COURT FILE NO.: CV-05-570

DATE: 2013/08/26

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

R.A.1, R.A.2

Plaintiffs

• and -

J.M., C.S. and J.M., AS LITIGATION ADMINISTRATOR OF THE ESTATE OF J.S.2

Defendants

P. Amey, for the Plaintiffs

G. Smits, for the Defendants

HEARD: April 10, 12, 15, 16, 17,18,May 13, 15, 16, 17, and June 4, 2013

The Hon. Mr. Justice Kent

REASONS FOR JUDGMENT

INTRODUCTION

[1] R.A.1 and R.A.2 were sexually abused by their maternal uncles, D.S. and M.S. in the late 1970’s and early 1980’s. At the time of this trial in 2013 R.A.1 and R.A.2 are 38 and 35 years of age respectively. D.S. is reported to be deceased. M.S., now 45 years of age, testified at trial and described the sexual abuse that occurred on multiple occasions. There is no doubt that the sexual abuse was significant and that both R.A.1 and R.A.2 have suffered considerably as a result of that abuse.

[2] R.A.1 and R.A.2 allege that they were also physically abused by their mother, the defendant, J.M., formerly J.S.1, daughter of the defendant C.S. and his wife J.S.2. R.A.1 and R.A.2 testified that their mother, J.M., administered excessive physical discipline to them over a period of time, principally in the 1980’s, prior to the breakup of their parents’ marriage in 1990. Such abuse is denied by J.M..

[3] R.A.1 and R.A.2 maintain that their mother and their maternal grandparents C.S. and J.S.2 did not fulfil their fiduciary duty to protect their children and grandchildren from sexual and physical abuse.

BACKGROUND

[4] C.S. and his wife J.S.2 adopted brothers D.S. and M.S. as children. These boys were younger than the other S. children who were all girls, still at home and unmarried at the time of the adoptions. J.M. was the oldest daughter. In 1975 J.M. married T.A. and in […] 1975 gave birth to R.A.1. In 1978 she gave birth to R.A.2.

[5] J.M.’s marriage to T.A. was not happy. He did not get along with her parents and frequently did not accompany her for visits to her parents’ farm home. R.A.1 and R.A.2 did accompany their mother on many visits to the S. home where they played with their older uncles, D.S. and M.S..

[6] It appears that D.S. first started sexually abusing M.S. when M.S. was 7 or 8 years old. The sexual activity included manual and oral sex as well as anal intercourse. M.S. recalled that it occurred “almost every day” until he was 14 or 15 and at that point D.S. was gone from their home. Having been threatened with death by D.S., M.S. was reluctant to complain about the abuse. He also heard D.S. threaten R.A.1 with death if R.A.1 said anything about the abuse.

[7] There is evidence that M.S., in the company of R.A.1 tried to complain to C.S. about D.S.. That evidence, by both R.A.1 and M.S. is insufficient to allow the court to find that a specific complaint about sexual abuse was made to C.S.. The words used by M.S. at the time were recalled at trial by R.A.1 and M.S. as “hurting me” and “at me again”. More critically, M.S. testified that late December 1982 was the first time he told his parents that D.S. was sexually abusing him. Whether at that time he said anything about D.S. or himself abusing R.A.1 or R.A.2 is open to question. M.S.’s evidence on that point is not precise and he does not inspire the court to find that he can be relied upon in May 2013 to recall specifically what he said on an occasion in December of 1982.

[8] Nevertheless, M.S.’s evidence is adequate to support a finding that when he complained in December 1982 that D.S. was sexually abusing him his parents and his sister J.M. who was present at the time of the complaint then acquired the knowledge that D.S. was a sexual abuser. This court so finds. That finding is consistent with the Children’s Aid Society records (Exhibit 1, page 44) that note that on 29 December 1982 C.S. and J.S.2 came to the CAS office and reported that M.S. had claimed that D.S. had been “having sex with him”.

[9] The defendants, therefore, knew by late 1982 that D.S. was a sexual abuser. They had no actual knowledge that M.S. was also a sexual abuser. What were their obligations to R.A.1 and R.A.2 who would be continuing to have contact with M.S.?

