Court of Appeal for Ontario

Date: December 13, 2018

Docket: C65851 and C65955

Judges: Pepall, Hourigan and Trotter JJ.A.

Parties

Between

Larry Philip Fontaine in his personal capacity and in his capacity as the Executor of the estate of Agnes Mary Fontaine, deceased, Michelline Ammaq, Percy Archie, Charles Baxter Sr., Elijah Baxter, Evelyn Baxter, Donald Belcourt, Nora Bernard, John Bosum, Janet Brewster, Rhonda Buffalo, Ernestine Caibaiosa-Gidmark, Michael Carpan, Brenda Cyr, Deanna Cyr, Malcolm Dawson, Ann Dene, Benny Doctor, Lucy Doctor, James Fontaine in his personal capacity and in his capacity as the Executor of the Estate of Agnes Mary Fontaine, deceased, Vincent Bradley Fontaine, Dana Eva Marie Francey, Peggy Good, Fred Kelly, Rosemarie Kuptana, Elizabeth Kusiak, Theresa Larocque, Jane McCullum, Cornelius McComber, Veronica Pauchey, Stanley Thomas Nepetaypo, Flora Northwest, Norma Pauchy, Camble Quatell, Alvin Barney Saulteaux, Christine Semple, Dennis Smokeyday, Kenneth Sparview, Edward Tapiatic, Helen Winderman and Adrian Yellowknee

Plaintiffs

and

The Attorney General of Canada, The Presbyterian Church in Canada, The General Synod of the Anglican Church of Canada, The United Church of Canada, The Board of Home Missions of the United Church of Canada, The Women's Missionary Society of the Presbyterian Church, The Baptist Church in Canada, Board of Home Missions and Social Services of the Presbyterian Church in Bay, The Canada Impact North Ministries of the Company for the Propagation of the Gospel in New England (also known as the New England Company), The Diocese of Saskatchewan, The Diocese of the Synod of Cariboo, The Foreign Mission of the Presbyterian Church in Canada, The Incorporates Synod of the Diocese of Huron, The Methodist Church of Canada, The Missionary Society of the Anglican Church of Canada, The Missionary Society of the Methodist Church of Canada (also known as The Methodist Missionary Society of Canada), The Incorporated Synod of The Diocese of Algoma, The Synod of the Diocese of Quebec, The Synod of the Diocese of Athabasca, The Synod of the Diocese of Brandon, The Anglican Synod of the Diocese of British Columbia, The Synod of the Diocese of Calgary, The Synod of the Diocese of Keewatin, The Synod of the Diocese of Qu'Appelle, The Synod of the Diocese of New Westminster, The Synod of the Diocese of Yukon, The Trustee Board of the Presbyterian Church in Canada, The Board Of Home Missions And Social Service of The Presbyterian Church of Canada, The Women's Missionary Society of The United Church of Canada, Sisters of Charity, A Body Corporate Also Known As Sisters of Charity of St. Vincent De Paul, Halifax, Also Known As Sisters of Charity Halifax, Roman Catholic Episcopal Corporation of Halifax, Les Soeurs De Notre Dame Auxiliatrice, Les Soeurs De St. Francois D'assise, Institut Des Soeurs Du Bon Conseil, Les Soeurs De Saint-Joseph De Saint-Hyacinthe, Les Soeurs De Jesus-Marie, Les Soeurs De L'assomption De La Sainte Vierge, Les Soeurs De L'assomption De La Saint Vierge De L'alberta, Les Soeurs De La Charite De St.-Hyacinthe, Les Oeuvres Oblates De L'Ontario, Les Residences Oblates Du Quebec, La Corporation Episcopale Catholique Romaine De La Baie James (The Roman Catholic Episcopal Corporation of James Bay), The Catholic Diocese of Moosonee, Soeurs Grises De Montreal/Grey Nuns if Montreal, Sisters of Charity (Grey Nuns) of Alberta, Les Soeurs De La Charite Des T.N.O, Hotel-Dieu De Nicolet, The Grey Nuns Of Manitoba Inc. Les Soeurs Crises Du Manitoba Inc., La Corporation Episcopale Catholique Romaine De La Baie D'Hudson - The Roman Catholic Episcopal Corporation of Hudson's Bay, Missionary Oblates – Grandin Province, Les Oblats De Marie Immaculee Du Manitoba, The Archiepiscopal Corporation of Regina, The Sisters of The Presentation, The Sisters of St. Joseph of Sault St. Marie, Sisters of Charity Of Ottawa, Oblates of Mary Immaculate -St. Peter's Province, The Sisters of Saint Ann, Sisters of Instruction of The Child Jesus, The Benedictine Sisters of Mt. Angel Oregon, Les Peres Montfortains, The Roman Catholic Bishop of Kamloops Corporation Sole, The Bishop of Victoria, Corporation Sole, The Roman Catholic Bishop of Nelson, Corporation Sole, Order of The Oblates of Mary Immaculate In The Province of British Columbia, The Sisters of Charity of Providence of Western Canada, La Corporation Episcopale Catholique Romaine De Grouard, Roman Catholic Episcopal Corporation Of Keewatin, La Corporation Archiepiscopale Catholique Romaine De St. Boniface, Les Missionnaires Oblates Sisters De St. Boniface-The Missionary Oblates Sisters of St. Boniface, Roman Catholic Archiepiscopal Corporation of Winnipeg, La Corporation Episcopale Catholique Romaine De Prince Albert, The Roman Catholic Bishop of Thunder Bay, Immaculate Heart Community of Los Angeles Ca, Archdiocese of Vancouver - The Roman Catholic Archbishop Of Vancouver, Roman Catholic Diocese of Whitehorse, The Catholic Episcopale Corporation of Mackenzie-Fort Smith, The Roman Catholic Episcopal Corporation of Prince Rupert, Episcopal Corporation of Saskatoon, Omi Lacombe Canada Inc. and Mt. Angel Abbey Inc.

