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Case Note re Wareham v Ontario (Ont Sup Ct, 2008) [April 2008]

. Overview

Wareham was a recent and broad-reaching case in which the plaintiffs sought a wide range of civil and Charter remedies in a class action proceeding which focussed on systemic delay in ODSP administration. The government's initial response, seeking to 'strike the pleadings' as failing to disclose a 'legal cause of action', was overwhelmingly successful. On such motions the court assumes that all fact allegations in the claim are correct, and just rules on the purely legal issues. It is plain from the judgment that the court had considerable difficulty with the specifics of the plaintiff's pleadings (although leave to amend them was granted), though I find its legal reasoning strained on several issues.

Regardless, the decision is useful as a legal initiation to the several areas of law that might be brought to bear to address systemic failures of any Canadian social assistance regime.

The claims in Wareham were primarily based on allegations relating to ODSP application-processing delays which - for the purposes of the motion - were assumed to be that the "overwhelming majority of applicants experience a delay of between six months to one year before receiving an initial response to their application" which thereby "impaired the mental and physical health" of applicants. The case also initially revolved around the [then] four-month limitation on retroactive ODSP eligibility [under the old version of s.17 of Reg 222/98] - a tempting class action "damages" claim (by seeking to extend retroactivity to date of application)which the government simply undercut by changing the impugned law in response, itself retroactive to the start of the ODSP program in 1998.

One of the representative plaintiffs (W) had been granted ODSP adminstratively, while the second (A) was successful only on appeal to the SBT. Both of them were subjected to the four-month retroactivity limitation.

The specific legal bases claimed and the court's disposition of them are considered in turn below.

. Negligence (Common Law)

The court, citing first principles of negligence law that required reasonable foreseeability of the harm (which was apparently conceded), 'proximity' (sufficiently close relationship between the parties ["for example expectations, representations, reliance and the nature of the interests engaged by the relationship"]) and the absence of any countervailing policy considerations against finding liability, held against the plaintiffs on the latter two points. Quoting Cullity J:
Under the ODSPA, Crown servants have an adjudicative function in the sense that they must weigh the evidence presented by applicants, determine whether the conditions for eligibility are satisfied, and decide on the appropriate level of support in accordance with the statute and the Regulation. In fulfilling the statutory obligations they are not, in my opinion, in a relationship of proximity with each applicant. Their duties are those of public servants engaged to administer the ODSPA for the benefit of eligible members of the public. It is not alleged that, in doing so, any particular individual applicants are singled out. The allegations of negligence are essentially systemic. In my opinion, the authorities require something more than this to indicate a personal, or otherwise close and direct, relationship that would satisfy the requirement of proximity.
I doubt that many ODSP recipients, once the concept is explained to them, would find that ODSP administration - the direct source of their primary, and often sole, income - is NOT in a proximate relationship with them although, truth be told, you never can get them on the phone ;-).]

A second ground of dismissing the negligence claim relates to another classic element of common law negligence: the existence of countervailing 'policy' reasons for not finding liability: Anns v Merton London Borough (UK HL, 1978). In the present context this amounts to a judicial exemption for the defendant when things get too 'political'. It also harkens back to established principles of government liability that tend to immunize 'planning' (ie. policy) decisions while otherwise permitting liability for 'operational' decisions: Kamloops v Nielson (SCC, 1984). While inefficient and slow administration certainly would be viewed as the average person as an 'operational' issue, courts have shyed away from it given their traditional reticence under the common law (and often the Charter) to impose financial burdens on government (ie. the decision to underfund is a 'planning' decision). The argument is that making the system 'efficient' will require greater devotion of public resources, and that's a political realm into which the courts will not interfere. Quoting Cullity J:
If the legislature has created a system that cannot be administered effectively without a significant further allocation of resources, or otherwise, the remedy lies in the political process rather than in the civil law of negligence.
. Unjust Enrichment

'Unjust enrichment' is what we call an 'equitable doctrine', which is a sort of all-purpose legal solvent to provide a remedy where strict application of the statutory and common law results in injustice (though it is not available to 'override' statutory law). In the present context it took the form of a constructive trust or 'restitution' claim seeking to have the government pay recipients interest on the retroactive entitlement that they lost due to government delay, both generally and under the old 'four-month rule'. The theory is that the government is unjustly enriched by any interest accruing on the money while it is in their hands.