ISSUES

[10] The following issues arise:

a) Did the Defendant mother, J.M., owe the Plaintiffs a fiduciary duty to stop the sexual abuse suffered at the hands of their uncles? If so, did she breach that fiduciary duty?

b) Did the Defendant grandparents, C.S. and J.S.2, owe the Plaintiffs a fiduciary duty to stop the sexual abuse suffered at the hands of their uncles? If so, did they breach that fiduciary duty?

c) Did the Defendant mother, J.M., breach her fiduciary duty to her sons by physically abusing them throughout their childhood?

d) What, if any, are the appropriate damages?

e) Were the Plaintiffs’ claims initiated within the applicable limitation period?

[11] Before addressing these issues, it will be helpful to briefly summarize the general law of fiduciary duty.

When do Fiduciary Duties Arise?

[12] Fiduciary duties ultimately arise out of relationships of trust. They require that one party, the fiduciary, act with absolute loyalty toward another party, the beneficiary or cestui que trust, in managing the latter's affairs: Alberta v. Elder Advocates of Alberta Society, 2011 SCC 24, [2011] 2 S.C.R. 261, at para. 22. There is mutual confidence, understanding and dependence between the parties.

[13] Certain relationships naturally give rise to per se fiduciary duties: director-corporation, trustee-beneficiary, solicitor-client, partners, principal-agent, and the like. However, not all obligations existing between such parties will necessarily be fiduciary in nature: Lac Minerals Ltd. v. International Corona Resources Ltd., [1989] 2 S.C.R. 574, [1989] S.C.J.M.No. 83 at para. 31. For example, not every interaction between two business partners will fall within the ambit of their respective fiduciary obligations.

[14] Other relationships, meanwhile, involve ad hoc fiduciary obligations arising by implication. Here it is the nature of the relationship, not the specific category of actor(s) involved, giving rise to the fiduciary duty. As a result, the categories of fiduciary, like those of negligence, should not be considered closed: Guerin v. The Queen, [1984] 2 S.C.R. 335, at p. 384; Lac Minerals, at para. 30.

[15] Originating from Wilson J.’s dissent in Frame v. Smith, [1987] 2 S.C.R. 99, the Supreme Court has refined a three-part test for whether an ad hoc fiduciary duty arises on certain facts:

In summary, for an ad hoc fiduciary duty to arise, the claimant must show, in addition to the vulnerability arising from the relationship as described by Wilson J.M.in Frame: (1) an undertaking by the alleged fiduciary to act in the best interests of the alleged beneficiary or beneficiaries; (2) a defined person or class of persons vulnerable to a fiduciary's control (the beneficiary or beneficiaries); and (3) a legal or substantial practical interest of the beneficiary or beneficiaries that stands to be adversely affected by the alleged fiduciary's exercise of discretion or control. [Emphasis Added.] (Alberta at para. 36)

[16] It is of note that vulnerability alone is not sufficient to sustain a claim for breach of fiduciary duty: Galambos v. Perez, 2009 SCC 48, [2009] 3 S.C.R. 247, at para. 67; Alberta, at para. 28. Discretion, influence, vulnerability and trust are but non-exhaustive examples of evidential factors to be considered in making the fiduciary duty determination: Hodgkinson v. Simms, [1994] 3 S.C.R. 377, [1994] S.C.J.M.No. 84, at para. 32.

[17] In short, evaluating whether a fiduciary duty exists between parties is primarily a question of fact to be determined by examining the specific facts and circumstances of the case: Galambos, at para. 48; Lac Minerals, at para. 148. It is to be a holistic determination firmly rooted in context.

[18] Keeping these general principles in mind, I now turn to the law on fiduciary duty specifically in the family context.

Issue #1: Did the Defendant mother, J.M., owe the Plaintiffs a fiduciary duty to stop the childhood sexual abuse suffered at the hands of their uncles? If so, did she breach that fiduciary duty?

