Wareham et al. v. Her Majesty the Queen in Right of Ontario (as represented by the Minister of Community and Social Services)

[Indexed as: Wareham v. Ontario (Minister of Community and Social Services)]

93 O.R. (3d) 27

Court of Appeal for Ontario,

Doherty, Cronk and MacFarland JJ.A.

November 18, 2008

Charter of Rights and Freedoms -- Fundamental justice -- Security of the person -- Procedural unfairness -- Plaintiffs commencing class action alleging that procedures used to process, evaluate and adjudicate claims for Ontario Disability Support Program benefits were irrational, inefficient, inaccessible and demeaning -- Motion judge striking statement of claim as disclosing no reasonable cause of action but granting leave to amend claim of s. 7 Charter violation to allege breach of s. 7 based on failure to give reasons for denial of benefits -- Plaintiffs' appeal allowed in part -- Leave to amend s. 7 claim extended to encompass alleged procedural deficiencies other than failure to give reasons -- Canadian Charter of Rights and Freedoms, s. 7.

The plaintiffs commenced a proposed class action alleging that the procedures used to process, evaluate and adjudicate claims for Ontario Disability Support Program benefits were irrational, inefficient, inaccessible and demeaning to applicants. The defendant brought a motion to strike the statement of claim as disclosing no reasonable cause of action. The motion judge struck the statement of claim but granted leave to amend the claim of a violation of s. 7 of the Canadian Charter of Rights and Freedoms to allege a breach of s. 7 based on the failure to give reasons for the denial of benefit claims. The plaintiffs appealed.

Held, the appeal should be allowed in part.

The motion judge did not err in finding that there was no reasonable cause of action pleaded by the plaintiffs in negligence or under s. 15 of the Charter. He was correct in finding that the claim for damages under s. 7 of the Charter could not succeed and that the only remedy potentially available to the plaintiffs was a declaration. However, leave to amend the s. 7 claim should not be limited to a claim based on the failure to give reasons. There was no reason why a properly pleaded s. 7 claim could not encompass alleged procedural deficiencies other than the failure to give reasons. The principles of fundamental justice include the right to a fair process.

APPEAL from the order of Cullity J., 2008 1179 (ON SC), [2008] O.J. No. 166, 166 C.R.R. (2d) 162 striking statement of claim with leave to amend part of claim.

Cases referred to Chaoulli v. Quebec (Attorney General), [2005] 1 S.C.R. 791, [2005] S.C.J. No. 33, 2005 SCC 35, 254 D.L.R. (4th) 577, 335 N.R. 25, J.E. 2005-1144, 130 C.R.R. (2d) 99, 139 A.C.W.S. (3d) 1080; R. v. Malmo-Levine, [2003] 3 S.C.R. 571, [2003] S.C.J. No. 79, 2003 SCC 74, 233 D.L.R. (4th) 415, 314 N.R. 1, [2004] 4 W.W.R. 407, J.E. 2004-131, 191 B.C.A.C. 1, 23 B.C.L.R. (4th) 1, 179 C.C.C. (3d) 417, 16 C.R. (6th) 1, 114 C.R.R. (2d) 189, 59 W.C.B. (2d) 116; Suresh v. Canada (Minister of Citizenship and Immigration), [2002] 1 S.C.R. 3, [2002] S.C.J. No. 3, 2002 SCC 1, 208 D.L.R. (4th) 1, 281 N.R. 1, J.E. 2002-161, 37 Admin. L.R. (3d) 159, 90 C.R.R. (2d) 1, 18 Imm. L.R. (3d) 1, 110 A.C.W.S. (3d) 1104; Wareham v. Ontario (Minister of Community and Social Services), 2008 1179 (ON SC), [2008] O.J. No. 166, 166 C.R.R. (2d) 162, 164 A.C.W.S. (3d) 65, 2008 CarswellOnt 176

