, even though the plaintiff made allegations that his initial injury had been aggravated by subsequent negligence by military officials. Similarly, in Kift v. Canada (Attorney General), 2003 11719 (ON SC), [2002] O.J. No. 5448 (S.C.J.), the court granted summary judgment and held that the action was barred because the plaintiff had been awarded a pension for post-traumatic stress disorder suffered as a result of a motor vehicle accident. The fact that he claimed damages for conduct occurring after the accident, such as a failure to transfer and to provide proper medical treatment, did not take the action outside s. 9. See also Sulz v. Canada (Attorney General), 2006 BCSC 99, [2006] B.C.J. No. 121, 263 D.L.R. (4th) 58 (S.C.), which was decided after a trial.
51This is a Rule 21 motion, not a summary judgment motion as in Dionne or Kift, where there was affidavit evidence on the motion. On the facts pleaded and on the basis of the sparse language of the decision letter awarding the pension, it is not plain and obvious that the injuries claimed in the action as a result of conduct following the assault are identical to the psychological injury for which the pension was awarded. In order to invoke the bar in s. 9 of the CLPA, the Crown must lead sufficient evidence to prove that the respondent's PTSD compensates for the conduct that occurred after the assault. On a Rule 21 motion, without the appropriate evidentiary foundation, it is not plain and obvious that the claim for damages for events after the assault is barred by s. 9.
52Therefore, the motions judge did not err in refusing to strike the Statement of Claim, with the exception of the references to claims relating to the assault in paras. 1A(b) and 42 and claims related to the failure to prevent hazing.
Issue No. 2: Did the motions judge err in failing to strike the Statement of Claim on the basis of s. 8 of the CLPA?
Issue No. 2: Did the motions judge err in failing to strike the Statement of Claim on the basis of s. 8 of the CLPA?
53The motions judge did not address this issue directly, holding that the constitutionality of this provision had not been tested. However, the issue raised in this proceeding is the application of s. 8, not its constitutionality.
54The appellant submits that s. 8 of the CLPA provides immunity to the Crown for unique military activity and, therefore, [page146] there is no reasonable cause of action because the claims relate to events that occurred while he was serving in Afghanistan and then back in Canada.
55This section protects the Crown from liability in respect of
anything done omitted in the exercise of any power or authority exercisable by the Crown, whether in time of peace or of war, for the purpose of the defence of Canada or of training, or maintaining the efficiency of, the Canadian Armed Forces.
In P.W. Hogg and Patrick J. Monahan, Liability of the Crown, 3rd ed. (Toronto: Carswell, 2000), s. 8 is said to provide [at 181]:
a sweeping immunity for military activity, drawing no distinction between war and peace; between combat, training and discipline; or between injured civilians and injured members of the forces.
56This section does not appear to have received much judicial attention. It was relied on in Hainsworth v. Canada, [2003] O.J. No. 6162 (S.C.J.) where the motions judge held that s. 8 conferred "sweeping immunity from actions in tort arising out of military activity" (at para. 33). In that case, the action arose after the Armed Forces sought to compel the appearance of the plaintiff, a former member of the Forces, before a court martial. The motions judge concluded that the case before him involved an exercise of power or authority by the Crown for the defence of Canada or maintaining the efficiency of the Canadian Forces.
57In Swanson v. Canada (Minister of Transport), 1991 8226 (FCA), [1992] F.C.J. No. 408, [1992] 1 F.C. 408 (C.A.), at para. 29, the Federal Court of Appeal suggested that s. 8 applied only to non-negligent conduct. The appellant takes issue with that interpretation.
58Novel points of law should not be determined in a Rule 21 motion (Nash, supra). Section 8 appears to protect the Crown from lawsuits that attack military decisions made for the purpose of the defence of Canada or training or maintaining the efficiency of the Armed Forces. Whether the wrongs allegedly done to the respondent were actions taken for "the defence of Canada" or "maintaining the efficiency of the forces" is an issue that should be determined in a factual context at trial. It is not plain and obvious, on the facts pleaded, that s. 8 bars this action.
Issue No. 3: Did the motions judge err in failing to stay the action pursuant to s. 111(2) of the Pension Act?
Issue No. 3: Did the motions judge err in failing to stay the action pursuant to s. 111(2) of the Pension Act?
59The motions judge failed to address the issue of a stay pursuant to s. 111(2) of the Pension Act.
60That subsection provides that an action not barred by s. 9 of the CLPA shall be stayed until an application for a pension in [page147] respect of the same disability or death has been made by the plaintiff, and a decision has been made and confirmed by the Veterans Review and Appeal Board that no pension is to be paid to the plaintiff in respect of the same disability or death. "Action" is defined in s. 111(1) to include an action brought by a member of the armed forces against the Crown in which damages are claimed "in respect of an injury or disease or aggravation thereof resulting in disability or death".
