19980604 Docket: A960346 Vancouver Registry IN THE SUPREME COURT OF BRITISH COLUMBIA BETWEEN: WILLIAM RICHARD BLACKWATER, W.C.A., C.H.B., THE ESTATE OF S.S.D., by his personal representative L.W., R.A.F., COLBERT MELVIN GOOD, S.G.G., R.G., G.J., R.J.J., R.V.J., A.J.J., M.L.J., R.H.J., E.B.M.,.L.G.P., DENNIS STEWART, DANIEL WATTS, D.W., M.W., M.B.W., M.W. and A.W. PLAINTIFFS AND: ARTHUR HENRY PLINT, A.E. CALDWELL, JOHN DENNYS, JOHN ANDREWS, THE UNITED CHURCH OF CANADA and HER MAJESTY THE QUEEN IN RIGHT OF CANADA as represented by THE MINISTER OF INDIAN AFFAIRS AND NORTHERN DEVELOPMENT DEFENDANTS AND: HER MAJESTY THE QUEEN IN RIGHT OF CANADA as represented by THE MINISTER OF INDIAN AFFAIRS AND NORTHERN DEVELOPMENT and ARTHUR HENRY PLINT THIRD PARTIES AND: THE UNITED CHURCH OF CANADA, ARTHUR HENRY PLINT, THE ESTATE OF A.E. CALDWELL by his personal representative, JOHN DENNYS and JOHN ANDREWS THIRD PARTIES - AND - Docket: C975834 Vancouver Registry BETWEEN: FREDERICK LEROY BARNEY PLAINTIFF AND: ARTHUR HENRY PLINT, JOHN DENNYS, JOHN ANDREWS, THE UNITED CHURCH OF CANADA and HER MAJESTY THE QUEEN IN RIGHT OF CANADA as represented by THE MINISTER OF INDIAN AFFAIRS AND NORTHERN DEVELOPMENT DEFENDANTS AND: THE UNITED CHURCH OF CANADA, ARTHUR HENRY PLINT, JOHN DENNYS and JOHN ANDREWS THIRD PARTIES - AND - Docket: A972666 Vancouver Registry BETWEEN: HARVEY BROOKS, GILBERT HILL, PATRICK DENNIS STEWART, MARLON BRADFORD WATTS, DENNIS WILLIAM TALLIO and HARRY DEVINE WILSON PLAINTIFFS AND: ARTHUR HENRY PLINT, A.E. CALDWELL, JOHN ANDREWS, THE UNITED CHURCH OF CANADA and HER MAJESTY THE QUEEN IN RIGHT OF CANADA as represented by THE MINISTER OF INDIAN AFFAIRS AND NORTHERN DEVELOPMENT DEFENDANTS - AND - Docket: S09345 Nanaimo Registry BETWEEN: DENNIS THOMAS PLAINTIFF AND: ARTHUR PLINT and THE UNITED CHURCH OF CANADA and HER MAJESTY THE QUEEN IN RIGHT OF CANADA as represented by THE MINISTER OF INDIAN AFFAIRS AND NORTHERN DEVELOPMENT DEFENDANTS AND: HER MAJESTY THE QUEEN IN RIGHT OF CANADA as represented by THE MINISTER OF INDIAN AFFAIRS AND NORTHERN DEVELOPMENT and ARTHUR HENRY PLINT THIRD PARTIES AND: THE UNITED CHURCH OF CANADA, ARTHUR PLINT, JOHN DENNYS and JOHN ANDREWS THIRD PARTIES REASONS FOR JUDGMENT OF THE HONOURABLE MR. JUSTICE BRENNER Counsel for the Plaintiff Blackwater et al.: P.R. Grant, D. Soroka, A. Early Counsel for the Plaintiff Thomas: A. Croll Counsel for the Plaintiff Brooks et al.: D. Paterson Counsel for the Defendant United Church of Canada: C. Hinkson Q.C., B.S. Buettner Counsel for the Defendant Her Majesty the Queen: M. Taylor, J. Mules, R. Garrett, O. Trombetti Counsel for the defendant John Andrews: A.E. King, C.J. Sadlemyer Date and Place of Hearing: February 2-5, 9-13, 16, 17, 26, 27; March 3, 4; April 14-16,1998 Nanaimo & Prince Rupert, British Columbia INTRODUCTION [1] In these actions the plaintiffs seek damages for sexual assaults committed against them by the defendant Arthur Henry Plint. The plaintiffs, all of whom are Indians within the meaning of the Indian Act, were students or residents at the Alberni Indian Residential School ("AIRS") during various years between 1943 and 1970 when their ages ranged from 5 to 19. [2] In the late 1800's the Presbyterian Church founded a residential school at Port Alberni for the education of First Nations children. The school was operated by that Church with periodic financial assistance from the Federal Government. In 1911 the parties entered into a written agreement in connection with what was then known as the "Alberni Boarding School". In 1925 a portion of the Presbyterian Church in Canada combined with two other religious denominations to form, through an Act of Parliament, the United Church of Canada. The United Church was involved in the school from 1925 onwards. [3] In 1962 another written agreement relating to the school was entered into by Canada and the United Church. On April 1, 1969, Canada took over the complete operation of the residential school and operated it until it was closed in 1973. PARTIES [4] Plint was employed as a dormitory supervisor at the school from 1948 to approximately 1953 and from 1963 to 1968. The dormitory supervisors, including Plint, worked in the residence at AIRS and were responsible for the daily care and well-being of the resident children including the plaintiffs. They reported to and worked under the direction of the principal of AIRS. [5] The defendants Caldwell, Dennys and Andrews were principals at AIRS during the periods the plaintiffs were in residence. Caldwell was principal from 1944 to 1959, Dennys from 1959 to 1962 and Andrews was the principal and residence administrator from 1962 to 1973. In the mid-1960's his title was changed to residence administrator to reflect the fact that the children no longer attended school at the AIRS but went instead to public school in Port Alberni. [6] The defendant United Church of Canada (the "Church") was incorporated in 1925. It was formed as the result of a merger between the Methodist Church, Canada, the