Supreme Court of Canada

Appeal Heard: October 10, 2018 Judgment Rendered: April 12, 2019 Docket: 37725

Between:

J.W. and REO Law Corporation Appellants

and

Attorney General of Canada, Chief Adjudicator of the Indian Residential Schools Adjudication Secretariat and Assembly of First Nations Respondents

— and —

Independent Counsel and K.B. Interveners

Coram: Wagner C.J. and Abella, Moldaver, Karakatsanis, Côté, Brown and Rowe JJ.

Reasons: (paras. 1 to 55) Abella J. (Wagner C.J. and Karakatsanis J. concurring)

Concurring Reasons: (paras. 56 to 174) Côté J. (Moldaver J. concurring)

Dissenting Reasons: (paras. 175 to 196) Brown J. (Rowe J. concurring)

J.W. v. Canada (Attorney General), 2019 SCC 20, [2019] 2 S.C.R. 224

J.W. and REO Law Corporation Appellants

v.

Attorney General of Canada, Chief Adjudicator of the Indian Residential Schools Adjudication Secretariat and Assembly of First Nations Respondents

and

Independent Counsel and K.B. Interveners

Indexed as: J.W. v. Canada (Attorney General)

2019 SCC 20

File No.: 37725.

2018: October 10; 2019: April 12.

Present: Wagner C.J. and Abella, Moldaver, Karakatsanis, Côté, Brown and Rowe JJ.

on appeal from the court of appeal of manitoba

Headnotes

Civil procedure — Class proceedings — Settlement — Administration and implementation — Settlement agreement resolving class actions brought by former Aboriginal students for harms suffered at residential schools — Agreement providing procedure for settling individual claims through adjudicative process — Whether courts can intervene in relation to adjudication decisions where internal review mechanisms exhausted — Appropriate scope of judicial recourse.

The Indian Residential Schools Settlement Agreement ("Agreement") represents the negotiated settlement of thousands of individual and class action lawsuits relating to the operation of residential schools. Nine provincial and territorial superior courts approved the Agreement. The Agreement includes a procedure for settling individual claims through an adjudicative process — the Independent Assessment Process ("IAP"). The IAP describes which harms are compensable. The Agreement also includes a system of internal reviews. There is no right of appeal to the courts. However, supervising judges from each province oversee the administration and implementation of the Agreement.

W brought a claim for compensation in accordance with the IAP, alleging that an incident he suffered while attending a residential school constituted compensable sexual abuse within the meaning of the Agreement. His claim was denied by the initial Hearing Adjudicator. Two levels of internal review upheld the denial. W filed a Request for Directions ("RFD") with the supervising court. The supervising judge found three errors in the Hearing Adjudicator's decision, ordered that the matter be sent back for reconsideration, and a subsequent Reconsideration Adjudicator awarded W compensation. The Manitoba Court of Appeal allowed the Attorney General's appeal, holding that the supervising judge had exceeded his jurisdiction.

Held (Brown and Rowe JJ. dissenting): The appeal should be allowed and the reconsideration adjudicator's compensation award reinstated.

Per Wagner C.J. and Abella and Karakatsanis JJ.: Judicial intervention was necessary in the face of an unauthorized modification of the Agreement, contrary to the intentions of the parties. This is precisely the kind of situation that calls for the ongoing exercise of the courts' supervisory jurisdiction.

The appellate authorities have indicated that courts may intervene in relation to IAP adjudications when exceptional circumstances are present. There are compelling reasons for setting a high bar for judicial intervention in the IAP context. The parties went to significant lengths to make the Agreement a "complete code", with a system of self‑contained internal reviews. They had many good reasons for wanting finality and expediency.

On the other hand, the necessity of ongoing judicial supervision was recognized when the Agreement was approved by the courts. There is a foundational link between judicial supervision and the Agreement. The existence of the Agreement was contingent on judicial approval, and judicial approval, in turn, was predicated on ongoing supervision.

As to when judges, exercising their supervisory role, should intervene in an IAP adjudication, there is an ongoing duty to supervise the administration and implementation of the Agreement, including the IAP. In exercising this supervisory role in the Requests for Directions context, judges should intervene where an adjudicator has made an unauthorized modification of the Agreement.

In this case, the initial adjudicator's decision constituted an unauthorized modification of the IAP. By substituting the wording of the IAP with her own and by adding a requirement of the perpetrator's sexual intent, the Hearing Adjudicator fundamentally modified the terms of the Agreement. This is what triggers the courts' supervisory authority.

Per Moldaver and Côté JJ.: Judicial review under an administrative law analysis is not applicable to IAP decisions. As the purpose of judicial review is to ensure the legality of state decision making, it is not available to review decisions whose source of authority is contractual rather than statutory. IAP adjudicators' powers flow from the IRSSA itself, not from any statutory delegation of power.

While the parties do not have the option of seeking judicial review of IAP decisions, they can file RFDs with the supervising courts to resolve issues relating to the implementation and administration of the IRSSA.

While it is clear that the courts retain supervisory powers pursuant to the Agreement itself, the Approval and Implementation Orders and class proceedings legislation, a distinction must be drawn between providing supervision by ensuring that the terms of the Agreement are faithfully implemented and supervising the substantive correctness of individual adjudicative decisions, which involves overseeing the merits of each claim.

The weight of the authorities supports a high jurisdictional threshold for supervising courts considering IAP decisions. The cases highlight several reasons why access to judicial recourse in respect of IAP decisions should be construed narrowly.

While the parties' intentions in creating the Agreement and the IAP must be honoured, circumstances will inevitably arise that were not foreseen by the parties and are therefore not provided for in the Agreement. Where the Agreement makes no provision for a particular situation, courts retain the supervisory authority to fill those gaps.

In this case, the supervising judge erred in scrutinizing the initial adjudicator's interpretation of the IAP and substituting his own. The supervising judge was entitled only to determine whether the Hearing Adjudicator had failed to apply the terms of the IAP in the narrow sense.

However, while the supervising judge erred in his analysis, this is an exceptional case in which reconsideration is appropriate. W's claim has given rise to a unique dilemma for which the Agreement provides no internal remedy. The Chief Adjudicator conceded that W's claim was wrongly decided and that he has no mechanism available to remedy it. This situation constitutes a gap in the Agreement, and the courts may step in to fill it.

This is a situation in which the courts can step in to provide a remedy that is consistent with the Agreement's objective of promoting a fair, comprehensive and lasting resolution of the legacy of Indian Residential Schools.

Per Brown and Rowe JJ. (dissenting): The appeal should be dismissed. Côté J. correctly states the law for a majority of the Court regarding the jurisdiction of the supervising courts in respect of IAP decisions. However, the concession of the Chief Adjudicator does not justify rewriting the terms of the Agreement.

The Agreement is a contract. Interpreting its terms therefore requires a court to discern the parties' intentions. In this case, it was the parties' intention that the Chief Adjudicator not have the authority to reopen IAP claims where he believes an adjudicator's decision was wrong.

The Agreement expressly precludes judicial intervention, even where the IAP has been incorrectly interpreted and applied. It is a complete code that limits access to the courts, preserves the finality of the IAP process and respects the expertise of IAP adjudicators.

Where the parties have failed in their contract to address a particular situation arising in the course of their relationship, a court may imply a contractual term. This does not permit a court to imply a term which is contrary to the parties' clearly expressed intentions. Straining to find a gap in the Agreement so as to open space for judicial recourse where the parties clearly intended to preclude it would rewrite the bargain the parties struck.

Cases Cited

By Abella J.

Explained: R. v. Chase, [1987] 2 S.C.R. 293; considered: Fontaine v. Duboff Edwards Haight & Schachter, 2012 ONCA 471, 111 O.R. (3d) 461; referred to: Baxter v. Canada (Attorney General) (2006), 83 O.R. (3d) 481; Fontaine v. Canada (Attorney General), 2017 ONCA 26, 137 O.R. (3d) 90; N.N. v. Canada (Attorney General), 2018 BCCA 105, 6 B.C.L.R. (6th) 335; R. v. Ewanchuk, [1999] 1 S.C.R. 330.

By Côté J.

Distinguished: Canada (Attorney General) v. Fontaine, 2017 SCC 47, [2017] 2 S.C.R. 205; considered: Fontaine v. Canada (Attorney General), 2016 BCSC 2218, [2017] 1 C.N.L.R. 104; Fontaine v. Duboff Edwards Haight & Schachter, 2012 ONCA 471, 111 O.R. (3d) 461; N.N. v. Canada (Attorney General), 2018 BCCA 105, 6 B.C.L.R. (6th) 335; Fontaine v. Canada (Attorney General), 2017 ONCA 26, 137 O.R. (3d) 90; referred to: Fontaine v. Canada (Attorney General), 2016 ONCA 241, 130 O.R. (3d) 1; Fontaine v. Canada (Attorney General), 2014 ONSC 4024, [2014] 4 C.N.L.R. 67; R. v. Chase, [1987] 2 S.C.R. 293; Fontaine et al. v. Canada (Attorney General) et al., 2014 MBQB 200, 311 Man. R. (2d) 17; Fontaine v. Canada (Attorney General), 2015 ABQB 225, [2015] 4 C.N.L.R. 69; Fontaine v. Canada (Attorney General), 2016 ONSC 4326, [2016] 4 C.N.L.R. 40; Dunsmuir v. New Brunswick, 2008 SCC 9, [2008] 1 S.C.R. 190; Highwood Congregation of Jehovah's Witnesses (Judicial Committee) v. Wall, 2018 SCC 26, [2018] 1 S.C.R. 750; Ledcor Construction Ltd. v. Northbridge Indemnity Insurance Co., 2016 SCC 37, [2016] 2 S.C.R. 23; Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, [2014] 2 S.C.R. 633; Fontaine et al. v. Canada (Attorney General) et al., 2014 MBCA 93, 310 Man. R. (2d) 162; Fontaine v. Canada (Attorney General), 2014 ONSC 283, [2014] 2 C.N.L.R. 86; Baxter v. Canada (Attorney General) (2006), 83 O.R. 481; Fontaine v. Canada (Attorney General), 2017 BCSC 946; Carter v. Canada (Attorney General), 2015 SCC 5, [2015] 1 S.C.R. 331.

By Brown J. (dissenting)

Fontaine v. Canada (Attorney General), 2017 ONCA 26, 137 O.R. (3d) 90; Canada (Attorney General) v. Fontaine, 2017 SCC 47, [2017] 2 S.C.R. 205; M.J.B. Enterprises Ltd. v. Defence Construction (1951) Ltd., [1999] 1 S.C.R. 619; Canadian Pacific Hotels Ltd. v. Bank of Montreal, [1987] 1 S.C.R. 711; Vorvis v. Insurance Corporation of British Columbia, [1989] 1 S.C.R. 1085; Fontaine v. Canada (Attorney General), 2016 BCSC 2218, [2017] 1 C.N.L.R. 104; N.N. v. Canada (Attorney General), 2018 BCCA 105, 6 B.C.L.R. (6th) 335; Fontaine v. Canada (Attorney General), 2014 ONSC 283, [2014] 2 C.N.L.R. 86; Fontaine v. Canada (Attorney General), 2018 ONSC 103; Spencer v. Continental Insurance Co., [1945] 4 D.L.R. 593.

Statutes and Regulations Cited

Class Proceedings Act, C.C.S.M., c. C130, s. 12. Court of Queen's Bench Act, C.C.S.M., c. C280, Part XIV.

Treaties and Agreements

Indian Residential Schools Settlement Agreement (2006), preamble, arts. 1.01, 4.11, 5, 5.09, 6, 6.03, 7.01, 12.01, 13.08, Sch. D, arts. I, II, III, App. V, IX, X, XII, XIII.

