COURT FILE NO.: 00-CV-192059CP
DATE: 2020-10-28
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
LARRY PHILIP FONTAINE in his personal capacity and in his capacity as the Executor of the estate of Agnes Mary Fontaine, deceased, MICHELLINE AMMAQ, PERCY ARCHIE, CHARLES BAXTER SR., ELIJAH BAXTER, EVELYN BAXTER, DONALD BELCOURT, NORA BERNARD, JOHN BOSUM, JANET BREWSTER, RHONDA BUFFALO, ERNESTINE CAIBAIOSAI-GIDMARK, MICHAEL CARPAN, BRENDA CYR, DEANNA CYR, MALCOLM DAWSON, ANN DENE, BENNY DOCTOR, LUCY DOCTOR, JAMES FONTAINE in his personal capacity and in his capacity as the Executor of the Estate of Agnes Mary Fontaine, deceased, VINCENT BRADLEY FONTAINE, DANA EVA MARIE FRANCEY, PEGGY GOOD, FRED KELLY, ROSEMARIE KUPTANA, ELIZABETH KUSIAK, THERESA LAROCQUE, JANE McCULLUM, CORNELIUS McCOMBER, VERONICA MARTEN, STANLEY THOMAS NEPETAYPO, FLORA NORTHWEST, NORMAN PAUCHEY, CAMBLE QUATELL, ALVIN BARNEY SAULTEAUX, CHRISTINE SEMPLE, DENNIS SMOKEYDAY, KENNETH SPARVIER, EDWARD TAPIATIC, HELEN WINDERMAN and ADRIAN YELLOWKNEE
Plaintiffs
- and -
THE ATTORNEY GENERAL OF CANADA, THE PRESBYTERIAN CHURCH IN CANADA, THE GENERAL SYNOD OF THE ANGLICAN CHURCH OF CANADA, THE UNITED CHURCH OF CANADA, THE BOARD OF HOME MISSIONS OF THE UNITED CHURCH OF CANADA, THE WOMEN’S MISSIONARY SOCIETY OF THE PRESBYTERIAN CHURCH, THE BAPTIST CHURCH IN CANADA, BOARD OF HOME MISSIONS AND SOCIAL SERVICES OF THE PRESBYTERIAN CHURCH IN BAY, THE CANADA IMPACT NORTH MINISTRIES OF THE COMPANY FOR THE PROPAGATION OF THE GOSPEL IN NEW ENGLAND (also known as THE NEW ENGLAND COMPANY), THE DIOCESE OF SASKATCHEWAN, THE DIOCESE OF THE SYNOD OF CARIBOO, THE FOREIGN MISSION OF THE PRESBYTERIAN CHURCH IN CANADA, THE INCORPORATED SYNOD OF THE DIOCESE OF HURON, THE METHODIST CHURCH OF CANADA, THE MISSIONARY SOCIETY OF THE ANGLICAN CHURCH OF CANADA, THE MISSIONARY SOCIETY OF THE METHODIST CHURCH OF CANADA (ALSO KNOWN AS THE METHODIST MISSIONARY SOCIETY OF CANADA), THE INCORPORATED SYNOD OF THE DIOCESE OF ALGOMA, THE SYNOD OF THE ANGLICAN CHURCH OF THE DIOCESE OF QUEBEC, THE SYNOD OF THE DIOCESE OF ATHBASCA, THE SYNOD OF THE DIOCESE OF BRANDON, THE ANGLICAN SYNOD OF THE DIOCESE OF BRITISH COLUMBIA, THE SYNOD OF THE DIOCESE OF CALGARY, THE SYNOD OF THE DIOCESE OF KEEWATIN, THE SYNOD OF THE DIOCESE OF QU’APPELLE, THE SYNOD OF THE DIOCESE OF NEW WESTMINISTER, THE SYNOD OF THE DIOCESE OF YUKON, THE TRUSTEE BOARD OF THE PRESBYTERIAN CHURCH IN CANADA, THE BOARD OF HOME MISSIONS AND SOCIAL SERVICE OF THE PRESBYTERIAN CHURCH OF CANADA, THE WOMEN’S MISSIONARY SOCIETY OF THE UNITED CHURCH OF CANADA, SISTERS OF CHARITY, A BODY CORPORATE ALSO KNOWN AS SISTERS OF CHARITY OF ST. VINCENT DE PAUL, HALIFAX, ALSO KNOWN AS SISTERS OF CHARITY HALIFAX, ROMAN CATHOLIC EPISCOPAL CORPORATION OF HALIFAX, LES SOEURS DE NOTRE DAME-AUXILIATRICE, LES SOEURS DE ST. FRANCOIS D’ASSISE, INSITUT DES SOEURS DU BON CONSEIL, LES SOEURS DE SAINT-JOSEPH DE SAINT-HYANCITHE, LES SOEURS DE JESUS-MARIE, LES SOEURS DE L’ASSOMPTION DE LA SAINTE VIERGE, LES SOEURS DE L’ASSOMPTION DE LA SAINT VIERGE DE L’ALBERTA, LES SOEURS DE LA CHARITE DE ST.-HYACINTHE, LES OEUVRES OBLATES DE L’ONTARIO, LES RESIDENCES OBLATES DU QUEBEC, LA CORPORATION EPISCOPALE CATHOLIQUE ROMAINE DE LA BAIE JAMES (THE ROMAN CATHOLIC EPISCOPAL CORPORATION OF JAMES BAY), THE CATHOLIC DIOCESE OF MOOSONEE, SOEURS GRISES DE MONTRéAL/GREY NUNS OF MONTREAL, SISTERS OF CHARITY (GREY NUNS) OF ALBERTA, LES SOEURS DE LA CHARITé DES T.N.O., HOTEL-DIEU DE NICOLET, THE GREY NUNS OF MANITOBA INC.