BARRIE COURT FILE NO.: CV-22-208-00CP
DATE: 20240620
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Andrew Knisley
Plaintiff
– and –
Attorney General of Canada
Defendant
Darryl Singer, Michael Blois, Mathura Santhirasegaram and Kristina Olivo, for the Plaintiff
Kathryn Hucal, Monisha Ambwani and Jennifer Caruso, for the Defendant
HEARD: May 21, 22 and 23, 2024
DECISION ON MOTION FOR CERTIFICATION OF CLASS ACTION
sutherland J.[^1]:
Introduction
[1] The plaintiff seeks certification of a class action under s. 5(1) of the Class Proceedings Act, 1992 (the “CPA”).[^2]
[2] The plaintiff has commenced this action[^3] seeking redress for the long-standing delay in the processing of disability benefits awards for himself and approximately 8,000 other veterans who were and are injured and disabled by virtue of their military service with the Canadian Armed Forces (“CAF”) which the plaintiff alleges has caused physical, mental and financial harm to him and the said veterans.
[3] It is without reproach that veterans who have served and sacrificed for Canada deserve timely and efficient processing of their benefit claims and awards for injures suffered as a result of their service to this country.
[4] The Attorney General of Canada (“Canada”) has repeatedly indicated that the veterans deserve nothing less.
[5] The issue for this Court to determine on this motion is not the merit of the allegations of the plaintiff but a procedural determination. Can the plaintiff pursue the claims on a class action basis for the benefit of himself and the other affected veterans (the “Class Members”)?
[6] For the reasons to follow, I find that the plaintiff may procced and grant the certification of the class action as described in the reasons.
The Plaintiff
[7] Mr. Knisley joined the CAF infantry in 2007 at the age of 23 and was deployed to Afghanistan as a member of the Police Operational Mentor Liaison Team.
[8] On January 19, 2009, he was injured by an improvised explosive device during a dismounted patrol. The explosion resulted in Mr. Knisley losing his entire right leg at the hip. He suffered other injuries including traumatic brain injury, hearing loss, a scrotal injury, renal failure, and ulnar nerve damages in his right arm.
[9] As a result of injuries suffered while active in the CAF, Mr. Knisley and the Class Members require disability benefits to sustain themselves or obtain access to vital treatment for their injuries.
The Legislative Scheme and Process of Benefits
[10] Veterans Affairs Canada (“VAC”) is the government department responsible for, among other things, the administration of legislation relating to the care, treatment and re-establishment in civilian life of veterans, as well as their survivors and dependants.[^4] VAC fulfils this mandate by delivering various programs and services, which provide compensation for hardships arising from disabilities and lost economic opportunities and recognize the achievements and sacrifices of Canadians during periods of war and conflict. VAC administers these programs and services to veterans, CAF members, and, in some cases, members of the Royal Canadian Mounted Police (“RCMP”) pursuant to a number of legislative schemes.[^5]
[11] Current CAF members and veterans may be entitled to monetary compensation for the effects of a service-related disability, via disability benefits. There are two types of disability benefits:
a. Disability Pension: A multi-purpose benefit available under the Pension Act
that provides compensation for the economic and non-economic impacts of a
service-related disability on pension recipients and their families.
b. Pain and Suffering Compensation (formerly the Disability Award): A benefit
paid in recognition of non-economic effects of a service-related disability to
eligible current CAF members or veterans under the Veterans Well-being Act.
[12] An individual who believes they have a diagnosed, permanent, chronic medical condition related to or aggravated by their military service may submit an application for disability benefits to VAC. These applications are assessed in respect of: (i) entitlement, which concerns the degree to which a disability is related to military service (for current CAF members and veterans) and (ii) assessment, which concerns the extent of the disability.
[13] Entitlement may be “full” or “partial” and is expressed in fifths.
[14] Disability benefit entitlement is a gateway to access certain other benefits, including treatment benefits. Treatment benefits provide financial support to eligible veterans for a variety of health care benefits and services. These benefits are distinct from the monthly, annual, or lump sum payment for a disability benefit. After being approved for a benefit, a veteran will receive a VAC healthcare card to access healthcare services and benefits from VAC-approved providers. A provider may be registered with VAC, who can then bill directly for the healthcare services or benefits. If the provider is not registered, then the Veteran pays out of pocket for the service and submits a reimbursement request.
[15] The Veterans Independence Program (“VIP”) assists eligible VAC recipients to remain in their homes and communities for as long as possible, by providing them with financial assistance towards the cost of services that support their independence. The VIP provides annual, tax-free funding that the Veteran may use for services such as, grounds maintenance, housekeeping, and professional health and support services.
[16] The Rehabilitation Services and Vocational Assistance Program (the “Rehabilitation Program”) provides a broad range of rehabilitation and vocational assistance services to eligible participants to assist the veterans re-establishment into civilian life by addressing barriers to re-establishment in their home, communities or workplaces. Veterans applying for or participating in the Rehabilitation Program are eligible to receive medical, psycho-social, and vocational services authorized under their rehabilitation plan.
[17] One of the financial benefits previously available to veterans was the Permanent Impairment Allowance (“PIA”), a monthly allowance paid to veterans who had a permanent and severe impairment resulting from a service-related injury or illness that affected their employment and potential career advancement. The PIA was payable at three grades. On April 1, 2017, the PIA was renamed the Career Impact Allowance and had substantially the same eligibility criteria as the PIA. On April 1, 2019, Parliament introduced the new “Pension for Life” suite of benefits, under which the PIA was transitioned to Additional Pain and Suffering Compensation, a non-economic benefit, and its economic components were replaced by the new Income Replacement Benefit.
[18] While VAC provides a variety of statutory benefits and programs, there are no legislated timeframes governing the speed at which VAC must provide a service or adjudicate an application. Nevertheless, to measure performance and effectiveness, VAC has created and published service standards for a variety of benefits and services.
[19] A service standard conveys the amount of time in which VAC aims to provide a service or make a benefit decision in normal circumstances. Service standards represent the target “turnaround time” for an application in a specified percentage of cases. The “turnaround time” is the amount of time it takes VAC to process an application. VAC begins measuring the turnaround time for disability benefits applications on the Service Standard Start Date (“SSSD”), which is the date upon which VAC receives a complete application. VAC also accepts incomplete applications for benefits and services, which are identified as “pending” until they are complete.