Authors Cited

Hall, Geoff R. Canadian Contractual Interpretation Law, 3rd ed. Toronto: LexisNexis, 2016.

Indian Residential Schools Adjudication Secretariat. Independent Assessment Process (IAP) Statistics (online: http://www.iap‑pei.ca/stats‑eng.php?act=20181031; archived version: http://www.scc‑csc.ca/cso‑dce/2019SCC‑CSC20_1_eng.pdf).

Swan, Angela, Jakub Adamski and Annie Y. Na. Canadian Contract Law, 4th ed. Toronto: LexisNexis, 2018.

The Right Honourable Stephen Harper on behalf of the Government of Canada. "Statement of Apology to former students of Indian Residential Schools". Ottawa, June 11, 2008 (online: https://www.aadnc‑aandc.gc.ca/DAM/DAM‑INTER‑HQ/STAGING/texte‑text/rqpi_apo_pdf_1322167347706_eng.pdf; archived version: http://www.scc‑csc.ca/cso‑dce/2019SCC‑CSC20_2_eng.pdf).

Appeal

APPEAL from a judgment of the Manitoba Court of Appeal (Monnin, Beard and leMaistre JJ.A.), 2017 MBCA 54, 413 D.L.R. (4th) 521, [2017] 3 C.N.L.R. 85, [2017] AZ‑51399218, [2017] M.J. No. 163 (QL), 2017 CarswellMan 247 (WL Can.), setting aside a decision of Edmond J., 2016 MBQB 159, 2016 MNQB 159, [2016] 4 C.N.L.R. 23, [2016] M.J. No. 232 (QL). Appeal allowed, Brown and Rowe JJ. dissenting.

Martin U. Kramer and Richard E. Olschewski, for the appellants.

Mitchell R. Taylor, Q.C., and Dayna Anderson, for the respondent the Attorney General of Canada.

Joseph J. Arvay, Q.C., Susan E. Ross and David W. L. Wu, for the respondent the Chief Adjudicator of the Indian Residential Schools Adjudication Secretariat.

Stuart Wuttke and Julie McGregor, for the respondent the Assembly of First Nations.

David Schulze, Maryse Décarie‑Daigneault and David P. Taylor, for the intervener the Independent Counsel.

Karim Ramji, for the intervener K.B.

Reasons for Judgment

The reasons of Wagner C.J. and Abella and Karakatsanis JJ. were delivered by

Abella J. —

[1] The years of sustained abuse committed in Residential Schools represent a profoundly shameful era in Canada's history. The legacy of the harms committed there consists of deep wounds that have never fully healed. The law's response, both in crafting the Indian Residential Schools Settlement Agreement (the "Agreement") and in ensuring it is properly implemented, must reflect this reality.

[2] When J.W. was a young boy at a Residential School a nun touched his genitals over his clothing. He was standing in line waiting for a shower. He was wearing what he described as a "little apron". The nun put her hand under the apron and touched him. J.W. was deeply traumatized by this touching, and by the shame and humiliation it caused him.

[3] In 2014, J.W. brought a claim for compensation in accordance with the Independent Assessment Process (IAP), the adjudicative component of the Agreement, alleging that this incident fell within the following definition of sexual abuse:

Any touching of a student, including touching with an object, by an adult employee or other adult lawfully on the premises which exceeds recognized parental contact and violates the sexual integrity of the student.

[4] J.W.'s claim proceeded in Manitoba. The Hearing Adjudicator concluded that the "sexual" intent of the nun was an element that had to be shown by the claimant. Despite the fact that she accepted J.W.'s account of what had happened, she found that his claim did not meet this requirement. The internal review process upheld the Hearing Adjudicator's decision. The Manitoba supervising judge found three errors in the Hearing Adjudicator's decision and ordered a reconsideration. The Reconsideration Adjudicator allowed J.W.'s claim. The Manitoba Court of Appeal reversed.

[5] The issue in this appeal is whether J.W. was entitled to judicial recourse.

Background

[6] The Agreement represents the negotiated settlement of thousands of individual and class action suits filed against a number of defendants, including the Government of Canada and various churches operating on behalf of Canada, by former Aboriginal students of Indian Residential Schools who suffered physical, emotional and sexual abuse.

[7] The Agreement includes a procedure for settling individual claims through an adjudicative process; provides for support services for former students; sets out a national procedure for healing, education and commemoration; provides for the activities of a Truth and Reconciliation Commission; and provides for compensation for the years a claimant spent at a residential school.

[8] While not admitting liability, the defendants acknowledged that harms and abuses were committed against Indigenous children at these schools. The individuals in the various classes of plaintiffs forfeited their rights to sue and agreed to resolve any individual claims through the IAP.

[9] Two avenues to compensation are available under the Agreement: the "common experience" payment received by all eligible former students, and individual payments awarded to claimants who establish that they suffered specific harms under Schedule D of the Agreement (the "Schedule"), which sets out the IAP Model.

[10] The Schedule describes which harms are compensable, what must be established by the claimant, and sets out a compensation scale. It includes both standard and complex track claims. Certain compensable acts are described in the Schedule; others constitute aggravated claims.

[11] There is a system of internal reviews. If the alleged error in an adjudicative decision is a palpable and overriding factual one, the scheme allows for one level of internal review. If the error alleged is that the adjudicator applied an incorrect legal standard, the scheme allows for two levels of internal review. The Chief Adjudicator presides over the second level of review.

[12] J.W.'s claim is a standard track claim. That entitled him to an in-person hearing and the possibility of two levels of internal review. There is, however, no right of appeal to the courts.

[13] Because the Agreement constitutes the settlement of ongoing actions, judicial approval was required. The parties brought the proposed settlement to the superior courts for approval, and between December 2006 and March 2007, courts in nine provinces and territories approved the Agreement and issued Approval and Implementation Orders.

[14] Ontario was the first jurisdiction to approve the Agreement, subject to certain conditions, in December 2006. In Baxter v. Canada (Attorney General) (2006), 83 O.R. (3d) 481, Winkler R.S.J. discussed the purpose of the Agreement:

For over 100 years, Canada pursued a policy of requiring the attendance of Aboriginal children at residential schools, which were largely operated by religious organizations under the supervision of the Canadian government. The schools were to be the primary tool for "educating" and socializing Aboriginal people, with the intent of assimilating them into mainstream Canadian society. . . .

The flaws and failures of the policy and its implementation are at the root of the allegations of harm suffered by the class members. Upon review by the Royal Commission on Aboriginal Peoples, it was determined that the policy of enforced attendance at residential schools was both seriously flawed and misguided. . . .

[15] As Winkler R.S.J. emphasized, given the goals of the Agreement, significant and ongoing judicial supervision was necessary. As he said, supervising courts must "ensur[e] that the administration and the implementation of the settlement proceeds as intended" (Baxter, at para. 59, citing para. 56).

[16] Winkler R.S.J. stressed that, as in all class actions, the courts must strive to protect the class members and ensure that the benefits they agreed to are actually delivered. In order to deliver these benefits"[a] pro-active approach is necessary" (Baxter, at para. 55).

[17] The Approval Orders in all other provinces were substantially similar, and stated that superior court judges were entitled to hear "Requests for Directions" with respect to the ongoing administration and implementation of the Agreement:

THIS COURT DECLARES that the Representative Plaintiffs, Defendants, Released Church Organizations, Class Counsel, the National Administration Committee, or the Trustee, or such other person or entity as may be ordered by this Court, may apply to this Court for advice and directions regarding the administration and implementation of this Agreement and any order of this Court.

[18] The effect of the Approval Orders in the provinces was the certification of the actions as a class proceeding, subject to certain changes being made to the Agreement.

[19] By March 2007, all nine provincial and territorial jurisdictions implicated by the Agreement took the next step and implemented the Agreement by court orders. These Implementation Orders incorporated the Agreement and conferred broad supervisory powers on the courts.

[20] Notably, the Manitoba Implementation Order concludes by stating that "the Courts shall supervise the implementation of the Agreement and this order and, without limiting the generality of the foregoing, may issue such further and ancillary orders, directions and declarations as may be necessary or appropriate" (A.R., vol. I, at p. 104).

[21] As proposed by Winkler R.S.J. in Baxter, a Court Administration Protocol was appended to each province's Implementation Order, stating that two Administrative Judges would be appointed to work collaboratively on the administration of the Agreement.

[22] Supplemented by the applicable class proceedings regime in each affected province and territory, and the inherent jurisdiction of the superior courts, the Approval and Implementation Orders gave the courts a broad and active supervisory role.

[23] This history demonstrates the foundational link between judicial supervision and the Agreement. The existence of the Agreement was contingent on judicial approval, and judicial approval, in turn, was predicated on ongoing supervision.

[24] The Ontario Court of Appeal explained how this ongoing judicial supervision should be exercised in Fontaine v. Duboff Edwards Haight & Schachter (2012), 2012 ONCA 471, 111 O.R. (3d) 461 (Schachter). The decision concerned a legal fee dispute, which came to the courts by way of a Request for Directions. The Court of Appeal, per Rouleau J.A., held that the courts' supervisory jurisdiction over the Agreement is limited to ensuring that the parties comply with the terms of the Agreement. Recourse to the courts is available only if it is provided for in the Agreement or where the final IAP decision of the Chief Adjudicator reflects a failure to comply with the Agreement or the Implementation Orders.

[25] The Ontario Court of Appeal returned to the scope of the courts' supervisory jurisdiction in Fontaine v. Canada (Attorney General) (2017), 2017 ONCA 26, 137 O.R. (3d) 90, and concluded that the "exceptional circumstances" threshold applied to IAP adjudicative decisions. Writing for the Court of Appeal, Sharpe J.A. considered the particular function of an IAP adjudicator and described the role of courts in this context.

[26] The British Columbia Court of Appeal also adopted the "exceptional circumstances" threshold in N.N. v. Canada (Attorney General) (2018), 2018 BCCA 105, 6 B.C.L.R. (6th) 335. In that case, the majority concluded that exceptional circumstances exist if there is a "gap" in the Agreement — that is, in situations where the Agreement makes no provision for the particular circumstance that has arisen.

[27] The appellate authorities in Ontario and British Columbia have thus indicated that courts may intervene in relation to IAP adjudications when exceptional circumstances are present, a threshold which I agree represents the correct approach to the courts' supervisory role in the IAP context.

[28] I agree that there are compelling reasons for setting a high bar for judicial intervention in the IAP context. The parties went to significant lengths to make the Agreement a "complete code", with a system of self-contained internal reviews. They had many good reasons for wanting finality and expediency.

[29] On the other hand, the necessity of ongoing judicial supervision was recognized when the Agreement was approved, as noted by Winkler R.S.J. in Baxter.

[30] Without ongoing judicial supervision, the Agreement would not have been recognized. In overseeing the administration and implementation of the Agreement, therefore, courts have a duty to ensure that the terms of the Agreement are respected.

[31] While the parties do not have a broad right to judicial intervention, they do have a right to the implementation of the terms of the settlement they bargained for. Judicial supervision plays a critical role in protecting that right.

Analysis

[32] The question in this appeal is when judges, exercising their supervisory role, should intervene in an IAP adjudication. Schachter provides a useful starting point — judges should intervene when there are "exceptional circumstances", which include a failure to comply with the terms of the Agreement. I would add, based on my reading of the appellate authorities on the subject, that judges may also intervene where an adjudicator has made an unauthorized modification of the Agreement.