Statutes referred to Canadian Charter of Rights and Freedoms, ss. 7, 15 Class Proceedings Act, 1992, S.O. 1992, c. 6 Ontario Disability Support Program Act, 1997, S.O. 1997, c. 25, Sch. B

Rules and regulations referred to Rules of Civil Procedure, R.R.O. 1990, Reg. 194

Authorities referred to Hogg, Peter W., Constitutional Law in Canada, 5th ed. (Scarborough, Ont.: Carswell, 2007) Sossin, Lorne, "Boldly Going Where No Law Has Gone Before: Call Centres, Intake Scripts, Database Fields and Discreetionary Justice in Social Assistance" (2004) 42 Osgoode Hall L.J. 363

Charles Roach, Sarah Shartal Levinthal and Kikelola Roach, for appellants. Michele M. Smith, Fateh Salim, Elaine Atkinson and Robert Donato, for respondent.

The judgment of the court was delivered by

DOHERTY J.A.: --

I. Overview

[1] The appellants commenced an action against the respondent (the "Province") on behalf of themselves and others who have applied for benefits under the Ontario Disability Support Program ("ODSP"). The proceeding was commenced under the Class Proceedings Act, 1992, S.O. 1992, c. 6. In their statement of claim, the appellants advanced a wide variety of claims. All the claims rested on the assertions that the procedures used to process, evaluate and adjudicate claims for ODSP benefits were inefficient, irrational, unnecessarily time-consuming, inaccessible and demeaned those who applied for the benefits. The appellants contended that the many failings in the process gave rise to several causes of action, including negligence, breach of fiduciary duty and violations of ss. 7 and 15 of the Canadian Charter of Rights and Freedoms. The appellants sought both damages and declaratory relief in respect of the alleged Charter violations.

[2] The Province, after filing a statement of defence and before any further steps were taken under the Class Proceedings Act, moved for an order striking the statement of claim as disclosing no reasonable cause of action. The motion judge struck the statement of claim. He granted leave to amend, but only as it related to declaratory relief based on the allegation that the failure to give reasons for the initial refusal of benefit claims constituted a violation of s. 7 of the Charter: see Wareham v. Ontario (Minister of Community and Social Services), 2008 1179 (ON SC), [2008] O.J. No. 166, 166 C.R.R. (2d) 162 (S.C.J.).

[3] The appellants appealed, arguing that the motion judge should have allowed the claims based on negligence, and breaches of ss. 7 and 15 of the Charter to proceed to trial.

[4] I am in substantial agreement with the analysis of the motion judge and his order striking the entire statement of claim. However, I would not restrict leave to amend the s. 7 claim to a breach based exclusively on the failure to give reasons for the denial of benefit claims. I would grant leave to amend permitting the appellants to advance a claim for a declaration of a s. 7 Charter breach based on the Province's failure to provide a process for the determination of benefit entitlement that complies with the Charter requirements of procedural fairness.

II. The Scope of the Appeal

[5] The appellants limited their submissions on appeal to the negligence claim, and the ss. 7 and 15 Charter claims. The other causes of action asserted in the statement of claim and struck by the motion judge are no longer in issue.

[6] I will not re-plough the ground so effectively worked by the motion judge. He identified the relevant principles applicable on a motion to strike a pleading: see para. 11. He properly analyzed the negligence claim and explained why there was no reasonable cause of action pleaded by the appellants in negligence: see paras. 15-28. The motion judge also properly analyzed and rejected the s. 15 claims: see paras. 59-72. I see no value in any further analysis of those claims.

III. The Section 7 Claim

[7] The appellants sought both damages and declaratory relief for the alleged breach of s. 7 of the Charter. At para. 73, the motion judge held that the damages claim could not possibly succeed. I agree with his reasons. The remainder of my analysis assumes that the only remedy available to the appellants for a breach of s. 7 is a declaration.

