K.L.B. et al. v. British Columbia et al., (2003) 187 B.C.A.C. 42 (SCC)

• Judge: McLachlin, C.J.C., Gonthier, Iacobucci, Major, Bastarache, Binnie, Arbour, LeBel and Deschamps, JJ.
• Court: Supreme Court (Canada)
• Case Date: October 02, 2003
• Jurisdiction: Canada (Federal)
• Citations: (2003), 187 B.C.A.C. 42 (SCC);2003 SCC 51

K.L.B. v. B.C. (2003), 187 B.C.A.C. 42 (SCC);

    307 W.A.C. 42

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: [2003] B.C.A.C. TBEd. OC.001

K.L.B., P.B., H.B. and V.E.R.B. (appellants) v. Her Majesty the Queen in right of the Province of British Columbia (respondent) and Attorney Gen­eral of Canada, Nishnawbe Aski Nation, Patrick Dennis Stewart, F.L.B., R.A.F., R.R.J., M.L.J., M.W., Victor Brown, Benny Ryan Clappis, Danny Louie Daniels, Robert Daniels, Charlotte (Wilson) Guest, Daisy (Wilson) Hayman, Irene (Wilson) Starr, Pearl (Wilson) Stelmacher, Frances Tait, James Wilfrid White, Allan George Wilson, Donna Wilson, John Hugh Wilson, Terry Aleck, Gilbert Spinks, Ernie James and Ernie Michell (intervenors)

(28612; 2003 SCC 51; 2003 CSC 51)

Indexed As: K.L.B. et al. v. British Columbia et al.

Supreme Court of Canada

McLachlin, C.J.C., Gonthier, Iacobucci, Major, Bastarache, Binnie, Arbour, LeBel and Deschamps, JJ.

October 2, 2003.

Summary:

The plaintiffs (four siblings) sued for damages for sexual and physical abuse suf­fered while in two foster homes. The plain­tiffs claimed that the provincial Crown was directly negligent, vicariously liable for the abuse suffered at the hands of foster parents, liable for breach of fiduciary duty and liable for breach of a non-delegable duty. The Crown submitted that the claims were barred by the Limitation Act.

The British Columbia Supreme Court, in a judgment reported at [1998] B.C.T.C. Uned. 233, allowed the action. The court dismissed the limitation period defence. The claims of sexual abuse were unsubstantiated, except for one incident involving one plaintiff. The Crown was directly liable in negligence in failing to adequately monitor and supervise the foster care placements and for breaching its fiduciary duty to the children. The Crown was vicariously liable for the torts committed by the foster parents. The court awarded the plaintiffs between $10,000 and $25,000 damages each. In supplementary reasons, the Supreme Court, in a decision reported at [1998] B.C.T.C. Uned. B37, awarded equi­table interest at the rate fixed under s. 56(2) of the Law and Equity Act, from the date the writs were issued. The Crown appealed against liability. The plaintiffs cross-appealed the damage awards.

The British Columbia Court of Appeal, in a judgment reported (2001), 151 B.C.A.C. 52; 249 W.A.C. 52, allowed the appeal and dismissed the cross-appeal on damages. The plaintiffs' claims (with the exception of the one plaintiff's claim for sexual assault), were barred by the limitation period. The court held that the Crown did not breach its fiduciary duty to the children, but agreed that the Crown was vicariously liable for the torts of the foster parents and liable for breach of a non-delegable duty respecting the placement and supervision of the children. The court ruled that equitable interest was not available in this case. The plaintiffs appealed, submitting that (1) their claims were not statute-barred; (2) the Court of Appeal erred in failing to find a breach of fiduciary duty; and (3) the trial judge erred in assessing damages. The Crown did not cross-appeal the findings of vicarious liabil­ity and breach of a non-delegable duty.