Congregational Union of Canada and approximately 70% of the Presbyterian Church in Canada. [7] The Church is the largest Protestant denomination in Canada and ministers to over 3.5 million people in 4,100 congregations. It is structured into four levels or "Courts": (a) the local congregations; (b) district presbyteries; (c) the regional conferences; and (d) the General Council. The congregations are the local church pastoral charges. District presbyteries cover a geographical area including 20 to 50 pastoral charges. In 1992 there were 96 presbyteries. There are 13 conferences, 12 of which cover a much wider geographical area roughly contiguous with provincial and territorial boundaries. The 13th Conference is known as the All Native Circle Conference. Its jurisdiction includes all First Nations congregations. Each conference has its own executive secretary and staff. The General Council is the highest court in the Church and is composed of some 400 commissioners. It meets biennially. Between General Council meetings the national affairs of the Church are administered by the Executive of the General Council. [8] The defendant, Her Majesty the Queen in Right of Canada is represented by the Minister of Indian Affairs and Northern Development and is referred to as "Canada", the "Crown", or "Indian Affairs" as the context requires. [9] On the application of the plaintiffs, I directed that the following issue be tried in this portion of the proceedings: Are the Defendants Her Majesty the Queen and/or the Defendant United Church of Canada vicariously liable for the sexual assaults committed by the Defendant Arthur Henry Plint against each of the Plaintiffs while those Plaintiffs were students at Port Alberni Indian Residential School, which sexual assaults are set out in the Statement of Claim? [10] The remaining liability issues including the direct liability allegations will be heard during the next phase of the trial scheduled to resume in Nanaimo on August 17, 1998. THE ASSAULTS [11] The plaintiffs in these actions allege that they were sexually assaulted by Plint while they were minors and resident at AIRS. Virtually all of the assaults at the school are said to have occurred in the residence in Plint's bedroom and/or office. As is set out in the agreed facts, in 1995 and 1997 Plint was convicted of multiple counts of sexual assault involving many of the plaintiffs. He is presently incarcerated serving sentences totaling 12 years. The Church and Canada admit that Plint sexually assaulted those plaintiffs in respect of whom a criminal conviction has been entered. [12] In addition a number of plaintiffs for whom there is at present no criminal conviction against Plint testified as to the sexual assaults he committed against them. These are Frederick Leroy Barney, Ralph Jerry Johnson, Darrell Bruce Watts, Mark Steven Watts, Harvey Brooks and Marlon Bradford Watts. For this vicarious liability phase of the trial the nature and frequency of the assaults need not be determined and the plaintiffs need only prove that there was at least one assault by Plint for each plaintiff who seeks judgment against the defendants. [13] After hearing their evidence and in view of the fact that neither the Church nor Canada argued that any of these plaintiffs had never been sexually assaulted by Plint, I find that these plaintiffs were in fact assaulted on at least one occasion by Plint. The issue of the frequency and severity of the assaults will be dealt with during the damages assessment phase of this trial. Accordingly in these Reasons I do not review the evidence given by the plaintiffs of the particulars of the assaults. [14] Accordingly to be decided is whether the Church or Canada or both are vicariously liable for the Plint assaults. THE POSITION OF THE PARTIES [15] The plaintiffs contend that the Church operated AIRS at all material times under the direction of the Minister and/or as the agent of Canada. They say the Church was in the position of guardian of the children at all times until 1969 when AIRS was taken over by Canada. The plaintiffs say that both the Church and Canada are vicariously liable for the breaches of fiduciary duty and duty of care on the part of Caldwell, Dennys and Andrews and the breach of fiduciary duty and assaults and battery by Plint. [16] Canada says that at all material times until April 1, 1969, the Church operated and managed AIRS and was responsible for the hiring, supervision, dismissal and actions of the principal and other staff including Plint. Canada says that the Church is solely vicariously responsible for the acts and omissions of the principals and Plint who stood in loco parentis to the plaintiffs. [17] The Church says that Canada directed and controlled all operations of AIRS, including employment of staff, but for certain aspects of religious education which were directed by the Church through employees paid directly by it and that the principals and Plint were employed by Canada. The Church denies that it was ever