(i) The pleading [^1]

[8] The ODSP is a social assistance income program made available under the provisions of the Ontario Disability Support Program Act, 1997, S.O. 1997, c. 25, Sch. B ("ODSPA"). Eligibility is based on financial need combined with disability. The two named plaintiffs allege that they are single mothers who suffer from severe physical and emotional health disabilities. They are unable to support themselves through gainful employment. Both applied for and eventually received ODSP benefits. However, both allege that they spent many months without those benefits as their claims were processed. The named plaintiffs allege that the lengthy and unnecessary delays in the processing of their claims had a significant negative impact on their mental and physical well-being.

[9] The ODSP application process is referred to in paras. 36-40 of the statement of claim. Paragraph 37 alleges that the administrative procedures are "inefficient and unnecessarily complicated and deprive applicants of timely determinations on their applications".

[10] Paragraph 38 asserts that those same procedures "serve no proper purpose, create undue delays and effectively constitute artificial barriers to determinations of entitlement to ODSP benefits on the merits".

[11] Paragraph 39 provides one example of an alleged artificial barrier imposed by the process, and para. 40 asserts that the majority of applicants experience a delay of between six months to one year before receiving an initial response to their application for benefits. Apart from the single reference in para. 39, and a later reference to the failure to give reasons, the statement of claim does not identify any specific features of the administrative procedures to support the conclusory assertions made in paras. 36-40.

[12] The s. 7 claim is also addressed in paras. 62-67 of the statement of claim. As with the earlier part of the statement of claim, the allegations are entirely conclusory. The appellants assert that the government has created and maintained an inaccessible, time-consuming and inefficient application process that humiliates those applying for benefits and harms their physical and mental health. The appellants further assert that the process violates their right to "essential human dignity". Finally, the appellants contend that the process contradicts the very purpose for which the ODSPA was created.

[13] Paragraphs 66 and 67 of the claim specifically address the failure to give reasons for the initial denial of benefits. Paragraph 67 asserts that the failure to provide reasons has deprived the appellants of "the ability to know the case against them and thus has infringed a principle of fundamental justice".

[14] The statement of claim does not identify any other applicable principle of fundamental justice.

(ii) The reasons of the motion judge

[15] The motion judge, following well-established authority, approached the adequacy of the s. 7 claim in two stages. First, he asked whether the appellants had pleaded a deprivation of security of the person caused by state action. Second, he considered whether the appellants had pleaded that the deprivation was contrary to a recognized principle of fundamental justice.

[16] When considering the first stage of the s. 7 analysis, the motion judge correctly observed that the appellants challenged the procedures used to process claims for benefits and not the criteria used to decide entitlement or the level of entitlement. At para. 46, the motion judge stated:

. . . I do not think it is plain and obvious that, if delays in the administrative and adjudicative process for determining eligibility for statutory welfare benefits caused serious harm to the plaintiffs, their rights to security of the person were not engaged.

[17] I agree with the motion judge that the appellants successfully cleared the first of the two s. 7 hurdles. There is a potential argument to be made that delay in processing applications for welfare benefits, essential for day-to-day existence and to which the applicants are statutorily entitled, could engage the right to security of the person where that delay has caused serious physical or psychological harm.

[18] Next, the motion judge turned to the second stage of the s. 7 analysis. Even where state action causes a deprivation of security of the person, it breaches s. 7 only if the deprivation is not in accordance with the principles of fundamental justice. The motion judge identified three features as essential components of a principle of fundamental justice. First, it must be a legal principle. Second, it must be widely accepted as an integral part of the due administration of justice. Third, the principle must be capable of being identified with sufficient precision to yield a manageable standard against which to measure the state conduct in issue.

