Elwin v. Nova Scotia Home for Coloured Children, 2013 NSSC 411

SUPREME COURT OF NOVA SCOTIA Citation: Elwin v. Nova Scotia Home for Coloured Children , 2013 NSSC 411 Date: 20131212 Docket: Hfx No. 343536 Registry: Halifax Between: June Elwin, Harriet Johnson, and Deanna Smith Plaintiffs v.

The Nova Scotia Home for Colored Children, a body corporate and the Attorney General of Nova Scotia, representing Her Majesty the Queen in right of the Province of Nova Scotia Defendants Judge: The Honourable Justice Arthur LeBlanc Heard: March 28, 2013; April 2 and 29, 2013; June 10, 11, 12, 13 and 14, 2013; and July 8, 9, 10, 11 and 12, 2013, in Halifax, Nova Scotia Final Written Submissions: August 30, 2013 Counsel: Ray Wagner, Q.C. and Michael Dull, for the Plaintiff Catherine Lunn and Peter McVey, for the Defendant Attorney General of Nova Scotia John Kulik, Q.C. and Ward Branch, for the Defendant Nova Scotia Home for Colored Children – Appearing on settlement as between Plaintiffs and The Nova Scotia Home for Colored Children By the Court : Table of Contents Paragraph No.

Introduction [1] Issues [3] Law on certification [4] Cause of Action: s. 7(1)(a) [10]

(1) Proceedings Against the Crown Act [16]

(2) Systemic negligence [31]

(3) Breach of fiduciary duty [72]

(4) Vicarious liability [88]

(5) Non-delegable duty [93]

(6) Causes of action:

summary [100] Identifiable class: s. 7(1)(b) [101] Common issues: s. 7(1)(c) [114] Preferable procedure: ss. 7(1)(

d) and 7(2) [130] Representative plaintiff: s. 7(1)(e) [144]

(1) Cause of action on part of representative plaintiff [147]

(2) Conflict of interest [150]

(3) Litigation plan [153] Conclusion [172] Introduction [ 1 ] The plaintiffs, June Elwin, Harriet Johnson, and Deanna Smith, each allege that, for a number of years during their respective childhoods, they were wards of the Province of Nova Scotia and were placed in the Nova Scotia Home for Coloured Children (hereafter “NSHCC” or “the Home”). They further allege that during their stay at the Home, they suffered physical, mental, and sexual abuse.

They have brought an action against the NSHCC and the Attorney General of Nova Scotia seeking damages for their injuries, and they now seek to have it certified as a class proceeding representing all “residents or former residents who, as wards of the Province, were placed in the NSHCC as residents.” In addition to general and special damages for negligence and breach of fiduciary duty, the plaintiffs seek declaratory relief, aggravated, punitive, and exemplary damages, interest and costs. [ 2 ] The NSHCC has chosen to settle with the plaintiffs and that settlement has been approved.

Accordingly, this certification decision will focus only on the Province as a proposed defendant. Issues [ 3 ] The issue is whether the class proceeding should be certified. Law on Certification [ 4 ] Class proceedings are powerful procedural tools that have many advantages over multiple individual actions. In Hollick v. Toronto (City) , 2001 SCC 68 , [2001] 3 S.C.R. 158 , McLachlin C.J.C. identified as most important the promotion of: (1) access to justice; (2) judicial economy; and (3) behaviour modification (para. 15). [ 5 ] Litigants do not have an automatic right to bring class proceedings.

The legislation requires court certification. This is a procedural determination. The Chief Justice said in Hollick , supra , that the question on certification “is not whether the claim is likely to succeed, but whether the suit is appropriately prosecuted as a class action” (para. 16). The Class Proceedings Act , S.N.S. 2007, c. 28, sets out five criteria to be satisfied before the court will certify a class proceeding. Subsection 7(1) provides: 7

(1) The court shall certify a proceeding as a class proceeding on an application under

Section 4, 5 or 6 if, in the opinion of the court, (

a) the pleadings disclose or the notice of application discloses a cause of action;

(

b) there is an identifiable class of two or more persons that would be represented by a representative party; (

c) the claims of the class members raise a common issue, whether or not the common issue predominates over issues affecting onlyindividual members; (

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

e) there is a representative party who (

i) would fairly and adequately represent the interests of the class, (ii) has produced a plan for the class proceeding that sets out a workable method of advancing the class proceeding on behalf of the classand of notifying class members of the class proceeding, and (iii) does not have, with respect to the common issues, an interest that is in conflict with the interests of other class members. [6] With respect to s. 7(1)(a), the question is answered only by reference to the pleadings, and evidence is neither required noradmissible to aid in that determination.

The requirement that the pleadings disclose a clause of action is “governed by the rule that apleading should not be struck for failure to disclose a cause of action unless it is ‘plain and obvious’ that no claim exists”: Hollick, supra,at para. 25. [7] With respect to ss. 7(1)(b)-(e), by contrast, the plaintiff has an evidentiary burden. In Taub v. Manufacturers Life InsuranceCo. (1998), (ON SC), 40 O.R. (3d) 379, [1998] O.J. No. 2694 (Gen.

Div.), affirmed at 42 O.R. (3d) 576, Sharpe J.said, at para. 4: … At a minimum, the court must be satisfied that there is a class of more [than] one person and that the issues raised by the members ofthe class satisfy the requirement that they raise common issues, and that a class proceeding would be the preferable procedure for theresolution of the common issues. In most class proceedings, these factual matters may well be obvious and require little evidence.

Mostclass [proceedings] arise from situations where the fact of wide-spread harm or complaint is inherent in the claim itself… I do not saythat there must be affidavits from members of the class or that there should be any assessment of the merits of the claims of other classmembers.

I do say, however, that there must, at the very least, be some basis in fact for the court to conclude that at least one other claimexists and some basis in fact for the court to assess of the nature of those claims that exist that will enable to court to determine whetherthe common issue and preferability requirements are satisfied. [Emphasis added.] [8] Similarly, in Hollick, supra, the Chief Justice stated that the plaintiff “must show some basis in fact for each of thecertification requirements” aside from the requirement to disclose a cause of action (para. 25). [9] I will now review the considerations set out in s. 7(1) of the Class Proceedings Act.

Cause of Action: s. 7(1)(a) [10] The first requirement for certification is that: “the pleadings disclose or the notice of application discloses a cause of action”:Class Proceedings Act, s. 7(1)(a). The pleading in question is the Third Amended Statement of Claim (hereafter “the Statement ofClaim”). Although only one cause of action is necessary to certify a class, the court must assess all of the causes of action pleaded inorder to determine whether they disclose a cause of action: Morrison Estate v. Nova Scotia (Attorney General), 2011 NSCA 68, at para.28.

It would be contrary to judicial economy to certify a cause of action and answer the possibly complex common issues raised by it if itis certain to fail. A class can only be certified on the basis of causes of action that pass the threshold test, and causes of action that do notmust be struck out: see, e.g., Alberta v. Elder Advocates of Alberta Society, 2011 SCC 24. [11] The test under s. 7(1)(

a) is not an analysis of the merits. In Hollick, supra, McLachlin C.J.C. considered a substantively identicalprovision in the Ontario Class Proceedings Act and concluded that this requirement is “governed by the rule that a pleading should notbe struck for failure to disclose a cause of action unless it is ‘plain and obvious’ that no claim exists” (para. 25). The same test appliesunder the Nova Scotia legislation, and that courts are expected to be sensitive to the possibility of amending pleadings: Morrison Estate,supra at paras. 26-27. The authorities thus import the test for

summary judgment on the pleadings (formerly striking a pleading forfailure to disclose a cause of action), with the main difference being that the onus lies on the plaintiff. In Hunt v. Carey Canada Inc., (SCC), [1990] 2 S.C.R. 959, the Supreme Court of Canada considered the British Columbia rule on that issue andWilson J. recited the test as follows at 980: [A]ssuming that the facts as stated in the statement of claim can be proved, is it "plain and obvious" that the plaintiff's statement of claimdiscloses no reasonable cause of action?

As in England, if there is a chance that the plaintiff might succeed, then the plaintiff should notbe "driven from the judgment seat". Neither the length and complexity of the issues, the novelty of the cause of action, nor the potentialfor the defendant to present a strong defence should prevent the plaintiff from proceeding with his or her case. [12] This passage has been applied to Nova Scotia’s rule on striking pleadings: see, e.g., Cape Breton (Regional Municipality) v.Nova Scotia (Attorney General), 2009 NSCA 44 at paras. 17-18. [13] In the recent decision in Canada (Attorney General) v.