-LES SOEURS GRISES DU MANITOBA INC., LA CORPORATION EPISCOPALE CATHOLIQUE ROMAINE DE LA BAIE D’HUDSON – THE ROMAN CATHOLIC EPISCOPAL CORPORATION OF HUDSON’S BAY, MISSIONARY OBLATES – GRANDIN PROVINCE, LES OBLATS DE MARIE IMMACULEE DU MANITOBA, THE ARCHIEPISCOPAL CORPORATION OF REGINA, THE SISTERS OF THE PRESENTATION, THE SISTERS OF ST. JOSEPH OF SAULT ST. MARIE, SISTERS OF CHARITY OF OTTAWA, OBLATES OF MARY IMMACULATE –ST. PETER’S PROVINCE, THE SISTERS OF SAINT ANN, SISTERS OF INSTRUCTION OF THE CHILD JESUS, THE BENEDICTINE SISTERS OF MT. ANGEL OREGON, LES PERES MONTFORTAINS, THE ROMAN CATHOLIC BISHOP OF KAMLOOPS CORPORATION SOLE, THE BISHOP OF VICTORIA, CORPORATION SOLE, THE ROMAN CATHOLIC BISHOP OF NELSON, CORPORATION SOLE, ORDER OF THE OBLATES OF MARY IMMACULATE IN THE PROVINCE OF BRITISH COLUMBIA, THE SISTERS OF CHARITY OF PROVIDENCE OF WESTERN CANADA, LA CORPORATION EPISCOPALE CATHOLIQUE ROMAINE DE GROUARD, ROMAN CATHOLIC EPISCOPAL CORPORATION OF KEEWATIN, LA CORPORATION ARCHIéPISCOPALE CATHOLIQUE ROMAINE DE ST. BONIFACE, LES MISSIONNAIRES OBLATES SISTERS DE ST. BONIFACE-THE MISSIONARY OBLATES SISTERS OF ST. BONIFACE, ROMAN CATHOLIC ARCHIEPISCOPAL CORPORATION OF WINNIPEG, LA CORPORATION EPISCOPALE CATHOLIQUE ROMAINE DE PRINCE ALBERT, THE ROMAN CATHOLIC BISHOP OF THUNDER BAY, IMMACULATE HEART COMMUNITY OF LOS ANGELES CA, ARCHDIOCESE OF VANCOUVER – THE ROMAN CATHOLIC ARCHBISHOP OF VANCOUVER, ROMAN CATHOLIC DIOCESE OF WHITEHORSE, THE CATHOLIC EPISCOPALE CORPORATION OF MACKENZIE-FORT SMITH, THE ROMAN CATHOLIC EPISCOPAL CORPORATION OF PRINCE RUPERT, EPISCOPAL CORPORATION OF SASKATOON, OMI LACOMBE CANADA INC. and MT. ANGEL ABBEY INC.
Defendants
Proceeding under the Class Proceedings Act, 1992
COUNSEL:
▪ Raymond A. Murray and Jessica Fullerton for Claimant M-23620
▪ Catherine A. Coughlan and Brent Thompson for the Attorney General of Canada
HEARING: October 22, 2020
PERELL, J.
REASONS FOR DECISION
A. Introduction
[1] Pursuant to the Request for Directions (“RFD”) procedure of the Indian Residential Schools Settlement Agreement (“IRSSA”), there are two RFDs before the court.
[2] The first RFD is by M-23620. She is an Independent Assessment Process (“IAP”) Claimant under the IRSSA. She applied for compensation under what is known as the Complex Track. She had a hearing, and the Adjudicator released a decision that was labelled an Interim Decision. In the Interim Decision, M-23620 was awarded $55,333, but the Adjudicator did not resolve M-23620’s alleged $3.5 million Actual Income Loss (“AIL”) Claim, because it exceeded the $250,000 maximum the IRSSA prescribes for AIL.
[3] Following the Interim Decision, M-23620 requested the Chief Adjudicator to grant leave for the AIL Claim to be heard in the court. Canada, however, opposed the request for a referral to the court, because it wished to have the Adjudicator’s decision reviewed in accordance with the review provisions of the IRSSA. Nevertheless, the Chief Adjudicator granted M-23620’s request.
[4] The Chief Adjudicator followed the Kelly line of decisions,[^1] which were spawned in Manitoba. In Kelly, the Manitoba courts interpreted the IRSSA and held that where there was AIL Claim in excess of $250,000, there would be a bifurcated procedure in which a superior court would decide the AIL claim in accordance with court procedures and then after the court’s order was entered into the court’s records, the IAP claim would be completed by returning it to an Adjudicator for a final decision. For M-23260’s case, the Chief Adjudicator ruled that the bifurcated approach would be applied. He said that Canada could invoke the IRSSA’s review process later.