Defendants (Respondent)

and

Chief Adjudicator Indian Residential Schools Adjudication Secretariat

Respondent (Appellant)

Proceeding under the Class Proceedings Act, 1992, S.O. 1992, c. 6

Counsel:

Joseph Arvay and Andrew Faith, for the appellant

Catherine Coughlan and Brent Thompson, for the respondent, the Attorney General of Canada

Heard: November 23, 2018

On appeal from the orders of Justice Paul M. Perell of the Superior Court of Justice, dated September 5, 2018 and September 27, 2018, with reasons reported at 2018 ONSC 5197 and 2018 ONSC 5706.

By the Court

A. Overview

[1] These appeals arise in the context of the administration of the Indian Residential School Settlement Agreement ("IRSSA"). The appellant, the Chief Adjudicator for the Independent Assessment Process ("IAP") under the IRSSA, is the subject of two directions issued by the Eastern Administrative Judge for the IRSSA. The appellant seeks an order setting aside both directions. These reasons explain why we have concluded that the appeal should be allowed and an order granted setting aside the directions.

B. Facts

(1) IAP Administration

[2] The Ontario Superior Court of Justice is one of nine provincial and territorial superior courts that in December 2006 and January 2007, on substantially identical terms, approved the IRSSA. On March 8, 2007, the courts issued orders governing the IRSSA's implementation, again on substantially identical terms (the "Implementation Orders").

[3] Schedule D to the IRSSA establishes the IAP, a claims adjudication process that acts as a means of providing compensation to individuals who suffered abuse at Indian residential schools. The Chief Adjudicator is responsible for ensuring the proper implementation of the IAP.

[4] The IAP provides for, among other things, an Oversight Committee. One of its duties is to "recruit and appoint, and if necessary terminate the appointment of, the Chief Adjudicator." However, in the Implementation Orders, the power of the Oversight Committee to appoint a Chief Adjudicator has been expressly limited and made subject to court approval. There is no concurrent limitation imposed in the Implementation Orders regarding the power of the Oversight Committee to terminate the Chief Adjudicator.

