Fontaine et al. v. Canada (Attorney General) et al., 2014 MBCA 93

• Judge: Steel, Monnin and Cameron, JJ.A.
• Court: Court of Appeal (Manitoba)
• Case Date: April 23, 2014
• Jurisdiction: Manitoba
• Citations: 2014 MBCA 93;(2014), 310 Man.R.(2d) 162 (CA)

Fontaine v. Can. (A.G.) (2014), 310 Man.R.(2d) 162 (CA);

      618 W.A.C. 162

MLB headnote and full text

Temp. Cite: [2014] Man.R.(2d) TBEd. OC.015

Fred Kelly (plaintiff/respondent) v. The Attorney General of Canada (defendant/appellant) and Les Oblats de Marie Immaculée du Manitoba (defendant/respondent)

Larry Philip Fontaine in his personal capacity and in his capacity as the Executor of the Estate of Agnes Mary Fontaine, Deceased, et al. (plaintiffs) v. The Presbyterian Church in Canada et al. (defendants)

(AI 13-30-08093; 2014 MBCA 93)

Indexed As: Fontaine et al. v. Canada (Attorney General) et al.

Manitoba Court of Appeal

Steel, Monnin and Cameron, JJ.A.

October 9, 2014.

Summary:

Under the Indian Residential Schools Settlement Agreement (the agreement), Canada provided compensation to individuals affected by the residential school system. Survivors of physical or sexual abuse were entitled to compensation through an independent assessment process. If actual loss of income was proven, compensation up to $250,000 was available. Despite that cap, Schedule D to the agreement outlined limited circumstances in which a claimant could gain access to the courts in order to claim more than the maximum amount. Kelly was a claimant under the agreement who was granted access to the court to resolve his claim for actual income loss. He sought direction as to whether (1) the "matter" to be addressed by the court was the entirety of Kelly's claim or only the issue of actual income loss and (2) being granted access to the courts would strip Kelly of other rights granted to claimants under the agreement.

The Manitoba Court of Queen's Bench, in a decision reported at (2013), 298 Man.R.(2d) 214, held that the matter to be addressed in the court was only the issue of actual income loss and that Kelly remained entitled to all substantive rights under the agreement. Canada appealed and moved for a stay of the order pending the determination of the appeal.

The Manitoba Court of Queen's Bench, in a decision reported at (2014), 302 Man.R.(2d) 170, denied the motion. The appeal proceeded.

The Manitoba Court of Appeal allowed the appeal only to the extent of removing two directions from the order: (1) that the judge hearing the actual income loss claim had to employ the "but for" test and (2) that a judgment made by the court was not to be entered in the court records. In all other respects, the appeal was dismissed.

Contracts - Topic 7401

Interpretation - General principles - Intention of parties (incl. reasonable interpretation) - [See first and second Indians, Inuit and Métis - Topic 4804 ].

Contracts - Topic 7406

Interpretation - General principles - Interpretation by context - [See first Indians, Inuit and Métis - Topic 4804 ].

Contracts - Topic 7407

Interpretation - General principles - Whole contract to be considered - [See first Indians, Inuit and Métis - Topic 4804 ].

Contracts - Topic 7426

Interpretation - Ambiguity - What constitutes ambiguity - [See first Indians, Inuit and Métis - Topic 4804 ].

Contracts - Topic 7431

Interpretation - Ambiguity - Choice between alternative interpretations - [See first Indians, Inuit and Métis - Topic 4804 ].

Contracts - Topic 7468

Interpretation - Interpretation of words - Whole of contract to be considered - [See first Indians, Inuit and Métis - Topic 4804 ].

Contracts - Topic 7490

Interpretation - Intrinsic aids - Recitals - [See first Indians, Inuit and Métis - Topic 4804 ].

Contracts - Topic 7490

Interpretation - Intrinsic aids - Recitals - The Manitoba Court of Appeal stated, "Contractual preambles, often called recitals, 'set out the background facts and purpose of an agreement'. ...  Generally there are two principles that govern the use of recitals in contractual interpretation. First, where the operative provisions are clear and unambiguous, they prevail over the recitals where there is any inconsistency between the two. Second, where there is ambiguity in the operative provisions the recitals may be considered in the resolution of the ambiguity." - See paragraphs 49 and 50.

