2022 FC, 2022 FC 1409

Date: 20221017 Docket: T-1106-20 Citation: 2022 FC 1409 Ottawa, Ontario, October 17, 2022 PRESENT: The Honourable Madam Justice Kane BETWEEN: SEAN BRUYEA Plaintiff and HIS MAJESTY THE KING Defendant Table of Contents I. Background 5 A. The Nature of the Claims 5 B. The Benefits at Issue 5 II. The Proposed Class Members’ Experience 9 A. Mr. Bruyea 9 B. Danny Carvalho Raposa 11 C. Andre Joseph Serge St-Jean 12 D. Perry Robert Gray 14 E. Ronald Joseph Cundell 15 III.

The Preliminary Issue: Systemic Negligence or Negligent Misrepresentation and Whether the Plaintiff Should be Granted Leave to Amend the Further Amended Statement of Claim 16 IV. Overview of the Parties’ Positions 18 A. The Plaintiff 18 B. The Defendant 21 V. The Amended Statement of Claim, Further Amended Statement of Claim and Proposed Further Amended Statement of Claim 22 A. The Claims 22 B. The Proposed Class 26 VI. The Statutory Provisions 27 VII. The Issues 30 VIII. Do the Pleadings Disclose a Reasonable Cause of Action? 31 A.

Is Systemic Negligence—or Alternatively Negligent Misrepresentation—a Reasonable Cause of Action? 32

(1) The Plaintiff’s Submissions 32

(2) The Defendant’s Submissions 37

(3) The Claim of Systemic Negligence has no Reasonable Prospect of Success 39

(4) The Plaintiff may Amend the Pleadings to Specifically Claim an Alternative Cause of Action for Negligent Misrepresentation 42

(5) Negligent Misrepresentation is a Reasonable Cause of Action 43 B. Breach of Fiduciary Duty 48

(1) The Plaintiff’s Submissions 48

(2) The Defendant’s Submissions 49

(3) The Claim for Breach of Fiduciary Duty is not a Reasonable Cause of Action 50 C. Unjust Enrichment 55

(1) The Plaintiff’s Submissions 55

(2) The Defendant’s Submissions 56

(3) The Claim for Unjust Enrichment is not a Reasonable Cause of Action 57 IX. Has the Plaintiff Established “Some Basis in Fact” for the Remaining Certification Requirements? 60 A. General Principles 60 B. An Identifiable Class 61 C. Do the Claims Raise Common Questions of Law or Fact? 64

(1) The Plaintiff’s Submissions 64

(2) The Defendant’s Submissions 68

(3) Common Questions Exist 70 D. Is the Class Proceeding the Preferable Procedure? 73

(1) The Plaintiff’s Submissions 73

(2) The Defendant’s Submissions 74

(3) The Plaintiff has Established Some Basis in Fact That a Class Proceeding is Preferable Procedure 75

(4) Mr. Bruyea is an Appropriate Representative Plaintiff 78 X.

Conclusion 79 ORDER AND REASONS [ 1 ] The Plaintiff brings this motion seeking to certify this action as a class action on behalf of an estimated 10,000 veterans who were eligible for a Supplementary Retirement Benefit in 2019 and who may not have received this benefit or who may have received this benefit in a lower amount than the Plaintiff claims they should have received due to the alleged conduct of the Defendant. [ 2 ] The issue on this motion is not whether the Plaintiff has established his claim, but whether the Plaintiff has established that the conditions of Rule 334.16(1) of the Federal Courts Rules , SOR/98-106 have been met, as this governs whether an action should be certified as a class proceeding.

In other words, that the pleadings disclose a reasonable cause of action; that there is an identifiable class of two or more persons; that the claims of the proposed class members raise common questions of law or fact, whether or not those common questions predominate over questions affecting only individual members; that a class proceeding is the preferable procedure for the just and efficient resolution of the common questions of law and fact; and, that there is an appropriate representative plaintiff. [ 3 ] For the reasons that follow, the Plaintiff’s motion is granted; I find that the Plaintiff has satisfied the requirements of Rule 334.16.

These reasons explain the contents of the Order that is being issued under Rule 334.17. [ 4 ] In

summary, I find that the Plaintiff’s claims for systemic negligence, breach of fiduciary duty and unjust enrichment have no reasonable prospect of success. The Plaintiff is granted leave to amend his Further Amended Statement of Claim to specifically and alternatively plead negligent misrepresentation. I find that the Plaintiff’s claim for negligent misrepresentation is a reasonable cause of action and that the Plaintiff has established some basis in fact for the other requirements of certification.

The Order below reflects the reasons and the requirements of Rule 334.17, including setting out the common questions that are certified. The Case Management Process will be relied on to address the potential need for amendments to the common questions, Litigation Plan and other procedural matters. I. Background

A. The Nature of the Claims [ 5 ] The Plaintiff, Mr. Sean Bruyea, is the proposed representative plaintiff and class member. He joined the Canadian Armed Forces [CAF] in 1982 and was medically released in 1996. He recounts that he has continued to experience service-related injuries and illnesses that have prevented him from rejoining the civilian workforce. [ 6 ] In this motion, Mr.

Bruyea seeks the certification of a class proceeding on behalf of himself and other veterans, alleging systemic negligence (and alternatively, negligent misrepresentation, as explained below), breach of fiduciary duty, and unjust enrichment by Canada, more particularly, Veterans Affairs Canada [VAC]. [ 7 ] Mr.

Bruyea claims that VAC, through its operations and management, failed to properly inform and advise him and other veterans about the financial benefits for which they were eligible, in particular the Supplementary Retirement Benefit [SRB] (described below) and its underlying criteria, resulting in smaller payouts than they would otherwise have been entitled to or received. B. The Benefits at Issue [ 8 ] To better understand Mr. Bruyea’s claim and to determine whether it is appropriate for certification, some of the benefits available to veterans are described below.

This description should not be regarded as comprehensive. The benefits have various eligibility requirements. In addition, amendments to the governing statutes made over the years, with a view to enhancing the benefits available to veterans, have resulted in further complexity in understanding who is entitled to what and when. [ 9 ] The Service Income Security Insurance Plan [SISIP] was established in 1969 as a long-term disability program for losses unrelated to military service. In 1976, the SISIP was extended to service-related injuries.

The CAF long-term disability plan [CAF-LTD] is part of SISIP and falls within the mandate of the Department of National Defence, not VAC. CAF-LTD is administered by Manulife and is for members of the CAF who are designated as " “totally disabled” " for the purposes of the plan. [ " “Total disability” " for the purpose of CAF-LTD is basically equivalent to " “totally and permanently incapacitated” " [TPI], which is the term used for the benefits administered by VAC].

The CAF-LTD payable is calculated at 75% of the veteran’s pre-release salary and is available until the veteran reaches age 65. [ 10 ] On April 1, 2006, the Canadian Forces Members and Veterans Re-establishment and Compensation Act , SC 2005, c 21 [the 2006 Act, also referred to as the Veterans Charter ] came into force. The 2006 Act established several new programs and benefits, including a rehabilitation and vocational services program to assist veterans in their return to civilian life [the Rehabilitation Program].

To be eligible for the Rehabilitation Program, veterans must either have been medically released from the CAF (section 9 of the 2006 Act) or have been determined to have a " “physical or a mental health problem resulting primarily from service in the Canadian Forces that is creating a barrier to re-establishment in civilian life” " (section 8).

These two eligibility criteria have been referred to by the Defendant’s affiants as the " “gateways” " to the Rehabilitation Program. [ 11 ] As explained by the Defendant’s affiants, to be eligible via either gateway, a veteran had to apply and be approved for the Rehabilitation Program. Once approved, the veteran was then also eligible for the Earning Loss Benefit [ELB] and the SRB. [ 12 ] The ELB was an income replacement benefit available to veterans participating in the Rehabilitation Program (subsection 18(1) of the 2006 Act) who applied for ELB.

The benefit continued to be payable until the veteran’s individual rehabilitation plan had been completed or cancelled, or until the veteran reached age 65 (subsection 18(3)). If a veteran were determined to be " “unable to engage in suitable gainful employment as a result of being totally and permanently incapacitated” " or, following the 2017 legislative amendments, to have a " “diminished earnings capacity” " [DEC], the ELB would continue to be payable even after completion or cancellation of the rehabilitation plan, up until age 65 (subsection 18(4)).

