Morrison Estate v. Nova Scotia (Health), 2020 NSSC 234

Supreme Court of Nova Scotia Citation: Morrison Estate v. Nova Scotia (Health), 2020 NSSC 234 Date: 20200902 Docket: Hfx No. 230887 Registry: Halifax Between: The Estate of Elmer Stanislaus Morrison, By His Representative Archibald Morrison, Joan Marie Morrison, and the Estate of John Kin Hung Lee, By His Representative Archibald Morrison Plaintiffs v.

The Attorney General of Nova Scotia, representing Her Majesty the Queen in right of the Province of Nova Scotia, (Department of Health), The Minister of Health for the Province of Nova Scotia at the relevant time and The Executive Director of Continuing Care for the Province of Nova Scotia Defendants Library Heading Judge: The Honourable Justice Scott C. Norton Heard: August 17, 2020 Decision: September 2, 2020 Subject: Class action, discontinuance

Summary: Following a long procedural history, the action had been on hold pending the outcome of a similar class action proceeding in Alberta which ultimately was dismissed by the Supreme Court of Canada. The Plaintiffs applied for an Order approving the discontinuance of their certified class proceeding. Issues: Whether to approve the requested discontinuance of the class action pursuant to s. 38(1) of the Class Proceedings Act, SNS 2007, c. 28 .

Result: The Court found that the chances of success of the class action were remote, partly as a result of the intervening event of the outcome in the Alberta proceeding. The Court was satisfied that the interests of the class would not be prejudiced by the discontinuance and the discontinuance was granted without costs. THIS INFORMATION SHEET DOES NOT FORM PART OF THE COURT'S DECISION. QUOTES MUST BE FROM THE DECISION, NOT THIS LIBRARY SHEET. SUPREME COURT OF Nova Scotia Citation: Morrison Estate v.

Nova Scotia (Health), 2020 NSSC 234 Date: 20200902 Docket: Hfx No. 230887 Registry: Halifax Between: The Estate of Elmer Stanislaus Morrison, By His Representative Archibald Morrison, Joan Marie Morrison, and the Estate of John Kin Hung Lee, By His Representative Archibald Morrison Plaintiffs v.

The Attorney General of Nova Scotia, representing Her Majesty the Queen in right of the Province of Nova Scotia, (Department of Health), The Minister of Health for the Province of Nova Scotia at the relevant time and The Executive Director of Continuing Care for the Province of Nova Scotia Defendants DECISION Judge: The Honourable Justice Scott C.

Norton Heard: August 17, 2020 Decision: September 2, 2020 Counsel: Raymond Wagner, Q.C. and Kate Boyle for the Plaintiffs Alison Campbell for the Defendants By the Court: [ 1 ] By Notice of Motion filed August 10, 2020, the Plaintiffs sought an Order approving the discontinuance of this certified class proceeding pursuant to s. 38(1) of the Class Proceedings Act , SNS 2007, c. 28 . The Defendants consent to the discontinuance. Following the hearing of the motion on August 17, 2020 I granted the Order with written reasons to follow. These are those reasons.

Background The Allegations in this Action [ 2 ] A proposed class action was commenced on September 8, 2005, following a Notice of Intended Action that was filed and served on the Attorney General of Nova Scotia (the “Province”) on September 15, 2004.

The pleadings were amended on various occasions, modifying, inter alia , the named Plaintiffs, Defendants, and allegations, ultimately leading to the Fifth Amended Statement of Claim, filed on August 17, 2020. [ 3 ] The Plaintiffs asserted causes of action in negligence, breach of fiduciary duty, equitable fraud, unjust enrichment, misfeasance in public office, fraudulent misrepresentation and deceit, waiver of tort, and discrimination under s. 15 of the Charter based on age and/or disability, and a violation of class members’ right to liberty as guaranteed by s. 7 of the Charter .

Specifically, the Plaintiffs claimed that the class received unequal treatment before the law and were discriminated against on the basis of age and/or disability and that the Defendants’ policy created a distinction which perpetuated the disadvantages faced by the elderly and/or disabled Class Members, contrary to s. 15(1) of the Charter . Procedural History of this Action [ 4 ] This action – commenced before the enactment of the Nova Scotia Class Proceedings Act , and the first to be filed under that Act when it came into force in 2007 – has a long procedural history.

Various motions took place prior to the certification hearing (intended to be the first step in a class proceeding), including the Defendants’ motion to compel the Plaintiffs to respond with better particulars, and a motion to strike the Plaintiffs’ application to continue under the Class Proceedings Act . [ 5 ] The action was certified as a class proceeding on November 29, 2010, on behalf of two subclasses (collectively, the “Class” or “Class Members”) defined as: Residential Class : Residents of nursing homes, or their estates if the resident has passed away, in the Province of Nova Scotia, who had been required to pay for the health care costs of residents in nursing homes for the period between February 1, 2001 and January 1, 2005.

