Steele v. Leduc (City), 2023 ABKB 460

Court of King’s Bench of Alberta Citation: Steele v. Leduc (City), 2023 ABKB 460 Date: 20230803 Docket: 2201 02402 Registry: Calgary Between: Christa Steele and Mindy Smith Plaintiffs - and - The City of Leduc Defendant _______________________________________________________ Reasons for Decision of the Honourable Justice J. C. Price _______________________________________________________ I. Overview [ 1 ] With consent of the City of Leduc, Christa Steele and Mindy Smith applied to certify their claim as a class action pursuant to the Class Proceedings Act , SA 2003, c C-16.5 ( CPA ).

Furthermore, the parties jointly requested that I approve a settlement agreement that they reached that was signed on June 20, 2023 (Settlement Agreement). [ 2 ] The parties appeared before me on July 4, 2023 for the hearing of the matter. After reviewing the Joint Brief for Certification and Settlement Approval filed on June 29, 2023, and the Affidavit of Faye Maguire filed in support of the Application on June 22, 2023, and after hearing oral submissions of Counsel for both parties, I gave a brief oral decision certifying the claim as a class proceeding and approving the Settlement Agreement.

As indicated at the hearing on July 4, 2023, my reasons would follow in a published written decision. These are my reasons for decision. [ 3 ] By way of brief background, on February 24, 2022, Steele and Smith filed a Statement of Claim (Claim) proposing a class action against Leduc alleging systemic negligence and breaches of

Section 15 of the Charter at Leduc Fire Services (Fire Department). On March 14, 2022 the application for case management under Division 2,

Part 4 of the Alberta Rules of Court was granted and I was appointed as the Case Management Justice. On May 9, 2022, the Claim was amended to add employees of Leduc to the class and to add claims for breach of

section 7 of the Charter and for defamation. The Claim was further amended on January 13, 2023. Hereinafter the Claim as amended on May 9, 2022 and again on January 13, 2023 is referred to as the “Claim”. [ 4 ] The parties first appeared before me on May 16, 2022 for case management. At our initial meeting, the Plaintiffs proposed a

schedule for their application for certification and for the Defendant’s cross-application to strike, as well I was informed of the Plaintiffs proposed application to compel the Defendant to file a Statement of Defence. The Plaintiff’s application for certification was filed on June 30, 2022. The Plaintiffs application to compel a Statement of Defence was also filed and subsequently was heard by me on July 21, 2022 and my decision rendered on July 22, 2022. On September 12, 2022 a further case management meeting was held. An update on the litigation was provided by Counsel for the parties.

By this time several affidavits had been filed in support of the certification application and several cross-examinations conducted. New deadlines were set and the certification application and cross-application to strike was scheduled to be heard on February 14, and 15, 2023. A further case management meeting was held on November 14, 2022 where a number of updates were given and new deadlines proposed in preparation for the hearing scheduled for February 14, and 15, 2023.

I was also informed that there would be an application by the Plaintiffs to compel answers to questions and undertakings that were objected to by the Defendant. The Plaintiffs application to compel was heard by me on December 6, 2022 and my decision rendered on December 22, 2022. On January 3, 2023 a further case management meeting was held. At this meeting the parties proposed adjourning

the certification application and cross-application to strike to a later date. The parties joint request was granted and the hearing date moved to May 3, and 4, 2023. By letter dated April 17, 2023 submitted jointly by Counsel for the parties, I was advised that the parties were engaged in “fruitful settlement discussions” and were “hopeful that a resolution of this matter may be reached”. A request to reschedule the hearing date to a later date and to

schedule a case management meeting for May 3, 2023 in lieu of the hearing was granted. Subsequently the parties advised that settlement was likely and wanted to set a date for the hearing of the within Application to certify the Claim by consent and to approve the Settlement Agreement. This Application was then set by consent and agreement of the parties to be heard in person at the Edmonton Law Courts on July 4, 2023. [ 5 ] With the assistance of the Honorable Kristine Eidsvik KC as mediator, the parties resolved the dispute. On June 20, 2023 the parties signed the Settlement Agreement.