This benefit was known as " “extended ELB.” " In such cases, TPI and DEC determinations were made on a case-by-case basis by the veteran’s case manager based on a number of factors set out in VAC policy documents. [ 13 ] The amount of the ELB was initially calculated at 75% of the veteran’s imputed income (the higher of the veteran’s pre-release salary and a prescribed minimum), subject to deductions for certain income sources [offsets], including CAF-LTD.

Because both the ELB and CAF-LTD were calculated at 75% of the veteran’s imputed income, a veteran who was already receiving CAF-LTD and who applied for ELB would not receive any additional income. [ 14 ] On October 1, 2016, the ELB was increased to 90% of the veteran’s imputed income, and the minimum imputed salary was raised. As a result, veterans to whom ELB was payable (although not necessarily paid due to the offset) received a top-up over the amount received as CAF-LTD. [ 15 ] The SRB was a one-time, lump sum payment intended to be paid when the veteran reached age 65.

The SRB was designed to acknowledge that veterans in receipt of ELB had a diminished capacity to contribute to a retirement pension plan. The SRB was available, on application, to veterans who had been approved for extended ELB payments due to a TPI or DEC designation when their entitlement to the ELB ended, which was typically at age 65, or where the criteria for a TPI or DEC designation were no longer met (subsection 25(1) of the 2006 Act). The SRB was calculated at 2% of the total ELB payable (regardless of whether it was paid out) to a veteran, without considering any income offsets (

section 29 of the Canadian Forces Members and Veterans Re-establishment and Compensation Regulations , SOR/2006-50 ). [ 16 ] In the event of a veteran’s service related death, the ELB was available, on application, to the survivors until the veteran would have reached age 65 (sections 22 and 23 of the 2006 Act) at which point the survivors became eligible to receive the SRB (subsections 25(2) and (3)). [ 17 ] On April 1, 2019, amendments to the 2006 Act, which had since been renamed the Veterans Well-being Act , came into force and replaced the ELB and SRB with other benefits, including the Pension for Life and Retirement Income Security Benefit [RISB].

Transitional provisions in the amendments to the Veterans Well-being Act provided for a one-time, lump sum payment equal to the amount of the SRB to which an eligible veteran would have been entitled as of March 31, 2019 [the SRB payout], if they had not yet received the SRB. [In other words, veterans who had not reached age 65 and who would have received SRB upon reaching age 65 under the 2006 Act, received a lump sum amount pursuant to the transitional provisions pro-rated to that date; they were not denied this benefit, but did not receive the amount they would have received at age 65]. II.

The Proposed Class Members’ Experience [ 18 ] Mr. Bruyea and other veterans provided affidavits attesting that, due to their service-related injuries, they struggled to re-establish themselves in civilian life. The affiants described their experience seeking and receiving information from VAC about the ELB and SRB benefits. A. Mr. Bruyea [ 19 ] Mr. Bruyea joined the CAF in 1982 and was medically released in 1996. In 2000, he was determined to be " “totally disabled” " and was approved for CAF-LTD. He attests that he learned about the VAC Rehabilitation Program and the ELB in 2005 when the 2006 Act was introduced.

He states that he spoke to VAC employees several times between 2005 and 2011 and was always advised that there was no benefit to him to apply for the new program because the ELB—to which he would be entitled—would be entirely offset by his CAF- LTD. Mr. Bruyea states that VAC never informed him of the SRB, its eligibility requirements or how it would be calculated. [ 20 ] Mr. Bruyea recounts that in 2011 he spoke to his VAC case manager about improving his conditions. The case manager suggested that he apply for the Rehabilitation Program and the ELB.

He applied and was approved for the Rehabilitation Program in early 2012. He was subsequently designated as TPI in March 2012. In September 2012, VAC advised him by letter that he had been approved for the ELB but was not entitled to any additional payment because he was receiving CAF-LTD. In 2016, when the ELB was increased from 75% to 90%, of pre-release salary, VAC informed Mr. Bruyea that he may be eligible for the top-up. He submitted the necessary forms and began to receive the top-up payments in November 2016. Mr.

Bruyea attests that none of the communications he received from VAC during this time mentioned the SRB or its eligibility criteria. [ 21 ] Mr. Bruyea attests that in 2019, when the termination of the SRB was announced, his VAC case manager advised him that he would receive a lump sum amounting to 2% of the total ELB to which he had been entitled since his acceptance into the Rehabilitation Program in 2012. Mr.

Bruyea explains that it was only at that time in 2019 that he understood that if he had applied for the Rehabilitation Program and ELB and had been approved when those programs were first established in 2006, rather than six years later, he would have been entitled to a significantly greater SRB payout. [ 22 ] Mr. Bruyea attests to his belief that VAC employees did not properly understand the interlocking benefit schemes and, therefore, failed to provide him and others with the necessary information and advice to take full advantage of the benefits.

He complained to the Office of the Veterans Ombudsperson [OVO] in May 2019 alleging unfair treatment by VAC about the start date for the calculation of his SRB. B. Danny Carvalho Raposa [ 23 ] Mr. Raposa attests that he served in the CAF from 1987 until his medical release in November 2001. He has received CAF-LTD since December 2001. Around December 2005, VAC determined that he was TPI. [ 24 ] Mr. Raposa attests that he was not assigned a VAC case manager until 2014. He states that he first learned of the Rehabilitation Program in 2014 from sources other than VAC. He applied and was approved. Mr.

Raposa adds that his case manager advised him to apply for ELB but did not advise him about the interrelationship between the benefit programs. He attests that although he was approved for ELB in 2015 he did not receive any additional payment because the ELB (at 75%) was offset by his CAF-LTD. He began to receive payments for ELB after it was increased to 90%. [ 25 ] Mr. Raposa attests that he received a lump sum SRB payout of approximately $4,000 in 2019. [ 26 ] The Defendant notes that VAC communicated with Mr.

Raposa, including with respect to his approval for the Rehabilitation Program and ELB on June 23, 2014. The November 5, 2014 letter from VAC advised Mr. Raposa that he was determined to be TPI and that he was eligible to receive ELB until the age of 65 or until his status changed. The letter further advised that when the ELB ends, he could apply for SRB, a taxable lump sum payment calculated as equal to 2% of ELB he was eligible to receive. The letter also explained that he could request a review and provided a contact number if he had any questions. [ 27 ] The Defendant notes that Mr.

Raposa was immediately informed of the SRB once he satisfied all three criteria. Although, Mr. Raposa recalls that he learned of the SRB at a conference, VAC advised him by letter in November 2014. [ 28 ] On cross-examination, Mr. Raposa was asked whether he thought he was entitled to more than the SRB lump sum he received. He acknowledged that he did not know how the amount was calculated and could not, therefore, respond. C. Andre Joseph Serge St-Jean [ 29 ] Mr. St-Jean served in the CAF from 1976 until his medical release in 2013. He has received CAF-LTD since August 2013.

He attests that he was also advised about the Rehabilitation Program from his case manager in August 2013, immediately applied and was approved in September 2013.

[ 30 ] By letter dated October 2, 2013, VAC advised him that he was also eligible for ELB, adding: " “However, as you are eligible for this type of benefit through Service Income Security Insurance Plan Long Term Disability (SISIP LTD) there is no VAC Earnings Loss Benefit payable to you from VAC at this time.” " The letter also explained that he could request a review and provided a number to call with any questions. [ 31 ] By letter dated March 21, 2014, VAC notified Mr.

St-Jean that a rehabilitation plan would not be developed, as his rehabilitation needs had not been identified, and that his participation in the program was considered to be completed. Mr. St-Jean did not request a review. [ 32 ] Mr. St-Jean attests that VAC did not advise him that the completion of the Rehabilitation Program would have implications for the ELB or SRB. [ 33 ] On May 19, 2015, Mr. St-Jean was advised that his SISIP claim had been reviewed and that his condition met the definition of " “total disability.” " [ 34 ] Mr.

St-Jean attests that in 2016, upon learning that the ELB had increased to 90%, he inquired about how to apply for the top-up. He states that he was advised by a VAC case manager that his file had been improperly closed in March 2014 upon completion of the Rehabilitation Program. The case manager advised him that he should have been designated TPI at that time and that he would be reinstated into the VAC Rehabilitation Program and designated TPI so that he could access the ELB top-up. [ 35 ] By letter dated November 3, 2016, VAC advised Mr. St-Jean that his ELB would continue to age 65.

The letter also explained that when ELB ends, he could apply for SRB, and also explained how SRB is calculated. The letter further advised Mr. St-Jean that he may be eligible for the RISB at age 65, which is a benefit available to veterans who were eligible for ELB as a result of being TPI and are also in receipt of a disability benefit. The letter provided information about requesting a review and a number to call with any questions. [ 36 ] In September 2019, Mr.