Indians, Inuit and Métis - Topic 4804

Indian Residential Schools Settlement Agreement - Access to the court - Under the Indian Residential Schools Settlement Agreement (the agreement), survivors of physical or sexual abuse in the residential school system were entitled to compensation through an independent assessment process (IAP) - If actual loss of income was proven, compensation up to $250,000 was available - Despite that cap, Schedule D to the agreement outlined limited circumstances in which a claimant could gain access to the courts in order to claim more than the maximum amount - At issue was whether the "matter" to be addressed by the court was the entirety of the claim or only the issue of actual income loss - The Manitoba Court of Appeal held that the word "matter" in the agreement was ambiguous as it could refer to either the entire claim or only the discrete issue of actual income loss - "Matter" was not defined in the agreement and there was no consistent use of it - The more reasonable construction which produced a fair result that would promote the intention of the parties was to interpret "matter" as referring only to the issue of actual income loss and not the entire action - This was consistent with the agreement as a whole and the factual matrix - The preamble of the agreement supported this interpretation, which was consistent with the agreement's goal of promoting reconciliation and resolving claims expeditiously - It was also consistent with the language used in the IAP which indicated that access to the courts was a resolution process within the IAP - If accessing the court meant that the entire IAP process no longer applied, that would have been clearly set out in the agreement - Finally, this result was sensible - Access to the courts was not used to deny claimants the benefit of the IAP - See paragraphs 41 to 90.

Indians, Inuit and Métis - Topic 4804

Indian Residential Schools Settlement Agreement - Access to the court - Under the Indian Residential Schools Settlement Agreement (the agreement), Canada provided compensation to individuals affected by the residential school system - Survivors of physical or sexual abuse were entitled to compensation through an independent assessment process - If actual loss of income was proven, compensation up to $250,000 was available - Despite that cap, schedule D to the agreement outlined limited circumstances in which a claimant could gain access to the courts in order to claim more than the maximum amount - Kelly was a claimant under the agreement who was granted access to the court for the limited purpose of evaluating his claim for actual income loss - The court held that Kelly remained entitled to all substantive rights under the agreement - In coming to this conclusion, the court cited a report on access to justice (the Cromwell Report) as an authority for the proposition that, if a creative solution could be found that respected the agreement, that solution was preferred - On appeal, Canada asserted that the court had erred in applying the concept of access to justice as an interpretive principle - The Manitoba Court of Appeal agreed - This case involved the interpretation of a contract and the parties' intention at the time the contract was made - The Cromwell Report played no part in the agreement - The court should not have relied on it - See paragraph 91.

Indians, Inuit and Métis - Topic 4804

Indian Residential Schools Settlement Agreement - Access to the court - Under the Indian Residential Schools Settlement Agreement (the agreement), Canada provided compensation to individuals affected by the residential school system - Survivors of physical or sexual abuse were entitled to compensation through an independent assessment process (IAP) - If actual loss of income was proven, compensation up to $250,000 was available - Despite that cap, schedule D to the agreement outlined limited circumstances in which a claimant could gain access to the courts in order to claim more than the maximum amount - Kelly was a claimant under the agreement who was granted access to the court for the limited purpose of evaluating his claim for actual income loss - The court held that Kelly remained entitled to all substantive rights under the agreement - On appeal, Canada asserted that the court had erred in interpreting Schedule D in a manner that was unworkable and incompatible with and unsupported by the IAP - The Manitoba Court of Appeal allowed the appeal in part - The court's direction that, in determining damages for loss of income, the court was to employ the "but for" test was premature - The determination of the test to be applied depended on the facts alleged, the nature of the harm claimed and the nature of the loss and should be made by the judge conducting the hearing - The court also erred in the direction that, after the determination of actual income loss, a judgment would not be entered in the court's records - This was contrary to the agreement and was not in accordance with the standards, rules and processes of the court - Those two directions were removed from the order - See paragraphs 97 to 106.

Indians, Inuit and Métis - Topic 4805

Indian Residential Schools Settlement Agreement - Interpretation - [See first and second Indians, Inuit and Métis - Topic 4804 ].

Practice - Topic 9864

Settlements - Interpretation - [See first and second Indians, Inuit and Métis - Topic 4804 ].

Words and Phrases

Matter - The Manitoba Court of Appeal considered the meaning of the word "matter" as found in Part III of Schedule D to the Indian Residential Schools Settlement Agreement - See paragraphs 41 to 90.

