The Manitoba Court of Queen’s Bench dismissed an application by members of four First Nations to certify a class action against Manitoba, Canada and the Manitoba Association of Native Firefighters Inc. relating to the flooding of reserves in 2011. The Court held that a class proceeding would not be the preferable procedure for the fair and efficient resolution of the common issues. This decision was based largely on the certification judge’s conclusion that there were no common issues in relation to the plaintiffs’ nuisance claim due to the individual nature of such claims. The plaintiffs’ claims relating to breach of fiduciary duty disclosed no reasonable cause of action.

The plaintiffs in this action are members of the Pinaymootang First Nation (formerly known as the Fairford River Nation), the Lake St. Martin First Nation, the Little Saskatchewan First Nation and the Dauphin River First Nation. These First Nations are all located along the waterways between Lake Manitoba and Lake Winnipeg.

The Fairford Dam, situated near the Pinaymootang First Nation’s community, regulates the outflow of water from Lake Manitoba. The inflow of water into Lake Manitoba is quite varied. In some years, the Portage Diversion contributes water to Lake Manitoba to divert water from the Assiniboine River and protect the City of Winnipeg and downstream farmland from flooding. Another flood control water work is the Shellmouth Dam, which protects cities such as Winnipeg, Brandon and Portage la Prairie.

The plaintiffs all claim damage from flooding that occurred on the reserves in 2011. The claimed damages arise from different impacts of the flooding. Some plaintiffs suffered flooded basements due to a high water table. Others were evacuated when water seeped through dykes and entered their houses. Others did not have a flood in their house, but claimed a mould problem or foundation problems.

The plaintiffs alleged that the flood was caused by Manitoba while exercising its water control functions during the spring and summer of 2011. In particular, they claim that the operation of the Shellmouth Dam, the Portage Diversion, and the Fairford Dam caused massive amounts of water to be diverted into Lake Manitoba. The claim against Manitoba in this respect was based upon three causes of action: (1) negligence; (2) nuisance and (3) breach of treaty.

They also claim that Manitoba, Canada, and the Native Firefighters failed to adequately provide evacuation and post-flood care to them.

Another plaintiff in this action is the Dauphin River Fisheries Company, a fish processing company, which depends upon people in the First Nations communities supplying fish to it.

Manitoba was required to file a pleading before the certification hearing. It made third party claims against Canada and the Native Firefighters. The plaintiffs had initially brought a separate claim against Canada and the Native Firefighters in relation to the evacuation and post-flood care, but this was consolidated with the present action in 2013.

It was noted that there were separate actions, dating back to the 1990s, in which the four First Nations alleged that Manitoba and Canada were liable for damages due to the regulation of water on their reserves. The pleadings in those actions were amended to make reference to the 2011 flood. The First Nations are consenting to the plaintiffs bringing this class action to avoid an argument in their own proceedings that the Chief and Council have no right to bring an action for individual members’ personal losses. They are also prepared to assign to the individual plaintiffs any right based upon breach of treaty rights. It was also noted that there has been ongoing negotiations between the First Nations, Manitoba and Canada to achieve a plan of compensation.

The Court reviewed the criteria for certifying a class proceeding. The mandatory criteria include that the pleadings disclose a cause of action, that there is a “common issue”, and that a class proceeding would be the preferable procedure for the fair and efficient resolution of the common issues. This is not a rubber stamp process. Dewar J. also noted the gatekeeper function of a certification judge: there must be some substance to the case sought to be certified.

In regards to whether the pleadings disclose a cause of action, the “plain and obvious” test for striking pleadings applies. Dewar J. held that the causes of action in nuisance, negligence and breach of treaty were all sufficiently pleaded to satisfy this test. In regards to the negligence claim, Manitoba argued that there was insufficient proximity to establish a private law duty of care, as the allegations involve a statutory scheme and public policy. Decisions about water flow, and sending water into Lake Manitoba to protect more populous areas, was a hard choice that the government has to make. The Court concluded that such policy decisions are best left to be made on an evidentiary record, not a pleadings analysis. In regards to the breach of treaty claim, Manitoba argued that this claim cannot be pursued by individual band members. Dewar J. held that the Supreme Court of Canada decision in Behn v. Moulton Contracting Ltd., 2013 SCC 26 left this question open, so it was therefore not “plain and obvious” that the plaintiffs lack standing.