61The respondent submits that s. 111(2) does not apply to his claim, because the wrongs claimed by him were not sustained during the course of carrying out his military duties. Moreover, he submits that the claims for damages for breach of fiduciary duty, intentional infliction of mental harm, breach of statutory duty, and breach of s. 7 are not claims for "injury or disease or aggravation thereof, resulting in disability or death".
62A pension is payable pursuant to s. 21(1) of the Pension Act for injuries resulting in disability that are "attributable" to military service. All the allegations underlying the respondent's claim are directed towards conduct by his superiors or fellow soldiers. Those occurring in Afghanistan appear to be attributable to his military service.
63With respect to events after his return to Canada, he complains of the conduct of his superior officers. This is true even with respect to the assault in the bar in Petawawa, since he has pleaded that the assault was a foreseeable result of his superior officers' failure to transfer him. Pursuant to s. 21(2) of the Pension Act, a pension is payable for peacetime service if the injury arose out of or is directly connected with military service.
64It is not for this court to determine whether the respondent suffered injury as a result of the conduct of his superior officers that entitles him to a further pension. Pursuant to s. 111(2), the remaining part of his action must be stayed until he has exhausted all his remedies under the Veterans Review and Appeal Board Act, S.C. 1995, c. 18.
Issue No. 4: Did the motions judge err in awarding costs on a substantial indemnity basis?
Issue No. 4: Did the motions judge err in awarding costs on a substantial indemnity basis?
65While it is not strictly necessary to deal with the issue of the scale of costs, I shall nevertheless do so in the interests of completeness. However, the motions judge's award of costs must be reconsidered in light of the result of this appeal.
66The Supreme Court of Canada in Hamilton v. Open Window Bakery Ltd., 2004 SCC 9, [2004] 1 S.C.R. 303, [2003] S.C.J. No. 72 held that a court should only set aside a costs award on appeal if the [page148] trial judge has made an error in principle, or if the costs award is plainly wrong (at para. 27).
67The respondent made an offer to settle on the basis that the appellant's motion would be dismissed with partial indemnity costs. The motions judge's decision to award substantial indemnity costs appears to turn on the fact of the offer to settle and the complexity of the motion.
68The motions judge placed great weight on the respondent's offer to settle and held that he should "order otherwise" under rule 49.10. He made reference in his reasons to rule 49.10(1), which deals with a plaintiff's offer to settle. If a plaintiff makes an offer to a defendant and succeeds in obtaining a judgment that is as favourable or more favourable than the terms of the offer, the plaintiff is entitled to partial indemnity costs to the date of the offer and substantial indemnity costs from the date of the offer "unless the court orders otherwise".
69In my view, the motions judge erred in relying on this part of rule 49.10, as the respondent was in the position of a defendant, not a plaintiff, in the motion. It would be rule 49.10(2), dealing with a defendant's offer, that would apply, by analogy, to the respondent's offer. Pursuant to that rule, if a plaintiff obtains a judgment that is as favourable as or less favourable than the terms of the defendant's offer, the plaintiff is entitled to partial indemnity costs to the date of the offer, and the defendant is entitled to partial indemnity costs thereafter, unless the court orders otherwise.
70However, these provisions of rule 49.10 do not apply where the plaintiff's action has been dismissed (see S & A Strasser Ltd. v. Richmond Hill (Town) (1990), 1990 6856 (ON CA), 1 O.R. (3d) 243, [1990] O.J. No. 2321 (C.A.), at p. 245 O.R.). Nevertheless, an offer can be considered under rule 57.01(1). In the Strasser case, the court awarded the successful defendant party and party costs to the date of the offer and solicitor and client costs thereafter.
71That case has received further comment from the Court of Appeal. In Scapillati v. A. Potvin Construction Ltd. (1999), 1999 1473 (ON CA), 44 O.R (3d) 737, [1999] O.J. No. 2187 (C.A.), the court explained that the principle in Strasser was narrow, turning on the magnitude of the plaintiff's claim, the size of the defendant's offer and the dismissal of the plaintiff's claim.
72While a judge can consider any offer pursuant to rule 57.01(1), the offer in this case does not justify an award of costs on a substantial indemnity basis. An award of costs on a substantial indemnity scale is to be made only in special and rare circumstances -- for example, where a party has made unfounded allegations of fraud (Murano v. Bank of Montréal (1988), 1998 5633 (ON CA), 41 O.R. (3d) 222, [1998] O.J. No. 2897 (C.A.), at para. 82), [page149] or where the conduct of a party is found to have been "reprehensible, scandalous or outrageous" (Foulis v. Robinson (1978), 1978 1307 (ON CA), 21 O.R. (2d) 769, [1978] O.J. No. 3596 (C.A.), at p. 776 O.R.).