St-Jean was advised by VAC that SRB had ended and that, because he had not yet reached age 65 and had not received SRB, he was eligible for a lump sum payment of $4,938.61. This amount was calculated based on 2% of ELB payable from April 2014 to October 25, 2016 (when he was deemed TPI). Mr. St-Jean complained to the OVO and the Minister of Veterans Affairs that a gap in his ELB, due to his wrongfully closed file, reduced his SRB payment. Mr. St-Jean attests that the OVO concluded that he had been unfairly treated. [ 37 ] In May 2020, VAC advised Mr.

St-Jean that his SRB had been recalculated to take into account the gap period from September 30, 2013 to March 31, 2014. However, the additional payment amounted to only $10.93 after taxes. Mr. St-Jean attests that VAC did not recalculate the April 2014 to October 2016 period during which VAC determined that a rehabilitation plan would not be developed. The May 10, 2020 letter from VAC includes the recalculation worksheet and provides contact information for questions. D. Perry Robert Gray [ 38 ] Mr. Gray served in the CAF from 1976 until his medical release in 2002.

He began to receive CAF-LTD in 2002 and was subsequently deemed to be TPI. He attests that he learned of ELB in 2006 but did not apply for ELB as he was told by VAC that he did not qualify. He states that his VAC case manager never discussed the Rehabilitation Program, ELB or SRB. [ 39 ] Mr. Gray attests that he learned of the Rehabilitation Program from another veteran in 2011, applied and was approved in November 2011. [ 40 ] Mr. Gray states that in 2018, VAC informed him that he was entitled to ELB. He applied and began to receive ELB in 2018.

He attests that VAC did not tell him about the ELB he should have received from 2006 to 2018. He believes that he was not provided with sufficient information to understand the Rehabilitation Program, a TPI designation, the ELB, or the SRB. [ 41 ] Mr. Gray attests that he received a lump sum SRB payment in 2019. [ 42 ] On cross-examination, Mr. Gray did not recall whether he received an application for the Rehabilitation Program and ELB from VAC in 2006, but acknowledged that this was possible. E. Ronald Joseph Cundell [ 43 ] Mr. Cundell served in the CAF from 1981 until his medical release in 2000.

He has received CAF-LTD since 2000. [ 44 ] He attests that he found the changes to the benefits programs implemented in 2006 to be overwhelming and did not understand which benefits he was required to apply for and which were automatic. He explains that through his own research he learned of the Rehabilitation Program in 2006 and contacted VAC. He attests that VAC asked him if he intended to forfeit his CAF-LTD, which led him to understand that he could not apply for the Rehabilitation Program. [ 45 ] Mr.

Cundell attests that in 2011, his VAC case manager applied for ELB on his behalf, and he assumes that the case manager also applied for the Rehabilitation Program. He states that his case manager presented him with forms regarding TPI, the Permanent Impairment Allowance and the Permanent Impairment Allowance Supplement, which he signed. He was deemed TPI in late 2016 or early 2017. [ 46 ] Mr.

Cundell states that he first heard about SRB in September 2019, when he received a letter from VAC advising him that the SRB would be terminated and that he was entitled to a lump sum SRB payment of $7,870.25 before deductions. [ 47 ] Mr. Cundell attests that no one at VAC ever explained to him the interrelationship between the Rehabilitation Program, ELB, TPI and SRB.

III. The Preliminary Issue: Systemic Negligence or Negligent Misrepresentation and Whether the Plaintiff Should be Granted Leave to Amend the Further Amended Statement of Claim [ 48 ] At the hearing of this motion, the Defendant argued that the Plaintiff had raised a new cause of action in negligent misrepresentation in the Plaintiff’s Reply submissions. The Defendant noted that the Plaintiff had amended his Statement of Claim as recently as April 29, 2022, yet had not pleaded negligent misrepresentation.

The Defendant noted the challenge of responding to a " “moving target.” " [ 49 ] The Plaintiff argued that he had set out the elements of negligent misrepresentation and relevant facts in support of a cause of action for negligent misrepresentation in his Further Amended Statement of Claim (April 2022).

The Plaintiff disputed that the Defendant had been taken by surprise given the Defendant’s argument that the systemic negligence claim was in essence a claim for negligent misrepresentation. [ 50 ] The Plaintiff also argued that he could seek to amend his Further Amended Statement of Claim to alternatively and specifically plead negligent misrepresentation given that the Defendant had not yet filed a Statement of Defence and the pleadings were not closed. [ 51 ] Following oral submissions, the Court agreed that the Defendant could provide short written submissions, post hearing, to address the alternative claim for negligent misrepresentation.

The Plaintiff was requested to provide a Proposed Further Amended Statement of Claim in order for the Defendant to respond to the specific pleading. [ 52 ] It was understood that if the Court concluded that the Plaintiff’s systemic negligence claim is not a reasonable cause of action, the Court could then consider whether the Plaintiff had already set out the requisite elements of negligent misrepresentation in his Further Amended Statement of Claim and could also consider the Plaintiff’s request to further amend his pleadings.

In the event that the Court were to grant leave to the Plaintiff to file the Proposed Further Amended Statement of Claim, the Court would then determine whether the alternative claim for negligent misrepresentation is a reasonable cause of action. [ 53 ] As agreed, the Plaintiff submitted a Proposed Further Amended Statement of Claim, dated June 27, 2022, which specifically pleads an alternative cause of action of negligent misrepresentation. The Defendant provided brief post-hearing submissions on the alternative pleading of negligent misrepresentation. IV. Overview of the Parties’ Positions A.

The Plaintiff [ 54 ] The Plaintiff submits that members of the CAF voluntarily sign up and risk their lives for the benefit of Canadians and others through their service and, in doing so, expect that Canada will support them if they suffer physical or mental health related injuries.

The Plaintiff alleges that veterans have not been sufficiently supported. [ 55 ] The Plaintiff asserts that Canada has undertaken to ensure that veterans who are ill and injured in service are compensated in a way that benefits their value to the country and that " “part of VAC’s mandate is to advise veterans about the benefits available to them and to explain those benefits and how to apply in order to maximize the benefits.” " [ 56 ] The Plaintiff points to the response by one of the Defendant’s affiants on cross-examination, who stated, " “I would say it is true that the Government of Canada wants to ensure that veterans who are ill or injured in service to the country are compensated and cared for in a way that befits their stature and value to the country.” " The Plaintiff regards this as Canada’s, and more particularly, VAC’s undertaking to do so. [ 57 ] The Plaintiff describes the proposed class members—who may exceed 10,000—as veterans that were determined by VAC to be totally incapacitated or to have diminished earning capacity.

The Plaintiff submits that this group has the most complex needs and are the most vulnerable.

The Plaintiff adds that this group is no longer able to earn the income they would have otherwise earned in the CAF and has been unable to save for their retirement in the same way as other veterans. [ 58 ] The Plaintiff claims that VAC’s conduct was systemic; VAC consistently wrongly advised proposed class members about their eligibility for benefits and, more particularly, VAC advised them that it would be pointless to apply for ELB upon becoming eligible because any ELB payment would be offset by CAF-LTD, which was initially the very same amount.

The Plaintiff adds that VAC also consistently failed to inform proposed class members how the SRB would be calculated or that the SRB depended upon ELB eligibility and approval, even if the ELB payable was offset by CAF-LTD. [ 59 ] The Plaintiff further submits that VAC’s acts and omissions were institutional and contrary to VAC’s mandate, as described by the Defendant’s affiant: to ensure that veterans are compensated in a manner that reflects their value to the country, which includes advising veterans about the benefits available to them.

The Plaintiff interprets this response as acknowledging that the mandate of VAC is to compensate and care for veterans. The Plaintiff further submits that VAC was aware that these vulnerable veterans – the proposed class members – did not understand the complex benefit regimes.

More troubling, VAC’s acts and omissions caused losses for the class members. [ 60 ] The Plaintiff points to the May 13, 2020 Report of the OVO, " “Supplementary Retirement Benefit (SRB) Payout Micro- Investigation” " [OVO Report], that responded to his complaint and found, among other things: that it was unfair for VAC to calculate the SRB based on the ELB start date, given VAC’s failure to provide clear and easy-to-understand information about the complex

benefit scheme; that VAC front-line workers are not fully informed about the complex benefit programs; and, that it is unreasonable to expect veterans to understand the eligibility criteria. The Plaintiff also points to other reports, which found that VAC workers lacked awareness of the benefit programs. [ 61 ] The Plaintiff argues that his claim of systemic negligence is a reasonable cause of action. However, if the Court disagrees, the Plaintiff relies on the alternative claim of negligent misrepresentation.