MacQueen, 2013 NSCA 143, the Court of Appeal confirmed that theClass Proceedings Act is “procedural not substantive. It does not relax the standard that pleadings must disclose a cause of action on theirface. The test is not onerous. Pleadings are adequate provided that it is not ‘plain and obvious’ that the cause of action will fail” (para.53). The statement of claim “must be read generously to allow for inadequacies owing to drafting frailties and the respondents’ lack ofaccess to documents and discovery…” (para. 54). [14] Some questions of law can be decided on a motion for

summary judgment on the pleadings. Rule 13.03 permits the court to

determine a question of law where the judge is satisfied that “the allegations of material fact in the pleadings sought to be set asideprovide, if assumed to be true, the entire facts necessary for the determination” and that “the outcome of the motion depends entirely onthe answer to the question”: Rule 13.03(

a) and (b). I also take note of the general principles of pleadings set out in Rule 38.02. [15] Considering the similarity between the test applied on

summary judgment on the pleadings and that under s. 7(1)(

a) of the ClassProceedings Act, I believe it would be appropriate to apply the same criteria here, although, naturally, the answer would only need todetermine the outcome of the s. 7(1)(

a) analysis, not the entire motion for certification.

(1) The Proceedings against the Crown Act [16] The Attorney General objects the class period commencing in 1921, arguing that no action could lie against the Crown forconduct occurring before the Proceedings against the Crown Act, S.N.S. 1951, c. 8, came into force on November 1,

Section 27 ofthe 1951 Act provided that “[n]o proceedings shall be brought against the Crown under this Act in respect of any act or omission,transaction, matter or thing arising, occurring or existing before the date on which this Act comes into force.” (The Attorney Generaltakes the view that this point pertains to the s. 7(1)(

b) analysis. I am satisfied that it is a matter that can be resolved as a question of lawon the basis of the pleadings, and is appropriately dealt with at the outset. It concerns both the viability of the causes of action pleadedand the requirement for an identifiable class.) [17] The plaintiffs concede that claims in negligence are barred prior to the 1951 Act. They also acknowledge that damages forequitable breaches cannot be ordered for that period. As such, no remedy in damages is available for conduct before that date.

Theplaintiffs submit, however, that declaratory relief may be ordered on account of breach of fiduciary duty by the Province, its servants,agents, or employees, as pleaded at para. 45(

b) of the Statement of Claim. I am satisfied that this is a question of law that can be resolvedon the pleadings. It is appropriate to determine if it is plain and obvious that no cause of action can be pursued against the Province foralleged breaches of fiduciary duty occurring before the Proceedings against the Crown Act came into force. [18] The plaintiffs rely on M.C.C. v. Canada (Attorney General)(2003), (ON SCDC), 65 O.R. (3d) 492, [2003]O.J. No. 2698 (Div. Ct.)(sub nom. Cloud v.

Canada (Attorney General), where Cullity J., dissenting, would have certified a class periodcommencing in 1922 for a claim for damages for breach of fiduciary duty on the basis that it could have been brought under theExchequer Court Act prior to the federal Crown Liability Act 1953 (para. 42). The Ontario Court of Appeal reversed the majoritydecision, affirming much of Justice Cullity’s analysis, without reference to the Crown Liability Act issue, which appears to have beenconceded: (2004), (ON CA), 247 D.L.R. (4th) 667, [2004] O.J. No. 4924, at paras. 6, 42-43.

Leave to appeal to theSupreme Court of Canada was denied: [2005] S.C.C.A. No. 50. According to the plaintiffs, Cloud suggests that Crown proceedingslegislation does not provide immunity from claims for declaratory relief related to breach of trust. In fact, Justice Cullity made noreference to purely declaratory relief. [19] The Attorney General cites Richard v. British Columbia, 2008 BCSC 254, affirmed at 2009 BCCA 185, a case dealing withabuse at a provincial institution in British Columbia.

The class period for claims in both tort and breach of fiduciary duty was limited toclaims arising after the British Columbia Crown Proceedings Act came into force. It was thus plain and obvious that no cause of actionbefore that date could survive. [20] The plaintiffs argue that the 1951 Proceedings against the Crown Act authorized the assertion of tort claims against the Crown,though not equitable claims (see s. 5(1)). As such, it is argued, declaratory relief for breach of fiduciary duty is not sought “under” theAct (as per s. 27), and is not barred.

Like the Ontario Act (and unlike the British Columbia Act), the 1951 Act includes the words “underthis Act.” The plaintiffs say it is not plain and obvious that declaratory relief is unavailable. [21] The question of the availability of declaratory relief was considered in Slark (Litigation Guardian of) v. Ontario, 2010 ONSC1726, leave to appeal refused, 2010 ONSC 6131 (Div. Ct.), where Cullity J. held that a claim for breach of fiduciary duty was not barred,because it could have been pursued by petition of right. The statement of claim in Slark sought declarations both of liability and ofentitlement to damages.

Justice Cullity set out the relevant provisions of Ontario’s Proceedings Against the Crown Act, S.O. 1962-63, c.109: 28. No proceedings shall be brought against the Crown under this Act in respect of any act or omission, transaction, matter or thingoccurring or existing before the first day of September, 1963. 29(1).

A claim against the Crown existing on the first day of September, 1963 that, if this Act had not been passed, might have beenenforced by petition of right may be proceeded with by petition of right subject to the grant of a fiat by the Lieutenant Governor as if thisAct had not been passed. [22] Nova Scotia has no provision equivalent to s. 29(1) of the Ontario Act. Proceeding by petition of right has never been part ofNova Scotia law: Cherubini Metal Works Ltd. v. Nova Scotia (Attorney General) (1995), (NS CA), 137 N.S.R. (2d)197, [1995] N.S.J. No. 12 (C.A.), at para. 11.

Even if it had been, s. 25(1) of the Proceedings against the Crown Act provides that“[e]xcept as provided in this Act, proceedings against the Crown are abolished.” Subsection 25(1) has no equivalent in the Ontariolegislation. Reading s. 25(1) alongside s. 27 of the 1951 Act, it appears that there is no way for residents who left the home before theProceedings against the Crown Act came into force to advance a cause of action against the Province in negligence or breach offiduciary duty.

It is plain and obvious that such claims will fail. [23] Alternatively, the plaintiffs submit, claims for breach of fiduciary duty would be governed by

section 3 of the ProceedingsAgainst the Crown Act, which merely removed the requirement for Crown consent.

The specific reference appears to be to s. 3(3), whichprovides that “[s]ubject to this Act, where a person has a claim against an officer of the Crown or a corporation owned or controlled bythe Crown that, if this Act had not been passed, might be enforced subject to the consent of an officer of the Crown, then the claim maybe enforced as of right without such consent.” The plaintiffs are not claiming against an officer of the Crown or a Crown corporation. [24] The plaintiffs go on to argue that declaratory relief is available against the Crown without resort to the Proceedings against theCrown Act, and that it would not have required Petition of Right before 1951.

They cite MacNeil v. Nova Scotia Board of Censors

(1974), (NS CA), 9 N.S.R. (2d) 483, 1974 CarswellNS 161 (S.C.A.D.), where the respondent sought a declarationthat certain statutory provisions were ultra vires. The Attorney General argued that the requirements of the Proceedings against theCrown Act were not met. MacDonald J.A. stated that the Act seems to me to be restricted by s. 3 to claims arising out of torts, contracts and cases in which the lands, goods or money of the plaintiffare in the possession of the Crown.

The application in issue does not fall within any of such classes; rather it is as the trial judge found: ... a matter which deals with the rights of the public generally, and this type of proceeding has always been recognized by the Courts inthe past... [25] The court cited Rule 5.14 (of the Civil Procedure Rules (1972)), which provided that no “proceeding shall be open to objectionon the ground that only a declaratory judgment or order is sought thereby, and the court may make binding declarations of right whetheror not any consequential relief is or could be claimed.” (The current Civil Procedure Rules provide, at Rule 38.07(5), that a “partymaking a claim in an action or an application may plead or apply for a declaration of the legal status or right of a person.”) MacDonaldJ.A. concluded that this Rule provided a general power to make a declaration at the instance of an interested party, regardless of whetherthere was a cause of action (para. 21).