[19] The motion judge held that the appellants had not identified any principle of fundamental justice in their pleadings. At para. 53, he stated:

In my opinion, none of the three requirements is satisfied by the pleading in this case. It is not, I believe, a principle of fundamental justice that, if the legislature chooses to establish a program for providing welfare, or other benefits, it must achieve a certain standard of efficiency. Insofar as the alleged delays are attributed to deficiencies and inadequacies in the process established under the ODSPA, the pleading does not, in my judgment, either expressly or impliedly, engage any principle of fundamental justice. (Emphasis added)

[20] The motion judge went on to strike the entirety of the appellants' broadly based s. 7 claim. However, he concluded that s. 7 could support a narrower claim for declaratory relief. At para. 56, he observed that the relevant regulations imposed a duty to give reasons for the initial denial of benefits. Further, he noted that the failure to comply with that obligation could delay the reconsideration of the initial refusal and ultimately the determination in favour of granting benefits. The motion judge was satisfied that the duty to give reasons imposed by the regulation was "sufficiently related to the rules of natural justice to be considered to be principles of fundamental justice". Therefore, he held that a properly pleaded claim alleging a breach of s. 7 on the basis of the failure to give the requisite reasons could possibly succeed, and he granted leave to amend on that basis.

(iii) Analysis

[21] In my view, leave to amend the s. 7 claim should not be limited to a claim based on the failure to give reasons. The motion judge characterized the s. 7 claim based on the failure to give reasons as a claim of procedural unfairness, as evidenced by his reference to the rules of natural justice. I agree with this characterization. However, I see no reason why a properly pleaded s. 7 claim could not encompass alleged procedural deficiencies other than the failure to give reasons.

[22] When considering the second stage of the s. 7 analysis, the motion judge treated the claim, apart from the failure to give reasons, as a challenge to the substance of the benefits scheme. The motion judge searched for an operative principle of fundamental justice in the pleadings using the approach set out in cases like Chaoulli v. Quebec (Attorney General), 2005 SCC 35, [2005] 1 S.C.R. 791, [2005] S.C.J. No. 33; and R. v. Malmo-Levine, 2003 SCC 74, [2003] 3 S.C.R. 571, [2003] S.C.J. No. 79. These cases examined the constitutionality of legislative schemes or criminal prohibitions where it was alleged that the substance of the scheme or prohibition contravened the principles of fundamental justice. I do not think that the approach taken to defining the principles of fundamental justice in that context is appropriate for claims based on procedural unfairness, where the inquiry focuses on the fairness of the procedures followed in arriving at a decision rather than the fundamental justice of the law or other state action.

[23] I do not criticize the motion judge for examining the s. 7 claim as he did. Given the inadequacies in the pleadings, it is very difficult to discern the exact nature of the appellants' s. 7 claim, apart from the aspect of the claim relating to the failure to give reasons. Certainly, the claim as drafted could be read as advancing in part at least an allegation of substantive as opposed to procedural unfairness in the process.

[24] At this stage, however, the issue is not whether the appellants properly pleaded procedural unfairness beyond the failure to give reasons. The motion judge has given the appellants a further opportunity to properly plead a s. 7 claim. The Province has not cross-appealed from that part of the order. The issue is whether leave to amend the pleading should be extended to allegations of procedural unfairness beyond the failure to give reasons.

[25] It is beyond doubt that the principles of fundamental justice include the right to a fair process. In Suresh v. Canada (Minister of Citizenship and Immigration), 2002 SCC 1, [2002] 1 S.C.R. 3, [2002] S.C.J. No. 3, the court said, at para. 113:

The principles of fundamental justice of which s. 7 speaks, though not identical to the duty of fairness elucidated in Baker, are the same principles underlying that duty. As Professor Hogg has said, "The common law rules [of procedural fairness] are in fact basic tenets of the legal system, and they have evolved in response to the same values and objectives as s. 7." In Singh v. Minister of Employment and Immigration, Wilson J. recognized that the principles of fundamental justice demand, at a minimum, compliance with the common law requirements of procedural fairness. Section 7 protects substantive as well as procedural rights: Re B.C. Motor Vehicle Act. Insofar as procedural rights are concerned, the common law doctrine summarized in Baker, properly recognizes the ingredients of fundamental justice. (Citations omitted)