General Fiduciary Duty of a Parent

[19] Canadian courts have recognized that parents and their children unquestionably share a fiduciary relationship arising at birth: Kerr v. Baranow, 2011 SCC 10, [2011] 1 S.C.R. 269, at para. 208. Indeed, it is difficult to think of a bond more premised on trust, loyalty and dependence than that of a parent and child. But how far does this fiduciary duty extend, and under what circumstances is such a duty, if imposed, breached? These questions speak to the heart of this case.

[20] In search of answers, counsel for the Plaintiffs points to M. (K.) v. M. (H.), [1992] 3 S.C.R. 6, [1992] S.C.J.M.No. 85, as an appropriate starting place. In that case, the Supreme Court unanimously held that incest constituted a breach of the fiduciary relationship between a parent and child. It formally recognized the obvious: that incest is antithetical to the inherent responsibilities of a parent.

[21] The facts in the present case, however, make matters significantly less clear. First, the sexual assaults suffered by the Plaintiffs were neither carried out by the parent(s), nor were they perpetrated directly in their presence. Second, courts have held that the nature of a parent’s obligations will depend on the particular factual context (as discussed above), and that the parent-child relationship raises only a presumption of fiduciary obligations: Louie v. Lastman, 61 O.R. (3d) 449, [2002] O.J.M.No. 3521 (Ont. C.A.), at para. 27; M. (K.) v. M. (H.), at para. 76. Lastly, any such contextual analysis is inevitably complicated in this instance by the passage of over 30 years.

[22] These difficulties require that I turn now to the case law on third-party - or what I will call for convenience “bystander parent” - fiduciary duty.

Bystander Parent(s) Fiduciary Duty

[23] Counsel for the Plaintiffs concedes that he could find no jurisprudence directly on point with the unfortunate facts before me. He submits, however, that the following jurisprudence collectively supports a breach of fiduciary duty claim against the Defendant, J.M..

[24] In M. (M.) v. F. (R.) (1997), 101 B.C.A.C. 97, [1997] B.C.J.M.No. 2914 (B.C.C.A.), a child was abused by her foster parents’ son (her foster sibling) for nearly a decade. At trial, the Plaintiff adduced evidence, or “warning signs,” to demonstrate that the Defendant mother knew or ought to have known that the young girl was at risk from the son. The trial judge ultimately accepted the mother’s defence that she did not know of the abuse, and that she had no reason to suspect that the abuse was occurring. The Court of Appeal upheld the trial judgment and cautioned that, “there is a grave potential for injustice to bystander parents if the court commits itself to broad and inflexible definitions of the duty resting on such parents” (para. 131).

[25] In B. (M.) v. British Columbia, 2000 BCSC 735, [2000] B.C.J.M.No. 909 (B.C.S.C.), a former foster child claimed damages and compensation from the Defendant Crown for negligence and breach of fiduciary duty for alleged sexual abuse occurring in the home. The court cited M. (M.) v. F. (R.), confirming that the knowledge requirement for a bystander parent is actual knowledge or a reasonably held suspicion of a danger to the child, taking into account the parent’s own subjective characteristics (para. 114).

[26] In K. (K.) v. G. (K.W.) (2006), 40 C.C.L.T. (3d) 139, [2006] O.J.M.No. 2672, this court addressed the onus faced by Defendants facing a bystander parent fiduciary duty claim. The court held that while the individual circumstances of a mother are surely relevant to the breach of fiduciary duty determination, it is still incumbent upon the fiduciary to demonstrate, on a balance of probabilities, that he or she did not have the ability, awareness and means to act (para. 55). The Court of Appeal upheld that the Defendant bears the onus of establishing that he or she was unable to intervene to prevent the abuse: K. (K.) v. G. (K.W.), 2008 ONCA 489, [2008] O.J.M.No. 2436, at para. 100.

[27] Finally, the Supreme Court has indirectly addressed the issue of liability of a bystander parent in B. (K.L.) v. British Columbia, 2003 SCC 51, [2003] 2 S.C.R. 403. In obiter, McLachlin C.J., writing for the majority, made passing reference to the criminal law concept of wilful blindness. It can be inferred from her comments that “turning a blind eye” to abuse occurring in one’s own home constitutes a parental breach of fiduciary duty (para. 49).