He said, at para. 24: It is my opinion, based on the foregoing and the reasons given by the trial judge that a proceeding seeking declaratory relief of the typesought in this case is not the kind of proceeding within the rule requiring petition of right to assert a declaratory remedy against theCrown and thus is not a "proceeding" to which the Proceedings Against the Crown Act of this province applies. [26] The Appeal Division also held that plaintiffs seeking a declaratory judgment would not have been bound to proceed by Petitionof Right if the proceeding was an action “which only indirectly affect the Crown and in which the Attorney General is but a nominaldefendant…” By way of example, MacDonald J.A. cited Tuxedo Holding Company v.

University of Manitoba, (MBCA), [1930] 3 D.L.R. 250 (Man.

C.A.), where the court quoted Robertson on Civil Proceedings (1908), at 477, to the effect that where“the rights of the Crown are immediately in question, and the proceedings against the Crown are possible, they must be taken by petitionof right, but where the interests of the Crown are only incidentally concerned in proceedings, the Attorney-General on behalf of theCrown may and must be made a defendant.” (MacNeil was affirmed by the Supreme Court of Canada without reference to this point: (SCC), [1976] 2 S.C.R. 265.) [27] The Attorney General suggests that MacNeil was wrongly decided.

Further, there are factual distinctions. The matter at issue inMacNeil was the constitutionality of a statute, arising in an administrative, rather than litigation, context. Further, the Attorney Generalalleges, the Crown is directly affected by a declaration of invalidity of a statute. Specifically, it argues, the Crown’s rights are not“indirectly affected” as described in Dyson v. Attorney-General, [1911] K.B. 410 (C.A.). In this case, it is argued, the claim directlyaffects the reputation of the Crown. Further, the Attorney General says, the pleadings continue to call for monetary damages.

Theplaintiffs do not press that claim, however, and the Attorney General points to no authority for the proposition that purely declaratoryrelief would directly affect the Crown’s rights. The Attorney General does not dispute that declaratory relief would have been availablefor claims that did not directly affect the “interests of the Crown” (as described in Dyson). [28] I admit to some hesitation as to whether the relief requested can be considered a declaration of “legal status or right” ascontemplated by Rule 38.07(5).

However, the Attorney General appears to accept that the Dyson route would render declarations with anindirect effect on the Crown available during the relevant time period. I am not convinced that a declaration of the kind requested woulddirectly affect the Crown. On the materials presented, I cannot conclude that a limited declaration of the kind sought in the pleadingwould be unavailable.

I note the remarks of Lazar Sarna in The Law of Declaratory Judgments, 3d ed. (Thomson Carswell, 2007), at 27-28, that the courts have on occasion assumed jurisdiction to make a declaration which is devoid of legal effect, but likely to have some practical effect…While the applicant may have no real economic or patrimonial stake in obtaining the judgment, judicial sympathy has been forthcoming:especially where relief might effectively remove a slur upon the applicant’s character, provide corrective or practical guidance toadministrative officials, lead to a possible practical result, or simply declare a breach of law for the intrinsic social good. [29] As such, I am not satisfied that it is plain and obvious that the plaintiffs’ claim for purely declaratory relief for the period priorto 1951 is bound to fail. [30] As an aside, the foregoing discussion makes it necessary to comment on one aspect of the 1951 Proceedings Against the CrownAct, the effectiveness of s. 27.

Although there appears to be no statute repealing it, s. 27 does not appear in the current consolidatedversion of the Proceedings against the Crown Act, R.S.N.S. 1989, c. 360. It appears to have been omitted from the 1967 RevisedStatutes, an error inherited by the 1989 revision. A similar omission occurred with an equivalent provision in Ontario. In S.M. v. Ontario(2003), (ON CA), 67 O.R. (3d) 97, [2003] O.J. No. 3236 (C.A.), the court held that the relevant sections remained inforce.

There are differences from the Nova Scotia circumstances; for instance, in Ontario’s 1980 revision, the relevant sections wereexpressly named in a

Schedule listing unrepealed and unconsolidated provisions (para. 16). In this case,

Schedule A lists “the whole” ofthe Proceedings against the Crown Act, R.S.N.S. 1954, c. 225, among the statutes repealed by R.S.N.S. 1967. Subsection 5(3) of theStatute Revision Act, S.N.S. 1964, c. 11, says that any statutes so listed were repealed and replaced by the versions in R.S.N.S. 1967.Arguably, therefore, the absence of

section 27 from the 1967 revision means that it was repealed entirely. On the other hand, such asubstantive change would be beyond the mandate of the revisers under s. 3 of the Statute Revision Act. I do not think it wise to give suchan apparent oversight substantive effect when the result would be a substantive change to the legislation: see R. v. Popovic and Askov, (SCC), [1976] 2 S.C.R. 308 at 321-323. In my view, s. 27 remains in force.

(2) Systemic Negligence

[ 31 ] The plaintiffs allege that the Province, by actions and omissions, negligently created or maintained a system inadequate to protect the plaintiff class from the harm alleged. Similar causes of action have been certified in other cases for alleged victims of abuse in institutional settings. The Attorney General admits that the allegations of systemic negligence are sufficient for plaintiffs who were wards of the Province, but disputes this ground for the two remaining subclasses.

According to the Attorney General, the legislation that governed the Home in particular, and child protection generally, over the past century makes it plain and obvious that the Province owed no duty of care to children who were wards of Children’s Aid Societies or were placed in the Home by other means. [ 32 ] Each representative plaintiff has pleaded that they were a ward of the Province. This assertion must be assumed to be true for the purposes of the motion.

For example, the June Elwin Statement of Claim says that “[f]rom approximately 1942 to 1953, June Elwin ordinarily resided at the NSHCC under the wardship (i.e. care and control) of the Province of Nova Scotia” (para. 9). There are similar paragraphs for the other plaintiffs. [ 33 ] The plaintiffs argue that the Attorney General’s admission that the Province owed a duty of care to its wards, and that the other requirements for negligence are pleaded sufficiently, ends the analysis, since each representative plaintiff has pleaded that they were a ward.

They say the Court is not required to assess whether the pleadings disclose a cause of action for non-wards, and that a representative plaintiff can assert a cause of action on their own behalf that is not personally asserted on behalf of each class member: see Matoni v. C.B.S. Interactive Multimedia Inc. , 2008 CarswellOnt 228 (Sup. Ct. J.) , at para. 76 . The question, however, is not whether the representative can assert a cause of action for a subclass to which they do not belong; it is whether that cause of action requires a foundation in the pleadings.

I am governed by Morrison Estate , supra , which requires me “ to consider any and all causes of action pleaded” (para. 28).

The Court of Appeal also said, at para. 25: [I]t is illogical to suggest that one plaintiff must only establish one cause of action, and a certification judge must review only those parts of the pleadings to determine they establish one cause of action against one defendant, where multiple causes of action are set out by multiple plaintiffs (potentially representing multiple classes or sub-classes) against multiple defendants. [ 34 ] Although this does not expressly address the situation of plaintiffs who plead a cause of action for a subclass to which they do not belong, the reasoning demands that the viability of such causes of action be assessed.

The question arises as to whether I should determine at the certification stage whether members of the proposed subclasses were wards of the Province. [ 35 ] In the Statement of Claim, the plaintiffs identify the class as “themselves and a Class of other residents or former residents who, as wards of the Province, were placed in the NSHCC as residents.” They add that the class would be further defined in the certification motion (para. 20).

In the original Notice of Motion for Certification the proposed classes were (1) former residents who, as wards of the Province, were placed in the NSHCC as residents; and (2) former residents who resided in the Home but who were not wards of the Province. Several of the proposed common issues requested answers for both proposed classes. It was to this classification that the Attorney General was responding in its initial brief. In my view it was open to the Attorney General to argue that members of the second class had no cause of action. [ 36 ] The plaintiffs subsequently amended the Notice of Motion.

They now propose three subclasses distinguished not by wardship status but by how the class members arrived at the Home. As they are now framed, the proposed subclasses are: (1) former residents of the Home placed there by the Province; (2) former residents of the Home placed there by children’s aid societies (other than the Home itself); and (3) former residents of the Home placed there by any means other than (1) or (2). [ 37 ] The Attorney General says it is proper at this stage to assess whether a duty of care is owed to non-wards. In R. v.