[20] Prior to fiscal year 2022-2023, all service standards and turnaround times for disability benefits represented the time between the SSSD and the date of decision. As the defendant stated in their factum, pursuant to a recommendation from the Office of the Auditor General,[^6] turnaround times and service standards for disability benefits for fiscal year 2022-2023 and onwards represent the time between the SSSD and, for favourable decisions, the date a payment is made.
[21] VAC has numerous service standards for various programs and the service standard has been changed several times over the years.
[22] The current Service Standards for Disability Benefits (“SSDB”) is for 80% of decisions to be made within 16 weeks from the first application and reassessment and 12 weeks for departmental reviews.
[23] VAC also triages disability applications for priority adjudication, for example, under its “Red Zone” protocol. Red Zone applications are given priority adjudication due to medical risk where the applicant is in advanced age, has a palliative medical condition, and/or has unmet health needs. VAC aims to process Red Zone applications within in seven to ten business days.
[24] The percentage of SSDB’s that have met the 16-week target has changed over the years. At no time has VAC attained the 80% target.
[25] As an example, in the fiscal year 2019-2020, 24% of the applications were processed within the 16-week target. The most recent data provided for this motion indicates that in the fiscal year 2020-2021, 39% and 2021-2022, 46% of the applications were processed in the 16 weeks target. The median time for VAC to process a first application for disability was 39 weeks in 2022.
[26] For the more seriously injured, veterans that require complicated care or assistance or require immediate care or assistance are assigned to the Case Management Program and are assigned a case manager. It is estimated that there are 14,445 veterans in the Case Management Program and have been assigned a case manager.
Legal Principles for Certification of Class Actions
[27] Section 5 of the CPA sets out a five-part conjunctive test for certification. The onus is on the plaintiff to meet all five criteria. The criteria are:
(a) the pleadings disclose a cause of action;
(b) there is an identifiable class;
(c) the members raise common issues;
(d) the class proceeding is the preferable procedure for the resolution of the common issues; and
(e) there is a suitable representative with a workable litigation plan.
[28] On a motion for certification, the focus is on the form of the action and whether the action is appropriately prosecuted as a class action. The focus is not on the merits of the action on whether the claim will likely succeed.[^7]
[29] I will now deal with an analysis of the five criteria separately.
Analysis
A. Disclose a Cause of Action
[30] The onus rests on the plaintiff to show that the Fresh as Amended Statement of Claim (the “Claim”) discloses a reasonable cause of action. The test is the same as on a motion to strike: the court asks whether, assuming the facts to be true and without reference to any evidence filed, it is plain and obvious that the plaintiff’s claim cannot succeed.[^8] It is a low threshold test.
[31] A claim fails to disclose a reasonable cause of action: (1) where the allegations do not give rise to a cause of action recognized in law; or (2) where a claimant has failed to plead the necessary material facts to establish a recognized cause of action.[^9] In reviewing the claim, the court should give a generous reading, read holistically, to accommodate any drafting deficiencies.[^10]
[32] Thus, in determining whether a cause of action is disclosed, the court should adopt a cautious approach as an order denying certification could effectively terminate claims of hundreds or thousands of individuals and “must err on the side permitting a novel but arguable claim to proceed.”[^11] As such, the burden is onerous on the defendant seeking to defeat a certification motion on the basis that no reasonable cause of action is pleaded.[^12]
[33] The plaintiff proposes the following causes of action:
(a) Breach of s. 7 of the Charter of Rights and Freedoms (the “Charter”)[^13].
(b) Breach of fiduciary duty.
(c) Breach of contract.
(d) Negligence.
(e) Negligent misrepresentation.
(f) Damages-psychological and punitive.
[34] I will deal with each cause of action separately.
[Section 7](https://www.canlii.org/en/ca/laws/stat/schedule-b-to-the-canada-act-1982-uk-1982-c-11/latest/schedule-b-to-the-canada-act-1982-uk-1982-c-11.html#sec7_smooth) of the [Charter](https://www.canlii.org/en/ca/laws/stat/schedule-b-to-the-canada-act-1982-uk-1982-c-11/latest/schedule-b-to-the-canada-act-1982-uk-1982-c-11.html)
[35] Section 7 of the Charter reads: Everyone has the right to life, liberty and security of the person and the right not to be deprived thereof except in accordance with the principles of fundamental justice.
[36] To demonstrate a s. 7 violation, the plaintiff must first demonstrate that the impugned state action interferes with or deprives them of their life, liberty, or security of the person. Once a s. 7 right has been engaged the plaintiff must show that the deprivation is not in accordance with the principles of fundamental justice.[^14]
[37] The plaintiff claims that the defendant “has denied or jeopardized Class Members’ section 7 rights by failing to take adequate and timely steps to protect this vulnerable group of disabled veterans in their time of need.” The plaintiff in effect argues that failure in managing and administering the disability benefits program and “ensuring the timely and orderly processing of” disability benefits has caused damage and has violated the Class Members of their s. 7 rights.
[38] Giving a generous reading of the Claim in regard to the s. 7 violation, the Claim is sparse on the aspects of the action and its nature that violates the s. 7 right and how such an action violates the principles of fundamental justice.
[39] In addition, the plaintiff appears to be putting forth that the managing and administering by Canada is the violation of the s. 7 right. This appears to the Court to be a claim based on the processing and administering of a program in a methodical way that causes delay rather than an action by Canada that has violated a section 7 right. In effect, it is a failure of adequate management, inaction, or poor decisions to process disability benefits in a method that meets VAC’s own standards of service or needs of the Class Members.
[40] Section 7 is meant to protect an individual from state interference with their physical and/or psychological integrity. It concerns state action that causes physical and or serious psychological interference and suffering.[^15] Section 7 does not create a positive obligation on Canada to take measures “to ensure that each person enjoys life, liberty or security of the person. Rather, s. 7 has been interpreted as restricting the state’s ability to deprive people of these.”[^16]
[41] Recently, the Ontario Court of Appeal has reiterated that governmental inaction does not amount to a state-imposed deprivation to subject itself to a s. 7 violation.[^17]
[42] In contrast, in Leroux, the Ontario Court of Appeal found that failing to provide supports to a developmental disability plaintiff who was assessed and approved for supports violated s. 7. This is not the case here. The evidence provided on this motion indicates that the plaintiff, at least, did receive benefits but as alleged in a much-delayed process.