73This is not a case like Strasser, where solicitor and client costs were awarded to the defendant from the date of the offer because of the unusual facts of the case. Here, the motions judge made no finding that the appellant's conduct was reprehensible, scandalous or outrageous. The respondent's offer contained no element of compromise, and that is a factor to be considered under rule 57.01(1) (see Celanese Canada Inc. v. Canadian National Railway Co., 2005 8663 (ON CA), [2005] O.J. No. 1122, 196 O.A.C. 60 (C.A.), at para. 36). In my view, there is nothing in the material before the court that would justify an award of substantial indemnity costs for the motion throughout.
74The motions judge gave great weight to the complexity of the motion. However, complexity is a factor to be considered in determining the appropriate quantum of costs, and will be reflected in the hours spent. It is not a reason for granting a punitive award of costs.
75In submissions before this court, the respondent submitted that this was an appropriate case in which to award a premium. However, that was not a reason given by the motions judge for his decision. Moreover, even assuming that a premium can be awarded following the decision of the Supreme Court of Canada in Walker v. Ritchie, [2006] 2 S.C.R. 428, [2006] S.C.J. No. 45, 2006 SCC 45, the cases in which a premium has been awarded followed a trial with an outstanding result for the plaintiff and evidence of a real risk of non-payment by the plaintiff's counsel, who has carried the litigation for the plaintiff (Ward v. Manulife Financial, 2007 92626 (ON SC), [2007] O.J. No. 37, 25 B.L.R. (4th) 327 (S.C.J.)). There is no evidence before us as to the financial arrangements between the respondent and his counsel. On the material before us, it would not be appropriate to award a premium on the costs for this motion.
76For these reasons, I am of the view that the motions judge erred in principle in awarding substantial indemnity costs.
77The appellant did not take issue with the motions judge's determination that the hours of counsel were reasonable. Given the complexity of the case and its importance to the respondent, I agree with that conclusion. On a partial indemnity basis, the respondent would have been entitled to two thirds of the substantial indemnity costs -- that is, $36,000 plus GST of $2,520 plus disbursements of $537.72. However, given the result in this appeal, the issue of the costs to be awarded for the motion can be determined only after further submissions from the parties. [page150] Conclusion
Conclusion
78The appeal is allowed, and the order of the motions judge is set aside. The motion is allowed in part: Paragraphs 1A(b) and 42 of the Statement of Claim are struck, as well as references to the failure to prevent hazing, and the action is otherwise stayed pursuant to s. 111(2) of the Pension Act pending the exhaustion of the respondent's remedies under the Veterans Review and Appeal Board Act.
79If the parties cannot agree on costs of the motion below, the motion for leave to appeal and the appeal, they may make written submissions within 30 days of the release of this decision.
Dissenting Reasons
80TALIANO J. (dissenting): -- I have read the reasons of my colleagues in this matter and I agree with their conclusion that it has not been demonstrated that this action is barred by s. 8 of the CLPA and that the appeal on this ground should be dismissed. I also concur with the majority on the granting of a stay of this proceeding pending the disposition of the plaintiff's application for a review of his entitlements under the Pension Act.
81However, I must respectfully disagree with the conclusion reached by my colleagues to strike portions of the Statement of Claim pursuant to s. 9 of the CLPA. I also disagree with the majority's disposition of the costs issue.
82For the sake of brevity, I adopt the review of the background giving rise to the motion and the framing of the issues as set out in the majority judgment and will now explain the reasons for my dissent on the two issues referred to.
Governing Principles
Governing Principles
83The applicable test on a motion to dismiss an action or to strike a pleading under rule 21.01 is whether it is plain and obvious that the pleadings disclose no reasonable cause of action. The defendant must demonstrate that the claim sought to be struck has no possibility whatsoever of success. Put another way, only if the action is certain to fail because it contains a radical defect should the Statement of Claim be struck out. (See Hunt v. Carey Canada Inc., 1990 90 (SCC), [1990] 2 S.C.R. 959, [1990] S.C.J. No. 93; Nash v. Ontario (1995), 1995 2934 (ON CA), 27 O.R. (3d) 1, [1995] O.J. No. 4043 (C.A.), and Duplessis v. Canada, 2000 16541 (FC), [2000] F.C.J. No. 1917, 101 A.C.W.S. (3d) 723 (T.D.), affd 2001 FCT 1038, [2001] F.C.J. No. 1455, 109 A.C.W.S. (3d) 147 (T.D.).) Given the finality of such an order, the court's power to strike a pleading or dismiss an action without affording the plaintiff a chance to go to trial is to be used sparingly and the onus on the moving party under this rule is described as being a "heavy one". In addition, it has been held that the court should [page151] not dispose of matters of law that are not fully settled in the jurisprudence (see Nash, supra).