the guardian of the plaintiffs and denies any vicarious liability. [18] Thus the Church and Canada each say that the other is solely vicariously liable for the assaults committed by Plint. THE VICARIOUS LIABILITY OF PLINT'S EMPLOYER [19] The law in British Columbia dealing with the test for the vicarious liability of an employer in respect of a sexual assault perpetrated by a child care worker against children was set out by the Court of Appeal in B. (P.A.) v. The Children's Foundation (25 March 1997), (unreported), CA020650. In that case one of the Foundation's employees Leslie Charles Currie sexually abused children in a group home operated by the Foundation. Currie was employed as a child care counselor and he was expected to fulfill the duties of a parent to the children. He worked day (7 a.m. to 3 p.m.) and evening (8 p.m. to 11 p.m.) shifts. [20] In determining that the Children's Foundation was responsible for the wrongful acts of Currie, the trial judge who heard the special case applied the second branch of the traditional "course of employment test" authoritatively stated in Salmond and Heuston on the Law of Torts, 20th ed. (London: Sweet & Maxwell, 1992) at 456- 457. He held that Currie's conduct constituted "a wrongful and unauthorized mode of doing some act authorized by his employer". [21] However the Court of Appeal noted the difficulty of applying the Salmond test to intentional torts. As stated by the Court, at para. 26: Intentional torts raise even more difficult problems, particularly where they are not done in furtherance of employer objectives and involve morally offensive behavior that no employer is likely to authorize or to be seen to have authorized. [22] Huddart J.A. posited a test based on the nature of the authority conferred on the employee and the consequent probability of wrong occurring. Newbury J.A. concluded that something more than such a conferral of authority is required for vicarious liability to arise. In her view there should be a close connection between the employee's authorized duties and his wrongful acts, with the sufficiency of that connection depending upon the facts of each case. [23] Finch J.A. concluded that both the "conferral of authority" test and the "closeness of connection" test are appropriate and useful tools when considering vicarious liability which in his view should continue to be decided on a case by case basis. Hollinrake J.A. (concurred in by Donald J.A.) concluded that the two tests could be set side by side and that together they stand for the proposition that: In cases such as this (sexual assault) the general proposition for the imposition of vicarious liability is that there must be sufficient nexus between the duties of the employee as such and his misconduct. Whether or not there is that sufficient nexus will depend on the nature of the power conferred on the employee by his employment and the likelihood that that conferral of power will make probable the very wrong that occurred. He went on to state: I emphasize that this latter consideration does not, and as a matter of law, cannot include those cases where all that can be said in support of a finding of vicarious liability is that the employment and its corresponding duties provided the wrongdoer with the opportunity to commit the wrongful act. [24] In the case at bar Plint, as a dormitory supervisor, had the authority of a parent conferred upon him. He was not just a person into whose care children were placed for a relatively small portion of the day. He awoke the children and ensured they were readied to go to school. He met them when they returned from school, supervised their homework and in all respects functioned as their parent at AIRS. [25] As stated by Huddart J.A. in describing Curry in the Children's Foundation case "When the appellant conferred the authority of a parent on Mr. Curry, it put him in the place of the most powerful person a child can know - - that of a parent upon whom the child is totally dependent." This description equally applies to the place Plint occupied in the lives of the plaintiffs while they were at AIRS. [26] The Newbury J.A. "connection test" is also met. This is not a case where Plint developed relationships with the children at AIRS and then assaulted them either at some distance from the school or during a vacation period away from the school premises. These assaults virtually all occurred in the residential school in Plint's office or adjoining bedroom located on the second floor of AIRS. In my view this case features a very close connection both temporally and spatially between where Plint carried out his duties as a dormitory supervisor and his acts of wrongdoing. [27] Accordingly I conclude that when the facts of this case are considered in the context of the tests outlined by the Court of Appeal in The Children's Foundation case, the employer of Plint is vicariously liable for the sexual assaults he committed. WHO EMPLOYED PLINT? [28] The Church and Canada each contend that