This is a special series of five Fontaine v Canada (AG) case summaries that involves the Chief Adjudicator of the Independent Assessment Process of the Indian Residential Schools Settlement Agreement.

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Fontaine v Canada (AG), 2018 ONSC 5197 (“The First Direction”)

Direction to terminate the Chief Adjudicator from his duties and all pending litigation that involves the Indian Residential Schools Settlement Agreement.

The Chief Adjudicator has been directed to be removed from his duties from the Independent Assessment Process (“IAP”), a central feature of the Indian Residential Schools Settlement Agreement (“IRSSA”). IRSSA is Canada’s largest and most complex class action settlement that was negotiated over ten years ago. The parties included Canada, representatives of the Indigenous Peoples in Canada, and of the religious organizations that operated Indian Residential Schools (“IRS”). They diligently worked to negotiate a fair, comprehensive and lasting resolution of the legacy of IRSs. The courts that approved the IRSSA have an ongoing role in supervising, implementing, and administering the IRSSA. A simplified and expedited process for the Courts to direct the IRSSA’s implementation and administration is known as a Request for Direction (“RFD”).

The IAP is an elaborate post-settlement claims adjudication process which include means for survivors to seek compensation for claims of serious abuse and other wrongful acts. The Chief Adjudicator’s duties are set out in the IRSSA and the role is responsible for the adjudication of IAP claims through the assistance of an administrative apparatus. The IAP must constitute an autonomous adjudicative body similar to a court and subject to court supervision. The Chief Adjudicator is retained on contract to ensure independence and reports directly to the courts that supervise the Settlement Agreement. The Chief Adjudicator is not independent, however, as judges are, as the role is accountable to the Supervising Courts. That approach is consistent with the leading authorities about the role of autonomous adjudicative bodies in matters before the courts (Ontario (Energy Board) v Ontario Power Generation Inc; Ontario (Children’s Lawyer) v Ontario (Information and Privacy Commissioner (“Goodis”)).

The Chief Adjudicator is obliged to report to the Courts at least quarterly. The most recent, the 43rd Quarterly Report to the Courts, was incomplete, as there were a number of unreported matters. The Chief Adjudicator had not only chosen to participate in several appeals before various appellate courts arising from the IAP, but had amplified that partisan position and now defies the Courts to which he is accountable. The Chief Adjudicator’s standing was challenged in the British Columbia Court of Appeal on a previous occasion, but he was permitted to participate as an intervenor, on the express understanding that his submissions would be limited to questions of jurisdiction and standard of review, but not touch on the merits. It was no answer for the Chief Adjudicator to point out that the Supreme Court of Canada and the British Columbia Court of Appeal had afforded him an audience. His standing in the pending appeals, and to make partisan arguments, has not been adjudicated and he did not advise the Supreme Court of his limited role under the IRSSA.

In connection with Canada’s RFD, the Chief Adjudicator’s counsel advised the Court that he intended to put on hold re-review cases that engaged what were called “procedural fairness” issues. He was directed that the matter be spoken to in open court, and it was made clear that for cases to be put on hold, a stay from the Court of Appeal would be required. No stay had been sought. Nevertheless, the Chief Adjudicator put a hold on the cases anyway. The Chief Adjudicator is an instrument of the IRSSA, not a stakeholder, not a party, and not an advocate for claimants or for itself. His role as an advocate is beyond his proper role, contrary to the scheme of the IRSSA and to the court orders that appointed him Chief Adjudicator. His partisan involvement has caused him to invite appellate courts to disagree with the very courts that are tasked with supervising him and to which he reports, which is unacceptable. His participation, akin to an intervention by an affected party, was not and is not required for a fully informed adjudication. The Chief Adjudicator should not be taking positions in matters arising from IAP decisions.

The goal of finality was contracted for and built into the IRSSA. Use by the Chief Adjudicator of procedural fairness as a means of re-opening IAP claims or holding them in abeyance pending the potential receipt of future admissions would compromise or defeat that important goal. Procedural fairness should not be used to avoid complying with the clear terms of the IRRSA, which preclude admission of new evidence on review or re-review and restricts reviews to the scrutiny of hearing adjudicators’ decisions for an overriding and palpable error. On re-review, the inquiry is limited to whether there was a misapplication of the IAP Model by the review adjudicator. The IAP Model requires that IAP adjudicators be impartial. It goes beyond the proper limits of the concept of procedural fairness to say that the discovery of new evidence is a sufficient basis for re-opening a hearing. Used in the context in which the Chief Adjudicator has used it in the IRSSA, “procedural fairness” is a misnomer, and one which erroneously invokes the administrative law paradigm. The IRSSA is a contract, and while the IAP Model provides an important means of redress to those who suffered abuse at IRSs, the courts and their officers must honour what was negotiated in the contract. Neither the courts nor the Chief Adjudicator should do anything that materially alters the bargain that the parties made. That bargain is set out in the IAP Model and when describing the concept of fairness in that context, the appropriate phrase is “IAP Model fairness”.