[33] Given the purposes of the Agreement and the ongoing supervisory powers built into the settlement, I do not, with respect, agree with the Manitoba Court of Appeal's decision in this case that so long as an adjudicator "turns her mind" to the relevant category, her interpretation is beyond judicial scrutiny. In my view, the courts, in exercising their supervisory role, have the authority to intervene where an adjudicator has fundamentally modified the terms of the Agreement.

[34] While finality and expediency are important goals, it is also crucial to recognize that claimants agreed to forfeit their litigation rights by not opting out of the Agreement. Given this trade-off, claimants are entitled to what they bargained for: a fair assessment of their claims under the terms agreed upon. They should not be forced to accept a materially modified version of those terms.

[35] Judges, in short, have an ongoing duty to supervise the administration and implementation of the Agreement, including the IAP. In exercising this supervisory role in the Requests for Directions context, judges may intervene where an adjudicator has made an unauthorized modification of the Agreement.

[36] In this case, J.W.'s claim fell under the IAP category "SL1.4", which is defined in the Agreement as:

Any touching of a student, including touching with an object, by an adult employee or other adult lawfully on the premises which exceeds recognized parental contact and violates the sexual integrity of the student.

[37] J.W.'s claim was rejected by the Hearing Adjudicator because, despite the fact that she believed J.W.'s account of what transpired, she was not satisfied on a balance of probabilities that the touching by the nun violated the sexual integrity of the student. This, in her view, required evidence of sexual intent on the part of the perpetrator.

[38] J.W. applied for a review of the Hearing Adjudicator's decision. The Review Adjudicator concluded that the Hearing Adjudicator had not misapplied SL1.4 by requiring J.W. to establish the perpetrator's sexual intent. The Re-Review Adjudicator upheld the review decision.

[39] The Supervising Judge, Edmond J. described his role in the following terms:

. . . I have the power to review the decision of the Re-Review Adjudicator to determine whether she failed to apply the terms of the [Agreement] and specifically the IAP Compensation Rules. I accept that the review process is not a standard process of judicial review and that [the parties] are not entitled to a comprehensive review of each decision.

Edmond J. went on to describe the standard of review for a Request for Directions as "ensuring that the Re-Review Adjudicator did not endorse a legal interpretation that is so unreasonable that it amounts to a failure to properly apply the IAP to the facts."

[40] Edmond J. found three errors warranting judicial intervention: the Hearing Adjudicator replaced the words "any touching" in SL1.4 with the words "sexual touching"; the Hearing Adjudicator imported a requirement that the perpetrator had sexual intent; and the Hearing Adjudicator misapplied the test for sexual assault in R. v. Chase, [1987] 2 S.C.R. 293.

[41] The Hearing Adjudicator described the question before her as "whether or not the incident was sexual touching which exceeded recognized parental conduct". As Edmond J. correctly noted, there is no reference to "sexual touching" in SL1.4. The definition uses the phrase "any touching".

[42] I agree with Edmond J. that the Hearing Adjudicator's added requirement of "sexual" touching amounted to an unauthorized amendment to the IAP, and the improper addition of a new threshold in the definition of SL1.4 was an unauthorized modification of the Agreement.

[43] In describing what J.W. needed to establish in order to demonstrate that the touching violated the sexual integrity of the student, the Hearing Adjudicator also stated that "[i]n this process a finding of sexual intent is required." There is no requirement of intent or purpose anywhere in SL1.4. The Hearing Adjudicator thus wrongly added a new requirement to SL1.4.

[44] The effect of these two errors is the same: the Hearing Adjudicator's decision constituted an unauthorized modification of SL1.4. By substituting the phrase "any touching" with "sexual touching" and by adding a requirement of sexual intent, the Hearing Adjudicator fundamentally modified the terms to which the parties had agreed, a modification for which she had no authority.

[45] These errors were compounded by the Hearing Adjudicator's misinterpretation of this Court's decision in Chase, the third and final error identified by Edmond J. Chase dealt with the meaning of sexual assault in the context of a criminal charge, not with the definition of SL1.4. The Hearing Adjudicator used Chase to redefine the threshold in SL1.4, substituting Chase's analysis for the clear language of the Agreement.

[46] The facts of Chase were as follows. The accused was a neighbour of the complainant, a 15-year-old girl. He entered the complainant's home, where she was playing pool with her 11-year-old brother. He grabbed the complainant around the shoulders and arms and grabbed her breasts. He was convicted of sexual assault.

[47] The accused was convicted of sexual assault in Provincial Court. His appeal to the Court of Appeal of New Brunswick was dismissed, but a conviction of common assault was substituted for the sexual assault conviction. Leave was granted to appeal to this Court.

[48] McIntyre J., writing for this Court, rejected the view that sexual assault was confined to "contact with specific areas of the human anatomy" and concluded that the test for sexual assault should be objective:

Applying these principles and the authorities cited, I would make the following observations. Sexual assault is an assault within any one of the definitions of that concept in s. 244(1) of the Criminal Code which is committed in circumstances of a sexual nature, such that the sexual integrity of the victim is violated. The test to be applied in determining whether the impugned conduct has the requisite sexual nature is an objective one: "Viewed in the light of all the circumstances, is the sexual or carnal context of the assault visible to a reasonable observer" . . . The part of the body touched, the nature of the contact, the situation in which it occurred, the words and gestures accompanying the act, and all other circumstances surrounding the conduct, including threats which may or may not be accompanied by force, will be relevant . . .

[49] Applied to the facts of the case, McIntyre J. concluded that there was ample evidence upon which the trial judge could have concluded that a sexual assault was committed: "[v]iewed objectively in the light of all circumstances, it [was] clear that the sexual integrity of the complainant was violated" (p. 302).

[50] Chase, therefore, stands for the proposition that the sexual nature of the assault is determined objectively. The Crown is not required to prove the accused had any mens rea with respect to the sexual nature of the act. Contrary to what the Hearing Adjudicator found, therefore, Chase does not support a requirement of sexual intent.

[51] I agree with Edmond J. that case law may be helpful, but it is the plain language of the Agreement that must guide an adjudicator's reasoning process. Case law cannot be used to modify the language of the Agreement, as the Hearing Adjudicator sought to do.

[52] The Agreement was entered into to address the abuses caused by the Residential Schools system and the courts' ongoing supervision of the settlement must allow judges to intervene where necessary to ensure that the agreed-upon terms are respected.

[53] The nun's conduct in touching J.W.'s genitals not only objectively "violates the sexual integrity of the student", contrary to the definition of sexual abuse in category SL1.4 of the Agreement, it also clearly "exceeds recognized parental contact". The genitals are among the most intimate parts of the human body. Touching them on a child in a public setting is unequivocally violative of the child's sexual integrity.

[54] J.W.'s is precisely the type of compensable claim contemplated by the parties to the Agreement. Failure to correct the Hearing Adjudicator's interpretation in this case would unacceptably undermine both the Agreement and the courts' supervisory role.

[55] I would allow the appeal with costs and reinstate the decision of the Reconsideration Adjudicator allowing J.W.'s claim, plus interest.

The reasons of Moldaver and Côté JJ. were delivered by

Côté J. —

I. Introduction

[56] Between the 1860s and the 1990s, more than 150,000 First Nations, Inuit and Métis children attended Indian Residential Schools operated by religious organizations and funded by the Government of Canada. As Canada acknowledged in its official apology, this system was intended to "remove and isolate children from the influence of their homes, families, traditions and cultures" ("Statement of Apology to former students of Indian Residential Schools" of the Right Honourable Stephen Harper on behalf of Canada, June 11, 2008 (online)). Thousands of these children experienced physical, emotional, and sexual abuse while at residential schools (Canada (Attorney General) v. Fontaine, 2017 SCC 47, [2017] 2 S.C.R. 205 ("SCC Records Decision"), at para. 1).

[57] The Indian Residential Schools Settlement Agreement ("IRSSA") [^3] was signed on May 8, 2006. It settled numerous class actions brought by former students against the Government of Canada and various religious organizations for the harms suffered at residential schools. Its purpose was to achieve a "fair, comprehensive and lasting resolution of the legacy of Indian Residential Schools" (IRSSA, preamble). In 2006 and 2007, the IRSSA was approved by courts in nine provinces and territories, which issued Approval and Implementation Orders providing for ongoing court supervision of its implementation and administration.

[58] The IRSSA is a multifaceted agreement. In addition to provisions intended to further healing, education, and reconciliation, it includes an Independent Assessment Process ("IAP") to settle individual claims for compensation arising from physical or sexual abuse at residential schools.

[59] This appeal concerns the ability of the courts to review final decisions of adjudicators under the IAP Model. J.W.'s claim was denied by the initial IAP Hearing Adjudicator, and that decision was upheld by two review adjudicators. The supervising judge intervened and directed that J.W.'s claim be reconsidered. The Reconsideration Adjudicator then decided in J.W.'s favour. The Manitoba Court of Appeal held that the supervising judge had exceeded his jurisdiction and set aside his decision, restoring the Re-Review Adjudicator's decision.

[60] I would allow the appeal and reinstate the supervising judge's order remitting J.W.'s claim for reconsideration (and I would reinstate the Reconsideration Adjudicator's decision allowing J.W.'s claim). I reach this conclusion, however, on different grounds from my colleague Abella J.

[61] This case involves a unique situation for which the IRSSA makes no provision. The Chief Adjudicator, Indian Residential Schools Adjudication Secretariat ("Chief Adjudicator"), concedes that J.W.'s claim was wrongly decided. Yet, he concedes, there is no mechanism within the four corners of the IRSSA to remedy this situation. This is precisely the type of case in which the courts may fill the gap.

II. Context

A. Overview of the IRSSA

(1) Indian Residential Schools Settlement Agreement

[62] The IRSSA provides for two compensation schemes: the Common Experience Payment ("CEP") and the Independent Assessment Process. The CEP is a compensatory payment available to all eligible former students of Indian Residential Schools ("IRS"). The IAP provides individual assessments of claims for specific harm, including sexual and serious physical abuse.

(2) Independent Assessment Process

[63] Schedule D of the IRSSA sets out the IAP Model. There are three categories of compensable continuing claims under the IAP: (1) sexual and physical assaults committed by adult employees of the government or church running the school; (2) sexual and physical assaults committed by fellow students; and (3) wrongful acts committed by an employee of the government or church that caused a student harm.

[64] IAP claims can proceed within either the standard track or the complex issues track, and all claimants are entitled to a hearing before a specially trained adjudicator (art. III(n) and (s); see also Sch. D, App. V, arts. 1 and 2).

[65] In Fontaine v. Canada (Attorney General), 2016 BCSC 2218, [2017] 1 C.N.L.R. 104 ("Bundled RFD"), at para. 11, Brown J., the supervising judge for British Columbia, aptly described the IAP as:

(a) a post-litigation claims assessment process, (b) a contractual component of the IRSSA, arising out of the negotiated settlement of class actions, (c) a self-contained process that is a "complete code" providing for its own, and only, dispute resolution process, (d) a closed adjudicative process, operating under the purview of independent adjudicators without any rights of appeal or judicial review, (e) a process in which the IAP adjudicators do not act as agents of any level of government, and (f) a process in which the participants are the parties to the IRSSA.

(3) Role of IAP Adjudicators

[66] The IAP is intended to be an inquisitorial process, requiring adjudicators to manage the hearing, draw out and test the evidence of witnesses, caucus with the parties on proposed lines of questioning, and assist claimants in establishing their claims (Sch. D, App. V, arts. 5, 6 and 9). [^1]

[67] Adjudicators are chosen by the unanimous agreement of a selection board appointed by the IAP Oversight Committee and composed of one representative of each of former students, plaintiffs' counsel, Canada, churches, and the Chief Adjudicator. Adjudicators must be members of provincial or territorial law societies and are required to have experience and training in working with victims of trauma.

