J.W. v. REO Law Corporation, 2019 SCC 20

SUPREME COURT OF CANADA Citation: J.W. v. Canada (Attorney General), 2019 SCC 20, [2019] 2 S.C.R. 224 Appeal Heard: October 10, 2018 Judgment Rendered: April 12, 2019 Docket: 37725 Between: J.W. and REO Law Corporation Appellants and Attorney General of Canada, Chief Adjudicator of the Indian Residential Schools Adjudication Secretariat and Assembly of First Nations Respondents - and - Independent Counsel and K.B. Interveners Coram: Wagner C.J. and Abella, Moldaver, Karakatsanis, Côté, Brown and Rowe JJ.

Reasons: (paras. 1 to 55) Abella J. (Wagner C.J. and Karakatsanis J. concurring) Concurring Reasons: (paras. 56 to 174) Côté J. (Moldaver J. concurring) Dissenting Reasons: (paras. 175 to 196) Brown J. (Rowe J. concurring) J.W . v. Canada (Attorney General), 2019 SCC 20, [2019] 2 S.C.R. 224

J.W. and REO Law Corporation Appellants v. Attorney General of Canada, Chief Adjudicator of the Indian Residential Schools Adjudication Secretariat and Assembly of First Nations Respondents and Independent Counsel and K.B. Interveners Indexed as: J.W. v. Canada (Attorney General) 2019 SCC 20 File No.: 37725. 2018: October 10; 2019: April 12.

Present: Wagner C.J. and Abella, Moldaver, Karakatsanis, Côté, Brown and Rowe JJ. on appeal from the court of appeal of manitoba Civil procedure — Class proceedings — Settlement — Administration and implementation — Settlement agreement resolving class actions brought by former Aboriginal students for harms suffered at residential schools — Agreement providing procedure for settling individual claims through adjudicative process — Whether courts can intervene in relation to adjudication decisions where internal review mechanisms exhausted — Appropriate scope of judicial recourse.

The Indian Residential Schools Settlement Agreement (“Agreement”) represents the negotiated settlement of thousands of individual and class action lawsuits relating to the operation of residential schools. Nine provincial and territorial superior courts approved the Agreement. The Agreement includes a procedure for settling individual claims through an adjudicative process — the Independent Assessment Process (“IAP”). The IAP describes which harms are compensable. The Agreement also includes a system of internal reviews. There is no right of appeal to the courts.

However, supervising judges from each province oversee the administration and implementation of the Agreement. W brought a claim for compensation in accordance with the IAP, alleging that an incident he suffered while attending a residential school constituted compensable sexual abuse within the meaning of the IAP. W’s claim was rejected by the initial adjudicator because, despite the fact that she believed W’s account of what transpired, she was not satisfied that the perpetrator acted with a sexual purpose, which she concluded was an essential element in order to demonstrate that the incident was compensable.

W was entitled to two levels of internal review, both of which were unsuccessful. Having exhausted his internal remedies, W brought a Request for Directions (“RFD”) to a supervising judge, pursuant to the Agreement. The supervising judge found errors in the adjudicator’s

interpretation of the IAP warranting judicial intervention and remitted W’s claim for re-adjudication. A reconsideration adjudicator allowed W’s claim, and awarded him compensation. Before the reconsideration decision was implemented, Canada appealed the supervising judge’s decision. The Court of Appeal found that there was no basis upon which the supervising judge could intervene, and overturned his decision. Held (Brown and Rowe JJ. dissenting): The appeal should be allowed and the reconsideration adjudicator’s compensation award reinstated.

Per Wagner C.J. and Abella and Karakatsanis JJ.: Judicial intervention was necessary in the face of an unauthorized modification of the Agreement, contrary to the intentions of the parties. This is precisely the type of compensable claim contemplated by the parties to the Agreement. Failure to correct the initial adjudicator’s errors in this case would unacceptably undermine the whole purpose of the Agreement. The appellate authorities have indicated that courts may intervene in relation to IAP adjudications when exceptional circumstances are present.

There are compelling reasons for setting a high bar for judicial intervention in the IAP context. The parties went to significant lengths to make the Agreement a complete code, by including levels of internal review and choosing not to include any provision granting court access. On the other hand, the necessity of ongoing judicial supervision was recognized when the Agreement was approved by the courts. There is a foundational link between judicial supervision and the Agreement.

The existence of the Agreement was contingent on judicial approval, and judicial approval, in turn, was contingent on ongoing judicial supervision. Given the goals of the Agreement, significant and ongoing judicial supervision was necessary. Without ongoing judicial supervision, the Agreement would not have been recognized. In overseeing the administration and implementation of the Agreement, courts have a duty to ensure that the claimants receive the benefits they bargained for.

While the parties do not have a broad right to judicial intervention, they do have a right to the implementation of the terms of the settlement. As to when judges, exercising their supervisory role, should intervene in an IAP adjudication, there is an ongoing duty to supervise the administration and implementation of the Agreement, including the IAP. In exercising this supervisory role, judges can intervene if there has been a failure to apply and implement the terms of the Agreement.

In determining whether this failure exists, judges will focus on the words of the Agreement, so that the benefits promised to the claimants are delivered. Interpreting this role too

narrowly prevents any meaningful judicial supervision of IAP decisions. It is paramount that the agreed-upon terms of the IAP are applied and implemented in a way that is consistent with the parties’ intentions. In this case, the initial adjudicator’s decision constituted an unauthorized modification of the IAP. By substituting the wording of the IAP with her own and by adding a requirement of the perpetrator’s sexual intent unsupported by the language of the IAP, the adjudicator relied on additional requirements that were not agreed to by the parties.

These errors were compounded by her misinterpretation of the case law with respect to sexual assault, which contributed to an unauthorized modification of the IAP. This amounted to a failure to apply or implement the terms of the Agreement, warranting judicial intervention to ensure that the benefits promised in the Agreement were delivered. In intervening, the supervising judge in this case did not usurp the role assigned to IAP adjudicators by re-weighing factual findings. Instead, he properly identified a failure to apply the Agreement in the adjudication of W’s claim.

Per Moldaver and Côté JJ.: Judicial review under an administrative law analysis is not applicable to IAP decisions. As the purpose of judicial review is to ensure the legality of state decision making, it is available only where there is an exercise of state authority that is of a sufficiently public character. The Agreement is, at its root, a contract. It was not created by any act of the executive or the legislature, but is a contractual settlement of private law tort claims, to which effect has been given by court orders. IAP adjudicators exercise powers granted by contract and have no statutory authority.

The courts’ general supervisory jurisdiction allows them to ensure that the Agreement’s contractual commitment is fulfilled, but this does not mean that IAP adjudicators are state actors. Nor does this analysis change just because Canada is one of the parties to the Agreement. The availability of judicial review depends on the source of the decision maker’s authority, not the identity of the parties. In this case, the IAP adjudicators’ authority was conferred by the parties to the Agreement, not by

an act of the legislature or the exercise of prerogative powers. Moreover, the fact that the contract was approved by court order does not transform the operation of this private settlement into a public act. While the parties do not have the option of seeking judicial review of IAP decisions, they can file RFDs with the supervising courts to resolve issues relating to the implementation and administration of the Agreement, after fully exhausting the internal review mechanisms in the Agreement.

Authority for recourse to the supervising courts can be found in the Agreement, the Approval and Implementation Orders, and provincial class proceedings legislation. The Agreement contemplates recourse to the supervising courts in certain specific circumstances — i.e., where losses may exceed the maximum compensation available under the IAP or where the evidence is overly complex. This creates an alternative avenue for dealing with claims that would otherwise be heard by IAP adjudicators but does not permit the courts to intervene in IAP decisions.

The supervising courts’ jurisdiction is also grounded in the Approval and Implementation Orders. These orders state the courts’ powers in broad terms. Finally, provincial class proceedings legislation grants broad supervisory jurisdiction to ensure that a class action proceeds in a fair and efficient manner. However, these broader conferrals of authority are given form and content by the facts of particular class proceedings. In the context of the supervision of a settlement agreement, the terms of the agreement are determinative.

While supervising judges are not free to approve an agreement that fully ousts their supervisory jurisdiction, their authority is limited and shaped by the terms of the agreement. While it is clear that the courts retain supervisory powers pursuant to the Agreement itself, the Approval and Implementation Orders and class proceedings legislation, a distinction must be drawn between providing directions respecting the implementation and administration of the Agreement, on the one hand, and reviewing adjudicators’

interpretations of the IAP, on the other. Only the former falls within the jurisdiction of the courts. Parties may seek judicial recourse only in cases where the IAP adjudicator failed to apply the terms of the Agreement, as this constitutes a failure to comply with the Agreement and the IAP. As long as it can be said that an adjudicator has turned his or her mind to the compensation category raised by the claimant, then the adjudicator has applied the terms of the Agreement.