As noted above, the Plaintiff submits that the essential elements of negligent misrepresentation were set out in the Further Amended Statement of Claim (April 2022).

If the Court does not agree, the Plaintiff submits that the Court should grant leave to him to amend the claim as set out in the Proposed Further Amended Statement of Claim given that the pleadings are not closed. [ 62 ] The Plaintiff further submits that the claims for breach of fiduciary duty and unjust enrichment are reasonable causes of action. [ 63 ] The Plaintiff suggests that the Defendant’s challenges to all the causes of action asserted are about their underlying merits, which is not the focus at the certification stage. [ 64 ] The Plaintiff submits that the Further Amended Statement of Claim and the Proposed Further Amended Statement of Claim disclose reasonable causes of action and the Plaintiff’s evidence provides some basis in fact for all other criteria for certification.

The Plaintiff adds that this class action promotes the policy objectives of access to justice, behaviour modification, and judicial economy. The Plaintiff further submits that the issues raised are common to the class and should be determined by the Court on a full record. B. The Defendant [ 65 ] The Defendant acknowledges the importance of the role of CAF members and their commitment to Canada.

The Defendant notes that the broad suite of benefits available to eligible veterans is not at issue; this action is only about the SRB. [ 66 ] The Defendant submits that the Plaintiff’s claim does not meet the criteria for certification as a class action.

The Defendant argues that: there is no reasonable cause of action for systemic negligence, breach of fiduciary duty, or unjust enrichment; the original class definition does not disclose an identifiable class; the issues raised are not common because all or many require individual determinations; and, a class action is not the preferable procedure. [ 67 ] As noted, the Defendant submits that any alleged negligence does not rise to the level of systemic negligence.

The Defendant adds that the claim of systemic negligence is really a disguised claim for negligent misrepresentation and should be struck. [ 68 ] The Defendant further submits that the proposed alternative claim of negligent misrepresentation will not work as a class action because its determination turns on the interaction between VAC and individual veterans and the individual issues overwhelm any possible common questions of law or fact. [ 69 ] The Defendant notes that all the Plaintiff’s affiants recounted different experiences and interactions with VAC and some acknowledged that they did not know whether they were " “short changed” " in their SRB payment. [ 70 ] The Defendant submits that the Plaintiff cannot rely on the OVO Report or the other reports to support the cause of action for systemic negligence ( Canada v Greenwood , 2021 FCA 186 at para 91 [ Greenwood ]) or to establish a basis in fact for the common questions related to the cause of action.

The OVO Report can only provide context, not any basis in fact. [ 71 ] The Defendant further submits that the Plaintiff’s claims for breach of fiduciary duty and unjust enrichment are untenable. V. The Amended Statement of Claim, Further Amended Statement of Claim and Proposed Further Amended Statement of Claim A. The Claims [ 72 ] As noted above, the Plaintiff claims that, as a result of their service in the CAF, he and other class members suffer from debilitating mental and physical injuries.

The Plaintiff explains that he and class members are all either " “totally disabled” " (the term used for CAF- LTD) or TPI or DEC and because of their disabilities, they are, by definition, vulnerable and marginalized. The Plaintiff alleges that VAC employees lack sufficient training, expertise, understanding, and awareness of programs in order to explain and communicate the programs and their eligibility requirements to veterans.

He alleges that VAC failed to have the appropriate management and operations procedures that would reasonably have ensured the provision of accurate, timely, and reliable information about eligibility for the SRB. He also claims that there has been significant confusion and misinformation due to the lack of expertise, knowledge and awareness among VAC employees regarding the benefit programs, the complexity of the benefit programs, and the vulnerability of the veterans who are entitled to the benefits.

He submits that, as a result, veterans have not received benefits to which they are entitled or received lower amounts than they would and should have if they had been properly advised of the eligibility criteria and the process to obtain the benefits. The Plaintiff alleges that VAC’s conduct amounts to systemic negligence (or alternatively, negligent misrepresentation), breach of fiduciary duty, and unjust enrichment. [ 73 ] The Plaintiff commenced his proceeding on September 16, 2020. His Statement of Claim dated September 15, 2020 was amended on May 20, 2021 (Amended Statement of Claim).

He filed a Further Amended Statement of Claim on April 29, 2022. [ 74 ] In the Further Amended Statement of Claim (April 2022) the Plaintiff seeks, on his own behalf and on behalf of proposed class

members, the certification of the action as a class proceeding and his appointment as representative plaintiff.

The Plaintiff seeks, among other things, a Declaration that VAC was systematically negligent and erred in failing to properly advise the Plaintiff and the class members of the eligibility requirements for the SRB and the steps needed to maximize their benefit entitlements. [ 75 ] The Proposed Further Amended Statement of Claim (June 27, 2022) is premised on the Court finding that systemic negligence may not be a reasonable cause of action and that the alternative claim of negligent misrepresentation was not previously sufficiently or specifically pleaded. [ 76 ] In the Proposed Further Amended Statement of Claim (June 2022), the Plaintiff alternatively and specifically claims negligent misrepresentation by VAC.

The Plaintiff asserts that a close and direct relationship of trust and confidence existed between VAC and the Plaintiff and class members; the relationship was one of proximity; and the injuries of the Plaintiff and class members were reasonably foreseeable to VAC. [ 77 ] The Plaintiff asserts that VAC expressly or impliedly undertook the responsibility to provide the Plaintiff and class members with accurate information about their entitlement to the ELB and SRB, the interrelationship of benefit schemes and how the SRB was calculated.

The Plaintiff also states that VAC undertook, expressly or impliedly, the responsibility not to provide the Plaintiff and other class members with erroneous and inaccurate information about the ELB and SRB programs.

The Plaintiff asserts that the undertakings arise from VAC’s statutory obligations and mandate to assist the Plaintiff and other class members to reintegrate into civilian life and from the special relationship owed by Canada via VAC to veterans and the close and direct relationship existing between VAC—as administrator of the ELB and SRB programs—and the Plaintiff and class members—as beneficiaries of those programs. [ 78 ] The Plaintiff asserts that there was a relationship of proximity with VAC and, therefore, a duty of care.

He adds that given the facts set out in the whole of the claim, there are no policy reasons to negate this duty. [ 79 ] The Plaintiff also asserts that VAC provided untrue, inaccurate or misleading representations to proposed class members with respect to the ELB and SRB. [ 80 ] The Plaintiff states that he and his fellow class members relied on the misrepresentations and altered their position, thereby foregoing alternative and more beneficial courses of action that were available to them and that they suffered economic detriment as a consequence.

He submits that it was reasonable for him and proposed class members to rely on VAC’s representations, which they did to their detriment, and that this was foreseeable to VAC.

The Plaintiff claims that if he and other class members had applied for ELB when first eligible, their SRB payment would have been greater than the SRB that they actually received (because ELB, whether " “payable” " or not, was used to calculate the SRB). [ 81 ] The Plaintiff also seeks a Declaration that VAC breached the fiduciary duty owed to the Plaintiff and the class in failing to properly advise him and class members of the eligibility requirements for the SRB and the steps they needed to take to maximize their benefits. [ 82 ] In addition, the Plaintiff seeks a declaration that Canada was unjustly enriched by not paying the benefits to which the class members were entitled. [ 83 ] The Plaintiff essentially seeks, on behalf of each class member, an additional SRB payout calculated based on each veteran’s earliest possible date of eligibility for the ELB, plus interest. [ 84 ] More specifically, the Plaintiff and proposed class members seek arrears of payments and other losses resulting from Canada’s and VAC’s negligence and breach of fiduciary duties; general damages; special damages; exemplary and punitive damages; out of pocket expenses and disbursements; an order pursuant to Rule 334.28(1) and (2) for the aggregate assessment of monetary relief and its distribution; restitution of Canada’s profits; pre and post-judgment interest; and, costs, including costs of notice and administering the distribution plan.

B.