[68] In addressing matters arising from the IAP, supervising and appellate courts have commented extensively on the expertise of IAP adjudicators. As the Ontario Court of Appeal observed in Fontaine v. Canada (Attorney General), 2016 ONCA 241, 130 O.R. (3d) 1, at p. 15"[a]djudicators are specially trained and have acquired expertise in dealing with the unique issues that arise in IAP proceedings. They conduct many hearings, develop familiarity with the relevant legal principles, and acquire practical knowledge about what constitutes compensable conduct within the various categories."

(4) Internal Review of IAP Decisions

[69] Schedule D of the IRSSA provides that a party who is dissatisfied with an IAP adjudicator's decision is entitled to a review on two grounds (see art. III(1)). First, the party may seek a review if the adjudicator's decision contains a palpable and overriding error of fact. Second, the party may seek a review if the adjudicator's decision fails to apply the IAP Model to the facts.

[70] A second level of review ("re-review") is also available on the latter ground and is to be conducted by the Chief Adjudicator or his designate. The adjudicators who conduct this type of review are required to be specially trained in IAP adjudication (Sch. D, art. III(l)(ii)).

[71] Neither Sch. D nor any other part of the IRSSA provides for an appeal to the courts from IAP decisions. This is in contrast with certain provisions of the IRSSA that specifically contemplate access to the courts:

• Article 4.11 provides for the creation and mandate of the National Administration Committee ("NAC"):
  • in the event of any dispute related to the appointment or service of a member of the NAC, the affected group or individual may apply to a supervising court for directions (art. 4.11(6));
  • in the event that a majority of five members of the NAC cannot be reached to resolve a dispute, the dispute may be referred by the NAC to a supervising court (art. 4.11(9));
  • the NAC may refer references from the Truth and Reconciliation Commission ("TRC") to a supervising court for a determination (art. 4.11(12)(j));
  • the NAC must apply to one of the supervising courts for a determination with respect to a refusal to add an institution as set out in art. 12.01 (arts. 4.11(12)(l) and 12.01);
  • the NAC must apply to the supervising courts for orders modifying the IAP as set out in art. 6.03(3) (arts. 4.11(12)(q) and 6.03(3)); and
  • where there is a disagreement between the Trustee under the IRSSA and the NAC with respect to the terms of the Approval Orders, the NAC or the Trustee may refer the dispute to a supervising court (art. 4.11(12)(r)).
• Article 5.09 provides for the appeal procedure for CEP applications:
  • in the event that the NAC denies an appeal from a decision on a CEP application, the applicant may apply to a supervising court for a determination (art. 5.09(2)); and
  • in exceptional circumstances, the NAC may apply to a supervising court for an order that the costs of an appeal be borne by Canada (art. 5.09(3)).
• Article 6.03 deals with the resources to be provided to the IAP:
  • in the event that continuing claims are not processed within the timeframes set out in art. 6.03(1), the NAC may apply to the supervising courts for the necessary orders to meet those timeframes (art. 6.03(2)).
• Article 7.01 pertains to truth and reconciliation:
  • where the NAC makes a decision on a dispute arising in respect of the TRC, either or both the implicated church organization and Canada may apply to a supervising court for a hearing de novo (art. 7.01(g)(iv)).
• Article 13.08 pertains to legal fees:
  • in the event of a disagreement as to disbursement amounts, the Federal Representative must refer the matter to a supervising court (art. 13.08(4)).

[72] Clearly, the parties did intend that there be access to the courts in specific circumstances. It is particularly noteworthy that the IRSSA provides for appeals from determinations made on CEP applications, while making no similar provision for IAP adjudicative decisions.

[73] The IRSSA does, however, permit IAP claimants to have their claims resolved by the courts in limited circumstances. The IAP Model provides as follows:

At the request of a Claimant, access to the courts to resolve a continuing claim may be granted by the Chief Adjudicator where he or she is satisfied that:

• there is sufficient evidence that the claim is one where the actual income loss or consequential loss of opportunity may exceed the maximum permitted by this IAP;
• there is sufficient evidence that the Claimant suffered catastrophic physical harms such that compensation available through the courts may exceed the maximum permitted by this IAP; or,
• in an other wrongful act claim, the evidence required to address the alleged harms is so complex and extensive that recourse to the courts is the more appropriate procedural approach.

In such cases, the Approval Orders will exempt the continuing claims from the deemed release, and thereafter the matter shall be addressed by the courts according to their own standards, rules and procedures.

(Sch. D, art. III(b)(iii))

[74] It is important to note that this provision of the IRSSA does not allow the courts to intervene in decisions of IAP adjudicators. Rather, a claimant may opt to have his or her claim resolved by the courts from the outset, but only where the Chief Adjudicator determines that one of three circumstances is present.

[75] In sum, the IAP creates a closed process for the determination of claims, with one in-person hearing and two levels of internal review (Bundled RFD, at para. 23; N.N. v. Canada (Attorney General), 2018 BCCA 105, 6 B.C.L.R. (6th) 335, at para. 78; Fontaine v. Canada (Attorney General), 2016 BCCA 1, at paras. 12-13).

(5) Oversight of the IAP

[76] While the parties to the IRSSA did not provide for appeals from IAP decisions to the supervising courts, they did agree that guidance on the interpretation and application of the IAP Model can be provided by the Chief Adjudicator in certain circumstances. When an adjudicator is uncertain as to how to apply the IAP Model to the facts of a particular case, the adjudicator may request a ruling from the Chief Adjudicator or his designate regarding the proper interpretation of the IAP Model (Sch. D, art. III(k)).

[77] The Chief Adjudicator is also tasked with overseeing the administration of the IAP. He is appointed by the IAP Oversight Committee, and the appointment is approved by court order. The full list of the Chief Adjudicator's responsibilities is set out in art. III(s) of Sch. D.

(6) Current Status of the IAP

[78] As of October 31, 2018, 26,669 IAP hearings had been held, or 99.95 percent of all anticipated hearings. Of the more than 38,000 claims filed, 99 percent had been resolved. There were still 199 cases awaiting hearing.

(7) Role of the Supervising Courts

[79] In December 2006, courts in nine provinces and territories concurrently issued reasons to certify a single national class action arising out of the residential schools system and to approve the IRSSA. Each of those courts issued an Approval Order. Then, in February and March 2007, Implementation Orders were issued. Together, these orders formed the IRSSA Court Administration Protocol (the "CAP").

[80] As this Court held in SCC Records Decision, the broad powers of supervising judges are both administrative and supervisory in nature and are supported by class action legislation, which provides a basis for ongoing court oversight and management of the settlement. Supervising judges are not "rubber stamps" — they are required to ensure that the administration and implementation of the IRSSA proceed as intended (para. 34).

B. Facts

[81] The facts that gave rise to J.W.'s claim are not contested. In 2014, J.W. applied for compensation pursuant to the IAP, alleging that when he was a student at an IRS, a nun had touched his genitals over his clothing. In J.W.'s claim, the potentially applicable category of compensable conduct under the IAP Model was SL1.4, which provides:

Any touching of a student, including touching with an object, by an adult employee or other adult lawfully on the premises which exceeds recognized parental contact and violates the sexual integrity of the student.

(Sch. D, art. II)

III. IAP Adjudication and Judicial History

A. Decision of the Hearing Adjudicator

[82] J.W.'s claim was heard on May 26, 2014, and the Hearing Adjudicator rendered her decision on April 7, 2015. While she accepted J.W.'s testimony and found that the incident had happened as described, she concluded that his claim did not fall within the definition of sexual abuse in SL1.4, based on the following test drawn from R. v. Chase, [1987] 2 S.C.R. 293:

Sexual assault is an assault . . . which is committed in circumstances of a sexual nature, such that the sexual integrity of the victim is violated. The test to be applied in determining whether the impugned conduct has the requisite sexual nature is an objective one: "Viewed in the light of all the circumstances, is the sexual or carnal context of the assault visible to a reasonable observer."

[83] In applying Chase, the Hearing Adjudicator acknowledged that the penis is a sexual organ but was not satisfied on a balance of probabilities that there was a sexual purpose associated with the touching. As a result, she denied J.W.'s claim.

B. Decision of the Review Adjudicator

[84] The appellants applied for a review of the Hearing Adjudicator's decision. In a decision dated July 5, 2015, the Review Adjudicator concluded that the Hearing Adjudicator had not misapplied the definition of SL1.4 in requiring J.W. to establish the perpetrator's sexual intent.

C. Decision of the Re-Review Adjudicator

[85] The appellants sought a review of the Review Adjudicator's decision. On November 22, 2015, the Re-Review Adjudicator upheld the review decision, finding that the Review Adjudicator had conducted a proper review of the Hearing Adjudicator's decision.

D. Manitoba Court of Queen's Bench (Edmond J.), 2016 MBQB 159, [2016] 4 C.N.L.R. 23

[86] The appellants subsequently filed an RFD with the Manitoba supervising court under the IRSSA Court Administration Protocol, taking the position that "J.W. was wrongly denied compensation in the IAP because the adjudicators added an element to the definition of SL1.4 (sexual intent) that does not appear in that definition."

[87] Faced with the appellants' RFD, Edmond J., the supervising judge for Manitoba, observed that his ongoing supervisory jurisdiction over IAP adjudication decisions was based on: (1) the inherent jurisdiction of superior courts; (2) the Manitoba Implementation Order; (3) the Agreement itself; and (4) the Class Proceedings Act, C.C.S.M., c. C130.

[88] After discussing Schachter and subsequent jurisprudence dealing with the scope of the review powers afforded to supervising courts, Edmond J. concluded that IAP adjudicators "have a duty to enforce the terms of the IRSSA and in doing so, they do not have jurisdiction to apply an unreasonable interpretation that amounts to a failure to properly apply the IAP." He described his role as follows:

. . . I have the power to review the decision of the Re-Review Adjudicator to determine whether she failed to apply the terms of the IRSSA and specifically the IAP Compensation Rules. I accept that the review process is not a standard process of judicial review and that [the parties] are not entitled to a comprehensive review of each decision.

[89] Edmond J. identified the standard of review on an RFD concerning an IAP decision as "ensuring that the Re-Review Adjudicator did not endorse a legal interpretation that is so unreasonable that it amounts to a failure to properly apply the IAP to the facts." He found that the adjudicator's requirement of sexual intent was such an error and that it fell outside the scope of a reasonable interpretation of SL1.4.

[90] As a result, Edmond J. ordered that J.W.'s claim be sent back to a first-level IAP adjudicator for reconsideration.

E. Decision of the Reconsideration Adjudicator

[91] On September 30, 2016, the Reconsideration Adjudicator decided in J.W.'s favour (A.R., vol. II, at pp. 143-61). In evaluating J.W.'s claim, she relied on the decision rendered by Adjudicator Ross, in which he correctly stated the test for sexual touching:

. . . [Adjudicator Ross] correctly pointed out that in Chase, the test was determined to be an objective one which considers general intent. That is, while a perpetrator's sexual gratification may be evident from the facts, this is not a requirement to satisfy the sexual intent element. . . .

[92] The Reconsideration Adjudicator also referred to Chief Adjudicator Ish's "B" decision mentioned earlier, particularly his conclusion that "both fondling and violation of sexual integrity categories did not require the actor to have possessed a sexual intent." She awarded J.W. $12,270.

[93] Before the reconsideration decision was implemented, the Attorney General of Canada ("Attorney General") appealed the supervising judge's decision to the Manitoba Court of Appeal, and obtained a stay.

