Bonaparte et al. v. Her Majesty the Queen in Right of Canada as represented by the Attorney General of Canada

[Indexed as: Bonaparte v. Canada (Attorney General)]

64 O.R. (3d) 1

[2003] O.J. No. 1046

Docket No. C37702

Court of Appeal for Ontario

Labrosse, Charron and Gillese JJ.A.

March 27, 2003

Family law -- Dependants -- Claims for damages -- Children of persons who attended residential schools before 1960 bringing action for damages under s. 61 of Family Law Act for loss of their parents' guidance, care and companionship -- Motions judge properly striking claim as disclosing no cause of action -- Plaintiffs' family relationships with their parents were not in existence when allegedly tortious conduct occurred -- Section 61 of Family Law Act not having retroactive effect -- Discoverability principle not operating to create cause of action where none previously existed -- Family Law Act, R.S.O. 1990, c. F.3, s. 61.

Fiduciaries -- Duties -- Children of aboriginal attendees of residential schools bringing action against federal Crown for breach of fiduciary duty -- Children alleging that residential schools were established pursuant to governmental policy of eradicating aboriginal cultures and that federal Crown breached its fiduciary duty to them by depriving them of benefit of transmission of aboriginal culture from their parents -- Motions judge erring in striking claim as disclosing no cause of action on basis that children were not alive when Crown allegedly breached its fiduciary duty to their parents -- Whether Crown's fiduciary duty extended to children in these circumstances should not be determined summarily.

Limitations -- Estates -- Estates of deceased aboriginal persons who attended residential schools before 1960 bringing action for damages against federal Crown and others -- Motions judge properly striking claim as statute-barred by virtue of two-year limitation period in s. 38(3) of Trustee Act -- Operation of s. 38(3) of Trustee Act not ousted by s. 42 of Indian Act -- Application of s. 38 of Trustee Act not restricted to torts alone -- Section applying regardless of form of action where alleged wrong constituted injury to deceased person -- Trustee Act, R.S.O. 1990, c. T.23, s. 38(3).

Native law -- Fiduciary duties -- Children of aboriginal attendees of residential schools bringing action against federal Crown for breach of fiduciary duty -- Children alleging that residential schools were established pursuant to governmental policy of eradicating aboriginal cultures and that federal Crown breached its fiduciary duty to them by depriving them of benefit of transmission of aboriginal culture from [page2 t]heir parents -- Motions judge erring in striking claim as disclosing no cause of action on basis that children were not alive when Crown allegedly breached its fiduciary duty to their parents -- Whether Crown's fiduciary duty extended to children in these circumstances should not be determined summarily.

A number of claims were asserted against the federal Crown and other defendants arising from the operation of residential schools between 1934 and 1960. It was alleged that the residential schools were established to implement a government policy, the objective of which was to eradicate aboriginal cultures and to effect the assimilation of Indians into non- aboriginal white Christian Canadian society. The primary plaintiffs, who attended the residential schools, claimed damages for assault and battery, forcible and wrongful confinement, physical, mental and sexual abuse, forced labour, breach of fiduciary duty and negligence. Claims were also advanced on behalf of the estates of 19 deceased individuals (the "estate claims") and on behalf of children of the primary plaintiffs (the "secondary plaintiffs"), who claimed damages for breach of fiduciary duty and for loss of guidance, care and companionship under s. 61 of the Family Law Act, R.S.O. 1990, c. F.3 ("FLA"). The secondary plaintiffs' claim for breach of fiduciary duty against the federal government was based on the allegation that it owed them, as the generational descendants of the primary plaintiffs, a duty to act as a protector of their aboriginal rights, including the protection and preservation of their language, culture and way of life. They alleged that, by reason of the application of government policy, they had been deprived of the full benefit of the transmission of their Indian culture from their parents. The defendants brought a motion to strike out the claims advanced on behalf of the estate plaintiffs and the secondary plaintiffs. The motions judge struck the estate claims as statute-barred by virtue of the two-year limitation period in s. 38(3) of the Trustee Act. He struck the secondary plaintiffs' claims for breach of fiduciary duty and for damages under s. 61 of the Family Law Act as disclosing no reasonable cause of action. He held that the secondary plaintiffs could not prove that the federal government owed them a fiduciary duty as they were not alive at the relevant time and no fiduciary duty may be owed to a non-existent individual at the time of the alleged breach. With respect to the FLA claim, he noted that, prior to the enactment of the Family Law Reform Act, R.S.O. 1980, c. 152 ("FLRA") in 1978, there was no cause of action available at common law for family members for loss of guidance, care and companionship. He held that an individual cannot be born or marry into a claim under the FLA. He concluded that the requisite family relationship did not exist at the time of the alleged tortious conduct and that no FLA claims could properly be advanced. He rejected the secondary plaintiffs' contention that it was sufficient to show that the requisite relationship existed at the time the cause of action was discovered. The estate plaintiffs and the secondary plaintiffs appealed.

Held, the appeal should be allowed in part.

The plaintiffs did not present any argument on appeal in support of their claim for breach of fiduciary duty against those defendants other than the federal Crown. There was no reason to interfere with the motions judge's findings with respect to the claim against those defendants. However, the motions judge erred in striking the claim for breach of fiduciary duty against the federal Crown. It was clear that there was a fiduciary relationship between the federal Crown and the secondary plaintiffs as aboriginal people. With the implementation of the "residential school policy", the federal Crown assumed a duty to act in a fiduciary capacity with respect to the education of aboriginal peoples. It was not plain and obvious that the fiduciary duty did not extend to the secondary plaintiffs simply [page3] on the basis that they were not yet in existence at the time. The secondary plaintiffs were alleging that the very purpose of the Crown's assumption of control over the primary plaintiffs was to strip the Indian children of their culture and identity, thereby removing, as and when they became adults, their ability to pass on to succeeding generations the spiritual, cultural and behavioural bases of their people. The secondary plaintiffs were claiming, then, that they were specifically targeted by the governmental policy and that they were profoundly and adversely affected as a result. It would be inappropriate to determine in summary fashion whether the fiduciary duty extended to the secondary plaintiffs without the benefit of an evidentiary record.