[5] In the first RFD, M-23620’s seeks directions from the court about the procedure and about the law and the evidence for the AIL Claim. Canada opposes M-23620’s RFD. In response to M-23620’s RFD, Canada submits that the bifurcated approach is wrong and need not and should not be followed. Canada submits that if it is successful on the review, then M-23620’s AIL Claim will be negated.
[6] The second RFD is by Canada. It says that the case at bar is one appropriate for judicial recourse, and it seeks an order that it is entitled to a review of the Adjudicator’s decision in accordance with the provisions of the IRSSA.
[7] While I disagree with Canada’s interpretation of the IRSSA and while I would follow the Kelly line of cases, and while I also agree with the Chief Adjudicator that there shall be a bifurcated procedure, for the reasons that follow I shall grant Canada’s RFD to the extent that I direct that the review process of the Adjudicator’s decision may immediately get underway. The review, however, shall proceed at the same time as M-23620’s court proceeding, and the review shall not in any way dispose of or intrude upon the court’s determination of M-23620’s AIL Claim. Similarly, the court proceeding shall not dispose of or intrude upon the review of the Adjudicator’s decision.
[8] As for M-23620’s RFD, she is entitled to a bifurcated hearing of her claim for compensation under the IRSSA. For the reasons that follow, I direct a regular action of M-23620’s AIL Claim to be tried in the Ontario Superior Court of Justice in accordance with the Rules of Civil Procedure and according to the standards, rules and processes of the Ontario Superior Court of Justice. The court proceedings, which shall be expedited, shall be case managed by me to prepare them for trial and tried by Justice Darla Wilson.[^2] As already noted, the action shall not in any way dispose of or intrude upon the IAP review process that will be proceeding concurrently.
B. Sealing Order and Other Preliminary Matters
[9] There was no dispute between the parties that the two RFDs involve intimate personal information and that the court record should be sealed and that M-23620’s identity should not be revealable from the court’s Reasons for Decision.
[10] I agree. I have written these reasons so that M-23620’s identity can remain secret. I order that the evidentiary record and the parties submissions be sealed.
[11] These reasons are not to be sealed and may be published as they do not reveal M-23620’s identity or personal information.
[12] As already noted, I shall case manage the action until it is set down for trial. I shall have the assistance of the Court’s Counsel (Brian Gover) appointed pursuant to the IRSSA. The first step is to set a timetable for the delivery of pleadings, affidavit of documents, discoveries, exchange of expert reports, etc. The parties have the option of consenting to a summary judgment or a simplified procedure type trial.
[13] The parties have the opportunity of preparing an agreed statement of facts and of incorporating the evidentiary record from the IAP procedure. To be clear, however, the proceeding in this court to determine the AIL claim is to be based on a fresh evidentiary record.
[14] Justice Wilson will hear submissions about the trial procedures in due course at the appropriate time.
C. Facts
[15] M-23620 is a not an Aboriginal person, but she adopted Aboriginal culture when her family moved its residence across Canada. When she was a pre-teen, her parents enrolled her at an Indian Residential School (“IRS”) for one four-month term. M-23620’s experience at the school was traumatic. (She later attended other IRS schools without significant incident.) The repercussions of her stay at the school have persisted throughout her life, although they have been balanced with some brave triumphs of the human spirit. For present purposes, I need not describe the details of what happened at the IRS and their aftermath.
[16] In 2008, M-23620 received a $19,000 Common Experience Payment pursuant to the IRSSA.
[17] In September 2012, M-23620 made an IAP Application for compensation for “other wrongful acts (“OWA”[^3]) under the IRSSA’s compensation rules. M-23620 also applied for AIL (Actual Income Loss) compensation. In May 2016, she submitted an amended application.
[18] M-23620’s IAP Application was placed on the complex track for adjudication, and there was five days of hearings in the summer of 2016. Prima facie submissions were heard in 2017. In June 2018, the Adjudicator received an expert’s assessment with respect to causation. In March 2018, interim submissions were made. Throughout, M-23620 indicated that she might apply for a court adjudication of her AIL Claim.
[19] On January 31, 2020, an actuarial report with respect to the AIL claim was received. The report was authored by one of the economic assessors approved by the IAP Oversight Committee. The actuarial expert provided an opinion based on three assumed scenarios with resulting AIL loses ranging from $3.0 million to $3.5 million.
[20] On February 28, 2020, the Adjudicator released her decision, which was styled as an “Interim Decision.” The Adjudicator identified six OWAs. She found that the OWAs caused consequential harms at the H4 level. The Adjudicator awarded 15 points for the OWAs and 17 points for the H4 finding. She identified the presence of aggravating factors and awarded 5 points. The Adjudicator awarded $10,000 for future care. In all, based on the points system, M-23620 was awarded $55,333.
[21] With respect to M-23620’s AIL Claim, no award was made, and the Adjudicator made no reference to the actuarial report.
[22] For the present purposes or the two RFDS, the following passages, edited for confidentiality, from the Adjudicator’s decision are pertinent:
As the claimant may seek access to the Courts, as allowed in the IAP, I am issuing this interim decision on the acts, harms, aggravating factors and future care. I am not making a decision on actual income loss at this time. The Court in IAP decision K-14135 stated that the Court will determine the causation test to be applied so I have not made a decision with respect to the cause of any potential income loss or loss of opportunity.