Cases Noticed:

Baxter et al. v. Canada (Attorney General) et al., [2006] O.T.C. 1346; 83 O.R.(3d) 481 (Sup. Ct.), refd to. [para. 5].

Semple et al. v. Canada (Attorney General) et al. (2006), 213 Man.R.(2d) 220; 2006 MBQB 285, refd to. [para. 6].

Fontaine Estate et al. v. Canada (Attorney General) et al., [2006] Yukon Cases (SC) 63; 35 C.P.C.(6th) 134; 2006 YKSC 63, refd to. [para. 29].

King v. Operating Engineers Training Institute of Manitoba Inc. (2011), 270 Man.R.(2d) 63; 524 W.A.C. 63; 2011 MBCA 80, refd to. [para. 37].

Hopkins v. Ventura Custom Homes Ltd. (2013), 294 Man.R.(2d) 168; 581 W.A.C. 168; 2013 MBCA 67, refd to. [para. 38].

Creston Moly Corp. v. Sattva Capital Corp. (2014), 358 B.C.A.C. 1; 614 W.A.C. 1; 461 N.R. 335; 2014 SCC 53, refd to. [para. 39].

Manulife Bank of Canada v. Conlin et al., [1996] 3 S.C.R. 415; 203 N.R. 81; 94 O.A.C. 161, refd to. [para. 43].

Scanlon v. Castlepoint Development Corp. et al. (1992), 59 O.A.C. 191; 11 O.R.(3d) 744 (C.A.), refd to. [para. 43].

Moore (Geoffrey L.) Realty Inc. v. Manitoba Motor League (2003), 173 Man.R.(2d) 300; 293 W.A.C. 300; 2003 MBCA 71, refd to. [para. 43].

Hi-Tech Group Inc. v. Sears Canada Inc. (2001), 141 O.A.C. 56; 52 O.R.(3d) 97 (C.A.), refd to. [para. 44].

Moon, In re; Ex parte Dawes (1886), 17 Q.B.D. 275 (C.A.), refd to. [para. 50].

British Columbia Hydro and Power Authority v. Gregory Manufacturing Ltd., [1979] B.C.J. No. 678 (C.A.), refd to. [para. 50].

Co-operative Trust Co. of Canada v. Receveur, Hansen, Paslowski and Mahon (1985), 40 Sask.R. 315 (C.A.), refd to. [para. 50].

Fontaine et al. v. Canada (Attorney General) et al., [2014] 2 C.N.L.R. 86; 2014 ONSC 283, refd to. [para. 72].

Consolidated-Bathurst Export Ltd. v. Mutual Boiler and Machinery Insurance Co., [1980] 1 S.C.R. 888; 32 N.R. 488, refd to. [para. 77].

Fontaine et al. v. Canada (Attorney General) et al. (2012), 295 O.A.C. 127; 2012 ONCA 471, refd to. [para. 96].

Alberta Teachers' Association v. Information and Privacy Commissioner (Alta.) et al., [2011] 3 S.C.R. 654; 424 N.R. 70; 519 A.R. 1; 539 W.A.C. 1; 2011 SCC 61, refd to. [para. 99].

Clements v. Clements, [2012] 2 S.C.R. 181; 431 N.R. 198; 331 B.C.A.C. 1; 565 W.A.C. 1; 2012 SCC 32, refd to. [para. 102].

Authors and Works Noticed:

Action Committee on Access to Justice, Access to Civil and Family Justice: A Roadmap to Change (2013), http://www.cfcjfcjc.org/sites/default/files/docs/2013/AC_Report_English_Final.pdf, generally [para. 25].

Elderkin, Cynthia L. and Shin Doi, Julia S., Behind and Beyond Boilerplate: Drafting Commercial Agreements (3d Ed. 2011), p. 25 [para. 49].

Hall, Geoff R., Contractual Interpretation Law (2d Ed. 2012), generally [para. 51].

Counsel:

J.L. Brooks and G.I. Soonarane, for the appellant;

K.E. Mahoney and M.W. Mulholland, for the respondent, F. Kelly;

No appearance for the respondent, Les Oblats de Marie Immaculée du Manitoba.

This appeal was heard on April 23, 2014, by Steel, Monnin and Cameron, JJ.A., of the Manitoba Court of Appeal. On October 9, 2014, Cameron, J.A., delivered the following judgment for the court.