The Chief Adjudicator’s active and partisan involvement in the appeals mentioned above cause significant concern for this Court that there is a possible appearance of compromised impartiality. Partisan advocacy, or the appearance of bias, is antithetical to the role of a neutral decision-maker. A tribunal whose decision is under review is not automatically entitled to standing at common law, and a primary consideration in whether they should be permitted to address the Court is the importance of maintaining tribunal impartiality (Goodis). Another concern is that without disclosing in his reports that the Chief Adjudicator is challenging the Court’s supervision of the IAP, he has taken to challenging decisions of his Supervising Courts. The Chief Adjudicator’s actions amount to insubordination of the Courts to which he is accountable, and his conduct runs the risk of compromising his impartiality or the appearance of a compromised impartiality. These circumstances necessitated urgent corrective action on the part of this Court.

Fontaine v Canada (AG), 2018 ONCA 749

Relief granted. Direction issued that required the Chief Adjudicator to withdraw from his involvement in three appeals stayed and appeal allowed.

The Eastern Administrative Judge (“EAJ”) for the Indian Residential School Settlement Agreement (“IRSSA”), issued a Direction that required the Chief Adjudicator to withdraw from three appeals that he is involved in has been stayed and an appeal granted. The three-part test for a stay applies: 1) the applicant must demonstrate that there is a serious issue to be tried; 2) that it will suffer irreparable harm if the stay is not granted; 3) and that the balance of convenience favours a stay pending the disposition of the appeal (RJR-MacDonald Inc v Canada (AG), [1994] 1 SCR 311 (RJR-MacDonald)).

The Court was satisfied that the Chief Adjudicator raised arguable grounds of appeal and serious questions to be determined. It is arguable that proceeding without notice and without submissions amounts to a denial of procedural justice. The Direction takes the form of a judicial order and the reasons given to support it are in the form of a judicial judgment, therefore, the usual norms of procedural fairness should have been followed. Of particular concern is the finding in the Direction that the Chief Adjudicator is guilty of “insubordination of the Courts to which he is accountable”. This is a finding of serious misconduct made against a lawyer without giving the lawyer an opportunity to respond. The Direction also relates to proceedings in other courts. The Chief Adjudicator is a respondent or an intervenor to the appeals in those other courts and is therefore subject to the control of those courts. The Chief Adjudicator accepts that he is subject to the usual limitations imposed upon administrative tribunals who participate in proceedings that challenge their decisions as outlined in Ontario (Energy Board) v Ontario Power Generation Inc, [2015] 3 SCR 147). There is an arguable issue as to whether the EAJ erred in assuming the authority to determine the nature and scope of the submissions the Chief Adjudicator should make in other courts. It is an issue as to whether the Chief Adjudicator has exceeded the limits of participation permitted for a tribunal in proceedings that challenge the tribunal’s decision.

The Court is satisfied that if a stay is denied, the Chief Adjudicator will suffer irreparable harm from being required to withdraw his factum and participation in an appeal before the Supreme Court of Canada, scheduled to be heard the next day. The balance of convenience favours granting a stay. If a stay is refused, the Chief Adjudicator’s participation in the appeals will be terminated. On the other hand, if the Chief Adjudicator’s participation exceeds the limits of what is permitted, the courts before whom the Chief Adjudicator appears can deal with that problem and limit his participation accordingly. It is accepted that where a stay would effectively determine the matter at issue, a court may go beyond the “serious issue to be tried” standard and grant the stay if the applicant shows a strong likelihood of success (RJR-Macdonald). The Chief Adjudicator has met that standard with respect to the issue of procedural fairness. Granting the stay will not preclude this Court from considering the general issues as to the nature of the relationship between the EAJ and the Chief Adjudicator on the appeal.

Fontaine v Canada (AG), 2018 ONSC 5706 (“Second Direction”)

The Eastern Administrative Judge (“EAJ”) for the Indian Residential School Settlement Agreement (“IRSSA”), rescinds his “First Direction” and issues a “Second Direction” to address his concerns and issues with the Chief Adjudicator.

A “Second Direction” rescinds and replaces the EAJ’s earlier Direction (Fontaine v Canada (AG), 2018 ONSC 5197) for the IRSSA. In the First Direction, the EAJ directed that the Chief Adjudicator of the Independent Assessment Process (“IAP”) to terminate his involvement in pending litigation before various appellate courts arising from the IAP, in which he advances partisan positions, thereby compromising the integrity of the IAP. The Chief Adjudicator sought and was granted a stay by the Court of Appeal, pending appeal (Fontaine v Canada (AG), 2018 ONCA 749), largely on the ground that he had been denied due process. The EAJ viewed the stay granted by the Court of Appeal as making the appeal of the First Direction largely moot in that the Chief Adjudicator will go ahead with submissions on an appeal scheduled to be before the Supreme Court of Canada.