The following information is evidence from [M-23620] during the hearings and the documentary evidence including her income tax returns. Although it is not my job, at this point, to make a decision on the actual income loss, the evidence is also relevant to harms and with the amount of evidence putting it into chronological order and summary makes sense. The following is a summary of [M-23620’s earnings; positions and other life factors:]
[Decision pages 18-23]
I found that [M-23620] had proven on a prima facie basis that she had suffered from other wrongful acts (OWA2) at [IRA]. As such, I retained an expert from the IAP approved list of experts to assist me with the issue of causation. I retained the services of Dr.[X], a psychiatrist in …. Her report was filed on May 28, 2018. She was questioned in person by the parties’ representatives on September 26, 2018. Dr. [X] concluded that [M-23620] suffered from harms at level 4 but that the harms were not caused by the other wrongful acts she experienced at [IRS]. Dr. [X] concluded that [M-23620] had a predisposition to a fragile constitution and therefore would have suffered the harms without [IRA] wrongful acts.
I am required to give significant regard to the expert’s opinion on the level of harm and on its causation pursuant to the standards in this IAP.
Relevant quotes from Dr. [X]’s report:
In summary, [M-23620]’s psychiatric diagnoses are: Generalized Anxiety disorder, panic disorder, and probable borderline personality disorder.
It is quite possible that exposure to the assumed acts as outlined by the Adjudicator have impacted [M-23620]’s mental health difficulties in childhood, adolescence and adulthood.
The writer finds that it would be speculative to conclude that the assumed acts were a necessary cause of the development of [M-23620]’s psychiatric difficulties, as well as global difficulties she has had in her life, including relationships, education and occupational function. [M-23620], from her self- described history as well as her presentation at the IRS hearings and with the writer, is a fragile individual who appears more sensitive than the average person to life’s situation. Other life factors that could be contributors to the development of [M-23620]’s psychological difficulties include [….]
[Decision pages 52-56]
Adjudicator’s analysis on causation
[Decision pages 56-62; paragraphs 160-182]
I find that “but for” the OWAs at [IRS] [M23620] would not have suffered the following harms: Generalized Anxiety disorder, severe anxiety; panic disorder; Borderline personality disorder; Moderate/severe depression; Somatic disorder from chronic pain.
The above harms resulted in her having frequent difficulties with interpersonal relationships, and the borderline personality disorder resulted in longstanding personality traits, patterns of coping, and interacting with people that gave rise to problems throughout [M-23620’s] life in difficulties in interpersonal function, social function, and occupational function.
[23] On March 10, 2020, M-23620, pursuant to Article III(B)(iii) of Schedule D of the IRSSA, M-23620 requested that the Chief Adjudicator permit access to the courts. Article III (B)(iii) is part of Schedule D, Part III(b) which sets out the assessment process for IAP Claims, as follows:
III. ASSESSMENT PROCESS OUTLINE
b. Resolution Processes within this IAP
i. This IAP consists of a standard track, a complex issues track, and a provision for access to the courts for the resolution of certain of the continuing claims as set out below.
ii. The complex issues track is for those continuing claims where the Claimant seeks an assessment of compensation for proven actual income losses resulting from continuing claims, and for other wrongful act claims (category [other wrongful act] on page 3).
iii. 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 processes. [emphasis added]
[24] On March 17, 2020, the Chief Adjudicator asked Canada to provide its submissions in response to M-23620’s application for leave to access the courts.
[25] Under the IRSSA, IAP Adjudicator’s Decision are subject to an IAP Review Process. Canada advised M-23620 and the Chief Adjudicator Daniel Shapiro, Q.C that it sought a review of the Adjudicator’s Decision, but by letter, on April 8, 2020, the Chief Adjudicator wrote that reviews of interim decisions were not contemplated by the IRSSA and that he was considering whether to refer M-23620’s AIL Claim to the court.
[26] On April 23, 2020, the Chief Adjudicator referred M-23620’s AIL Claim for determination by the court.
[27] In allowing access to the court, the Chief Adjudicator followed Justice Schulman’s decision in the RFD application Fontaine v Canada (Attorney General), 2013 MBQB 272[^4] which is known as the Kelly case. In the Kelly case, Justice Schulman approved a bifurcated procedure where the IAP Adjudicator would decide all issues except the Claimant’s AIL Claim. Under this process, the court would determine the AIL Claim, if any, and then remit that determination to the Adjudicator who would incorporate it in the final decision. Justice Schulman’s approach was affirmed with some variations by the Manitoba Court of Appeal.[^5] The main variation was that the court’s order would be entered into the court’s record before the matter was returned to the IAP process.
[28] In his April 23, 2020 decision, the Chief Adjudicator addressed the matters of: (a) how the court’s decision about the AIL Claim would be integrated with the Adjudicator’s Decision about the other claims; and (b) the review process for IAP decisions. He stated at paragraphs 33-37 of his ruling:
To date, there has been no precedent for reconsideration of a decision made partly by a court and partly by an adjudicator—whether it would proceed through the IAP review process or by way of a judicial appeal.
Nevertheless, such concerns must have been contemplated by the Manitoba Court of Appeal in its decision allowing a bifurcated process. They can be addressed in this case either by the Supervising Court or by review or re-review adjudicators in the event that the case does come back in to the IAP after actual income loss is assessed by the Court.