[5] The Chief Adjudicator's duties are also delineated in Schedule D of the IRSSA. They include putting into effect training programs and administrative measures, assigning hearings to adjudicators, and assigning and conducting reviews. Pursuant to Schedule D, the Chief Adjudicator is also obliged to "prepare annual reports to the Oversight Committee on the functioning of the adjudicative process under the IAP." In the Implementation Orders, an additional reporting obligation is imposed on the Chief Adjudicator. Paragraph 7 provides:

THIS COURT ORDERS that in addition to any other reporting requirements, the Chief Adjudicator shall report directly to the Courts through the Monitor not less than quarterly on all aspects of implementation and operation of the IAP. The Courts may provide the Chief Adjudicator with directions regarding the form and content of such reports.

[6] The Implementation Orders created two other positions that are relevant in these appeals. A Court Counsel was appointed and charged with assisting the courts in their supervision of the implementation and administration of the IRSSA. A Court Monitor was also appointed and, as per para. 4 of the Implementation Orders, is obliged to "communicate with, take directions from and report to the courts upon the implementation and administration of the Agreement in such manner and at such times as the Courts direct."

[7] In addition to the foregoing, the Implementation Orders established a process (the "Court Administration Protocol") in which a "party, counsel or other entity with standing in respect of the Agreement" may file a Request for Direction ("RFD") with the supervising courts relating to the implementation of the IRSSA: see the Court Administration Protocol, at para. 2. The Court Administration Protocol designates two administrative judges from among nine supervising judges, who determine whether a case management conference and a hearing are required.

[8] Finally, pursuant to para. 23 of the Implementation Orders, courts are permitted to make further ancillary orders as necessary to implement and enforce the provisions of the IRSSA.

[9] The IAP has been in operation since 2007 and is now substantially complete. As of September 9, 2018, 37,826 of 38,255 claims have been resolved. Of claims that go to a hearing or result in a negotiated settlement, 89% of claimants are successful in obtaining compensation. The IAP is not expected to wind-up before March 31, 2021.

(2) The Impugned Directions

(a) The First Direction

[10] On September 5, 2018, the Eastern Administrative Judge, on his own motion and without notice to any party, issued a direction (the "First Direction") prohibiting the appellant from continuing his participation in three appeals (the "Impugned Appeals"), one before the Supreme Court of Canada and two before the British Columbia Court of Appeal. The Eastern Administrative Judge found the appellant was insubordinate and in defiance of the supervising courts.

[11] In reaching this conclusion, the Eastern Administrative Judge pointed to: (a) the appellant's overtly partisan positions, based on the content of his facta in the Impugned Appeals, (b) the appellant's failure to describe his participation in the Impugned Appeals in a report via the Monitor to the courts, and (c) the appellant's efforts to hold re-review adjudications in abeyance, pending the outcome of an appeal considering issues of procedural fairness in the IAP: Fontaine v. Canada (Attorney General), 2018 ONSC 5197. He directed the appellant to withdraw from the Impugned Appeals and remove his facta from the Supreme Court of Canada and British Columbia Court of Appeal registries. In addition, the Eastern Administrative Judge ordered that the Chief Adjudicator's future legal fees had to be authorized by Court Counsel.

[12] One of the Impugned Appeals was to be argued before the Supreme Court of Canada on October 10, 2018. The appellant filed a Notice of Appeal against the First Direction in this court and moved for a stay pending the hearing of the appeal. Sharpe J.A. granted that stay on September 12, 2018. Following a case management conference call, Sharpe J.A. directed that the appeal against the First Direction be heard on November 23, 2018.

(b) The Second Direction

[13] On September 27, 2018, the Eastern Administrative Judge issued another direction (the "Second Direction"), again on his own motion and without notice to any party. The Second Direction purports to rescind the First Direction and directs "a different path that will provide for a fuller opportunity to canvass this Supervising Court's underlying concerns" and "provide the Chief Adjudicator with a full hearing with due process, as he submits is his due": Fontaine v. Canada (Attorney General), 2018 ONSC 5706, at para. 4.

[14] The Second Direction appoints amicus curiae and directs him to bring a RFD to be considered at a hearing to be held before two other supervising judges, one from the Supreme Court of Yukon and the second from the Superior Court of Québec. The Second Direction specifies five issues for the RFD to address and lists the materials to be considered. The issues to be addressed reflect similar concerns to those that motivated the First Direction, namely, whether the appellant has taken "partisan positions before courts" without proper instructions from supervising courts or advice from the Oversight Committee, and failed to properly report his activities to the supervising courts: at para. 7. The issue of whether the appellant complied with a specific order issued by the supervising judge for British Columbia is also included in the list of matters to be considered.