[43] Accordingly, based on the Claim as drafted, it is plain and obvious to me that the plaintiff’s claim under s. 7 cannot succeed.
Breach of Fiduciary Duty
[44] A fiduciary duty will rarely attach to a government’s relationship with those affected by government actions. The rationale is that it is very difficult to show that the government has a duty of loyalty to a particular group over that of the public in general. As the Supreme Court of Canada stated in Elders Advocates of Alberta Society v. Alberta:
Compelling a fiduciary to put the best interests of the beneficiary before their own is thus essential to the relationship. Imposing such a burden on the Crown is inherently at odds with its duty to act in the best interests of society as a whole, and its obligation to spread limited resources among competing groups with equally valid claims to its assistance: Sagharian (Litigation Guardian of) v. Ontario (Minister of Education), 2008 ONCA 411, 172 C.R.R. (2d) 105, at paras. 47-49. The circumstances in which this will occur are few. The Crown’s broad responsibility to act in the public interest means that situations where it is shown to owe a duty of loyalty to a particular person or group will be rare: see Harris v. Canada, 2001 FCT 1408, [2002] 2 F.C. 484, at para. 178.[^18]
[45] Moreover, the Federal Court of Canda reviewed the request for a class action proceeding against VAC and declined to certify breach of a fiduciary duty, indicating:
The jurisprudence is clear that there must be a clearly worded undertaking in the applicable legislation. There is no such wording in the Veterans Wellbeing Act or its predecessor. There is also no implicit undertaking arising from VAC’s broad mandate or the circumstances of proposed class members to prioritize their interests over the interests of all other veterans who may also be eligible for other benefits or assistance. The Plaintiff’s pleading of an undertaking does not create the undertaking and the Plaintiff has not established sufficient facts to support the elements of the cause of action. As the Defendant notes, the Plaintiff’s reliance on the vulnerability of this group of disabled veterans to support the undertaking is not enough (Elder Advocates at paras 28, 36, 57).[^19]
[46] I fail to see how the Courts decision in Bruyea relying on Elders Advocates is any different then the factual situation before me. The plaintiff has not directed the Court to any part of any of the pertinent statutes which provides such an undertaking. Nor has the plaintiff provided any material facts to support such an undertaking. At most, the plaintiff is relying on the same argument as in Bruyea that the reliance and the vulnerability of the Class Members are enough. The case law says otherwise. I see no substantive reason to not follow the reasoning in Bruyea.
[47] Accordingly, I conclude that the law does not support the plaintiff’s contention that Canada owes the Class Members a fiduciary duty and as such conclude that it is plain and obvious that this cause of action would not be successful.
Breach of Contract
[48] The plaintiff contends that the defendant breached its terms of contract, a social covenant, with him and the Class Members. As I understand from the plaintiff’s submissions, the plaintiff and the Class Members entered into an offer to join the CAF on the term that Canada would take care of them and their families if they would be injured or give the ultimate sacrifice of their life in the service of Canada. Reliant on this term, the plaintiff and the Class Members volunteered to join the CAF.
[49] This argument presupposes that the plaintiff and the Class Members can enter into an employment contract, a social covenant, with Canada.
[50] Canada argues that the presupposition of the plaintiff is not accurate in law.
[51] Canada directs the Court to Gallant v. The Queen in Right of Canada,[^20] and Gligbe v. R.[^21]
[52] In Gallant, the Federal Court concluded:
Both English and Canadian Courts have always considered, and have repeated whenever the occasion arose, that the Crown is in no way contractually bound to the members of the Armed Forces, that a person who joins the Forces enters into a unilateral commitment in return for which the Queen assumes no obligations, and that relations between the Queen and Her military personnel, as such, in no way give rise to a remedy in the civil Courts. This principle of common law Courts not interfering in relations between the Crown and the military, the existence of which was clearly and definitively confirmed in England in the oft-cited case of Mitchell v. The Queen, [1896] 1 Q.B. 121, was taken over by our Courts and repeated in a wide variety of situations: see, in particular, Leaman v. The King, [1920] 3 K.B. 663; Bacon v. The King (1921), 1921 CanLII 393 (CA EXC), 21 Ex. C.R. 25; Mulvenna v. The Admiralty, [1926] S. L. T. 568; Cooke v. The King, 1928 CanLII 765 (CA EXC), [1929] Ex. C.R. 20; McArthur v. The King, 1943 CanLII 296 (CA EXC), [1943] 3 D.L.R. 225, [1943] Ex. C.R. 77, particularly, p. 263 et seq. D.L.R., p.117 et seq. Ex. C.R., and Fitzpatrick v. The Queen, 1959 CanLII 785 (CA EXC), [1959] Ex. C.R. 405.
[53] Gligbe concerns an action for contract damages according to common law principles respecting labour law. Mr. Gligbe joined the CAF on July 15, 2012, and the CAF decided to release Mr. Gligbe on May 7, 2012. Without describing in detail, the facts, in essence, the Court decision concerns a motion to strike an action commenced by Mr. Gligbe for wrongful dismissal. In determining that Mr. Gligbe had no cause of action and struck the claim, Justice Harrington recognized the existing common law that members of the CAF serve at pleasure. Justice Harrington wrote:
[13] It is recognized that members of the CAF serve at pleasure. There are many examples of decisions, including one from the Federal Court of Appeal, confirming that they are not bound to Her Majesty the Queen by an employment contract (Mitchell v. The Queen, [1896] 1 QB 121 (UK) (QL); Gallant v. The Queen in Right of Canada (1978), 1978 CanLII 2084 (FC), 91 DLR (3d) 695 (FCT); Sylvestre v. R (1986), 1986 CanLII 6868 (FCA), 30 DLR (4th) 639 (FCA); McClennan v. Canada, 2002 FCT 244, at paragraph 11; Donoghue v. Canada (Minister of National Defence), 2004 FC 733, at paragraph 35; MacLellan v. Canada (Attorney General), 2014 NSSC 280, at paragraph 59). I, myself, acknowledged this principle in Bissonnette v. Canada, 2007 FC 281, at paragraphs 7‑8.
[54] I recognize that the common law is not static in that precedent can be changed given the change or development of societal principles and attitudes or to comply with Charter principles. However, the plaintiff has not provided any justification for this Court to not be bound by the extensive precedential authority that members of the CAF do not have a common law contractual employment relationship with Canada.