Section 9 of the CLPA
84The removal of the right to sue for redress and the granting of federal immunity has spawned considerable litigation challenging the validity of the immunity provisions of the CLPA. The results of this litigation have not been entirely consistent.
85In Duplessis v. Canada, supra (judgment delivered November 17, 2000), the plaintiff brought an action for compensation for injuries that resulted from post-traumatic stress disorder after returning from peace keeping assignments in Bosnia and the aggravation of the disorder as a result of alleged indifference and hostility towards him by the Armed Forces. Notwithstanding that the plaintiff was in receipt of a disability pension, Prothonotary Aronovitch dismissed a motion to strike the pleadings on the grounds that the law was still developing with respect to the breach of fiduciary and statutory duties and it appeared that the plaintiff's losses were far greater than the matters for which he had received compensation under his disability pension.
86In Stopford v. Canada, 2001 FCT 887, [2002] F.C.J. No. 1255, 1 F.C. 360 (T.D.) (judgment dated August 14, 2001), the plaintiff brought an action to recover damages for injuries suffered both before and after performing his duties as a warrant officer in the Balkans in 1993. While serving in Croatia, the plaintiff was required to handle hazardous materials without being given appropriate protection. Several years later, he was informed that members of his own troop had poisoned him while in Croatia. The Statement of Claim included allegations of deliberate wrongdoing on the part of his senior officers and breach of fiduciary duties to the plaintiff. Notwithstanding that the plaintiff was receiving a pension for injuries sustained during military service and notwithstanding s. 9 of the CLPA which barred the plaintiff from requesting additional compensation from the courts, Prothonotary Aronovitch dismissed a motion brought to strike the Statement of Claim concluding that there was a serious question to be determined which should be determined on the merits after a trial. In addition, he held the law of fiduciary duty was not yet settled and therefore it was not plain and obvious that the plaintiff's claim would fail. An appeal by the Crown to the Federal Court Trial Division was dismissed by Gibson J. on August 25, 2003, relying on the just released decision of the Federal Court of Appeal in Marsot v. Canada, [2003] F.C.J. No. 453, 2003 FCA 145 (C.A.). Gibson J. held that since a good part of the relief claimed was not in respect of an injury or aggravation therefore directly connected [page152] with military service, but rather in respect of a disease or aggravation thereof arising after the plaintiff's return to Canada, the matter should proceed to trial.
87In Marsot v. Canada (Minister of National Defence), 2002 FCT 226, [2002] F.C.J. No. 313, [2002] 3 F.C. 579 (T.D.), the plaintiff was deployed to Kosovo in December 1999 where she alleged that she was constantly harassed by her direct supervisors over a period of three years. As a result of injuries sustained, she applied for and was granted a disability pension based on post-traumatic stress disorder and subsequently commenced an action claiming damages as a consequence of the acts of her superiors relating to harassment and abuse. The crown brought a motion to dismiss the action pursuant to s. 9 of the CLPA and s. 111 of the PA. However, Lemieux J. of the Federal Court of Canada dismissed the motion on February 28, 2002. He held that the purpose of s. 9 of the CLPA was to bar legal action if a pension or compensation has been paid or is payable out of the Fund for the same loss which forms the subject matter of the claim before the courts. Since there was no evidence to indicate what the basis was for the finding by the Department of Veteran's Affairs ("DVA") of post- traumatic stress disorder and its cause in the plaintiff, he concluded that the evidentiary gaps in the crown's application dictated a dismissal of the motion. An appeal of his ruling to the Federal Court of Appeal was dismissed on March 19, 2003, several months after the release of the Supreme Court of Canada's judgment in Sarvanis v. Canada, 2002 SCC 28, [2002] 1 S.C.R. 921, S.C.J. No. 27, 2002 SCC 28.