This application for leave to access the court arrives at the 11th hour of the IAP. The current IAP Completion Strategy, released in 2018, posted to the IAP website, and widely circulated, calls for all adjudication (including reviews and appeals), to be concluded by December 1, 2020 and for the Secretariat to be wound down by March 31, 2021, subject to court approval. This case appears to have moved very slowly and without apparent regard to the end of the IAP being in sight. Further, I note, as a practical consideration, that the adjudicator who presided over this file for many years has recently concluded her departure from the IAP.
These practicalities present a significant challenge to the implementation of a court’s determination on AIL from a procedural point of view: will the court implement the AIL award, if any, in a comprehensive IAP decision, from which presumably appeal rights to the provincial Court of Appeal would arise? Or will the court remit the matter to an IAP adjudicator to incorporate into a final award from which review and re-review rights may arise in the IAP? If the latter, provision will need to be made for the adjudicative and administrative capacity to deal with the matter within the IAP as presently constituted.
Thus, while I grant leave to the Claimant to access the courts for the purposes of determining actual income loss, if any, in this case, it will be up to the supervising courts …. to determine how this will unfold. ….
[29] After the Chief Adjudicator’s decision, both M-23620 and also Canada brought an RFD.
[30] Before moving on to describe the parties’ submissions and my analysis, the circumstances in which the two RFD’s arise should be noted because while not relevant to the answers, these circumstances complicate matters and impart considerable urgency into how the answers to the two RFD’s must be crafted.
[31] The circumstances are that operative part of the IRSSA, including the IAP, over which the Chief Adjudicators have overseen the resolution of approximately 30,000 IAP claims is now in the process of being wound up. The Indian Residential Schools Adjudication Secretariat, which administers the IAP is being shut down with a planned closing date of March 31, 2021. It is already a skeletal operation administering one last IAP claim and addressing such matters as what to do with its records, a matter that is presently before the Ontario Court of Appeal.
D. Canada’s Submissions
[32] Canada submits that it had a right to have the so-called Interim Decision of the Adjudicator reviewed in accordance with the rules set out at Schedule D of the IRSSA for the review and the rereview of IAP decisions. It submits that the Adjudicator’s decision was for all intents and purposes a final decision and that the Chief Adjudicator’s refusal to permit Canada to exercise its review rights is a failure of the IAP model warranting judicial recourse.
[33] Further, Canada submits that if a review is permitted, it may obviate the need for a court determination of the AIL Claim because after a review: (a) M-23620’s IAP Application may be dismissed in its entirety; or (b) if there is an AIL Claim, it will be properly determined in accordance with the parameters of the IRSSA. In that last regard, Canada submits that the Adjudicator’s ordering of an actuarial assessment was an election to have the income loss claim determined within the IAP.
[34] Canada submits that the denial of its rights for a review is substantive and prejudicial because a judicial determination of the AIL Claim must accept the adjudicative findings of the Adjudicator, which would effectively render those findings final and immune from review or appeal.
[35] Canada submits that the bifurcation approach of the Kelly line of cases has been overruled by the judgment of Justice Côté in the Supreme Court’s judgment in J.W. v Canada (Attorney General), 2019 SCC 20[^6] and the present case demonstrates that the Manitoba line of cases creates confusion and inefficiencies, and unfairness given the logistical and substantive difficulties caused by an intertwined approach.
[36] Canada submits that on the two RFDs, the court has three choices. The first choice, which is Canada’s primary and preferred choice, is that the court direct a review of the Adjudicator’s so-called Interim Decision and not proceed to determine M-23620’s AIL Claim. The second choice would be for the court not to determine the AIL Claim and direct that it be determined entirely by an IAP Adjudicator. While Canada does not clearly say as much, this second choice would set a cap of $250,000 for the $3.5 million claim. The third choice is for the court to have this court determine all of M-23620’s IAP claims.
E. M-23620’s Submissions
[37] M-23620 submits that the Chief Adjudicator made no error or no error reviewable by judicial recourse. She submits that this court should follow the lead of the Manitoba courts and follow the Kelly line of authorities by directing what was authorized in those cases; namely, an proceeding by application that would incorporate the record from the IAP complex track proceeding and give deference to the Adjudicator’s decision to the extent possible and to afford her the benefits to which she is entitled under the IRSSA. She submits that the court should regulate the matters of fees and costs of the court proceedings to reflect the approach of the IRSSA.
F. Analysis and Discussion
1. Canada’s RFD
[38] I can be relatively brief in providing reasons for allowing Canada’s RFD to the extent of ordering the review process to begin and to run concurrently with the court determining M-23620’s AIL Claim
[39] The main thrust of Canada’s RFD was to challenge the bifurcation approach of the Kelly line of cases, which was the basis of the Chief Adjudicator’s decision to refuse Canada’s request of a review of the so-called Interim Decision. As the case law interpreting the IRSSA has developed, there is only a narrow right of judicial recourse or intervention into the IPA. Generally speaking, for judicial recourse, there must have been a failure to apply or implement the terms of the IRSSA and the IAP Model.[^7] In my opinion, there was such failure in the immediate case.
