The Divisional Court of the Ontario Superior Court of Justice dismissed an appeal from the order of a chambers judge certifying a class action against Canada concerning the “Sixties Scoop”. The allegations of breach of fiduciary duty and negligence against Canada disclosed a reasonable cause of action.

The claim of the plaintiffs is that they lost their identity as Aboriginal persons, and their connection to their Aboriginal culture, by being removed from their families and placed with non-Aboriginal foster or adoptive parents. The claim relates to the period of 1965 to 1984. Canada had entered into an agreement with Ontario in 1965 to extend the provincial welfare programs to “Indians in the province”. The plaintiffs allege that Canada wrongfully delegated its fiduciary duties through the 1965 Agreement. They seek declaratory relief and $85,000 in damages for each class member.

The procedural history of the case is complex. In 2010, Mr. Justice Perell conditionally certified the proceeding as a class action on the basis that proper pleadings be filed: 2010 ONSC 3095. In December 2011, the Divisional Court allowed an appeal from this order and struck out the plaintiffs’ pleadings with leave to amend: 2011 ONSC 7712. This order was affirmed by the Ontario Court of Appeal: 2013 ONCA 18.

The plaintiffs brought a second certification motion in July 2013. In September 2013, Belobaba J. certified the proceeding, and dismissed an action by Canada to strike the pleadings as not disclosing a reasonable cause of action: 2013 ONSC 5637. In March 2014, the Divisional Court granted leave to appeal the decision of Justice Belobaba: 2014 ONSC 1583.

At this appeal, Canada did not challenge whether the class action should be certified. The focus was on whether the pleadings disclose a reasonable cause of action. The two primary claims are breach of fiduciary duty and negligence. The Divisional Court considered whether it was “plain and obvious” that the pleadings disclose no reasonable cause of action. Nordheimer J. also noted that Aboriginal claims are “particularly undeveloped and fluid”, and courts should not strike out claims at this stage of the proceedings on questions of law that are not fully settled.

The three elements to identify the existence of a fiduciary duty were described by the Supreme Court of Canada in Alberta v. Elder Advocates of Alberta Society, 2011 SCC 24. The alleged fiduciary must give an undertaking of responsibility to act in the best interests of the beneficiary. The duty must be owed to a defined person or class of persons who are “vulnerable” to the fiduciary in the sense that the fiduciary has a discretionary power over them. Finally, the claimant must show that the fiduciary’s power may affect the legal or substantial practical interests of the beneficiary.

The Divisional Court held that it was arguable that a fiduciary duty existed in this case. Nordheimer J. first noted the distinct relationship between Aboriginal peoples and the Crown. It was conceded that Canada stands in a fiduciary relationship to Aboriginal peoples. Noting cases such as Wewaykum and Manitoba Métis Federation, the Court also stated that a fiduciary relationship does not arise in all aspects of the relationship, but only in relation to specific Aboriginal interests.

The Divisional Court found that it was at least arguable that Canada had a responsibility to act in the best interests of the members of the class. It was also clear that there is a defined class of persons who were vulnerable to the discretionary authority that Canada held over them. Canada chose to delegate that responsibility to Ontario through the 1965 Agreement, and cannot avoid its responsibilities as a fiduciary through such delegation. Canada was responsible for ensuring that its delegate carries out those fiduciary responsibilities in a proper manner. In regards to the third prong of the Elder Advocates test, the Court held that it was clear that removing a child from his or her family, and placing the child in the care of others, affected “the child’s most basic interests”. Nordheimer J. further held:

… I am mindful of the fact that a fiduciary duty does not arise between the Crown and aboriginal peoples with respect to all aspects of the relationship between the two. As was clearly stated in Wewaykum, the fiduciary duty arises only in relation to specific aboriginal interests. Cases, such as Guerin, have imposed a fiduciary duty in respect of aboriginal lands because of the central role that land played in aboriginal economies and culture. Here, we are not dealing with just one aspect of that culture. Rather, we are dealing with a person’s connection to that culture as a whole. It is difficult to see a specific interest that could be of more importance to aboriginal peoples than each person’s essential connection to their aboriginal heritage. In addition, on this point, the importance of aboriginal rights cannot be disputed. They are specifically “recognized and affirmed” by s. 35(1) of the Constitution Act, 1982 and a long line of authorities.

The Divisional Court also held that the claim of negligence had been sufficiently pleaded, and disclosed a reasonable cause of action. There was a sufficient relationship of proximity between Canada and the class members. It was arguable that Canada ought to have recognized that the failure to take reasonable care, to ensure that the welfare programs were administered properly, might foreseeably cause harm to the class members. The Court held that there were no policy reasons to negate this duty of care. The fact that Canada was trying to do something positive for the children does not remove the need to undertake the work free of negligence.

The Court made four additional observations:

  1. The pleadings of the plaintiffs in this case are not flawless, but a perfect pleading is not required. Nordheimer J. quoted from the Supreme Court of Canada decision in Tsilhqot’in Nation about the function of pleadings in Aboriginal claims, and that a “technical approach to pleadings” would not serve the goals of reconciliation and justice.
  2. The issue is whether the decision reached by the chambers judge is correct. It does not matter that the reasoning of the Divisional Court differs from the reasoning used by Mr. Justice Belobaba.
  3. It was also noted that the reasoning of the chambers judge concerning the 1965 Agreement was quite different than the original chambers judge. Nordheimer J. held that this was not particularly relevant to the issue of whether the plaintiffs’ pleadings disclose a reasonable cause of action.
  4. Following the hearing, counsel for the plaintiffs wrote to the Court to draw their attention to the Newfoundland and Labrador decision of Anderson v. Canada (2011). The Court allowed the parties to make written submissions on the matter, but ultimately held that the Anderson case did not add much. Nordheimer J. was critical of the actions of plaintiff’s counsel. Uninvited communications to the court runs afoul of principles stated by Borins J. (as he then was) in Walker Estate v. York Finch General Hospital (1998) and puts the court in a difficult position. It was also noted that the 2011 decision from Newfoundland and Labrador was “not a ‘late breaking’ decision”.   

The Divisional Court therefore dismissed Canada’s appeal, and invited submissions on costs.


Scott Kerwin


Aboriginal Law