The Proposed Class [ 85 ] The Further Amended Statement of Claim (April 2022) describes the proposed class as a ll former members of the Canadian Armed Forces (veteran(s)) who were approved for the Rehabilitation Program, deemed to be TPI or DEC, approved for " “extended” " ELB and those who " “would have” " met these criteria and who received or " “would have” " been eligible to receive a SRB. [ 86 ] The Defendant objects to the proposed definition, noting that it lacks objectivity due to the use of vague terms, including " “would have” " with respect to the eligibility criteria. [ 87 ] The Plaintiff now submits, based on information gleaned since the April 2022 amendment to his Statement of Claim and in the course of the hearing of this motion and on the Defendant’s objections, that the proposed class can be described in a clearer and more objective way.

The Plaintiff provides the following description in the Proposed Further Amended Statement of Claim; All former members of the Canadian Armed Forces (“Veteran(s)”) who were: 1. approved to be in the VAC Rehabilitation Program sponsored and administered by the Defendant; 2. declared to be Totally and Permanently Incapacitated and/or suffering Diminished Earnings Capacity as defined in programs sponsored and administered by the Defendant including those Veterans approved for CAF-LTD and designated Totally Disabled; and 3. approved for and in receipt of an Earnings Loss Benefit (ELB) sponsored and administered by the Defendant, whether or not that payment [the ELB payable to them] would have been offset by other income or payments;

and, as a result, received the Supplementary Retirement Benefit, and the survivors of Veterans, where those survivors received the Supplementary Retirement Benefit under the Defendant’s legislative scheme and programs. VI. The Statutory Provisions [ 88 ]

Part 5.1 of the Federal Courts Rules , SOR/98-106 governs class actions. Rule 334.16(1) sets out the criteria for certification; 334.16

(1) Subject to subsection (3), a judge shall, by order, certify a proceeding as a class proceeding if " " 334.16

(1) Sous réserve du paragraphe (3), le juge autorise une instance comme recours collectif si les conditions suivantes sont réunies : " " (

a) the pleadings disclose a reasonable cause of action;

a) les actes de procédure révèlent une cause d’action valable; (

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

b) il existe un groupe identifiable formé d’au moins deux personnes; (

c) the claims of the class members raise common questions of law or fact, whether or not those common questions predominate over questions affecting only individual members;

c) les réclamations des membres du groupe soulèvent des points de droit ou de fait communs, que ceux-ci prédominent ou non sur ceux qui ne concernent qu’un membre; (

d) a class proceeding is the preferable procedure for the just and efficient resolution of the common questions of law or fact; and

d) le recours collectif est le meilleur moyen de régler, de façon juste et efficace, les points de droit ou de fait communs; (

e) there is a representative plaintiff or applicant who

e) il existe un représentant demandeur qui : (

i) would fairly and adequately represent the interests of the class, (

i) représenterait de façon équitable et adéquate les intérêts du groupe, (ii) has prepared a plan for the proceeding that sets out a workable method of advancing the proceeding on behalf of the class and of notifying class members as to how the proceeding is progressing, (ii) a élaboré un plan qui propose une méthode efficace pour poursuivre l’instance au nom du groupe et tenir les membres du groupe informés de son déroulement, (iii) does not have, on the common questions of law or fact, an interest that is in conflict with the interests of other class members, and (iii) n’a pas de conflit d’intérêts avec d’autres membres du groupe en ce qui concerne les points de droit ou de fait communs, (iv) provides a

summary of any agreements respecting fees and disbursements between the representative plaintiff or applicant and the solicitor of record. (iv) communique un

sommaire des conventions relatives aux honoraires et débours qui sont intervenues entre lui et l’avocat inscrit au dossier.

(2) All relevant matters shall be considered in a determination of whether a class proceeding is the preferable procedure for the just and efficient resolution of the common questions of law or fact, including whether

(2) Pour décider si le recours collectif est le meilleur moyen de régler les points de droit ou de fait communs de façon juste et efficace, tous les facteurs pertinents sont pris en compte, notamment les suivants :

(

a) the questions of law or fact common to the class members predominate over any questions affecting only individual members;

a) la prédominance des points de droit ou de fait communs sur ceux qui ne concernent que certains membres; (

b) a significant number of the members of the class have a valid interest in individually controlling the prosecution of separate proceedings;

b) la proportion de membres du groupe qui ont un intérêt légitime à poursuivre des instances séparées; (

c) the class proceeding would involve claims that are or have been the subject of any other proceeding;

c) le fait que le recours collectif porte ou non sur des réclamations qui ont fait ou qui font l’objet d’autres instances; (

d) other means of resolving the claims are less practical or less efficient; and

d) l’aspect pratique ou l’efficacité moindres des autres moyens de régler les réclamations; (

e) the administration of the class proceeding would create greater difficulties than those likely to be experienced if relief were sought by other means.

e) les difficultés accrues engendrées par la gestion du recours collectif par rapport à celles associées à la gestion d’autres mesures de redressement. VII. The Issues [ 89 ] The issue is whether the Plaintiff has established the criteria for certification of this action as a class action.

This entails determining: 1) whether the pleadings disclose a reasonable cause of action (i.e., whether, if the facts pleaded are taken to be true, it is plain and obvious that the claim has no reasonable prospect of success); and, 2) whether the Plaintiff has established some basis in fact for all other requirements for certification (identifiable class, common questions, preferable procedure, and representative plaintiff). [ 90 ] In Canada (Attorney General) v Jost , 2020 FCA 212 at paras 25–28 [ Jost ], the Federal Court of Appeal summarized the benefits of class actions and the established general principles: [25] As the Supreme Court has observed, class actions allow for improved access to justice for those who might otherwise be unable to seek vindication of their rights through the traditional litigation process.

Class actions also enhance judicial economy, allowing a single action to decide large numbers of claims involving similar issues. Finally, class actions encourage behaviour modification on the part of those who cause harm: Western Canadian Shopping Centres Inc. v. Dutton , 2001 SCC 46 , [2001] 2 S.C.R. 534, at paras. 27-29 ; Hollick v. Toronto (City) , 2001 SCC 68 , [2001] 3 S.C.R. 158, at para. 27 ; and Rumley v.

British Columbia , 2001 SCC 69 , [2001] 3 S.C.R. 184. [26] The Supreme Court has also held that an overly restrictive approach to the application of class action certification legislation must be avoided, so that the benefits of class actions can be fully realized: Western Canadian Shopping Centres , above at para. 46; Hollick , above at para. 15 . [27] As this Court observed in John Doe , the focus at the certification stage is on the form of the action.

The question at this point is not whether the claim is likely to succeed, but whether the suit is appropriately prosecuted as a class action: above at paras. 23 and 24. [28] The onus is on the plaintiff in a certification motion to establish an evidentiary basis for certification: Hollick , above at para. 25 ; John Doe , above at para. 24. That is, the plaintiff must show some basis in fact for each of the certification requirements, apart from the requirement that the pleadings disclose a reasonable cause of action. VIII.

Do the Pleadings Disclose a Reasonable Cause of Action? [ 91 ] The Plaintiff’s Further Amended Statement of Claim (April 2022) pleads three causes of action: systemic negligence, breach of fiduciary duty, and unjust enrichment.

The Proposed Further Amended Statement of Claim pleads negligent misrepresentation as an alternative to systemic negligence. [ 92 ] The jurisprudence has established that to determine whether the pleadings disclose a reasonable cause of action, the issue is whether, assuming that the facts pleaded are true, it is plain and obvious that the pleadings disclose no reasonable cause of action, i.e., that there is no reasonable prospect of success: Hollick v Toronto (City) , 2001 SCC 68 at para 25 [ Hollick ]; Canada v John Doe , 2016 FCA 191 at para 23 [ John Doe ]; Jost at para 29 ; Greenwood at para 91 .

At this stage, the Court does not consider evidence: John Doe at

para 23; Greenwood at para 91. [93] In John Doe at para 23, the Court of Appeal explained: For the purposes of the first criterion - that the pleadings disclose a reasonable cause of action - the principles are the sameas those applicable on a motion to strike. The facts alleged in the statement of claim are assumed to be true, and no evidencemay be considered. The test is whether it is “plain and obvious” that the pleadings, assuming the facts pleaded to be true,disclose no reasonable cause of action.

Or, to put it differently, the plaintiffs must establish that there is a reasonableprospect of success should the claim be permitted to proceed towards trial: see Hollick v. Toronto (City), 2001 SCC 68,[2001] 3 S.C.R. 158, at para. 25 [Hollick]; Pro-Sys, at para. 63; Hunt v. Carey Canada Inc., (SCC), [1990] 2S.C.R. 959 at p. 980, 74 D.L.R. (4th) 321 [Hunt]; R. v. Imperial Tobacco Canada Ltd., 2011 SCC 42, [2011] 3 S.C.R. 45, atparas. 17, 70.

