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Court Considers Scope and Constitutionality of Provisions of the Crown Liability and Proceedings Act in Class Action Part 2

11 minute read

In our initial blog, we discussed Justice Belobaba’s recent decision in Leroux v Ontario,1 a certified class action involving the operation and administration of a social assistance program for adults with developmental disabilities, which considered the scope of s. 11 of the new Crown Liability and Proceedings Act, S.O. 2019, c. 7, Sched 17 (the “CLPA”). After Justice Belobaba released his decision on the CLPA issue, the appeal was subsequently heard by the Divisional Court on June 17 and 18, 2020. Lerners Lawyers, Jennifer Hunter and Jacqueline Palef represented the Canadian Civil Liberties Association (intervener) in the appeal.

In the few short months since Justice Belobaba released his decision on the CLPA issue, three other cases have considered issues surrounding the CLPA demonstrating the distinct approaches judges have taken in interpreting the scope and constitutional implications of the statute.

Francis v Ontario

In Francis v Ontario,2 Perell J. heard a summary judgment motion in this certified class action involving prisoners of correctional institutions and allegations involving the practice of administrative segregation. One of the issues before the court was what impact the newly enacted CLPA had on the certified class action, specifically, whether the class members’ negligence claims are precluded by s. 11 of the CLPA. The court noted, “The dispute between the parties is essentially a matter of statutory interpretation with Mr. Francis arguing that s. 11 is a codification and Ontario opaquely arguing that s. 11 is a substantive change to the law, which, of course, Ontario is entitled to do if so inclined and subject to being constitutionally compliant.”3

The court considered the core policy/operational distinction observing:

I agree with Mr. Francis that the purpose of s.11 was to codify the scope of the intrusion on Crown liability that maintained or continued a government’s or a public authority’s immunity from causes of action respecting certain governmental functions. The language of s. 11 appears to reflect the state of the law reached by R. v. Imperial Tobacco. So interpreted, s. 11 leaves intact the distinction between core policy matters, for which a government or public authority is not exposed to tort liability and non-core policy decisions and operational decisions for which the government or a public authority is exposed to liability. Ontario’s interpretation would change the common law and virtually eliminate the policy-operational dichotomy and make all provincial government activities policy and thus immune from tort claims.

Put shortly, as a matter of statutory interpretation and as a matter of the factual and legal findings discussed above, Ontario is not protected by s. 11 of the Crown Liability and Proceedings Act, 2019. However it might be dressed up by policy documents, Ontario’s conduct was operational. Ontario’s conduct falls outside of the ambit of s. 11, properly interpreted, and its liability for misconduct is not extinguished.4

Justice Perell reasoned that since the negligence that he had found was at the operational level rather than the policy level, there were no statutory grounds on which to find that the claim had been extinguished. He noted that “s. 11 leaves intact the distinction between core policy matters, for which a government or public authority is not exposed to tort liability and non-core policy decisions and operation decisions for which the government or a public authority is exposed to liability.”5 In granting summary judgment, Perell J. decided against Ontario’s defence that, assuming section 11(4) of the CLPA applies, Ontario was immunized only for negligent policy decision making. Ultimately, the court refrained from considering the constitutionality of the provisions at issue.

Cirillo v Ontario

In Cirillo v Ontario,6 similar to Leroux, the Divisional Court remitted the issues surrounding the CLPA to the certification judge for a decision at first instance before the appeal to the Divisional Court could proceed. This case can be readily distinguished from Leroux, here Morgan J. denied certification of the proposed class action involving delays in bail hearings. At the re-hearing motion, Morgan J. noted that the CLPA issue was arguably moot, as he had already declined to certify any of the plaintiff’s claims separate and apart from the CLPA.

In considering the recent decisions of Leroux and Francis, Morgan J. noted, “Although each of Belobaba J. in Leroux and Perell J. in Francis provide their own interpretation of s. 11 of the CLPA, both cases illustrate that in order to make an intelligible decision on Crown immunity the court must look at the specific action being challenged...”7 The court turned to the policy/operational distinction in this case noting:

Having found that the government decisions and acts in issue are social, economic, and political in nature, the answer to whether they fall within the newly articulated Crown immunity in ss. 11(4) and (5) of the CLPA is obvious: they do. Whether the terms of the CLPA potentially broaden the scope of immunity for the Crown, as Belobaba J. suggested in Leroux, or leave the scope of immunity substantively unchanged from the common law, as Perell J. suggested in Francis, the matters challenged by the Plaintiff in the instant case fall within the CLPA’s terms. I need decide no more than that here; indeed, without a factual matrix to consider any other scenario, it would be unhelpful for me to do so.8