[40] The Chief Adjudicator followed the jurisprudence that emanated in Manitoba. He was correct in doing so. I agree with the decision of Justice Schulman and of the Manitoba Court of Appeal in the Kelly line of cases that the IRSSA envisions a bifurcated adjudication when there are AIL Claims in excess of $250,000. The bifurcated procedure maintains the benefits of the IRSSA for the beneficiaries of the agreement. In the Manitoba Court of Appeal, Justice Cameron stated:[^8]
- Finally, in accordance with Consolidated-Bathhurst, the result is sensible. That is, access to the courts is not used to deny the respondent the benefits of the IAP. However, the respondent must still meet all of the standards required to prove his continuing claim pursuant to the IAP and his actual income loss to the court. This is a balanced response that respects the terms of the Agreement.
[41] There is nothing in the Supreme Court of Canada’s decision in in J.W. v Canada (Attorney General), 2019 SCC 20[^9] that overrules or overturns the jurisprudence provided by the Manitoba courts.
[42] I agree with the decision of the Chief Adjudicator that Canada is not being denied a right to have the Adjudicator’s decision reviewed in accordance with the IRSSA. Where, however, the Chief Adjudicator erred is in making the review contingent on and linked to the completion of the court’s determination of M-23620’s AIL Claim. I agree with the Chief Adjudicator that the problems of a bifurcated procedure can be addressed as I shall explain below, but the solution lies in keeping the procedures separate, not by comingling them.
[43] The errors of the Chief Adjudicator in sequencing and interrelating the IAP process and the court’s process are errors of interpreting and implementing the IRSSA. The Chief Adjudicator was mainly correct, but he misunderstood some aspects of the Kelly line of authorities.
[44] The superior court will determine the AIL Claim, and the court’s decision will be appealable in the normal course. After the court’s decision on the AIL Claim is final, it will be remitted back to the IAP to be attached or conjoined with the Adjudicator’s decision. The Adjudicator’s decision will be subject only to the review or re-review procedures of the IRSSA and there is no reason that the two procedures cannot and should not proceed concurrently.
[45] I disagree with Canada’s argument that it would be substantively prejudiced by a bifurcated determination M-23620’s Claims. Canada’s argument is based on; (a) misreading Kelly and misunderstanding the implications of a bifurcated approach; and (b) the erroneous premise that the court must accept the adjudicative findings of the Adjudicator, which would effectively render those findings final and immune from adjudication or appeal.
[46] Under the IRSSA, the IAP Adjudicator employs an inquisitorial procedure in determining M-23620’s IAP Claims. Under the IRSSA, the court will employ its own standards, rules and processes, which is to say that it employs an adversarial approach different than the inquisitorial approach of the IAP. Under a bifurcated approach, the court’s determination of the AIL Claim is a fresh start based on a new evidentiary record.
[47] The bifurcated approach does not deny the IAP Claimants any of the benefits of the IAP process which are conjoined but not comingled with the court’s process. To speak metaphorically, M-23620’s continuing IAP claim is like the Ottawa and Saguenay Rivers, tributaries that eventually join to form the St. Lawrence River but until joinder, the tributaries proceed as separate watercourses. At there terminus, the two tributary rivers merge with the St. Lawrence River.
[48] The bifurcated process affords the IAP Claimant access to justice for a claim that otherwise would be released by the Settlement Agreement. However, that access to justice is “addressed by the courts according to their own standards, rules and processes.”
[49] Canada’s argument is also wrong in asserting that if it were allowed to pursue a review of the Adjudicator’s $55,000 compensation award, if successful, it might spare the court having to decide the $3.5 million AIL Claim. The Chief Adjudicator, correctly in my view, granted M-23620 leave to assert that claim in the court. The Superior Court will have to determine whether what happened at the IRS caused M-23620’s alleged $3.5 million income loss and that determination will not affect the Adjudicator’s decision that what happened at the IRS caused M-23620 to suffer damages for which she was entitled to compensation in accordance with the points system provided by the IAP Model (Schedule “D” to the IRSSA). The compensation decisions are independent of one another and then integrated, which is to say conjoined into one IAP decision.
[50] What follows from the bifurcated approach is that the superior court decides just the AIL claim in accordance with “its own standards, rules and processes.” Canada is entitled to give full answer and defence to what is in effect a de novo or separate hearing of a discrete and separated aspect of the continuing IAP Claim. Because the proceedings are separate and independent until they run their course, the proper interpretation of the IRSSA is that they may run their course’s concurrently.
[51] I agree with the decisions of the Manitoba Courts in the Kelly line of decisions that when a IAP Claimant is granted leave to assert a claim in the superior courts it is not the case that the whole matter of the IAP Claim is for the superior court to decide. That is not what the IRSSA calls for. Referring the entire matter to the court would deny the Class Member of the IRSSA what was contracted for him or her as a beneficiary of the contract that is the IRSSA.
[52] Either party has a right to have the court’s AIL Claim decision reviewed by appeal and whatever is the final AIL Claim decision will be incorporated into the award granted to the Claimant, of which the Adjudicator’s decision will be subject to the review process of the IAP.
[53] The court’s decision on the AIL Claim does not affect the review of the Adjudicator’s decision, which is subject to the review standards of the inquisitorial process of the IAP, which is very different than the standards of appellate review of a court’s decision.
[54] In a given case, the bifurcated approach might conceivably produce inconsistent results but there should be no adjudicative embarrassment because the adjudicative approaches are very different. The rules of engagement are very different. But more to the point, a bifurcated approach is what was bargained for under the IRSSA.