[28] In sum, these cases establish that a parent who is not the perpetrator of sexual abuse may still be found liable for breach of parental fiduciary duty. Without actual knowledge of sexual abuse, a bystander parent must still take objectively/subjectively reasonable steps to intervene so as to meet his or her burden. Whether we choose to employ the term “imputed knowledge,” “reasonable foreseeability” or “wilful blindness,” the required contextual analysis remains unchanged - it is above all a question of fact.

Application of the Law to this Case

[29] Given the facts and case law outlined above, I am unable to find a breach of fiduciary duty on the part of J.M. for her failure to stop the sexual abuse perpetrated against her sons. There is an insufficient factual basis on which to establish that such a breach occurred.

[30] Before addressing my reasons, I wish to briefly address the rather difficult issue of context. It is trite that the sexual abuse in this case occurred in a vastly different cultural and social milieu. The “average parent” living in a rural county in Ontario in the late 1970’s and early 1980’s is not the “average parent” of today. So, while I can only speculate as to the awareness J.M. had, or should have had, about the dangers her brothers faced to her young sons, I undertake the following analysis fully appreciating that today’s standards must be relaxed. I turn now to that analysis.

[31] Counsel for the Plaintiffs virtually concedes that J.M. did not have actual knowledge of the sexual abuse at any time. Instead, the Plaintiffs submit that she should have reasonably foreseen the abuse, or that she was wilfully blind to it. J.M.’s defence is simply that the abuse was not reasonably foreseeable in all of the circumstances - that she had no way of knowing what was happening to her sons. Therefore, a breach of fiduciary duty ultimately hinges on my interpretation of who knew what, and when.

[32] While we know that sexual abuse of R.A.1 and R.A.2 by D.S. and M.S. occurred before late December 1982 and by M.S. after December 1982, we also know that J.M. had no actual knowledge of that abuse. Ought she to have known? Should she have asked questions? Should she have endeavoured to learn more about sexual abuse? Should she have wondered about whether an abused boy, her brother M.S., had become an abuser himself?

[33] The Answer to all the foregoing questions is yes. But that answer can only be made with the benefit of hindsight.

[34] It must be remembered that in the early 1980’s J.M. did not have the internet available to her. The concept and possibility of an abused boy becoming an abuser himself would not have been widely known. Claims of historic sexual abuse were in their infancy.

[35] To find that J.M. failure to stop the sexual abuse of her sons by her brothers either before or after late 1982 constituted a breach of her fiduciary duty to her sons is not supportable on the evidence or the law as it applies to the evidence.

Issue #2: Did the Defendant grandfather, C.S. and his wife J.S.2, owe the Plaintiffs a fiduciary duty to stop the childhood sexual abuse suffered at the hands of their uncles? If so, did they breach that fiduciary duty?

[36] Establishing a breach of fiduciary duty against the Defendant grandparents, Mr. and J.S.2, similarly hinges on the contextual analysis above. Counsel for the Plaintiffs submits that Mr. and J.S.2 stood in loco parentis to the Plaintiffs when they visited their home. By extension, they breached their fiduciary duty by failing to intervene in the sexual abuse.

Jurisprudence

[37] Counsel for the Plaintiffs concedes that there is no jurisprudence directly on point. The following cases, however, may loosely provide a basis for imposing a duty by analogy.

[38] In J.M.(L.A.) v. J.M.(H.), 13 O.R. (3d) 306, [1993] O.J.M.No. 266 (Gen. Div.), the plaintiff alleged that she had been sexually abused in her childhood by her mother's common-law husband, whom she believed was her father, but who in fact was her uncle. She brought both tort claims and fiduciary obligations in her action against her mother and the "father." The court confirmed that while the obligations of a fiduciary will vary according to the circumstances and nature of the relationship, in the parent-child context the broad principle that guides and infuses all parental conduct is that a parent must act in the best interests of the child (para. 17). As such, the court held that an individual who assumes a parental role may in turn assume a parental fiduciary duty (para. 20). Both mother and “father” were found to have breached their duty.