The court dismissed this claim on the basis that the absence of an interest-payment duty under the statute trumped the trust argument by providing a "juristic reason" for any enrichment, assuming that it could be said to have occured. This is a classic and well-accepted doctrine of constructive trust law.

. Breach of Fiduciary Duty

A claim under 'breach of fiduciary duty' requires the plaintiff to establish a particularly strong duty of care to ODSP recipients, analogous to the loyalty duty that lawyers owe to their clients, or trustees to their beneficiaries.

In dismissing this claim, the court cited the following passage from R v Guerin (SCC, 1984) against this proposition:
... [F]iduciary duties generally arise only with regard to obligations originating in a private law context. Public law duties, the performance of which requires the exercise of discretion do not typically give rise to a fiduciary relationship.
The use of the term 'typical' in this quote clearly implies that exceptions are possible, and as such I find the result far from 'plain and obvious' [the legal test applied to dismiss this claim] . It is my view that if a fiduciary duty is ever to be imposed on government with respect to the implementation of a legislative scheme, that ODSP-type disability support schemes - serving physically and mentally-handicapped Ontarians - are amongst the most eligible. I find the cursory treatment of this ground unsettling, particularly when s.15 (equality) rights should influence the interpretation of the common law: R v Salituro. I suggest that the degree to which such a position varies from public expectation with respect to government service can be measured by the degree of surprise that the reader experiences when they read this explanatory quote from Cullity J:
It is, I believe, a far cry from the existence of public duties to the imposition, or assumption, of an enforceable obligation owed to the applicants as individuals to act in their best interests and to protect their rights.
A 'far cry' perhaps in law - but not in public expectations.

. Charter s.7 (Life, Liberty and Security of the Person)

Section 7 of the Charter gives Canadians the right to life, liberty and security of the person, subject only to deprivation thereof "in accordance with the principles of fundamental justice."

Section 7 Charter law has revolved almost entirely around criminal procedure, rarely straying into other areas (eg. abortion with the Morgenthaler SCC case) - though many have tried unsuccessfully to expand it. Here it was grounded in an allegation that the delay caused the applicants physical, mental and emotional harm - themes not foreign to those who work with the poor.

The court cited the leading case of Gosselin v Quebec (SCC, 2002) for the following criteria for s.7 Charter claims:
  1. that the legislation affects an interest protected by
    the right to life, liberty and security of the person
    within the meaning of s. 7;

  2. that providing inadequate benefits constitutes a
    "deprivation" by the state; and

  3. that, if deprivation of a right protected by section 7
    is established, this was not in accordance with the
    principles of fundamental justice.
Unlike all the claims considered above, the court did not immediately dismiss this claim, as it did not (yet) meet the 'plain and obvious'. In so doing, the court was at pains to make clear that:
The constitutionally-protected right on which they rely
is not an entitlement to a certain level of income
support. It is the right not to suffer injurious
psychological harm from delays in the legislated process
for accessing such entitlement.
Without this allegation of 'harm', no 'deprivation' could be present to ground the claim.

The court continued on the issue of whether this potential deprivation was 'in accordance with principles of fundamental justice'. Consistent with the above 'far cry' quote above, the court stated:
It is not, I believe, a principle of fundamental justice
that, if the legislature chooses to establish a program
for providing welfare, or other benefits, it must achieve
a certain standard of efficiency. Insofar as the alleged
delays are attributed to deficiencies and inadequacies in
the process established under the ODSPA, the pleading
does not, in my judgment, either expressly or impliedly,
engage any principle of fundamental justice.
There being no 'duty' under the principles of fundamental justice to provide efficient public service, any harm or deprivation stemming from inefficiency was therefore (apparently) created "IN accordance" with such principles. The decision does not reflect if the Magna Carta was advanced in argument, though I understand that it had something to do with the establishment of the foundation principles of our present-day justice system:
To no one will we sell, to no one deny or delay right or
justice.
In the result, the court did dismiss the s.7 claim at least with respect to systemic administrative delay and its consequent harm. However it did preserve the claim with respect to any harm grounded in delay caused by legal deficiencies in Notices of Decision issued to A (who had to appeal her ruling). Presumably this is because there is an affirmative statutory right to "reasons for the decision" [Reg 222/98, s.56(2)(b) and 60(2)(c)] of which an applicant could be 'deprived'. Regular readers of the Isthatlegal.ca ODSP Legal Guide will be aware that this is an issue that I get much exercised about, and I am happy to see at least a passing judicial acknowledgement that it could be a problem subject of a remedy [see ODSP Guide Ch.11, s.2(d); OW Guide Ch.9, s.2(d)].