The Court held that the plaintiffs failed to establish any cause of action based upon breach of fiduciary duty. The plaintiffs claimed that Manitoba undertook to provide lodging and care, and a particular level of care arose. Dewar J. held:

The practical effect of what the plaintiffs argue is this – when a government commits a tort or breach of treaty, a fiduciary duty to make it right arises. In my view, that is not the law. When a government is negligent, it is liable, as a result of the breach of duty, to pay damages. So also when it commits a nuisance or breaches a treaty. It is the illegal conduct which drives the legal obligation to compensate, not the existence of a separate fiduciary duty arising only after causation has occurred.

Furthermore, in my opinion, the extension of fiduciary law should only arise where no other remedy exists. In the circumstances pleaded in the Consolidated Statement of Claim, there is no need for a fiduciary duty. Reasonable compensation flows if and once liability is determined. An adequate remedy already exists.

The second criterion reviewed by the Court was whether there was an identifiable class of two or more persons. The Court accepted that this criterion was satisfied after some changes to the wording of the named class. Revisions were needed to remove people who would not have been directly impacted by the floods, such as people who lived off-reserve.

The third criterion involved finding common issues. A decision on a common issue must be applicable to the claim of every member of the class, and a “win” for one should be a “win” for all. Dewar J. held that the plaintiffs’ claims relating to nuisance failed to satisfy this criterion. The plaintiffs experienced the flooding in different ways. Dewar J. noted the Nova Scotia Court of Appeal decision in Canada v. MacQueen, 2013 NSCA 143 in which it was held that “each class member’s nuisance claim is unique” would apply here. The flooding impacted the different class members in different ways depending upon factors like topography and the characteristics of their house. Dewar J. held:

I am content to say that success on this common issue will not mean success for all other members of the proposed class.

Following MacQueen, the Court held that nuisance claims involve individual enjoyments of property and do not easily lend themselves to a class action regime.

In regards to the negligence claim, Dewar J. referred to his “gatekeeper” function and reviewed the evidentiary foundation of the claims. Some of the claims were broadly pleaded. The Court held:

The broad characterization of proposed issues 4 and 6 appears to me to be simply a catch-all, just in case some information might arise during the course of discoveries, perhaps even inadvertently. Class actions should not become fishing expeditions in the hands of creative lawyers who know how to plead. There should be some evidence laid before the certification court to suggest that a class action plaintiff is not speculating.

The Court held that certain questions could be certifiable, and satisfy the “common issue” criterion, if revised to include specific dates.  The proposed common issue in relation to the breach of treaty claim was also sufficient. The Court held, however, that there was no evidence to support a claim for punitive damages. The decision to divert water was “the kind of decision which governments are sometimes forced by circumstances to make”.

The Court held that, in regards to the flooding claims, a class action was not the preferable procedure. This decision was largely based on the fact that one of the main claims brought by the plaintiffs – nuisance – did not give rise to any common issues. Dewar J. stated:

What then of judicial economy or efficiency in this case? In my view, what is fatal to the certification of this case is the fact that one of the main causes of action is not certifiable. The conventional cause of action for the plaintiffs to advance in a claim of this nature is a claim in nuisance. I have concluded that there is no common issue in this case respecting nuisance within the meaning of the [Class Proceedings Act]. Certifying only parts of other causes of actions in breach of treaty or negligence means that there would still need to be issues in nuisance as well as causation in the certified causes of action to be decided, issues of contributory negligence to be addressed and assessments of damages to be made. In the overall scheme of things a class action which addresses only part of two causes of action does not save much time or expense. A class proceeding that does not encompass all critical causes of action would not normally be a preferable procedure.

In my view, the tort of nuisance may well be the strongest of the causes of actions available to the plaintiffs, and to certify a class action on some of the elements of negligence and breach of treaty does not provide the finality that is necessary for a class action.

Further, I would not be prepared to certify this action even if counsel for the plaintiffs were willing to jettison the allegations of nuisance. Were that done, it would leave a whole group of people who rely on the existence of a class action exposed because a major cause of action has not been pursued.