[55] As I will explain in more detail below, when addressing M-23620’s RFD requests, none of the evidence from the IAP hearings is carried forward into the court’s process and none of the determinations of the Adjudicator are binding on the superior court judge who will determine M-23620’s AIL Claim.
[56] It follows from the above, that Canada was right about commencing the review process but it was wrong in thinking that the review process might forestall or obviate the need of the court to address M-23620’s AIL Claim.
[57] Canada is wrong about the court having three choices, all of which are not prescribed by the IRSSA. The court has a fourth choice, which is to determine M-23620’s AIL Claim “according to [the court’s] own standards, rules and processes,” which is precisely the topic of M-23620’s RFD, to which I now turn.
2. M-23620’s RFD
[58] In its written submissions, M-23620 defines the issues before the court on her RFD. In the chart below, I have set out the issues in one column and the court’s answers in the second column. I shall explain the answers below.
| ISSUES | ANSWERS |
|---|---|
| (a) Should the Claimant’s continuing claim for AIL proceed in the Ontario Superior Court of Justice? | Yes. |
| (b) Should the Claimant’s continuing claim for AIL proceed by way of Notice of Application as the originating process? | No. M-23620’s AIL Claim should proceed as a regular action in the Superior Court. A trial judge should immediately be assigned to case manage the action for an expedited trial. The parties have the options of a summary judgment procedure or a simplified trial procedure. |
| (c) Should the court defer to the factual findings of the IAP Hearing Adjudicator when making its decision, and, if so, to what extent should it do so? | No. The adversary system proceedings in the Superior Court are separate from the inquisitorial-like IAP process, and the court may not and should not defer to the factual findings of the IAP Adjudicator. |
| (d) Should the court apply Clements v Clements, 2012 SCC 32, when determining whether the compensable acts perpetrated against the Claimant and the subsequent harms she sustained caused her AIL? | It will be for the trial judge to find the facts and to apply the law to resolve M-23620’s AIL Claim. |
| (e) If the compensable acts perpetrated against the Claimant while she was a resident of a recognized Indian Residential School, and the harms she suffered as a result, caused her AIL or a loss of opportunity, should the court: i. Provide the factual assumptions necessary for the actuary agreed to by the parties and retained by the hearing adjudicator to determine the quantum of the Claimant’s AIL, which shall include: ii. Direct that the assessment of future loss of income and lost pension income be included in the calculation of the quantum of the Claimant’s AIL; and, iii. Include prejudgment interest in the calculation of the quantum of the Claimant’s AIL. |
Proceedings in the Superior Court are not inquisitorial but rather employ an adversary system model in which the parties are domini litis. It is not for the court to provide factual assumptions to an actuary. It is for the parties to present their own cases. |
| (f) Should the court close the proceedings in the Claimant’s continuing claim for AIL to the public, treat any documents filed during the course of those proceedings as confidential, seal them and ensure they do not form a part of the public record, and, further either seal or redact the court’s judgment? | The trial shall be in camera and the evidentiary record shall be sealed. |
| (g) Following the court’s determination of the Claimant’s continuing claim for AIL, should the court remit the matter back to the IAP Hearing Adjudicator for implementation, including, as necessary: i. Coordinating a final report from the actuary retained by the IAP Hearing Adjudicator setting out the quantum of AIL; and ii. Addressing all remaining issues to conclude the claim, including legal costs and disbursements in accordance with the IRSSA? |
Subject to any appeal, the court’s decision will be remitted back to the IAP to be integrated (conjoined) into a IAP decision. The IAP Adjudicator’s portion of the decision is subject to the review provisions of the IAP. The court’s decision is subject to the rights of appeal provided by the Courts of Justice Act and the Rules of Civil Procedure. |
[59] I can once again be relatively brief in explaining the answers to the issues raised in M-23620’s RFD because the answers are corollaries to the bifurcated approach of the Kelly line of cases. As I have already indicated, I agree with how the courts of Manitoba have interpreted the IRSSA as it applies to AIL Claims.
[60] There was no dispute that Ontario was the jurisdiction for the AIL Claim for factual reasons that I need not discuss here as they might disclose M-23620’s identity.
[61] The circumstances of the Kelly case were not as complicated as in the immediate case because in Kelly the parties agreed about causation of harm, which is not the situation in the immediate case. Kelly was essentially a case about quantification of damages arising from caused harms that were not contested. The immediate case is much more complicated than Kelly. In the immediate case, there is a very serious challenge to the Adjudicator’s findings made in an inquisitorial process.
[62] Further, in the immediate case, the causation issues that were before the Adjudicator were different from the causation issues that will be before the Superior Court. The issue before the Adjudicator was the comparatively easier issue of whether what happened at the IRS caused M-23620 to suffer physical and psychological injuries compensable in accordance with the damages grid of the IAP. The issue before the court in the immediate case is the multiplex-issue of whether what happened at the IRS caused physical and psychological injuries to M-23620 and whether those physical or psychological injuries, in turn, caused M-23620 to incur an Actual Income Loss.
[63] The issues that will be before the court are well within the expertise of a superior court judge, and that judge does not require the expertise of an inquisitorial adjudicator familiar with the nuances of the IRSSA. In the immediate case what the IRSSA calls for is the specialized knowledge of a superior court judge who would not use extra-curial knowledge from deciding other cases about what occurred at the Indian Residential Schools.