While the facts alleged are assumed to be true, they must still be pleaded in support of each cause of action.Bald assertions of conclusions are not allegations of material fact and cannot support a cause of action: Merchant LawGroup v. Canada Revenue Agency, 2010 FCA 184, 321 D.L.R. (4th) 301, at para. 34; Mancuso et al. v.

Canada (Minister ofNational Health and Welfare) et al., 2015 FCA 227, 476 N.R. 219, at para. 27. [94] In Canada v Harris, 2020 FCA 124 at para 23, the Court of Appeal noted that the test on a motion to strike "“is generous toplaintiffs”" and went on to clarify at para 24, that "“[n]evertheless, a plaintiff must still plead sufficient facts to support the claim,”"noting that the pleadings frame the issues. A. Is Systemic Negligence—or Alternatively Negligent Misrepresentation—aReasonable Cause of Action?

(1) The Plaintiff’s Submissions [95] The Plaintiff submits that the facts disclose a claim of negligence that has a reasonable prospect of success, namely the existence ofa duty of care, breach of the duty of care by VAC, and resulting damage to the Plaintiff. [96] The Plaintiff submits that in this case, the class members—who are disabled and, therefore, among the most vulnerable veterans—were in a position of complete reliance on VAC for timely and accurate information about their entitlement to the SRB.

As noted, thePlaintiff submits that VAC’s mandate is to compensate and care for veterans, including to advise them about the available benefits sothat they can maximize them, and that VAC has an obligation to be mindful of class members’ interests when administering its programsand benefits. [97] With respect to the cause of action in systemic negligence, the Plaintiff claims that VAC, as administrator of the benefits, through itsmanagement and operations or lack of adequate operations procedures, breached its duty to provide accurate information about the SRBand its calculation based on the ELB and breached its duty to not provide erroneous information regarding the ELB and SRB.

ThePlaintiff alleges that, as a consequence, class members lost out on benefits that they would have received.

The Plaintiff argues thatVAC’s failings were "“institutional”" and contrary to its mandate. [98] The Plaintiff relies on Lin v Airbnb, Inc, 2019 FC 1563 at para 59 [Lin], where the Court stated, [59] … In order to find that it is “plain and obvious” that no claim exists, there must be “a decided case directly on point,from the same jurisdiction, demonstrating that the very issue has been squarely dealt with and rejected” (Arsenault at para27, citing Dalex Co. v Schwartz Levitsky Feldman (1994), 19 OR (3d) 463, (SC); see also Finkel at para17). [99] The Plaintiff submits that, as there are no decided cases on the issues he has raised, the Court cannot find that it is plain and obviousthat the cause of action for systemic negligence has no chance of success. [100] The Plaintiff also submits that the Court need not even engage in a proximity analysis to determine whether a duty of care exists onthe part of VAC because an analogous duty of care has been established by Jost. [101] The Plaintiff notes that in Jost, the Court of Appeal found that it was not plain and obvious that Canada, as the pensionadministrator, did not owe the class members a duty of care, noting the "“substantial body of case law that has found the relationshipbetween pension administrators and members of a pension plan to be sufficiently proximate as to give rise to a duty of care”" (Jost atparas 67–71). [102] The Plaintiff submits that the reasoning in Jost applies to his claims because the ELB and SRB are social benefits akin to thepension benefits; the ELB and SRB are not discretionary; ill and injured veterans are statutorily entitled to these benefits; and, Canada, asthe administrator of the ELB and SRB, knew or ought to have known that the failure to take reasonable care to ensure that veteransunderstood the SRB and how it was calculated would result in harm to the proposed class members. [103] The Plaintiff reiterates that the proposed class members are those with the most complex needs and are the most vulnerable; thisgroup was in a position of reliance on VAC for accurate information about these benefits. [104] The Plaintiff adds that whether Jost is relied on to establish the duty of care, or the Court engages in a proximity analysis, there is aclose and direct relationship between VAC and the class members, which is a hallmark of the duty of care. [105] The Plaintiff argues that given VAC’s mandate, VAC cannot deny a proximate relationship with proposed class members.

ThePlaintiff argues that VAC’s conduct fell below the standard of care required and that the harm was foreseeable; due to VAC’s acts andomissions, class members suffered damages because they received a lower amount of SRB than they would have if they had received

proper information. The Plaintiff adds that there are no residual policy considerations that could make it plain and obvious that no dutyof care exists, particularly not at this stage where the Court does not weigh evidence. [106] The Plaintiff also argues that his systemic negligence claim is not a claim for pure economic loss, but rather arises from VAC’sconduct and the breach of his rights.

However, if the claim—in particular, VAC’s breach of the duty not to provide erroneousinformation—were viewed as a claim for pure economic loss, it would fall into the category of negligent misrepresentation (relying onOntario Inc v Maple Leaf Foods Inc, 2020 SCC 35 at paras 20–21 [Maple Leaf]).

The Plaintiff adds that regardless of the type ofnegligence alleged, the test is the same and begins with a relationship of proximity (Maple Leaf at paras 23, 30, 31), which he submitshas been established. [107] The Plaintiff submits that, even without another amendment to the Further Amended Statement of Claim, the pleadings disclose areasonable cause of action in negligent misrepresentation. [108] In the Proposed Further Amended Statement of Claim (June 2022), as more fully described above, the Plaintiff specifically claimsnegligent misrepresentation by VAC as an alternative to the claim of systemic negligence.

The Plaintiff asserts that, based on VAC’smandate, a close and direct relationship of trust and confidence existed between VAC and class members; the relationship was one ofproximity and his injuries and those of class members were reasonably foreseeable.

The Plaintiff also asserts that VAC expressly orimpliedly undertook the responsibility to provide the Plaintiff and class members with accurate—not erroneous—information about theirentitlement to the ELB and SRB, the interrelationship of benefit schemes, and how the SRB was calculated. [109] The Plaintiff asserts that VAC provided untrue, inaccurate or misleading representations to them with respect to the ELB and SRB.He again asserts that if he and other class members had applied for ELB when first eligible for it, their SRB payment would have beengreater than the SRB that they actually received. [110] The Plaintiff adds that given the facts set out in the whole of the claim, there are no policy reasons to negate the duty of care owedby VAC. [111] In conclusion, the Plaintiff submits that it is not plain and obvious that his systemic negligence claim or, alternatively, his claim ofnegligent misrepresentation cannot succeed.

(2) The Defendant’s Submissions [112] The Defendant submits that the Plaintiff’s claim in systemic negligence cannot succeed because: there is no duty to informpotential beneficiaries of a statutory scheme of their possible entitlements, the eligibility criteria, or how to maximize the benefits; and,the Plaintiff’s allegation that VAC did not have "“adequate management and operations procedures”" does not give rise to a close anddirect relationship between VAC and class members.

The Defendant explains that the relationship between the Plaintiff and theadministrators of benefits—who implement policies and procedures—is different from the relationship between the Plaintiff and VACservice representatives or case managers. [113] The Defendant further argues that the claim for systemic negligence should be struck because it is really a claim for negligentmisrepresentation "“masquerading”" as a general negligence claim.

The Defendant submits that the Plaintiff has attempted to transformhis claim into one of systemic negligence by alleging that there was a lack of internal controls or adequate procedures; however, thereare no material facts to support this. [114] The Defendant submits that the Plaintiff’s claim fails to establish that class members relied to their detriment on any undertaking—implicit or explicit—to ensure that adequate management and operations procedures were in place or that this caused class members tosuffer a loss.

The Defendant argues that the Plaintiff’s claim is simply that VAC told him there was no point to apply for theRehabilitation Program or ELB while he was in receipt of CAF-LTD. [115] The Defendant notes that the proximity analysis depends on the relationship and that something more than the relationshipbetween the Government and the public affected by the Government’s work is required to establish a close and direct relationship. [116] The Defendant disputes that Jost establishes that a duty of care exists between VAC and proposed class members. [117] The Defendant also submits that the Plaintiff’s systemic negligence claim seeks damages for pure economic loss and such claimsmust fit into a recognized category, such as negligent misrepresentation.

The Defendant disputes that the Plaintiff set out the elements ofnegligent misrepresentation in his Further Amended Statement of Claim. [118] The Defendant adds that the Plaintiff’s Proposed Further Amended Statement of Claim confirms that his claim for systemicnegligence is really a disguised claim for negligent misrepresentation and also confirms that his initial pleadings did not plead therequisite elements to support an alternative cause of action in negligent misrepresentation. [119] The Defendant acknowledges that the Plaintiff’s Proposed Further Amended Statement of Claim pleads the requisite elements ofnegligent misrepresentation.