The court refrained from addressing the constitutionality issues surrounding the CLPA noting, “Nothing has changed from the pre-CLPA state of the law, and so none of the newly raised challenges to Crown immunity allegedly contained in the CLPA are relevant here. If the law of Crown immunity was constitutional and in force before the CLPA’s enactment, nothing in the present case changes that. Whether the CLPA might be interpreted as extending beyond the pre-CLPA scope of immunity established in prior case law, and what might be the constitutional and other implications of such an extended immunity, must be saved for another case with facts that raise that question.”9

Seelster Farms et al v Her Majesty the Queen and OLG

This is one of the first non-class action decisions to consider the CLPA. In Seelster Farms et al v Her Majesty the Queen and OLG,10 the plaintiffs were horse breeders that supplied horses to the race tracks in Ontario. The action was commenced after the Ontario Lottery and Gaming Corporation (“OLG”), terminated the Slots at the Racetrack Program (“SARP”) which was introduced to incentivize racetracks to permit slots on their premises by sharing revenues from those slots. On the motion for summary judgment, Emery J. considered whether the plaintiffs’ claims against the province in negligence and negligent misrepresentation were now barred by the newly enacted CLPA.

In considering the impact of the CLPA on the action the court noted:

The coming into force of the CLPA has dramatically altered the nature of the three motions with respect to the plaintiffs’ right to maintain certain causes of action since they were argued. The CLPA does not merely codify what the common law has developed as lines between liability and immunity from liability for the Crown in right of Ontario and its agents. The new legislation moves those lines to define a changed legal landscape. Those changes impose a new statutory framework relevant to the plaintiffs’ ability to make their claims against Ontario and OLG as of July 1, 2019.

The expanded scope of the term “policy matter” under section 11(5) of the CLPA blurs, if not removes the distinction between Crown immunity for policy decisions, and operational decisions made to implement policy matters of the Crown and its agents. However, it is clear from the emerging jurisprudence on the CLPA that the reach of section 11(4) is dependent on a careful consideration of the language of section 11(4) and by extension subsection (5) and how they are applied to the specific facts of a case. The application of ss. 11(4) is therefore specific to the term “decision” and whether it is respecting a “policy matter.” The analysis with reference to these terms is fact driven, particular to the circumstances and the subject matter of the claim.

Distinct from the interpretation from Leroux, Francis, and Cirillo, here the court considered whether the core policy/operational analysis has been overhauled under the CLPA to a new framework that is focused on whether the decision at issue was made in good faith rather than the traditional policy vs operational distinction:

The CLPA removes the distinction between decisions that are policy decisions, and decisions that are operational in nature, made for the purpose of implementing or carrying out a government policy or program. The language used in subsection 11(5) (c) extends the traditional immunity afforded to policy decisions to those decisions made to implement a policy matter to decisions that include the termination of that policy, and any notice or other relief claimed by affected parties. The lines of analysis have been moved by the CLPA for the purpose of determining Crown immunity from questioning whether the decision was one of policy or if it was operational in nature, to whether it was made in good faith….

With the proclamation of the CLPA into law, defining the decision of Cabinet that effectively ended SARP as a policy decision or an operational directive is essentially rendered academic. However, the statutory immunity to liability for this decision is also subject to the terms of the CLPA that limit its scope. The language of section 11(4) provides that it applies only to those decisions that are made in respect to a policy matter, and that are made in good faith. Those authorities that interpret the principles of Crown immunity on the grounds a decision was “irrational” or made “in bad faith” are, in my view, just as relevant today for assessing if the impugned decision was made in good faith.

Ultimately, the court found that any claim for negligence was dismissed under s. 11(4) and (8) of the CLPA. Similarly, the cause of action for negligent misrepresentation was dismissed.

Conclusion

As the case law demonstrates, issues surrounding both the scope and the constitutionality of the CLPA remain very much live issues before the court. These cases provide insight into how different judges have approached the issues presented by the newly enacted CLPA and the constitutional implications that follow. There seem to be three streams of thought appearing from the case law: one view is that there is no change in the law under the CLPA, another is that the law has changed greatly under the CLPA; and a third view is that under the CLPA the entire analysis has changed, and what matters is that a decision is made in good faith rather than the traditional policy vs operational distinction. The pending decision of the Divisional Court in Leroux v Ontario, will certainly be one to watch for. Based on the jurisprudence to date, the Ontario Court of Appeal will ultimately have to weigh in, and possibly the Supreme Court of Canada. Stay tuned

[1] Leroux v Ontario, 2020 ONSC 1994 [Leroux].

[2] Francis v Ontario, 2020 ONSC 1644.

[3] Ibid at para 498.

[4] Ibid at paras 506 – 508.

[5] Ibid at para 479.

[6] Cirillo v Ontario, 2020 ONSC 3983.

[7] Ibid at para 17.

[8] Ibid at para 24.

[9] Ibid at para 26.

[10] Seelster Farms et al v Her Majesty the Queen and OLG, 2020 ONSC 4013.

[11] Ibid at para 100.

[12] Ibid at para 110.

[13] Ibid at para 117- 118.

[14] Ibid at para 141.

[15] Ibid at para 150

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