[26] Professor Hogg in his text, Constitutional Law of Canada, vol. 2, 5th ed. (Scarborough Ont.: Carswell, 2007), at p. 448, notes:

[Section] 7 also includes a requirement of procedural fairness. This requirement attaches only where a decision-maker has a power of decision over life, liberty or security of the person. Where this is so, s. 7 will impose rules of procedural fairness on the decision-maker. Those rules are probably the same as those that would be required by the common law. (Emphasis added)

[27] The content of the duty of fairness in any given circumstance, and hence the requirements of the principles of fundamental justice, will vary depending on the context. That context includes the statutory scheme in issue, the procedural protections, if any, provided in the scheme, the nature of the decision in issue, the importance of the decision to the individual affected by it and the legitimate expectations of the persons affected by the decision: see Suresh, at para. 115.

[28] In this case, I am satisfied that a s. 7 claim based on procedural fairness could go beyond the failure to give reasons. Just as the failure to give reasons may render a process constitutionally unfair, other aspects of that process that unreasonably hinder, delay or deny access to benefits to which persons are statutorily entitled may be so procedurally unfair as to contravene s. 7 of the Charter.

[29] Some indication of the possible nature of a s. 7 claim based upon procedural unfairness can be found in Professor Sossin's article "Boldly Going Where No Law Has Gone Before: Call Centres, Intake Scripts, Database Fields and Discretionary Justice in Social Assistance" (2004) 42 Osgoode Hall L.J. 363. Counsel for the appellants placed significant reliance on this article in oral argument.

[30] Professor Sossin sets out in careful detail the process used to determine eligibility for ODSP benefits, beginning with the initial intake telephone call and proceeding through various stages to the ultimate determination of eligibility. He presents this process as a case study in "bureaucratic disentitlement". The phenomenon of "bureaucratic disentitlement" is defined, at p. 399, as "a series of structural and situational features of the welfare eligibility process which together have the effect of discouraging applicants and demoralizing recipients". Professor Sossin contends that applicants for benefits, many of whom are seriously disadvantaged and vulnerable, face difficulties and unnecessary barriers to an expeditious and fair determination of their claim on its merits. He strongly argues that the process at the least demeans and dehumanizes many who need the benefits and in some situations causes those who are entitled to the benefits to simply give up trying to get them.

[31] Professor Sossin advances several potential avenues of redress open to those who are victims of "bureaucratic disentitlement". Among those avenues, he identifies a s. 7 claim based on the state's failure to meet constitutional standards of procedural fairness in the methods used to process the benefit applications: see pp. 393-95.

[32] I am in no position to comment on the correctness of Professor Sossin's description of the process, his criticisms of that process, or on any differences that may exist between the current process and the one described by him. I refer to his article because it demonstrates to me that there is sufficient potential to a procedural due process claim to justify extending leave to amend beyond the failure to give reasons to include other aspects of that process considered both individually and cumulatively.

IV. Disposition

[33] As the appellants are to have a further opportunity to amend their s. 7 pleading, I would extent that opportunity to cover all potential facets of a claim based on procedural unfairness.

[34] I would allow the appeal in part, as follows. Paragraph 1 of the order of the motion judge stands. Paragraph 2 is varied to provide that leave to amend the claim is granted with respect to a claim for a breach of s. 7 of the Charter based on the government's failure to comply with the procedural requirements of the principles of fundamental justice. That claim must of course be pleaded with sufficient specificity to meet the pleading requirements of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194.

[35] The appellants have been largely unsuccessful in the appeal and are not entitled to costs. The Province does not seek costs in the appeal. I would make no order as to costs.

Appeal allowed in part.

[^1]: The operative pleading is a Further Fresh As Amended Statement of Claim issued on June 14, 2006. I will refer to it as the statement of claim.