The motions judge did not err in his disposition of the FLA claim. Neither s. 61 of the FLA nor its predecessor, s. 60 of the FLRA, operate retroactively. Allowing the secondary plaintiffs' claims to proceed would create a new cause of action where one never existed in the past and would result in the retroactive, and therefore impermissible, application of s. 61 of the FLA. The plaintiffs' reliance on the discoverability principle in this context was misguided. Even if the cause of action was not discoverable until after the FLRA or the FLA was in force and the requisite relationship was in existence, the discoverability principle does not create a new cause of action where none previously existed. It was plain and obvious that the FLA claims disclosed no reasonable cause of action.

The motions judge did not err in striking the estate claims as being barred by s. 38(3) of the Trustee Act. He properly rejected the argument that s. 38(3) of the Trustee Act had no application to these particular plaintiffs because s. 42 of the Indian Act, R.S.C. 1985, c. I-5 vested administration of "Indian estates" exclusively in the federal government. Section 42 applied to "matters and causes testamentary", and "matters and causes testamentary" related solely to the grant and revocation of probate of wills and administration and incidental matters. The application of s. 38(1) of the Trustee Act is not restricted to torts alone. Section 38(1) applies, regardless of the form of the action, where the alleged wrong constituted an injury to the deceased person.

APPEAL by the plaintiffs from an order of Poupore J. (2002), 16 C.P.C. (5th) 105 (S.C.J.) striking claims.

Cases referred to

• Cooper v. Hobart, [2001] 3 S.C.R. 537, 96 B.C.LR. (3d) 36, 206 D.L.R. (4th) 193, 277 N.R. 113, [2001] 11 W.W.R. 221, 2001 SCC 79, 8 C.C.L.T. (3d) 26 (sub nom. Cooper v. Registrar of Mortgage Brokers (B.C.));
• Edwards v. Law Society of Upper Canada, 2001 SCC 80, [2001] 3 S.C.R. 562, 56 O.R. (3d) 456n, 206 D.L.R. (4th) 211, 277 N.R. 145, 2001 SCC 80, 8 C.C.L.T. (3d) 153, 13 C.P.C. (5th) 35;
• Ficht v. Kitchen (1984), 1984 2068 (ON SC), 47 O.R. (2d) 495, 46 C.P.C. 125 (H.C.J.);
• Hunt v. Carey Canada Inc., 1990 90 (SCC), [1990] 2 S.C.R. 959, 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);
• International Corona Resources Ltd. v. Lac Minerals Ltd., 1989 34 (SCC), [1989] 2 S.C.R. 574, 69 O.R. (2d) 287n, 36 O.A.C. 57, 61 D.L.R. (4th) 14, 101 N.R. 239, 44 B.L.R. 1, 26 C.P.R. (3d) 97, 35 E.T.R. 1, 6 R.P.R. (2d) 1;
• M. (K.) v. M. (H.), 1992 31 (SCC), [1992] 3 S.C.R. 6, 96 D.L.R. (4th) 289, 142 N.R. 321, 14 C.C.L.T. (2d) 1;
• Norberg v. Wynrib, 1992 65 (SCC), [1992] 2 S.C.R. 226, 68 B.C.L.R. (2d) 29, 92 D.L.R. (4th) 449, 138 N.R. 81, [1992] 4 W.W.R. 577, 12 C.C.L.T. (2d) 1;
• Peixeiro v. Haberman, 1997 325 (SCC), [1997] 3 S.C.R. 549, 151 D.L.R. (4th) 429, 217 N.R. 371, 30 M.V.R. (3d) 41, 12 C.P.C. (4th) 255;
• Pole v. Hendery (1987), 1987 4163 (ON CA), 61 O.R. (2d) 486, 23 O.A.C. 238, 43 D.L.R. (4th) 150, 21 C.P.C. (2d) 109 (C.A.);
• Quebec (Attorney-General) v. Canada (National Energy Board), 1994 113 (SCC), [1994] 1 S.C.R. 159, 112 D.L.R. (4th) 129, 163 N.R. 241 (sub nom. Québec (Procureur général) v. Canada (Office national de l'énergie));
• Roth v. Weston Estate (1997), 1997 1125 (ON CA), 36 O.R. (3d) 513, 20 E.T.R. (2d) 69 (C.A.);
• Smallman v. Moore, 1948 4 (SCC), [1948] S.C.R. 295, [1948] 3 D.L.R. 657; [page4]
• Waschkowski v. Hopkinson Estate (2000), 2000 5646 (ON CA), 47 O.R. (3d) 370, 184 D.L.R. (4th) 281, 32 E.T.R. (2d) 308, 44 C.P.C. (4th) 42 (C.A.);
• Wewaykum Indian Band v. Canada (2002), 220 D.L.R. (4th) 1, 297 N.R. 1, 2002 SCC 79, [2002] S.C.J. No. 79 (sub nom. Roberts v. R.);
• Winnipeg Child and Family Services v. G. (D.F.), 1997 336 (SCC), [1997] 3 S.C.R. 925, 121 Man. R. (2d) 241, 152 D.L.R. (4th) 193, 219 N.R. 241, 158 W.A.C. 241, [1998] 1 W.W.R. 1, 39 C.C.L.T. (2d) 155, 31 R.F.L. (4th) 165;
• Yuill v. McMullen (1980), 1980 1589 (ON CA), 28 O.R. (2d) 624, 110 D.L.R. (3d) 256 (C.A.), affg (1979), 25 O.R. (2d) 178, 100 D.L.R. (3d) 370, 9 C.C.L.T. 106, 11 C.P.C. 63, 9 R.F.L. (2d) 275 (H.C.J.)