88The operation of s. 9 of the CLPA was examined by the Supreme Court in Sarvanis on March 21, 2002, although the factual context was quite different from the facts of the case at bar. In Sarvanis, the plaintiff was an inmate of a federal prison and while working in the hay barn of the prison farm, fell through a trap door on the second floor and sustained serious and permanent injuries, rendering him unable to work. In due course he was awarded Canada Pension Plan ("CPP") disability benefits but also launched an action for damages arising from the Crown's negligence. The Crown moved for summary judgment seeking to dismiss the action pursuant to s. 9 of the CLPA. The motion was dismissed at first instance on the ground that the benefits being paid to the plaintiff were not intended to be compensatory and arose by reason of the plaintiff's disability not because of the circumstances leading to the injury. In the Federal Court of Appeal, that decision was reversed. However, the Supreme Court of Canada restored the order of the motions court judge holding that the disability pension paid pursuant to the CPP did not constitute a pension or compensation in "respect of death, injury, damage or [page153] loss" for the purposes of s. 9 of the CLPA, but rather was based on a physical condition without reference to its cause. In the course of its ruling the court observed that s. 9 operates to bar an action based on the same factual basis as the pension award, the purpose being to avoid double recovery and to prevent Crown liability under ancillary heads of damages for an event already compensated. Even though the head of damages might be different, all damages arising out of the incident which entitle a person to a pension will be subsumed under s. 9, so long as that pension is given "in respect of" or on the same basis as, the identical death, injury, damage or loss. Iacobucci J. stated at p. 939 S.C.R.:
Simply put, s. 9 of the Crown Liability and Proceedings Act establishes Crown immunity where the very event of death, injury, damage or loss that forms the basis of the barred claim is the event that formed the basis of a pension or compensation award.
89In Sarvanis, the court held that although the words "in respect of" have the widest meaning of any expression intended to convey some connection between two related subjects, the court held that the term was not infinite in reach. In order to use the defence provided by s. 9, the Crown must prove that the damages giving rise to the plaintiff's action are identical to the psychological difficulties for which the respondent is receiving his pension.
90In the context of this case, the Crown must therefore prove that the plaintiff's PTSD, for which he receives a pension, arises from the events that occurred in Afghanistan, including the response by the plaintiff's superiors to the plaintiff's complaint concerning the assault.
91However, the plaintiff alleges that his claim for compensation is based, not on his PTSD, but rather on other harm he claims to have suffered as a result of the negligence of the Crown's servants arising from the manner in which they responded to his report of the assault, their policies surrounding hazing rituals, their having employed incompetent servants or employees who were the plaintiff's superior officers, their breach of fiduciary and other statutory duties, their failure to provide assistance, their intentional infliction of mental suffering in failing to promptly return the plaintiff to Canada and their failure to protect the plaintiff from further exposure to his attackers.
92Both before and since Sarvanis, the courts have treated these challenges to the CLPA somewhat differently. In contrast to Duplessis, Stopford and Marsot, there are several other decisions that have been decided differently. In Kift v. Canada (Attorney General), 2003 11719 (ON SC), [2002] O.J. No. 5448 (S.C.J.), the plaintiff was an R.C.M.P. officer who had been involved in a motor vehicle accident, [page154] following which he developed post-traumatic stress disorder for which he received a federal disability pension. He subsequently sought to advance a claim for damages arising from the alleged failure on the part of the Crown to transfer him to another position and for failing to provide him with appropriate medical services. On a motion to strike the proceedings, the court ruled that the claim being advanced in the action was part of the whole claim that was handled by the disability pension and therefore the plaintiff's claim was barred.
93Similarly in Sulz v. Canada (Attorney General), 2006 BCSC 99, [2006] B.C.J. No. 121, 263 D.L.R. (4th) 58 (S.C.) (dated January 19, 2006), the plaintiff was an R.C.M.P. officer who sustained various psychiatric difficulties arising from intentional harassment by her supervisors, which culminated in her medical release from the R.C.M.P. She applied for and received a pension based on the events in question and subsequently commenced an action for damages alleging that the R.C.M.P. took no steps to prevent or avoid the harassment in question. It was held that since the pension rulings referred to the allegations of harassment and concluded that her disability arose out of or was directly connected to her service in the R.C.M.P., her claim was therefore statute barred by s. 9.
94A similar result was reached on similar facts in Lebrasseur v. Canada, [2006] F.C.J. No. 1088, 2006 FC 852 and in Prentice v. Canada (Royal Canadian Mounted Police), 2005 FCA 395, [2005] F.C.J. No. 1954, 264 D.L.R. (4th) 742 (C.A.) where the court observed that the plaintiff was advancing an action seeking damages for harm allegedly suffered in the course of his employment. Although the claim was "disguised",it was held by the court to be an action as a result of a workplace accident and was therefore barred.
