Elder Advocates of Alberta Society et al. v. Alberta et al., (2011) 499 A.R. 345

• Judge: McLachlin, C.J.C., Binnie, LeBel, Deschamps, Fish, Abella, Charron, Rothstein and Cromwell, JJ.
• Court: Supreme Court (Canada)
• Case Date: January 27, 2011
• Jurisdiction: Canada (Federal)
• Citations: (2011), 499 A.R. 345;2011 SCC 24;81 CCLT (3d) 1;[2011] EXP 1574;[2011] 2 SCR 261;JE 2011-868;EYB 2011-190431;416 NR 198;41 Alta LR (5th) 1;[2011] SCJ No 24 (QL);499 AR 345;331 DLR (4th) 257

Elder Advocates of Alta. Soc. v. Alta. (2011), 499 A.R. 345; 514 W.A.C. 345 (SCC)

MLB headnote and full text

[French language version follows English language version]

[La version française vient à la suite de la version anglaise]

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Temp. Cite: [2011] A.R. TBEd. MY.110

Her Majesty The Queen in Right of Alberta (appellant) v. Elder Advocates of Alberta Society and James O. Darwish, Personal Representative of the Estate of Johanna H. Darwish, deceased (respondents) and Attorney General of Canada and Attorney General of British Columbia (intervenors)

(33551; 2011 SCC 24; 2011 CSC 24)

Indexed As: Elder Advocates of Alberta Society et al. v. Alberta et al.

Supreme Court of Canada

McLachlin, C.J.C., Binnie, LeBel, Deschamps, Fish, Abella, Charron, Rothstein and Cromwell, JJ.

May 12, 2011.

Summary:

Long term care facility (LTCF) operators, as agents of the regional health authorities, provided long term or auxiliary nursing care to Alberta residents for the government. The LTCF operators' funding came from the government and from money paid by residents as an accommodation charge under the Nursing Homes Act and Nursing Homes Operation Regulation. The plaintiffs brought an action in which they challenged the levying of the accommodation charges, asserting that the monies had been used to pay for health care costs that were the defendants' responsibility, rather than only for accommodation and meals as the legislation required. The plaintiffs applied to certify the action on behalf of a proposed class.

The Alberta Court of Queen's Bench, in a decision reported at (2008), 453 A.R. 1, allowed the application. The defendants appealed. The plaintiffs cross-appealed.

The Alberta Court of Appeal, in a decision reported at (2009), 469 A.R. 270; 470 W.A.C. 270, dismissed the appeal and allowed the cross-appeal in part. The defendants sought leave to appeal.

The Supreme Court of Canada, in a decision reported at (2010), 409 N.R. 381, granted leave to appeal.

The Supreme Court of Canada allowed the appeal in part.

Crown - Topic 1561

Torts by and against Crown - Negligence by Crown - General - [See Torts - Topic 77 ].

Crown - Topic 1645

Torts by and against Crown - Actions against Crown - Defences, bars or exclusions - Policies or "policy" decisions - [See Torts - Topic 77 ].

Crown - Topic 2888

Crown immunity - Exceptions - Restitution for ultra vires taxes - [See Restitution - Topic 61 ].

Crown - Topic 2890

Crown immunity - Exceptions - Negligence - [See Torts - Topic 77 ].

Crown - Topic 2895

Crown immunity - Exceptions - Flagrant impropriety or bad faith - [See Torts - Topic 77 ].

Equity - Topic 3606

Fiduciary or confidential relationships - General principles - What constitutes a fiduciary relationship - The Supreme Court of Canada discussed the general requirements for imposition of a fiduciary duty in cases not covered by an existing category in which fiduciary duties had been recognized - In addition to vulnerability arising from the relationship, the claimant had to show, first, that the alleged fiduciary gave an undertaking of responsibility to act in the beneficiary's best interests and to forsake the interests of all others in favour of those of the beneficiary in relation to the specific interest at stake - Second, the duty had to be owed to a defined person or class of persons who had to be vulnerable to the fiduciary in the sense that the fiduciary had a discretionary power over them - Finally, the claimant had to show that the alleged fiduciary's power might affect the legal or substantial practical interests of the beneficiary - See paragraphs 22 to 36.

