Fontaine v. Canada (Attorney General)

2018 BCSC 1097 Fontaine v. Canada (Attorney General)

IN THE SUPREME COURT OF BRITISH COLUMBIA Citation: Fontaine v. Canada (Attorney General), 2018 BCSC 1097 Date: 20180629 Docket: L051875 Registry: Vancouver Between: Larry Philip Fontaine et al Plaintiffs And The Attorney General of Canada et al Defendants Brought under the Class Proceedings Act, R.S.B.C. 1996, c. 50 Before: The Honourable Madam Justice B.J. Brown Ruling - National Administration Committee's Standing re: Request for Direction brought by Monitor and the Transition Coordinator Counsel for the Monitor and Blott Transition Coordinator Louis Zivot Counsel for the Attorney General of Canada: Catherine A. Coughlan Counsel for the Independent Counsel and National Consortium Representatives on the National Administration Committee Peter Grant, P. Jonathan Faulds, Q.C. Counsel for the Court: Brian Gover Place and Date of Judgment: Vancouver, B.C. June 29, 2018 Introduction [1] These reasons are in relation to a ruling regarding the National Administration Committee ("NAC")'s standing to participate in a Request for Direction ("RFD") brought by the Monitor and the Transition Coordinator. It is made as part of this court's ongoing responsibility in overseeing the implementation and administration of the Indian Residential Schools Settlement Agreement ("IRSSA"), which was approved by nine provincial and territorial superior courts (collectively, the "Courts") in December

2016 and January 2017 in what are termed the "Approval Orders". [2] The IRSSA is intended to bring about a "fair, comprehensive and lasting resolution of the legacy of Indian Residential Schools". It aims to promote "healing, education, truth and reconciliation and commemoration". Compensation to those who attended Indian Residential Schools through two means: the Independent Assessment Process ("IAP") is an inquisitorial process through which former students who suffered sexual abuse, serious physical abuse, and other wrongful acts resulting in serious psychological consequences are compensated. It is a claimant-centered, inquisitorial process. The other means of compensation, the Common Experience Payment ("CEP") provides compensation for the experience of attending an Indian Residential School (which involved separation from family and community and resulted in loss of language and culture). [3] In section 4.10 of the IRSSA, the contracting parties agreed to establish the NAC in order to implement the Approval Orders. Among other things, section 4.11 of the IRSSA addresses the composition of the NAC and the terms during which its members serve. That section also addresses the NAC's means of decision-making, a subject that was dealt with in this court's decision in Fontaine v. Canada (Attorney General), 2018 BCSC 376, and one to which I will return. [4] As a primary means of

implementing the IRSSA, the Courts issued substantially identical orders on March 8, 2007 (the "Implementation Orders"). The Implementation Orders appointed the Monitor and vested it with significant powers. The Implementation Orders state that "the Courts shall supervise the implementation of the [IRSSA] and this order and, without limiting the generality of the foregoing, may issue such further and ancillary orders, from time to time, as are necessary to implement and enforce the provisions of the [IRSSA], the [decision underlying the Approval Order] and this order." Applications to the Courts must be carried out in accordance with a protocol appended to the Implementation Orders (the "Court Administration Protocol"). The Court Administration Protocol establishes the process for bringing an RFD. [5] The Honourable Ian Pitfield, a former member of this court, was appointed the Transition Coordinator by order of this court dated June 5, 2012 (the "January 5, 2012 Order"). That order was made in consequence of the court's decision in Fontaine v. Canada (Attorney General), 2012 BCSC 839 ("Blott #1") and grants the Transition Coordinator considerable powers with which to carry out his mandate. [6] Among other things, the terms of the January 5, 2012 Order also: a. excluded an Alberta-based lawyer, David Blott, his professional corporation (David Blott Professional Corporation) and

his law firm (Blott & Company), as well as associated entities, from further participation in the IRSSA's administration; b. required Blott & Company to cooperate fully with the Transition Coordinator, and to assist him as necessary and deliver the files pertaining to IAP claimant clients no later than June 22, 2012; c. mandated the winding down of Blott & Company's IAP practice and a "structured and orderly transition" of the firm's IAP files to other qualified lawyers or law firms referred to in the order as "Successor Counsel"; and d. deemed claims that Blott & Company had not filed in the IAP, including those designated or determined by Blott & Company not to qualify for consideration in the IAP ("DNQ Files") to have been submitted to the IAP adjudication system by the IAP filing deadline of September 19, 2012; [7] The work of the Transition Coordinator has proven to be both an enormous undertaking and highly successful. The former clients of Blott & Company were properly consulted and over 2000 claims transitioned to Successor Counsel in an expeditious and orderly manner. [8] The Monitor and the Transition Coordinator brought a further RFD that was heard in September 2016 and was the subject of a decision issued in October 2016 (Fontaine v. Canada (Attorney General), 2016 BCSC 1998). The court ordered that certain Blott Claimant matters deemed admitted pursuant to the June