[55] Thus, like Justice Harrington, I am bound by the extensive case law that clearly establishes that the relationship between a soldier and Canada is not one based on common law contract.
[56] There is no common law contractual employment relationship between the plaintiff and Class Members and Canada and consequently, there is no cause of action that can be based on contract law.
Negligence
[57] It is not disputed that for the plaintiff and the Class Members to justify a cause of action in negligence, a duty of care needs to be owed by Canada to the Class Members, and that Canada breached that standard of care of this duty of care.
[58] To establish a duty of care, the Class Members and the plaintiff must satisfy a two-stage test. The test is:
(a) First, it must be established that there is a sufficient proximity between the plaintiff and Canada and whether it was foreseeable that the plaintiff and Class Members would be affected by Canada’s conduct.
(b) Second, if such a relationship exists, then one is to consider whether there is any policy consideration transcending the relationship between the parties that militates imposing such a duty of care.[^22]
[59] At this stage my analysis is narrow and focused on whether the pleading sets out a basis for a cause of action in negligence and not whether such negligence has been proven on the balance of probabilities.
[60] The plaintiff contends that the Claim sets out that there is a proximity between the plaintiff and Class Members and Canada, and that the standard of care has been breached. The standard of that duty of care is that Canada has failed to effectively and efficiently deliver disability benefits. In support of this contention is Canada’s own admissions that they have failed to comply with there own service standards, and the multiple reports of others, such as the Auditor General report, that VAC has consistently and historically failed to process Disability Benefit Claims effectively and failed to keep proper data to effectively monitor their methodologies and processes. It is this failure, the plaintiff says, which encompasses negligent operational decisions and conduct for which Canada should be held responsible.
[61] Canada contends that the two stage criteria has not been met. That the Claim fails to disclose any material facts that support such a contention that there is a proximity of relationship that results in a duty of care and further, that a standard of care has been articulated in the Claim for which Canada has breached its conduct. There is no basis in the Claim that an action of negligence can be founded.
[62] With respect to Canada, I disagree. Reviewing the Claim as a whole, and not just narrowly focusing on the paragraphs under the negligence heading, and thereby giving the Claim a generous review, I am of the view that the Claim does set out a proximity of relationship that could give rise to a duty of care and that the failure of VAC to historically and consistently process applications efficiently and effectively which includes failing to comply with its own service standards in processing to each of the Class Members may encompass a breach of standard of care. VAC is the sole actor as the operational administrator and decision maker of the program and provides individual advice and instructions to veterans on how their respective applications are processed. Veterans are fully reliant on the statutory system created solely for their benefit, which is operated and processed by VAC, who is solely and fully responsible for the training, education and hiring of appropriately trained staff to process the applications of veterans efficiently and effectively, along with providing management, advice and information to individual Class Members. The Claim pleads that the Class Members relied on the information and advice provided.
[63] The Supreme Court of Canada in R. v. Imperial Tobacco Canada Ltd.[^23] envisioned such a scenario when the Court pronounced:
The argument in the first kind of case is that the statute itself creates a private relationship of proximity giving rise to a prima facie duty of care. It may be difficult to find that a statute creates sufficient proximity to give rise to a duty of care. Some statutes may impose duties on state actors with respect to particular claimants. However, more often, statutes are aimed at public goods, like regulating an industry (Cooper), or removing children from harmful environments (Syl Apps). In such cases, it may be difficult to infer that the legislature intended to create private law tort duties to claimants. This may be even more difficult if the recognition of a private law duty would conflict with the public authority’s duty to the public: see, e.g., Cooper and Syl Apps. As stated in Syl Apps, “[w]here an alleged duty of care is found to conflict with an overarching statutory or public duty, this may constitute a compelling policy reason for refusing to find proximity” (at para. 28; see also Fullowka v. Pinkerton’s of Canada Ltd., 2010 SCC 5, [2010] 1 S.C.R. 132, at para. 39).
The second situation is where the proximity essential to the private duty of care is alleged to arise from a series of specific interactions between the government and the claimant. The argument in these cases is that the government has, through its conduct, entered into a special relationship with the plaintiff sufficient to establish the necessary proximity for a duty of care. In these cases, the governing statutes are still relevant to the analysis. For instance, if a finding of proximity would conflict with the state’s general public duty established by the statute, the court may hold that no proximity arises: Syl Apps; see also Heaslip Estate v. Mansfield Ski Club Inc., 2009 ONCA 594, 96 O.R. (3d) 401. However, the factor that gives rise to a duty of care in these types of cases is the specific interactions between the government actor and the claimant.
Finally, it is possible to envision a claim where proximity is based both on interactions between the parties and the government’s statutory duties.
Since this is a motion to strike, the question before us is simply whether, assuming the facts pleaded to be true, there is any reasonable prospect of successfully establishing proximity, on the basis of a statute or otherwise. On one hand, where the sole basis asserted for proximity is the statute, conflicting public duties may rule out any possibility of proximity being established as a matter of statutory interpretation: Syl Apps. On the other, where the asserted basis for proximity is grounded in specific conduct and interactions, ruling a claim out at the proximity stage may be difficult. So long as there is a reasonable prospect that the asserted interactions could, if true, result in a finding of sufficient proximity, and the statute does not exclude that possibility, the matter must be allowed to proceed to trial, subject to any policy considerations that may negate the prima facie duty of care at the second stage of the analysis. (emphasis added)
[64] Utilizing the same rationale as is in Imperial Tobacco, I find that it is arguable that such a proximity of relationship exists here.
[65] On the second part of the test, Canada argues that the duty of care concerns residual policy considerations which militate against the imposition of such a duty of care. The Claim seeks to impugn policy decision, as opposed to operational decisions. Policy decisions are not in the realm of this Court to engage. That is for the political system to remedy.[^24]
[66] There is some merit to the argument of Canada, but the Claim does not just claim relief for institutional wide delays but for individual delays, information and advice given to the individual Class Members by their respective Case Managers along with a failure to rectify operational deficiencies for individual Class Members which lends itself to be more of an operational decision based on objective criteria than a policy decision made by decision-makers more closely related to a democratically-accountable official.[^25]
[67] Hence, it is arguable, though may be novel, that the claim concerns operational decisions and the duty of care is not militate by policy considerations, even if such decisions concern other service recipients. This is due to the legislative scheme enacted and the deliberate focus of this scheme to veterans.