95Dumont v. Canada, 2003 FCA 475, [2004] F.C.J. No. 1857, [2004] 3 F.C.R. 338 (C.A.) is a case that is factually similar to the case at bar. In Dumont, the Federal Court heard appeals from dismissals of separate claims brought by two former soldiers who claimed psychological injury. They alleged that their underlying injuries had been exacerbated by the negligence or deliberate behaviour of military superiors. Both soldiers had applied for disability pensions but neither soldier sought a review before the Veterans Review and Appeal Board, nor did they ask for a reconsideration of their pension decisions. Both soldiers commenced actions in damages against the Crown, alleging negligence, breach of fiduciary duties and breaches of s. 7 of the Charter. The court held that the actions were barred by the operation of s. 9 of the CLPA. With regard to the entitlement under s. 21(1), the special duty provisions applied to an injury that was "attributable to" or having been "incurred during special duty service". The "peace time" [page155] entitlement was based on the injury having arisen "out of or was directly connected" with military service. Both such claims were held to be barred by the Federal Court of Appeal.
96Counsel for the plaintiff argued that the court in Dumont did not take into account the decision of the Federal Court of Appeal in Duplessis, and the earlier lower court decisions in Stopford and Marsot. However, in its reasons, the court referred to all of these decisions and chose not to follow them.
97In Cross v. Sullivan, a decision dated November 8, 2006, Lafreniere J. declined to strike an action on facts quite similar to the facts before this court. Cross was a member of the Canadian Forces whose immediate supervisor had been coerced to sign a false and negative assessment. Although Cross had filed a grievance which was ultimately held to be valid, it was not possible for him to obtain redress and as a result of the bad faith actions of his superiors and the failure of the military grievance system, he fell into a chronic depression and was ultimately dismissed from the military. In due course he received a 40 per cent pension based on "adjustment disorder with depressed and anxious mood".The Crown's motion to strike the action failed, the court concluding that deliberate infliction of injury or disease is distinguishable from accidental injury and may not be pensionable. Second, although the plaintiff may have been compensated for the injury caused by the wrongdoing, he had not been compensated for the wrongdoing itself and these were triable issues. In addition, the court concluded that the Crown had not met the onus of establishing a causal link between the wrongdoing of the defendants and the disability for which the plaintiff had been awarded the pension. Madam Justice Lafreniere held that the Crown had to do more than simply prove a pensionable disability related to military service. Rather the Crown must prove that the tortuous acts and other wrongs complained of are the very same claim or event that caused the pensionable disability.
98Based on these conflicting decisions, I have concluded that Marchand J. was correct when he observed that the case law in this area is still evolving. His dismissal of the motion on this ground is supported by the decision of the Ontario Court of Appeal in Nash, supra, which held that at this stage of the proceedings, the court should not dispose of matters of law that are not fully settled in the jurisprudence.
99However, there is another area of concern that prompts me to the view that Marchand J. was correct in his disposition of this motion.
100There is case law that casts some doubt on whether or not a pension would be payable to a soldier who was the victim of [page156] deliberate misconduct or intentional infliction of harm on the part of a superior officer acting outside of his scope of employment. In Young v. McCreary (2001), 2001 4456 (ON CA), 53 O.R. (3d) 257, [2001] O.J. No. 1315 (C.A.), at para. 11, Sharpe J.A. said (and the key word is "or" in line 2 of the following quotation):
Similarly, it is my view that if the appellant can establish that the respondents were acting maliciously or outside the scope of the Corrections Canada procedure when bringing their complaints against her, she would not be barred by s. 9 from proceeding with her claim. It would be inconsistent with established principles of interpretation to hold that s. 9 applies to all actions against Crown servants without regard to the capacity in which they were acting at the time of the alleged wrong.
101In Levesque v. Canada (Attorney General), 2004 ABCA 43, [2004] A.J. No. 108, 346 A.R. 88 (C.A.), para. 11, the Court of Appeal of Alberta expressed similar concerns in a case involving alleged improper conduct on the part of superior officers. The court held that:
We are not persuaded that the Court of Queen's Bench has the jurisdiction to determine whether s. 22(1) refers to improper conduct of superior officers, or whether the appellant has a right to apply for a pension where the injury results from the deliberate improper act of superior officers.
