Docket:
T-1542-12
Citation: 2013 FC 1213
Ottawa, Ontario, December 4, 2013
PRESENT: The
Honourable Mr. Justice Harrington
PROPOSED
CLASS PROCEEDING
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BETWEEN:
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CHIEF SHANE GOTTFRIEDSON,
ON HIS OWN BEHALF AND ON BEHALF OF ALL THE MEMBERS OF THE
TK’EMLÚPS TE SECWÉPEMC INDIAN BAND AND THE TK’EMLÚPS TE SECWÉPEMC INDIAN
BAND,
CHIEF GARRY FESCHUK, ON HIS OWN BEHALF AND ON BEHALF OF ALL
MEMBERS OF THE SECHELT INDIAN BAND AND THE SECHELT INDIAN BAND,VIOLET
CATHERINE GOTTFRIEDSON, DOREEN LOUISE SEYMOUR,
CHARLOTTE ANNE VICTORINE GILBERT, VICTOR FRASER, DIENA MARIE
JULES, AMANDA DEANNE BIG SORREL HORSE, DARLENE MATILDA BULPIT, FREDERICK
JOHNSON, ABIGAIL MARGARET AUGUST,
SHELLY NADINE HOEHNE, DAPHNE PAUL, AARON JOE AND RITA POULSEN
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Plaintiffs
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and
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HER MAJESTY THE QUEEN
IN RIGHT OF CANADA
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Defendant
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and
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THE ORDER OF THE OBLATES OF MARY IMMACULATE IN THE PROVINCE OF
BRITISH COLUMBIA, THE ROMAN CATHOLIC ARCHBISHOP OF VANCOUVER, THE ROMAN
CATHOLIC BISHOP OF KAMLOOPS, THE SISTERS OF INSTRUCTION OF THE CHILD JESUS,
AND THE SISTERS OF SAINT ANN
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Third Parties
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REASONS FOR ORDER AND ORDER
[1]
Chief Garry Feschuk and the other plaintiffs
have sued Her Majesty the Queen, and Her Majesty alone, for harm they allegedly
suffered as a result of Canada’s Indian Residential Schools Policy. They
say they were deprived of their language as well as their culture and suffered
social damage and irreparable harm. For the ease of reference, the defendant is
referred to as “Canada”.
[2]
Canada, in turn, seeks
contribution and indemnity from the third parties whom it says were responsible
for supervision, control and maintenance at the two Residential Schools
currently identified in the action, the Kamloops Indian Residential School and the Sechelt Indian Residential School.
[3]
Before me now is a motion by the third parties,
to whom I shall refer, from time to time, as the Religious Orders, to have the
action against them struck on the basis that even if the allegations therein
were true, Canada has no claim against them as the plaintiffs only seek redress
against Canada severally, that is to the extent it is liable to them and unable
to flow that liability through to third parties in whole or in part by way of
contribution or indemnity. Their motion is supported by the plaintiffs.
[4]
In my opinion, Canada has no cause of action
against the Religious Orders, and there is no reason to keep them in.
Therefore, I shall strike the third party claim without leave to amend.
[5]
The cornerstone of the motion is rule 221 of the
Federal Courts Rules which provides that the Court may, at any time,
order that a pleading be struck out with or without leave to amend if, among
other things, it discloses no reasonable cause of action. There is a heavy
burden upon the moving party because, as the Supreme Court held in Hunt v
Carey Canada Inc., [1990] 2 S.C.R. 959, [1990] SCJ No 93
(QL), a party will not be “driven from the judgment seat” unless it is
“plain and obvious” that the pleading discloses no cause of action or defence
as the case may be.
[6]
More recently, in R v Imperial Tobacco Canada
Ltd., 2011 SCC 42, [2011] 3 S.C.R. 45, [2011] SCJ No. 42
(QL),
the Supreme Court explained at paragraphs 19 and
20 why pleadings with no chance of success should be struck. It weeds out
hopeless claims and ensures that those that have some chance of success go to
trial:
[19] The power
to strike out claims that have no reasonable prospect of success is a valuable
housekeeping measure essential to effective and fair litigation. It unclutters
the proceedings, weeding out the hopeless claims and ensuring that those that
have some chance of success go on to trial.