[68] Consequently, with the claim of negligence, I am cognizant that the burden on Canada is onerous, and the threshold on the plaintiff is low. Further, that novel arguments should not be dismissed readily to disentitle hundreds or thousands of a claim.
[69] The analysis here is not to determine the likelihood of success but to ascertain on this procedural motion whether there may exist a cause of action.
[70] On this basis, I am not satisfied that the claim of negligence is clear and obvious to fail.
Negligent Misrepresentation
[71] The elements for a claim of negligent misrepresentation are not contested. The elements are:
(a) a duty of care based on a “special relationship” between the representor and the representee;
(b) the representation in question must be untrue, inaccurate, or misleading;
(c) the representor must have acted negligently in making said misrepresentation;
(d) the representee must have relied, in a reasonable manner, on the alleged negligent misrepresentation; and,
(e) the reliance must have been detrimental to the representee in the sense that damages resulted.[^26]
[72] The Claim as constituted fails to describe that the representations that were untrue, inaccurate, or misleading, and that the plaintiff and Class Members relied upon them to their detriment.
[73] Reliance of the negligent misrepresentation to one’s detriment is a critical element to be pleaded to sustain a claim for negligent misrepresentation.
[74] The detrimental reliance is evidenced by one “altering its position, forgoing more beneficial courses of action that it would have taken, absent the defendant’s inducement.”[^27]
[75] Even if the court gives the Claim a generous reading, there is nothing in the Claim that the plaintiff pleads as material facts that he or any of the Class Members altered their position relying on any negligent misrepresentation by Canada. What beneficial courses of action was altered? It is nonexistent in the Claim and accordingly, there is no detrimental reliance.
[76] This lack of specificity in the claim of negligent misrepresentation, along with the lack of detrimental reliance, fails to satisfy critical elements of negligent misrepresentation.
[77] The Claim is lacking and consequently it is clear and obvious that the claim of negligent misrepresentation, as constituted, cannot succeed.
Damages: Psychological and Punitive
[78] Canada submits that the Claim does not plead the requite harm to recover psychological damages in tort, and further that the claim for punitive damages does not provide sufficient particulars to identify the essential elements for punitive damages.
[79] First, on the claim for psychological damages, Justice Perell on a motion for certification of a class action in Hoy v. Expedia Group Inc. reviewed the law and stated:
As a matter of tort law, in Mustapha v. Culligan of Canada Ltd. and in Saadati v. Moorhead, the Supreme Court of Canada established the general approach of the law with respect to damages for psychological harm in tort. After Saadati v. Moorhead to establish a compensatory psychological injury, the claimant need not prove that he or she was suffering a recognized psychiatric illness. Rather, the claimant needs to prove that as a result of the defendant’s wrongdoing, he or she suffered a mental disturbance that is serious and prolonged and that rises above the ordinary annoyances, anxieties and fears that come with living in civil society. No such harm is pleaded in the immediate case.
In Richardson v. Samsung Electronics Canada Inc., which was a proposed class action brought on behalf of consumers who purchased a smartphone with defective batteries, the plaintiff alleged, among other things, that the defendant had breached Ontario’s Consumer Protection Act, 2002. Justice Rady dismissed the certification motion for several reasons. One of the reasons was that the class member’s pain and suffering damages claim required a threshold beyond mere upset, disgust, anxiety and agitation, and required physical or psychological injury and the evidence did not pass the threshold. The case at bar is similar and there is no evidence that two or more putative Class Members suffered a mental harm that passes the threshold to be compensable. [^28]
[80] The situation here, I find is different. The plaintiff in his affidavit has indicated that he (along with similarly situated veterans) has been diagnosed with post-traumatic stress disorder, his dealing with VAC and the delay in benefits has either aggravated this mental disorder or has contributed to the disorder. Further, the Auditor’s Report, that was referred to by Canada in their factum, does indicate that the effects of the failure of veterans to obtain disability benefits in a timely manner, or at all, does negatively affect psychological and mental health.
[81] I am, therefore, satisfied that the Claim has plead psychological and mental harm and does provide enough material facts to meet the low threshold on this motion.
[82] Second, concerning punitive damages, I also am satisfied that the Claim as a whole does provide enough particulars to justify the claim as plead. It is not contested that a claim for punitive damages is permitted in class actions.[^29]
[83] Canada argues that the Claim does not provide material facts to justify a claim for punitive damages. I disagree.
[84] The claim for punitive damages flows from the conduct of Canada and the findings and answers provided to the common issues in this class action. A determination by the court can be made after the determination on causation and damages for the whole class.[^30]
[85] At this stage, the Claim is sufficient to put forth a claim for punitive damages.
B. An Identifiable Class
[86] The Supreme Court of Canada in Hollick described the three criteria for ascertaining the existence of an identifiable class, which must be established by the representative plaintiff. At paragraphs 17-20, the Court established that the class must be defined by objective criteria, there must be a rational relationship between the class, the cause of action and the common issues and the class must not be unnecessarily broad or over inclusive. If the class can be defined more narrowly, the Court should either disallow certification or allow certification on condition that the definition of the class be amended.[^31]
[87] The plaintiff has proposed the following definition of the class:
All veterans that are in Case Management as of May 21, 2024, and any future veterans from May 21, 2024, that are placed in Case Management who have applied for and/or are receiving Disability Benefits.
[88] The plaintiff argues that the definition is not overly broad for it does not include all veterans ever placed in Case Management and further, does not include all veterans. The plaintiff proposes that this definition narrows the class in order to investigate which veterans, from review of their particular cases, experienced inordinate delay in their application process.[^32] The plaintiff concedes this will require much work given that there are approximately 14,445 veterans in Case Management, but this exercise is required to ascertain those that may be caught by the class action. Canada knows exactly who the affected parties are for they have the files.
[89] Canada argues that the definition of the class is too narrow and undefined. There is no discernible method for determining whose application is processed within or beyond VAC’s service standards. There are veterans who are in Case Management who may not have experienced any delays in processing their disability benefits and veterans who are not in Case Management that may have experienced delays. There are veterans in Case Management that are not receiving disability benefits and there are veterans who are not in Case Management who are receiving disability benefits. Further, there are veterans who go in and out of Case Management subject to the seriousness of their situation. The Class definition proposed by the plaintiff, Canada argues, is simply not workable.