F. Manitoba Court of Appeal (Monnin, Beard and leMaistre JJ.A.), 2017 MBCA 54, 413 D.L.R. (4th) 521

[94] The Manitoba Court of Appeal unanimously allowed the Attorney General's appeal on the basis that the supervising judge had exceeded his jurisdiction under the IRSSA. Beard J.A. began by noting that the court's jurisdiction was grounded in the inherent jurisdiction of the court, class action legislation, and the court's role as defined by the IRSSA.

[95] Beard J.A. went on to find that a supervising judge is not entitled to assume the role of a review adjudicator (para. 43). The mere fact that a supervising judge disagrees with an adjudicator's interpretation of the IAP is not sufficient to justify intervention (para. 44).

[96] Applying these principles to J.W.'s claim, Beard J.A. held that the supervising judge in the present case had erred in modifying the scope of the courts' jurisdiction as set out in Schachter by asserting that a supervisory judge can conduct a reasonableness review of an IAP adjudicative decision.

[97] Beard J.A. found that the supervising judge's jurisdiction was limited to determining whether the Hearing Adjudicator had implemented the provisions of the IAP in the narrow sense of determining whether she had turned her mind to and addressed the appropriate category, and whether the decision was a complete failure to apply the IAP terms in any meaningful sense.

IV. Issues

[98] While the appellants have raised several interrelated questions, the appeal ultimately turns on the following two issues:

1. Is judicial review of the decisions of IAP adjudicators available?
2. If judicial review is not available, what is the scope of the judicial recourse available to parties seeking intervention by the supervising courts in decisions rendered under the IAP?

V. Analysis

[99] To be clear, I would emphasize that there is a distinction between the availability of judicial review based on the principles of administrative law and the availability of judicial recourse as described in this case. In my view, judicial review is not available to review IAP decisions. However, the parties do have access to judicial recourse through RFDs with the supervising courts.

A. Availability of Judicial Review

[100] The appellants submit that the availability of judicial review of IAP decisions is grounded in the court orders approving the IRSSA, the class proceedings statutes applicable to the IRSSA, and the inherent jurisdiction of the superior courts.

[101] Judicial review is the means by which the courts "supervise those who exercise statutory powers, to ensure that they do not overstep their legal authority" (Dunsmuir v. New Brunswick, 2008 SCC 9, [2008] 1 S.C.R. 190, at para. 28). This Court recently set out the factors to be applied in determining the applicable standard of review (Dunsmuir, at para. 62).

[102] The appellants submit that the IAP is a creature of statute (namely provincial class proceedings legislation), agreement and court order (A.F., at paras. 33-35). Respectfully, I disagree. As the Ontario Court of Appeal correctly found in Schachter, IAP adjudicators are not government decision makers exercising public powers delegated to them by statute.

[103] The appellants err in suggesting that the courts' supervisory powers include an obligation to ensure that class members receive the promised benefits of the IRSSA and that this entitles the courts to exercise a supervisory jurisdiction akin to judicial review. The courts' role in overseeing the IRSSA is qualitatively different from their role when exercising judicial review over administrative actors.

[104] As the Chief Adjudicator points out in his written submissions, this analysis does not change just because Canada is one of the parties to the IRSSA. If Canada's participation as a contracting party were sufficient to transform the IAP into a statutory scheme, then court approval of a class action settlement would similarly convert every settlement into a statutory scheme, a result clearly not intended.

[105] Moreover, the fact that the contract was approved by court order does not transform the operation of this private settlement into a public act. Rather, the settlement is the result of lengthy negotiations, and approval by the courts did not fundamentally alter the nature of the agreement.

[106] This conclusion is consistent with the Ontario Court of Appeal's decision in Schachter, in which Rouleau J.A. said the following about whether a legal fee review decision by the Chief Adjudicator was subject to judicial review:

The Administrative Judge also correctly concluded that there is no right to seek judicial review from a legal fee review decision of the Chief Adjudicator. The court's jurisdiction to issue a declaration or grant other relief in the context of the implementation and administration of a settlement agreement is grounded in the court's supervisory and oversight role over the class proceeding, not in the Administrative Procedures Act.

The appellant further contends that the office of the Chief Adjudicator is a quasi-judicial public body that is subject to judicial review proceedings by way of an application for an order in the nature of certiorari, mandamus or prohibition. . . . The court's jurisdiction in this context is limited to ensuring that the Chief Adjudicator complies with the terms of the settlement agreement and the relevant implementation orders.

[107] Supervising and appellate courts have followed this reasoning in affirming that judicial review of decisions of IAP adjudicators is not available (see R.F. (Chief Adjudicator), at para. 56, for a summary of these decisions).

[108] Because the purpose of judicial review is to ensure the legality of state decision making (Highwood Congregation of Jehovah's Witnesses (Judicial Committee) v. Wall, 2018 SCC 26, [2018] 1 S.C.R. 750, at para. 13) and because the powers of IAP adjudicators are not conferred by statute but rather flow from the IRSSA itself, judicial review of IAP decisions is not available.

B. Availability of Judicial Recourse

[109] The parties are in agreement that the standard of review applicable to the question of whether judicial recourse is available is correctness. I am of the same view.

[110] The issue on appeal relates to the jurisdiction of a supervising judge in hearing and deciding an RFD. In finding that the correctness standard applies, Beard J.A. compared the IAP to a standard form contract. While individual claimants could opt out of the IAP scheme and have their claim determined by the courts, those who did not opt out agreed to be bound by the terms of the Agreement. The interpretation at issue is therefore of precedential value, like the interpretation of a standard form contract.

. . . Where, like here, the appeal involves the interpretation of a standard form contract, the interpretation at issue is of precedential value, and there is no meaningful factual matrix specific to the parties that is relevant to the legal dispute, this Court may substitute its own view of the correct interpretation: see Ledcor Construction Ltd. v. Northbridge Indemnity Insurance Co., 2016 SCC 37, [2016] 2 S.C.R. 23, at para. 24; Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, [2014] 2 S.C.R. 633, at para. 50.

[111] The question of the supervising courts' jurisdiction to assess IAP decisions will have precedential value beyond the present case, as it extends to all claims under the IAP. Further, Beard J.A. correctly noted that there is no meaningful factual matrix specific to the parties that is relevant to the legal dispute.

[112] This case can be distinguished from SCC Records Decision, in which this Court found that the standard of review applicable to a supervising judge's interpretation of the IRSSA was whether the decision was "reasonable." The decision at issue in that case related to a specific interpretation of the IRSSA in the context of a unique set of facts (i.e., the destruction of IAP records) and did not deal with the jurisdiction of the supervising courts.

(1) Sources of the Supervising Courts' Authority

[113] While it is clear that the parties do not have the option of seeking judicial review of IAP decisions, they can file RFDs with the supervising courts to resolve issues relating to the implementation and administration of the IRSSA.

[114] Authority for recourse to the supervising courts can be found in the IRSSA, the Approval and Implementation Orders, and provincial class proceedings legislation. I will address each of these sources of authority in turn.

[115] While the IRSSA provides for a comprehensive multi-level process for the resolution of IAP claims, it does contemplate recourse to the supervising courts in certain specific circumstances. As stated above, none of these avenues for judicial recourse would allow the courts to intervene in IAP adjudicative decisions.

[116] The supervising courts' jurisdiction is also grounded in the Approval and Implementation Orders. Paragraph 13 of the Schulman Approval Order for Manitoba [^4] provides:

THIS COURT ORDERS AND DECLARES that this Court shall supervise the implementation of the Agreement and this judgment and, without limiting the generality of the foregoing, may issue such orders as are necessary to ensure its proper implementation and any matters that may arise in connection therewith.

(A.R., vol. I, at p. 93)

Paragraph 23 of the Schulman Implementation Order similarly provides:

THIS COURT ORDERS that the Courts shall supervise the implementation of the Agreement and this order and, without limiting the generality of the foregoing, may issue such further and ancillary orders, directions and declarations as may be necessary or appropriate.

(A.R., vol. I, at p. 104)

[117] These broad supervisory powers conferred by the orders are in stark contrast to the limited recourse to the courts provided for in the IRSSA. While the IRSSA contemplates a few narrow avenues of court access, the Approval and Implementation Orders appear to confer unlimited supervisory jurisdiction.

[118] The final source of the courts' jurisdiction in overseeing the implementation of the IRSSA is provincial class proceedings legislation. Section 12 of Manitoba's Class Proceedings Act, C.C.S.M., c. C130, provides:

The court may at any time make any order that it considers appropriate respecting the conduct of a class proceeding to ensure its fair and expeditious determination and, for that purpose, may impose such terms on the parties as it considers appropriate.

[119] This provision grants broad supervisory jurisdiction to ensure that a class action proceeds in a fair and efficient manner (Fontaine v. Canada (Attorney General), 2014 ONSC 283, [2014] 2 C.N.L.R. 86 ("Fontaine 283")). This Court has observed that class proceedings legislation supports the ongoing supervisory jurisdiction of the supervising courts in the IRSSA context (SCC Records Decision, at para. 35).

[120] In the abstract, there is an apparent tension between the narrow availability of judicial recourse under the IRSSA, on the one hand, and the broader jurisdiction conferred on the courts by the Approval and Implementation Orders and class proceedings legislation, on the other hand. In my view, this tension must be resolved by reference to the parties' intentions in entering into the IRSSA.

[121] My colleague Abella J. emphasizes that, in the case of the IRSSA, the RFD process arose as a condition of settlement approval, suggesting that the terms of the agreement on their own are not determinative of the courts' jurisdiction. I agree with my colleague that the parties' intentions must be ascertained by reference to the IRSSA as a whole, including the Approval and Implementation Orders. However, I do not share my colleague's view that the parties' intentions in creating the RFD procedure and granting broad supervisory powers to the courts extended to permitting the courts to intervene in IAP adjudicative decisions on the basis that they are wrong.

[122] While it is clear that the courts retain broad supervisory powers pursuant to the Approval and Implementation Orders and class proceedings legislation, a distinction must be drawn between providing supervision by ensuring that the terms of the Agreement are faithfully implemented and supervising the substantive correctness of individual adjudicative decisions, which involves overseeing the merits of each claim.

(2) Judicial Recourse Is Available Only Where the Adjudicator Failed to Apply the Terms of the IAP

[123] On the question of the supervising courts' jurisdiction to consider errors in the interpretation of the IAP, I would affirm the approach taken by the Manitoba Court of Appeal. Parties may seek judicial recourse where an adjudicator has failed to apply the terms of the IAP. This threshold includes situations in which the adjudicator has not turned his or her mind to the relevant category of compensable conduct. It does not permit the courts to evaluate the correctness of an adjudicator's interpretation of the IAP.

[124] Put another way, as long as it can be said that an adjudicator has turned his or her mind to the compensation category raised by the claimant, then the adjudicator has applied the terms of the IAP. Any error in interpretation made along the way is not subject to judicial recourse.

[125] The weight of the authorities supports a high jurisdictional threshold for supervising courts considering IAP decisions. I find the following cases to be instructive on this point.

[126] In Schachter, the Ontario Court of Appeal heard an appeal from a supervising judge's decision on an RFD concerning the provisions of the IAP and the Implementation Order relating to legal fees. Writing for the court, Rouleau J.A. held as follows:

. . . The terms of the S.A. and the implementation orders set out the process for reviewing decisions of the IAP Adjudicators. Recourse to the courts is only available if it is provided for in the S.A. or the implementation orders or where the final IAP decision of the Chief Adjudicator reflects a failure to comply with the S.A. or the implementation orders. . . .

I turn now to whether a process, other than an appeal or judicial review, is available to review a decision by the Chief Adjudicator. The Administrative Judge properly confirmed that the IAP Adjudicators have a duty to enforce the terms of the Agreement. . . .