[39] In T.L.B. v. R.E.C., 2000 MBCA 83, [2000] M.J.M.No. 434 (Man. C.A.), various claims were brought by three sisters who alleged that they had endured childhood sexual abuse by their uncle. The defendant had acted as a protector and caregiver to the girls, providing for their physical and emotional well-being. The court ultimately recognized that the plaintiffs' relationship with the defendant could give rise to fiduciary obligations akin to those imposed on parents (para. 41).

Application of the Law to this Case

[40] To be clear, the two cases above are vastly different than the present. In those cases, the fiduciary non-parent actually perpetrated the sexual abuse. On the contrary, Plaintiffs’ counsel here submits that because the S.s at times stood in loco parentis to the boys, they breached their fiduciary duty as parental bystanders. As far as I am aware, such a duty is novel – it would effectively impose a parental fiduciary duty a significant step removed.

[41] In any event, the merit of imposing any such responsibility will remain academic. Given the evidence, I am simply unable to find that the grandparents breached a fiduciary duty to the Plaintiffs by failing to intervene. As with J.M., there is an insufficient factual foundation to reasonably impute any degree of knowledge to Mr. and J.S.2.

[42] For the same reasons as set out in paragraphs 29 and 35 above I would not find that C.S. and J.S.2’s failure to stop the sexual abuse of their grandsons constituted a breach of any fiduciary duty they had to those boys, if any such fiduciary duty existed.

[43] It must be noted that when the S.s obtained actual knowledge of sexual abuse they acted immediately to contact the CAS.

[44] It should also be noted that when J.M. learned that M.S. had sexually touched her daughter T.H. she also acted immediately to protect the child.

[45] The actions of the defendants when they learned about improper sexually activity were appropriate and timely. They are not the actions of persons who are indifferent to any fiduciary duty they may have.

Issue #3: Did the Defendant mother, J.M., breach her fiduciary duty to her sons by allegedly physically assaulting them throughout their childhood?

[46] In addition to the claims surrounding sexual abuse, the Plaintiffs submit that they were physically abused by their mother, constituting a breach of her fiduciary duty. It is alleged that they endured a pattern of violence well beyond the scope of imposing discipline by using corporal punishment.

Sexual v. Physical Abuse in the Fiduciary Duty Context

[47] In G.K. v. D.K., 122 O.A.C. 36, [1999] O.J.M.No. 1953, the Ontario Court of Appeal addressed the differentiation of sexual and physical abuse claims. In that case, a jury found that a father had physically assaulted his daughter, but did not sexually assault her. The judge tried the breach of fiduciary duty claim separately and awarded recovery equal to that awarded by the jury.

[48] On appeal, the issue became whether the claim for physical abuse, independent of that for sexual abuse, was statute-barred (discussed further at Issue #5). The court held that, as in similar child abuse cases, the issue of discoverability was inextricably bound to the alleged sexual abuse (para. 8). Both the sexual and physical abuse ultimately contributed to the lasting impact faced by the victims. Citing M. (K.) v. M. (H.), the panel therefore concluded that the distinction between incestuous conduct and persistent physical abuse does not appear to be significant for limitation purposes (para. 9).

Application of the Law to this Case

[49] Although J.M. denies excessive physical discipline it is clear that the information provided for the official Guardian Reports (Exhibit 2) prepared when J.M. and her husband T.A. were divorcing certainly flagged her physical discipline as a concern.

[50] R.A.1 and R.A.2 testified that, when their father was not home, their mother would hit them with a number of items including:

• a metal fly swatter handle

• a stick otherwise used to bar a patio door

• a black skate-blade guard

• the buckle end of a belt

• an extension cord

• a rubber hose

[51] Sometimes according to R.A.1, she would hit them up to 20 times appearing to be using all of her strength while in an uncontrolled rage. R.A.2’s evidence was similar. He also mentioned that “a few times” his mother threatened the children with a knife.

[52] Both R.A.1 and R.A.2 testified that their mother told them not to say anything about the physical violence when they were interviewed for the Official Guardian’s Report.