[64] In the immediate case, there is highly contested issue about causation of economic harms caused by psychiatric injuries. What is called for in the immediate case, is a regular action under the Rules of Civil Procedure, which entail an adversarial process. The action should be case managed, and the trial should be expedited. M-23620’s AIL Claim should not proceed by application. It is readily apparent that a regular trial is required.
[65] In the Kelly case, unlike the case at bar, the underlying facts that might affect causation were not contested and Justice Schulman said that “to the extent possible, deference should be extended to the adjudicator’s factual determinations.” In the immediate case, there is no extent possible to defer to the adjudicator’s factual determinations pro or con to the interests or positions of the parties.
[66] Since the causation issue and the issue of the quantification of the AIL are so intertwined with the personal history of M-23620 it would not be fair to either party or perhaps even possible for the judge to make a determination based on the findings of another adjudicator. M-23620 is advancing a complex claim, and while it is unfortunate, because of the pain it will cause her to testify again about what happened to her before and after she attended an Indian Residential School, that is what the IRSSA agreement has prescribed. She will have to begin again and decide what evidence to present. There is no longer an inquisitorial process.
[67] There are no issue estoppels, and none of the evidence proffered as a part of the inquisitorial IAP process is part of the evidentiary record for the trial, unless, of course, the parties consent or wish to prepare a statement of agreed facts. To be clear, the Adjudicator’s findings are not part of the evidentiary record in the court. There is a fresh start, that should begin with a Statement of Claim and the completion of pleadings.
G. Miscellaneous Matters
[68] It was an important aspect of the negotiations that produced the IRSSA and that found its way into the settlement agreement that legal fees and legal costs be regulated. The matter of the costs and the legal fees for an AIL Claim is, however, a lacunae in the agreement. The court on this RFD can fill that lacunae as follows.
Where compensation for an AIL Claim is awarded to a Claimant who has been represented by counsel, a further 15% of the amount paid will be added as a contribution towards legal fees. Reasonable and necessary disbursements will also be paid. The court may resolve disputes about the disbursements to be paid.
Save for conduct that would justify a punitive award of costs, each party shall bare their own costs for the action to determine the AIL Claim.
[69] Given the urgency of the circumstances that the IAP is in the process of being wound down, I direct the parties to arrange two case management conferences with the Court’s Counsel (Brian Gover). One case conference with me is to set a timetable for the court proceedings. The other case conference without me but with the Chief Adjudicator and with Court Counsel acting in his role to assist in the administration of the IRSSA is to ask the Chief Adjudicator to set a timetable for the review and rereview process of the IAP.
H. Conclusion
[70] For the reasons set out above, I grant both parties RFDs as aforesaid and I direct that M-23620’s AIL Claim proceed as a regular action under the Rules of Civil Procedure as directed above.
[71] While success was divided on these RFDs, in my opinion, subject to hearing from the parties, this is an appropriate case to award costs to M-23620. If the parties cannot agree about the matter of costs, they may make costs submissions in writing beginning with M-23620’s costs submission within ten days of the release of these Reasons for Decision followed by Canada’s submissions within a further ten days.
Perell, J.
Released: October 28, 2020
COURT FILE NO.: 00-CV-192059
DATE: 2020-10-28
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
LARRY PHILIP FONTAINE in his personal capacity and in his capacity as the Executor of the estate of Agnes Mary Fontaine, deceased, et al.
Plaintiffs
‑ and ‑
THE ATTORNEY GENERAL OF CANADA et al.
Defendants
REASONS FOR DECISION ________________________________________
Perell, J.
Released: October 28, 2020
[^1]: Fontaine v. Canada (Attorney General) 2013 MBQB 272 (bifurcation); Fontaine v. Canada (Attorney General), 2014 MBCA 93 (bifurcation appeal); Fontaine et al. v. Canada (Attorney General), 2015 MBCA 41 (appeal, costs); Kelly v. Canada (Attorney General), 2017 MBQB 21 (AIL Claim); Fontaine v. Canada (Attorney General), (costs, AIL Claim).
[^2]: I asked Regional Senior Justice Firestone to assign the AIL Claim action, and he assigned the action to Justice Wilson.
[^3]: The IRSSA describes OWA’s as follows: “Any other wrongful act or acts committed by adult employees of the government or a church entity which operated the IRS in question, or other adults lawfully on the premises, which are proven to have caused serious psychological consequences for the Claimant, as particularized in and causing the harms set out in the Compensation Rules and Instructions below. These claims are referred to in this document as “other wrongful acts”
[^4]: 2013 MBQB 272 (Kelly).
[^5]: Fontaine v. Canada (Attorney General), 2014 MBCA 93 (Kelly).
[^6]: 2019 SCC 20
[^7]: The cases that define when judicial recourse is available are: Fontaine v. Canada (Attorney General), 2020 BCSC 21; Fontaine v Canada (Attorney General), 2019 BCCA 246; J.W. v Canada (Attorney General), 2019 SCC 20; Fontaine v. Canada (Attorney General, 2017 ONCA 26 (Spanish IRS); The Attorney General of Canada v. J.W. and Reo Law Corp., 2017 MBCA 54; Fontaine v. Duboff, Edwards Haight & Schacter, 2012 ONCA 471.
[^8]: Fontaine v. Canada (Attorney General), 2014 MBCA 93 (bifurcation appeal).
[^9]: 2019 SCC 20.