Equity - Topic 3611

Fiduciary or confidential relationships - General principles - Crown - The Supreme Court of Canada discussed the imposition of fiduciary duties in the governmental context - The special characteristics of governmental responsibilities and functions meant that governments would owe fiduciary duties only in limited and special circumstances - In order to establish a fiduciary duty on an ad hoc basis, a claimant had to show (1) an undertaking by the alleged fiduciary to act in the beneficiary's best interests, (2) a defined person or class of persons who were vulnerable to the fiduciary's control and (3) a practical interest that stood to be adversely affected - In the governmental context, first, imposing a burden on the Crown to put the interests of the beneficiary ahead of its own was at odds with the Crown's duty to act in the best interests of society as a whole - It was not impossible to meet the requirement of an undertaking by a government actor, but it would be rare - A general obligation to the public or sectors of the public did not meet the requirement - Further, it would be difficult to establish the second requirement of a defined person or class who were vulnerable - The government had to act in the interests of all citizens - Finally, it might be difficult to establish the requirement that the government power attacked affected a legal or significant practical interest, where the alleged fiduciary was the government - It was not enough that the alleged fiduciary's acts impacted generally on a person's well-being, property or security - The interest affected had to be a specific private law interest to which the person had a pre-existing distinct and complete legal entitlement - A rigorous application of the general requirements of fiduciary duty would limit the range of cases in which a fiduciary duty on the government was found - Claims against the government that failed to satisfy the legal requirements of a fiduciary duty should not be allowed to proceed in the speculative hope that they might ultimately succeed - The truism that the categories of fiduciary duty were not closed did not justify allowing hopeless claims to proceed to trial - See paragraphs 37 to 54.

Equity - Topic 3611

Fiduciary or confidential relationships - General principles - Crown - Long term care facility (LTCF) operators, as agents of the regional health authorities, provided long term or auxiliary nursing care to Alberta residents for the government - The LTCF operators' funding came from the government and from money paid by residents as an accommodation charge - The plaintiffs maintained that the Crown had failed to ensure that the monies paid for "accommodation and meals" were used exclusively for that purpose - They alleged that Alberta was only allowed to charge for the actual costs of accommodation and meals and was not to use funds collected at the maximum level to subsidize basic care costs - Seeking return of the overcharge or damages, the plaintiffs applied to certify a class action, claiming, inter alia, breach of fiduciary duty - Alberta opposed the application, asserting that the claim should be struck - The Supreme Court of Canada agreed that the claim of breach of fiduciary duty should be struck - First, while the pleadings emphasized the vulnerability of the class members, vulnerability alone was insufficient to ground a fiduciary obligation - Further, the class members' vulnerability did not arise from their relationship with Alberta - Second, the plaintiffs failed to identify anything in the legislation or in the factual relationship that supported an undertaking by Alberta to act with undivided loyalty toward the class members regarding the accommodation charges - Third, the legal or substantial practical interests alleged to be affected by the Crown's exercise of authority were insufficient to attract a fiduciary duty - Finally, the specific fiduciary duty that the plaintiffs sought to establish related primarily to setting the accommodation charges by regulation - This was a legislative function of government - Where a government acted in the exercise of its legislative function, the courts had consistently held that a fiduciary duty did not arise - The claim was doomed to fail - See paragraphs 55 to 63.

Equity - Topic 3993

Fiduciary or confidential relationships - Practice - Pleadings - [See second Equity - Topic 3611 ].

Practice - Topic 209.3

Persons who can sue and be sued - Individuals and corporations - Status or standing - Class or representative actions - Certification - Considerations (incl. when class action appropriate) - Long term care facility (LTCF) operators, as agents of the regional health authorities, provided long term or auxiliary nursing care to Alberta residents for the government - The LTCF operators' funding came from the government and from money paid by residents as an accommodation charge - The plaintiffs maintained that the Crown had failed to ensure that the monies paid for "accommodation and meals" were used exclusively for that purpose - They alleged that Alberta was only allowed to charge for the actual costs of accommodation and meals and was not to use funds collected at the maximum level to subsidize basic care costs - Seeking return of the overcharge or damages, the plaintiffs applied to certify a class action, claiming, inter alia, unjust enrichment - Alberta opposed the application, asserting that a class action was not the preferable procedure - The application was allowed - Alberta appealed - The Supreme Court of Canada declined to decertify the action - The court rejected Alberta's assertion that an individualized cost review would have to be conducted for each proposed class member - The common questions certified by the application judge asked whether the accommodation charges, as a practice carried out on a class-wide basis, resulted in unjust enrichment - An individual assessment of the nexus between specific accommodation and meal charges was not necessary in order to ground potential liability to the class - The Class Proceedings Act provided sufficient remedial flexibility to address any potential difficulties in assessing, awarding, and distributing damages - See paragraphs 97 to 101.