Therefore the EAJ rescinds the First Direction and will follow a different path that will provide for a fuller opportunity to canvass this Supervising Court’s underlying concerns and to provide the Chief Adjudicator with a full hearing with due process. The EAJ appoints in the Second Direction an amicus curiae to bring a Request for Direction (“RFD”). This RFD shall be heard and determined at a joint hearing by a panel of two Supervising Judges, to be assigned in accordance with the Court Administration Protocol appended as Schedule “A” to the Implementation Orders. The Second Direction specifies five issues for the RFD to address and lists the materials to be considered. The issues to be addressed reflect similar concerns to those that motivated the First Direction.

Fontaine v Canada (AG), 2018 ONCA 832

Relief granted. Stay for the Second Direction nunc pro tunc from the date it was issued. The appeal granted for the Second Direction will be heard together with the appeal from the First Direction.

The direction, now called the “First Direction” (Fontaine v Canada (AG), 2018 ONSC 5197), has been rescinded by the Eastern Administrative Judge (“EAJ”) that supervises, along with other courts, the Chief Adjudicator who is in charge of the Independent Assessment Process (“IAP”) of the multi-billion dollar class action settlement agreement, the Indian Residential Schools Settlement Agreement (“IRRSA”). In the First Direction, the Chief Adjudicator was ordered to withdrawal from three appeals he was involved in, as there were concerns and issues the EAJ had regarding the Chief Adjudicator’s duties. From the EAJ rescinding and replacing his First Direction, with a “Second Direction”, it is arguable to this Court that it was done in violation of the functus officio principle. As the Supreme Court of Canada (“SCC”) stated in (Doucet-Boudreau v Nova Scotia (Minister of Education), [2003] 3 SCR 3 (“Doucet-Boudreau”)), the purpose of this principle is “to allow finality of judgments from courts which are subject to appeal”. The SCC recognized that allowing the court appealed from to vary its orders would allow that court to “assume the function of an appellate court and deny litigants a stable basis from which to launch an appeal” (“Doucet-Boudreau”).

It was also found arguable that the Second Direction amounted to an attempt to short-circuit the appeal to this Court from the First Direction. The Second Direction declared the appeal to this Court “largely moot”, rescinded the First Direction which removes the basis for the appeal, and purports to confer jurisdiction on two extra-provincial judges to decide some of the issues raised by the appeal. In addition, the terms of the RFD that the EAJ directed the amicus curiae to bring, appears to assume, if not decide, some of the issues raised before this Court in the appeal from the First Direction. The Second Direction is a final order from which an appeal lies to this Court. If the Second Direction rescinds the First Direction, it has the effect of ending the appeal from the First Direction, as the Chief Adjudicator cannot appeal from an order that is no longer in effect. The Second Direction thus removes some of the issues raised in that appeal to another tribunal outside the jurisdiction of the Ontario courts. An order that finally determines the forum for the dispute is a final order for the purposes of appeal, even though the substantive issues remain to be determined by the court or tribunal held to have that jurisdiction (Manos Foods International Inc v Coca-Cola Ltd,180 DLR (4th) 309 (ONCA)).

The Second Direction was made without notice and a hearing, thereby in violation of the principles of procedural fairness. It is unprecedented for a judge to purport to rescind an order after it has been made, appealed and stayed, thereby effectively ending the appeal and replacing it with another process. The issue of the Chief Adjudicator’s participation on court proceedings is one that affects all jurisdictions. It is arguable that a panel of two judges from different provincial and territorial superior courts should be avoided where the issue is hotly contested, as there could be risk of disagreement or conflicting results on appeal or even appeals. Irreparable harm could flow from allowing two parallel proceedings to unfold at the same time. There is a clear risk of inconsistent results that would cause confusion from which the Chief Adjudicator and the IAP would suffer serious harm. Conflicting results would also cause harm by bringing the administration of justice into disrepute. The balance of convenience favours granting a stay as it would allow these proceedings to unfold in an orderly manner and avoid duplicative proceedings that could lead to inconsistent results. The three-part test for a stay is met (RJR-MacDonald Inc v Canada (AG), [1994] 1 SCR 311).

Fontaine v Canada (AG), 2018 ONCA 1023

The First Direction and the Second Direction is ordered to be set aside. Any party is open to bring a Request for Direction regarding the issues in the directions, however, it must be conducted by a different supervising judge. This process must be carried out in a procedurally fair manner and the directions are limited in scope to the form and content of the reports.