Since the parties have expressed a clear intention to grant IAP adjudicators exclusive jurisdiction to interpret the terms of the Agreement and the IAP, it must be accepted that an adjudicator who has interpreted these terms, even if a court considers the

interpretation unreasonable, has not failed to apply the terms. The test for judicial recourse is therefore whether there has been a failure by the IAP adjudicator to apply the terms of the IAP, which accounts to a failure to enforce the Agreement. The weight of the authorities supports a high jurisdictional threshold for supervising courts considering IAP decisions. The cases highlight several reasons why access to judicial recourse in respect of IAP decisions should be construed narrowly. First, this approach honours the intentions of the parties to the Agreement.

Second, in entering into the Agreement, claimants relinquished their right to have their claims resolved by the courts in favour of a process with various compensatory and non-compensatory benefits; as such, disagreement with the conclusions reached by adjudicators, whether on matters of fact or on the

interpretation of the terms of the IAP, should be addressed through the review procedures provided for in the IAP and, if necessary, by approving binding instructions to adjudicators. Third, the scheme need not be infallible. Fourth, to open IAP decisions to intervention by the courts would be contrary to the objective of efficient and timely resolution of disputes with finality. Fifth, a broad right to judicial recourse in respect of IAP decisions would allow Canada, and not only claimants, to challenge adjudicators’ conclusions with which it disagreed. Sixth, under a broader

interpretation of the judicial oversight function, supervising judges would be engaging in the same exercise as reviewing adjudicators under the IAP. While the parties’ intentions in creating the Agreement and the IAP must be honoured, circumstances will inevitably arise that were not foreseen by the parties and are therefore not provided for in the Agreement. Should a situation arise which was not contemplated by the parties, courts must have the power to intervene to ensure that the parties receive the benefits of the Agreement, i.e., what they bargained for.

The courts have the jurisdiction to ensure that the Agreement provides both procedural and substantive access to justice. Should a situation arise which is not provided for in the Agreement and which might affect the outcome of a claim, it would be inconsistent with the purpose of the settlement to deny relief to the claimant. However, parties are not automatically entitled to have a claim reopened if they are able to point to a procedural gap in the IAP.

A case-by-case analysis is required, and a variety of factors may have to be considered, including whether some prejudice to the party requesting judicial intervention has been shown. Cases in which a claim can be reopened will be rare. Ultimately, a balance must be struck between resolving claims efficiently and obtaining a sense of finality for the parties, on the one hand, and ensuring fair and just outcomes, on the other. In this case, the supervising judge erred in scrutinizing the initial adjudicator’s

interpretation of the IAP and substituting his own. The supervising judge was entitled only to determine whether the adjudicator had considered the correct terms. Instead, he engaged in the same analysis that the parties assigned to IAP adjudicators and came to a different result. While the adjudicator interpreted the

sexual abuse category of the IAP differently, this does not amount to a failure to apply the terms of the IAP. The choice to deny W’sclaim was based on a deliberate

interpretation of and engagement with the sexual abuse category of the IAP. The adjudicator had regardto and applied the factors in that category, and her decision was upheld, in keeping with the review mechanism contained in theIAP. While the supervising judge may have disagreed with the outcome, this was not a basis for finding that the adjudicator had failed toapply the terms of the IAP. The supervising judge exceeded his jurisdiction by substituting his own

interpretation of the IAP anddirecting that the claim be reconsidered in accordance with that

interpretation. However, while the supervising judge erred in his analysis, this is an exceptional case in which reconsideration isappropriate. W’s claim has given rise to a unique dilemma for which the Agreement provides no internal recourse, and which thereforerequires the Court to craft a remedy. Certain concessions made at the hearing before the Court exposed a gap in the Agreement’sprovisions.

Specifically, the Chief Adjudicator of the Indian Residential Schools Adjudication Secretariat conceded that the decisions ofthe initial and review adjudicators in this case were aberrant, and that he has no authority to reopen W’s claim despite this conclusion.The Chief Adjudicator’s inability to remedy such an error in IAP decisions is clearly inconsistent with the role conferred upon him by theparties — i.e., the parties intended that the Chief Adjudicator should represent the final level of review in order to ensure consistencyacross all IAP decisions.

The practical effect of this situation is that W did not receive the benefits bargained for. As there is no remedywithin the four corners of the Agreement that is available to either W or the Chief Adjudicator, the courts must step in to fill this gap. Itis particularly appropriate that the Court intervene in light of the fact that the Agreement is a settlement of a class action, and it can beassumed that all similarly situated individuals are entitled to the same treatment under the scheme.

This is a situation in which the courts can step in to provide a remedy that is consistent with the Agreement’s objective ofpromoting a fair, comprehensive and lasting resolution of the legacy of Indian Residential Schools. The appeal should be allowed andthe order made by the supervising judge that W’s claim be sent back to a first-level IAP adjudicator for reconsideration should bereinstated. Given that W’s claim has already been reconsidered and that the Chief Adjudicator is satisfied that the reconsiderationadjudicator properly applied the IAP, the compensation award should be reinstated, with interest.

Per Brown and Rowe JJ. (dissenting): The appeal should be dismissed. Côté J. correctly states the law for a majority of theCourt regarding the jurisdiction of the supervising courts in respect of IAP decisions. Where there is a gap in the Agreement, a courtmight fill it in accordance with the parties’ intentions. However, as no gap exists here, there is no basis for rewriting the terms of theAgreement. The Agreement is a contract. Interpreting its terms therefore requires a court to discern the parties’ intentions.

In this case, itwas the parties’ intention that the Chief Adjudicator not have the authority to respond to incorrect

interpretations of the IAP byreopening claims. Instead, the Chief Adjudicator has a right of final review of IAP decisions and is empowered to remedy incorrectinterpretations of the IAP on a prospective basis by preparing instructions for the IAP Oversight Committee. The Agreement expressly precludes judicial intervention, even where the IAP has been incorrectly interpreted and applied. Itis a complete code that limits access to the courts, preserves the finality of the IAP and respects the expertise of IAP adjudicators.

Theadjudication of IAP claims is limited to one in-person hearing and two levels of internal review without any judicial recourse. Given thefinality promised by the IAP, the parties would have seen prolonged litigation of IAP claims in the courts to be undesirable. The internalmechanisms of review in the Agreement have clearly been designed to allow for judicial recourse in specific situations. But this does notinclude incorrect

interpretations of the IAP. Where the parties have failed in their contract to address a particular situation arising in the course of their relationship, acourt may imply a contractual term. This does not permit a court to imply a term which is contrary to the parties’ clearly expressedintentions. Straining to find a gap in the Agreement so as to open space for judicial recourse where the parties clearly intended topreclude it defeats the intentions of the parties and undermines the integrity of the process that they settled upon.

Merely because theAgreement does not contain certain terms does not mean that there is a gap waiting to be filled by judges. There is a difference betweenfailing to grant authority and deciding not to grant such authority. A review of the Agreement reveals that the absence of a termauthorizing the Chief Adjudicator to reopen claims clearly represents an instance of the latter. In addition, the Chief Adjudicator’sconcession in this case does not expose any gap in the Agreement, much less any basis for judicial intervention to fill it.

In any event, theChief Adjudicator did not clearly agree that such a gap existed here. The denial of compensation to W was not the result of any gapwhich required judicial recourse so as to reopen the claim; instead, it resulted from the Chief Adjudicator failing to properly dischargehis final review obligations. Cases Cited By Abella J. Explained: R. v. Chase, (SCC), [1987] 2 S.C.R. 293; considered: Fontaine v. Duboff Edwards Haight &Schachter, 2012 ONCA 471, 111 O.R. (3d) 461; referred to: Baxter v. Canada (Attorney General) (2006), (ONSC), 83 O.R. (3d) 481; Fontaine v.

Canada (Attorney General), 2017 ONCA 26, 137 O.R. (3d) 90; N.N. v. Canada (Attorney General),2018 BCCA 105, 6 B.C.L.R. (6th) 335; R. v. Ewanchuk, (SCC), [1999] 1 S.C.R. 330. By Côté J. Distinguished: Canada (Attorney General) v. Fontaine, 2017 SCC 47, [2017] 2 S.C.R. 205; considered: Fontaine v.Canada (Attorney General), 2016 BCSC 2218, [2017] 1 C.N.L.R. 104; Fontaine v. Duboff Edwards Haight & Schachter, 2012 ONCA471, 111 O.R. (3d) 461; N.N. v. Canada (Attorney General), 2018 BCCA 105, 6 B.C.L.R. (6th) 335; Fontaine v. Canada (AttorneyGeneral), 2017 ONCA 26, 137 O.R. (3d) 90; referred to: Fontaine v.