Imperial Tobacco Canada Ltd. , 2011 SCC 42 , where, McLachlin C.J.C. emphasized that a motion to strike is not concerned with possible future evidentiary developments, but with what has actually been pleaded. New developments are properly dealt with by amending the pleadings (paras. 23-24). It is appropriate to conduct a duty of care analysis on the assumption that the facts as pleaded are true. [ 38 ] The plaintiffs say the Attorney General seeks a finding of fact that wards of child protection agencies were not wards of the Province.

They argue that this cannot be done, since the pleadings allege systematic negligence by child protection agencies. They also say the Attorney General cannot, at this stage, seek an

interpretation of the historical statutes in order to determine the status and attributes of child protection agencies, since findings of fact or law that the child protection agencies were not acting as agents of the Province will require consideration not only of the statutes, but of evidence of the conduct of the Province and its relationship with the child protection agencies. [ 39 ] I cannot disregard the question of wardship at this stage.

The plaintiffs plead that the Home was empowered as a Children’s Aid Society (para. 24), but they do not specifically plead that child protection agencies are agents of the Province. Paragraph 23 states, inter alia , that “the Province of Nova Scotia … is deemed to include all its … agents...” This general reference to “agents” is not an allegation that Children’s Aid Societies are among them. As a proposition not pleaded by the plaintiffs, I am not required to assume its truth. [ 40 ] It is also not clear that the plaintiffs have actually pleaded that wards of Children’s Aid Societies were wards of the Province.

Paragraph 20 of the Statement of Claim defines the class as “residents or former residents who, as wards of the Province , were placed in the NSHCC as residents” (emphasis added). It is unclear whether the class is defined to exclude non-wards, or whether this is a factual allegation that all former residents were wards of the Province by virtue of their residency at the Home. In my view, I cannot adopt the latter

interpretation. The Attorney General is entitled to know the case it has to meet. The pleading must provide enough information to identify the class to whom the defendant is alleged to be liable. If the plaintiffs intended to plead that all former residents were wards, this ought to have been done explicitly. Paragraph 20 incorporates by reference the three subclasses identified in the Notice of Motion for Certification. This description is objective on its face, but does not fully address the fact that a cause of action has only been pleaded for wards.

If certified, there is still the potential to bind individuals to the result of an action before they can determine whether they are wards. [ 41 ] Paragraph 23 pleads that the Province “was responsible for the care, maintenance, education, protection and supervision of the Plaintiffs and Class Members as wards in custody of the Province ” (emphasis added). This paragraph adequately pleads that the Province

has a relationship with those class members who were its wards. A duty of care in such situations has been recognized at law: Broome v. Prince Edward Island , 2009 PECA 1 , affirmed at 2010 SCC 11 . The Attorney General has admitted to such a duty, and admits that the Statement of Claim adequately pleads the elements of a cause of action in negligence for wards. However, there does not appear to be a pleading of a duty of care for non-wards.

I cannot, therefore, assume this to be true for purposes of the motion. [ 42 ] For residents who were under the guardianship of the Province, it is objectively verifiable whether they were wards. For individuals under the guardianship of Children’s Aid Societies, this can be determined on the basis of whether those societies were agents of the Province.

For individuals under another form of guardianship, wardship status could also be determined on the basis of whether the Home itself was an agent of the Province. (That is not to say that agency is the only way the Province could be attributed with a duty toward the residents of the Home.) [ 43 ] As such, the proposed subclasses cannot be certified without determining whether the class members were wards of the Province.

If this is a pure question of fact, then I must reject certification except for the representative plaintiffs and the first proposed subclass, because only the representative plaintiffs have pleaded that they were wards of the Province, and only for the first subclass is it objectively determinable whether they were wards of the Province.

For the other two subclasses, it is possible to frame the issue of wardship as a question of law which can be determined on the pleadings. [ 44 ] An entity would only have the authority to place a child in the Home (1) if it was the legal guardian or (2) it acted on the instructions of the legal guardian. In my view, therefore, the pertinent distinction between classes is legal guardianship. This distinction does not potentially include individuals who would only know to which group they belong after the resolution of the proceeding. I would reconfigure the relevant groups as:

(1) Former residents of the NSHCC for whom the Province was the direct legal guardian;

(2) Former residents of the NSHCC for whom a provincial Children’s Aid Society was the direct legal guardian; and

(3) Former residents of the NSHCC for whom neither the Province nor a provincial Children’s Aid Society was the direct legal guardian. [ 45 ] There are several questions to be addressed by reference to the statutes, including whether Children’s Aid Societies were agents of the Province when caring for their wards, and whether the Home was an agent of the Province when caring for its residents. On the pleadings, the question is whether the statutory framework created agency relationships. [ 46 ] The plaintiffs maintain that the societies were agents of the Province.

They submit that the Province had oversight of all child welfare services, whether through legislation, regulation, or funding. Child welfare services were provided directly through Provincial offices or through the Province’s agents, namely children’s aid societies, to which it sometimes delegated its authority. The plaintiffs argue that the Province had ultimate legal responsibility for guardianship of wards under its, or its agents’, care, and was obliged to ensure that the requirements of child welfare legislation were observed.

This responsibility, the plaintiffs say, was equivalent to “that of a parent or guardian for the child’s care and custody….” Further, the plaintiffs say, the Province had “responsibilities vis-à-vis organizing its agents and visiting and inspecting orphanages.” [ 47 ] The child welfare legislation of the first half of the twentieth century made Children’s Aid Societies fundamentally local institutions, with funding primarily from the relevant municipalities, but a provincial supervisory role was beginning to evolve.

As early as 1912, the Superintendent of Neglected and Dependent Children (later the Director of Child Welfare) had the duty to “encourage and assist in the organization and establishment in the various parts of the province of Children’s Aid Societies” and to “to advise Children’s Aid Societies and committees thereof, and to assist and instruct them, whenever necessary, in the performance of their duties”: Children’s Protection Act , S.N.S. 1912, c. 4, ss. 7(

a) and (d). The Superintendent possessed “throughout the Province … all the powers conferred by this act upon Children’s Aid Societies”: s. 8. The Superintendent’s power was expanded in 1913, with the granting of the power to take delivery of an apprehended child and place them in a temporary home or shelters: S.N.S. 1913. C. 55. s. 5, amending s. 18 of the 1912 Act.

Where a child was committed to the care of a Children’s Aid Society, the Society became the legal guardian of that child, and was obliged to “use special diligence in providing a suitable home for such child,” where the child would receive, inter alia , “kind and proper treatment”: S.N. S. 1912, c. 21. [ 48 ] Under the 1912 Act, the Societies’ constitutions and by-laws required approval of the Governor-in-Council: s. 11.

Pursuant to subsequent amendments, societies were authorized to amend their by-laws (S.N.S. 1920, c. 45, s. 1) and constitutions (S.N.S. 1926, c. 52, s. 7) without the approval of the Governor-in-Council. Funding of societies and maintenance for children in care remained municipal responsibilities: S.N.S. 1912, c. 4, s. 22; S.N.S. 1913, c. 55, ss. 1 and 6; S.N.S. 1915, c. 34, s. 1. [ 49 ] The Governor-in-Council was later granted the power to determine the territorial jurisdiction of children’s aid societies: S.N.S. 1919, c. 63, s. 1, amending S.N.S. 1917, c. 2, s. 15.

Under the 1917 Children’s Protection Act , S.N.S. 1917, c. 2, the Superintendent was authorized to “exercise such care of and control over neglected and delinquent children as by this Act is required” (s. 9(b)) and was granted status as a children’s aid society (s. 10(1)), with powers that included the duty to take care and control of children if a society had its incorporation revoked (s.16). [ 50 ] A further expansion of the Province’s powers to deal with children’s aid societies came with amendments to the Children’s Protection Act in S.N.S. 1942, c. 25, s. 3, pursuant to which the Governor-in-Council was permitted to make regulations prescribing standards and methods of work of children’s aid societies in order to qualify for provincial payments out of the consolidated revenue fund; qualification of agents for societies; territorial jurisdiction; information and evidence to be submitted in order to receive provincial funding; and timing of such payments.

The Governor-in-Council made regulations in 1942: N.S. Reg. 6/42. [ 51 ] For the purposes of the class period in this case, the most relevant legislation commences with the Child Welfare Act , S.N.S. 1950, c. 2, which entered force on January 1, 1951. The Act provided for municipal funding of general expenses, in addition to Provincial grants and subsidies: ss. 15 and 16. The Province remained responsible for wards committed to care in areas without local societies: ss. 5, 29, 38.