[20] This
promotes two goods — efficiency in the conduct of the litigation and correct
results. Striking out claims that have no reasonable prospect of success promotes
litigation efficiency, reducing time and cost. The litigants can focus on
serious claims, without devoting days and sometimes weeks of evidence and
argument to claims that are in any event hopeless. The same applies to judges
and juries, whose attention is focused where it should be — on claims that have
a reasonable chance of success. The efficiency gained by weeding out
unmeritorious claims in turn contributes to better justice. The more the
evidence and arguments are trained on the real issues, the more likely it is
that the trial process will successfully come to grips with the parties’
respective positions on those issues and the merits of the case.
I. The
History of the Case
[7]
As this is a proposed class action, our rules
call for immediate case management. I was appointed case manager along with
Prothonotary Lafrenière.
[8]
At an early case management conference, Canada announced its intention to seek a stay of the action on the ground that it intended
to take third party proceedings against the Religious Orders, but could not do
so in the Federal Court, which lacked jurisdiction. Section 50.1 of the Federal
Courts Act calls for a mandatory stay in such circumstances.
[9]
In the event that a stay was not granted, the
parties also agreed to a timetable leading up to a motion for certification.
The timetable calls for filing of the plaintiffs’ affidavits, which has now
been done, and approximately a five-month delay for Canada to file its affidavits
in response. This delay, as mutually proposed by the parties, is not
unreasonable given that the Kamloops Indian Residential School was established
in or about 1890, and the Sechelt Indian Residential School in or about 1904.
The allegations in the pleadings to date indicate that the relationship among the
Bands, Canada and the Religious Orders was lengthy and complex, to say the
least. The certification hearing is tentatively scheduled for next October. The
plaintiffs and defendants also agreed that a statement of defence need not be
filed before the decision on the certification motion.
[10]
I directed that the proposed third parties be
given notice of Canada’s stay motion, so that the order would not be ex
parte against them. They fully participated. By order dated 24 May 2013,
I dismissed Canada’s motion. My reasons are reported at 2013 FC 546. Canada has appealed that order, but did not seek a stay of the timetable.
[11]
In the meantime, the plaintiffs amended their
statement of claim to resolve any possible ambiguity as to their intentions to seek
redress from Canada and Canada alone.
[12]
Paragraph 80 of the Amended Statement of Claim
reads:
Additionally, the
Plaintiffs hold Canada solely responsible for the creation and implementation
of the Residential Schools Policy and, furthermore:
a.
The Plaintiffs expressly waive any and all
rights they may possess to recover from Canada, or any other party, any portion
of the Plaintiffs’ loss that may be attributable to the fault or liability of
any third-party and for which Canada might reasonable be entitled to claim from
any one or more third-party for contribution, indemnity or an apportionment at
common law, in equity, or pursuant to the British Columbia Negligence Act,
R.S.B.C. 1996, c. 333, as amended; and
b.
The Plaintiffs will not seek to recover from any
party, other than Canada, any portion of their losses which have been claimed,
or could have been claimed, against any third-parties.
[13]
Nevertheless, Canada filed a third party claim
against the Religious Orders for contribution and indemnity for any claim or
amount to which it is found to be liable to the plaintiffs.
[14]
The Religious Orders have advanced a number of
reasons why the third party claim should be struck, such as time bar and
fatally defective pleadings with respect to breach of contract or trust or
fiduciary duty, or negligence. It is not necessary to consider these
allegations. My decision rests on section 80 of the Amended Statement of Claim,
and peripheral amendments to the original statement of claim which constitute a
waiver of such claim the plaintiffs may otherwise have had against the Religious
Orders.
[15]
Their case rests on three decisions, in
chronological order: British Columbia Ferry Corp v T&N plc, 65 BCAC 118, [1996]
4 WWR 161, [1995] BCJ No 2116 (QL) a decision of the
British Columbia Court of Appeal; Taylor v Canada (Health), 2009 ONCA
487, 309 DLR (4th) 400, [2009] OJ No 2490 (QL), a decision of the Ontario Court
of Appeal; and Sable Offshore Energy Inc v Ameron International Corp,
2013 SCC 37, [2013] SCJ No 37 (QL).
[16]
Canada advances several
grounds why the motion should be dismissed, at least at this stage.
a.
the motions to strike are premature at this
early stage before the class and claim are fully defined;
b.
it is not plain and obvious on the pleadings
that the third party claim does not disclose a reasonable cause of action;
c.
the Religious Orders are necessary parties to
the litigation;
d.
its defence would be prejudiced if the third
party claim were struck; and
e.
the Religious Orders should not be released from
the litigation as a matter of public policy.