A related s.7 Charter damage claim also failed for lack of specific pleadings of "bad faith, abuse of power, negligence or a willfully blind disregard of constitutional obligations", as recent doctrine has required of Charter "tort" cases. It is a standard requirement of civil litigation that allegations of a party's impropriety be alleged with particularity.

. s.15 Charter (Discrimination)

Inevitably, a s.15 discrimination claim was also advanced - again grounded in systemic delay and resultant physical, mental and emotional harm. As both class plaintiffs were found to be "persons with a disability" - and as "mental or physical disability" are enumerated s.15 grounds, one would think that this is a legal 'no-brainer'.

However, the court launched on a classic (though often criticized as formalistic) "comparator" analysis, which is essentially a search for 'similarly-situated' classes of persons to which ODSP recipients could be compared - and their rights found wanting in relation to the administrative delays that the other classes experienced. Once a 'comparator' class is identified, the consideration turns to whether distinctions in their situations constitute 'discrimination'.

The plaintiffs offered WSIB and welfare (Ontario Works) recipients as comparator classes, an effort which the court denied (in perhaps its weakest moment):
The legislative purpose and the context in which benefits are provided under OW and WSIA are, in my opinion, materially different to those of the ODSPA even though the applicants under each of the programs share the personal characteristic of seeking financial support under a statute.
Well for that matter, ODSP cheques are green - while WSIB and OW cheques tend to be blue. However they all provide Ontarians with basis income support, a far more significant similarity. Regardless, the lack of a 'similarly-situated' comparator class was fatal to the systemic delay s.15 argument.

The plaintiff's second s.15 attempt was to draw comparator distinctions between those ODSP recipients whose disabilities impact their cognitive, communicative and general socio-cultural participation - and thus their ability to participate in and satisfy the legal processes of the ODSP program. This attempt failed however apparently due to the factual uncertainty as to who was in, and who was out, of such groups. Quoting Cullity J:
As the intended comparison is apparently with applicants under the ODSP who do not experience the same difficulties, it might not appear to be subject to the objection that I considered fatal to the first ground on which the plaintiffs' pleaded a breach of section 15. I note, however, that there are not, to any extent, discrete identifiable groups who are said to be treated unequally. Every applicant will be in a different position to some extent. In a sense they are all treated unequally.
The court did however leave open the possibility of improving this argument thorough more precise pleadings (allegations in the legal documents).

. Summary

The only claim to withstand the non-suit motion was one under s.7 respecting harm-causing delay brought about by the failure of ODSP to meet its statutory duty to provide adequate "reasons for decision". That said, for the sake of efficiency the court ordered the claim struck entirely, with leave to amend with respect to this surviving s.7 claim. Appeal of the ruling is certainly an option, and would be required to resurrect the defeated claims.

Charitably, the court's case treatment can be read as scolding and corrective of weak pleadings. Less charitably - especially re the s.15 comparator group treatment - it can be criticized as 'impossible to satisfy' in its apparent requirements. On that note, Cullity J's final words are worth quoting:
I trust it goes without saying that this decision does not deny, and is not intended to question to any extent, the reality of the plaintiffs' circumstances and experiences in applying for support under the ODSP. Nor does it address the question whether the alleged deficiencies in the program exist. The truth and accuracy of the factual allegations made by the plaintiffs have been accepted for the purpose of the motion. In the ultimate analysis, the claims pleaded - other than the Charter challenge for the failure to give reasons - are not, in my judgment, capable of enforcement in this court.
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