Notice of the settlement reached and of the hearing date to certify the Claim and to approve the Settlement Agreement was announced and sent to interested parties on or about June 21, 2023. [ 6 ] In the Settlement Agreement, Leduc recognizes and acknowledges that gender discrimination, sexual harassment, sexual misconduct, and sexual assault have no place at Leduc or the Fire Department. [ 7 ] It is further acknowledged that some members of the Fire Department and employees of Leduc have suffered gender discrimination, sexual harassment, sexual misconduct, and sexual assault in connection with their employment as firefighters (Sexual Misconduct).

It is also acknowledged that the Sexual Misconduct has had harmful effects on the class members. [ 8 ] Steele and Smith, who are firefighters, claimed on their own behalf and on behalf of all class members that have suffered harm because of the Sexual Misconduct. [ 9 ] The parties express in the Settlement Agreement their wish to enter a settlement to provide compensation to those who suffered from the Sexual Misconduct. [ 10 ] The parties have agreed to settle the Claim subject to whether I grant the certification of the class action and if I approve the Settlement Agreement they have reached. [ 11 ] The stated purpose of the Settlement Agreement is to provide compensation for the effects of the Sexual Misconduct and to resolve the Claim.

If approved, the settlement will provide compensation for general damages arising from the negligence and the Charter damages arising from the

Section 7 and 15 Charter claims advanced, and for defamation. [ 12 ] The issues in the Application for certification of the Claim and for approval of the settlement are: (

a) Should the proposed class proceeding be certified?; (

b) Should the Settlement Agreement be approved?; (

c) Should the payment of honoraria be approved?; and (

d) Should the procedure for fees and disbursements of class counsel be approved? II. Analysis A. Should the proposed class proceeding be certified? [ 13 ] Although the parties consent to the certification of the Claim as a class proceeding, before the Claim can be certified as a class proceeding the parties must still satisfy the Court of each of the following criteria:

a) the pleadings disclose a cause of action;

b) there is an identifiable class of 2 or more persons;

c) the claims of the prospective class members raise a common issue;

d) the class proceeding would be a preferable procedure for the fair and efficient resolution of the common issues; and

e) there is a person eligible to be appointed as a representative who in my opinion will fairly and adequately represent the interests of the class without a conflict of interest and who has produced a workable litigation plan: CPA section 5(1) . [ 14 ] The focus of my analysis at the certification stage is not on the merits of the Claim, but rather on whether the Claim may be appropriately advanced as a class action.

In this case, because the parties negotiated a settlement of the Claim and have jointly moved to have the Claim certified, the threshold for satisfying the criteria for certification is lower and less rigorous: Heyder v Canada (Attorney General) , 2019 FC 1477 at paras 24 and 25 ( Heyder ). However, in any event, the analysis must still be done and each criteria considered and satisfied. [ 15 ] Considering the evidence on the record that is before me and the criteria that must be satisfied, I find that the Claim should be certified as a class proceeding for the following reasons: (

a) Having read the Claim and assuming the facts pleaded to be true, I find that the Claim as pled discloses the following reasonable causes of action: a

section 15 Charter claim; a

section 7 Charter claim; a claim for Negligence; and a claim for defamation. I further find that the material facts in support of the elements that need be proved in respect of each of the causes of action pled are sufficiently pleaded in the Claim. (

b) There is an identifiable class - “all female current and former employees who worked for Leduc between 2002 and the date of certification who allege that they were subject to discrimination, sexual misconduct, or sexual assault at Leduc” (Class Members). There were 9 women who provided affidavits stating that they were subject to discrimination, sexual misconduct, and/or sexual assault at Leduc in that time frame. I find that the Class Members as defined and identified meets the objective criteria of two or more persons. Accordingly, this element of the test for certification is satisfied.