The Supreme Court of Canada dismissed the appeal. The court agreed that the Crown was directly negligent for failing to have proper placement and supervision proce­dures, but that the negligence claim was statute-barred. There was an insufficiently close relationship between the Crown and foster parents to warrant a finding of vicari­ous liability. There was no basis for finding a non-delegable duty on the Crown to ensure that no harm came to children through sex­ual or physical abuse by foster parents. Finally, although the Crown owed a fidu­ciary duty to the children, that duty was not breached where the Crown was negli­gent, but committed no acts amounting to betrayal of trust or disloyalty. Finally, although un­necessary to decide the issue, the court opined that the trial judge did not err in assessing damages, particularly in apply­ing the "crumbling skull" principle.

Crown - Topic 1513

Torts by and against Crown - General and definitions - Independent contractors - [See Torts - Topic 2655 ].

Crown - Topic 1527

Torts by and against Crown - Liability of Crown for acts of servants - When Crown liable - [See Crown - Topic 1572.1 ].

Crown - Topic 1572.1

Torts by and against Crown - Negligence by Crown - When acting in loco parentis - The Supreme Court of Canada held that s. 8(12) of the Protection of Children Act imposed a high standard of care on child welfare officials (Crown) respecting the placement of children in foster homes - The court stated that "in the case of those exercising a form of control over a child comparable to that of a parent, however, the law imposes a heightened degree of attentiveness. The 'careful parent' imposes the standard of a prudent parent solicitous for the welfare of his or her child. ... This is the test that governs the placement and supervision of children in foster care under the Protection of Children Act. It does not make the government a guarantor against all harm. But it holds it responsible for harm sustained by children in foster care, when, judged by the standards of the day, it was reasonably foreseeable that the government's conduct would expose these children to harm of the sort that they sustained. ... the government must set up adequate procedures to screen prospective foster parents. And it must monitor homes so that any abuse that does occur can be promptly detected." - The court affirmed that the Crown was negligent in placing four children in two different foster homes where they were subjected to physical and sexual abuse - Negligence was based on the failure to put in place proper placement and supervision procedures, as required by the Act - See paragraphs 12 to 17.

Crown - Topic 1701

Torts by and against Crown - Actions against Crown for breach of statutory duty - General - Children were abused by foster parents - The children submitted that the Crown was liable for breaching a non-delegable statutory duty to ensure that they would not be harmed by the abuse or negligence of the foster parents - The Supreme Court of Canada rejected the submission, stating that "the legislation [Protection of Children Act] offers no basis for imposing on the Superintendent a non-delegable duty to ensure that no harm comes to children through the abuse or negligence of foster parents. ... Although the Act makes the Superintendent solely responsible for the well-being of a child before placement, it does not suggest that this is work for which the Superintendent retains responsibility after placement." - See paragraphs 30 to 37.

Damages - Topic 591

Limits of compensatory damages - Predis­position to damage (thin skull or crumbling skull rule) - "Thin skull" or "crumbling skull" - Four foster children suffered phys­ical abuse by foster parents - One of them was also sexually abused - In assessing damages, the trial judge applied the "crumbling skull" rule to limit damages on the basis of a pre-existing condition (i.e. poor home life with extreme material deprivation and marital discord) - The Supreme Court of Canada held that the trial judge did not err in applying the "crumbling skull" rule on the facts - It would have been an error to assume that children from impoverished or difficult homes would have suffered extensive psychological damage in any event - How­ever, the trial judge's finding was based on a review of all of the evidence, not on assumption - See paragraphs 60 to 61.

Equity - Topic 3606

Fiduciary or confidential relationships - General principles - What constitutes a fiduciary relationship - [See Equity - Topic 3611 ].