Restitution - Topic 61

Unjust enrichment - General - Long term care facility (LTCF) operators, as agents of the regional health authorities, provided long term or auxiliary nursing care to Alberta residents for the government - The LTCF operators' funding came from the government and from money paid by residents as an accommodation charge - The plaintiffs maintained that the Crown had failed to ensure that the monies paid for "accommodation and meals" were used exclusively for that purpose - They alleged that Alberta was only allowed to charge for the actual costs of accommodation and meals and was not to use funds collected at the maximum level to subsidize basic care costs - Seeking return of the overcharge or damages, the plaintiffs applied to certify a class action, claiming, inter alia, unjust enrichment - Alberta opposed the application, asserting that the claim should be struck - Alberta argued, inter alia, that the decision in Kingstreet Investments Ltd. et al. v. New Brunswick (Minister of Finance) et al. (2007 S.C.C.) held that an action for unjust enrichment could not be brought against government - The Supreme Court of Canada held that the claim of unjust enrichment could proceed - Kingstreet stood for the proposition that public law remedies, rather than unjust enrichment, were the proper route for claims relating to restitution of taxes levied under an ultra vires statute - However, Kingstreet left open the possibility of suing for unjust enrichment in other circumstances - The claim pled here was not for taxes paid under an ultra vires statute - It was not therefore precluded - The plaintiffs had pled the three elements of unjust enrichment: benefit, deprivation and absence of juristic reason for the deprivation - It was not plain and obvious that the claim did not disclose a cause of action - See paragraphs 81 to 96.

Restitution - Topic 67

Unjust enrichment - General - Persons entitled to claim - [See Restitution - Topic 61 ].

Restitution - Topic 69

Unjust enrichment - General - Where money paid under invalid law - [See Restitution - Topic 61 ].

Torts - Topic 77

Negligence - Duty of care - Relationship required to raise duty of care - Long term care facility (LTCF) operators, as agents of the regional health authorities, provided long term or auxiliary nursing care to Alberta residents for the government - The LTCF operators' funding came from the government and from money paid by residents as an accommodation charge - The plaintiffs maintained that the Crown had failed to ensure that the monies paid for "accommodation and meals" were used exclusively for that purpose - They alleged that Alberta was only allowed to charge for the actual costs of accommodation and meals and was not to use funds collected at the maximum level to subsidize basic care costs - Seeking return of the overcharge or damages, the plaintiffs applied to certify a class action, claiming, inter alia, negligence and bad faith in the exercise of discretion - Alberta opposed the application, asserting that the claims should be struck - The Supreme Court of Canada agreed that these claims should be struck - The negligence claim was bound to fail at the first step of the Anns/Cooper inquiry (prima facie duty of care) - Absent a statutory obligation to do the things that the plaintiffs claimed were done negligently (administering the accommodation fees), the necessary relationship of proximity was not made out - Even if it were, the claim would fail at the second step as any prima facie duty of care would be negated by policy considerations - The bad faith claim was explicitly linked to the negligence claim and could not survive on its own - The simple fact of bad faith was not independently actionable - Nor could the court read the plea of bad faith as disclosing the tort of misfeasance in public office, which was not raised in the courts below - See paragraphs 64 to 80.

Cases Noticed:

Hollick v. Metropolitan Toronto (Municipality) et al., [2001] 3 S.C.R. 158; 277 N.R. 51; 153 O.A.C. 279; 2001 SCC 68, refd to. [para. 20].

Hunt v. Carey Canada Inc. - see Hunt v. T & N plc et al.

Hunt v. T & N plc et al., [1990] 2 S.C.R. 959; 117 N.R. 321, refd to. [para. 20].