Statutes referred to

• Constitution Act, 1867 (U.K.), 30 & 31 Vict. c. 3
• Constitution Act, 1982, being Sched. B to the Canada Act, 1982 (U.K.), 1982, c. 11
• Crown Liability and Proceedings Act, R.S.C. 1985, c. C-50, ss. 3, 10, 24
• Family Law Act, R.S.O. 1990, c. F.3, s. 61
• Family Law Reform Act, R.S.O. 1980, c. 152, s. 60
• Indian Act, R.S.C. 1985, c. I-5, s. 42
• Trustee Act, R.S.O. 1990, c. T.23, s. 38(1), (3)

Rules and regulations referred to

• Rules of Civil Procedure, R.R.O. 1990, Reg. 194, rules 21, 21.01(1)(a), (b)

Russell Kronick, Q.C., and Joseph W. Griffiths, for appellants. Linda Dolan and Caroline Clark, for respondent the Attorney General of Canada. M. Gregory Ellies, for respondent the Roman Catholic Episcopal Corporation of the Diocese of Sault Ste. Marie. Wally Zimmerman, for respondent The Jesuit Fathers of Upper Canada.

[1] BY THE COURT: -- The appellants appeal the order of Poupore J. dated January 11, 2002, striking the claims and denying leave to add proposed claims advanced on behalf of the estates of 19 deceased individuals (the "estate claims") and on behalf of 189 individuals (the "secondary plaintiffs") [See Note 1 at end of document] who claim damages for breach of fiduciary duty, and for loss of guidance, care and companionship under s. 61 of the Family Law Act, R.S.O. 1990, c. F.3 ("FLA").

[2] The order was made following the hearing of two motions. One motion was brought by the appellants to sever certain claims made by individuals in actions other than the present one, to consolidate the severed claim to this action, and to amend the statement of claim by adding certain plaintiffs. The respondents [page5] brought a cross-motion under Rule 21 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 to strike out the claims advanced on behalf of the estates and the secondary plaintiffs, on the ground that they disclosed no reasonable cause of action. The respondents also opposed the addition of further estate claimants and secondary plaintiffs to the action, on the same ground. This appeal concerns the motions judge's decision on the cross-motion striking the claims advanced by the estates and by the secondary plaintiffs, and his decision on the motion denying leave to add like claimants to the existing action.

[3] In our view, the motions judge was correct in striking and disallowing the estate claims and the claims under the FLA on the basis that they disclosed no reasonable cause of action. The secondary plaintiffs' claims for breach of fiduciary duty were also properly dismissed, except as against the federal Crown. In respect of the latter, we conclude that the motions judge erred in finding that it was plain and obvious that the claims cannot succeed.

FACTS

[4] The 56 plaintiffs, referred to as "Males" and "Females" in the existing and proposed amended statement of claim, are identified in the pleading as Indians. The Males and Females will be referred to collectively as "the primary plaintiffs". The primary plaintiffs advance individual claims stemming from their attendance, for a period of time between 1934 and 1960, at St. Peter Claver Industrial School for males and St. Joseph School for females. The two schools were located near Spanish, Ontario. They were residential schools established by the federal government, as represented in this action by the defendants the Attorney General of Canada and the Minister for Indian and Northern Affairs. It is alleged that the residential schools were established to implement a government policy "the objective of which was to eradicate aboriginal cultures and to effect the assimilation of Indians into the non-aboriginal white Christian Canadian society". The residential schools were run respectively by the defendants, The Jesuit Fathers of Upper Canada, and The Daughters of the Immaculate Heart of Mary. It is alleged that both schools fell under the supervision of the remaining defendants, the Roman Catholic Bishop of Sault Ste. Marie and the Roman Catholic Episcopal Corporation of the Diocese of Sault Ste. Marie.

[5] The primary plaintiffs claim damages for a variety of causes of action including assault and battery; forcible and wrongful confinement; physical, mental and sexual abuse; forced labour; breach of fiduciary duty; and negligence. Not all of the primary [page6] plaintiffs claim for all of these causes of action. The claims advanced by the primary plaintiffs are not contested in this proceeding, save and except for the 19 estate claims, brought on behalf of deceased former students. The respondents contend that those claims are statute-barred.

[6] The 189 secondary plaintiffs are identified in the pleading as "family members or relatives" of the primary plaintiffs. However, counsel advised the court that they are all children of the primary plaintiffs. Fifty-six of these secondary plaintiffs are the children of the estate claimants; however, it is not necessary to distinguish between these secondary plaintiffs and the others for the purpose of this appeal. None of the secondary plaintiffs attended the schools, and none was born or conceived at the time their parents attended the schools.

[7] The secondary plaintiffs claim damages for breach of fiduciary duty. Their claim against the federal government is based on the allegation that, by virtue of the Constitution Act, 1867 (U.K.), 30 & 31 Vict., c. 3, the Constitution Act, 1982, being Schedule B to the Canada Act, 1982 (U.K.), 1982, c. 11, and the provisions of the Indian Act, R.S.C. 1985, c. I-5, as amended from time to time, it owed them, as the generational descendants of the primary plaintiffs, a duty to act as a protector of their aboriginal rights, including the protection and preservation of their language, culture, and way of life. They allege that, by reason of the application of government policy, they have been deprived of the full benefit of the transmission of their Indian culture from their parents, the primary plaintiffs, and they have been denied the opportunity to achieve a full and normal family, social and economic life, as has been afforded to other Canadians, and as would have been the case except for the application of the policy. The claim for breach of fiduciary duty against the other defendants is based on their participation, for remuneration, in the implementation of the government policy.