102In addition, given the broad basis for the plaintiff's claim and given the fact that the plaintiff's pension was based narrowly on the assault in Afghanistan and the diagnosis of PTSD, it is not clear whether the disability pension which was awarded to the plaintiff was awarded in respect to the numerous complaints that form the basis for his alleged injuries and damages. The question is, has the moving party demonstrated that the plaintiff's action is based on the same factual foundation as the pension which was awarded to him? The pension letter is unquestionably vague. It awards a pension based on PTSD arising out of Special Duty Service in Afghanistan. The letter goes on to state that medical records confirm that he was "assaulted" and that a disability pension is awarded because the plaintiff has PTSD related to "those traumatic events". Counsel for the plaintiff justifiably argues that the expression "those traumatic events" is too vague to justify a finding that there is no triable issue raised by the plaintiff's pleadings. This is particularly so given that the letter refers to an assault in the singular, yet goes on to use the plural form in the phrase "those traumatic events" without specifying what those other traumatic events were. In addition, the pension is based on an "assault", not on a "sexual assault", which constitutes one of the plaintiff's numerous claims. These contradictions do not justify an order to strike either the pleadings or the action. If the assault claim is struck, the plaintiff would be foreclosed from [page157] pursuing the claim for events in Petawawa. Striking the claim for "sexual assault" is unwarranted because the pension letter makes no specific mention that such an event formed the basis for the pension award. Further, there is nothing in the award to indicate what the basis was for awarding the plaintiff a pension of 60 per cent other than it was for assault and PTSD. For example, it has not been demonstrated by the defendant that the plaintiff's PTSD was caused or contributed to by the alleged misconduct on the part of the plaintiff's superior officers. Nor has it been demonstrated whether the plaintiff's claims for loss of enjoyment of life and future lost income are related to the diagnosis of PTSD or to other causes. The pension award does not indicate whether it is intended to compensate the plaintiff for the alleged breach of his Charter rights or whether indeed such an award is permitted under the PA. Similarly, it is not clear whether the misconduct alleged by the plaintiff on the part of his superior officers gives rise to a disability pension and if so, whether or not such alleged misconduct formed the basis for the award of the disability pension to the plaintiff. Nor is it clear at this point whether or not an award for punitive, exemplary or aggravated damages would violate the rule in Sarvanis with respect to double recovery. Finally, it is arguable that the assault in Afghanistan produced injuries which were aggravated by post assault events which may not be pensionable but may be actionable. In Mérineau v. Canada, 1983 164 (SCC), [1983] 2 S.C.R. 362, [1983] S.C.J. No. 77, the plaintiff was disabled because of negligent medical treatment and the court held that his action for damages was not barred by s. 9 of the CLPA because the damages sustained were "too tenuously linked to his military service". The same argument may apply to several of the events that are pleaded in the Statement of Claim including the Petawawa incident.
103As previously indicated, to be successful, a motion to dismiss this action or to strike all or part of the pleadings requires that the moving party show a causal link between the damages being sought and the disability pension that was awarded. The defendant must be able to demonstrate that the plaintiff's claims for damages for breach of contract, breach of fiduciary duty, breach of Charter rights and malicious behaviour are all subsumed in the award or potential award of a disability pension. Given the factual complexity of this action, it is not surprising that such a proposition was not demonstrated and indeed could not have been demonstrated without the benefit of a full evidentiary record. As previously noted, the test on a motion to strike is a heavy one and the moving party must show that it is plain and obvious that the pleadings disclose no reasonable cause of action and that the [page158] action is certain to fail. The court's power to strike a claim without affording the plaintiff an opportunity to go to trial is to be used sparingly. Given the evidentiary uncertainty and given the uncertainty in the law, I have concluded that the applicable tests have not been met by the appellant, and that Marchand J. was correct in so concluding.
Costs
Costs
104As to the issue of costs, Marchand J. awarded the plaintiff the costs of the motion which he fixed in the sum of $58,336.98, which represented the full fees and disbursements incurred by the plaintiff in responding to the crown's motion (as set out in the plaintiff's Bill of Costs).
105The appellant objects to the award on several grounds. First, it is argued that the motions court judge took into account an Offer to Settle served by the plaintiff which proposed to dismiss the motion upon payment of partial indemnity costs. Counsel for the defendant's position is that the Offer to Settle was irrelevant since it did not contain any element of compromise. That being the case, an award of costs on a substantial indemnity basis was not justified under Rule 49. Further, the Crown argues that the Bill of Costs relied upon by the plaintiff did not differentiate between time expended on the motion before and after delivery of the offer. Although the appellant acknowledges that an award of substantial indemnity costs is within the discretion of the court, it is conceded by the plaintiff that such an award should only be granted in special and rare cases (see Murano v. Bank of Montréal (1998), 1998 5633 (ON CA), 41 O.R. (3d) 222, [1998] O.J. No. 2897 (C.A.) and Foulis v. Robinson (1978), 1978 1307 (ON CA), 21 O.R. (2d) 769, [1978] O.J. No. 3596 (C.A.), or where there has been "reprehensible, scandalous or outrageous" conduct. The appellant contends that since there was no finding by the motions court judge that this was a special or rare case or that the Crown's conduct was objectionable, the substantial indemnity award was incorrect and this court has the jurisdiction to therefore intervene.