(

c) The claims of the prospective Class Members raise common issues that focus on Leduc’s alleged misconduct. I find that the claims advanced share substantial common elements. Wherein each of the issues arise out of the Class Members being female and having worked at Leduc. (

d) Litigation of the claims advanced in this proceeding will undoubtedly be complex and expensive. I find that a class proceeding in this case that involves claims against systemic wrongs in the work place is the preferable procedure that will address the claims advanced as set out in the Claim. Furthermore, there is no evidence of any individual issues overwhelming the common issues. Rather, I find that resolution of the common issues will resolve the Claim.

Furthermore, there is no evidence that any prospective Class Members have commenced separate court actions against Leduc or have any interest in individually controlling the prosecution of separate actions. Also, the parties have jointly submitted to me that the Claim is the only proposed class proceeding being advanced on behalf of the Class Members in respect of the issues raised in the Claim. Accordingly, I have no concern that there will be duplication of efforts.

In the result, I find that proceeding by way of a class proceeding will promote judicial economy, avoid a multiplicity of proceedings and will promote access to justice. (

e) Lastly, there is no dispute that Steele and Smith who are the proposed representative plaintiffs, are eligible and appropriate. They have each sworn affidavits wherein they testify that they understand the duties and responsibilities that they would be undertaking as representative plaintiffs and are willing and able to do so. From my review, I find that they are fully committed to putting in the time necessary to fairly and adequately represent the Class Members.

Furthermore, each of Steele and Smith have testified as to the discrimination, sexual misconduct and sexual assault they have suffered while at Leduc. There is no evidence that either of them are unwilling or incapable of fulfilling the role and responsibilities of representative plaintiffs.

In the result, I find that based on the evidence before me, Steele and Smith will fairly and adequately represent the interests of the Class Members; have produced a plan for the class proceeding that sets out a workable method of advancing the proceeding on behalf of the Class Members and of notifying Class Members; and do not have in respect of the common issues, an interest that is in conflict with the interests of other prospective Class Members. [ 16 ] For all of the foregoing reasons, the criteria for certification has been met.

In the result, I hereby certify Action 2201-02402 commenced by Steele and Smith against Leduc as a class proceeding pursuant to section 5(1) of the CPA. B. Should the settlement agreement be approved? [ 17 ] The parties jointly seek approval of the Settlement Agreement pursuant to Division 3,

section 35 of the CPA which provides that a class proceeding may be settled only with the approval of the Court, and subject to any terms or conditions that the Court considers appropriate. [ 18 ] Counsel for the parties submitted that the Settlement Agreement in this case was modeled after the settlement in Heyder which involved similar allegations of discrimination, sexual misconduct, and sexual assault in a workplace. In Heyder , the Federal Court granted certification and approved the settlement. [ 19 ] In this case, the settlement reached by the parties provides for the following: (

a) Individual compensation between $10,000 and $285,000 for women that experienced discrimination, sexual misconduct, or sexual assault while working at Leduc; (

b) Individual compensation of $10,000 for the defamation claim to those Class Members that qualify; (

c) A claims process that is paper-based, confidential, non-adversarial and intended to be restorative in nature; (

d) An apology from Leduc to be read by the Mayor at a City Council meeting; (

e) The option of participating in a restorative engagement program for Class Members to share their experiences of sexual misconduct with a senior Leduc representative; (

f) The option of giving victim impact statements at a City Council meeting; (

g) Changes to policies and other measures addressing sexual misconduct at Leduc; (

h) An external review within four years to assess the progress of Leduc’s efforts to make its workplace free of discrimination, sexual misconduct, and sexual assault; and (

i) A release of Leduc from all proceedings, actions, and claims based on the matters asserted in the Claim. [ 20 ] The Settlement Agreement defines Class Members as follows: All female current and former employees who worked for Leduc between 2002 and the date of certification who allege that they were subject to discrimination, sexual misconduct, or sexual assault at Leduc. [ 21 ] For the settlement of the claim for defamation, the class is specifically those individuals whose testimony is described in the redacted Veritas Reports, namely: Mindy Smith, Christa Steele, Emily Montgomery, Tamara Osmack and Megan Wright. [ 22 ] The compensation grid for Class Members who meet the eligibility criteria under the Settlement Agreement is as follows.