[8] The secondary plaintiffs also claim damages under s. 61 of the FLA for loss of guidance, care and companionship that each could reasonably have expected to receive from the primary plaintiffs, if the latter had not suffered the abuse resulting from the implementation of the policy.

[9] The motions judge struck the secondary plaintiffs' claims from the statement of claim as not disclosing a cause of action. The claim for breach of fiduciary duty was struck on the basis that none of the secondary plaintiffs were either born or conceived at the time of the alleged breach of duty. By reason of that fact, the motions judge held that the secondary plaintiffs could [page7 n]ot prove the existence of a fiduciary relationship between themselves and the defendants at the time that their parents were residents at the schools. He held further that no material facts were pleaded in support of their claim for breach of fiduciary duty, save and except as against the federal government, and even in respect of the claim against the latter, there were insufficient facts to support it.

[10] The motions judge struck the secondary plaintiffs' claims under the FLA on the basis that they fell outside the purview of s. 61 because none of the family relationships with the primary plaintiffs was in existence at the time that the tortious conduct occurred. Further, he held that, because the tortious conduct occurred prior to the legislative enactment of the right of action, to allow the claim would result in a retroactive and therefore impermissible application of the statute.

[11] Finally, the motions judge struck the estate claims on the basis that they were barred by virtue of s. 38(3) of the Trustee Act, R.S.O. 1990, c. T.23.

ISSUES

[12] The three issues in this appeal are as follows:

(1) Did the motions judge err in striking the secondary plaintiffs' claims for breach of fiduciary duty?

(2) Did the motions judge err in striking the secondary plaintiffs' Family Law Act claims?

(3) Did the motions judge err in striking the estate claims as statute-barred?

ANALYSIS

[13] All parties agree that the correct test to be applied on a motion to strike all or part of a statement of claim under rule 21.01(1)(a) or (b) is whether it is "plain and obvious" that the statement of claim discloses no reasonable cause of action: see Hunt v. Carey Canada Inc., 1990 90 (SCC), [1990] 2 S.C.R. 959, 74 D.L.R. (4th) 321. As Wilson J. noted in Hunt, this test is rooted in the need for courts to ensure that their process is not abused. However, as she noted at p. 977 S.C.R."[t]he fact that the case the plaintiff wishes to present may involve complex issues of fact and law or may raise a novel legal proposition should not prevent a plaintiff from proceeding with his action." Although the appellants concede that the motions judge relied on the correct test, they submit that he erred in applying it, by failing to recognize that the [page8] novelty of their claims provided no basis for striking them at this stage of the proceeding.

[14] In our view, the motions judge instructed himself in accordance with the correct test. We do not read his reasons as dismissing the claims simply because they were novel. Indeed, he expressly stated that it would be improper to dismiss the claims on that basis. Rather, he dismissed them because, in his view, they were not tenable at law. As counsel for the appellants properly conceded at the hearing, the novelty of a claim, in and of itself, provides no reason for allowing it to proceed if it does not disclose a reasonable cause of action.

(1) Did the Motions Judge Err in Striking the Secondary Plaintiffs' Claims for Breach of Fiduciary Duty?

(a) The motions judge's decision

[15] The motions judge held that, in order to sustain a cause of action for breach of fiduciary duty, the secondary plaintiffs must establish a fiduciary relationship between the parties and conduct by the fiduciary that is in breach of that relationship. He then referred to the common characteristics that usually serve to identify fiduciary relationships, as set out by the Supreme Court of Canada in International Corona Resources Ltd. v. Lac Minerals Ltd., 1989 34 (SCC), [1989] 2 S.C.R. 574, 61 D.L.R. (4th) 14, at pp. 577-78 S.C.R.:

(1) The fiduciary has scope for the exercise of some discretion or power;

(2) The fiduciary can unilaterally exercise that power or discretion so as to affect the beneficiary's legal or practical interests; and

(3) The beneficiary is peculiarly vulnerable to or at the mercy of the fiduciary holding the discretion or power.

[16] With respect to the Crown, the motions judge stated as follows at paras. 37-38:

The Federal Government removed the Residents from the care of their parents and assumed that role. The Residents were placed in boarding schools where all decisions affecting their interests were made for them.

I am satisfied that by virtue of the Constitution Act of 1867 [sic] the provisions of the Indian Act as amended and with the implementation of the 'residential school policy' for the education of children, the Federal Government assumed a duty to act in a fiduciary capacity with respect to the education of aboriginal peoples. I come to this conclusion after reviewing the decisions of the Supreme Court of Canada in Guerin v. The Queen, 1984 25 (SCC), [1984] 2 S.C.R. 335 and in R. v. Sparrow, 1990 104 (SCC), [1990] 1 S.C.R. 1075 (S.C.C.).

[17] The motions judge then noted, and correctly so, that the issue was not whether the primary plaintiffs could prove that the Crown owed them a fiduciary duty, but whether their children, [page9] the secondary plaintiffs, could do so despite the fact that none was yet born at the relevant time. He concluded that it was plain and obvious that they could not because no fiduciary duty may be owed to a non-existent individual at the time of the alleged breach. He stated as follows at para. 42:

It is plain and obvious that the secondary plaintiffs are not able to prove the existence of a fiduciary relationship between themselves and the defendants at the time that their parents were residents at the Schools. There is therefore no substantive question of law in the secondary plaintiffs' claim for breach of fiduciary duty that can go to trial.