Spousal Class : Spouses of residents of nursing homes, or their estates if the spouse has passed away, in the Province of Nova Scotia, who have been required to pay for the health care costs of residents in nursing homes for the period between February 1, 2001 and January 1, 2005. [ 6 ] The Court certified fourteen common issues relating to: the statutory obligation requiring the Province to pay for health care services for the resident class; the statutory authority for the Single Entry Access (“SEA”) system and whether the Defendants misrepresented the system, committed equitable fraud or were unjustly enriched by it; breach of fiduciary duty; viability of estate actions; unjust enrichment and waiver of tort; joint and several liability; aggregate damages; division of assets for the Spousal Class; and breach of Charter rights. [ 7 ] The Defendants appealed the Order for Certification, and on July 15, 2011, the Nova Scotia Court of Appeal released its decision, remitting the matter back to the Case Management Judge to determine whether the Charter claims should be certified [1] .

[ 8 ] On December 22, 2011, this Honourable Court released its decision [2] and on June 4, 2012, issued an Order certifying the cause of action alleging breach of s.15(1) of the Charter , and denying certification of the cause of action alleging breach of s.7 of the Charter . [ 9 ] Affidavits of Documents were exchanged in May 2013. The Plaintiffs sought further production from the Province, and a series of further documents were produced in August 2014 and September 2015. [ 10 ] No further material substantive steps were taken in the action. Elder Advocates of Alberta Society v.

Alberta (“Elder Advocates”) [ 11 ] Over the course of these proceedings, a similar class action, Elder Advocates , was progressing at a more advanced stage in Alberta.

Elder Advocates was commenced on June 29, 2005, by Elder Advocates of Alberta Society and other plaintiffs who challenged Alberta’s policy of charging residents in nursing homes an “accommodation charge”, which the plaintiffs alleged included health care related services, falling under the responsibility of the province of Alberta. [ 12 ] After lengthy pre-trial proceedings, involving multiple appeals of certification, the common issues trial in Elder Advocates proceeded in late 2016 and early 2017, advancing claims of unjust enrichment and breach of s. 15 of the Charter against Alberta, and claims of negligence, bad faith in the exercise of discretion, unjust enrichment, breach of contract, and breach of s. 15 of the Charter against Alberta Health Services (“AHS”).

Broader claims had originally been advanced but were limited through the certification process. [ 13 ] After a six-week trial, the Alberta Court of Queen’s Bench ultimately dismissed all certified claims of the plaintiffs in 2018 [3] . In sum, the Trial Judge concluded that all accommodation charges were lawful, falling within the maximum amount set by regulation, which is all the statutes require. In the alternative, if the statutes require a reasonable nexus between accommodation charges and the costs of provided accommodation and meals, a reasonable nexus was demonstrated.

The Trial Judge also found that, on this basis, the claims of unjust enrichment, breach of contract against AHS and negligence and bad faith must fail [4] . [ 14 ] With respect to the s.15(1) Charter claim, the plaintiffs in Elder Advocates had alleged discrimination on the basis of age and disability, akin to the Plaintiffs in the within action.

After analyzing the parties’ arguments under s.15(1), the Trial Judge concluded that the plaintiffs failed to establish substantive discrimination, and therefore failed to prove a breach of s 15(1) of the Charter. [5] [ 15 ] This decision was largely affirmed on appeal in 2019, though the Alberta Court of Appeal modified the Trial Judge’s finding under the Charter [6] .

It held that the accommodation charge prima facie violates s.15(1), but that the breach was justified under s.1 on the basis that the deleterious effect of the accommodation charge on the claimants’ s.15 rights – payment of a limited sum for accommodation and meals – is outweighed by the beneficial effects of a legislative scheme which provides long-term care to those who need it. [7] [ 16 ] The plaintiffs’ Application for Leave to Appeal to the Supreme Court of Canada was dismissed on April 2, 2020 [8] .

Reasons for not Advancing the Within Action Pending the Outcome of Elder Advocates [ 17 ] Elder Advocates was proceeding to a six-week common issues trial in 2016. In the within action, the Plaintiffs had received the final of a series of further document productions from the Defendants in September of 2015, and thus were not at as advanced stages as Elder Advocates . Given the further progress of the Alberta action, and the similarity of the issues to be adjudicated, the Plaintiffs decided to await the outcome of Elder Advocates prior to materially advancing this matter towards a common issues trial.