[90] I agree with Canada, I too have much concern regarding the definition proposed by the plaintiff during argument. The class definition proposed is not the same proposed in the plaintiff’s materials filed on this motion. The proposed definition remedied the concern from the previous definition by restricting the time period. The new proposed definition limits the claim to Class Members that are presently in Case Management. However, this presents a further problem of omitting veterans that may be within the breadth of the cause of action but are excluded due to the definition.
[91] This begs the question on what the Court should do. The Court has two alternatives. The Court can disallow the certification motion due to a class definition that is too narrow and underinclusive or the Court can allow the certification on the condition that the definition be amended to properly define the class that is not too narrow nor too broad. This dilemma was expressed by Justice Perell in Hoy v. Expedia Group Inc.:
In defining the persons who have a potential claim against the defendant, there must be a rational relationship between the class, the cause of action, and the common issues, and the class must not be unnecessarily broad or over-inclusive. An over-inclusive class definition binds persons who ought not to be bound by judgment or by settlement, be that judgment or settlement favourable or unfavourable. The rationale for avoiding over-inclusiveness is to ensure that litigation is confined to the parties joined by the claims and the common issues that arise. A proposed class definition, however, is not overbroad because it may include persons who ultimately will not have a successful claim against the defendants.
The class must also not be unnecessarily narrow or under-inclusive. A class should not be defined wider than necessary, and where the class could be defined more narrowly, the court should either disallow certification or allow certification on condition that the definition of the class be amended.[^33]
[92] Recognizing that a class definition is not merit based, the purpose is for self identification and “all that is necessary is that the Class Members know whether they have a potential claim, and it is not even necessary that they know whether it is a probable claim or a claim worth pursuing.”[^34] I am less concerned with the methodology for determining the individual veterans that may fall within the Class Members. As Justice Perell stated, this can be achieved by necessary communication to have the Class Members self identify. But again, to whom will the communication be given for this purpose?
[93] Notwithstanding my concerns with the definition of the Class, I accept the alternative option; if this court determines the class action be certified, it will be on the condition that the class definition be amended.
C. Common Issues
[94] Section 1(1) of the CPA defines common issues as “(a) common but not necessarily identical issues of fact, or (b) common but not necessarily identical issues of law that arise from common but no necessarily identical facts.”
[95] For an issue to be a common issue requires it be a substantial ingredient of each class member’s claim, and its resolution must be necessary to the resolution of each class member’s claim.[^35]
[96] As Justice Perell stated in Bennett, which was accepted by the Divisional Court:
An issue is not a common issue if its resolution is dependent upon individual findings of fact that would have to be made for each class member. Common issues cannot be dependent upon findings which will have to be made at individual trials, nor can they be based on assumptions that circumvent the necessity for individual inquiries. However, the commonality requirement does not mean that an identical answer is necessary for all the members of the class, or even that the answer must benefit each of them to the same extent; it is enough that the answer to the question not give rise to conflicting interests among the members; success for one member must not result in failure for another.
The common issue criterion presents a low bar. An issue can be a common issue even if it makes up a very limited aspect of the liability question and even though many individual issues remain to be decided after its resolution. Even a significant level of individuality does not preclude a finding of commonality. A common issue need not dispose of the litigation; it is sufficient if it is an issue of fact or law common to all claims and its resolution will advance the litigation.[^36]
[97] The common issues for negligence put forth by the plaintiff are:
Negligence
Did Canada owe a duty of care to the Class Members to provide Benefits in accordance with its service standards and/or in a timely manner?
Did Canada breach its duty of care to the Class Members?
Did the Class Members suffer damages as a result of the breach?
Damages Suffered by the Class
- Can damages be determined on a class-wide aggregate basis?
Punitive Damages
Is Canada’s conduct towards the Class callous and highhanded, and a marked departure from the standards expected of Canada and its treatment of its Veterans?
If the answer is “yes”, is Canada’s conduct so egregious as to justify an award of exemplary or punitive damages?
[98] I find the common issues put forth meet the required criteria. The issues are common to all the Class Members. The determination does not result in success for one Class Member and failure for another. There will be individual differences on whether a breach of the duty of care has occurred. But the determination of such a duty of care is common to all Class Members.
[99] Further, the claim for punitive damages would be common to all Class Members. The conduct of VAC to Class Members is the inquiry to the Class and not to individual members in the Class. This is the commonality of the question. It is a class wide question.
[100] I am therefore satisfied that the plaintiff has met the low threshold that there are common issues concerning negligence, and damages.
D. Class Proceeding the Preferable Procedure
[101] Subsection 5 (1.1) of the CPA imposes a test for preferability. The subsection reads:
(1.1) In the case of a motion under section 2, a class proceeding is the preferable procedure for the resolution of common issues under clause (1) (d) only if, at a minimum,
(a) it is superior to all reasonably available means of determining the entitlement of the class members to relief or addressing the impugned conduct of the defendant, including, as applicable, a quasi-judicial or administrative proceeding, the case management of individual claims in a civil proceeding, or any remedial scheme or program outside of a proceeding; and
(b) the questions of fact or law common to the class members predominate over any questions affecting only individual class members. 2020, c. 11, Sched. 4, s. 7 (2). [emphasis added]
[102] Prior to the amendments, case law dictated that the preferability inquiry was to be conducted through the lens of the three principal objectives of class action proceedings: access to justice, behaviour modification, and judicial economy.[^37]
[103] Canada argues that these 2020 amendments imposed a stricter test for preferability then the test enunciated by the case law. The plaintiff must establish some basis in fact that the proposed action would be a fair, efficient and manageable method of advancing the claim, and the class action would be preferable to any other reasonable available means of resolving the claims.[^38] Canada contends that the class action here would not sufficiently meet the requirements of the subsection as it would be unmanageable and individual issues would predominate over common issues.
[104] The plaintiff argues that the class action would be much more efficient and cost effective than litigating individual claims. The costs of litigation would greatly outweigh any recovery on an individual basis. As such, “one of the main goals of this litigation is to modify Canada’s behaviour and hold it accountable for its wrongdoings.”[^39]
Superior to all Reasonably Available Means
[105] According to Canada, there are other superior means than class action to provide Class Members relief which include individual actions or application to Federal Court for mandamus, as well as seeking treatment for psychological harm while Class Members wait for the adjudication of their application from VAC’s Mental Health Benefit Program which provides immediate coverage or request their Disability Benefit application be designated as “Red Zone” for urgent processing.