Equity - Topic 3611

Fiduciary or confidential relationships - General principles - Crown - The Supreme Court of Canada stated that the Crown owed a fiduciary duty to children in foster care, as the Crown was the legal guardian with the power to direct and supervise their placement - The court held that the fiduciary duty was "to avoid certain harm­ful actions that constitute a betrayal of trust, of loyalty and of disinterest" - The Crown had no fiduciary duty to exercise due diligence in ensuring on a day-to-day basis that a foster child's best interests were promoted, as the Crown had no capacity to closely supervise a foster par­ent's day-to-day care of a foster child - The court did not endorse a parental fiduciary obligation to "look after" the best interests of the child, because, inter alia, that constituted a form of results-based liability, rather than liability based on faulty actions and omissions - Further, a simple injunction to act in the best inter­ests of children did not provide parents with a workable standard by which to regulate conduct - The court held that the Crown did not breach any fiduciary duty to children abused by foster parents, where the Crown's fault lay in a failure to take sufficient care respect­ing the placement and supervision of the foster children, as opposed to conduct constituting disloyalty or abuse of trust - See paragraphs 38 to 51.

Guardian and Ward - Topic 815.4

Public trustee or guardian - Appointment - Child in need of protection - Duties of agency - [See Crown - Topic 1572.1 ].

Limitation of Actions - Topic 15

General principles - Discoverability rule - Application of - Foster children were abused by foster parents from 1966 to 1968 - The youngest child reached the age of majority in 1980 - The children com­menced actions between 1994 and 1996 - The Crown pleaded the two year limitation period for personal injuries in tort (Limita­tions Act, s. 3(2)) - The children submitted that the actions were not statute-barred because their causes of action were not reasonably discoverable "prior to com­mencement of the actions" - The Supreme Court of Canada affirmed that the tort claims were statute-barred - The children knew of the abuse at the time it occurred -In light of negotiations with government officials in an attempt to secure financial compensation for their abuse, the children were sufficiently aware by June 1991, at the latest, of the facts necessary to be able to commence an action - The court also rejected the submission that the commence­ment of the limitation period be postponed because the children were under a "disabil­ity" within the meaning of s. 7(1)(a)(ii) of the Act - The evidence did not support an inability to manage their affairs - See paragraphs 53 to 59.

Limitation of Actions - Topic 3108

Actions in tort - Negligence - Personal injury - [See Limitation of Actions - Topic 15 ].

Limitation of Actions - Topic 3212

Actions in tort - Trespass to the person - Assault and battery - [See Limitation of Actions - Topic 15 ].

Limitation of Actions - Topic 3215

Actions in tort - Trespass to the person - Sexual misconduct - Sexual abuse - [See Limitation of Actions - Topic 15 ].

Limitation of Actions - Topic 7543

Actions against the Crown - Torts - Assault - [ See Limitation of Actions - Topic 15 ].

Limitation of Actions - Topic 9004

Persons under disability and exemptions and exclusions - Person under disability - What constitutes - [See Limitation of Actions - Topic 15 ].

Torts - Topic 2563

Vicarious liability - For independent con­tractors - Sexual abuse - [See Torts - Topic 2655 ].

Torts - Topic 2655

Vicarious liability - Particular persons - Foster parents - The Supreme Court of Canada held that the Crown was not vicar­iously liable for the torts of foster parents who abused foster children, as there was not a sufficiently close relationship be­tween the Crown and foster parents to im­pose such liability - Foster parents were "independent contractors" as opposed to "employees" - The court stated that "[foster parents] have complete control over the organization and management of their house­hold; they alone are responsible for running their home. The government does not supervise or interfere, except to ensure that the child and the foster parents meet regularly with their social workers, and to remove the child if his or her needs are not met. The independence of the foster family is essential to the government's goal of providing family care. ... [foster parents'] actions are too far removed from the gov­ernment for them to be reasonably per­ceived as acting 'on account of' the gov­ernment in the sense necessary to justify vicarious liability." - See paragraphs 16 to 29.

Torts - Topic 8906

Duty of care - Particular relationships - Control of conduct of others - Care of children - [See Crown - Topic 1572.1 ].

Torts - Topic 9159

Duty of care - Particular relationships - Claims against public officials, authorities or boards - Child and family services departments and employees, subcontract­ors, etc. - [See Crown - Topic 1572.1 ].

Cases Noticed:

M.B. v. British Columbia (2003), 309 N.R. 375; 187 B.C.A.C. 161; 307 W.A.C. 161 (S.C.C.), refd to. [para. 1].