Class Members may receive compensation under Category A, Category B1 or B2, and Category C, provided they meet the criteria for each category:

Category Compensation Amount / Harm Level A. Sexual harassment or gender based discrimination $10,000 B1. Targeted or ongoing or severe sexual harassment and/or sexual assault in the form of unwanted sexual touching Low Harm $10,000 Medium Harm $20,000 High Harm $30,000 B2. Sexual assault in the form of sexual attack or sexual activity where the Class Member did not consent or was unable to consent Low Harm $45,000 Medium Harm $60,000 High Harm $75,000 C.

Enhanced Payment – Class Members who suffer or suffered from PTSD or other diagnosed mental injuries, or physical injuries directly arising from sexual assault or sexual harassment Low Harm $90,000 Medium Harm $140,000 High Harm $200,000 [ 23 ] The Settlement Agreement provides for a paper-based, non-adversarial, and confidential claims process. Class Members will not be required to participate in an interview. However, they may request an interview in certain circumstances.

No claimant is required to testify in a court or undergo cross-examination or any questioning by an adverse party. [ 24 ] Like in Heyder , the claims process in this case is intended to prevent re-traumatization of Class Members who experienced sexual misconduct, by forgoing the need for oral testimony or cross-examination: Heyder at para 52 . [ 25 ] To make a claim for compensation, a Class Member must only complete an application form with the following information: (

a) confirmation that the claimant is a current or former employee of Leduc who experienced gender discrimination, sexual misconduct, or sexual assault; (

b) basic biographical information (e.g., name, date of birth, contact information, details of employment); (

c) for Compensation Category A, a short description of the harm sustained; (

d) for Compensation Category B, a description of the incidents and harm sustained; (

e) for Compensation Category C, copies of medical records demonstrating that the claimant suffered a diagnosed mental or physical injury, supported by additional information as needed; and (

f) an attestation before a commissioner for oaths. [ 26 ] Key features of the claims administration process include the following: (

a) the claims process is meant to be non-adversarial and restorative; (

b) claimants are presumed to be acting honestly and in good faith in completing their claim forms; (

c) claimants have 12 months to prepare and submit their claim forms, with a possible 60-day extension in exceptional circumstances; (

d) claimants are expected to provide details of their complaint and relevant biographical information, and are encouraged to provide all relevant documentation; (

e) claimants seeking compensation under Category C must provide medical records in support of the level of harm claimed, (

f) claimants seeking compensation must attest that the information in their application is true; (

g) the administrator must initially verify the identity of the claimant, that the information provided is complete, and whether the claimant has opted out; (

h) Class Counsel and counsel for Leduc will review the claim and attempt to agree on eligibility and the level of compensation; (

i) if Class Counsel and counsel for Leduc cannot agree, the claim will be provided to an independent third-party assessor to be determined; (

j) the administrator shall then inform the claimant of the decision; (

k) to request reconsideration by the assessor, claimants may submit a reconsideration form and any new relevant information; (

l) the assessor shall then issue a decision and inform the claimant; (

m) the decisions of the assessor and any reconsideration decisions are final and binding without recourse to the Court or another tribunal; and

(

n) compensation will be paid promptly after a decision is reached. [ 27 ] The following factors in my view weigh in favour of approving the Settlement Agreement: (

a) the significant compensation fund with a simple paper-based claims process. In particular, the compensation is significantly higher than the compensation provided in similar settlements for example in Heyder at para 45 . as seen in the comparison chart below: Category Compensation Amount / Harm Level Compensation Amount in Heyder A. Sexual harassment or gender based discrimination $10,000 $5,000 B1. Targeted or ongoing or severe sexual harassment and/or sexual assault in the form of unwanted sexual touching Low Harm $10,000 $5,000 Medium Harm $20,000 $10,000 High Harm $30,000 $20,000 B2.

