Brown et al. v. The Attorney General of Canada

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

114 O.R. (3d) 352

2011 ONSC 7712

Ontario Superior Court of Justice, Divisional Court, Cunningham A.C.J., Pardu and Mulligan JJ.

December 28, 2011*

* This judgment was recently brought to the attention of the editors.

Civil procedure -- Class proceedings -- Certification -- Case management judge on certification motion finding that statement of claim did not disclose cause of action -- Judge erring in conditionally certifying claim framed in negligence and breach of fiduciary duty and permitting plaintiffs to plead fresh as amended statement of claim in accordance with his framing of new questions in respect of negligence and fiduciary duty -- Judge denying defendant opportunity to fully argue issue by predetermining that statement of claim would disclose cause of action so long as fresh pleading was prepared in accordance with his reasons -- Judge failing to conduct analysis to determine whether viable claim for negligence or breach of fiduciary duty existed.

The plaintiffs brought a proposed class proceeding seeking compensation on behalf of aboriginal people who allegedly suffered the loss of their aboriginal identity as a result of having been placed in foster care or in adoptive homes pursuant to child welfare legislation in place between 1965 and 1984. On a certification motion, the motion judge found that the statement of claim did not disclose a cause of action. However, he conditionally certified claims framed in negligence and breach of fiduciary duty and gave the plaintiffs an opportunity to plead a fresh as amended statement of claim in accordance with his framing of a new question in respect of negligence and fiduciary duty. The defendant appealed.

Held, the appeal should be allowed. [page353]

The motion judge erred in conditionally certifying claims framed in negligence and breach of fiduciary duty. He seemed to have predetermined that a cause of action would emerge so long as the fresh pleading was prepared in accordance with his reasons. The defendant would be denied an opportunity to argue the elements of s. 5(1) of the Class Proceedings Act, 1992, S.O. 1992, c. 6. The motion judge failed to conduct a full analysis in order to determine whether a viable claim existed in either negligence or fiduciary duty. The existing statement of claim was struck, the plaintiffs were granted leave to amend their pleading and the certification motion was to be ground before another judge. The defendant was entitled to its costs of the leave motion and the appeal, fixed at $25,000.

APPEAL from an order conditionally certifying a class action.

Cases referred to Brown v. Canada (Attorney General) (2010), 102 O.R. (3d) 493, [2010] O.J. No. 2253, 2010 ONSC 3095, [2010] 3 C.N.L.R. 41, 94 C.P.C. (6th) 276 (S.C.J.) [Leave to appeal granted [2011] O.J. No. 940, 2011 ONSC 1193 (S.C.J.)]

Statutes referred to Class Proceedings Act, 1992, S.O. 1992, c. 6 [as am.], s. 5(1)

Rules and regulations referred to Rules of Civil Procedure, R.R.O. 1990, Reg. 194, rule 21.01(1) (b)

Jeffery Wilson and Morris Cooper, for respondents. Owen Young, Paul Evraire, Q.C., and Michael W. Bader, Q.C., for appellant.

Endorsement

[1] BY THE COURT: -- This matter comes before us as an appeal from the decision of Perell J. in which he conditionally certified a class action under the Class Proceedings Act, 1992, S.O. 1992, c. 6 (the "CPA"). Leave was granted by Swinton J. on February 22, 2011 [[2011] O.J. No. 940, 2011 ONSC 1193 (S.C.J.)]. Her reasons are informative.

[2] For the purposes of this endorsement, it will not be necessary to recite the factual background other than to say the representative plaintiffs claim compensation on behalf of approximately 16,000 aboriginals who allege they suffered the loss of their aboriginal identity as a result of having been placed in foster care or in adoptive homes pursuant to child welfare legislation in place between 1965 and 1984. A companion motion brought by the Attorney General of Canada ("AG") pursuant to rule 21.01(1)(b) [of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194] was also before Perell J.

[3] The certification was opposed by the AG on the basis that the action as pleaded failed to meet the criteria set out in s. 5(1) of the CPA, principally because it failed to disclose a cause of action. [page354]

[4] In his decision dated May 26, 2010 [(2010), 2010 ONSC 3095, 102 O.R. (3d) 493, [2010] O.J. No. 2253 (S.C.J.)], the motion judge found the statement of claim did not disclose a cause of action. Although three of the claims advanced were struck, Perell J. conditionally certified claims framed in negligence and breach of fiduciary duty. Essentially, and this is where we find error, Perell J. permitted the plaintiff an opportunity to plead a fresh as amended statement of claim in accordance with his framing of a new question in respect of negligence and fiduciary duty. As Perell J. stated in his reasons [at para. 12]:

In Ontario between December 1, 1965, and December 31, 1984, when an aboriginal child was placed in the care of non- aboriginal foster or adoptive parents who did not raise the child in accordance with the child's aboriginal customs, traditions and practices, did the Federal Crown have and breach a fiduciary or common law duty of care to take reasonable steps to prevent the aboriginal child from losing his or her aboriginal identity?

[5] In our view, the motion judge seems to have predetermined that a cause of action will emerge so long as the fresh pleading is prepared in accordance with his reasons. In other words, the AG, so it would seem, will be denied an opportunity to argue the elements of s. 5(1) of the CPA. We concur with Swinton J. when she stated [at para. 12]:

Instead of the conditional order, he [the motion judge], should have adjourned the certification motion as contemplated by s. 5(4) of the CPA which allows the court to adjourn the certification motion to permit the parties to amend their pleadings.

[6] As Swinton J. pointed out, this was not simply a case of tidying up a litigation plan or some deficiency in the pleading. Here, the motion judge concluded that the pleading before him failed to disclose a cause of action.

[7] Because we view this matter as procedural, we do not intend to discuss the merits other than to say we agree, once again, with Swinton J. concerning the motion judges' failure to conduct a full analysis in order to determine a viable claim either in negligence or fiduciary duty. The motion judge concluded that it was not plain and obvious that these duties did not exist without considering the necessary elements for there to be such duties.

[8] As to the negligence claim, clearly novel, no Cooper-Anns analysis was conducted. In the view of the motion judge, a proper negligence claim would simply be based on [at para. 152] "what Canada knew or ought to have known and what it did or did not do after Ontario welfare authorities began placing aboriginal children in non-aboriginal homes". [page355]

[9] Having said that, because the motion judge appears to have pre-approved the amendments necessary to satisfy him that a cause of action existed, the appellants have been denied the opportunity to fully argue the issue. As counsel for the AG put it in submissions, there is no available mechanism for the AG to come back. To appear before Perell J. with these apparently pre-approved amendments would be to appeal his determination. Once a motion judge concludes pleadings do not show a cause of action, conditional certification is not available. One option, as Swinton J. pointed out, would be to simply adjourn the certification motion in order to permit an amendment. However, once it is determined that no cause of action has been pleaded, as was the case here, the pleading should have been struck with leave to amend. This was not, as suggested by the respondent in submissions, appropriate case management.

[10] We understand from the respondents that the claim has now been recast (presumably in accordance with the reasons of Perell J.) as a fresh as amended statement [of] claim. In order to enable the matter to proceed as expeditiously as possible, the appeal is allowed and the following ordered.

[11] Paragraphs 1, 2, 6 and 7 of the order dated May 26, 2010 are set aside. The existing statement of claim is struck. Leave is granted to the plaintiffs to amend their pleading and the certification motion is to be brought before another judge. Unless the parties determine it to be necessary, there will be no new affidavits.

[12] The appellant is entitled to its costs of the motion for leave and for the appeal which we fix at $25,000, all inclusive.

Appeal allowed.