E.D.G. v. Hammer et al. (2003), 310 N.R. 1; 187 B.C.A.C. 193; 307 W.A.C. 193 (S.C.C.), refd to. [para. 1].

Wilsher v. Essex Area Health Authority, [1988] 1 All E.R. 871; [1988] 1 A.C. 1074; [1988] 2 W.L.R. 557; 87 N.R. 140 (H.L.), refd to. [para. 13].

Snell v. Farrell, [1990] 2 S.C.R. 311; 110 N.R. 200; 107 N.B.R.(2d) 94; 267 A.P.R. 94, refd to. [para. 13].

Challand v. Bell (1959), 18 D.L.R.(2d) 150 (Alta. T.D.), refd to. [para. 14].

Saif Ali v. Mitchell (Sydney) & Co. (A Firm), [1980] A.C. 198 (H.L.), refd to. [para. 14].

Durham et al. v. Board of Education of North Oxford Township School Area (1960), 23 D.L.R.(2d) 711 (Ont. C.A.), refd to. [para. 14].

McKay v. Board of Education of Govan School Unit No. 29 of Saskatchewan, [1968] S.C.R. 589, refd to. [para. 14].

Myers et al. v. Board of Education of Peel, [1981] 2 S.C.R. 21; 37 N.R. 227, refd to. [para. 14].

P.A.B. v. Children's Foundation et al., [1999] 2 S.C.R. 534; 241 N.R. 266; 124 B.C.A.C. 119; 203 W.A.C. 119, refd to. [paras. 18, 66].

G.T.-J. et al. v. Griffiths et al., [1999] 2 S.C.R. 570; 241 N.R. 201; 124 B.C.A.C. 161; 203 W.A.C. 161, refd to. [paras. 18, 92].

671122 Ontario Ltd. v. Sagaz Industries Canada Inc. et al., [2001] 2 S.C.R. 983; 274 N.R. 366; 150 O.A.C. 12, refd to. [paras. 19, 69].

Lister et al. v. Hesley Hall Ltd., [2002] 1 A.C. 215; 270 N.R. 203 (H.L.), dist. [para. 27].

Cassidy v. Ministry of Health, [1951] 2 K.B. 343 (C.A.), refd to. [para. 30].

Lewis et al. v. British Columbia, [1997] 3 S.C.R. 1145; 220 N.R. 81; 98 B.C.A.C. 168; 161 W.A.C. 168, refd to. [para. 31].

K.M. v. H.M., [1992] 3 S.C.R. 6; 142 N.R. 321; 57 O.A.C. 321, refd to. [para. 38].

P.A.B. v. Children's Foundation et al. (1997), 89 B.C.A.C. 93; 145 W.A.C. 93; 30 B.C.L.R.(3d) 1 (C.A.), refd to. [para. 38].

Wewayakum Indian Band v. Canada and Wewayakai Indian Band (2002), 297 N.R. 1 (S.C.C.), refd to. [para. 40].

Blueberry River Indian Band and Doig River Indian Band v. Canada (Minister of Indian Affairs and Northern Develop­ment), [1995] 4 S.C.R. 343; 190 N.R. 89, refd to. [para. 40].

Guerin v. Canada, [1984] 2 S.C.R. 335; 55 N.R. 161; 13 D.L.R.(4th) 321, refd to. [para. 40].

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. 41].

Emery v. Emery (1955), 289 P.2d 218 (Cal.), refd to. [para. 42].

Evans v. Eckelman (1990), 265 Cal. Rptr. 605 (Cal. Ct. App. Dist. 1), refd to. [para. 42].

M.M. v. R.F. et al. (1997), 101 B.C.A.C. 97; 164 W.A.C. 97; 52 B.C.L.R.(3d) 127 (C.A.), refd to. [para. 43].

P.C. v. R.J.C. (1994), 114 D.L.R.(4th) 151 (Ont. Gen. Div.), refd to. [para. 43].

L.A.J. v. H.J. (1993), 13 O.R.(3d) 306 (Gen. Div.), refd to. [para. 43].