[18] As noted earlier, the motions judge held further that no material facts were pleaded in support of the secondary plaintiffs' claim for breach of fiduciary duty, save and except as against the federal government, and even in respect of the claim against the latter, he expressed the view that there were insufficient facts to support it.

[19] The appellants did not present any argument in this court in support of their claim for breach of fiduciary duty against those defendants other than the federal Crown. We see no reason to interfere with the motions judge's finding that the pleading did not present, let alone support, a claim against them. We will therefore deal with this ground of appeal only as it relates to the Crown.

(b) The position of the parties

[20] The secondary plaintiffs submit that the fiduciary relationship between the Crown and the aboriginal peoples of Canada is well-recognized. It is a relationship that is rooted in history, not in the pleading. They submit that the nature of this relationship gives rises to a presumption of fiduciary obligations owed by the Crown to aboriginal peoples in general and, more specifically, to themselves.

[21] In particular, the secondary plaintiffs submit that fiduciary obligations arose by reason of the fact that the Crown, in establishing the residential schools, embarked upon a unilateral undertaking related to the education, housing and social development of aboriginal peoples. They allege that the residential schools were established to implement a governmental policy, the objective of which was to bring about the eradication of the aboriginal culture, past, present and future. Hence, they submit that it was foreseeable, if not intended by the Crown, that the long-term consequence of its actions would deprive not only the primary plaintiffs, but also their generational descendants, of their culture, history and status as a nation. In these circumstances, they submit that [page10] the fiduciary obligations arising from the Crown's actions extended not only to the residents of the schools but also to themselves as the members of the next generation.

[22] In the alternative, the secondary plaintiffs submit that, even if the long-term effect of the residential school policy could not be said to be a breach of the fiduciary duty owed to them, the Crown's failure to take corrective measures to restore to the secondary plaintiffs their culture, history and status, is itself a breach of the fiduciary duty.

[23] The Crown submits that the secondary plaintiffs have not pleaded any facts to support the allegation that a fiduciary duty was owed to them, as children of the former students at the schools. It is submitted that the pleading discloses none of the essential ingredients necessary to found a fiduciary relationship between the parties. In this respect, the Crown stresses the importance of the fact that none of the secondary plaintiffs were born or even conceived when the acts complained of are said to have occurred.

[24] The Crown submits further that an Indian right is a collective right, not an individual right and that the secondary plaintiffs have not pleaded any facts to support a collective claim. In this respect, the Crown notes in its factum that "[p]resumably the secondary plaintiffs are advancing their fiduciary duty claims on the basis that they are the children of 'native Indians' even though they have not pleaded that they themselves are members of any aboriginal collectivity." The Crown therefore submits that the secondary plaintiffs' claims are in effect individual claims based on alleged breaches of fiduciary duty owed to each of them by virtue of familial relationships only.

[25] Finally, the Crown submits that the law has always distinguished between an unborn child and a child after birth. It is the Crown's position that the secondary plaintiffs are asking the court to ignore this distinction and to take a further step in recognizing a duty of care owed to future generations of children not yet conceived. The Crown submits that this approach would give rise to the spectre of indeterminate liability and, moreover, would constitute a radical extension of the common law that is properly within the purview of the legislature, not the court.

(c) Analysis

[26] It is important to note at the outset that, in order to prove the existence of a fiduciary duty, it is not sufficient for the appellants to rely solely on the general fiduciary nature of the relationship between the Crown and the aboriginal peoples of Canada. In Quebec (Attorney General) v. Canada (National Energy Board), 1994 113 (SCC), [1994] 1 S.C.R. 159, 112 D.L.R. (4th) 129, [page11] the Supreme Court of Canada stated as follows at p. 183 S.C.R.:

It is now well settled that there is a fiduciary relationship between the federal Crown and the aboriginal peoples of Canada: Guerin v. The Queen, 1984 25 (SCC), [1984] 2 S.C.R. 335. Nonetheless, it must be remembered that not every aspect of the relationship between fiduciary and beneficiary takes the form of a fiduciary obligation: Lac Minerals Ltd. v. International Corona Resources Ltd., 1989 34 (SCC), [1989] 2 S.C.R. 574. The nature of the relationship between the parties defines the scope, and the limits, of the duties that will be imposed.

[27] More recently, in Wewaykum Indian Band v. Canada, 2002 SCC 79, 220 D.L.R. (4th) 1, Binnie J., writing for the court, reviewed some of the relevant jurisprudence on the various fiduciary obligations that have been imposed on the Crown as a result of its relationship with the aboriginal peoples. He then stated the following at para. 81:

But there are limits. The appellants seemed at times to invoke the "fiduciary duty" as a source of plenary Crown liability covering all aspects of the Crown-Indian band relationship. This overshoots the mark. The fiduciary duty imposed on the Crown does not exist at large but in relation to specific Indian interests.

(Emphasis added)

[28] Binnie J. then noted at para. 82 that "[s]ince Guerin, Canadian courts have experienced a flood of 'fiduciary duty' claims by Indian bands across a whole spectrum of possible complaints" and he cited several cases by way of example. The cases that he cited involved claims to structure elections; to require the provision of social services; to rewrite negotiated provisions; to cover moving expenses; to suppress public access to information about band affairs; to require legal aid funding; to compel registration to individuals under the Indian Act; and to invalidate a consent signed by an Indian mother to the adoption of her child. Binnie J. then stated as follows at para. 83:

I offer no comment about the correctness of the disposition of these particular cases on the facts, none of which are before us for decision, but I think it desirable for the Court to affirm the principle, already mentioned, that not all obligations existing between the parties to a fiduciary relationship are themselves fiduciary in nature (Lac Minerals, supra, at p. 597), and that this principle applies to the relationship between the Crown and aboriginal peoples. It is necessary, then, to focus on the particular obligation or interest that is the subject matter of the particular dispute and whether or not the Crown had assumed discretionary control in relation thereto sufficient to ground a fiduciary obligation.