106In considering the costs issue, Marchard J. referred to both rule 57.01(1), which sets out the factors governing the exercise of the court's discretion to award costs and rule 49.10, which deals with offers to settle. He instructed himself regarding the common law requirement that the court consider what is "fair and reasonable", as directed by the Ontario Court of Appeal in Celanese Canada Inc. v. Canadian National Railway Co., 2005 8663 (ON CA), [2005] O.J. No. 1122, 196 O.A.C. 60 (C.A.). This decision confirmed that "an element of compromise is not an essential feature of an offer [page159] to settle, but where fairness is a relevant consideration its absence can be a factor for the court to consider in deciding whether to order 'otherwise' under rule 49.10 (1) [at para. 33]."
107With respect to the Offer to Settle, Marchand J. concluded that in this case, it would have been "exceedingly difficult, if not impossible to formulate an offer which would indicate an element of 'compromise'".
108In applying rule 57.01 he alluded to several of the factors therein that favoured the plaintiff and he also concluded that given the importance of the matter, the extraordinary length and complexity of the hearing, the amount proposed for costs by the plaintiff was reasonable in all of the circumstances.
109The Supreme Court of Canada in Hamilton v. Open Window Bakery Ltd., 2004 SCC 9, [2004] 1 S.C.R. 303, [2004] S.C.J. No. 72 held that a court should only set aside a costs award on appeal if the trial judge has made an error in principle or if the costs award is plainly wrong. In this context, it was argued that Marchand J. made a reversible error in not differentiating in his ruling between services delivered before and after the delivery of the offer. However, it does not appear to me on a fair reading of his reasons that the Offer to Settle was determinative of the issue and therefore this objection carries less weight than it otherwise might. What was more cogent for Marchand J. were the circumstances of the case and although he did not characterize the case as being "special" or "rare" and did not use the word "premium" in his reasons, he did refer to the fact that this case required a study by a local practitioner of complex federal statutes on behalf of a client who had been subjected to the cost of an extraordinarily lengthy hearing (six days of which five were taken up by the appellant's submissions) at the instance of the Federal Government. A motion of this length is extremely rare even in the Superior Court and that in itself without anything else, makes this case a special or rare one. However, there are other circumstances that qualify this case as being special. Although there is no evidence before the court as to the nature of the retainer in this case, it is obvious from the pleadings that the plaintiff is youthful (he was a private in the Canadian Service on active duty in Afghanistan) and is therefore of modest income particularly when the plaintiff's resources are compared to those of the defendant. That being the case, this litigation might fairly be characterized as a battle between David and Goliath and based on the disproportionate time taken by counsel for the appellant in presenting its case, it is not a stretch to conclude that the plaintiff is involved in a war of attrition. This court is entitled to examine all of the circumstances that surrounded the [page160] costs ruling in determining whether an error has been made that warrants relief. In my view, the costs ruling was prompted by the extraordinary circumstances that this motion presented, the results achieved and the complexity of the matter and is in keeping with that line of cases that permits a premium to be awarded in special circumstances and to permit substantial indemnity awards in special or rare cases (see Lurtz v. Duchesne, 2005 5080 (ON CA), [2005] O.J. No. 354, 194 O.A.C. 119 (C.A.) and Walker v. Ritchie, 2005 13776 (ON CA), [2005] O.J. No. 1600, 197 O.A.C. 81 (C.A.)).
110Although not all of the circumstances that exist here were specifically mentioned by Marchand J. in his ruling, they must nevertheless be taken into account by this court in reviewing the correctness of the ruling. When all of the circumstances are considered, it cannot be said that the costs ruling was clearly wrong. Nor can I agree that the ruling should be regarded as being punitive in nature. The costs that were awarded were intended to fully compensate the plaintiff for legal fees that had been incurred that would probably not be otherwise paid. There is a great risk both for payment of legal fees in cases of this sort as well as for the actual life of the action, and those factors need to be taken into account in determining the correctness of the ruling. In my view, these factors would have informed Marchand J.'s decision, even though they were not all specifically referred to in the ruling. A similar costs disposition was made by Lafreniere J. in Cross where substantial indemnity costs were also awarded in circumstances not unlike the circumstances here.
111Since the motions court judge dismissed the motion in its entirety, I am unable to conclude that he erred in principle or that his award was plainly wrong and I would therefore not interfere with his disposition of costs except in this way.
112Given the fact that a stay of the action is necessary and has now been ordered, the defendant has achieved in this court some measure of success that was not achieved before Marchand J. I would therefore reduce the costs award by 20 per cent to reflect the degree of success the defendant should have achieved on the motion.
113I would reserve the question of costs of the hearing before this court pending further submissions.
114With the exception of the stay order and the adjustment of the costs award, I would dismiss the appeal.
Appeal allowed. [page161]