[53] T.H. (formerly A.), the younger sister of R.A.1 and R.A.2 testified. She observed her mother’s punishing of R.A.1 and R.A.2 and corroborated their evidence. She described her mother as hitting the boys “as hard as she could” when she was “really really mad”. It is difficult to accept that all of this evidence has been fabricated.

[54] Any excessive physical disciplining would appear to have occurred during the 1980’s when the marriage of J.M. and T.A. was in state of constant stress. Even allowing for a degree of exaggeration as a result of the passage of time, it is not difficult to accept that a mother under constant stress might be carried away when disciplining her children.

[56] S.A., the youngest of the children was only two years old when J.M. and T.A. separated in 1990. Interestingly, he recalls that his mother never disciplined him physically. It is of note that, once removed from a situation of constant stress, J.M. did not get carried away when administering discipline.

[57] It is more probable than not that J.M. employed excessive physical discipline as described by her sons R.A.1 and R.A.2 and her daughter T.H.. This court so finds. The denial by J.M. is not supportable on the evidence.

[58] Considering the foregoing, I find that J.M. breached her fiduciary duty to the Plaintiffs by repeatedly physically abusing them during their childhood. It is acknowledged that this finding is made in circumstances different than those in the above mentioned cases. It cannot be said, however, that J.M.’s violence occurred in a factual vacuum, nor can its effects be, however, viewed in isolation today. This particular breach of fiduciary duty served to exacerbate the loss of trust and confidence that the Plaintiffs’ had placed in their mother.

Damages

[59] Any physical injuries suffered by R.A.1 and R.A.2 were no more than superficial. There is no evidence that they were ever observed by any relative, adult or teacher. The psychological injuries were, no doubt, of considerably greater significance. The later were imposed on two young boys who had been continually sexually abused by their two uncles. Understandably, they would lose their trust and confidence in their mother.

[60] The expert evidence of Paul Ricketts, a therapist and Dr. Peter Jaffe, an expert on child sexual abuse, makes it clear that even though R.A.1 and R.A.2 have had what can be fairly described as successful lives, they probably would have been more successful and suffered less psychologically, but for the sexual abuse.

[61] While there is no evidence to support a finding, it is a reasonable and logical inference that the physical abuse by their mother must have aggravated the difficulties caused to R.A.1 and R.A.2 by the sexual abuse at the hands of their uncles.

[62] Considering all of the foregoing, the damages of each plaintiff are assessed in the amount of $35,000.

Issue #5: Were the Plaintiffs’ claims initiated within the applicable limitation period?

[63] Considering that counsel for the Defendants all but conceded the inapplicability of a limitations defence in his closing argument, I will only briefly address this issue.

[64] At the time of the abuse in this case, there was no statutory limitation period for claims based in equity. As of January 1, 2004, however, the Limitations Act, 2002, S.O. 2002, c. 24, Sch. B, imposed the usual two-year limitation period for new equitable claims: Boyce v. Toronto (City) Police Services Board, 2012 ONCA 230, [2012] O.J.M.No. 1531. The transition provision between these two pieces of legislation explicitly stated that if there was no time limit under the old Act, and the claim was discovered prior to the effective date, there is no limitation period.

[65] The Plaintiffs’ date of discovery is not in issue before this court. The “reasonable discoverability” (as discussed in M. (K.) v. M. (H.)) of these claims was long before January 1, 2004.

[66] Accordingly, the Plaintiffs’ claims are not statute-barred.

Result

[67] For all of the foregoing reasons R.A.1 and R.A.2 should each recover damages from their mother J.M. damages in the amount of $35,000. Judgment accordingly.

Costs

[68] If counsel are unable to agree as to costs, they may contact the trial co-ordinator at Brantford to arrange an appointment to make submissions before me.

KENT, J.M.

Released: August 26, 2013

COURT FILE NO.: CV-05-570

DATE: 2013/08/26

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

R.A.1, R.A.2

Plaintiffs

• and -

J.M., C.S. and J.M., AS LITIGATION ADMINISTRATOR OF THE ESTATE OF J.S.2

Defendants

REASONS FOR JUDGMENT

KENT, J.M.

Released: August 26, 2013