Course:Law3020/2014WT1/Group O

(Case Brief) Facts - Alberta is responsible for the cost of medical care required by the residents of nursing homes and auxiliary hospitals, but patients may be asked to contribute to the costs of their housing and meals through the payment of accommodation charges. o Nursing homes, or LTCFs, are regulated by the Nursing Homes Act and receive funding from both the Alberta government, by way of the RHAs, and the nursing home residents themselves. Nursing home operations — which are run by either private operators or the RHAs, not by the Province — may impose on residents an accommodation charge for housing and meals, not to exceed a maximum daily amount prescribed by regulation (Para 10) - Alberta long-term care facilities allege that the government artificially inflated accommodation charges to subsidize the cost of medical expenses o August 1st, 2003 – Alberta’s Minister of Health and Wellness, raised the maximum accommodation charge payable by residents of the province’s nursing homes and auxiliary hospitals (para 14) despite knowledge of “past practice” on part of LTCF’s - Have brought a claim against Alberta and the 9 Regional Health Authorities who administered/operated the health care regime o The class has filed a statement of claim in which it alleges that the government’s conduct constitutes a breach of fiduciary duty, negligence, bad faith in the exercise of discretion and/or unjust enrichment (para 2) o The class also brings an equality claim under s. 15 of the Canadian Charter of Rights and Freedoms (para 2)

Issue(s) 1. Whether the disputed claims disclose a cause of action, assuming the facts pleaded to be true? 2. Whether principles of fiduciary duty applicable to private actors apply to governments? 3. Whether government owed fiduciary duty to patients? 4. Whether government breached s. 15(1) (equality) of the Charter?

Ratio Fiduciary duty (new category): A claimant must show that (Para 30-34; 36): (1) The alleged fiduciary has undertaken to act in the best interests of the alleged beneficiary or beneficiaries; (2) A defined person or class of persons is vulnerable to a fiduciary’s control; and (3) A legal interest or a substantial practical interest of the beneficiary or beneficiaries stands to be adversely affected by the alleged fiduciary’s exercise of discretion or control.

Unjust Enrichment (per Garland v Consumers’ Gas Co., 2004 SCC) – Para 82 The cause of action has three elements: (1) An enrichment of the defendant; (2) A corresponding deprivation of the plaintiff; and (3) An absence of juristic reason for the enrichment

Analysis

Fiduciary Duty (duty described at Para 22 – test outlined Para 30-34) - Special characteristics of governmental responsibilities and functions mean that governments will owe fiduciary duties only in limited and special circumstances (Para 37) - No fiduciary duty is owed to the public as a whole, and generally an individual determination is required to establish that the fiduciary duty is owed to a particular person or group. (Para 50) - The pleading of breach of fiduciary duty does not disclose a supportable cause of action. The claimants’ state of vulnerability, as alleged in their pleadings, does not arise from their relationship with Alberta o The plaintiffs do not point to anything in the legislation (AB Health Care Insurance Act), or in the factual relationship pleaded, that supports an undertaking by Alberta to act with undivided loyalty toward the claimant class members (Para 58) - Vulnerability alone is insufficient to support a fiduciary claim (Para 56-57) - The specific fiduciary duty that the plaintiffs seek to establish relates primarily to setting the accommodation charges by regulation – this is a legislative function – courts have consistently held that a fiduciary duty does not arise where the government acts in the exercise of its legislative functions (Para 62)

Negligence Claim (fails at first step of Anns/Cooper inquiry – Para 73) - The legislative scheme does not impose a duty on the Crown to act in relation to the class members with respect to the accommodation charges (Para 70) - In the absence of a statutory duty, the fact that Alberta may have audited, supervised, monitored and generally administered the accommodation fees objected to does not create sufficient proximity to impose a prima facie duty of care. (Para 72)

Bad Faith Claim - The plaintiff class pleads that the instruction by the Minister of Health and Wellness to the LTCF operators to charge the maximum fee allowable under the regulations for accommodation and meals is a bad faith exercise of discretion. - Law does not recognize a stand-alone action for bad faith, not independently actionable (Para 78) – cannot survive when the plea of negligence is struck

Unjust Enrichment Claim - By overcharging them for accommodation and food, the government used their money to partially offset its obligations (expenses) under the scheme, without being entitled to do so. (Para 81) - Plaintiffs plead the three elements of unjust enrichment — benefit, deprivation, and absence of juristic reason for the deprivation – should be allowed to proceed to trial

Section 15(1) Claim of Discrimination - The imposition on the class members of an obligation to pay health care costs violates s. 15(1) of the Charter (Para 97) - consequent infringement of their equality rights is not demonstrably justified under s. 1 of the Charter - Alberta argues action should be decertified because a class proceeding is not the preferable procedure – Court: “The claim as pleaded does not require an individual assessment of the nexus between specific accommodation and meal charges in order to ground any potential liability to the class” (Para 100) - Class proceeding remains preferable option – may proceed to trial

Held The pleas of breach of fiduciary duty, negligence and bad faith in the exercise of discretion are struck from the statement of claim. It follows that the certification of the class is upheld, and the unjust enrichment claim may proceed to trial, together with the claim for discrimination under s. 15(1) of the Charter. (Para 5)