M.B. v. B.C. (2003), 187 B.C.A.C. 161 (SCC);
307 W.A.C. 161
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.002
Her Majesty The Queen in Right of the Province of British Columbia (appellant) v. M.B. (respondent) and Attorney General of Canada, Nishnawbe Aski Nation, Insurance Corporation of British Columbia, 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)
(28616; 2003 SCC 53; 2003 CSC 53)
Indexed As: M.B. v. British Columbia
Supreme Court of Canada
McLachlin, C.J.C., Gonthier, Iacobucci, Major, Bastarache, Binnie, Arbour, LeBel and Deschamps, JJ.
October 2, 2003.
Summary:
A teenaged foster child (M.B.) was sexually abused by her foster father in 1976. M.B. had previously been sexually abused by her natural father. M.B. sued the provincial Crown, claiming that (1) the Crown breached its fiduciary duty by failing to investigate problems in the foster parents’ home at least at the time of M.B. leaving the home and by failing to provide her with alternate placement and counselling; (2) the Crown was vicariously liable for the foster parents breach of fiduciary duty to M.B. and negligence in their role as foster parents; (3) the Crown was liable in negligence for the social workers’ negligence in their hiring, monitoring and supervision of the foster parents; (4) the Crown breached its non-delegable duty of care respecting its role as guardian. The Crown submitted that M.B.’s experiences materially contributed to her pre-existing emotional problems by impacting negatively on her ability to trust, form healthy relationships and further her education and capacity to earn income. The Crown alleged that M.B.’s problems were caused by her dysfunctional family life, particularly the physical and sexual abuse by her natural father.
The British Columbia Supreme Court, in a judgment reported at [2000] B.C.T.C. 305, held that the Crown was negligent in the social workers’ failure to properly monitor and supervise the placement, but that such negligence had no causal connection with the loss suffered. The Crown was vicariously liable for the foster father’s torts and breach of fiduciary duty. The Crown was directly liable for breaching its non-delegable duty to look after the welfare of foster children, but not liable for breach of fiduciary duty. The court awarded damages as follows: (1) $80,000 general damages for nonpecuniary loss; (2) $5,000 aggravated damages (foster father only); (3) $10,000 for pre-trial loss of earnings (after deducting $122,000 in social assistance benefits received by the plaintiff prior to trial from a gross award of $132,000); (4) $40,000 for future loss of earning capacity; and (5) $15,000 for future care and treatment (psychological counselling). The Crown appealed both the finding of liability and the assessment of damages.
The British Columbia Court of Appeal, McEachern, C.J.B.C., dissenting in part, in a decision reported in (2001), 151 B.C.A.C. 70; 249 W.A.C. 70, dismissed the appeal from liability. The Crown was liable for breaching its non-delegable duty of care and vicariously liable for the torts committed by the foster father. The court reduced non-pecuniary damages and loss of past income, but held that the amount of social assistance benefits should not have been deducted. Counsel subsequently applied for clarification of the decision with respect to the award for past loss. The Crown sought to have the social assistance benefits deducted from the award for past loss of income. An issue also arose on the method of calculating interest on the award for past loss of income. A five-judge panel was convened to decide the issues.
The British Columbia Court of Appeal, per Prowse, J.A. (Finch, C.J.B.C., and Mackenzie, J.A., concurring), in a supplementary judgment reported (2002), 164 B.C.A.C. 247; 268 W.A.C. 247, dismissed the Crown’s application to deduct the social assistance benefits from the award for past loss of income. Hall and Smith, JJ.A., dissented on this issue. On the issue of interest the court unanimously held that interest should be calculated on the award for past loss in accordance with s. 1(2) of the Court Order Interest Act by treating the award as a stream of income received evenly over the period starting six months after the cause of action and ending at the date of judgment. The Crown appealed the finding of liability and the failure to deduct the social assistance benefits from damages. M.B. cross-appealed against the reduction of non-pecuniary damages and on the issue of pre-judgment interest.
The Supreme Court of Canada, Arbour, J., dissenting in part, allowed the Crown’s appeal and dismissed the cross-appeal. For the reasons stated in K.L.B. et al. v. British Columbia et al., the Crown was not vicariously liable for torts committed by the foster father and there was no breach of any non-delegable duty of care to the foster child. Although it was unnecessary to decide the issues respecting damages and interest, the court opined that (1) social assistance benefits were deductible from damages; (2) the Court of Appeal did not err in awarding pre-judgment interest in six-month increments; and (3) the Court of Appeal erred in reducing damages absent any palpable and overriding error by the trial judge.