Canada (Attorney General), 2016 ONCA 241, 130 O.R. (3d) 1;Fontaine v. Canada (Attorney General), 2014 ONSC 4024, [2014] 4 C.N.L.R. 67; R. v. Chase, (SCC), [1987] 2 S.C.R.293; Fontaine et al. v. Canada (Attorney General) et al., 2014 MBQB 200, 311 Man. R. (2d) 17; Fontaine v. Canada (AttorneyGeneral), 2015 ABQB 225, [2015] 4 C.N.L.R. 69; Fontaine v. Canada (Attorney General), 2016 ONSC 4326, [2016] 4 C.N.L.R. 40;Dunsmuir v. New Brunswick, 2008 SCC 9, [2008] 1 S.C.R. 190; Highwood Congregation of Jehovah’s Witnesses (Judicial Committee)

v. Wall, 2018 SCC 26, [2018] 1 S.C.R. 750; Ledcor Construction Ltd. v. Northbridge Indemnity Insurance Co., 2016 SCC 37, [2016] 2S.C.R. 23; Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, [2014] 2 S.C.R. 633; Fontaine et al. v. Canada (AttorneyGeneral) et al., 2014 MBCA 93, 310 Man. R. (2d) 162; Fontaine v. Canada (Attorney General), 2014 ONSC 283, [2014] 2 C.N.L.R. 86;Baxter v. Canada (Attorney General) (2006), (ON SC), 83 O.R. 481; Fontaine v. Canada (Attorney General), 2017BCSC 946; Carter v. Canada (Attorney General), 2015 SCC 5, [2015] 1 S.C.R. 331. By Brown J. (dissenting) Fontaine v.

Canada (Attorney General), 2017 ONCA 26, 137 O.R. (3d) 90; Canada (Attorney General) v. Fontaine, 2017SCC 47, [2017] 2 S.C.R. 205; M.J.B. Enterprises Ltd. v. Defence Construction

(1951) Ltd., (SCC), [1999] 1 S.C.R.619; Canadian Pacific Hotels Ltd. v. Bank of Montreal, (SCC), [1987] 1 S.C.R. 711; Vorvis v. Insurance Corporation ofBritish Columbia, (SCC), [1989] 1 S.C.R. 1085; Fontaine v. Canada (Attorney General), 2016 BCSC 2218, [2017] 1C.N.L.R. 104; N.N. v. Canada (Attorney General), 2018 BCCA 105, 6 B.C.L.R. (6th) 335; Fontaine v. Canada (Attorney General), 2014ONSC 283, [2014] 2 C.N.L.R. 86; Fontaine v. Canada (Attorney General), 2018 ONSC 103; Spencer v. Continental Insurance Co., (BC SC), [1945] 4 D.L.R. 593. Statutes and Regulations Cited Class Proceedings Act, C.C.S.M., c. C130, s. 12. Court of Queen’s Bench Act, C.C.S.M., c. C280,

Part XIV. Treaties and Agreements Indian Residential Schools Settlement Agreement (2006),

preamble, arts. 1.01, 4.11, 5, 5.09, 6, 6.03, 7.01, 12.01, 13.08, Sch. D, arts. I, II,III, App. V, IX, X, XII, XIII. Authors Cited Hall, Geoff R. Canadian Contractual

Interpretation Law, 3rd ed. Toronto: LexisNexis, 2016. Indian Residential Schools Adjudication Secretariat. Independent Assessment Process (IAP) Statistics (online:http://www.iap-pei.ca/stats-eng.php?act=20181031; archived version: http://www.scc-csc.ca/cso-dce/2019SCC-CSC20_1_eng.pdf). Swan, Angela, Jakub Adamski and Annie Y. Na. Canadian Contract Law, 4th ed. Toronto: LexisNexis, 2018. The Right Honourable Stephen Harper on behalf of the Government of Canada. “Statement of Apology to former students of IndianResidential Schools”.

Ottawa, June 11, 2008 (online:https://www.aadnc-aandc.gc.ca/DAM/DAM-INTER-HQ/STAGING/texte-text/rqpi_apo_pdf_1322167347706_eng.pdf; archivedversion: http://www.scc-csc.ca/cso-dce/2019SCC-CSC20_2_eng.pdf). APPEAL from a judgment of the Manitoba Court of Appeal (Monnin, Beard and leMaistre JJ.A.), 2017 MBCA 54, 413D.L.R. (4th) 521, [2017] 3 C.N.L.R. 85, [2017] AZ-51399218, [2017] M.J. No. 163 (QL), 2017 CarswellMan 247 (WL Can.), settingaside a decision of Edmond J., 2016 MBQB 159 , 2016 MNQB 159, [2016] 4 C.N.L.R. 23, [2016] M.J. No. 232 (QL). Appealallowed, Brown and Rowe JJ. dissenting. Martin U.

Kramer and Richard E. Olschewski, for the appellants. Mitchell R. Taylor, Q.C., and Dayna Anderson, for the respondent the Attorney General of Canada. Joseph J. Arvay, Q.C., Susan E. Ross and David W. L. Wu, for the respondent the Chief Adjudicator of the IndianResidential Schools Adjudication Secretariat. Stuart Wuttke and Julie McGregor, for the respondent the Assembly of First Nations. David Schulze, Maryse Décarie-Daigneault and David P. Taylor, for the intervener the Independent Counsel. Karim Ramji, for the intervener K.B.

The reasons of Wagner C.J. and Abella and Karakatsanis JJ. were delivered by [1] Abella J. — The years of sustained abuse committed in Residential Schools represent a profoundly shameful era inCanada’s history. The legacy of the harms committed there consists of deep wounds not only to those who were forced to attend, but alsoto our national psyche. The recovery process, when it is possible, is slow and painful. But at least there is a process, one that paysrespectful tribute to the enduring character of the harm and the need to address it.

The Indian Residential Schools Settlement Agreement(2006) is part of that healing process. [2] When J.W. was a young boy at a Residential School a nun touched his genitals over his clothing. He was standingin line waiting for a shower. He was wearing what he described as a “little apron”. [3] In 2014, J.W. brought a claim for compensation in accordance with the Independent Assessment Process (IAP), the

adjudicative component of the Agreement, alleging that this incident fell within the following category of abuse: Any touching of a student, including touching with an object, by an adult employee or other adult lawfully on the premises whichexceeds recognized parental contact and violates the sexual integrity of the student. [art. II] [4] J.W.’s claim proceeded in Manitoba. The Hearing Adjudicator concluded that the “sexual” intent of the nun was anelement that had to be shown by the claimant.

Despite the fact that she accepted that the incident had occurred as J.W. described, theHearing Adjudicator denied his claim because he was unable to prove the nun’s sexual intent. [5] The issue in this appeal is whether J.W. was entitled to judicial recourse.

Background [6] The Agreement represents the negotiated settlement of thousands of individual and class action suits filed against anumber of defendants, including the Government of Canada and various churches, relating to the operation of Residential Schools. [7] The Agreement includes a procedure for settling individual claims through an adjudicative process; provides forsupport services for former students; sets out a national procedure for healing, education and reconciliation through the Truth andReconciliation Commission; and creates a scheme for the general implementation of public programs to recognize and commemorate thesignificant and lasting harms caused by the Residential Schools system. [8] While not admitting liability, the defendants acknowledged that harms and abuses were committed againstIndigenous children at these schools.

The individuals in the various classes of plaintiffs and potential claimants could opt out of theAgreement and pursue their own litigation through the courts, but they could not take this route if they accepted compensation pursuantto the Agreement. [9] Two avenues to compensation are available under the Agreement: the “common experience” payment received byall eligible former students, and individual payments awarded to claimants who establish specific compensable harms. These individualclaims are adjudicated through the IAP. The rules governing these adjudications are set out in

Schedule D to the Agreement. [10] The

Schedule describes which harms are compensable, what must be established by the claimant, and sets out acompensation scale. It includes both standard and complex track claims. Certain complex track claims may be referred to the courts bythe Chief Adjudicator of the Indian Residential Schools Adjudication Secretariat who is generally responsible for guiding, training andassisting the adjudicators. This is the only category of claims which provides a mechanism for court access. [11] There is a system of internal reviews.

If the alleged error in an adjudicative decision is a palpable and overridingfactual one, the scheme allows for one level of internal review. If the error alleged is a failure to apply the IAP Model to the facts, thereare two levels of internal review available. [12] J.W.’s claim is a standard track claim. That entitled him to an in-person hearing and the possibility of two levels ofinternal review. There is, however, no right of appeal to the courts. [13] Because the Agreement constitutes the settlement of ongoing actions, judicial approval was required.