Class Members were advised of this in December of 2015. [ 18 ] After my appointment as case management judge in this matter in June 2019, future dates were scheduled for completion of pre- trial tasks, pending the outcome of the Elder Advocates appeal decision . [ 19 ] After the Alberta Court of Appeal dismissed the appeal and affirmed the lower court’s dismissal of all certified claims on September 17, 2020, Class Counsel requested time to seek client instruction and to communicate with Class Members. Client instruction was sought.

However, on December 17, 2019, the parties jointly informed the court that the plaintiffs in Elder Advocates had filed an Application for Leave to Appeal to the Supreme Court of Canada.

The parties requested and the court granted an extension to complete pre-trial tasks pending the final outcome of Elder Advocates . [ 20 ] In June 2020, the Plaintiffs advised the Court that the Application for Leave to Appeal to the Supreme Court of Canada had been denied in Elder Advocates , and proposed discontinuing this matter, considering the unsuccessful outcome in Elder Advocates . [ 21 ] The Representative Plaintiffs, Joan Morrison and Archibald Morrison, provided their instructions to discontinue the action.

The Issue [ 22 ] The only issue before this Honourable Court is whether to approve the requested discontinuance of the class action pursuant to s. 38(1) of the Class Proceedings Act . Analysis Legislative Requirement for Court Approval of Discontinuance [ 23 ] In the class action context, discontinuance of a class proceeding requires Court approval. This requirement is set out in s.38(1) of the Act as follows: 38(1) A class proceeding may be settled or discontinued only

(

a) with the approval of the court; and (

b) on the terms or conditions the court considers appropriate. … [ 24 ] Section 38(5) of the Act provides guidance regarding potential notice to the class:

(5) In dismissing a class proceeding or in approving a settlement or discontinuance, the court shall consider whether notice should be given and whether the notice should include any of the following: (

a) an account of the conduct of the class proceeding; (

b) a statement of the result of the class proceeding; General Principles for Approval of a Discontinuance [ 25 ] Class Counsel found no reported jurisprudence in Nova Scotia pertaining to discontinuance of a class proceeding, outside of the settlement context. However, there is abundant jurisprudence in other Canadian jurisdictions, providing guidance to this Court. [ 26 ] In order to grant a discontinuance, the Court must be satisfied that the interests of the class will not be prejudiced, or that any potential prejudice be ameliorated [9] .

The test for approving a discontinuance is different from the test for approving a settlement.

A discontinuance of a class action does not have to be beneficial or in the best interests of class members [10] . [ 27 ] A Court can take into consideration whether the chances of success in the litigation are “risky” or “remote”, and whether intervening events in the course of a class proceeding have caused the chances of success to become remote [11] . [ 28 ] The Court should consider, among other things, whether the proceeding was commenced for an improper purpose, whether there is a viable replacement party so that class members are not prejudiced or whether the defendant will be prejudiced [12] . [ 29 ] The policy rationales for requiring court approval for discontinuing a class action are to deter plaintiffs and class counsel from abusing class action procedures by bringing meritless class proceedings to extract a payment as the price of discontinuing the class proceeding, and to provide an opportunity to ameliorate any potential prejudice to class members who may suffer adverse effects from the discontinuance [13] . [ 30 ] Where there is no prospect of success of the remaining claim, Courts have held that class members will not be prejudiced by the dismissal or discontinuance of a certified class action, and that it is appropriate to grant approval for a discontinuance [14] .

Discontinuance of this Action Will Not Prejudice the Class [ 31 ] The prospects of success in this class action have been diminished. Although Elder Advocates and the within action impugn different applicable provincial statutes, in essence, both cases share a common theory: that the charges to residents of long term care homes include health care costs, for which the provinces of Nova Scotia and Alberta, respectively, are responsible. [ 32 ] The legislative

interpretation in Elder Advocates could be applied and considered in the context of the challenged Nova Scotia legislation. As in Elder Advocates, in Nova Scotia, the “per diem” rate is a maximum amount specified by the Minister through regulation [15] . This broad discretion, only limited by having regard to the best interests of the resident, would likely result in a finding that the per diem rates are appropriate, being within the maximum set by regulation, as was concluded in Elder Advocates [16] .

This finding may also impact the Plaintiffs’ claims of unjust enrichment, as in Elder Advocates . [ 33 ] The claims alleging breach of fiduciary duty in this action would not be successful, given the Supreme Court of Canada’s determination in the Elder Advocates 2011 appeal of certification that class members’ vulnerability alone was insufficient to ground fiduciary obligation, as their state of vulnerability did not arise from their relationship with province, and their de-certification of this claim [17] . [ 34 ] It is also likely that the s.15(1) discrimination analysis in Elder Advocates , described above at paragraphs 14 and 15, would apply to the s.15(1) analysis in this case, were it to proceed to a common issues trial. [ 35 ] The within action also challenged the SEA System, for which there were not analogous pleadings or findings in Elder Advocates .