5, 2012 Order be barred from the IAP and gave further directions respecting what were referred to as the Lost Estate Claims and the Lost Claims. No order was made with respect to the Blott DNQ Files. [9] The Transition Coordinator's work is now largely complete and the administration of the IAP itself is in its final stages. [10] In this RFD, the Monitor and the Transition Coordinator seek an order "that all DNQ Claims, the 102 Claims, the 12 Claims and all other claims of every nature and kind whatsoever not already dealt with in the October 102 Order be forever barred from the IAP". [11] The NAC sought to participate in the determination of this RFD. Through Court Counsel, I sought written submissions from counsel seeking to participate on behalf of the NAC, the Monitor/Transition Coordinator and Canada concerning the following question: [W]hether the same standing issue arises here that arose in Fontaine v. Canada (Attorney General), 2018 BCSC 376 - in other words, whether Canada voted in favour of participating in the RFD. The operative provision in the IRSSA is subsection 4.11(10) ("Notwithstanding Section 4.11(9), where a vote would increase the costs of the Approval Orders whether for compensation or procedural matters, the representative for Canada must be one (1) of the five (5) member majority"). [12] Having considered those submissions, I determined that the NAC

should not be granted standing to participate. Consequently, Court Counsel advised the parties as follows: Her Ladyship has concluded that the National Administration Committee lacks standing to participate in the hearing of this Request for Direction. However, as signatories to the IRSSA, its members do have standing to do so. [13] Subsequently, Mr. Grant (the Independent Counsel group's representative on the NAC, and the NAC's Chair) and Mr. Faulds (the National Consortium's representative on the NAC) wrote to Court Counsel, seeking the court's reasons for denying the NAC standing. The parties' submissions and those reasons are set out below. The Parties' Submissions [14] The main point on which the issue pertaining to the NAC's standing turned was whether the NAC's participation in the RFD "would increase the costs of the Approval Orders whether for compensation or procedural matters". [15] On behalf of a majority of the NAC's members (but, as will be seen, not on behalf of the NAC), Mr. Grant submitted as follows: Although Canada abstained on this RFD, the NAC motion to participate will not incur 'additional cost' to Canada either for compensation or procedural matters for the following reasons: 1. Firstly, in accordance with Justice Brown's earlier [word missing in original] in the Blott matter, the 147 files in question are deemed to have been submitted to the IAP on time. Accordingly, the resolution of any such claims as are determined to be admissible cannot by definition increase the cost of the Agreement. Any valid claim which was deemed submitted is entitled to be addressed and that includes these files.

2. Secondly, as set out in Ms. Hansen's affidavit, 12 of these claims were in fact admitted to the IAP and five were allowed with compensation. A sixth also received ex gratia compensation under the administrative split program. Canada never objected to the payment of the valid claims as they form part of the Settlement Agreement.

3. Thirdly, any costs for the Court Monitor to distribute the remaining DNQ claims for review would properly be paid out of the Transition Fund which is funded by foregone legal fees of successor counsel and which exists to cover the costs of dealing with the Blott files. The Transition fund has adequate monies to cover any such expenses incurred. No additional cost to Canada arises. We should add we are advised the IAP Oversight Committee had, for the purposes of Unrepresented Claimants, created a list of lawyers who are prepared to take on those cases. That list can be provided to the Court Monitor so that he can refer the DNQ (Blott) files to those lawyers. Given the small number of files in issue we would expect these could be distributed quickly to counsel who can then contact the claimants and assess their claims and keep within the Court mandated timelines for completion. With respect to the limited information in the Blott DNQ files, Successor Counsel in the majority of cases had to re-submit claims and applications as the original applications were incomplete or erroneous. These claims, if valid, can be addressed in the same manner. [16] In submissions made on Canada's behalf, Ms. Coughlan indicated that "Canada lacks sufficient information about the proposed NAC involvement to be in a position to answer [the question as to whether that involvement would engage

subsection 4.11(10) of the IRSSA]." She pointed to the paucity of information before the NAC at the meeting when the majority voted to participate in the RFD. Although the NAC's position seemed to be that the Blott DNQ Files should be transferred from a storage facility over which Mr. Blott has control to the Indian Residential Schools Adjudication Secretariat, and then distributed to a counsel named on a list said to have been generated by the IAP Oversight Committee for review, there was no information as to: the names of counsel on the list; their authority to conduct the review; the parameters governing the review; nor the manner of the review. [17] Ms. Coughlan also confirmed that Canada and the church representative refraining from voting on the basis of lack of client instructions. [18] Counsel for the Monitor and the Transition Coordinator, Mr. Zivot, did not make submissions on the issue. Analysis [19] The NAC is not a party to the IRSSA, but a creature of it. The Approval Orders provide that in addition to entities that include the representative plaintiffs, defendants and class counsel, the NAC can bring an RFD. But the IRSSA itself limits that ability. [20] Sections 4.11(9) and (10) of the IRSSA provide as follows: (9) Decisions of the NAC will be made by consensus and where consensus cannot be reached, a majority of five (5) of the seven (7) members is required to