The partiesbrought the proposed settlement to the superior courts for approval, and between December 2006 and January 2007, nine provincial andterritorial superior courts approved the Agreement through Approval Orders. [14] Ontario was the first jurisdiction to approve the Agreement, subject to certain conditions, in December 2006. InBaxter v.

Canada (Attorney General) (2006), (ON SC), 83 O.R. (3d) 481 (S.C.J.), the decision accompanying thefirst Approval Order, Winkler R.S.J. emphasized the enduring, harmful legacy of Residential Schools which ultimately led to theAgreement: For over 100 years, Canada pursued a policy of requiring the attendance of Aboriginal children at residential schools, which were largelyoperated by religious organizations under the supervision of the federal government. The children were required to reside at theseinstitutions, in isolation from their families and communities, for varying periods of time.

This policy was finally terminated in 1996 withthe closing of the last of the residential schools and has now been widely acknowledged as a seriously flawed failure. In its attempts toaddress the damage inflicted by, or as a result of, this long-standing policy, the settlement is intended to offer a measure of closure forthe former residents of the schools and their families.

The flaws and failures of the policy and its implementation are at the root of the allegations of harm suffered by the class members.Upon review by the Royal Commission on Aboriginal Peoples, it was found that the children were removed from their families andcommunities to serve the purpose of carrying out a “concerted campaign to obliterate” the “habits and associations” of “Aboriginallanguages, traditions and beliefs”, in order to accomplish “a radical re-socialization” aimed at instilling the children instead with thevalues of Euro-centric civilization.

The proposed settlement represents an effort to provide a measure of closure and, accordingly, hasincorporated elements which provide both compensation to individuals and broader relief intended to address the harm suffered by theAboriginal community at large. [Emphasis added; paras. 2-3.] [15] As Winkler R.S.J. emphasized, given the goals of the Agreement, significant and ongoing judicial supervision wasnecessary. As he said, supervising courts must “ensur[e] that the administration and implementation of the settlement are done in amanner that delivers the promised benefits to the class members. . . .

Once the court is engaged, it cannot abdicate its responsibilities”(Baxter, at para. 12). Additionally, “the court must be in a position to effectively evaluate the administration and the performance of theadministrator and, further, be empowered to effect any changes that it finds necessary to ensure that the benefits promised under thesettlement are being delivered” (para. 51).

[16] Winkler R.S.J. stressed that, as in all class actions, the courts must strive to protect the class members and ensurethat the benefits they agreed to are actually delivered. In order to deliver efficient, coordinated judicial supervision of the multi-jurisdictional Agreement, he suggested that each supervising court approve a Court Administration Protocol. [17] The Approval Orders in all other provinces were substantially similar, and stated that superior court judges ​wereentitled to hear “Requests for Directions” with respect to the ongoing administration and implementation of the Agreement.

Paragraph 31of the Manitoba Approval Order, for example, states: THIS COURT DECLARES that the Representative Plaintiffs, Defendants, Released Church Organizations, Class Counsel, theNational Administration Committee, or the Trustee, or such other person or entity as this Court may allow, after fully exhausting thedispute resolution mechanisms contemplated in the Agreement, may apply to the Court for directions in respect of the implementation,administration or amendment of the Agreement or the implementation of this judgment on notice to all affected parties, all in conformitywith the terms of the Agreement. [Emphasis added.] The inclusion of the Requests for Directions provision in the Approval Orders contemplates that recourse to the courts is possible incircumstances where all internal mechanisms have been exhausted and directions are needed about the implementation of theAgreement. [18] The effect of the Approval Orders in the provinces was the certification of the actions as a class proceeding, subjectto certain changes being made to the Agreement. [19] By March 2007, all nine provincial and territorial jurisdictions implicated by the Agreement took the next step andimplemented the Agreement by court orders.

These Implementation Orders incorporated the Agreement and addressed issues relating toits administration. [20] Notably, the Manitoba Implementation Order concludes by stating that “the Courts shall supervise theimplementation of the Agreement and this order and, without limiting the generality of the foregoing, may issue such further andancillary orders, from time to time, as are necessary to implement and enforce the provisions of the Agreement” (para. 23). [21] As proposed by Winkler R.S.J. in Baxter, a Court Administration Protocol was appended to each province’sImplementation Order, stating that two Administrative Judges would be appointed to work in conjunction with the Supervising Judgesfrom each province to oversee the administration and implementation of the Agreement.

The Protocol stated that each Request forDirections brought by a party would be first made to one of the two Administrative Judges, who would then direct it to a SupervisingJudge for a hearing if necessary. [22] Supplemented by the applicable class proceedings regime in each affected province and territory, and the inherentjurisdiction of the superior courts, the Approval and Implementation Orders gave the courts broad supervisory and administrativeauthority in overseeing the application and implementation of the Agreement.

This authority was integral to the Agreement’s goal ofaddressing the serious harms caused by Residential Schools and was a fundamental precondition to judicial endorsement. Ongoingjudicial supervision was seen to be necessary to ensure that the benefits promised to the claimants — benefits for which theyrelinquished their litigation rights — were delivered in accordance with the terms of the Agreement (Baxter, at paras. 12 and 51). [23] This history demonstrates the foundational link between judicial supervision and the Agreement.

The existence ofthe Agreement was contingent on judicial approval, and judicial approval, in turn, was contingent on ongoing judicial supervision. [24] The Ontario Court of Appeal explained how this ongoing judicial supervision should be exercised in Fontaine v.Duboff Edwards Haight & Schachter (2012), 2012 ONCA 471 , 111 O.R. (3d) 461 (Schachter). The decision concerned a legalfee dispute, which came to the courts by way of a Request for Directions. While concluding that judicial review in the administrative lawsense was unavailable, the Court of Appeal described the appropriate scope of judicial recourse.

Rouleau J.A. acknowledged thatadjudicators “cannot ignore” the provisions of the Implementation Orders, and that they must apply the relevant factors in theAgreement. But in his view, “[i]n the perhaps unlikely event that the final decision of the Chief Adjudicator reflects a failure to considerthe terms of the [Agreement] and implementation orders . . . then, in my view, the parties to the [Agreement] intended that there be somejudicial recourse” (para. 53).

He found that this judicial recourse was necessary to ensure that the bargain the parties agreed to wasrespected, a critical consideration given the vulnerability of the claimants. However, he held that judicial recourse was limited to “veryexceptional circumstances” because the parties intended that the implementation of the Agreement be expeditious and the Agreementaimed to achieve finality. [25] The Ontario Court of Appeal returned to the scope of the courts’ supervisory jurisdiction in Fontaine v.

Canada(Attorney General) (2017), 2017 ONCA 26 , 137 O.R. (3d) 90, and concluded that the “exceptional circumstances” thresholdapplied to IAP adjudicative decisions. Writing for the court, Sharpe J.A. held that Supervising Judges should not conduct “a detailedreview of the factual findings made by the adjudicator” because that would allow judges to usurp the role of IAP review adjudicators(para. 55). Disagreement with the result reached does not amount to a failure to apply or enforce the Agreement. [26] The British Columbia Court of Appeal also adopted the “exceptional circumstances” threshold in N.N. v.

Canada(Attorney General) (2018), 2018 BCCA 105 , 6 B.C.L.R. (6th) 335. In that case, the majority concluded that exceptionalcircumstances exist if there is a “gap” in the Agreement.

The inability of adjudicators to reopen concluded claims in circumstances wherethere was new, material evidence was one such “gap”, and therefore an “exceptional circumstance” warranting judicial intervention. [27] The appellate authorities in Ontario and British Columbia have thus indicated that courts may intervene in relation toIAP adjudications when exceptional circumstances are present, a threshold which is met if there is either a failure to apply the terms ofthe Agreement, including the Approval and Implementation Orders, or if there is a “gap” in the Agreement. [28] I agree that there are compelling reasons for setting a high bar for judicial intervention in the IAP context.

Theparties went to significant lengths to make the Agreement a “complete code”, with specialized training for adjudicators, levels of internal

review, the creation of an IAP Oversight Committee responsible for monitoring the implementation of the IAP and the absence of anyprovision granting court access in the context of standard track IAP decisions. [29] On the other hand, the necessity of ongoing judicial supervision was recognized when the Agreement was approved,as noted by Winkler R.S.J. in Baxter. [30] Without ongoing judicial supervision, the Agreement would not have been recognized.