The new Act maintained the requirement for the Governor-in-Council to approve a society’s constitution and by- laws (including amendments), and to regulate such matters as agents’ qualifications and standards and methods of work necessary to

qualify for funding: ss. 9-10. [ 52 ] Under the 1950 Act the Governor-in-Council was authorized to “by order declare that on or after a day to be named therein a Society shall not be competent to accept the care and custody of neglected children”: s. 14(1). All children committed to the care and custody of such a Society would subsequently be deemed to be under the care and custody of the Director: s. 14(2). As such, the regulation-making power was supplemented by the power to revoke the societies’ powers.

In 1952, the Province was granted to power to stop provincial payments to societies where necessary to bring about compliance with “standards and methods of work” demanded by regulation: S.N.S. 1952, c. 78, s. 2.

Therefore, by 1952 the Province had the power to withdraw funding where Societies did not comply with provincially-determined standards, and ultimately to revoke a Society’s powers. [ 53 ] The Province’s regulatory power was expanded in 1959 to permit provincial evaluation of the work of children’s aid societies, with the continued possibility of payment being cut off if the Minister was not satisfied that the prescribed “standards and methods of work” were being met: S.N.S 1959, s. 15, ss. 1, 2.

In 1961 the power to approve amendments to societies’ constitutions and by-laws was transferred from the Governor-in-Council to the Minister: S.N.S. 1961, c. 17, s. 2. [ 54 ] The 1950 Act additionally provided for ministerial approval (at s. 51) of “child caring institutions”, being a building or other accommodation “wherein care, food and lodging are furnished, with or without charge, for two or more children living apart from their parents or guardians, or any place of accommodation designated as a child caring institution by the Minister”: s. 49.

Such an institution was obliged to “meet and maintain the standards prescribed by the Governor-in-Council by regulation” in order to receive funding from the Province: s. 54. More generally, the Director was required to “assist and encourage child caring institutions in the improvement of their accommodation, equipment, staff and policies, and the nutrition, education, recreations, medical attention, and general care provided to the children therein.

By regulations passed in 1959, the Director of Child Welfare was assigned the duty of inspecting child caring institutions, in addition to the duty to “encourage and advise” such institutions in providing “adequate care and facilities: N.S. Reg. 4/59, ss. 1(

c) and (f). The regulations also, inter alia , imposed standards for the physical condition of the buildings, and imposed standards of nutrition: ss. 11-15. There is a general reference to the Home as a “care facility” in which the Province placed children (para. 36(g)), and there is an allegation that the Province “chose to provide less than appropriate financing to the NSHCC when compared to other homes, schools, and institutions of a similar kind” (para. 36(m)).

Nothing in the pleadings amounts to an assertion that the Home was a “child caring institution” within the meaning of the legislation, however. [ 55 ] The Children’s Services Act , S.N.S. 1976, c. 8, replaced the 1950 Child Welfare Act . The traditional structure of local jurisdiction for children’s aid societies survived, still supplemented by a residual provincial power to Act in areas without local societies. Societies appointed their own agents, with approval of the Administrator of Family and Child Welfare (formerly the Director): s. 90(d).

An “agent” was either an agent of the Administrator (or the Minister), or an agent of a local society: s. 2(d). The Governor-in-Council could regulate the “qualifications, appointment and duties” of such agents: s. 88(1)(a). The Minister was accordingly, by regulation, granted the power to approve appointments to “executive, administrative, supervisory, or field work” positions, as well as persons responsible for agency accounts: Children’s Services Regulations , 1976, s. 31. [ 56 ] Pursuant to ss. 89-93 of the 1976 Children’s Services Act , children’s aid societies remained local and private organizations.

They were required to have Governor-in-Council approval for their constitution and by-laws, as well as names being approved by cabinet. Their powers were determined by statute and by their own constitutions, and cabinet retained the power to revoke the powers of a society and assign them to an administrator. Funding remained a municipal responsibility. The 1976 Act also permitted the Administrator to examine and audit the books, records and accounts of a society: s. 92.

The Attorney General accepts that s. 88 “expanded somewhat the regulation-making powers of the Governor in Council.” [ 57 ] By its 1915 act of incorporation, the Nova Scotia Home for Colored Children was “empowered to act as a Children’s Aid Society for matters affecting the children of the colored race, and to receive and keep the same under their care” pursuant to the Children’s Protection Act , 1912: S.N.S. 1912, c. 107, s. 3.

The 1915 Act incorporating the Home was revised pursuant to S.N.S. 1978, c. 64, which provided, at s. 8(2), that the Home “may, pursuant to the Children’s Services Act, carry out he functions and duties of a Family and Children’s Services Agency.” [ 58 ] The Children’s Services Act was succeeded by the Children and Family Services Act , S.N.S. 1990, c. 5, which came into force on September 4, 1991. This is the legislation that remains in force today.

The class period ends before the current legislation came into force. [ 59 ] The plaintiffs also sought admission of two letters, one from Raymond Morse, on behalf of several of the defendant children’s aid societies, dated July 18, 2008, and one from Peter McVey on behalf of the Minister of Community Services dated June 30, 2011. Both letters arose from inquiries respecting, inter alia , document requests by plaintiffs’ counsel. In the 2008 letter, Mr. Morse wrote: I note the request for documents concerning practices, procedures and protocols for provincial wards.

Your correspondence also confirms that you are only looking for production of such documents for the relevant timeframe which in this case … would be 1970 to 1984.

If we are talking about child welfare practices, procedures and protocols respecting the interview of wards, it would be the Department of Community Services who would be responsible for establishing the appropriate standards and would not be up to the individual agencies to establish appropriate practices, procedures and protocol respecting the interviews of wards. [ 60 ] It was not argued that the Morse letter constituted hearsay, although a hearsay concern is obvious. Had this been argued, I would have been satisfied that the letter should be admitted on the basis of the principled exception: see R. v.

Khelawon , 2006 SCC 57 . [ 61 ] In the 2011 letter, Mr. McVey wrote: Child protection agencies are an administrative agency of government operating solely under the statutory mandate provided for in the Children and Family Services Act .

Child protection agencies do not conduct investigations of allegations of historical, physical and sexual abuse unless that history isdirectly relevant to the circumstances of the child whom can be identified and is now under the age of 16 years. [62] The plaintiffs claimed that these letters were relevant to common issues under s. 7(1)(c), while the Attorney General submittedthat they were being offered in order to support a cause of action under s. 7(1)(a), which does not permit of evidence beyond thepleadings.

I will deal with this issue at this stage, as the letters relate to the statutory relationship of child protection societies to theProvince. [63] At the hearing I reserved on the question of whether the statements in these letters constituted admissions of fact. If they are,even to the extent that they relate to the present legislation (which would not be relevant in view of the class period), they would alsopertain to predecessor acts if they were substantially similar.

Although the inquiries by plaintiffs’ counsel, and the replies fromdefendants’ counsel, were in respect of individual actions, those prospective plaintiffs are either representative plaintiffs or potentialplaintiffs in the class proceeding. If they are admissions of fact, I am satisfied that they would be probative and not unduly prejudicial. Ifthey are admissions of law, however, they would be of limited weight, as it is for the court to determine the law. [64] I conclude that the letters are admissions of law.

Aside from saying that an agency relationship exists, the McVey letter does notgive any basis to find such a relationship, whether by contract, conduct, estoppel, or statute. Absent a factual basis, an admission that anagency relationship exists is only a bare legal assertion. Moreover, the statement was in the present tense, and was only admitted on thebasis that it could be relevant if the current legislation is substantively identical to the legislation during the class period. At most, it is anadmission that the relationship was created by statute, but that is purely a question of statutory

interpretation and it makes the admissionone of law. As to the Morse admissions, even if the societies are ultimately agents for the purpose of liability, they remain separatecorporate entities and, at the time the statement was made, were parties adverse in interest to the Province. As such, I am not convincedthat such an admission would bind the Province. Accordingly, I do not ascribe any weight to the admissions in the two letters. [65] Returning to the main issue, the plaintiffs maintain that the societies were agents of the Province.