[17]
In British Columbia Ferry Corp v T&N plc,
the plaintiffs took action in negligence claiming damages arising from the fact
that the defendants had allegedly negligently manufactured asbestos products
and failed to warn the plaintiffs of its dangerous properties. As a result, a
number of ships were rendered unsafe.
[18]
The defendants, in turn, claimed indemnity from
various third parties.
[19]
Subsequently, the plaintiff and the third
parties entered into agreements whereby the plaintiff waived any right to recover
from the defendants any portion of the loss which the Court might attribute to
fault on the part of any of the third parties. The third parties then moved to
have the contribution and indemnity claims against them struck. They succeeded
in first instance. The only issue in appeal was the Court’s discretion to grant
declaratory relief. The question was whether the third party proceedings could
be continued for purely procedural purposes.
[20]
Mr. Justice Wood, speaking for the British
Columbia Court of Appeal, was of the general view that actions should not
continue for purely procedural relief, but there would be rare instances where
declaratory relief should be granted notwithstanding that it would be purely a
point of procedure. He went on to say at paragraph 30:
In my view this is
just such a case. While it is true to say, as did the judge below, that the
suit between the plaintiffs and the defendants will require a determination of
the fault of the defendants limited as it may be by the fault, if any, of other
persons or companies, the fact is that unless those others are joined as
parties the ability of the defendants to demonstrate such fault on their part
will be adversely affected - perhaps severely so - by the defendants' inability
to invoke those procedures under the Rules designed to enhance the ability of
one party to an action to prove its case against another. One has only to
consider the importance to the process of proof of such procedures as the right
of discovery, the notice to admit and the ability to call parties as adverse
witnesses, to realize that there will be circumstances in which the need to
resort to such procedures will meet the expanded definition given to the term
"relief" by Lord Justice Bankes in the Guaranty Trust Company of New
York case.
[21]
He added at paragraph 31:
It is important to
keep in mind that the defendants had a perfect right to bring third party
proceedings against the respondents, based on the allegations of fault
attributed to them in the Third Party Notices, for the purpose of seeking
contribution or indemnity in the event that the plaintiffs succeed in proving
some or all of their claims against the defendants.
[22]
While it may well be that Canada was entitled to institute third party proceedings on the original statement of claim,
the proceedings were actually taken in the face of section 80 of the Amended
Statement of Claim.
[23]
In Taylor, a class action was instituted
in which it was alleged that the plaintiff suffered injuries as a result of the
surgical implantation of a device in her jaw. She only sued Her Majesty based
on alleged negligent regulation of the devices by Health Canada. Her Majesty, in turn, instituted third party proceedings against the hospital and the
individual surgeon involved.
[24]
The statement of claim was amended so that Ms.
Taylor only sought from Health Canada “those damages that are attributable to
its proportionate degree of fault”. The third parties then moved, under the Ontario
Rules of Civil Procedure, to dismiss the third party claim on the grounds
that it disclosed no reasonable cause of action. The motion was granted in
first instance and in appeal.
[25]
Assuming joint and several liability, Mr.
Justice Laskin pointed out that if only one defendant is sued, it would be 100%
liable to the plaintiff even if it were only, say, 20% at fault. It would then
be entitled to a statutory right of apportionment by taking third party
proceedings under the Ontario Negligence Act. He went on to say, at
paragraph 20, that contribution rights only arise where the defendant is
required to pay more than its proportionate share of a plaintiff’s damages:
In other words, she
is not seeking all of her damages from Health Canada; she seeks only the
portion of her damages attributable to Health Canada’s neglect and not the
portion of her damages that may be attributable to the neglect of the doctor or
the hospital.
Consequently,
the apportion provisions of the Act were irrelevant.
[26]
He added at paragraph 22:
[…] because Ms.
Taylor has limited her claim to those damages attributable to Health Canada's
fault, Health Canada can have no claim over against the doctor or the hospital
for the damages claimed by Ms. Taylor and the other class members.
[27]
Furthermore, the Court may apportion fault
against a person who is not a party to the proceedings. He added that:
“Permitting apportionment without insisting that they be parties will mean
fewer parties at trial, a shorter trial and reduced costs.” I agree.
[28]
In the Taylor appeal, Her Majesty raised for
the first time the point that in any event She should be at least entitled to
production of documents and to examine each of the putative third parties on
discovery. That question was referred back to the trial judge.
[29]
In this particular case, the third parties have
undertaken to produce documents and to make representatives available for
discovery.