However, the Defendant submits that the Plaintiff has not established facts to support all the elements ofnegligent misrepresentation, which were established in Queen v Cognos Inc, (SCC), [1993] 1 SCR 87 at 88–89, 99DLR (4th) 626 [Cognos]. The Defendant maintains that there is no relationship of proximity between VAC and proposed class membersto establish a duty of care to ground a negligence claim.

(3) The Claim of Systemic Negligence has no Reasonable Prospect of Success [120] As noted, the issue is whether the Plaintiff has pleaded material facts in support of each element of the causes of action claimed,and whether it is plain and obvious that the cause of action has no reasonable prospect of success. The Court must make thisdetermination without considering evidence, but at the same time, the Court does not rely on bald assertions (Bigeagle v Canada, 2021

FC 504 at para 71 ). [ 121 ] I find that the Plaintiff’s claim for systemic negligence has no reasonable prospect of success and should be struck. [ 122 ] The systemic negligence claim relies on the Plaintiff’s assertion that VAC’s conduct was institutional and systemic, that VAC failed to have adequate management and operations procedures in place, and that, contrary to its mandate, VAC failed to provide accurate information about the ELB and SRB in order for veterans to maximize their benefits and, instead, provided erroneous information about the ELB and SRB. [ 123 ] The Plaintiff does not point to facts in support of his assertion that VAC lacked adequate management or operations procedures, which is the basis of his claim—or, as the Defendant submits, what the Plaintiff asserts in order to transform his claim into that of systemic negligence, i.e., that VAC routinely, consistently and systemically failed to inform veterans of their possible benefits, or provided erroneous information. [ 124 ] I agree with the Defendant that the Plaintiff has not pleaded facts in support of a systemic negligence claim.

The Plaintiff’s assertion that VAC’s mandate includes an obligation to advise veterans about the benefits available to them and to explain the benefits, how to apply and how to maximize their benefits is based only on the Plaintiff’s own

interpretation of VAC’s mandate. The Plaintiff’s reliance on the responses on cross-examination of one of the Defendant’s affiants does not provide facts in support of any obligation or undertaking to ensure that procedures were in place to provide information for veterans to maximize their benefits. Moreover, the Court does not consider evidence at this stage. In addition, a response provided on cross-examination and interpreted in a particular manner by the Plaintiff cannot support finding that VAC had a particular mandate that is not set out in its governing statutes.

At best, the affiant’s response conveys the affiant’s own understanding of VAC’s role in the compensation of veterans. [ 125 ] The Plaintiff does not plead that he or proposed class members relied on any undertaking—whether implicit or explicit—by VAC to have adequate management and operations procedures in place or that the lack of such procedures caused proposed class members to suffer a loss. [ 126 ] The Plaintiff does not set out facts related to the alleged lack of adequate procedures at the institutional level.

As the Defendant notes, the Plaintiff’s claim is primarily that VAC representatives told him and others that there was no point to apply for ELB while in receipt of CAF-LTD because it would be offset. [ 127 ] The Plaintiff cannot rely on the OVO Report or other government initiated reports as material facts to establish the systemic negligence claim. [ 128 ] As noted, the Court does not evaluate and weigh evidence in determining whether a cause of action should be struck.

The OVO Report and other reports cited by the Plaintiff may be considered only with respect to the other elements of the test for certification as " “some basis in fact” " ( Greenwood at paras 91, 96 ). [ 129 ] The Plaintiff also cannot rely on the affidavit evidence of veterans (as described at paras 19–47) as facts in support of the claim of systemic negligence given that these affiants all received information from VAC about their benefits, although they may have received the information at different times and in different ways.

While the affiants describe some similar experiences with respect to information about the CAF-LTD offset, none of the affiants suggests that there was a systemic or institutional failure by VAC in the provision of information or that VAC failed to have adequate procedures in place to provide information and administer the benefits. [ 130 ] I am mindful of the jurisprudence that establishes that the bar to establish a reasonable cause of action is low and that the Court should not take a narrow approach.

On the other hand, it is not in anyone’s interest for a claim to proceed that is destined to fail, or, as in this case, that can be addressed by an alternative claim. [ 131 ] The Plaintiff’s reliance on Lin , at para 59 , in support of finding that it is not plain and obvious that the cause of action in systemic negligence cannot succeed because there is no other decided case from this court exactly on point " “demonstrating that the very issue has been squarely dealt with and rejected” " , overlooks that the Plaintiff must still plead facts in support of the requisite elements of the cause of action and cannot rely on assertions. [ 132 ] As noted, the Defendant also characterizes the Plaintiff’s claim for systemic negligence as a claim for economic loss, which the Plaintiff disputes.

However, it is not necessary to delve into the jurisprudence on economic loss (e.g. Maple Leaf at paras 18–23 ) . Both the Plaintiff and Defendant appear to agree that negligent misrepresentation is an alternative characterization of the claim.

(4) The Plaintiff may Amend the Pleadings to Specifically Claim an Alternative Cause of Action for Negligent Misrepresentation [ 133 ] The Plaintiff’s Further Amended Statement of Claim set out elements of negligence but did not specifically plead negligent misrepresentation. The Plaintiff’s Proposed Further Amended Statement of Claim (June 27, 2022) specifically pleads negligent misrepresentation. As noted by the Plaintiff, the pleadings are not yet closed. I find that the Plaintiff should be granted leave to amend the pleadings as proposed.

(5) Negligent Misrepresentation is a Reasonable Cause of Action [ 134 ] Given the amended pleadings, the issue turns to whether it is plain and obvious that the cause of action in negligent misrepresentation has no reasonable prospect of success. [ 135 ] As the Defendant notes, the required elements of the claim of negligent misrepresentation were established in Cognos at 88–89: (1) a duty of care based on a “special relationship” between the representor and the representee;

(2) the representation in question must be untrue, inaccurate, or misleading; (3) the representor must have acted negligently in making said misrepresentation; (4) the representee must have relied, in a reasonable manner, on the alleged negligent misrepresentation; and, (5) the reliance must have been detrimental to the representee in the sense that damages resulted. [136] Although the Defendant argues, among other things, that there is no duty of care between VAC and class members as there is nospecial or proximate relationship, and disputes that VAC provided untimely or misleading information, the Defendant’s arguments relatemore to the merits and strength of the Plaintiff’s claim.

The Court’s role at this stage is to determine if it is plain and obvious that thereis no proximate relationship and duty of care owed by VAC; i.e., whether the facts as pleaded and taken as true support a duty of care byVAC to the class members. [137] As noted by the Supreme Court of Canada in Alberta v Elder Advocates of Alberta Society, 2011 SCC 24 at para 66 [ElderAdvocates], whether the pleadings support a duty of care, requires the Court to first determine whether the defendant and class memberswere in a relationship that gave rise to a prima facie duty of care, based on foreseeability and proximity, and if so, whether the duty isnegated by policy considerations. [138] More recently, in Jost, at para 66, the Court of Appeal noted the same test, citing Cooper v Hobart, 2001 SCC 79 [Cooper], [66] … There, the Supreme Court held that a two-stage test applies in determining whether a duty of care exists in a givencase.

The first question is whether the requirements of reasonable foreseeability and proximity have been met.

If the Courtconcludes that a prima facie duty of care exists, it must then be determined whether there are residual policy reasons thatmilitate against the imposition of a duty of care: at paras. 38-39. [139] With respect to whether residual policy reasons would erode the duty of care, the Court of Appeal noted, at para 74, There is, however, jurisprudence holding that courts should be reluctant to dismiss a proposed class action as disclosing noreasonable cause of action “based on policy reasons at the motion stage before there is a record on which a court can analyzethe strengths and weaknesses of the policy arguments”: Haskett v.

Equifax Canada Inc., (ON CA), 224D.L.R. (4th) 419, [2003] O.J. No. 771 at para. 52; See also Williams v. City of Toronto, 2011 ONSC 6987, 346 D.L.R. (4th)173 at para. 47. [140] As noted, the Plaintiff argues that the duty of care has already been recognized, relying on Jost, where a duty of care was found toexist between the pension administrator and pensioners.

The Plaintiff argues that, by analogy, VAC as administrator of the benefits forveterans owes a duty of care to the proposed class members. [141] I do not agree that the duty of care found in Jost is analogous or that it should be extended to the administrators of other socialbenefit schemes.