Crown – Topic 1527
Torts by and against Crown – Liability of Crown for acts of servants – When Crown liable – Vicarious liability for independent contractors – [See
Crown – Topic 1701
].
Crown – Topic 1701
Torts by and against Crown – Actions against Crown for breach of statutory duty – General – A foster child was sexually abused by her foster father – The child claimed that the provincial Crown was liable for breaching its non-delegable duty of care to ensure that no harm came to her and vicariously liable for the torts committed by the foster father – The Supreme Court of Canada, for the reasons stated in its concurrently released judgment in K.L.B. et al. v. British Columbia et al., held that there was no breach of any non-delegable duty of care and the Crown was not vicariously liable for the torts of the foster father – See paragraphs 16 to 18.
Damage Awards – Topic 210
Injury and death – Psychological injuries – Aggravation of psychological injuries – [See
Damage Awards – Topic 627
].
Damage Awards – Topic 627
Torts – Injury to the person – Sexual assault (incl. sexual abuse) – The plaintiff was apprehended by child welfare because of sexual abuse by her natural father from age four to 12, and placed in foster care, where the foster father sexually abused her at age 15 – She suffered an intense inferiority complex, isolation, avoidance and conflict in her interpersonal relationships, sexual inhibition, abnormally poor self-image, depression, anxiety, anger, hostility, resentment and lost opportunity to have corrective experience with good foster parents – The British Columbia Court of Appeal held that the trial judge when assessing damages failed to exclude the detrimental effects of the natural father’s prior abuse, which abuse caused most of the plaintiff’s complaints – The court reduced the nonpecuniary general damages from $80,000 to $30,000 – The Supreme Court of Canada held that the trial judge’s assessment of the proportion of damage attributable to the foster father’s sexual abuse (as opposed to damage caused by her natural father’s abuse) was a judgment of fact which the Court of Appeal erred in overturning absent any palpable and overriding error – See paragraphs 52 to 54.
Damages – Topic 1765
Deductions for payments or assistance by third parties – By statute or government – Social welfare payments – A sexually abused foster child was awarded damages for loss of past opportunity to earn income – At issue was whether social assistance benefits were deductible from damages – The Supreme Court of Canada held that the social assistance benefits should have been deducted from the damage award – The benefits constituted wage or income replacement – Accordingly, they were non-deductible at common law only if they fit within the charitable benefits exception to the rule against double recovery or if the court carved out a new exception – Social assistance benefits did not fit the rationales for the charitable benefits exception and there was no principled rationale for carving out a new policy-based exception for social assistance benefits – See paragraphs 21 to 43.
Guardian and Ward – Topic 815.4
Public trustee or guardian – Appointment – Child in need of protection – Duties of agency – [See
Crown – Topic 1701
].
Interest – Topic 5009
Interest as damages (prejudgment interest) – General principles – Prejudgment interest – Calculation of – Counsel agreed that damages to a sexually abused foster child for loss of past earning capacity were “special damages” for the purpose of calculating interest pursuant to s. 1(2) of the Court Order Interest Act, which provided that interest was to be calculated from the end of each six month period in which the special damages were incurred – The Supreme Court of Canada agreed that interest should be calculated under s. 1(2) by treating the award as a stream of income received evenly over the period starting six months after the cause of action arose and ending at the date of judgment – The court rejected the submission that interest was payable on the full amount awarded commencing six months after the cause of action arose – Although loss of earning capacity was treated in case law as the loss of a capital asset, that did not determine how interest was to be calculated – For interest purposes, the loss was valued and treated as a loss sustained over time – Awarding interest on the full award starting six months after the cause of action arose would overcompensate the child given the effects of inflation over the 20 years since the cause of action arose – See paragraphs 44 to 51.
Interest – Topic 5012.2
Interest as damages (prejudgment interest) – General principles – Special damages – [See
Interest – Topic 5009
].
Practice – Topic 8802
Appeals – General principles – Duty of appellate court regarding damage awards by a trial judge – [See
Damage Awards – Topic 627
].
Cases Noticed:
K.L.B. et al. v. British Columbia et al. (2003), 309 N.R. 306; 187 B.C.A.C. 42; 307 W.A.C. 42 (S.C.C.), refd to. [para. 2].
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. 2].
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. 21].
Cooper v. Miller (No. 1), [1994] 1 S.C.R. 359; 164 N.R. 81; 41 B.C.A.C. 1; 66 W.A.C. 1; [1994] 4 W.W.R. 153; 113 D.L.R.(4th) 1; 88 B.C.L.R.(2d) 273; 20 C.C.L.T.(2d) 1, refd to. [para. 30].
Cunningham v. Wheeler – see Cooper v. Miller (No. 1).