[30]
The plaintiffs say that this undertaking is
unnecessary as the Federal Courts Rules give me all the discretion I
need - discretion which I have already indicated I would exercise in favour of Canada
should the need arise. Pursuant to rule 233, the Court may order production of
documents from non-parties, and rule 238 provides that a non-party, with leave,
may be examined for discovery.
[31]
The third case strongly relied upon by the Religious
Orders is Sable Offshore Energy Inc v Ameron International Corp, 2013
SCC 37. This case dealt with settlement privilege. Sable sued a number of
defendants who had allegedly supplied it with defective paint which did not
prevent corrosion of its offshore structures. It also sued contractors and
applicators who had prepared surfaces and applied that paint. Sable then
entered into what are called “Pierringer” agreements with some of the
defendants. Its action was discontinued against them but continued against the
non-settling defendants.
[32]
Pierringer agreements, named after a Wisconsin case, allow a defendant to settle leaving the remaining defendants only responsible
for the loss they actually caused. The issue before the Court was whether the
amounts of those settlements should be disclosed prior to judgment. The Court
held that the amounts of the settlements were covered by settlement privilege.
[33]
Speaking for the Court, Madam Justice Abella
noted that settlements of lawsuits are to be favoured, and settlement privilege
promotes settlements. She emphasized the value of Pierringer agreements in the
settlement of multiparty litigation.
[34]
In Canada, such agreements include additional
protection for non-settling defendants such as requiring that they be given access
to the settling defendants’ evidence. Of course, after trial, if liability is
established, the amount of the settlements would be disclosed to the trial
judge so that a plaintiff would not be overcompensated.
[35]
Although there is no Pierringer agreement in
place in this case, the underlying philosophy remains relevant. Indeed, the
plaintiffs chose not to sue the Religious Orders.
[36]
While they were under no obligation to declare
why they had chosen not to sue the Religious Orders, the plaintiffs pointed out
that they have limited resources and want to spend their litigation money where
they think it would do the most good.
[37]
The Amended Statement of Claim is very carefully
crafted as it contemplates the possibility that the class might be expanded to include
others who were not involved with the Kamloops or Sechelt Indian Residential Schools. Those schools may not have been administered by the Religious Orders
currently named as third parties. Indeed, in the Ontario case of Baxter v
Canada (Attorney General), 2005 OTC 391, [2005] OJ No 2165 (QL), there were
well-over 100 third parties represented by 15 different sets of counsel. So
far, in the case at bar, the third parties are only represented by three sets
of counsel.
[38]
Having come to the conclusion that Canada has no cause of action against the Religious Orders, I have to decide if,
nevertheless, they should remain as third parties.
II. Canada’s Case
A. The
Motion is Premature
[39]
In Baxter, above, and in many other
cases, it has been held that the certification motion should be heard promptly
and is normally given priority over other motions. One factor in Ontario is that the motion to certify should be brought on within 90 days. Rule 334.15 of Federal
Courts Rules provides that certification motions are returnable no later
than 90 days after the day on which the last statement of defence was filed. In
this particular case, at the parties’ request, and endorsed by the Court, the
statement of defence is not due until after the certification motion is
decided.
[40]
In Campbell v Canada (Attorney General),
2008 FC 353, [2008] FCJ No 456 (QL), Madam Justice Hansen of this Court, ruled
with respect to the scheduling of plaintiff’s certification motion and
defendant’s motion to strike. She pointed out that the Federal Courts Rules
do not cover the sequence in which certification and other motions should be
heard. Furthermore, rule 221 provides that a motion to strike out pleadings may
be brought at any time, and rule 334.11, within the certification rules,
provides that the general rules applicable to actions remain in place, except
if incompatible. In the context of that case, she held that the motion to
strike should be heard prior to the certification motion.
[41]
In this case, Canada had already moved to have
the action stayed, without suggesting that it should only be heard after the
certification motion.
[42]
In Momi v Canada (Minister of Citizenship and
Immigration), 2005 FC 1484, 283 FTR 143, [2005] FCJ No 1824 (QL), Her
Majesty moved at the outset under rule 221 to have the statement of claim in a
proposed class action struck. She succeeded in part.