(Emphasis added)

[29] The question here, of course, is not whether the secondary plaintiffs' claims for breach of fiduciary duty, as pleaded, would likely or probably succeed at trial but whether it is plain and [page12] obvious that they would not. In considering this question, the facts as pleaded must be taken as proven.

[30] As noted earlier, the Crown's submissions, in large part, are based on the fact that none of the secondary plaintiffs were born or conceived at the time of the alleged wrong. The motions judge accepted the Crown's position. In our view, the Crown's submissions would be more persuasive if the claims in question were individual claims founded in tort. The question would then arise whether a remedy could be sought for a wrong that occurred long before each plaintiff was born or conceived. In order to prove their claims, the plaintiffs would have to establish the existence of a duty of care in accordance with the test set out in Cooper v. Hobart, 2001 SCC 79, [2001] 3 S.C.R. 537, 206 D.L.R. (4th) 193 and in Edwards v. Law Society of Upper Canada, 2001 SCC 80, [2001] 3 S.C.R. 562, 206 D.L.R. (4th) 211. In applying this test, even on a Rule 21 motion (Edwards was a pleadings case), the court could conclude, as the motions judge did in this case, that none of the secondary plaintiffs could prove that a duty of care was owed to him or her because there was not sufficient proximity between the parties at the time the wrong occurred. The court could further conclude, as is argued by the Crown in this case, that to allow such a claim would constitute a radical extension of the common law of tort, a matter that should be left to the legislature. See for example, Winnipeg Child and Family Services v. G. (D.F.), 1997 336 (SCC), [1997] 3 S.C.R. 925, 152 D.L.R. (4th) 193, where the court refused to extend common law principles of tort where the change would, among other things, overturn the rule that rights accrue to a person only at birth, and recognize a fetal right to sue the mother carrying the fetus.

[31] However, the secondary plaintiffs' claims for breach of fiduciary duty are not founded in tort. Fiduciary law is a creature of equity. Different considerations apply. The claim for breach of fiduciary duty, in both its foundation and scope, is conceptually different from tort law. See, for example, Norberg v. Wynrib, 1992 65 (SCC), [1992] 2 S.C.R. 226, 92 D.L.R. (4th) 449 where McLachlin J. (as she then was) stated at p. 272 S.C.R.:

The foundation and ambit of the fiduciary obligation are conceptually distinct from the foundation and ambit of contract and tort. Sometimes the doctrines may overlap in their application, but that does not destroy their conceptual and functional uniqueness. In negligence and contract the parties are taken to be independent and equal actors, concerned primarily with their own self-interest. Consequently, the law seeks a balance between enforcing obligations by awarding compensation when those obligations are breached, and preserving optimum freedom for those involved in the relationship in question. The essence of a fiduciary relationship, by contrast, is that one party exercises power on behalf of another and pledges himself or herself to act in the best interests of the other. [page13]

[32] Further, as Binnie J.'s review of the law in Wewaykum Indian Band reveals, fiduciary law in Canada, particularly in respect of the Crown's relationship with aboriginal peoples, is a very dynamic area of Canadian law. The nature and extent of the particular obligations that may arise out of this relationship are matters that remain largely unsettled in the jurisprudence.

[33] This state of the law does not mean, of course, that any claim for breach of fiduciary duty arising out of the relationship between the Crown and the aboriginal peoples of Canada must necessarily survive the pleading stage. The same test under Rule 21 applies to this kind of action. It does mean, however, that more claims of this nature may be, as of yet, unprecedented but nonetheless tenable at law within the meaning of Rule 21.

[34] In this case, it is clear that there is a fiduciary relationship between the federal Crown and the secondary plaintiffs as aboriginal people. We do not agree with the Crown's contention that the pleading discloses none of the essential ingredients necessary to found a fiduciary relationship because the claims for breach of fiduciary duty are in effect nothing more than individual claims based on family relationships and not claims as aboriginal people. While this can be said of their FLA claims, it is our view that the pleading goes beyond those claims and is sufficient to establish the fiduciary nature of the relationship between the Crown and the secondary plaintiffs as an aboriginal people.

[35] As noted earlier, however, the existence of a fiduciary relationship, in and of itself, does not suffice. There must be a particular context that could give rise to the imposition of a fiduciary obligation. In this respect, we agree with the motions judge's conclusion that, with the implementation of the "residential school policy", the federal Crown "assumed a duty to act in a fiduciary capacity with respect to the education of aboriginal peoples". However, in the factual context of this case, we do not agree with his further conclusion that it is plain and obvious that the fiduciary duty did not extend to the secondary plaintiffs simply on the basis that they were not yet in existence at the time. This ignores the essence of the secondary plaintiffs' claim. They allege that the very purpose of the Crown's assumption of control over the primary plaintiffs was to strip the Indian children of their culture and identity, thereby removing, as and when they became adults, their ability "to pass on to succeeding generations the spiritual, cultural and behavioural bases of their people". Hence, the secondary plaintiffs claim that they were specifically targeted by the governmental policy. They further allege that they were profoundly and adversely affected as a result. [page14]

[36] In these circumstances, we do not find that this is an appropriate case to determine in summary fashion whether the fiduciary duty extended to the secondary plaintiffs without the benefit of an evidentiary record. We would therefore give effect to this ground of appeal.