[15] The appellant filed a Notice of Appeal against the Second Direction on October 5, 2018 and then moved for a stay pending determination of the appeal, which was granted by Sharpe J.A. on October 17, 2018. He further ordered that the two appeals be heard together. Prior to the hearing of the appeals, counsel had raised concerns about the evidentiary record. No argument was advanced to limit the materials before us and we see no reason to address this issue any further.

C. Issues

[16] These appeals raise the following issues:

(1) Should the First Direction be set aside?

(2) Should the Second Direction be set aside?

(3) Should this court adjudicate the issues raised in the directions?

(4) If the answer to issue 3 is no, how should the issues raised in the directions be determined?

D. Analysis

(1) First Direction

(a) Was the appellant owed procedural fairness?

[17] The appellant submits that the First Direction amounted to a finding against him of serious misconduct akin to contempt of court. Accordingly, the appellant's position is that the strict procedural protections of contempt proceedings ought to have been afforded to him. He submits that instead of being provided with the procedural protections he was entitled to, he was given no notice that the First Direction was in contemplation, no opportunity to be heard, and no opportunity to contribute to the accuracy of the facts as found by the Eastern Administrative Judge. Indeed, no one ever brought concerns about his conduct to his attention before the issuance of the First Direction. This, he argues, amounts to a breach of procedural fairness and natural justice, which was further compounded by entrusting Court Counsel with the authority to deny the Chief Adjudicator funding for counsel.

[18] In response to this argument, the respondent, the Government of Canada, asserts that no duty of procedural fairness or natural justice was owed to the appellant. It relies on the courts' supervisory jurisdiction over the IRSSA, as confirmed by the Supreme Court of Canada in Fontaine v. Canada (Attorney General), 2016 ONCA 241, 130 O.R. (3d) 1, at para. 172, aff'd 2017 SCC 47, [2017] 2 S.C.R. 205.

[19] The respondent submits that the Eastern Administrative Judge is always entitled to raise concerns about the Chief Adjudicator's activity, particularly in order to ensure that the objectives of the IRSSA are met. Moreover, because the Chief Adjudicator is court appointed, the supervising courts must be afforded substantial latitude to direct his activities and, where the courts determine a need, they may intervene and provide direction. In these circumstances, the respondent argues, no duty of procedural fairness or natural justice is owed to the appellant. Instead, the court can simply issue directives when and how it sees fit.

[20] We will consider below the respondent's arguments regarding the extent of the courts' supervisory powers and how those powers may be exercised. For present purposes, we note that the First Direction contained findings made by a judge of the Superior Court that cast aspersions on the appellant's professional judgment and competence. Further, the First Direction ordered him to take certain actions, failing which he was at risk of being terminated from his position.

[21] Contrary to what the respondent argues, it is precisely because the Eastern Administrative Judge was exercising his judicial functions that he owed the appellant an elevated duty of procedural fairness and natural justice. Of the many principles underlying the Canadian judicial system, generally those who will be subject to an order of the court are to be given notice of the legal proceeding and afforded the opportunity to adduce evidence and make submissions: A.(L.L.) v. B.(A.), [1995] 4 S.C.R. 536, at para. 27. It is our view, therefore, that the Eastern Administrative Judge's power to supervise must be exercised in a manner that conforms to the principles of natural justice and respects the rights of the appellant to procedural fairness.

(b) Was the standard of procedural fairness satisfied?

[22] After determining that the appellant was owed a duty of procedural fairness, the next step in our analysis is to determine whether the appellant was afforded rights to procedural fairness aligned with the principles of natural justice. While not conceding that a duty of procedural fairness applies, the respondent advances two arguments in support of its contention that the appellant was dealt with fairly.

[23] First, the respondent notes that, before the issuance of the First Direction, Court Counsel engaged in a dialogue with the Chair of the Oversight Committee, wherein he raised the Eastern Administrative Judge's concerns regarding the appellant's conduct. In our view, those interactions only serve to underscore the lack of procedural fairness in this case. After some initial discussions between Court Counsel and the Chair, a request was made by the Chair to permit her to consult with the members of the Oversight Committee about the concerns raised by Court Counsel at their next meeting six days hence. The response to that request came the following day in the form of an email from Court Counsel attaching the First Direction.