make any decision. In the event that a majority of five (5) members cannot be reached the dispute may be referred by a simple majority of four (4) NAC members to the Appropriate Court in the jurisdiction where the dispute arose by way of reference styled as In Re Residential Schools. (10) Notwithstanding Section 4.11(9), where a vote would increase the costs of the Approval Orders whether for compensation or procedural matters, the representative for Canada must be one (1) of the five (5) member majority. (emphasis added) [21] Section 4.11(10) has been referred to as the "Canada veto". [22] As Ms. Coughlan noted in her submissions, there is a dearth of information about the process for transferring the Blott DNQ Files from the storage facility to the Indian Residential Schools Adjudication Secretariat and, ultimately, to counsel for review. In particular, there is no information about who should bear the cost of this. In my experience as a Supervising Judge in the IRSSA's administration since 2009, the default position on funding for such procedural steps has been that Canada has been the funder. [23] As the funder for all aspects of the IRSSA's administration, Canada pays for costs incurred by the NAC. Pursuant to sections 13.11(1) and (2) of the IRSSA, Canada pays the "reasonable hourly rates" of counsel representing the Assembly of First Nations, Inuit Representatives,

Independent Counsel, National Consortium and Merchant Law Group, up to a monthly maximum of $60,000. Accounts must be submitted; this is not an allowance. The representatives of each of those groups voted in favour of the NAC's participation in this RFD. The point is that fees incurred in participating in this RFD would not otherwise have been incurred and therefore those fees would amount to "increased costs for procedural matters" within the meaning of section 4.11(10). [24] Perhaps more importantly, it is likely that the relief to be sought by the NAC members seeking to intervene in the Transition Coordinator's RFD will ultimately engage section 4.11(10). Those purporting to act on behalf of the NAC oppose the relief sought by the Monitor and Transition Coordinator. They seek a review of the Blott DNQ Files, to determine whether they merit awards in the IAP. Those awards are paid by Canada and would amount to "increased costs for compensation" within the meaning of section 4.11(10). [25] In Fontaine v. Canada (Attorney General), 2018 BCSC 376, this court quashed an RFD brought by the NAC on the basis that the result of a successful RFD would have been additional cost to Canada. The court reasoned as follows: [27] If this RFD involved only the interpretation of the Settlement Agreement, I would accept Mr. Faulds' submission that this does not amount to the sort of "procedural

cost" referred to in s. 4.11(10). However, the NAC's RFD seeks declarations that essentially involve an amendment to the Settlement Agreement: namely, it seeks an order that SOS claimants may apply to the Chief Adjudicator or the Court to have their IAP decisions reconsidered in light of subsequently discovered admissions. That would fall squarely within the prohibition set out in s. 4.11(10). [26] The same concern arises here. If the remedy sought by the Transition Coordinator and the Monitor is not granted, there will at least be additional procedural costs, if not costs in additional IAP awards to be borne by Canada. [27] I note that at the hearings in relation to both Blott #1 and Blott #2, Mr. Grant and Mr. Faulds appeared and made submissions, Mr. Grant on behalf of the Independent Counsel group and Mr. Faulds for the National Consortium. They did so as of right, as representatives of signatories to the IRSSA. As I instructed Court Counsel to note in advising the parties of my ruling in this matter, it is open to Mr. Grant and Mr. Faulds to participate on behalf of the groups they represent. They have chosen to do so. In my view, that is preferable to purporting to appear with the NAC's imprimatur, but without Canada's consent and despite section 4.11(10) of the IRSSA. [28] Those purporting to act on behalf of the NAC are not asking me to exercise my discretion in order

to allow them standing. They claim they have it, as the NAC. Although strictly speaking, the test for standing set out in Fontaine v. Canada (Attorney General), 2015 BCSC 1386 (the "Cachagee test") is inapplicable, I find that it is nonetheless helpful in the analysis in asking (in the third branch of the inquiry) whether there is any other reasonable and effective manner in which the issue can be brought before the court. Of course, there is in this case, and that is for Independent Counsel and the National Consortium to participate in the hearing of this RFD in their own names, as signatories to the IRSSA, as is their right. [29] I have now received the joint submissions of Independent Counsel and the National Consortium, which I have reviewed together with the other materials prior to court being convened. Conclusion [30] For these reasons I have denied standing to those purporting to act on behalf of the NAC. "B. J. Brown, J."