[106] The plaintiff contends that none of these measures put forth by Canada are superior. For they either will costs inordinate sums of money for legal fees, nor resolve or provide relief of the issue of untimely processing of applications. The plaintiff further contends that all these suggestions of Canada are hypothetical with no evidentiary foundation. The suggestions are not practical in that they have not been used and shown to be effective, nor are they realistic given the costs incurred for individual Class Members and the added burden on the Federal Court and VAC.
[107] I agree with the plaintiff. There is no indication in fact that the suggestions of Canada are superior. There may be alternatives, but it cannot be concluded on the evidence before this Court that the class action process is not superior.
[108] Given there are no reasonably available means that have been presented that would be superior to a class action, or put another way, that a class action is not the superior process, I can only conclude that the superior procedure for access to justice, behaviour modification and judicial economy is the class action proceeding.
Questions of Fact or Law Common Predominate
[109] Canada argues that the common issues will be overwhelmed by individual issues. The common issues taken together will not advance the objective of judicial economy and sufficiently advance the claims of class members to achieve access to justice.[^40]
[110] I do not agree that the common issues together will be dominated by individual claims and as such will not advance the class action. While there will be an aspect of individual claims, this, on its own, is not surprising in class actions. As Justice Perell stated in Hoy, there is an aspect to individual issues in all class actions. The question is whether these individual issues will be to such an extent that it will overwhelm the class action process and the common issues, in that the common issues as a whole do not move the plaintiff’s claim forward.
[111] On the sole issue of negligence, I do not envisage that it will. The self reporting aspect along with narrowing the Class Members to those veterans that are either in the Case Management Program that have experienced delay in the processing, or their benefits, will reduce the degree of individual investigation. This is not to say that with any class action proceeding there may well be some individuality of the claim especially when to concerns damages.
[112] Furthermore, as I have already stated, the objective of judicial economy and access to justice compels that a class action process is required. The burden on the judicial system to deal with the extensive number of individual claims along with the fact that some of these claims will not be extensive leans to the necessity of a class action over individual claimants.
[113] In the end, I am not persuaded by the position of Canada and do not conclude that individual issues would predominate over common issues.
E. Suitable Plaintiff
[114] Canada argues the plaintiff is not suitable or adequate as a representative plaintiff.[^41] Canada argues that the plaintiff is not suitable or adequate because he is not a member of the class asserting claims in that he does not have a claim that is genuinely representative of the members of the class or that is capable of asserting a claim on behalf of the class members. Canada argues that there is no evidence that the plaintiff experienced any delays in processing his claims, and further that the limitation date has expired.
[115] First, there is evidence of at least one occasion where the plaintiff’s claim was delayed in processing. This was conceded by Canada in submissions. The plaintiff has deposed that he has more than one disability benefits claim delayed. Even more, there is ample evidence on the plaintiff’s history that he has the capability of asserting a claim on behalf of the class members against the defendant.
[116] On the litigation plan, it will have to be revised given my findings on the certified causes of action.
[117] Subject to my decision on limitation date below, the plaintiff meets the criterion.
Limitation Date
[118] Canada put forth a position that the plaintiff’s amputation claim surpasses the Ontario limitation date of two years.[^42]
[119] The plaintiff replies by arguing that the limitation act that applies is the Crown Liability and Proceedings Act,[^43] with a six-year limitation period. The plaintiff directs the Court to the Supreme Court of Canada decision of Markevich v. Canada,[^44] where the Court determined that s. 32 as a general application “presumptively applies on a residual basis to all Crown proceedings. The breadth of the provision’s application can be narrowed only by an Act of Parliament that has “otherwise provided”, either expressly or impliedly, for limitation periods.”[^45]
[120] Further, the plaintiff argues that the causes of action of the plaintiff are continuous and as such the commencement date of the limitation period has not started until the plaintiff knows or ought to have known the facts that give rise to a cause of action.[^46] Thus, the plaintiff submits that be it either the six year period or the discoverability by the plaintiff of the facts when he knew or ought to have know that an action arises, there is no breach of a limitation period.
[121] On the record before me, I am not inclined to make a determination on which limitation act applies, federal or provincial. Nor on the date of discoverability of the plaintiff for which the limitation date starts to run, or how that date falls with the suspension of the limitation period during COVID times. The evidentiary record is not complete or fulsome on this issue.
[122] Consequently, I make no determination one way or another whether there is a limitation date issue and how this issue affects this class proceeding. I leave the adjudication of that issue for another day, once pleadings have closed.
Conclusion
[123] Based on the reasons above and the qualifications and findings in the reasons above, including the condition to amend the class definition, the plaintiff’s motion for certification is granted.
Costs
[124] Pursuant to my Order at the end of submissions, both parties filed their Bill of Costs. Given that success is divided, I reserve costs in the cause.
Justice P.W. Sutherland
Released: June 20, 2024
BARRIE COURT FILE NO.: CV-22-208-00CP
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Andrew Knisley
Plaintiff
– and –
Attorney General of Canada
Defendant
DECISION ON MOTION for Certification of Class Action
Justice P.W. Sutherland
Released: June 20, 2024
[^1]: I wish to acknowledge and thank our law clerk, Conor Wickham, for his assistance.
[^2]: S.O. 1992, c. 6.
[^3]: The Statement of Claim has been amended several times and the pleading used for this motion is the Fresh as Amended Statement of Claim, amended on April 26, 2024.
[^4]: Department of Veterans Affairs Act, RSC, 1985, c V-1, s 4.
[^5]: See: Department of Veterans Affairs Act, note 3; Veterans Well-being Act, SC 2005, c 21 (formerly named the Canadian Forces Members and Veterans Re-establishment Act); Veterans Well-being Regulations, SOR/2006-50 (formerly named the Canadian Forces Members and Veterans Re-establishment Regulations); Veterans Health Care Regulations, SOR/90-594; Royal Canadian Mounted Police Pension Continuation Act, RSC 1970, c R-10; Royal Canadian Mounted Police Superannuation Act, RSC 1985, c R-11. For the purposes of this motion, RCMP are not included for they do not form part of the Class Members.