Pensioners who have paid into a pension plan over many years and are entitled to collect their pension, but experiencedelays in its receipt, differ from the proposed class members who may or may not be eligible for various benefits depending on specificeligibility criteria. [142] However, I find that the application of the test established in Anns v Merton London Borough Council (1977), [1978] AC 728 (HL(Eng)) [Anns] and adopted in Cooper [known as the Anns/Cooper test or analysis] leads to the conclusion that it is not plain and obviousthat no duty of care is owed by VAC to the veterans that fall within the proposed class. [143] The facts support finding a relationship of proximity between the proposed class members, all of whom were on ELB and all, ormost of whom, had a VAC case manager or other regular contact with VAC representatives.

As noted by the Plaintiff, VAC reached outto ELB recipients in 2016 when the top-up became available.

Also, as noted by the Plaintiff, this group had high needs, as most were onextended ELB. [144] The Plaintiff pleads (in the Further Amended Statement of Claim and in the Proposed Further Amended Statement of Claim) thatthere is a special relationship between the parties; that he and class members suffer from disabilities due to their service and that VAChas a statutory mandate and obligation to assist them in re-establishment to civilian life. [145] As noted above, in the Proposed Further Amended Statement of Claim (June 2022), the Plaintiff specifically pleads negligentmisrepresentation.

The Plaintiff asserts that a close and direct relationship of trust and confidence existed between VAC and classmembers; the relationship was one of proximity and his injuries and those of class members were reasonably foreseeable. [146] The Plaintiff also asserts that VAC provided untrue, inaccurate or misleading representations to them with respect to the ELB andSRB. [147] The facts pleaded are that the Plaintiff and proposed class members received information from VAC in various ways, includingfrom case managers.

The facts pleaded, taken as true, support that the relationship was one of proximity—close and direct—and that it isreasonable to expect VAC to take reasonable care to prevent harm that could occur if VAC provided misinformation. (This is not aconclusion that misinformation was provided, only that it is not plain and obvious that there is no proximate relationship or duty of care.) [148] I find that the Plaintiff has pleaded all the elements of negligent misrepresentation and facts in support of these elements, includingthat: VAC representatives made untrue, inaccurate or misleading representations about the eligibility requirements for ELB and SRB;VAC representatives lacked expertise; the Plaintiff and class members relied on the representations by VAC; and, the Plaintiff and classmembers suffered damages because if they had received timely and complete information, they may have received a greater SRBpayment.

[ 149 ] Given the facts pleaded and the low threshold to establish a reasonable cause of action and the jurisprudence that cautions that an overly restrictive approach should be avoided ( Jost at para 66 ) and noting that, at this stage, the issue is only whether the action should proceed as a class action and not whether it will succeed, I cannot find that it is plain and obvious that VAC as administrator of the SRB and related benefits does not owe a duty of care to the proposed class members. [ 150 ] I also cannot find, at this stage, that there are residual policy reasons to negate the imposition of a duty of care as there is no record before the Court with respect to the policy underlying the benefits at issue ( Jost at para 74 ). [ 151 ] In conclusion, the claim for negligent misrepresentation is a reasonable cause of action and can proceed.

B. Breach of Fiduciary Duty

(1) The Plaintiff’s Submissions [ 152 ] The Plaintiff submits that Canada (i.e., VAC) acted as a fiduciary vis-à-vis vulnerable and disabled veterans and has breached its fiduciary duty. [ 153 ] The Plaintiff submits that he has pleaded the material facts necessary to establish the elements of a claim for breach of fiduciary duty; an undertaking by the fiduciary to act in the best interests of the beneficiary; a defined person or class of persons vulnerable to the fiduciary’s control; and, a legal or substantial practical interest of the beneficiaries that stand to be adversely affected by the alleged fiduciary’s exercise of discretion or control. [ 154 ] T he Plaintiff again submits that VAC’s mandate is to provide information and assistance to ill and injured veterans so that they can access and maximize their benefits.

Therefore, by implication, Canada undertook to act in the best interests of this highly vulnerable group of veterans and to ensure that they understood the available programs. The Plaintiff argues that the unique position of the proposed class members—who became disabled as a result of their military service to Canada—gives rise to a special relationship which is capable of supporting this implicit undertaking to act in their best interests. [ 155 ] The Plaintiff again relies on Jost , at para 41 , to support finding a fiduciary duty.

The Plaintiff submits that the basis for his claim of breach of fiduciary duty claim is stronger than in Jost , because of the unique relationship between the proposed class members and VAC.

(2) The Defendant’s Submissions [ 156 ] The Defendant notes that a claim of fiduciary duty must be based on clear language in the enabling legislation to create an undertaking to act in the best interests of a particular group over all others and at the expense of all others ( Elder Advocates at para 44 ). [ 157 ] The Defendant submits that the Plaintiff has not identified any undertaking by Canada or VAC arising from the applicable statutes to act in the best interests of this group of veterans over all other veterans.

The Defendant argues that the eligibility for benefits as described in the statute does not treat ELB and SRB with prominence over other benefits or beneficiaries. [ 158 ] The Defendant points to Professional Institute of the Public Service of Canada v Canada (Attorney General) , 2012 SCC 71 [ PIPSC ] , regarding a pension surplus, where the Supreme Court of Canada confirmed, at paras 124–127, that the fiduciary must undertake to act in the best interests of the particular group and forsake the interests of all others.

The Defendant reiterates that nothing in the 2006 Act or subsequent amendments supports such an undertaking to forsake the interests of all others in favour of the proposed class members. [ 159 ] The Defendant further submits that there is no implied undertaking to act in the best interests of class members over and above others. [ 160 ] The Defendant notes that fiduciary obligations rarely attach to the relationship between the government and those affected by government actions because the government has a duty to act in the best interests of society as a whole. [ 161 ] The Defendant submits that Jost , which is based on different facts, does not support finding a fiduciary duty; the Court of Appeal found only that in the context of the pension plan at issue and the delay in paying pensioners, the " “door was not closed” " to finding a fiduciary duty on the part of the pension administrator.

The Defendant argues that in the present case, the door is closed. [ 162 ] The Defendant submits that a pleading cannot create an express or implied undertaking where none exists at law. The Defendant notes that the Plaintiff again relies on the response of one of the Defendant’s affiants, which the Plaintiff has stretched and misinterpreted, regarding the scope of VAC’s mandate as establishing an undertaking. The Defendant adds that evidence cannot be considered in assessing the cause of action. [ 163 ] The Defendant further submits that the vulnerability of veterans is not enough to base an implied undertaking.

(3) The Claim for Breach of Fiduciary Duty is not a Reasonable Cause of Action [ 164 ] In Elder Advocates , at para 36 , the Supreme Court of Canada summarized the requirements to establish a fiduciary duty as follows, In

summary, for an ad hoc fiduciary duty to arise, the claimant must show, in addition to the vulnerability arising from the relationship as described by Wilson J. in Frame : (1) an undertaking by the alleged fiduciary to act in the best interests of the alleged beneficiary or beneficiaries; (2) a defined person or class of persons vulnerable to a fiduciary’s control (the beneficiary or beneficiaries); and (3) a legal or substantial practical interest of the beneficiary or beneficiaries that stands to

be adversely affected by the alleged fiduciary’s exercise of discretion or control. [ 165 ] The Court noted, at para 45, that the statutory language must clearly support the undertaking relied on, where it is alleged to arise from the statute. [ 166 ] The Court explained why it would be rare—although not impossible—to find a fiduciary duty on the Government, noting, " [44] Compelling a fiduciary to put the best interests of the beneficiary before their own is thus essential to the relationship.

Imposing such a burden on the Crown is inherently at odds with its duty to act in the best interests of society as a whole, and its obligation to spread limited resources among competing groups with equally valid claims to its assistance: Sagharian (Litigation Guardian of) v. Ontario (Minister of Education) , " " 2008 ONCA 411 " " , " " 172 C.R.R. (2d) 105 " " , at paras. " " 47- 49 " " . The circumstances in which this will occur are few.

The Crown’s broad responsibility to act in the public interest means that situations where it is shown to owe a duty of loyalty to a particular person or group will be rare: " " see Harris v. Canada , " " 2001 FCT 1408 " " , " " [2002] 2 F.C. 484 " " , at para. " " 178 " . [ 167 ] In PIPSC , the Supreme Court of Canada addressed the fiduciary obligations of a pension administrator to members of certain pension plans regarding an actuarial surplus in the pension plan accounts. The Court found that the government had no fiduciary duty to

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