The Indian Residential Schools Settlement Agreement (“IRSSA”) was designed to give some measure of redress to victims of a dark chapter in Canadian history. Since its implementation, tens of thousands of victims have been compensated and billions of dollars have been dispersed. It is near completion and that accomplishment is attributable in no small measure to the many people who are part of the Independent Assessment Process (“IAP”), including the appellant (the Chief Adjudicator), and the Eastern Administrative Judge (“EAJ”). The IRSSA establishes the IAP, a claims adjudication process that acts as a means of providing compensation to individuals who suffered abuse at Indian Residential Schools. The Chief Adjudicator is responsible for ensuring the proper implementation of the IAP. The Oversight Committee is provided by the IAP. The power of the Oversight Committee to appoint a Chief Adjudicator has been expressly limited and made subject to court approval, however, there is no concurrent limitation to terminate the Chief Adjudicator.

The “First Direction” was issued by the EAJ on his own motion and without notice to any party, that prohibited the appellant from continuing his participation in three appeals (the “Impugned Appeals”), one before the Supreme Court of Canada (“SCC”) and two before the British Columbia Court of Appeal (“BCCA”). The EAJ found the appellant to be insubordinate and in defiance of the supervising courts. His reasons were the appellant’s overtly partisan positions, based on the content of his facta and his participation in the Impugned Appeals that failed to be described in a recent quarterly report to the IRRSA Court Monitor. Also of concern in the First Direction, is the appellant’s efforts to hold re-review adjudications in abeyance, pending the outcome of an appeal that considered issues of procedural fairness in the IAP (Fontaine v Canada (AG), 2018 ONSC 5197). The EAJ directed the appellant to withdraw from the Impugned Appeals and remove his facta from the SCC and BCCA registries. The appellant filed a Notice of Appeal against the First Direction in this Court and moved for a stay pending the hearing of the appeal, which was subsequently granted.

The appellant was owed an elevated duty of procedural fairness and natural justice because the EAJ was exercising his judicial functions (A(LL) v B(A), [1995] 4 SCR 536). The EAJ’s power to supervise must be exercised in a manner that conforms to the principles of natural justice and respects the rights of the appellant to procedural fairness. The First Direction amounted to a warning that all the orders for the Chief Adjudicator must implemented by the deadline mandated by the EAJ, otherwise the appellant could face termination from his position. But the power to terminate the Chief Adjudicator resides with the Oversight Committee, not the EAJ. It must also be remembered that the appellant occupies a significant role in the administration of a multi-billion dollar class action settlement, thereby the First Direction compromised the appellant’s professional reputation and his ability to carry out his mandate as Chief Adjudicator.

Subsequently, the EAJ issued another direction (the “Second Direction”), again on his own motion and without notice to any party. The Second Direction purported to rescind the First Direction for the express purpose of avoiding appellate review. It directed “a different path that will provide for a fuller opportunity to canvass this Supervising Court’s underlying concerns” and “provide the Chief Adjudicator with a full hearing with due process, as he submits is his due” (Fontaine v Canada (AG), 2018 ONSC 5706). The appellant filed a Notice of Appeal against the Second Direction and moved for a stay pending determination of the appeal. It was granted along with the relief that the two appeals be heard together. This Court also accepted that the Second Direction violated the law of functus officio. Once the First Direction was issued, the EAJ’s jurisdiction over the matter was exhausted. While the First Direction was under appeal, he had no authority to rescind and replace it with the Second Direction. The principle of functus officio addresses the harm at issue in these appeals, namely that a lower court must not interfere with the jurisdiction of an appellate court (Doucet-Boudreau v Nova Scotia (Minister of Education), [2003] 3 SCR 3). Courts do not have the power to amend an order except in limited circumstances that have no application in this case.

This Court should not determine the substantive issues raised in the First Direction and the Second Direction. An RFD to the supervising courts is the process mandated by the Implementation Orders for applications regarding the administration of the IRSSA. Where a hearing is required, the administrative judges determine the jurisdiction in which the hearing should be held. Where the issues will affect all jurisdictions, the hearing may be directed to any court supervising the IRSSA. There is nothing in the Court Administration Protocol of the IRRSA that permits the courts to initiate their own process. Instead, it is contemplated that it is the parties that bring RFDs to the courts. If the respondent has a concern about that conduct, there is nothing preventing it from bringing a RFD. Engaging in the RFD process would permit all parties to adduce evidence, make submissions, and to receive the direction of the court. The IRSSA, the Implementation Orders, and the Court Administration Protocol provide a detailed procedure regarding the adjudication of issues that arise in the administration of the IAP. That process must be respected. While the courts have a supervising role, it is one that must be guided by the IRSSA and the Implementation Orders. The supervising courts are not free to graft on their own processes to the mandated RFD process.