Frame v. Smith and Smith, [1987] 2 S.C.R. 99; 78 N.R. 40; 23 O.A.C. 84, refd to. [para. 27].

International Corona Resources Ltd. v. LAC Minerals Ltd., [1989] 2 S.C.R. 574; 101 N.R. 239; 36 O.A.C. 57, refd to. [para. 27].

Perez v. Galambos et al., [2009] 3 S.C.R. 247; 394 N.R. 209; 276 B.C.A.C. 272; 468 W.A.C. 272; 2009 SCC 48, refd to. [para. 28].

Guerin v. Canada, [1984] 2 S.C.R. 335; 55 N.R. 161, refd to. [para. 29].

Hodgkinson v. Simms et al., [1994] 3 S.C.R. 377; 171 N.R. 245; 49 B.C.A.C. 1; 80 W.A.C. 1, refd to. [para. 29].

Wewayakum Indian Band v. Canada and Wewayakai Indian Band, [2002] 4 S.C.R. 245; 297 N.R. 1; 2002 SCC 79, refd to. [para. 38].

Hogan et al. v. Newfoundland (Attorney General) (2000), 189 Nfld. & P.E.I.R. 183; 571 A.P.R. 183; 183 D.L.R.(4th) 225 (Nfld. C.A.), refd to. [para. 38].

Sagharian et al. v. Ontario (Minister of Education), [2008] O.A.C. Uned. 726; 172 C.R.R.(2d) 105; 2008 ONCA 411, refd to. [para. 44].

R. v. Sparrow, [1990] 1 S.C.R. 1075; 111 N.R. 241, refd to. [para. 39].

Harris v. Minister of National Revenue, [2002] 2 F.C. 484; 214 F.T.R. 1; 2001 FCT 1408, refd to. [para. 44].

K.L.B. et al. v. British Columbia et al., [2003] 2 S.C.R. 403; 309 N.R. 306; 187 B.C.A.C. 42; 307 W.A.C. 42; 2003 SCC 51, refd to. [para. 45].

Authorson v. Canada (Attorney General), [2000] O.T.C. 719; 53 O.R.(3d) 221 (Sup. Ct.), affd. (2002), 157 O.A.C. 278; 58 O.R.(3d) 417 (C.A.), revd. [2003] 2 S.C.R. 40; 306 N.R. 335; 175 O.A.C. 363; 2003 SCC 39, refd to. [para. 45].

Bennett v. British Columbia, [2009] B.C.T.C. Uned. 1358; 2009 BCSC 1358, refd to. [para. 49].

Drady v. Canada (Minister of Health), [2007] O.T.C. Uned. F30; 2007 CanLII 27970 (Sup. Ct.), affd. (2008), 270 O.A.C. 1; 300 D.L.R.(4th) 443; 2008 ONCA 659, leave to appeal refused [2009] 1 S.C.R. viii; 396 N.R. 396; 260 O.A.C. 399, refd to. [para. 49].

Gorecki v. Canada (Attorney General) (2006), 208 O.A.C. 368 (C.A.), refd to. [para. 61].

Anns v. Merton London Borough Council, [1978] A.C. 728 (H.L.), refd to. [para. 66].

Nielsen v. Kamloops (City) and Hughes, [1984] 2 S.C.R. 2; 54 N.R. 1, refd to. [para. 66].

Cooper v. Hobart - see Cooper v. Registrar of Mortgage Brokers (B.C.) et al.

Cooper v. Registrar of Mortgage Brokers (B.C.) et al., [2001] 3 S.C.R. 537; 277 N.R. 113; 160 B.C.A.C. 268; 261 W.A.C. 268; 2001 SCC 79, refd to. [para. 66].

Broome et al. v. Prince Edward Island, [2010] 1 S.C.R. 360; 400 N.R. 148; 297 Nfld. & P.E.I.R. 24; 918 A.P.R. 24; 2010 SCC 11, refd to. [para. 66].

Childs v. Desormeaux et al., [2006] 1 S.C.R. 643; 347 N.R. 328; 210 O.A.C. 315; 2006 SCC 18, refd to. [para. 67].

Syl Apps Secure Treatment Centre v. B.D. - see B.D. et al. v. Children's Aid Society of Halton Region et al.