[24] We fail to see any urgency that would justify this arbitrary termination of discussions. These interactions demonstrate a rush to judgment unimpeded by even the most basic measures of procedural fairness and natural justice.

[25] The second argument advanced by the respondent is that the First Direction included a procedure to permit the appellant to respond to the allegations of misconduct made against him. Counsel for the respondent is referring to the provision in the First Direction, that if the appellant did not comply with what he was directed to do by the deadline cited therein, he "shall appear before me on September 20, 2018 to show cause why the Order approving his appointment as Chief Adjudicator should not be rescinded": at para. 61.

[26] We do not read this provision as affording the appellant any measure of procedural fairness or natural justice. It does not contemplate the appellant being able to make submissions to reverse the decision of the Eastern Administrative Judge. Rather, it amounts to nothing more than a warning that unless all the orders in the First Direction were implemented by the deadline mandated by the Eastern Administrative Judge, the appellant would have to explain why he should not be terminated from his position as Chief Adjudicator. Further, as noted above, the power to terminate the Chief Adjudicator resides with the Oversight Committee, not the Eastern Administrative Judge.

[27] In our view, the appellant's rights to procedural fairness were not respected in the present case. The appellant was afforded no opportunity to participate in the Eastern Administrative Judge's fact-finding process, given no warning that his activities were being impugned, and was deprived of the opportunity to adduce evidence and make submissions. It must be remembered that the appellant occupies a significant role in the administration of a multi-billion dollar class action settlement. The First Direction compromised the appellant's professional reputation and his ability to carry out his mandate as Chief Adjudicator. No person occupying such an important public position should be the subject of adverse judicial findings regarding the exercise of his or her duties without being granted some measure of procedural fairness and natural justice.

[28] In summary, the First Direction was issued in a manner that denied the appellant the most basic elements of procedural fairness and natural justice. It must be set aside, and we so order.

(2) Second Direction

[29] The Eastern Administrative Judge issued the Second Direction in the same manner as the First Direction. The appellant was afforded no opportunity to make submissions or participate in the process. Accordingly, the Second Direction must also be set aside on the grounds of lack of procedural fairness and breach of natural justice.

[30] The appellant raises an additional ground for setting aside the Second Direction. He submits that the Second Direction violates the law of functus officio. We accept that submission. We also note that the respondent takes no position on this submission. Once the First Direction was issued, the Eastern Administrative Judge's jurisdiction over the matter was exhausted. While the First Direction was under appeal, he had no authority to rescind and replace it with the Second Direction.

[31] The principle of functus officio addresses the very harm at issue in these appeals, namely that a lower court must not interfere with the jurisdiction of an appellate court: Doucet-Boudreau v. Nova Scotia (Minister of Education), 2003 SCC 62, [2003] 3 S.C.R. 3, at paras. 75-79. Pursuant to the principle of functus officio, courts do not have the power to amend an order except in limited circumstances, which have no application in this case. The Second Direction purports to entirely rescind and replace the First Direction for the express purpose of avoiding appellate review. In addition, the Eastern Administrative Judge further held that the appeal of the First Direction was "largely moot" as a result of the first stay order made by Sharpe J.A.: at para. 3. The Eastern Administrative Judge had no jurisdiction to make that finding. In so doing, he violated the principle of functus officio, and did so in a way that usurped the jurisdiction and function of this court by purporting to decide an issue under appeal.

(3) Hearing in this Court

[32] The appellant has filed evidence on these appeals addressing the substantive concerns raised by the Eastern Administrative Judge regarding his conduct. It is his position that this court should determine these issues. We decline to do so for two reasons. First, as will be discussed below, the IRSSA provides a process for adjudication for such issues and that process should be followed. Second, even if we had jurisdiction, given how this proceeding unfolded, we are not confident that there is a proper evidentiary record to determine these issues.

(4) Adjudication of the Issues

[33] Given our conclusion that this court should not determine the substantive issues raised in the First Direction and Second Direction, what remains outstanding is a question as to how these issues should be adjudicated. To answer this question, we turn to the RFD process and further ask whether supervising courts can commence proceedings on their own initiative.