They submit that the Provincehad oversight of all child welfare services, whether through legislation, regulation, or funding. Child welfare services were provideddirectly through Provincial offices or through the Province’s agents, namely children’s aid societies, to which it sometimes delegated itsauthority. The plaintiffs argue that the Province had ultimate legal responsibility for guardianship of wards under its, or its agents’, care,and was obliged to ensure that the requirements of child welfare legislation were observed.

This responsibility, the plaintiffs say, wasequivalent to “that of a parent or guardian for the child’s care and custody….” Further, the plaintiffs say, the Province had“responsibilities vis-à-vis organizing its agents and visiting and inspecting orphanages.” [66] The Attorney General argues, during the proposed class period those children who were not wards of the Province were wardsof local children’s aid societies, administered and funded within their municipalities, with local boards of directors.

The AttorneyGeneral says the statutes did not create a relationship of “guardianship or wardship” between the Province and the society wards. Further,it is argued, the power to prescribe “standards and methods of work to be maintained and adopted by Societies” in order to qualify forfunding did not create direct Provincial control over societies placing children in the Home. As such, the Attorney General says, it is“plain and obvious” that the claim in negligence by non-ward members of the proposed class cannot succeed, and therefore the testunder s. 7(1)(

a) is not met in respect of non-wards. [67] The Province’s power over the Children’s Aid Societies in the years after 1950 was, it seems to me, broader than the AttorneyGeneral would suggest. In essence, the Province had a funding role, as well as the ability to set standards, and had the ultimate ability torevoke the powers of a Society. Throughout the period after 1950 there was a degree of Provincial oversight and ultimate responsibilityarising from the relevant child welfare legislation that I am satisfied rendered the societies agents of the Province for the purposes of thatlegislation.

As noted earlier, the Statement of Claim does not specifically plead that the societies were agents of the Province, but itwould be open to the plaintiffs to seek an amendment to that effect. [68] The plaintiffs submit that the Province had a statutory duty to assist in the organization of the Home, and to “visit and inspect”it, pursuant to the applicable child protection legislation throughout the years of the proposed class period.

By its 1915 act ofincorporation, the Home was “empowered to act as a Children’s Aid Society for matters affecting the children of the colored race, and toreceive and keep the same under their care” pursuant to the 1912 Children’s Protection Act.

The 1915 Act was revised pursuant to S.N.S.1978, c. 64, which, at s. 8(2), permitted the Home to “carry out he functions and duties of a Family and Children’s Services Agency.”There is no pleading that it actually did so, under either Act. [69] The Attorney General maintains that the failure to plead that the Home was a children’s aid society is fatal, arguing that theincorporating statute alone does not give the Home status as a children’s aid society. The Attorney General cites the principle that privatestatutes – such as the 1915 Act incorporating the Home – “invite a strict

interpretation: they are exceptions to the general law, andbecause they are drafted by their promoters are consequently construed to their disadvantage”: Pierre-André Cǒté, The

Interpretation ofLegislation in Canada, 2d edn. (1991) at 195; see also Great Northerm Piccadilly and Brompton Railway v. Attorney General, [1909]A.C. 1 (H.L.); Dwyer v. Port Arthur (Town)(1893), 1893 CanLII 12 (SCC), 22 S.C.R. 241; Cie pour l'éclairage au gaz de St. Hyacinthev. Cie des pouvoirs hydrauliques de St. Hyacinthe (1895), 1895 CanLII 69 (SCC), 25 S.C.R. 168; and Ottawa (City) v. Royal Trust Co., (SCC), [1964] S.C.R. 526.

I am not convinced by these authorities that the plaintiffs are in a position which demandsthat the 1915 Act be strictly interpreted against them, nor am I convinced that the 1915 Act purports to create an “exception” to thegeneral child welfare laws which would demand strict

interpretation. The “public versus private statute” issue is essentially a red herring. [70] That being said, I am unable to conclude that the Home was an agent of the Province pursuant to its incorporating legislation.That legislation, on its own, does not incorporate the elements of oversight and control that came to characterize the relationship betweenthe Province and children’s aid societies. Nor does it indicate that the Home was a child caring institution (which is not pleaded, in anyevent).

As such, the Home would only be an agent if it acted as a CAS. [71] Accordingly, I conclude that the pleadings as they now stand do not adequately plead that the children’s aid societies wereagents of the Province, or that the Home acted as a CAS. No cause of action can therefore be certified with respect to proposed plaintiffswho were placed in the Home by a CAS or through other means. This finding does not foreclose any opportunity for the plaintiffs to seek

an amendment for the purpose of making the pleading sufficient.

(3) Breach of Fiduciary Duty [ 72 ] The plaintiffs allege (at para. 36 of the Statement of Claim) that the Province breached a fiduciary duty to the class members. In order to make out a claim breach of fiduciary duty, the statement of claim must set out material facts that are sufficient to identify the (1) nature of the fiduciary relationship; (2) the nature of the duty owed by the fiduciary; (3) how the duty was breached; (4) how the defendant put its own interests ahead of the plaintiff’s; and (5) the appropriate remedy for the breach: Cooper v.

Atlantic Provinces Special Education Authority , 2008 NSCA 94 , at para. 14 . [ 73 ] The Attorney General primarily objects to this pleading on two bases: firstly, that governments owe fiduciary duties only in limited circumstances: and secondly, that none of the specified actions or omissions disclose any allegation that the Province profited from the alleged conduct, or placed anyone else’s interests above those of the class members.

According to the Attorney General, the duty to financially support children committed to care rested with municipalities and children’s aid societies, and did not create a fiduciary relationship between society wards and the Province.

Any such relationship, it is submitted, could only arise in relation to true wards of the Province, in areas where there was no children’s aid society. [ 74 ] In Elder Advocates , supra , McLachlin C.J.C. confirmed “ the special characteristics of governmental responsibilities and functions mean that governments will owe fiduciary duties only in limited and special circumstances” (para. 37). In Professional Institute of the Public Service of Canada v.

Canada (Attorney General) , 2012 SCC 71 , the court held that an ad hoc fiduciary duty will only arise where the alleged fiduciary undertakes to act in accordance with a duty of loyalty, whether expressly or by implication (para. 124, cited in MacQueen , supra, at para. 158). [ 75 ] The fact that governments will owe fiduciary duties in rare circumstances, however, does not make it plain and obvious that no fiduciary duty claim is sustainable here.

In Broome , supra , the Prince Edward Island Court of Appeal held that the Province did not owe a fiduciary duty to the children in the facility, but qualified this by saying that “the Province would have had a fiduciary relationship with and fiduciary duty as guardian to children who were its wards during the period of wardship” (para. 142). The Supreme Court of Canada affirmed the decision (and this finding specifically). In light of that decision, it is not plain and obvious that the Province did not owe a fiduciary duty to class members who were wards.

Similarly, I cannot find that it is plain and obvious that the Province did not owe a fiduciary duty to Society wards, having found the Societies to be agents of the Province. [ 76 ] As to the second objection, t he plaintiffs allege that the Province “ placed its interests in conflict with the interests of the Plaintiffs and Class Members” and that it “profited at the expense of the Plaintiffs and Class Members” (para. 36). T his is a bare assertion. It does not describe how the defendant put its own or someone else’s interests ahead of the class members.

In Cooper , supra , the court held that similar language was “simply a statement of law of what a fiduciary duty is and a claim that it was breached”, providing no “particulars or description” of what the defendant allegedly did or how it put its interests ahead of the plaintiffs’ (para. 16). The plaintiffs, however, advance several grounds on which they say disloyalty is in fact alleged by this paragraph. They say:

(1) Children rely on their parents to provide resources required to meet the necessities of life. The Province’s wards were vulnerable children who relied on the Province for these resources. The pleadings allege that the provision of these resources was inadequate. Instead of spending the necessary funding to ensure that its wards met the necessities of life, the Province kept it for itself, thereby benefiting at its wards’ expense .

(2) Children rely on their parents to take reasonable steps to ensure that their “health and well-being” are adequately cared for. If these reasonable steps come at a cost (financial, time, or otherwise), parents are expected to incur that cost. The Plaintiffs relied on the Province to take these reasonable steps. If it cost time or funds to adequately investigate complaints of abuse, or adequately supervise their placement, the Province was required to spend these resources.

