Core values: Ontario Court of Appeal rejects core policy immunity defence and permits certification of class action against Crown

In Leroux v Ontario, released earlier this month, the Ontario Court of Appeal overturned a 2021 Ontario Divisional Court decision that had allowed appeals from two Superior Court decisions certifying a class action against the Crown for alleged operational negligence in relation to the Ontario government’s management of delivering essential services and supports to statutorily eligible adults with developmental disabilities.¹

The Court of Appeal’s decision in Leroux serves as yet another reminder that the cause of action test in s. 5(1)(a) of Ontario’s Class Proceedings Act, 1992 (the CPA) is a low bar to clear for class action plaintiffs. Leroux also contains an important lesson for federal and provincial Crown defendants in both class actions and ordinary civil proceedings: the “core policy immunity” doctrine does not extend to operational negligence.

The Leroux saga

The appellant in Leroux had a severe developmental disability. Represented by her father, acting as litigation guardian, the appellant commenced a proposed class action against the provincial government alleging that it had been negligent in operating a social assistance program for developmentally disabled persons. In the words of the certification judge “[t]he complaint, in a nutshell, is about the negligent operation of a social assistance system that has approved the delivery of much-needed support and services but then fails to follow up.”²

The appellant also alleged a breach of s. 7 of the Charter.³ This constitutional claim asserted that the developmental services to which the class members were entitled are essential to their life and security of the person, and that the unreasonable and indeterminate administration of the government’s waitlists had deprived them of their s. 7 rights.

The appellant’s class action was certified in 2018.⁴ The government appealed the certification decision to the Divisional Court, but before the appeal could be heard, the government enacted the Crown Liability and Proceedings Act (the CLPA), a statute that altered decades of caselaw that would have allowed the appellant’s claim to proceed based on the distinction between true policy decisions and their implementation. In light of the CLPA’s enactment, the Divisional Court remitted the matter back to the certification judge for reconsideration.

In 2020, the appellant’s class action was certified for a second time.⁵ The certification judge held that notwithstanding the CLPA, the appellant had cleared the hurdle of s. 5(1)(a) because it was not plain and obvious that her operational negligence claim against the Crown was doomed to fail. Ontario appealed this second decision to the Divisional Court. A majority of the Divisional Court disagreed with the certification judge, holding that CLPA aside, the government was immune from the negligence claim by the operation of common law Crown immunity, and that as a result, the class action was doomed to fail and could not satisfy the requirements of s. 5(1)(a) of the CPA.⁶

The Court of Appeal rejected the majority of the Divisional Court’s analysis and reinstated the class action. 

Key takeaway 1 – s. 5(1)(a) poses a low bar for class action plaintiffs 

The Court of Appeal agreed with the certification judge that, as pleaded, the proposed class action alleges that, within existing resources, Ontario negligently implemented a program of which the class members were already a part. The majority of the Divisional Court had erred by re-characterizing the appellant’s negligence claim. At the certification stage of a class action, just like on a motion to strike under Rule 21 of the Rules of Civil Procedure, the facts pleaded by a plaintiff must be taken as true for the purpose of determining whether a cause of action has been alleged. Similarly, the Court of Appeal held that the majority of the Divisional Court had interpreted the appellant’s secondary, constitutional claim too narrowly, emphasizing that a pleading must be read generously under s. 5(1)(a) of the CPA. 

Key takeaway 2 – there are limits to the Crown’s core policy immunity 

It is well established in Canada that the federal and provincial governments cannot be liable in negligence for their core policy decisions, as long as those decisions are not irrational or made in bad faith.⁷

In its 2021 reasons, the majority of the Divisional Court adopted an expansive interpretation of core policy immunity, holding that even the “devising, implementing and administering a benefits program is a core policy decision of government.” In the Divisional Court’s view, the Crown owes no private duty of competent public administration to individual benefits claimants, and recognizing such a private duty “would usurp unto the courts fundamental aspects of public administration and strike at the very heart of Crown immunity for core policy decisions.”

The Court of Appeal rejected this deferential approach to government decision-making in favour of a narrower interpretation. Specifically, drawing on the Supreme Court of Canada’s decision in Nelson (City) v Marchi,⁸ the Court of Appeal emphasized that (i) core policy decisions must be distinguished from “operational implementation” – i.e. the carrying out of a policy – and (ii) in ascertaining whether a decision is one of “core policy,” the use of the term “policy” by the government entity cannot be determinative. The focus must be on the nature of the decision in question. 

Conclusion 

Together with the low threshold under s. 5(1)(a) of the CPA, the Court of Appeal’s more doctrinal approach to core policy immunity resulted in the certification of the appellant’s proposed class action: on a generous reading of her pleading, it was not plain and obvious that core policy immunity would defeat the appellant’s claim at trial. 

In the Court of Appeal’s view, this result did not undermine the important constitutional protections for legislative and executive decision-making by the Crown. To the contrary, “The overarching guiding principle for core policy immunity, the separation of powers, remains respected if this claim proceeds to trial, as it has the potential to be adjudicated without compromising the institutional roles and competencies of the three branches of government.”⁹