[^6]: These recommendations were published in the Reports of the Auditor General of Canada to the Parliament of Canada-Processing Disability Benefits for Veterans-2022. Its conclusion in the Report, the Auditor General stated: “We concluded that although Veterans Affairs Canada implemented initiatives to improve the processing of disability benefit applications, its actions did not reduce overall wait times for eligible veterans. The department was still a long way from meeting its service standard. Implementation of initiatives was slow. Data to measure improvements was lacking. Both the funding and almost half of the employees on the team responsible for processing applications were temporary. As a result, veterans waited too long to receive benefits to support their physical and mental health and their families’ overall well-being.”
[^7]: Hollick v. Toronto (City), 2001 SCC 68, [2001] 3 S.C.R. 158, at para. 16; see also Canadian Imperial Bank of Commerce v. Green, 2015 SCC 60, [2015] 3 S.C.R. 801, at para. 49; Pro-Sys Consultants Ltd. v. Microsoft Corporation, 2013 SCC 57, [2013] 3 S.C.R. 477, at para. 99.
[^8]: Western Canadian Shopping Centres v. Dutton, 2001 SCC 46, [2001] 2 S.C.R. 534, at paras. 14-15; Grozelle v. Corby Spirit and Wine Limited, 2023 ONSC 7212, [2023] O.J. No. 5708, at para. 34; Bigeagle v. His Majesty the King, 2023 FCA 128, [2023] F.C.J. No. 750, at para. 22.
[^9]: Gjonaj v. Ontario Lottery and Gaming Corporation, 2018 ONSC 2404, [2018] O.J. No. 2155, at para. 6; Abbasbayli v. Fiera Foods Company, 2021 ONCA 95, [2018] O.J. No. 2155, at para. 20.
[^10]: Operation Dismantle v. The Queen, 1985 CanLII 74 (SCC), [1985] 1 S.C.R. 441, at para. 14.
[^11]: Hollick, note 7, at para. 15; Bigeagle, note 8.
[^12]: Bigeagle, note 8.
[^13]: During argument, the plaintiff withdrew its cause of action under s. 15(1) of the Charter.
[^14]: Leroux v. Ontario, 2023 ONCA 314, [2023] O.J. No. 2027.
[^15]: Carter v. Canada Attorney General, 2015 SCC 5, [2015] 1 S.C.R. 331, at para. 64.
[^16]: Ibid, at para. 81.
[^17]: Robertson v. Ontario, 2024 ONCA 86, [2024] O.J. No. 537, at paras. 73-76; affirming 2022 ONSC 5127.
[^18]: 2011 SCC 24, [2011] 2 S.C.R. 261, at para. 44.
[^19]: Bruyea v. Canada, 2022 FC 1409, [2022] F.C.J. No. 1456, at para. 174.
[^20]: 1978 CanLII 2084 (FC), [1978] F.C.J. No. 1122, at para. 53.
[^21]: 2016 FC 467, [2016] F.C.J. No. 458.
[^22]: Copper v. Hobart, 2001 SCC 79, [2001] 3 S.C.R. 537, at paras, 30-39; Flying E Ranche Ltd. v. Canada (Attorney General), 2022 ONSC 601, [2022] O.J. No. 474, at paras. 549-551.
[^23]: 2011 SCC 42, [2011] S.C.J. No. 42, at paras. 44-47.
[^24]: Wareham v. Ontario (Minister of Community & Social Services), 2008 CanLII 1179 (ON SC), [2008] O.J. No. 166 (Ont. S.C.), at paras. 22-25, (rev’d in part on other grounds, 2009 ONCA 771).
[^25]: Nelson (City) v. Marchi, 2021 SCC 41, [2021] S.C.J. No. 41, at paras. 62-65.
[^26]: Queen v. Cognos Inc., 1993 CanLII 146 (SCC), [1993]1 S.C.R. 87; Hercules Managements Ltd. v. Ernst & Young, 1997 CanLII 345 (SCC), [1997] 2 S.C.R. 165 paras. 23-30; Doumouras v. Chander, 2019 ONSC 6056, [2019] O.J. No. 5322, at para. 25.
[^27]: 1688782 Ontario Inc. v. Maple Leaf Foods Inc., 2020 SCC 35, [2020] 3 S.C.R. 504, at para. 40.
[^28]: Hoy v. Expedia Group Inc., 2022 ONSC 6650, 2022 OSNC 6650, [2022] O.J. No. 5384, at paras 215-216.
[^29]: Rumley v. British Columbia, 2001 SCC 69, [2001] 3 S.C.R. 184; Boulanger v. Johnson & Johnson Corporation, 2007 CanLII 735 (ON SC), [2007] O.J. No. 179 (Ont. S.C.), at para. 48.
[^30]: Boulanger, note 28, at para. 61; Anderson v. St. Jude Medical Inc, 2003 CanLII 5686 (ON SC), [2003] O.J. No. 3556 (Ont. S.C.).
[^31]: Hollick, note 7, at para. 21.
[^32]: This delay as proposed by the plaintiff are applications that do not meet the service standard of 16 weeks.
[^33]: Hoy v. Expedia Group Inc. 2022 ONSC 6650, [2022] O.J. No. 5384, at paras. 226-227.
[^34]: Hoy, note 33, at para. 230.
[^35]: Bennett v. Hydro One Inc., 2018 ONSC 7741, [2018] O.J. No. 6847 (Div. Ct.), at para. 23.
[^36]: Bennett v. Hydro One Inc., 2017 ONSC 7065, [2017] O.J. No. 6211, at paras. 82-83.
[^37]: Hollick, note 7, para. 27.
[^38]: Bayens v. Kincross Gold Corporation, 2014 ONCA 901, [2014] O.J. No. 6070, at para. 122.
[^39]: Fresh as Amended Factum of the Plaintiff, para. 130.
[^40]: See: Banman v. Ontario, 2023 ONSC 6187, [2023] O.J. No. 4867, at paras. 321-322.
[^41]: Banman, note 40, at para. 365.
[^42]: Limitation Act, 2002, SO 2002, c. 24, Sched B, s. 4.
[^43]: RSC 1985, c. C-50. S. 32.
[^44]: 2003 SCC 9, [2003] 1 S.C.R. 94.
[^45]: Ibid., at para. 11.
[^46]: Limitation Act, 2022, note 42, s. 6; and Canada Trust Co. v. Rafuse, 1986 CanLII 29 (SCC), [1986] 2 S.C.R. 147, at para. 77.