The parties intended that implementation of the S.A. be expeditious and not mired in delay and procedural disputes. As noted by the Chief Adjudicator, there are already many checks and balances in place to assist the adjudicators in performing their duties. . . .

[127] The "very limited circumstances" in which judicial recourse is available would include cases in which the Chief Adjudicator upholds an adjudicator's decision as fair and reasonable even though the adjudicator failed to follow the terms of the IRSSA or the Implementation Orders. Rouleau J.A. also said:

Before leaving this issue, I note that I agree with the Chief Adjudicator's submission that allowing a party to request directions when it is alleged that the Chief Adjudicator's decision reflects a failure to comply with the terms of the Agreement or the implementation orders would not have the intended result. The standard of review would not be whether the Chief Adjudicator correctly interpreted the provisions of the Agreement, but rather whether the decision was made in good faith and in a manner that could reasonably be said to be an attempt to comply with the Agreement.

[128] The Ontario Court of Appeal similarly found in Spanish IRS C.A. that the supervising judge had exceeded the limits of his authority by overturning findings of fact and by awarding compensation to a claimant who had not established a compensable claim.

[129] In Bundled RFD, Brown J. heard RFDs from five claimants dissatisfied with the results of their IAP claims. She confirmed that the appropriate test for judicial recourse is that set out in Schachter. Brown J. summarized the evolving case law as follows:

The principles governing RFDs . . . from IAP decisions have been coalesced in a number of recent court decisions. These decisions are the progeny of the Ontario Court of Appeal's decision in Fontaine v. Duboff Edwards Haight and Schachter, 2012 ONCA 471. They all reinforce the view that the IAP was designed to be a closed self-contained process, and accordingly limit the extent to which recourse to the courts may be sought . . .

At the risk of stating the obvious, this is a very onerous standard. This high threshold reflects at least two factors. The first is a realization of the jurisdictional limitations of the court when dealing with matters arising from the IRSSA. . . .

The second factor is a policy preference (that was formalized into the terms of IRSSA and the IAP process itself) for granting deference to the IAP Adjudicators. This policy is the same as that which underlies the concept of deference in administrative law.

(Fontaine v. Canada (Attorney General), 2017 BCSC 946, at paras. 65-67)

[130] These cases highlight several reasons why access to judicial recourse in respect of IAP decisions should be construed narrowly. First, this approach honours the intentions of the parties to the IRSSA:

. . . Fundamentally, the IRSSA is a contract. The IAP is a negotiated process, and a complete code. To put it plainly, when the IAP Model was negotiated, the parties called "Done!" at re-review by the Chief Adjudicator. To allow judicial recourse thereafter is to rewrite their agreement.

[131] Because the IAP is a closed process, any disagreement with respect to the interpretation of its terms should be dealt with internally. The parties foresaw the need to resolve such disputes by way of the Chief Adjudicator's interpretation authority under Sch. D, art. III(k), thereby ensuring consistency throughout the IAP.

[132] Second, in entering into the IRSSA, claimants relinquished their right to have their claims resolved by the courts in favour of a process with various compensatory and non-compensatory benefits. Claimants have accepted the associated risk of inconsistency in exchange for the benefits offered by the settlement.

[133] Third, none of the parties to the IRSSA can argue that the scheme should be, to use the word employed by counsel for the Chief Adjudicator"infallible" (transcript, at p. 83). As Winkler J. stated in Baxter, at para. 21:

. . . Although not perfect in every respect, or perhaps in any respect, perfection is not the standard by which the settlement must be measured. Settlements represent a compromise between the parties and it is to be expected that the result will not be entirely satisfactory to any party or class member. . . .

[134] Fourth, to open IAP decisions to intervention by the courts would be contrary to the objective of efficient and timely resolution of disputes with finality (Man. C.A. Reasons, at para. 63; Spanish IRS C.A., at paras. 51, 53 and 60; Bundled RFD, at para. 12 and 178; Schachter, at para. 58). More than 150,000 students attended an IRS. As of 2008, approximately 80,000 were still living. Several years of negotiations preceded the finalization of the IRSSA. Many of the students were elderly by that time and passed away prior to receiving their settlements (Man C.A. Reasons, at para. 62). To use J.W.'s case as an example, the IAP adjudication process began in 2014 and the Hearing Adjudicator's decision was not released until April 2015. It took a further 7.5 months for the claim to make its way through the review and re-review processes. It is now 2019, and the outcome of J.W.'s claim has remained uncertain as the IAP decisions are subjected to continued scrutiny by the courts. This type of delay cannot be what the parties intended.

[135] Moreover, the statistics cited above clearly indicate that the IAP Model has been largely successful in resolving these claims in a timely and efficient manner, with over 99% of claims resolved as of October 31, 2018.

[136] Fifth, a broad right to judicial recourse in respect of IAP decisions would allow Canada, and not only claimants, to challenge adjudicators' conclusions with which it disagreed. This would further delay the resolution of claims and undermine the fundamental purpose of the IRSSA.

[137] Beard J.A. put it well when she stated the following (Man C.A. Reasons, at para. 64):

When the objective of providing compensation to individual claimants is considered in light of the entire IRSSA, the very extensive and specialized adjudication and two-step review process under the IAP, and the objective of having an expeditious process to resolve a large number of complex claims efficiently, it is apparent that the parties did not intend the courts to have the jurisdiction to review IAP adjudicative decisions on the merits to determine whether, in the view of the court, those decisions are reasonable.

[138] Sixth, if this Court were to accept the appellants' interpretation of the judicial oversight function, supervising judges would be engaging in the same exercise as reviewing adjudicators acting under the IAP's review provisions, resulting in unnecessary duplication and delay.

[139] The courts' broad supervisory authority would, however, allow a supervising judge to order remedies that lie outside the exclusive jurisdiction of IAP adjudicators should they be necessary to ensure that the IAP is administered fairly. For example, where it becomes apparent that Canada has breached its disclosure obligations, a supervising court can intervene to ensure that the IAP is administered fairly, even if doing so affects a previously determined IAP claim.

[140] Before moving on, I pause for a moment to discuss the concept of "exceptional circumstances". At various points in both the written and the oral submissions, the phrase "exceptional circumstances" has been referred to as a "threshold" or "test" for judicial intervention. I agree with the approach taken by the Ontario and British Columbia Courts of Appeal in using "exceptional circumstances" to describe the scope of recourse available to parties seeking judicial intervention in IAP adjudicative decisions. However, I would caution that this phrase should not be used in a way that creates the false impression that supervising courts have broad jurisdiction to intervene in IAP adjudicative decisions where the circumstances are "exceptional" in a general sense.

(3) Where the IRSSA Provides No Internal Remedy, Recourse Can Be Sought From the Supervising Courts to Fill This Gap

[141] While the parties' intentions in creating the IRSSA and the IAP must be honoured, it must also be acknowledged that circumstances will inevitably arise that were not foreseen by the parties and are therefore not provided for in their agreement. Where the IRSSA makes no provision for a particular situation, the courts retain their supervisory authority to fill those gaps.

[142] A clear example of the courts' supervisory authority being utilized to fill a gap in the IRSSA arose recently in N.N., a decision of the British Columbia Court of Appeal. In that case, one of the claimants requested a re-review after her claim had already been settled, owing to Canada's breach of its disclosure obligations. The supervising judge found that while the IRSSA did not contemplate this situation, the court had the jurisdiction to direct the reopening of the settled claims.

[143] While reaffirming that courts should not be engaging in detailed reviews of findings of fact made by IAP adjudicators, MacKenzie J.A. found that where new information comes to a court's attention, it will be necessary for that court to determine whether this information requires the court to exercise its supervisory authority. She held:

. . . I note that in Schachter at para. 57, Justice Rouleau described an exceptional circumstance as being "where the final decision of the Chief Adjudicator reflects a failure to comply with the terms of the [IRSSA] or the implementation orders" (emphasis added). . . .

Any consideration of an exceptional circumstance must include a consideration of the objectives of the negotiated IRSSA, reflected in the preamble, to achieve a "fair, comprehensive and lasting resolution of the legacy of Indian Residential Schools" . . .

In my view, it may be necessary for a court on judicial recourse to consider new information, and to determine whether a claim must be remitted to the Chief Adjudicator for reconsideration, but this will only be appropriate in very rare and exceptional circumstances.

[144] MacKenzie J.A. adopted the approach taken in Fontaine 283 by Perell J., who found that supervising courts have the jurisdiction to direct the reopening of settled IAP claims on a case-by-case basis (N.N., at para. 164; Fontaine 283, at paras. 224-32). Perell J.'s reasoning is instructive:

. . . the Applicants' RFD raises the question of whether the court may direct the re-opening of settled IAP claims on the grounds of Canada's breach of its disclosure obligations.

In my opinion, the answer to this question is yes. The court does have the jurisdiction to re-open settled claims but that jurisdiction must be exercised on a case-by-case basis.

If truth and reconciliation is to be achieved and if nous le regrettons, we are sorry, nimitataynan, niminchinowesamin, mamiattugut, is to be a genuine expression of Canada's request for forgiveness for failing our Aboriginal peoples so profoundly, then Canada must be legally accountable for its misconduct. . . .

Thus, I conclude that the court does have the jurisdiction to re-open a settled IAP claim but whether a claim should be re-opened will depend upon the circumstances of each particular case. [Emphasis added; paras. 224-32.]

[145] Should a situation arise which is not provided for in the IRSSA and which might affect the outcome of a claim, it would be inconsistent with the purpose of the settlement to deny relief to the claimant. This was clearly the case in N.N., where Canada's breach of its disclosure obligations had prejudiced the claimant. It would have been contrary to the objective of achieving a "fair, comprehensive and lasting resolution" of residential school claims to deny relief in such circumstances.

[146] This is not to say that parties will automatically be entitled to have a claim reopened if they are able to point to a procedural gap in the IAP Model or provide new information that was not before the IAP adjudicator(s). A case-by-case analysis is required. The circumstances in which the courts may fill a gap in the IRSSA are limited, as this jurisdiction should be exercised in a manner that is consistent with the parties' intentions.

[147] In his factum, the Chief Adjudicator acknowledges the need for supervising courts to "fill in the gaps" left by IAP provisions and states that this would be an appropriate use of the courts' supervisory authority (para. 95). The outcome in N.N. is consistent with the parties' intentions, as they would certainly have wanted to ensure that a claimant who suffered a breach of Canada's disclosure obligations would not be permanently deprived of the benefits of the IRSSA.

[148] Ultimately, a balance must be struck between resolving claims efficiently and obtaining some sense of finality for the parties, on the one hand, and ensuring fair and just outcomes, on the other (N.N., at para. 167). This approach gives effect to the parties' intention in entering into the IRSSA.

C. Application to the Instant Case

(1) The Supervising Judge Erred in Substituting His Own Interpretation of SL1.4

[149] As noted above, Edmond J. stated that his jurisdiction was limited to "ensuring that the Re-Review Adjudicator did not endorse a legal interpretation that is so unreasonable that it amounts to a failure to properly apply the IAP to the facts." This formulation, as Beard J.A. correctly found, reflects a misunderstanding of the scope of the courts' supervisory jurisdiction.

[150] I agree with the Manitoba Court of Appeal that Edmond J. erred in scrutinizing the Hearing Adjudicator's interpretation of SL1.4 and substituting his own. Edmond J. could not concern himself with the proper interpretation of SL1.4, but was entitled only to determine whether the Hearing Adjudicator had failed to apply the terms of SL1.4. The Ontario Court of Appeal noted in Spanish IRS C.A.:

The administrative judge appears to have taken the view that if, in his judgment, M.F. was entitled to compensation, any other conclusion necessarily reflected a failure to apply the IAP model. In my respectful opinion, that approach reflects a failure to appreciate the distinction between the supervisory jurisdiction of the court and the decisional jurisdiction of the Chief Adjudicator.