The SEA System ended private pay residents’ ability to jump the queue ahead of public pay residents to enter a nursing home by creating one waiting list which required all prospective nursing home residents, whether public pay or private pay, to do both a care assessment and a financial assessment. This action brought claims on behalf of the private pay residents who allege that their ability to contract directly with nursing homes is a constitutionally protected right.

Although this argument was not advanced within the Elder Advocates proceeding, the s. 15(1) analysis in that case would also likely apply to the SEA System allegations, resulting in no prima facie violation, or one that is justified under s. 1, given the ameliorative intent to equalize the disadvantage suffered by public pay residents with a greater need and less financial means than private pay residents. [ 36 ] For the above reasons, the Alberta Court of Appeal’s decision to dismiss all claims, and the Supreme Court of Canada’s dismissal of the Application for Leave to Appeal, provides persuasive appellate authority to this court to approve a discontinuance of the within action, given the diminished probability of success. [ 37 ] As Perell J. of the Ontario Superior Court of Justice held in Parker v.

Pfizer Canada Inc .: “[g]iven the remote prospects of success, it is opportune to allow [the representative plaintiffs] to end [their] exposure to costs in what is now an extraordinarily risky litigation to pursue. [18] ” The same comment applies in the within case as a result of the outcome in Elder Advocates .

[ 38 ] Continued adversarial proceedings are costly, both in expenditures and in time by both the parties and judicial system. If the requested discontinuance is not approved, the parties will have to return to further discoveries, set dates for a common issues trial, and expend costs on expert reports for a case with a diminished chance of success.

It is likely the Court would expend judicial resources adjudicating pre-trial motions and presiding over a lengthy common issues trial that has a decreased probability of success [19] . [ 39 ] Class Counsel pursued the action on a contingency basis and funded all disbursements associated with the advancement of the litigation.

If the class action is discontinued, there will be no fees payable to Class Counsel for the significant expenditure of time and resources put into the advancement of this case. [ 40 ] The Defendants will not be prejudiced by the discontinuance since all claims against them are being discontinued and they will not be required to continue to litigate and expend resources in defending this action.

I repeat here that the Defendants have consented to the discontinuance without costs payable to them. [ 41 ] Additionally, given the passage of time since commencement of the action, the elderly composition of the Residential and Spousal Classes, and the class period range from February 1, 2001 to January 1, 2005, many Class Members initially participating in the action are likely now deceased, with many of their estates probably unaware that the class action even exists. [ 42 ] I find that this action was not brought for an improper purpose, but for an important public interest purpose.

The issues raised matters of broad public importance regarding the costs associated with health care and concerned disadvantaged members of society, disabled, often elderly persons, who as result of extreme medical needs were required to reside in nursing homes. The public interest nature of the litigation was affirmed in the context of the Elder Advocates decision regarding costs, in which the Court declined to award costs against the plaintiffs as a result [20] . [ 43 ] Given the diminished likelihood of success, I conclude that Class Members will not be prejudiced by discontinuance of this class action.

Conclusion [ 44 ] In

summary, I am satisfied by the evidence and submissions of Class Counsel that the court should approve the discontinuance of this Class Proceeding without costs payable to any party, subject to the following requirements of notice to the Class Members. Proposed Notice to the Class [ 45 ] Section 38(5) of the Act provides that the court shall consider whether notice should be given to class members regarding the discontinuance. [ 46 ] Class Counsel proposes to inform the Class of the discontinuance through direct and indirect means, as set out in the Notice Plan at

Schedule “B” to the Draft Order for Discontinuance. It is proposed that notice be in the form set out at

Schedule “A” to the Draft Order for Discontinuance, which describes the history of the action, the certified classes, the Elder Advocates proceeding and outcome, contact information, and the effect of the discontinuance on the limitation period, which would cease to be tolled once the case is discontinued (“Notice to Class of Discontinuance”). [ 47 ] Given the passage of time since collecting Class Member contact information and the limited response from dissemination of the Notice of Certification, it is likely that much of the contact information in Class Counsel’s database is outdated for purposes of providing direct notice.

As such, Class Counsel proposes to supplement this direct notice by posting the Notice to Class of Discontinuance on Class Counsel (Wagners’) website, and having the Notice to Class of Discontinuance published in the print edition of the Chronicle Herald newspaper. [ 48 ] Order accordingly. Norton, J.