Sexual assault in the form of sexual attack or sexual activity where the Class Member did not consent or was unable to consent Low Harm $45,000 $30,000 Medium Harm $60,000 $40,000 High Harm $75,000 $50,000 C. Enhanced Payment – Class Members who suffer or suffered from PTSD or other diagnosed mental injuries, or physical injuries directly arising from sexual assault or sexual harassment Low Harm $90,000 $50,000 Medium Harm $140,000 $75,000 (

b) the non-monetary benefits to the Class Members, including an apology, restorative engagement, policy changes, and other systemic measures at Leduc outside of the relief that this Court could grant at trial; (

c) the litigation risks faced by the Plaintiffs in a common issues trial means that success was not guaranteed and lengthy litigation and appeals regarding Leduc's jurisdictional and statutory defences were likely; and (

d) if the Plaintiffs were successful at trial, the Class Members would have had to engage in individual assessments, which would in my view be traumatic for many of them. [ 28 ] The parties also acknowledge that prosecuting the proposed class action through litigation and eventually a common issues trial, followed by appeals, carries risk: (

a) a certification order may not be granted; (

b) the parties will engage in prolonged litigation; (

c) the Court may conclude that it lacks jurisdiction over some or all Class Members; (

d) the asserted causes of action may be found not to be viable; (

e) liability may not be established; (

f) statutory limitation periods may bar some of the Class Members’ claims; (

g) proven damages may be similar to or less than the settlement amounts; and (

h) systemic change, reconciliation, commemorative, and healing initiatives are outside the jurisdiction of the courts to order. [ 29 ] Class Counsel estimates that if this matter were to proceed through litigation, it would take at least five years to resolve. [ 30 ] The Settlement Agreement provides the highest compensation in a class action that the parties are aware of for workplace sexual misconduct claims.

This coupled with the restorative and simple claims process and the avoidance of lengthy and risky litigation, makes this a fair and equitable settlement for the Class Members. [ 31 ] After the Settlement Agreement was announced on June 21, 2023, C ounsel sought to bring the proposed settlement to the attention of as many Class Members as possible prior to this hearing. This was done in a number of ways: (

a) Leduc sent email notifications of the proposed settlement to 646 current employees on June 21, 2023; (

b) the Notice of Settlement and Settlement Agreement were posted on the class action website at https://leducclassaction.com ; (

c) the Notice of Settlement and Settlement Agreement were sent to all women who had previously been in contact with Class Counsel about the case; and (

d) the proposed settlement received extensive media coverage.

[ 32 ] These methods appear to have been successful as Class Counsel have been contacted by several former employees who had not previously been in contact. Of those who have contacted Class Counsel, all potential Class Members have expressed support for the settlement. No Class Members have objected. [ 33 ] Without hesitation, I find that the settlement reached was negotiated at arm’s length and was recommended to the parties by experienced legal counsel.

That being said, having reviewed all of the terms of the Settlement Agreement including the release term and having reviewed all of the materials on the record before me, as well as having heard submissions of Counsel for the parties, I find that the settlement reached by the parties is fair, reasonable and in the bests interests of the Class Members. Accordingly, the Settlement Agreement is approved without any additional terms or conditions imposed by me. C.

Should the payment of honoraria be approved? [ 34 ] Honoraria is not uncommon, it is intended to recognize the representative plaintiffs who make additional contributions and sacrifices to advance the litigation on behalf of the class: Heyder at para 97 . [ 35 ] In this case Steele and Smith are the representative plaintiffs. They were compelled to divulge in detail intensely personal events that caused them significant harm. As this case attracted significant public interest, Steele and Smith as the representative plaintiffs were required to participate in media events to raise awareness of the Claim.

In addition, I note that in all case management meetings held with Counsel, one or both them were present. Managing this case as representative plaintiffs involved a significant time commitment by both of them. [ 36 ] The Settlement Agreement provides for a $10,000 honoraria payable to each of Steele and Smith who I find have made additional contributions and sacrifices that should be recognized. The amounts of the honoraria have been agreed to by the parties. I find the amount of the honoraria to be relatively modest. In the result, payment of the honoraria is approved. D.