In overseeing theadministration and implementation of the Agreement, therefore, courts have a duty to ensure that the claimants receive the benefits theybargained for. The provisions of the Approval and Implementation Orders contemplate ongoing recourse to the courts, with judgessupervising the Agreement to ensure that the implementation and administration of the Agreement take place in the way the partiesagreed. [31] While the parties do not have a broad right to judicial intervention, they do have a right to the implementation of theterms of the settlement they bargained for.

Judicial supervision plays a critical role in ensuring that the claimants receive the benefits thatthey were promised. The obligations in the Agreement must be read in light of the Agreement’s spirit — to address the “damage inflictedby, or as a result of, [Canada’s] long-standing [Residential Schools] policy” (Baxter, at para. 2). Analysis [32] The question in this appeal is when judges, exercising their supervisory role, should intervene in an IAPadjudication. Schachter provides a useful starting point — judges should intervene when there is a failure to apply or implement theterms of the Agreement.

Unauthorized modifications of the Agreement are encompassed by this threshold. If an adjudicator changes theterms or requirements of the plain language of the Agreement, this will amount to a failure to apply or implement the terms of the Agreement.[1] Courts have a duty to ensure that the Agreement is implemented in accordance with the intentions of the parties asreflected in the Agreement’s terms.

In determining whether an adjudicative decision rises to this threshold, Supervising Judges should beguided by the plain language of the Agreement, viewed in light of its remedial, benefit-conferring objectives. [33] Given the purposes of the Agreement and the ongoing supervisory powers built into the settlement, I do not, withrespect, agree with the Manitoba Court of Appeal’s decision in this case that so long as the adjudicator refers to the relevant sections ofthe IAP, there is no basis upon which a Supervising Judge can intervene, regardless of how these sections are interpreted or applied.Reading “apply” and “implement” so narrowly prevents any meaningful judicial supervision of IAP decisions.

In light of the purposes ofthe Agreement, which include achieving “a fair, comprehensive and lasting resolution of the legacy of Indian Residential Schools” and a “promotion of healing, education, truth and reconciliation and commemoration”[2], such an approach reduces judicial supervision to asearch for ensuring that the right

section of the IAP is applied, rather than ensuring that the rights promised by the

section are beingdelivered. [34] While finality and expediency are important goals, it is also crucial to recognize that claimants agreed to forfeit theirlitigation rights by not opting out of the Agreement. Given this trade-off, it is paramount that the agreed-upon terms of the IAP Modelare applied and implemented in a way that is consistent with the parties’ intentions.

The courts’ supervisory power must permitintervention when it is necessary to ensure that the benefits promised are delivered. [35] Judges, in short, have an ongoing duty to supervise the administration and implementation of the Agreement,including the IAP. In exercising this supervisory role in the Requests for Directions context, judges can intervene if there has been afailure to apply and implement the terms of the Agreement.

In determining whether this failure exists, Supervising Judges will focus onthe words of the Agreement, so that the benefits promised to the class members are delivered. [36] In this case, J.W.’s claim fell under the IAP category “SL1.4”, which is defined in the Agreement as: Any touching of a student, including touching with an object, by an adult employee or other adult lawfully on the premises whichexceeds recognized parental contact and violates the sexual integrity of the student. [37] J.W.’s claim was rejected by the Hearing Adjudicator because, despite the fact that she believed J.W.’s account ofwhat transpired, she was not satisfied on a balance of probabilities that the perpetrator acted with a sexual purpose when committing theact in question.

This was fatal to J.W.’s case because IAP adjudicators “must be satisfied in regard to any allegation of sexual abuse thatwhat took place was done for a sexual purpose” (para. 24). In so holding, the Hearing Adjudicator relied on this Court’s decision in R. v.Chase, (SCC), [1987] 2 S.C.R. 293. Sexual purpose, she held, was a technical requirement of SL1.4. [38] J.W. applied for a review of the Hearing Adjudicator’s decision. The Review Adjudicator concluded that theHearing Adjudicator did not misapply SL1.4 by requiring J.W. to establish the perpetrator’s sexual purpose.

J.W.’s request for re-reviewwas similarly unsuccessful. The Re-Review Adjudicator held that the Review Adjudicator had not misapplied the IAP Model. Havingexhausted his internal remedies, J.W. brought a Request for Directions to the Supervising Judge, Edmond J. [39] The Supervising Judge, Edmond J. described his role in the following terms: . . . I have the power to review the decision of the Re-Review Adjudicator to determine whether she failed to apply the terms of the[Agreement] and specifically the IAP Compensation Rules.

I accept that this is a limited form of curial review, reserved for exceptionalcases, and that I must ensure that I do not engage in rewriting the [Agreement] by effectively giving the Requestors a right of appealand/or review for which they did not bargain. [para. 35] Edmond J. went on to describe the standard of review for a Request for Directions as “ensuring that the Re-Review Adjudicator did notendorse a legal

interpretation that is so unreasonable that it amounts to a failure to properly apply the IAP to the facts of a particularcase” (para. 40).

[40] Edmond J. found three errors warranting judicial intervention: the Hearing Adjudicator replaced the words “anytouching” in SL1.4 with the words “sexual touching”; the Hearing Adjudicator imported a requirement of sexual intent on the part of theperpetrator, contrary to the plain language of SL1.4; and, the Hearing Adjudicator incorrectly interpreted this Court’s decision in Chaseas requiring a sexual purpose as a necessary element of proving

an act of sexual abuse. [41] The Hearing Adjudicator described the question before her as “whether or not the incident was sexual touchingwhich exceeded recognized parental conduct”. As Edmond J. correctly noted, there is no requirement for the impugned touching to be“sexual” in SL1.4.

He also properly noted that the formulation relied upon by the Hearing Adjudicator leads to the illogical propositionthat there could be sexual touching which does not exceed the parameters of recognized parental conduct. [42] I agree with Edmond J. that the Hearing Adjudicator’s added requirement of “sexual” touching amounted to anunauthorized amendment to the IAP, and the improper addition of a new threshold in the language of SL1.4.

This constituted a failure toapply and implement the Agreement. [43] In describing what J.W. needed to establish in order to demonstrate that the touching violated the sexual integrity ofthe student, the Hearing Adjudicator also stated that “[i]n this process an adjudicator must be satisfied in regard to any allegations ofsexual abuse that what took place was done for a sexual purpose”.

As Edmond J. observed, nothing in the plain language of SL1.4indicates that the sexual intent of the perpetrator is relevant and that “[c]learly, and on a simple plain-language analysis, a child’s sexualintegrity can be violated without a perpetrator having any sexual intent whatsoever” (para. 48). [44] The effect of these two errors is the same: the Hearing Adjudicator’s decision constituted an unauthorizedmodification of SL1.4.

By substituting the phrase “any touching” with “sexual touching” and by adding a requirement of sexual intentunsupported by the language of the provision, the Hearing Adjudicator relied on additional requirements that were not agreed to by theparties.

The unauthorized modifications of the IAP Model amounted to a failure to apply or implement the terms of the Agreement,warranting judicial supervisory intervention to ensure that the benefits promised in the Agreement were delivered. [45] These errors were compounded by the Hearing Adjudicator’s misinterpretation of this Court’s decision in Chase, thethird and final error identified by Edmond J. Chase dealt with the meaning of “sexual assault” in the Criminal Code, R.S.C. 1985, c. C-46.

The Court stated that “[s]exual assault is an assault . . . which is committed in circumstances of a sexual nature, such that the sexualintegrity of the victim is violated” (p. 302). [46] The facts of Chase were as follows. The accused was a neighbour of the complainant, a 15-year-old girl. He enteredthe complainant’s home, where she was playing pool with her 11-year-old brother, grabbed her around her shoulders and arms, andgrabbed her breasts. Eventually, the complainant and her brother were able to call another neighbour for help. [47] The accused was convicted of sexual assault in Provincial Court.

His appeal to the Court of Appeal of NewBrunswick was dismissed, but a conviction of common assault was substituted for the sexual assault conviction. In making thissubstitution, the Court of Appeal held that the word “sexual” in sexual assault should be understood as referring to specific parts of thebody — genitalia in particular.

Body parts with “secondary sexual characteristics” — like breasts — were not encompassed by thisdefinition. [48] McIntyre J., writing for this Court, rejected the view that sexual assault was confined to “contact with specific areasof the human anatomy” and concluded that the test for sexual assault should be objective: Applying these principles and the authorities cited, I would make the following observations. Sexual assault is an assault within any oneof the

definitions of that concept in s. 244(1) of the Criminal Code which is committed in circumstances of a sexual nature, such that thesexual integrity of the victim is violated. The test to be applied in determining whether the impugned conduct has the requisite sexualnature is an objective one: “Viewed in the light of all the circumstances, is the sexual or carnal context of the assault visible to areasonable observer” (Taylor, supra, per Laycraft C.J.A., at p. 269).