Norberg v. Wynrib, [1992] 2 S.C.R. 226; 138 N.R. 81; 9 B.C.A.C. 1; 19 W.A.C. 1, refd to. [para. 48].

Athey v. Leonati et al., [1996] 3 S.C.R. 458; 203 N.R. 36; 81 B.C.A.C. 243; 132 W.A.C. 243, refd to. [para. 60].

Housen v. Nikolaisen et al., [2002] 2 S.C.R. 235; 286 N.R. 1; 219 Sask.R. 1; 272 W.A.C. 1, refd to. [para. 62].

Stein Estate v. Ship Kathy K, [1976] 2 S.C.R. 802; 6 N.R. 359, refd to. [para. 62].

Yewens v. Noakes (1880), 6 Q.B.D. 530 (C.A.), refd to. [para. 76].

Statutes Noticed:

Limitations Act, R.S.B.C. 1996, c. 266, sect. 3(2)(a), sect. 7(1)(a), sect. 7(9) [Appendix A].

Protection of Children Act, R.S.B.C. 1960, c. 303, sect. 8(5), sect. 8(12), sect. 10(1), sect. 14, sect. 15(1), sect. 15(3) [Appen­dix A].

Authors and Works Noticed:

Atiyah, P.S., Vicarious Liability in the Law of Torts (1967), pp. 38 [para. 70]; 327 [para. 20].

British Columbia, Ministry of Children and Family Development, British Columbia Foster Care Education Program, B.C. Federation of Foster Parents Association, Foster Family Handbook (3rd Ed. 2001), generally [para. 86].

British Columbia, Ministry of Children and Family Development, British Columbia Foster Care Education Program, B.C. Federation of Foster Parents Association, Program Schedule and Registration Guide (Fall 2002), generally [para. 86].

British Columbia, Ministry of Children and Family Development, Standards for Foster Homes (2001), sect. B.2.2 [para. 88].

Flannigan, Robert, Enterprise control: the servant-independent contractor distinction (1987), 37 U.T.L.J. 25, p. 37 [para. 76].

Meagher, Gummow and Lehane's Equity Doctrines and Remedies (4th Ed. 2002), pp. 508, 509 [para. 42].

Counsel:

Gail M. Dickson, Q.C., Megan R. Ellis, Karen E. Jamieson and Cristen L. Glee­son, for the appellants;

Douglas J. Eastwood, John J.L. Hunter, Q.C., and Kim Knapp, for the respon­dent;

David Sgayias, Q.C., and Kay Young, for the intervenor, Attorney General of Canada;

Susan M. Vella and Elizabeth K.P. Grace, for the intervenor, Nishnawbe Aski Nation;

David Paterson, Peter Grant and Diane Soroka, for the intervenors, Patrick David Stewart et al.

Solicitors of Record:

Dickson Murray, Vancouver, B.C., for the appellants;

Ministry of the Attorney General of British Columbia, Vancouver, B.C., for the respondent;

Deputy Attorney General of Canada, Ottawa, Ontario, for the intervenor, Attorney General of Canada;

Goodman and Carr and Lerner & Associ­ates, Toronto, Ontario, for the intervenor, Nishnawbe Aski Nation;

David Paterson Law Corp., Surrey, B.C., and Hutchins, Soroka & Grant, Van­couver, B.C., for the intervenors, Patrick Dennis Stewart et al.

This appeal was heard on December 5-6, 2002, before McLachlin, C.J.C., Gonthier, Iacobucci, Major, Bastarache, Binnie, Arbour, LeBel and Deschamps, JJ., of the Supreme Court of Canada.

On October 2, 2003, the judgment of the Supreme Court of Canada was delivered in both official languages and the following opinions were filed:

McLachlin, C.J.C. (Gonthier, Iacobucci, Major, Bastarache, Binnie, LeBel and Deschamps, JJ., concurring) - see para­graphs 1 to 63;

Arbour, J. (concurring in result) - see paragraphs 64 to 99.