Should the procedure for fees and disbursements of class counsel be approved? [ 37 ] In this case the parties have negotiated as part of the settlement that Leduc pay legal counsel for the Class Members (Class Counsel) solicitor-own-client fees and disbursements and that Class Counsel may subsequently apply to the Court for an increase to those fees: see

section 48 of the Settlement Agreement. [ 38 ] The legal fees are in addition to the compensation paid to Class Members, in other words, the legal fees are separate from the funds that will be paid to the Class Members. Legal fees will not be paid out of the funds payable to Class Members . There is no contingency fee arrangement in this case. I agree with counsel such a fee arrangement would be inappropriate in a case such as this involving the types of claims advanced. Rather, the legal fees that are to be paid by Leduc are for time and disbursements that have been incurred by Class Counsel.

These are normally paid by the client and if assessed would be payable in full providing the fees and disbursements are reasonable. [ 39 ] Considering the terms in the Settlement Agreement, the submissions of Counsel for the parties, and how Counsel and the parties have conducted themselves throughout, I am satisfied that Class Counsel has not been “bought off” nor will they have their obligations to the Class Members affected by being paid their solicitor-own-client fees: Adrian v Canada (Minister of Health) , 2007 ABQB 377 at para 29 .

In the result, I approve of the procedure for fees and disbursements of Class Counsel. III.

Summary [ 40 ] For the reasons set out herein, the Claim is hereby certified as a class proceeding and the Settlement Agreement is hereby approved. I commend Counsel and the parties for their professionalism and conduct throughout this matter and for resolving the dispute in an effective and efficient manner. [ 41 ] At the hearing of this matter on July 4, 2023, I made the following specific orders and signed the Order that was jointly proposed by Counsel: 1.

Action 2201-02402 commenced by Christa Steele and Mindy Smith against The City of Leduc is certified as a class proceeding pursuant to section 5(1) of the Class Proceedings Act , SA 2003, c C-16.5 ( CPA ); 2. The class is defined as all female current and former employees who worked for The City of Leduc between 2002 and the date of certification who allege that they were subject to discrimination, sexual misconduct, or sexual assault as Leduc employees from January 1, 2002 to present (the Class Period) (the Class); 3. Christa Steele and Mindy Smith are appointed as representative plaintiffs; 4.

The settlement of this Action as set out in the Settlement Agreement reached between the Parties as evidenced by their signatures signed on June 20 th , 2023, is approved. A copy of the Settlement Agreement is to be appended to my Order; 5. The Settlement Agreement and my Order are binding on the Parties and on every Class Member, unless they opt out on or before the expiry of the Opt Out Period, being September 4, 2023; 6.

The Parties to the Settlement Agreement may make non-substantive amendments to the Settlement Agreement, provided that each Party to the Settlement Agreement agrees in writing to any such amendments;

7. The Notice to Class Members of certification and the approval of the settlement of this Action shall be distributed in accordance with the Notice Program set out at paragraphs 4.1 and 4.2 of the Settlement Agreement; 8. Leduc shall pay the amounts required under the Settlement Agreement; 9. Leduc shall release to the Administrator and Assessor information and documents required by them or as otherwise required by the Settlement Agreement; 10. The representative plaintiffs, Christa Steele and Mindy Smith, are each awarded an honorarium of $10,000; 11. This Court shall retain continuing jurisdiction over the settlement and its implementation,

interpretation, and enforcement; and 12. There shall be no costs of the Application before me to certify the Claim as a class action and to approve the Settlement Agreement. Heard on July 4 th , 2023 at the City of Edmonton. Dated at the City of Calgary, Alberta this 3 rd day of August, 2023. J. C. Price J.C.K.B.A. Appearances: Robert Martz, Richard Steele, Sydney Black, and Alanna Wiercinski for the Representative Plaintiffs, Christa Steele and Mindy Smith George (Joe) F. Chivers for the Defendant, The City of Leduc