The Plaintiffs allege that the Province (and its agents) benefited by withholding the time and funds required to ensure that their “health and well-being” were adequately cared for … [Emphasis added]. [ 77 ] The second paragraph implies that any failure to meet the needs of the children was automatically a breach of fiduciary duty, a position explicitly rejected in K.L.B. v.

British Columbia , 2003 SCC 51 , where McLachlin C.J.C. emphasized the requirement in the context of parental fiduciary duty to show disloyalty, that is, “putting someone’s interests ahead of the child’s in a manner that abuses the child’s trust. Negligence, even aggravated negligence, will not ground parental fiduciary liability unless it is associated with breach of trust in this sense” (para. 49). A third ground, suggesting that public embarrassment and “mud-slinging” motivated the Province relies entirely on evidence and has no basis in the pleadings.

Accordingly, I ignore it. [ 78 ] I am satisfied, however, that the first ground advanced by the plaintiffs is implicit in the Statement of Claim. Paragraphs 36(

m) and (

n) say that the Province “chose to provide less than appropriate financing to the NSHCC when compared to other homes, schools and institutions of similar kind” (36(m)) and “discriminated against the students of the NSHCC by providing insufficient means to train, hire and supervise appropriate trained workers as was the standard in other care facilities” (36(n)). In my view, an allegation that the Province withheld funding implies an allegation that it retained those funds to be applied to other purposes. Although para. 36(

m) could be interpreted as an allegation of simple negligence (failing to adequately assess the appropriate level of financing), the comparison to other homes implies that the Province favoured those other homes. Further, para. 36(n), read in the context of para. 6, alleges racial discrimination. In my view, both paragraphs adequately allege disloyalty. [ 79 ] The Attorney General further argues that no cause of action can lie for a pleading of inadequate funding. If this is correct, paras. 36(

m) and (

n) cannot be used to substantiate the claim for breach of fiduciary duty. The claim of “inadequate funding” is not a separate cause of action, but is pleaded as an element of breach of fiduciary duty and systemic negligence. [ 80 ] The Attorney General argues that the Home’s funding was determined by the legislature or by senior Crown officials, and

therefore fell within the category of “pure policy decisions regarding the allocation of scarce public resources” discussed in ImperialTobacco, supra, for which there is no liability. The Supreme Court of Canada held that “core policy” decisions of government “protectedfrom suit are decisions as to a course or principle of action that are based on public policy considerations, such as economic, social andpolitical factors, provided they are neither irrational nor taken in bad faith…” (para 90).

The Attorney General says the budgetarydecisions in respect of the Home fall within that definition and that the pleadings do not allege that these decisions were madeirrationally. Therefore, it is submitted, it is plain and obvious that this aspect of the plaintiff’s case will fail. [81] The plaintiffs respond that the Attorney General is improperly conflating decisions regarding the care of children with otherless important government decisions.

They claim that the Attorney General’s position amounts to a suggestion that a guardian candisregard the health and well-being of children as an “exercise of discretion.” A guardian, they submit, has no discretion to “disregardthe health and well-being” of a child. The plaintiffs provide no authority for their position. In my view, decisions about child protectionfunding would be core policy decisions. [82] That being said, the plaintiffs are not required to show that it is obvious that they will succeed. The question is whether it isplain and obvious that the allegations in paras. 36(

m) and (

n) are unsustainable in negligence or fiduciary duty. In my view, it is not plainand obvious that the claim is doomed to fail, at least in respect of fiduciary duty. In Elder Advocates, supra, Chief Justice McLachlinnoted that imposing a duty on the Crown to put the best interests of a beneficiary before its own “is inherently at odds with its duty to actin the best interests of society as a whole, and its obligation to spread limited resources among competing groups with equally validclaims to its assistance” (para. 44).

This was said that in the context of explaining why such duties should be rare, but the commentimplies that where a fiduciary duty does exist, the Crown may be required to prioritize the beneficiary in funding decisions. [83] In this case, the class members plead that they were wards of the Province, and it is adequately pleaded that the Province owedthem a fiduciary duty.

Therefore, I cannot say that it is plain and obvious that the Crown is immunized from liability for decisions whichare disloyal to the alleged beneficiaries, even if they are core policy decisions. [84] In addition, I do not think it is accurate to say that the plaintiffs have failed to plead that the funding decisions were irrational ormade in bad faith. Although it is true that those specific words were not used, para. 36(

m) alleges that the Home received less fundingthan other similarly situated group homes, and para. 36(

n) alleges that these decisions were discriminatory. In addition, para. 6 allegesthe existence of a pervading atmosphere of racism in Nova Scotia and in the NSHCC specifically. In my view, inherent in the claim ofracial discrimination is an allegation that the relevant decisions were irrational. [85] The Attorney General argues that an allegation of irrationality is bound to fail on the basis of Brown v.

British Columbia(Minister of Transportation and Highways), (SCC), [1994] 1 S.C.R. 420 at 435, where the Supreme Court of Canadastated that it is “relatively rare” for a decision to be so “patently unreasonable” as to exceed governmental discretion. However, “rare”does not mean “bound to fail.” A low probability that something will happen is still more than a certainty that it will not.

It is not plainand obvious that the allegation will fail. [86] I do not believe that it is necessary to decide whether the Province could be liable in negligence for the inadequate fundingclaims, since the other elements in paragraph 36 adequately plead negligence in other ways. However, my comments on the racismallegations could equally apply to the negligence claim. [87] With respect to the claim for breach of fiduciary duty, I repeat my earlier comments about the inadequacy of the pleading toencompass claims by plaintiffs placed in the home by children’s aid societies or through other means.

(4) Vicarious Liability [88] At para. 39 of the Statement of Claim the plaintiffs “plead the doctrine of respondeat superior and state that the Defendants arevicariously liable for the actions of its or their agents, employees, servants and contractors.” The Attorney General claims that vicariousliability is a separate cause of action that has not been adequately pleaded. The Supreme Court of Canada set out the elements ofvicarious liability in K.L.B., supra, at para. 19: To make out a successful claim for vicarious liability, plaintiffs must demonstrate at least two things.

First, they must show that therelationship between the tortfeasor and the person against whom liability is sought is sufficiently close as to make a claim for vicariousliability appropriate. […] Second, plaintiffs must demonstrate that the tort is sufficiently connected to the tortfeasor's assigned tasks thatthe tort can be regarded as a materialization of the risks created by the enterprise. [89] The Attorney General argues that a pleading that the Home received “some per diem funding” from the Province (para. 29)does not make out the material facts for vicarious liability.

Further, it is submitted, neither the 1915 nor the 1978 Acts governing theNSHCC imposed duties on the Province. Nor did the child protection statutes impose duties or authority on the Province respecting theinternal operations of a “privately run” institution such as the Home. According to the Attorney General, the Province had nosupervisory role, only a regulatory one, which evolved gradually from an inspection power pursuant to the 1917 Children’s ProtectionAct, into a licensing process. In addition, the pleadings do not suggest that the Province had employees at NSHCC.

In thesecircumstances, the Attorney General says, it is plain and obvious that the Province cannot be vicariously liable. [90] The plaintiffs argue that vicarious liability is not a separate cause of action. Plainly, an entity can be vicariously liable forconduct for which it is not directly liable, and in that sense vicarious liability is not an element of direct liability, nor is it simply a way toforeclose a defence in direct liability. The plaintiffs must plead that an employee or agent of the Province was negligent.

Pleading thematerial facts is crucial, whether or not vicarious liability is a separate cause of action. [91] The legal test for vicarious liability includes at least the two elements listed in K.L.B., supra. However, the plaintiffs are notrequired to plead the legal test, only the material facts to support the claim. In paras. 23 and 36, they do so. Paragraph 23 deems the“Province” to include “contractors, sub contractors, agents, servants, employees and appointees.” The effect of this language is that everyallegation of breach of fiduciary duty in para. 36 is repeated for every category named in para. 23.

Paragraph 37 states that the sameconduct is asserted as systemic negligence. In my view the plaintiffs have adequately pleaded that those entities harmed the plaintiffs,

and para. 39 adequately asserts vicarious liability against the Province in breach of fiduciary duty and systemic negligence. At trial theplaintiffs would need to identify which entities did what, and show that their relationship to the Province was sufficiently close to groundvicarious liability. I cannot conclude that it is plain and obvious that the claim will fail. [92] That said, vicarious liability is not sufficiently pleaded if the plaintiffs seek to hold the Province accountable for the actions ofthe NSHCC alleged in para. 35. That paragraph sets out the claim in fiduciary duty against the Home.