The part of the body touched, the nature of the contact, the situationin which it occurred, the words and gestures accompanying the act, and all other circumstances surrounding the conduct, includingthreats which may or may not be accompanied by force, will be relevant (see S. J. Usprich, “A New Crime in Old Battles: DefinitionalProblems with Sexual Assault” (1987), 29 Crim. L.Q. 200, at p. 204.) The intent or purpose of the person committing the act, to theextent that this may appear from the evidence, may also be a factor in considering whether the conduct is sexual.

If the motive of theaccused is sexual gratification, to the extent that this may appear from the evidence, it may be a factor in determining whether theconduct is sexual.

It must be emphasized, however, that the existence of such a motive is simply one of many factors to be considered,the importance of which will vary depending on the circumstances. [Emphasis added; p. 302.] [49] Applied to the facts of the case, McIntyre J. concluded that there was ample evidence upon which the trial judgecould have concluded that a sexual assault was committed: “[v]iewed objectively in light of all the circumstances, it is clear that theconduct of [Mr.

Chase] in grabbing the complainant’s breasts constituted an assault of a sexual nature” (p. 303). [50] Chase, therefore, stands for the proposition that the sexual nature of the assault is determined objectively. TheCrown is not required to prove the accused had any mens rea with respect to the sexual nature of his or her behaviour (see also R. v.Ewanchuk, (SCC), [1999] 1 S.C.R. 330, at para. 25, per Major J.). The Hearing Adjudicator in J.W.’s case, however,improperly interpreted Chase as requiring the complainant to prove sexual intent.

She relied upon Chase to read in a mens rearequirement that does not exist in either Chase or in the SL1.4 category of the IAP. [51] I agree with Edmond J. that case law may be helpful, but it is the plain language of the Agreement that must guidean adjudicator’s reasoning process. Case law cannot be used to modify the language of the IAP, as the Hearing Adjudicator did in thiscase. The Hearing Adjudicator’s inaccurate

interpretation of Chase thereby contributed to an unauthorized modification of the IAPModel. As former Chief Adjudicator Ish rightly concluded in another IAP adjudication review decision, “there is no requirement in theIAP that the actor possessed a sexual intent before liability can be found for a sexual assault”. [52] The Agreement was entered into to address the abuses caused by the Residential Schools system and the courts’

ongoing supervision of the settlement must allow judges to intervene where necessary so as to ensure that the benefits promised by the settlement are actually delivered. In my view, Edmond J. properly identified a failure to apply the IAP Model in the adjudication of J.W.’s claim. These failures were confirmed on review and re-review. In intervening, Edmond J. did not usurp the role assigned to IAP adjudicators by re-weighing factual findings. Instead, in the face of a failure to apply the terms of the Agreement as agreed to by the parties, he intervened, remitting J.W.’s claim for re-adjudication.

As such, I respectfully disagree that recourse to a “gap” in the Agreement is necessary in this case. Rather, judicial intervention was necessary in the face of an unauthorized modification of the Agreement, contrary to the intentions of the parties. [ 53 ] The nun’s conduct in touching J.W.’s genitals not only objectively “violates the sexual integrity of the student”, contrary to the definition of sexual abuse in category SL1.4 of the Agreement, it “exceeds recognized parental contact”. J.W.’s claim is therefore compensable within the meaning of SL1.4.

This is the only tenable conclusion in light of the factual findings made by the Hearing Adjudicator. I note that the same conclusion was reached by a Reconsideration Adjudicator who re-heard — and allowed — J.W.’s claim before the Manitoba Court of Appeal’s decision was made. [ 54 ] J.W.’s is precisely the type of compensable claim contemplated by the parties to the Agreement. Failure to correct the Hearing Adjudicator’s

interpretation in this case would unacceptably undermine the whole purpose of the Agreement. [ 55 ] I would allow the appeal with costs and reinstate the decision of the Reconsideration Adjudicator allowing J.W.’s claim, plus interest. The reasons of Moldaver and Côté JJ. were delivered by Côté J. — I. Introduction [ 56 ] Between the 1860s and the 1990s, more than 150,000 First Nations, Inuit and Métis children attended Indian Residential Schools operated by religious organizations and funded by the Government of Canada.

As Canada acknowledged in its official apology, this system was intended to “remove and isolate children from the influence of their homes, families, traditions and cultures” (“Statement of Apology to former students of Indian Residential Schools” of the Right Honourable Stephen Harper on behalf of Canada, June 11, 2008 (online)). Thousands of these children experienced physical, emotional, and sexual abuse while at residential schools ( Canada (Attorney General) v.

Fontaine , 2017 SCC 47 , [2017] 2 S.C.R. 205 (“ SCC Records Decision ”), at para. 1 ). [ 57 ] The Indian Residential Schools Settlement Agreement (“IRSSA”) [3] was signed on May 8, 2006. It settled numerous class actions brought by former students against the Government of Canada and various religious organizations for the harms suffered at residential schools. Its purpose was to achieve a “fair, comprehensive and lasting resolution of the legacy of Indian Residential Schools” (IRSSA,

preamble). In 2006 and 2007, the IRSSA was approved by courts in nine provinces and territories, which issued Approval and Implementation Orders providing for ongoing court supervision of its implementation and administration. [ 58 ] The IRSSA is a multifaceted agreement. In addition to provisions intended to further healing, education, and reconciliation, it includes an Independent Assessment Process (“IAP”) to settle individual claims through specialized adjudication that takes place outside of the court system.

Although the IAP Model contains an internal review mechanism, it does not provide a right of appeal to the courts from the decisions of IAP adjudicators. [ 59 ] This appeal concerns the ability of the courts to review final decisions of adjudicators under the IAP Model. J.W.’s claim was denied by the initial IAP Hearing Adjudicator, and that decision was upheld at two levels of internal review. However, the supervising judge tasked with responding to a Request for Direction (“RFD”) arising from the IAP decision on J.W.’s claim disagreed with the adjudicators’ conclusions, substituted his own

interpretation of the IAP Model, and remitted the matter to a first-level adjudicator for reconsideration. The Manitoba Court of Appeal overturned that decision, finding that judicial review of IAP decisions is not available and that recourse to the supervising courts is available only where there has been a failure to apply the terms of the IAP Model. J.W. and his counsel (collectively the “appellants”) now appeal that result to this Court. They are asking this Court to find that decisions of IAP adjudicators are subject to judicial review pursuant to the principles of administrative law.

In the alternative, they submit that the courts’ supervisory power over the implementation of the IRSSA includes the jurisdiction to review IAP decisions, and that this jurisdiction extends to the

interpretation of the IAP. [ 60 ] I would allow the appeal and reinstate the supervising judge’s order remitting J.W.’s claim for reconsideration (and I would reinstate the Reconsideration Adjudicator’s decision allowing J.W.’s claim and awarding him compensation), but for reasons that differ from those relied upon by the supervising judge. Indeed, I disagree with the supervising judge’s decision to substitute his own

interpretation of the IAP Model for that of the IAP adjudicators, and I would therefore endorse the Manitoba Court of Appeal’s approach in limiting the scope of judicial recourse in respect of IAP decisions. While the courts’ supervisory jurisdiction over the implementation of the IRSSA requires them to ensure that IAP adjudicators make decisions in accordance with the terms of the IAP, the parties clearly intended the

interpretation of those terms to fall within the adjudicators’ exclusive jurisdiction. Judges cannot take on the role the parties have assigned to those adjudicators. [ 61 ] This case involves a unique situation for which the IRSSA makes no provision. The Chief Adjudicator, Indian Residential Schools Adjudication Secretariat (“Chief Adjudicator”), concedes that J.W.’s claim was wrongly decided and that the decisions made by the adjudicators in this case are “aberrant”.

Despite the fact that the Chief Adjudicator represents the final level of review under the IAP scheme, he is unable to reopen the claim himself and fulfill his role under the IRSSA of ensuring consistency in the application of the IAP. It is therefore appropriate for this Court to step in, not to provide its own

interpretation of the IAP Model, but to fill this procedural gap and ensure a fair outcome for J.W. that is in keeping with the purpose of the IRSSA. II. Context

A. Overview of the IRSSA

(1) Indian Residential Schools Settlement Agreement [ 62 ] The IRSSA provides for two compensation schemes: the Common Experience Payment (“CEP”) and the Independent Assessment Process. The CEP is a compensatory payment available to all eligible former students based on the number of years they attended an Indian Residential School (“IRS”). Compensation under the CEP process does not require proof of physical, sexual, or emotional harm (IRSSA, art. 5).