Bustard v. Boucher, [1997] N.B.R.(2d) (Supp.) No. 3 (T.D.), refd to. [para. 38].
Cockerill et al. v. Willms Transport (1964) Ltd. et al. (2001), 284 A.R. 256 (Q.B.), refd to. [para. 38].
Ramsay (Tichkowsky) v. Bain (1995), 170 A.R. 298 (Q.B.), refd to. [para. 38].
M.S. et al. v. Baker (2001), 309 A.R. 1 (Q.B.), refd to. [para. 38].
Krangle v. Brisco et al., [2002] 1 S.C.R. 205; 281 N.R. 88; 161 B.C.A.C. 283; 263 W.A.C. 283, refd to. [para. 39].
Lincoln v. Hayman, [1982] 2 All E.R. 819 (C.A.), refd to. [para. 41].
Hodgson v. Trapp, [1989] 1 A.C. 807; 102 N.R. 287 (H.L.), refd to. [para. 41].
Andrews et al. v. Grand & Toy (Alberta) Ltd. et al., [1978] 2 S.C.R. 229; 19 N.R. 50; 8 A.R. 182; [1978] 1 W.W.R. 577; 83 D.L.R.(3d) 452; 3 C.C.L.T. 225, refd to. [para. 47].
Ontario (Minister of Highways) v. Jennings, [1966] S.C.R. 532, refd to. [para. 47].
Earnshaw v. Despins (1990), 45 B.C.L.R.(2d) 380 (C.A.), refd to. [para. 47].
Palmer v. Goodall (1991), 53 B.C.L.R.(2d) 44 (C.A.), refd to. [para. 47].
Pallos v. Insurance Corp. of British Columbia (1995), 53 B.C.A.C. 310; 87 W.A.C. 310; 100 B.C.L.R.(2d) 260 (C.A.), refd to. [para. 47].
Housen v. Nikolaisen et al., [2002] 2 S.C.R. 235; 286 N.R. 1; 219 Sask.R. 1; 272 W.A.C. 1; 211 D.L.R.(4th) 577, refd to. [para. 54].
Statutes Noticed:
Court Order Interest Act, R.S.B.C. 1996, c. 79, sect. 1(2) [para. 45].
Protection of Children Act, R.S.B.C. 1960, c. 303, sect. 8(8), sect. 11A, sect. 14, sect. 15(1), sect. 15(3) [Appendix].
Authors and Works Noticed:
Cooper-Stephenson, Kenneth D., Personal Injury Damages in Canada (2nd Ed. 1996), pp. 138 [para. 49]; 581 [para. 36].
Fleming, John G., The Law of Torts (9th Ed. 1998), p. 280 [paras. 35, 42].
Great Britain, Royal Commission on Civil Liability and Compensation for Personal Injury (1978), vol. 1, p. 107, para. 475 [para. 40].
Lewis, Richard, Deducting collateral benefits from damages: principle and policy (1998), 18 Legal Studies 15, p. 17 [para. 37].
Pearson Report – see Great Britain, Royal Commission on Civil Liability and Compensation for Personal Injury.
Counsel:
John J.L. Hunter, Q.C., Thomas H. MacLachlan, Q.C., and Karen Horsman, for the appellant/respondent on cross-appeal;
Gail M. Dickson, Q.C., Karen E. Jamieson and Cristen L. Gleeson, for the respondent/appellant on cross-appeal;
David Sgayias, Q.C., Kay Young, for the intervenor, Attorney General of Canada;
Susan M. Vella and Elizabeth K.P. Grace, for the intervenor, Nishnawbe Aski Nation;
Christopher E. Hinkson, Q.C., and Guy P. Brown, for the intervenor, Insurance Corporation of British Columbia;
David Paterson and Diane Soroka, for the intervenors, Patrick Dennis Stewart et al.
Solicitors of Record:
Ministry of Attorney General of British Columbia, Victoria, B.C., for the appellant/respondent on cross-appeal;
Dickson Murray, Vancouver, B.C., for the respondent/appellant on cross-appeal;
Deputy Attorney General of Canada, Ottawa, Ontario, for the intervenor, Attorney General of Canada;
Goodman and Carr, Toronto, Ontario, and Lerner and Associates, Toronto, Ontario, for the intervenor, Nishnawbe Aski Nation;
Harper Grey Easton, Vancouver, B.C., for the intervenor, Insurance Corporation of British Columbia;
David Paterson Law Corp., Surrey, B.C., and Hutchins, Soroka & Grant, Vancouver, B.C., for the intervenors, Patrick Dennis Stewart et al.
This appeal and cross-appeal were 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 55;
Arbour, J., dissenting in part – see paragraphs 56 to 58.