I have rejected the proposition thatan agency relationship between the Province and the Home arose through the statutes. As such, the pleadings as they now stand are notspecific enough to indicate to the Province that it might be in jeopardy of being found vicariously liable for any of the claims set out inpara. 35. The plaintiffs, however, are entitled to seek an amendment to the Statement of Claim in order to provide an adequate basis toadvance the claim. The plaintiffs, however, are entitled to seek an amendment to the Statement of Claim to effect an appropriate basis toadvance the claim.

(5) Non-Delegable Duty [93] As a general rule, a person who employs an independent contractor is not liable for the contractor’s negligence. There is anexception for non-delegable duties. Where such a duty exists, the ultimate responsibility remains with the person who employed thecontractor. In concurring reasons in Lewis (Guardian ad litem of) v. British Columbia, (SCC), [1997] 3 S.C.R. 1145,McLachlin J. (as she then was) described this doctrine at para. 50: In essence, a non-delegable duty is a duty not only to take care, but to ensure that care is taken.

It is not strict liability, since it requiressomeone (the independent contractor) to have been negligent. But if it applies, it is no answer for the employer to say, "I was notnegligent in hiring or supervising the independent contractor." The employer is liable for the contractor's negligence. The employeralready has a personal duty at common law or by statute to take reasonable care.

The non-delegable duty doctrine adds another obligation-- the duty to ensure that the independent contractor also takes reasonable care. [Emphasis added.] [94] As to when such a duty should arise, the majority in Lewis, supra, noted that it “will depend upon the nature and the extent ofthe duty owed by the defendant to the plaintiff” (para. 17).

In that case the majority considered the statutory framework and thecompeting policy arguments. [95] As amended, para. 40 of the Statement of Claim now contains a pleading of non-delegable duty; the plaintiffs allege that theProvince “owed them, and Class Members, a non-delegable duty which was breached by various Children’s Aid Societies and other suchchild protection agencies.

The Province … owed a duty of care in exercising its powers to all neglected children taken into custody,whether it did so by means of servants or contractors.” [96] As with vicarious liability, since this claim requires proof that a contractor hired by the party was negligent or otherwise liable,those facts must be pleaded. I am satisfied that paras. 23 and 36, read together, adequately make these allegations, though not para. 35.Paragraph 40, read generously, supplements para. 23.

It makes clear that the plaintiffs assert that the duties created by a wardshiprelationship and pleaded in para. 23 are, in fact, non-delegable. [97] The plaintiffs appear to allege the existence of duties apart from those pleaded in para. 23. In submissions, they refer to threestatutes which, collectively, span the entire proposed class period: Children’s Protection Act, S.N.S. 1917, c. 2, s. 9(b); Child WelfareAct, S.N.S. 1950, c. 2, s. 54; and Children’s Services Act, S.N.S. 1976, c. 8, s. 3(1). Paragraph 40 of the Statement of Claim contains littledetail.

It does not cite the statutes, nor does it refer to the duties allegedly created by them. However, statutes, like law generally, do notordinarily need to be pleaded. The

Interpretation Act, R.S.N.S. 1989, c. 235, provides, at s. 5, that “[e]very Act shall be judicially noticedby all judges, justices of the peace and others without being specially pleaded.” [98] I conclude that the material facts necessary to make out a violation of the alleged statutory duties have not been pleaded. Theprovisions in themselves do not set out duties beyond carrying out the requirements of the relevant Acts. As noted by Chief JusticeMcLachlin in R. v. Imperial Tobacco, supra, at para. 44: Some statutes may impose duties on state actors with respect to particular claimants.

However, more often, statutes are aimed at publicgoods, like regulating an industry … or removing children from harmful environments… In such cases, it may be difficult to infer thatthe legislature intended to create private law tort duties to claimants. This may be even more difficult if the recognition of a private lawduty would conflict with the public authority's duty to the public. [99] More importantly, the pleadings never say how such requirements were breached. A similar comment can be made about eachof the statutory duties asserted by the plaintiffs.

These duties, if they are owed to the class members, arise by the terms in the statute andnot exclusively out of the wardship relationship alleged to exist between the Province and the plaintiffs. It is not sufficient only to pleadthe wardship relationship and attempt to incorporate into that any duty that might apply to the Province for other reasons. Rather, theplaintiffs must plead the material facts to show that those duties are owed to them. As it stands, para. 40 amounts to an assertion of lawwithout the support of material facts.

It therefore does not meet the requirements of pleading in rule 38.02(4), except insofar as itsupplements paragraph 23. It would be open to the plaintiffs to seek an amendment to this effect.

(6) Causes of action:

summary [100] In

summary, I am satisfied that causes of action are sufficiently pleaded in negligence and breach of fiduciary duty for the classcomprised of plaintiffs placed in the Home directly by the Province. As I have indicated, this does not preclude amendments designed toincorporate pleadings that children’s aid societies were agents of the Province, and that the Home itself was a children’s aid society. Ihave also found that vicarious liability is adequately pleaded for agents of the Province, as well as non-delegable duty for contractors,albeit both with qualifications.

Additionally, I am not satisfied that it is plain and obvious that a claim for purely declaratory relief forbreach of fiduciary duty for the period prior to the Proceedings against the Crown Act is bound to fail.

Identifiable Class: s. 7(1)(b) [101] The second stipulation of s. 7(1) of the Class Proceedings Act is that “there is an identifiable class of two or more persons thatwould be represented by a representative party”: s. 7(1)(b). In Western Canadian Shopping Centres Inc. v. Dutton, 2001 SCC 46,McLachlin C.J.C. said “[c]lass definition is critical because it identifies the individuals entitled to notice, entitled to relief (if relief isawarded), and bound by the judgment” (para. 38).

She went on to state (at para. 38) that the definition should state objective criteria by which members of the class can be identified. While the criteria should bear a rational relationship tothe common issues asserted by all class members, the criteria should not depend on the outcome of the litigation. It is not necessary thatevery class member be named or known.

It is necessary, however, that any particular person's claim to membership in the class bedeterminable by stated, objective criteria. [Emphasis added.] [102] It is not necessary that all class members share “the same interest in the resolution of the asserted common issue”, but the classmust not be overly broad, in the sense that it “could not be defined more narrowly without arbitrarily excluding some people who sharethe same interest in the resolution of the common issue”: Hollick, supra, at para. 21.

The Ontario Court of Appeal summarized as followsin Cloud, at para. 45, referring to Hollick: … The appellants are required to show that the three proposed classes are defined by objective criteria which can be used to determinewhether a person is a member without reference to the merits of the action. In other words, each class must be bounded and not ofunlimited membership. As well, there must be some rational relationship between the classes and the common issues.

The appellantshave an obligation, although not an onerous one, to show that the classes are not unnecessarily broad and could not be defined morenarrowly without arbitrarily excluding some people who share the same interest in the resolution of the common issues. [103] If potential class members have a claim on the face of the pleadings, the possibility that specific defences – such as limitationsdefences – may pertain to individual claims should not interfere with certification: MacQueen v.

Sydney Steel Corp., 2011 NSSC 484, atpara. 73. [104] As currently configured, the Notice of Motion proposes the following classes:

(1) Former residents of the NSHCC placed into the NSHCC by the Province of Nova Scotia;

(2) Former residents of the NSHCC placed into the NSHCC by Children’s Aid Societies (other than the NSHCC); and

(3) Former residents of the NSHCC placed into the NSHCC by any means other than (

a) or (b). [105] The Attorney General claims that the class period can begin no earlier than entry into force of the Proceedings Against theCrown Act 1951. This issue has been dealt with. I have determined that it is plain and obvious that the pre-1951 claims will fail, and theclass period should therefore begin on November 1, 1951. [106] The proposed period ends in 1990. The Attorney General says the cut-off date should be June 27, 1986, the last residency date forany of the deponents. The authorities, however, do not demand a precise correspondence of the class period to the available evidence. InSeed v.

Ontario, 2012 ONSC 2681, for instance, the court certified a class period that exceeded the number of years for which there wasevidence, with the following comments by Horkins J., at paras. 118-123: The defendant argues that the class definition is too broad because there is no evidence to support the existence of the class after 1985.The class definition covers the period of January 1, 1951 up to the present day. Former students of Ross MacDonald have provided someevidence of their experience that starts in 1951

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