The Court provided a discussion of whether the litigation could be pursued in other ways, such as involving a sample of class members from various locations, coupled with tolling agreements pending the resolution of representative claims. He commented:

In my view, a court should not automatically consider that a dismissal of a certification claim takes away access to justice. In the same way that lawyers in this country have creatively advanced class actions, lawyers can also find ways to represent a stable of individual plaintiffs who might share the costs of the proceedings.

The Court then turned to the “business claims” brought by the Dauphin River Fisheries Company. The Court held that a class action was not the preferable procedure. There must be an individual assessment of the damage to or interference with the property rights of each member of the class. Some of the damages would be pure economic loss, but the court preferred to dismiss the application on the basis that there were no common issues.

In regards to the evacuation and post-flood care claims against Canada and Manitoba, the Court held that the pleadings disclosed no cause of action in negligence. Dewar J. stated:

Manitoba essentially asks: Where in the law does such a duty arise? Manitoba submits that there is no overarching duty to provide post-flood care. I agree. As harsh as it may seem, absent appropriate legislation, governments are not obliged to provide catastrophe assistance to its citizens. No doubt, governments do. But is there any reason for so doing, apart from the notion that it may be the moral thing to do when people become victims of a natural disaster?

The plaintiffs did not plead sufficient facts to establish a cause of action. The government in times of natural disaster is a volunteer or rescuer. It was also noted that the statute provides an appeal to the Disaster Financial Assistance Appeal Board.

The Court held that it was plain and obvious that there was no cause of action against Canada for breach of fiduciary duty. The Supreme Court of Canada decision in Wewaykum (2002) sent a clear signal that a cause of action in breach of fiduciary duty is not a “cure-all” for every case in which Aboriginal people are parties. Dewar J. summarized this point as follows:

In short, a fiduciary duty does not arise in every interaction between Canada and aboriginal peoples. There needs to be a cognizable Indian interest and an undertaking by the Crown of discretionary control in relation thereto in a way that invokes responsibility in the nature of a private law duty.

If the case at bar is a case which is said to arise from the presence of a historical fiduciary relationship between the Crown and aboriginals, is there a cognizable Indian interest, and the Crown's undertaking of discretionary control in relation thereto in a way that invokes responsibility "in the nature of a private law duty” (Wewaykum, at para. 85)? In my view it is plain and obvious that there is not. This is a case which deals with the efforts of Canada to provide a form of disaster relief. There is no special Indian interest in that respect. Every person in Canada, aboriginal or otherwise, would have the same interest in this subject. There is no dealing by Canada of a particular Indian interest over which Canada had exclusive and discretionary control. There is simply no foundation in the pleading which would ground a fiduciary duty based on a plaintiff’s aboriginal status.

Alternatively, if this is a case where the fiduciary duty arises out of unrecognized relationships as described in the Elder Advocates case, does it meet the criteria set out therein? I have found it does not with regard to Manitoba earlier in these reasons and conclude the same here. There are no facts pleaded to support the bald assertion of an undertaking, but even more, there is no mention of the “legal or substantial practical interest of the beneficiary or beneficiaries [plaintiffs] that stands to be adversely affected by the alleged fiduciary’s [Canada’s] exercise of discretion or control.” There is nothing in the statement of claim that suggests the provision of evacuation services and post-flood care by Canada was anything beyond the political or policy decision of a government program to help a segment of its citizens who were impacted by a flood. Simply because a government attempts to provide some disaster assistance, whether it be by providing funding, or by taking a more active role, does not make the government a fiduciary to the people requiring that assistance, nor does it create a fiduciary duty on the part of the government to achieve a particular level of assistance.

The Court held that the negligence claim against the Native Firefighters was sufficiently pleaded. This claim faltered, however, on the “common issue” and “preferable procedure” criteria. The claims would be highly individual in nature. In consequence, a class action is not a preferable procedure. It was also noted that the Native Firefighters, a non-profit corporation, was not the “prime target” of the plaintiffs.

The class action was therefore not certified.

http://www.canlii.org/en/mb/mbqb/doc/2014/2014mbqb255/2014mbqb255.html

Author

Scott Kerwin 
SKerwin@blg.com
604.640.4029

Expertise

Aboriginal Law