(Spanish IRS C.A., at para. 60)

[151] My colleague Abella J. correctly observes that the Hearing Adjudicator described the question before her as "whether or not the incident was sexual touching which exceeded recognized parental conduct" and that SL1.4 uses the phrase "any touching" rather than "sexual touching." However, this observation does not change my analysis. Whether the Hearing Adjudicator applied the correct threshold is a question of whether she correctly applied the terms of SL1.4. This is precisely the type of question that is for IAP adjudicators to resolve, not the courts.

[152] The Hearing Adjudicator in the instant case had regard to and applied the factors in the SL1.4 category, and her decision was upheld by the Review Adjudicator and the Re-Review Adjudicator, in keeping with the mechanism contained in the IAP Model. Regardless of whether the Hearing Adjudicator interpreted SL1.4 correctly, there is nothing in the applicable framework that opens her decision to judicial scrutiny on the basis of the correctness of her interpretation.

(2) The Chief Adjudicator Concedes That J.W. Is Entitled to Relief, But He Lacks a Remedy Under the IRSSA

[153] While I am in agreement with the Manitoba Court of Appeal that the supervising judge erred in his analysis, I believe this to be an exceptional case in which reconsideration is appropriate. I am not basing this conclusion on Edmond J.'s reasoning, but rather on a unique situation that has arisen in this case.

[154] To reach this conclusion, it is necessary to consider the sequence of events that revealed this gap in the IRSSA.

[155] In their written submissions, neither the Attorney General nor the Chief Adjudicator directly addressed the substance of the IAP adjudicators' decisions or the proper interpretation of SL1.4. Rather, each of them argued that courts should not intervene in IAP decisions, and noted that there was no specific allegation in the RFD that the adjudicators had failed to apply the IAP Model to the facts.

[156] In response to these submissions, the Chief Adjudicator directed the Court to former Chief Adjudicator Ish's decision, which states: ". . . I find that there is no requirement in the IAP that the actor possessed a sexual intent before liability is established." The following exchange then took place during the oral hearing:

Mr. Arvay, Q.C.: These decisions are aberrant.

Madam Justice Karakatsanis: Are there other aberrant decisions? . . .

Mr. Arvay, Q.C.: The best I can answer is this way. After Justice Edmond's decision there was a reconsideration decision and it went the other way. And that of course that decision was stayed when it went to the Court of Appeal. To our knowledge there are no other decisions that go the same way.

Madam Justice Karakatsanis: So there aren't other claimants out there who have been denied for the same reason, the same interpretation, that you are aware of? . . .

Mr. Arvay, Q.C.: There are seven other [outstanding] claimants who fall within the category SL1.4. To our knowledge — or to my knowledge anyway — none of those involve in this particular issue.

(Transcript, at pp. 76-77)

[157] I would also highlight the following exchange, in which the Chief Adjudicator agreed that there is no mechanism in the IRSSA that enables him to reopen a matter where he disagrees with the outcome:

Madam Justice Karakatsanis: I accept that, but the Chief Adjudicator, once something comes to the Chief Adjudicator's attention. And my question to you is, there is a responsibility under the schedule to try and ensure consistency, is there no recourse?

Mr. Arvay, Q.C.: It's all future looking, Justice Karakatsanis.

Mr. Justice Moldaver: It's even more egregious, it seems to me, when you are sitting there conceding that this man's case should have been heard and now you are telling us they got no remedy.

Mr. Arvay, Q.C.: Right . . . That happens. In a scheme that allows for 38,000 adjudications, mistakes may be made for which there is no remedy.

(transcript, at pp. 83-87)

[158] The Chief Adjudicator also agreed that where the IRSSA contains no internal remedy, the courts may intervene to fill the gap:

Mr. Justice Moldaver: . . . If as a result of working [the interpretative problems] out [within the four corners of the agreement] we reach — we have a hiatus, we have a gap, we have an inability to do justice in a particular case —

Mr. Arvay, Q.C.: Yes.

Mr. Justice Moldaver: — then you should be able to go to the court to fill that gap.

Mr. Arvay, Q.C.: I agree.

(transcript, at p. 92; see also, R.F. (Chief Adjudicator), at para. 95)

[159] Given the Chief Adjudicator's role within the IAP scheme, I attach significant weight to these statements. As set out above, the Chief Adjudicator is tasked under the IRSSA with ensuring consistency among the decisions of adjudicators in the IAP, and with overseeing the administration of the IAP.

[160] In addition to these "future looking" mechanisms, the Chief Adjudicator ensures consistency in the application of the IAP through his role in the internal review process. As stated above, the final level of review (re-review) is conducted by the Chief Adjudicator or his designate. The Chief Adjudicator's designate conducted the re-review in the instant case.

[161] The Chief Adjudicator has conceded that the decisions of the adjudicators in this case were "aberrant" and did not reflect the direction provided by former Chief Adjudicator Ish. As my colleague Brown J. observes, the Chief Adjudicator did not catch the error here, because his designate conducted the re-review and took a different approach. Regardless of the reason, the Chief Adjudicator's concession that his own designate — acting in the Chief Adjudicator's stead at the re-review stage — reached the wrong conclusion has significant implications for our analysis.

[162] Furthermore, the Chief Adjudicator is not actually a party to the IRSSA or the IAP, but is instead, as my colleague Brown J. observes, a creation of that scheme (para. 190). Therefore, while the Chief Adjudicator's concession that an IAP claimant was wrongly denied compensation is noteworthy, it does not, standing alone, trigger the courts' supervisory jurisdiction.

[163] The "gap" in this case does not arise as a result of a finding by this Court that J.W. is entitled to compensation based on its own interpretation of the IAP. Rather, the gap arises as a result of the parties' intention that adjudicators decide claims in a manner consistent with the direction given by the Chief Adjudicator, but the mechanism for doing so has failed in this particular case.

[164] Given that the IAP dictates that the Chief Adjudicator should have the final word under the review mechanism, the practical effect of this situation is that J.W. did not receive the benefits bargained for. As there is no remedy within the four corners of the IRSSA, the courts may step in to fill this gap.

[165] This conclusion is not, as my colleague Brown J. would find, inconsistent with the provision stating that stare decisis does not apply to the IAP (Sch. D, App. X, s. 5; Brown J. Reasons, at para. 185). The initial hearing adjudicator in any case is entitled to reach her own conclusions on the application of the IAP to the facts before her, based on the guidance provided by the Chief Adjudicator. What is not permitted is for the Chief Adjudicator's own designate, acting in the Chief Adjudicator's stead at the re-review stage, to fail to apply the direction that the Chief Adjudicator has provided.

[166] As was the case in N.N., this gap in the IRSSA has caused significant prejudice to J.W. He was denied any compensation, despite the Chief Adjudicator's acknowledgment at the hearing before this Court that this result is inconsistent with the direction the Chief Adjudicator has provided regarding how such claims should be assessed.

[167] I would clarify that while I find that J.W.'s claim should be remitted for reconsideration, I would not do so on the basis on which the supervising judge made his order. Edmond J. erred in applying his own interpretation of the IAP Model.

VI. Remedy

[168] For the reasons stated above, I would reinstate the order made by Edmond J. on August 3, 2016 that J.W.'s claim be sent back to a first-level IAP adjudicator for reconsideration (A.R., vol. I, at pp. 48-51).

[169] Given that J.W.'s claim has already been reconsidered and that the Chief Adjudicator is satisfied that the Reconsideration Adjudicator properly applied the IAP Model, I would give effect to the Reconsideration Adjudicator's decision (A.R., vol. II, at pp. 143-61), and reinstate the award of $12,270, with interest calculated in accordance with Part XIV of Manitoba's Court of Queen's Bench Act, C.C.S.M., c. C280.

VII. Costs

[170] I would award costs to J.W. per the usual rule. However, I note that J.W. seeks costs on a solicitor-client basis in this Court and in the courts below. He submits that this case raises issues of public interest relating to the implementation of the IRSSA.

[171] In Carter v. Canada (Attorney General), 2015 SCC 5, [2015] 1 S.C.R. 331, this Court identified two considerations that can help guide the exercise of a judge's discretion on a motion for special costs in a case involving the public interest:

. . . First, the case must involve matters of public interest that are truly exceptional. It is not enough that the issues raised have not previously been resolved or that they transcend the individual interests of the successful litigant: they must be of a nature that it would not be in the public interest for the decision to go unreviewed. Second, the party seeking costs must have no personal, proprietary or pecuniary interest in the litigation, or such interest is a modest one bearing no relationship to the legal costs of pursuing the litigation. . . .

[172] In my view, neither of these considerations supports the awarding of special costs to J.W. First, the issue raised in this appeal is not "truly exceptional". While the issues relating to the implementation of the IRSSA will have an impact on other parties in J.W.'s position, they were not such that it would be contrary to the public interest for the decision to go unreviewed. Second, J.W.'s case involves both a pecuniary interest and a public interest in the proper implementation of the IRSSA. The pecuniary interest in J.W.'s case is not a "modest one bearing no relationship to the legal costs of pursuing the litigation" — it was the central reason for J.W.'s claim.

[173] I am therefore not persuaded that it would be appropriate to grant J.W.'s request for solicitor-client costs.

VIII. Conclusion

[174] For these reasons, I would allow the appeal and reinstate the Reconsideration Adjudicator's award of $12,270, with interest calculated in accordance with Part XIV of Manitoba's Court of Queen's Bench Act, and with costs to J.W. per the usual rule.

The reasons of Brown and Rowe JJ. were delivered by

Brown J. (dissenting) —

[175] I would dismiss the appeal. Paragraphs 56‑138, 140 and 149‑52 of the reasons of my colleague Côté J. correctly state the law for a majority of this Court with respect to the jurisdiction of the supervising courts. I therefore confine my own reasons to explaining why, notwithstanding the concessions of the Chief Adjudicator at the hearing before this Court, this is not an exceptional case which justifies judicial intervention.

[176] The IRSSA expressly precludes our intervention in the Independent Assessment Process ("IAP"), even where we might be of the view that it has been incorrectly interpreted and applied. It is "'a complete code' that limits access to the courts, preserves the finality of the IAP process and respects the expertise of IAP adjudicators" (para. 130 of Côté J.'s reasons). To hold otherwise, as Côté J. does in the latter part of her reasons, is to rewrite this agreement.

[177] To support having found this supposed gap, Côté J. points to the Chief Adjudicator's concession that (1) J.W.'s claim was wrongly decided by the Hearing Adjudicator ("aberrant") and wrongly confirmed by two review adjudicators, and (2) that he has no mechanism available to remedy it. Neither of these concessions supports judicial intervention as a matter of law.

I. Rewriting the Terms of the IRSSA

[178] The IRSSA is a contract (Canada (Attorney General) v. Fontaine, 2017 SCC 47, [2017] 2 S.C.R. 205 ("SCC Records Decision"), at para. 35). Interpreting its terms therefore requires a court to discern the contracting parties' intentions, and to enforce the bargain to which they committed (M.J.B. Enterprises Ltd. v. Defence Construction (1951) Ltd., [1999] 1 S.C.R. 619, at para. 26).