(2) Did the Motions Judge Err in Striking the Secondary Plaintiffs' [Family Law Act](https://www.canlii.org/en/on/laws/stat/rso-1990-c-f3/latest/rso-1990-c-f3.html) Claims?

[37] The motions judge struck the secondary plaintiffs' FLA claims on the basis that they disclosed no reasonable cause of action. His analysis focused on two sub-issues: whether the requisite family relationship under s. 61 of the FLA must have been in existence at the time of the tortious conduct, and whether allowing recovery under the FLA for wrongful acts that occurred prior to the enactment of the FLA (or its predecessor, the Family Law Reform Act, R.S.O. 1980, c. 152 ("FLRA")) would constitute an impermissible retroactive application of the statute.

[38] Section 61 of the FLA, which is substantially identical to its predecessor, s. 60 of the FLRA, reads as follows:

61(1) If a person is injured or killed by the fault or neglect of another under circumstances where the person is entitled to recover damages, or would have been entitled if not killed, the spouse, as defined in Part III (Support Obligations), same-sex partner, as defined in Part III, (Support Obligations), children, grandchildren, parents, grandparents, brothers and sisters of the person are entitled to recover their pecuniary loss resulting from the injury or death from the person from whom the person injured or killed is entitled to recover or would have been entitled if not killed, and to maintain an action for the purpose in a court of competent jurisdiction.

(2) The damages recoverable in a claim under subsection (1) may include,

(e) an amount to compensate for the loss of guidance, care and companionship that the claimant might reasonably have expected to receive from the person if the injury or death had not occurred.

[39] The motions judge first addressed the issue of the existence of a family relationship at the time of the tortious conduct. He began by noting that, prior to the enactment of the FLRA in 1978, there was no cause of action available at common law for family members for loss of guidance, care and companionship.

[40] Relying on various cases including Pole v. Hendery (1987), 1987 4163 (ON CA), 61 O.R. (2d) 486, 43 D.L.R. (4th) 150 (C.A.) and Ficht v. Kitchen (1984), 1984 2068 (ON SC), 47 O.R. (2d) 495, 46 C.P.C. 125 (H.C.J.), Poupore J. found that the FLRA provision was enacted to protect family relationships from disturbance or destruction due to tortious conduct and, consequently, that a claim cannot be made thereunder [page15] unless the family relationship was in existence at the time that the tortious conduct occurred. He relied on Ficht, as well as several other cases, to support his further finding that an individual cannot be born or marry into a claim under the FLA.

[41] The motions judge rejected the appellants' contention that it was sufficient to show that the requisite relationship was in existence at the time the cause of action was discovered. He held that the discoverability principle is a rule of statutory interpretation, which, when applicable, only postpones the running of a limitation period and does not create a cause of action that would not otherwise exist under the FLA.

[42] The motions judge noted that none of the primary plaintiffs attended the schools after 1960 and that none of the secondary plaintiffs were born or conceived at the time the primary plaintiffs attended the schools. He therefore concluded that the requisite family relationship did not exist at the time of the alleged tortious conduct and no FLA claims could properly be advanced.

[43] The motions judge then addressed the second issue of whether allowing these FLA claims would constitute an impermissible retroactive application of the statute. Citing the decision in Yuill v. McMullen (1979), 1980 1589 (ON CA), 25 O.R. (2d) 178, 100 D.L.R. (3d) 370 (H.C.J.), affd (1980), 28 O.R. (2d) 624, 110 D.L.R. (3d) 256 (C.A.), among others, he held that neither s. 61 of the FLA nor s. 60 of the FLRA operate retroactively. He further found that the tortious conduct occurred at least 18 years, and as many as 68 years, before any right to claim for such damages rose under the FLRA. He concluded that allowing these claims to proceed would create a new cause of action where one never existed in the past and would result in the retroactive and therefore impermissible application of s. 61 of the FLA.

[44] The secondary plaintiffs submit that the motions judge erred in striking their FLA claims. They submit that the relevant time that must be considered in respect of both questions, the existence of the requisite relationship and the application of the statute, is not the time when the tortious conduct occurred, but rather the time when the cause of action accrued. They argue that according to the discoverability principle, as set out by the Supreme Court in M. (K.) v. M. (H.), 1992 31 (SCC), [1992] 3 S.C.R. 6, 96 D.L.R. (4th) 289, a cause of action only accrues when a party discovers the connection between the harm suffered and the circumstances from which the harm arose. Consequently, they submit that their derivative claims cannot be determined until after the discoverability principle has been considered in the context of the evidence at trial.[page16]

[45] In our view, the appellants' reliance on the discoverability principle is misguided. Even if the cause of action was not discoverable until after the FLRA or the FLA was in force and the requisite relationship was in existence, the discoverability principle does not create a cause of action where none previously existed. Rather, it is "a general rule applied to avoid the injustice of precluding an action before the person is able to raise it": see Peixeiro v. Haberman, 1997 325 (SCC), [1997] 3 S.C.R. 549, 151 D.L.R. (4th) 429 at para. 36. When applicable, it can postpone the running of a limitation period that would otherwise result in the plaintiff being deprived of a right of action that he or she had at the time of the tortious conduct and which might otherwise be lost as a result of the hidden nature of the injury or damages that would result from the conduct.

[46] We are in substantial agreement with the motions judge's reasons in respect to the FLA claims. Based on his analysis, it is plain and obvious that the FLA claims brought on behalf of the secondary plaintiffs disclose no reasonable cause of action. The motions judge acted appropriately in striking these claims from the statement of claim. We would dismiss this ground of appeal.