The IAP, by contrast, is an adjudicative process created to resolve “continuing claims” for serious proven physical or sexual abuse, or other wrongful acts committed against individual students of an IRS (IRSSA, art. 6 and Sch. D; R.F. (Attorney General), at para. 9).

(2) Independent Assessment Process [ 63 ]

Schedule D of the IRSSA sets out the IAP Model. There are three categories of compensable continuing claims under the IAP: (1) sexual and physical assaults committed by adult employees of the government or a church entity that operated the residential school or other adults lawfully on school premises; (2) sexual or physical assaults committed by one student against another on school premises; and (3) any other wrongful act or acts committed by adult employees or other adults lawfully on school premises (Sch. D, art. I). Continuing claims are dealt with in detail in the IAP’s Compensation Rules (art.

II) and Instructions for Adjudicators (App. IX). Adjudicators are bound by the standards for compensable wrongs and for the assessment of compensation defined for the IAP (art. III). SL1.4, the provision under which J.W. brought his claim, is the first level of sexual assault under the IAP compensatory structure (art. II). [ 64 ] IAP claims can proceed within either the standard track or the complex issues track, and all claimants are entitled to a hearing before a specially trained adjudicator (art. III(

n) and (s); see also App. V). The hearing takes place in a location of the claimant’s choice, and costs are paid so that the claimant can bring a support person. Counselling services are available, and cultural ceremonies are incorporated at the claimant’s request (art. III(c)). These features, among others, distinguish the IAP adjudication process from a court hearing. [ 65 ] In Fontaine v. Canada (Attorney General) , 2016 BCSC 2218 , [2017] 1 C.N.L.R. 104 (“ Bundled RFD ”), at para. 11 , Brown J., the supervising judge for British Columbia, aptly described the IAP as: “(

a) a post-litigation claims assessment process, (

b) a contractual component of the IRSSA, arising from the parties’ negotiations, and (

c) a closed adjudicative process, operating under the purview of independent adjudicators without any rights of appeal or judicial review”.

(3) Role of IAP Adjudicators [ 66 ] The IAP is intended to be an inquisitorial process, requiring adjudicators to manage the hearing, draw out and test the evidence of witnesses, caucus with the parties on proposed lines of questioning, and make any factual and legal findings necessary to resolve the claim. Only adjudicators can ask claimants questions and test evidence where necessary (art. III(e)). They are empowered to make binding findings on credibility, determine whether a claim has been proven, and award compensation where appropriate (art. III(a)). The IAP Model sets out in detail the procedures to be followed by adjudicators, claimants, and counsel (art. III(

e) to (g)). Adjudicators are required to render a decision within 30 days for standard track hearings and within 45 days for complex track hearings. The decision must have a specific format, which is set out in App. XII of Sch. D; in particular, it must outline key factual findings and provide a rationale for the adjudicator’s findings and for the compensation assessed, if any (Sch. D., art.

III). [ 67 ] Adjudicators are chosen by the unanimous agreement of a selection board appointed by the IAP Oversight Committee and composed of one representative of each of former students, plaintiffs’ counsel, church entities and government (App. XIII).

Recognizing that the role of adjudicator requires a unique combination of skills, the parties to the IRSSA agreed that all adjudicators must have a law degree or a combination of related training and significant experience, knowledge of and sensitivity to Aboriginal culture and history, and sexual and physical abuse issues, the ability to work with staff and participants from diverse backgrounds, knowledge of personal injury law and damages assessment, as well as a variety of competencies generally required of decision makers in adjudicative and administrative contexts (App. V; Bundled RFD , at para. 17).

Adjudicators receive training approved by the IAP Oversight Committee and ongoing mentoring by the Chief Adjudicator and other senior adjudicators (Sch. D., art. III(s); R.F. (Chief Adjudicator), at para. 22). [ 68 ] In addressing matters arising from the IAP, supervising and appellate courts have commented extensively on the expertise of IAP adjudicators. As the Ontario Court of Appeal observed in Fontaine v.

Canada (Attorney General) , 2016 ONCA 241, 130 O.R. (3d) 1, at p. 15, “[a]djudicators are specially trained to conduct the hearing in a way that is respectful to the claimant and conducive to obtaining a full description of his or her experience”. In Fontaine v. Duboff Edwards Haight & Schachter , 2012 ONCA 471 , 111 O.R. (3d) 461 (“ Schachter ”), the Ontario Court of Appeal recognized the Chief Adjudicator’s “broad discretion” and “relative expertise” in overseeing the IAP (paras. 54 and 78).

Brown J. held in Bundled RFD that the IAP creates “exclusive jurisdiction for independent adjudicators to manage IAP hearings, find facts, and assess IAP claims, which in turn fosters their considerable expertise” (para. 20). I would agree with Perell J., the Eastern Administrative Judge, that “[u]nder the IRSSA, the adjudicators are –– as their name suggests –– exercising a judicial function in accordance with the terms of the IRSSA” ( Fontaine v. Canada (Attorney General) , 2014 ONSC 4024 , [2014] 4 C.N.L.R. 67, at para. 15 ).

(4) Internal Review of IAP Decisions [ 69 ]

Schedule D of the IRSSA provides that a party who is dissatisfied with an IAP adjudicator’s decision is entitled to a review on two grounds (see art. III(1)). First, the party may seek a review on the basis that the IAP adjudicator’s decision contains a palpable and overriding error. While claimants may seek a review on this ground in respect of decisions made in either the standard track or the complex issues track, defendants may seek such a review only in respect of those made in the complex issues track. Second, any party may ask the Chief Adjudicator or his designate to determine whether an adjudicator’s decision (in either track) properly applied the IAP Model.

[ 70 ] A second level of review (“re-review”) is also available on the latter ground and is to be conducted by the Chief Adjudicator or his designate. The adjudicators who conduct this type of review are designated and approved by the IAP Oversight Committee, on the recommendation of the Chief Adjudicator, “to exercise the Chief Adjudicator’s review authority” (Sch. D., art. III(r) (iii)). All such reviews are conducted on the record and without oral submissions (art. III; R.F. (Chief Adjudicator), at paras. 27-30). [ 71 ] Neither Sch.

D nor any other part of the IRSSA provides for an appeal to the courts from IAP decisions. This is in contrast with certain provisions of the IRSSA that specifically contemplate access to the courts: •

Article 4.11 provides for the creation and mandate of the National Administration Committee (“NAC”): o in the event of any dispute related to the appointment or service of a member of the NAC, the affected group or individual may apply to a supervising court for directions (art. 4.11(6); o in the event that a majority of five members of the NAC cannot be reached to resolve a dispute, the dispute may be referred by the NAC to a supervising court (art. 4.11(9)); o the NAC may refer references from the Truth and Reconciliation Commission (“TRC”) to a supervising court for a determination (art. 4.11(12)(j)); o the NAC must apply to one of the supervising courts for a determination with respect to a refusal to add an institution as set out in art. 12.01 (arts. 4.11(12)(

l) and 12.01); o the NAC must apply to the supervising courts for orders modifying the IAP as set out in art. 6.03(3) (arts. 4.11(12)(

q) and 6.03(3)); and o where there is a disagreement between the Trustee under the IRSSA and the NAC with respect to the terms of the Approval Orders, the NAC or the Trustee may refer the dispute to a supervising court (art. 4.11(13)). •

Article 5.09 provides for the appeal procedure for CEP applications: o in the event that the NAC denies an appeal from a decision on a CEP application, the applicant may apply to a supervising court for a determination (art. 5.09(2)); and o in exceptional circumstances, the NAC may apply to a supervising court for an order that the costs of an appeal be borne by Canada (art. 5.09(3)). •

Article 6.03 deals with the resources to be provided to the IAP: o in the event that continuing claims are not processed within the timeframes set out in art. 6.03(1), the NAC may apply to the supervising courts for the necessary orders to meet those timeframes (art. 6.03(3)). •

Article 7.01 pertains to truth and reconciliation: o where the NAC makes a decision on a dispute arising in respect of the TRC, either or both the implicated church organization and Canada may apply to a supervising court for a hearing de novo (art. 7.01(3)). •

Article 13.08 pertains to legal fees: o in the event of a disagreement as to disbursement amounts, the Federal Representative must refer the matter to a supervising court (art. 13.08(4)). [ 72 ] Clearly, the parties did intend that there be access to the courts in specific circumstances. It is particularly noteworthy that the IRSSA provides for appeals from determinations made on CEP applications, but not from decisions under the IAP Model. [ 73 ] The IRSSA does, however, permit IAP claimants to have their claims resolved by the courts in limited circumstances.