[179] It is of course true that, where the parties have failed in their contract to address a particular situation arising in the course of their relationship, a court may imply a contractual term (M.J.B. Enterprises, at para. 26; Canadian Pacific Hotels Ltd. v. Bank of Montreal, [1987] 1 S.C.R. 711, at p. 776; Vorvis v. Insurance Corporation of British Columbia, [1989] 1 S.C.R. 1085, at pp. 1100‑01). This, however, is subject to an important limitation: implied terms must be consistent with the parties' clearly expressed intentions (G.R. Hall, Canadian Contractual Interpretation Law (3rd ed. 2016), at pp. 163-64; A. Swan, J. Adamski and A.Y. Na, Canadian Contract Law (4th ed. 2018), at §8.149). Thus, a court may not imply a term which is contrary to the parties' clearly expressed intentions.

[180] A degree of circumspection in implying a term permitting judicial recourse is particularly important here. Given the finality promised by the IAP, it is easy to appreciate why the parties might have seen prolonged litigation of IAP claims in courts as an unacceptable alternative.

[181] The IAP is intended to be a "closed adjudicative process, operating under the purview of independent adjudicators without any rights of appeal or judicial review" (Côté J. Reasons, at para. 65, citing Fontaine v. Canada (Attorney General), 2016 BCSC 2218, [2017] 1 C.N.L.R. 104, at para. 11). The IAP is a complete code that limits access to the courts (Côté J. Reasons, at para. 130). These propositions are not in dispute.

[182] Nor is the IRSSA silent on the circumstances in which recourse can be had to the courts under the IAP. It provides that the Chief Adjudicator may permit the claimant to access the courts where the value of the harm or loss exceeds the compensation available through the IAP, or where the claim is too complex (Sch. D, art. III(b)(iii)). No similar access is provided in cases where a claimant believes that the IAP has been misinterpreted.

[183] That it was the parties' intention that the Chief Adjudicator not have the authority to respond to incorrect interpretations of the IAP by reopening claims is also demonstrated by how the IRSSA does empower the Chief Adjudicator to respond to incorrect interpretations of the IAP:

. . . [A]ny party may ask the Chief Adjudicator or designate to determine whether an adjudicator's, or reviewing adjudicator's, decision properly applied the IAP Model to the facts as found by the adjudicator, and if not, to correct the decision, and to establish the compensation amount that should have been awarded.

[184] Further, and even where the Chief Adjudicator or his designate has (as here) failed to exercise his final review authority to correct an error in interpreting the IAP, he is empowered to remedy on a prospective basis such incorrect interpretations by directing adjudicators on how to properly apply the IAP Model in the future.

[185] Further, by providing that stare decisis does not apply to IAP decisions (Sch. D, App. X, item 5), the IRSSA clearly contemplates that the various IAP adjudicators will provide inconsistent and even incorrect interpretations of the IAP. As the Chief Adjudicator observed (R.F. (Chief Adjudicator), at para. 71): "[T]he stare decisis exemption removes an important vehicle for challenging adjudicative consistency in the courts." The parties therefore accepted some measure of inconsistency in IAP decisions as a cost of the agreement which they reached.

[186] Both my colleagues Abella J. (at paras. 26-27) and Côté J. (at paras. 139 and 141‑48) point to the majority decision at the British Columbia Court of Appeal in N.N. v. Canada (Attorney General), 2018 BCCA 105, 6 B.C.L.R. (6th) 335, at paras. 83‑85, in support of the proposition that courts can "fill the gap" left by a failure to anticipate certain circumstances in the IAP. I agree that N.N. stands for this proposition. In that case, however, the gap that the court filled was unambiguous: the IRSSA makes no provision for the situation in which Canada breaches its disclosure obligations to a claimant. Here, by contrast, there is no gap at all — the IRSSA clearly addresses the situation in which an adjudicator makes an error in interpretation:

. . . [J]udicial intervention by a supervising judge may occur only in very exceptional circumstances when there has been a failure by the Chief Adjudicator or his designate to apply the terms of the IRSSA or the implementation orders. The purpose of judicial recourse is not to create a de facto appeal of an IAP claim, but rather to ensure that the process set out in the Agreement is respected.

(N.N., at para. 85)

[187] My colleague Côté J. leans heavily (at paras. 144‑46), as did the majority in N.N., on the decision of Perell J. of the Ontario Superior Court of Justice in Fontaine v. Canada (Attorney General), 2014 ONSC 283, [2014] 2 C.N.L.R. 86, as suggesting that settled claims can be reopened on a case-by-case basis. But that case involved the distinct issue of Canada's breach of its disclosure obligations — a gap in the IRSSA analogous to the one addressed in N.N. As I have explained, there is no such gap here.

[188] It is therefore clear that, by imposing a process to which the parties did not agree (and which — going by what they did include in the IRSSA — they would have rejected), my colleague Côté J. is rewriting the IRSSA. Clear textual and contextual indications of the parties' intent are being supplanted by a judicial policy preference for "just" outcomes, with no grounding in the text or structure of the agreement.

II. The Chief Adjudicator's Concession

[189] I now turn to the concession which my colleague Côté J. seizes upon as grounds for rewriting the parties' contract. In oral argument, counsel to the Chief Adjudicator noted that the Hearing Adjudicator and review adjudicators interpreted SL1.4 in a manner that was "aberrant" and inconsistent with prior interpretations of that provision, and that there was no mechanism in the IRSSA that would allow the Chief Adjudicator to remedy this situation.

[190] I observe, preliminarily, that the Chief Adjudicator is not a party to the IRSSA, but rather a creation of it (Sch. D, art. III(s)). Any concession on his part as to the scope of his authority is therefore of limited value to a judicial determination of the scope of that authority.

[191] Further, and as I have already recounted, the Chief Adjudicator does have authority to respond to incorrect interpretations of the IAP by exercise of his final review authority. I grant that he did not catch the error here, because his designate conducted the re-review and took a different approach. But the fact that the mechanism set in place by the parties failed in this one case does not give rise to a gap in the IRSSA — it is simply a failure of the mechanism.

[192] That this is so is made plain by the Chief Adjudicator's submission before this Court that the courts could not provide a remedy in this case, despite the aberrant interpretation of the IAP:

Mr. Arvay, Q.C.: . . . We reject that approach. We reject any approach that will allow a supervising court to set aside a decision of an adjudicator when the point of disagreement is on a matter of interpretation of a provision in the IAP. That doesn't address whether J.W. was wrongfully denied or not. What we say is that that was wrong, that denial.

But we [will] seize on the idea that this judicial recourse should be rare and it should really be limited to cases where, in the words of the Manitoba court of Appeal, there wasn't even a consideration of the terms. Not that there was a bad interpretation. . . .

[193] I recognize that, in response to questions from the hearing panel, the Chief Adjudicator went further. The exchange proceeded as follows:

Mr. Justice Moldaver: Why are you taking such a technical position on that when you say if it's fresh evidence, you know, we can go back to the court, even though the proceedings are complete. But if it's a fresh view and a right view of the interpretation of the clause, you can't go back to the court. Why, why, why? . . .

Mr. Arvay, Q.C.: Okay.

Mr. Justice Moldaver: Really, with respect, that's an absurd position.

Mr. Arvay, Q.C.: Okay. So then maybe I'm wrong. Maybe I'm wrong. Maybe that would allow — that might be allowed, I don't know. That hasn't been done.

Mr. Justice Moldaver: — and now you are saying nothing can be done. You just backed off of that a little bit and said"Well, maybe something can be done", which would be going back to the Supervising Judge to get an order, I suppose, to reopen this whole matter. Is that right?

Are you going to concede that that would be a reasonable solution to the problem?

Mr. Arvay, Q.C.: Well, you can tell I seem to be of mixed minds on it.

My first impression, my first reaction was that that just seems to bring back the reasonableness interpretation. I take your point, it might be different. It might be different.

Mr. Justice Moldaver: . . . If as a result of working [the interpretative problems] out [within the four corners of the agreement] we reach — we have a hiatus, we have a gap, we have an inability to do justice in a particular case —

Mr. Arvay, Q.C.: Yes.

Mr. Justice Moldaver: — then you should be able to go to the court to fill that gap.

Mr. Arvay, Q.C.: I agree. [Emphasis added; pp. 87‑89 and 92.]

[194] In short, the Chief Adjudicator acknowledged that "maybe [he is] wrong", and that he was "of mixed minds". He also agreed that where there is a "gap", a court might fill it. As to that last proposition, and subject to what I have said about the absence of a gap in this case, I agree. But I cannot take a hesitant and equivocal statement, made in response to pressing questions from the panel and in the heat of the moment, as a binding concession that the courts can provide a remedy in this case. The Chief Adjudicator's actual, considered position was that the courts cannot intervene in this case.

[195] If this exchange could tenably be said to have left open the possibility of a gap, such possibility was closed immediately thereafter when the Chief Adjudicator appeared to recoil from that very suggestion in responding to the next line of questions:

Mr. Justice Rowe: . . . [T]he circumstances which we are now faced with in this case may constitute exceptional circumstances such that a supervising judge could deal with a highly problematic — a fundamentally troubling application of the agreement. . . .

Mr. Arvay, Q.C.: But the difference between what I think you are positing is — that's not what happened here, right. What I think you are positing is what Justice Moldaver is saying maybe should have happened, which is that there should have been an approach consistent with what I'll call Mr. Ish's approach. . . .

So so I think that's not what happened. What Justice Edmond did, he just re‑interpreted himself, he didn't rely on Mr. Ish's decision.

Mr. Justice Rowe: So therefore you disagree with his general approach, which is substituting his view, although you seem to be saying that it would be — it would serve the ends of justice if this matter were to be sent back for re‑adjudication.

Mr. Arvay, Q.C.: Well, I don't know if I would go that far. As Justice Sharpe says, you know, justice in this particular case is following the processes, the boundaries, the terms of this agreement.

Mr. Justice Brown: So we have to go back — just to be clear, we are back to the bright line then?

Mr. Arvay, Q.C.: We are back to the bright line then. [Emphasis added; pp. 94‑95.]

III. Conclusion

[196] My colleague Côté J. has simply gone too far, with too little. A concession by the Chief Adjudicator that J.W.'s claim was wrongly decided does not support a judicial rewrite of the terms of a complex settlement agreement reflecting the common intentions of a multitude of contracting parties. The IRSSA establishes a closed process, and it is for the parties to that process to reopen it — not for the courts to do so on the basis of an equivocal and wavering concession by a non-party to the IRSSA.

Appendix

Acronym	Meaning
CEP	Common Experience Payment
IAP	Independent Assessment Process
IRS	Indian Residential School
IRSSA	Indian Residential Schools Settlement Agreement
NAC	National Administration Committee
RFD	Request for Direction
TRC	Truth and Reconciliation Commission

Appeal allowed with costs, Brown and Rowe JJ. dissenting.

Solicitors for the appellants: Olschewski Davie, Winnipeg.

Solicitor for the respondent the Attorney General of Canada: Attorney General of Canada, Vancouver.

Solicitors for the respondent the Chief Adjudicator of the Indian Residential Schools Adjudication Secretariat: Arvay Finlay, Vancouver; Susan E. Ross Law Corporation, Victoria.

Solicitor for the respondent the Assembly of First Nations: Assembly of First Nations, Ottawa.

Solicitors for the intervener the Independent Counsel: Dionne Schulze, Montréal.

Solicitors for the intervener K.B.: Donovan & Company, Vancouver.

[^1]: Adjudicators are bound by the standard for compensable wrongs and for the assessment of compensation as defined in the IAP (art. II).

[^2]: See B and C in the recitals of the Agreement.

[^3]: A complete list of all acronyms used in these reasons can be found in the attached Appendix.

[^4]: Similar or identical wording can be found in the Approval and Implementation Orders made by all nine supervising courts.