(3) Did the Motions Judge Err in Striking the Estate Claims as Being Barred by [s. 38(3)](https://www.canlii.org/en/on/laws/stat/rso-1990-c-t23/latest/rso-1990-c-t23.html) of the [Trustee Act](https://www.canlii.org/en/on/laws/stat/rso-1990-c-t23/latest/rso-1990-c-t23.html)?

[47] The motions judge noted that the estate claims were framed in tort or breach of fiduciary duty. He further noted that, at common law, there is no cause of action available to relatives for any tort or injury to a deceased person or to the property of a deceased person. The right of action is found in the Trustee Act and, consequently, the claims are subject to the two-year limitation period prescribed by s. 38(3) of that Act. Relying on Waschkowski v. Hopkinson Estate (2000), 2000 5646 (ON CA), 47 O.R. (3d) 370, 184 D.L.R. (4th) 281 (C.A.), he held that the discoverability principle does not apply to overcome the statutory bar imposed by s. 38(3). The action was commenced in November of 1999 but all of the deceased residents died well before November 1997. As the estates had to have brought their actions within two years of the date of death in order to meet the two-year limitation period, the claims were struck.

[48] In coming to this conclusion, the motions judge rejected the appellants' argument that s. 38(3) of the Trustee Act had no application to these particular plaintiffs because s. 42 of the Indian Act vested administration of "Indian estates" exclusively in the federal government. He held that s. 42 applied to "matters and causes testamentary" and that "matters and causes testamentary" related solely to the grant and revocation of probate of wills and administration and incidental matters. [page17]

[49] We agree with the reasoning and result of the motions judge on those matters.

[50] The appellants submit that the motions judge erred in failing to consider the contractual or quasi-contractual nature of the estate claims to compensation for unpaid wages. They argue that, as a claim for breach of contract could be sustained at common law, such claims do not depend upon the existence of the Trustee Act and, therefore, are not statute- barred. Consequently, they argue, the motions judge erred in striking the estate claims.

[51] In addition, they argue that because an action for breach of fiduciary duty is a separate cause of action sounding in neither tort nor contract, it is not an action for personal injury or tort within the meaning of s. 38(1) of the Trustee Act and therefore is not statute-barred by virtue of s. 38(3).

[52] On a plain reading of s. 38(1) of the Trustee Act, the statutory bar prescribed by s. 38(3) applies to claims advanced by executors or administrators of an estate for "all torts or injuries to the person":

Actions by executors and administrators for torts

38(1) Except in cases of libel and slander, the executor or administrator of any deceased person may maintain an action for all torts or injuries to the person or to the property of the deceased in the same manner and with the same rights and remedies as the deceased would, if living, have been entitled to do, and the damages when recovered shall form part of the personal estate of the deceased; but, if death results from such injuries, no damages shall be allowed for the death or for the loss of the expectation of life, but this proviso is not in derogation of any rights conferred by Part V of the Family Law Act.

Limitation of actions

(3) An action under this section shall not be brought after the expiration of two years from the death of the deceased.

(Emphasis added)

[53] We reject the argument that s. 38(1) should be restricted in application to torts alone; to do so is to ignore the words "or injuries to the person". Such an approach is in conflict with the basic principle of statutory interpretation that every word in a statute is to be given meaning.

[54] In determining whether the estate claims fall within the scope of s. 38(1) of the Trustee Act, the focus is not upon the form of the action but, rather, the nature of the injury. The question to be asked in determining its applicability is whether the alleged wrong constituted an injury to the deceased person. [page18] See Smallman v. Moore, 1948 4 (SCC), [1948] S.C.R. 295, [1948] 3 D.L.R. 657, and Roth v. Weston Estate (1997), 1997 1125 (ON CA), 36 O.R. (3d) 513, 20 E.T.R. (2d) 69 (C.A.).

[55] Whether the claim for forced labour is framed in tort, contract, quasi-contract or breach of fiduciary duty, the claim is for injury of a personal nature. The core of the alleged wrongdoing is the failure of those running the residential schools to compensate the deceased persons for the work they were forced to perform. In other words, the claims arise out of the treatment that the deceased plaintiffs endured at the residential schools. As such, the claims for forced labour are within the meaning of "injuries to the person". Accordingly, they fall squarely within the provisions of s. 38(1) of the Trustee Act and are subject to the applicable two-year limitation period in s. 38(3).

[56] The same analytical approach applies to the estate claims for breach of fiduciary duty. Again, the focus is not upon the form of the action but whether the alleged wrong constitutes an injury to the person. It is apparent that the alleged breaches of fiduciary duty are said to have inflicted injury upon the deceased persons and therefore the claims for breach of fiduciary duty are within the ambit of s. 38(1).

[57] Where an action is statute-barred against the individual pursuant to the Trustee Act, it is also statute-barred against the Crown by virtue of ss. 3, 10 and 24 of the Crown Liability and Proceedings Act, R.S.C. 1985, c. C-50.

[58] Thus, it is plain and obvious that the estate claims cannot succeed. The motions judge made no error in striking the estate claims and we dismiss this ground of appeal.

DISPOSITION

[59] The appeal is allowed in part and the judgment below is varied to accord with these reasons. In light of the divided success, we make no order as to costs as between the appellants and the Crown. The other respondents may, if so advised, file their bills of costs and written submissions within 15 days. The appellants may file their responding submissions on costs within ten days thereafter.

Appeal allowed in part. [page19]

Notes

Note 1: References throughout the judgment to the number of claimants include both the existing parties to the action and the proposed additional plaintiffs.