[34] A RFD to the supervising courts is the process mandated by the Implementation Orders for applications regarding the administration of the IRSSA. Where a hearing is required, the administrative judges determine the jurisdiction in which the hearing should be held. Where the issues will affect all jurisdictions, the hearing may be directed to any court supervising the IRSSA.

[35] There is nothing in the Court Administration Protocol that permits the courts to initiate their own process. Instead, it is contemplated that it is the parties that bring RFDs to the courts. If the respondent has a concern about that conduct, there is nothing preventing it from bringing a RFD. Engaging in the RFD process would permit all parties to adduce evidence, make submissions, and to receive the direction of the court.

[36] The question that remains is whether the supervising courts can initiate their own proceedings, such as the one contemplated in the Second Direction, to review the conduct of the Chief Adjudicator? The respondent advances two arguments in support of that right.

[37] The first argument is that because the appellant is court appointed, he is subject to orders made by the court on its own motion. We reject that submission on the ground that any such general power is limited by the terms of the constating documents. The IRSSA, the Implementation Orders, and the Court Administration Protocol provide a detailed procedure regarding the adjudication of issues that arise in the administration of the IAP. That process must be respected. While the courts have a supervising role, it is one that must be guided by the IRSSA and the Implementation Orders. The supervising courts are not free to graft on their own processes to the mandated RFD process.

[38] The respondent's second argument is based on the language in para. 7 of the Implementation Orders that the "Courts may provide the Chief Adjudicator with directions regarding the form and content" of his quarterly reports. It submits that this provision grants supervising courts the authority to provide directions regarding how the Chief Adjudicator is undertaking his duties, beyond the execution of his reporting obligation. For example, in the present case, the respondent argues this provision granted the Eastern Administrative Judge the authority to sanction the appellant for his participation in the Impugned Appeals.

[39] In our view, this submission reads into para. 7 of the Implementation Orders sweeping powers that its language cannot reasonably bear. While there is no doubt that the supervising courts may enforce their limited power regarding the form and content of reports, that provision does not permit the type of comprehensive review of the Chief Adjudicator's performance as found in the First Direction. In that regard, we note that this limited reporting duty contrasts sharply with the relationship between the Court Monitor and the supervising courts, which requires the Court Monitor to not only report but also take direction from the supervising courts. The obligations of the Chief Adjudicator to the supervising courts, and the corresponding authority of the supervising courts, is much more limited.

[40] In addition, any such limited review conducted by the supervising courts regarding the Chief Adjudicator's reports must be carried out in a procedurally fair manner. The provision relied on by the respondent does not permit the supervising courts to issue sweeping unilateral declarations impacting the operation of the IAP and the actions of the Chief Adjudicator.

E. Disposition

[41] We order that the First Direction and the Second Direction be set aside. It is open to any party to bring a RFD regarding the issues canvassed in the directions. Given the Eastern Administrative Judge's involvement described above and his views expressed regarding these issues, we order that any such RFD be conducted by a different supervising judge. This order should not be interpreted as impeding the supervising courts from taking such steps as they deem necessary to provide the appellant with directions regarding the form and content of his reports, provided that the process for those directions is conducted in a procedurally fair manner and the directions are limited in scope to the form and content of the reports. Again, we are of the view that the Eastern Administrative Judge should not participate in that process. Further, if the parties cannot agree on the costs of these appeals, they may make brief written submissions.

[42] Finally, we make these observations. The IRSSA was designed to give some measure of redress to victims of a dark chapter in Canadian history. Since its implementation, tens of thousands of victims have been compensated and billions of dollars have been dispersed. That accomplishment is attributable in no small measure to the many people who are part of the IAP, including the appellant and the Eastern Administrative Judge. As noted above, this ground breaking process is nearing completion. It is hoped that the parties can work together in the spirit of cooperation that underlies the IRSSA to resolve any concerns regarding the appellant's performance of his duties. To the extent that the parties are unable to resolve outstanding issues, we would encourage them to seriously consider mediation.

Released: December 13, 2018

"S.E. Pepall J.A."

"C.W. Hourigan J.A."

"G.T. Trotter J.A."