[43]
In Cannon v Funds for Canada Foundation,
2010 ONSC 416, [2010] OJ No. 314 (QL), Mr. Justice Strathy,
as he then was, discussed the Court’s discretion in scheduling motions at
paragraph 15, as follows:
Without being
exhaustive, some of the factors that I consider relevant to the exercise of my
discretion include:
(a)
whether the motion will dispose of the entire proceeding or will
substantially narrow the issues to be determined;
(b)
the likelihood of delays and costs associated with the motion;
(c) whether
the outcome of the motion will promote settlement;
(d)
whether the motion could give rise to interlocutory appeals and delays that
would affect certification;
(e)
the interests of economy and judicial efficiency; and
(f)
generally, whether scheduling the motion in advance of certification would
promote the "fair and efficient determination" of the proceeding (s.
12).
[44]
The prime focus of the plaintiffs’ Amended Statement
of Claim is the Indian Residential Schools Policy itself, not abuses
that may have occurred in its implementation. Although damages are sought, the
various proposed classes seek declarations that Canada was in breach of
fiduciary, constitutionally-mandated, statutory and common law duties; that
Canada breached their aboriginal rights; that the obligatory attendance at the
residential schools intentionally inflicted mental distress; and that damages
should include amounts to cover the costs of restoring; and protecting and
preserving their linguistic and cultural heritage.
[45]
The plaintiffs who attended the residential
schools did so as day students and thus were not covered by the Indian
Residential Schools Settlement Agreement of 2006.
[46]
They rely strongly upon a Statement of
Reconciliation issued by Canada in 2008. As to the Residential Schools
Policy:
This system separated
many children from their families and communities and prevented them speaking
their own languages and from learning about their heritage and cultures. In the
word cases, it left legacies of personal pain and distress that continued to
reverberate in Aboriginal Communities to this date. […] The Government of
Canada acknowledges the role it played in the development and administration of
these schools.
[47]
In 2008, Prime Minister Harper acknowledged the
harm done by the Policy:
Two primary
objectives of the Residential Schools System were to remove and isolate
children from the influence of their homes, families, traditions and cultures,
and to assimilate them into the dominant culture. […] Indeed, some sought, as
it was infamously said, “to kill the Indian in the child”.
[48]
All of this is simply to say that the focus of
the Amended Statement of Claim is on the Policy, not abuses in its
implementation which may have occurred in certain instances.
[49]
To return to Mr. Justice Strathy’s
non-exhaustive list of factors, the motion will not dispose of the principal
action, but it will dispose of the third party proceedings. It should also
narrow the scope of the inquiry in the principal action.
[50]
There may well be delays associated with this
motion, as Canada may choose to appeal. However, that appeal may well be
disposed of before the certification motion. If the Religious Orders are kept
in and if they take issue with Canada’s affidavits, they may wish to file their
own in reply. This may well lead to cross-examinations involving five sets of
lawyers rather than just two, and might well require a rescheduling of the
certification motion.
[51]
Striking the third party proceedings may well
promote settlement in that the number of parties involved will be significantly
reduced.
[52]
In my view, making the decision now to strike
the third party proceedings is in the interests of judicial economy and
efficiency and will promote the fair and efficient determination of the
proceeding.
B. The
Plain and Obvious Test
[53]
It is plain and obvious that Canada does not have a cause of action. It submits that come the certification hearing,
other bands and individuals may seek standing but might oppose the waiver of
liability which might ultimately fall upon the Religious Orders. However, it is
the plaintiffs who control their process. The Amended Statement of Claim makes
it clear that should other plaintiffs be added who were involved with other
Indian residential schools, they would have to do so on the basis of the
waiver. Furthermore, any disgruntled member of the classes currently proposed,
or who may be proposed in the future, may opt out.
C. Are
the Religious Orders Necessary Parties?
[54]
It is clear from both BC Ferries and Taylor that the Court may make a declaration as to the liability of non-parties.
Furthermore, Canada will have access to the third parties’ documents and will
be entitled to examine them for discovery. Consequently, they are not necessary
parties. In the circumstances, Canada’s defence will not be prejudiced.
D. Public
Policy
[55]
Canada argues that the
Religious Orders should not be “left off the hook”. This would put the
administration of justice in disrepute. I do not agree. The plaintiffs have the
right to spend their litigation dollars as they choose. They acknowledge the
risk that they may not be made whole as they seek recourse against Canada severally, not jointly with others. However, any fair minded person looking at the
pleadings will appreciate the complications should third parties, who cannot be
condemned in damages, remain in the suit. Furthermore, those plaintiffs who may
have suffered sexual abuse at the hands of those for whom the third parties may
be vicariously liable, were entitled to file claims under the Independent
Assessment Process provided for in the 2006 Indian Residential Schools
Settlement Agreement.
[56]
Finally, many of the plaintiffs are elderly. We
should get on with it.
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