B.D. et al. v. Children's Aid Society of Halton Region et al., [2007] 3 S.C.R. 83; 365 N.R. 302; 227 O.A.C. 161; 2007 SCC 38, refd to. [para. 69].

Brewer Bros. et al. v. Canada (Attorney General), [1991] 1 F.C. 25; 129 N.R. 3 (F.C.A.), dist. [para. 70].

Welbridge Holdings Ltd. v. Greater Winnipeg, [1971] S.C.R. 957, refd to. [para. 74].

Ultramares Corp. v. Touche (1931), 174 N.E. 441 (N.Y. Ch.), refd to. [para. 74].

Design Services Ltd. et al. v. Canada, [2008] 1 S.C.R. 737; 374 N.R. 77; 2008 SCC 22, refd to. [para. 74].

Odhavji Estate et al. v. Woodhouse et al., [2003] 3 S.C.R. 263; 312 N.R. 305; 180 O.A.C. 201; 2003 SCC 69, refd to. [para. 79].

Garland v. Consumers' Gas Co., [2004] 1 S.C.R. 629; 319 N.R. 38; 186 O.A.C. 128; 2004 SCC 25, refd to. [para. 82].

Air Canada and Pacific Western Airlines Ltd. v. British Columbia, [1989] 1 S.C.R. 1161; 95 N.R. 1, refd to. [para. 86].

Eurig Estate v. Ontario Court (General Division), Registrar, [1998] 2 S.C.R. 565; 213 N.R. 55; 114 O.A.C. 55, refd to. [para. 87].

Pacific National Investments Ltd. v. Victoria (City) et al., [2004] 3 S.C.R. 575; 327 N.R. 100; 206 B.C.A.C. 99; 338 W.A.C. 99; 2004 SCC 75, refd to. [para. 88].

Kingstreet Investments Ltd. et al. v. New Brunswick (Minister of Finance) et al., [2007] 1 S.C.R. 3; 355 N.R. 336; 309 N.B.R.(2d) 255; 799 A.P.R. 255; 2007 SCC 1, refd to. [para. 89].

620 Connaught Ltd. et al. v. Canada (Attorney General) et al., [2008] 1 S.C.R. 131; 371 N.R. 200; 2008 SCC 7, refd to. [para. 93].

Peel (Regional Municipality) v. Canada - see Peel (Regional Municipality) v. Ontario.

Peel (Regional Municipality) v. Ontario, [1992] 3 S.C.R. 762; 144 N.R. 1; 59 O.A.C. 81, refd to. [para. 94].

Authors and Works Noticed:

Ellis, Mark Vincent, Fiduciary Duties in Canada (1993) (2011 Looseleaf Update, Release 1), pp. 19-3, 19-24.10 [para. 54].

Finn, Paul D., The Fiduciary Principle, in Youdan, Timothy G., Essays in Equity, Fiduciaries and Trusts (1989), p. 27 [para. 43].

Maddaugh, Peter D., and McCamus, John D., The Law of Restitution (2004) (2010 Looseleaf Update, Release 6), p. 22-1 [para. 84].

Youdon, Timothy G., Essays in Equity, Fiduciaries and Trusts (1989), p. 27 [para. 43].

Counsel:

G. Alan Meikle, Q.C., Ward K. Branch and Michael Sobkin, for the appellant;

Allan A. Garber and Nathan J. Whitling, for the respondents;

Christine Mohr, for the intervenor, the Attorney General of Canada;

Anthony Fraser, for the intervenor, the Attorney General of British Columbia.

Solicitors of Record:

Attorney General of Alberta, Edmonton, Alberta, for the appellant;

Parlee McLaws, Edmonton, Alberta, for the respondents;

Attorney General of Canada, Toronto, Ontario, for the intervenor, the Attorney General of Canada;

Attorney General of British Columbia, Vancouver, B.C., for the intervenor, the Attorney General of British Columbia.

This appeal was heard on January 27, 2011, by McLachlin, C.J.C., Binnie, LeBel, Deschamps, Fish, Abella, Charron, Rothstein and Cromwell, JJ., of the Supreme Court of Canada. On May 12, 2011, McLachlin, C.J.C., released the following reasons for judgment for the court in both official languages.