The IAP Model provides as follows: At the request of a Claimant, access to the courts to resolve a continuing claim may be granted by the Chief Adjudicator where he or she is satisfied that: • there is sufficient evidence that the claim is one where the actual income loss or consequential loss of opportunity may exceed the maximum permitted by this IAP; • there is sufficient evidence that the Claimant suffered catastrophic physical harms such that compensation available through the courts may exceed the maximum permitted by this IAP; or, • in an other wrongful act claim, the evidence required to address the alleged harms is so complex and extensive that recourse to the courts is the more appropriate procedural approach.

In such cases, the Approval Orders will exempt the continuing claims from the deemed release, and thereafter the matter shall be addressed by the courts according to their own standards, rules and processes. (Sch. D, art. III(b)(iii)) [ 74 ] It is important to note that this provision of the IRSSA does not allow the courts to intervene in decisions of IAP adjudicators.

Rather, a claimant may opt to have his or her claim resolved by the courts instead of through the IAP adjudication process where the claim is particularly complex or merits compensation exceeding the maximum permitted by the IAP. [ 75 ] In sum, the IAP creates a closed process for the determination of claims, with one in-person hearing and two levels of internal review ( Bundled RFD , at para. 23; N.N. v. Canada (Attorney General) , 2018 BCCA 105 , 6 B.C.L.R. (6th) 335, at para. 78 ; Fontaine v. Canada (Attorney General) , 2017 ONCA 26 , 137 O.R. (3d) 90 (“ Spanish IRS C.A. ”), at para. 53 ).

(5) Oversight of the IAP [ 76 ] While the parties to the IRSSA did not provide for appeals from IAP decisions to the supervising courts, they did agree that guidance on the

interpretation and application of the IAP Model can be provided by the parties themselves through the IAP Oversight Committee (R.F. (Chief Adjudicator), at para. 32). The Committee is established under Sch. D and consists of a chairperson and eight other members, including former students (designated by the Assembly of First Nations and the Inuit Representatives), plaintiffs’ counsel, church entities, and government.

The Committee considers proposed instructions provided by the Chief Adjudicator, prepares its own instructions, monitors the implementation of the IAP, and makes recommendations to the NAC on changes to the IAP as necessary. Instructions are subject to approval by the NAC prior to publication (IRSSA, art. 1.01; Sch. D, art. III(r) ). [ 77 ] The Chief Adjudicator is also tasked with overseeing the administration of the IAP. He is appointed by the IAP Oversight Committee, and the appointment is approved by court order. The full list of the Chief Adjudicator’s duties can be found in art. III(

s) of Sch. D and includes assisting in the selection of adjudicators, ensuring consistency among IAP decisions by implementing training programs and administrative measures, and preparing proposed instructions for consideration by the IAP Oversight Committee to better give effect to the provisions of the IAP (art. III(s)). The Chief Adjudicator possesses broad discretion and “relative expertise” under the IAP Model and is monitored and guided by the IAP Oversight Committee ( Schachter , at paras. 54 and 78; Bundled RFD , at para. 19; N.N. , at para. 81 ).

(6) Current Status of the IAP [ 78 ] As of October 31, 2018, 26,669 IAP hearings had been held, or 99.95 percent of all anticipated hearings. Of the more than 38,000 claims filed, 99 percent had been resolved. There were still 199 claims in progress, with 36 hearings scheduled for a later date, 1 hearing remaining to be scheduled, 34 claims expected to be resolved through other means and 128 claims awaiting decision.

Over $3.1 billion had been paid to successful claimants, and close to 90 percent of IAP claims that had gone to hearing or been settled had resulted in an award in favour of the claimant (Indian Residential Schools Adjudication Secretariat, Independent Assessment Process (IAP) Statistics (online)).

(7) Role of the Supervising Courts [ 79 ] In December 2006, courts in nine provinces and territories concurrently issued reasons to certify a single national class action arising out of the residential schools system and to approve the IRSSA as a proposed settlement. The provincial and territorial superior court judges who certified the class action were designated as supervising judges. In 2007, Approval and Implementation Orders were entered in each of the nine supervising courts to give effect to the settlement (A.R., vol. I, at pp. 85-97 (“Schulman Approval Order”); A.R., vol.

I, at pp. 98-107 (“Schulman Implementation Order”)). The Approval Orders incorporate by reference the terms of the IRSSA and provide that the applicable provincial and territorial class proceedings law shall apply to the supervision, operation, and implementation of the IRSSA. They further provide that the courts will supervise the implementation of the IRSSA and “may issue such orders as are necessary to implement and enforce the provisions of the Agreement and this judgment” (Schulman Approval Order, at para. 13).

The Implementation Orders incorporate a Court Administration Protocol, under which an RFD may be made to a supervising court in respect of the implementation, administration, or amendment of the IRSSA or the implementation of the orders (Schulman Implementation Order, Sch.

A). [ 80 ] As this Court held in SCC Records Decision , the broad powers of supervising judges are both administrative and supervisory in nature and are supported by class action legislation, which provides the courts with “generous discretion to make orders and impose terms as necessary to ensure a fair and expeditious resolution of class actions” (paras. 31-32). B. Facts [ 81 ] The facts that gave rise to J.W.’s claim are not contested.

In 2014, J.W. applied for compensation pursuant to the IAP, alleging that when he was a student at an IRS, a nun had touched his genitals over his clothing while he was waiting in line to take a shower. He argued that this incident fell within category SL1.4 of the IAP, which provides compensation for harm caused by: Any touching of a student , including touching with an object, by an adult employee or other adult lawfully on the premises which exceeds recognized parental contact and violates the sexual integrity of the student . (Sch. D, art. II)

III. IAP Adjudication and Judicial History A. Decision of the Hearing Adjudicator [82] J.W.’s claim was heard on May 26, 2014, and the Hearing Adjudicator rendered her decision on April 7, 2015.While she accepted J.W.’s testimony and found that the incident had happened as described, she denied the claim as she was not satisfiedon a balance of probabilities that the nun had acted with a “sexual purpose” when committing the act in question (A.R., vol.

I, at p. 4).She found that IAP adjudicators “must be satisfied in regard to any allegations of sexual abuse that what took place was done for a sexualpurpose” (ibid.), relying on R. v. Chase, (SCC), [1987] 2 S.C.R. 293. In that case, which involved an accused chargedwith sexual assault for grabbing a girl’s breasts, this Court identified the following factors to consider in determining whether theimpugned conduct has the requisite sexual nature: Sexual assault is an assault . . . which is committed in circumstances of a sexual nature, such that the sexual integrity of the victim isviolated.

The test to be applied in determining whether the impugned conduct has the requisite sexual nature is an objective one:“Viewed in the light of all of the circumstances, is the sexual or carnal context of assault visible to a reasonable observer”.

The part ofthe body touched, the nature of the contact, the situation in which it occurred, the words and gestures accompanying the act, and all othercircumstances surrounding the conduct, including threats which may or may not be accompanied by force would be relevant. [Emphasisadded; pp. 293-94.] [83] In applying Chase, the Hearing Adjudicator acknowledged that the penis is a sexual organ but was not satisfied on abalance of probabilities that there was a sexual purpose associated with the nun’s conduct, given the context in which the touching hadoccurred and J.W.’s failure to point to any evidence or circumstance to suggest such a purpose (A.R., vol.

I, at pp. 4-5). Ultimately, sheinterpreted SL1.4 as including sexual purpose as one of its “technical requirements” and found that J.W. had not met the burden of proofin this regard (p. 5). B. Decision of the Review Adjudicator [84] The appellants applied for a review of the Hearing Adjudicator’s decision. In a decision dated July 5, 2015, theReview Adjudicator concluded that the Hearing Adjudicator had not misapplied the IAP by requiring J.W. to prove sexual purpose andthat the decision therefore fell within a range of reasonable outcomes (A.R., vol. I, at p. 11).

In his analysis, the Review Adjudicatorpurported to apply the decision rendered by former Chief Adjudicator Ish in another similar IAP claim, which I shall refer to as the “B”decision and which is considered to be a seminal decision in the IAP context (Transcript, at pp. 74, 76 and 82). In applying that decision,the Review Adjudicator stated that “the former Chief Adjudicator determined that both of these categories of SL1 abuse require anobjective analysis of the effect on the victim . . . and an objective analysis of the intent of the actor to commit a sexual assault” (A.R.,vol.

I, at p. 9 (emphasis in original)). Viewing the claim through this lens, the Review Adjudicator found that the Hearing Adjudicatorhad properly applied the Chase factors and had not misapplied the IAP Model by evaluating the perpetrator’s sexual motivation or l

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