the other was the sole employer of Plint. It is clear that Plint reported to the principal of AIRS. The principal created the rules Plint was to follow and he had complete control over and responsibility for Plint's day to day activities. The principal determined Plint's salary within the appropriate budget category approved by Canada. The principal had the authority to hire and fire dormitory supervisors: this is just what Andrews did after his wife reported to him seeing one of the children in Plint's room which contravened the rules Andrews had put in place. [29] However in my view it is not accurate to characterize the principal as the "employer" of Plint. The principal was the chief executive officer at AIRS. If incorporated, AIRS would have been the employer of Plint. However AIRS did not exist as a legal entity and hence it is necessary to look beyond AIRS to the Church and Canada to try to answer the real question: Which one of the Church or Canada can be properly characterized as the directing or controlling entity of AIRS and consequently responsible in law for the conduct of Plint who was controlled and directed on a day to day basis through the office of the principal? [30] The resolution of this issue requires an analysis of the historical relationship between the Church and Canada with respect to AIRS and a consideration of the applicable legal principles of vicarious liability. FEDERAL LEGISLATION REGARDING INDIAN RESIDENTIAL SCHOOLS [31] Pursuant to s. 91(24) of the Constitution Act, 1867, 30 & 31 Vict., c. 3 the responsibility for legislating on behalf of "Indians and Lands reserved for the Indians" was assigned to the Federal Government. [32] The Indian Act, R.S.C. 1927, c. 81 contained the following provisions regarding the provision of schools for Indian children: (a) Section 9 provided that the Governor General in Council "may establish industrial or boarding schools for Indian children"; (b) Section 9(4) provided that the Superintendent General "shall have the power to make regulations prescribing a standard for the buildings, equipment, teaching and discipline of and in all schools and for the inspection of such schools"; (c) Sections 10(1), (3) and (4) contained provisions making mandatory the attendance of Indian children between the ages of 7 to 15 at such day, industrial or boarding schools; for the appointment of truant officers to enforce attendance with provision for charges to be brought against any parent or guardian who failed to cause any Indian child to attend school as required; (d) Section 10(2) provided that: "Such schools shall be the nearest available school of the kind required, and no Protestant child shall be assigned to a Roman Catholic School or a school conducted under Roman Catholic auspices and no Roman Catholic child shall be assigned to a Protestant school or a school conducted under Protestant auspices". [33] Minor amendments were made to the Indian Act in 1930 and 1933. The statute was redrafted in 1951 and the provisions in this version of the Act remained largely unaltered through the remainder of the years relevant to these proceedings. That statute (R.S.C. 1951, c. 29) provides with respect to schools: S. 113. The Governor-in-Council may authorize the Minister, in accordance with this Act, (a) to establish, operate and maintain schools for Indian children, (b) to enter into agreements on behalf of Her Majesty for the education in accordance with this Act of Indian children, with ...... (v) a religious or charitable organization. S. 114. The Minister may (a) provide for and make regulations with respect to standards for buildings, equipment, teaching, education, inspection and discipline in connection with the schools, (b) provide for the transportation of children to and from school, (c) enter into arrangements with religious organizations for the support and maintenance of children who are being educated in schools operated by those organizations, and (d) apply the whole or any part of monies that would otherwise be payable to or on behalf of a child who is attending a residential school to the maintenance of that child and at that school. [34] Sections 115, 116 and 118 contain provisions concerning the following: the mandatory attendance of Indian children between the ages of 6 and 16 at school; the appointment of truant officers to enforce attendance; charging parents or guardian for not ensuring the attendance of an Indian child at school and, empowering a truant officer to take into custody an Indian child and to convey the child to school "using as much force as the circumstances require." [35] S. 115(1) requires that "every Indian child who has attained the age of seven (7) years shall attend school" and s. 117 provides: "Every Indian child who is required to attend school shall attend such school as the Minister may designate." S. 117 also provides that Indian children who have Protestant parents shall attend a school conducted under Protestant auspices and those with Roman Catholic parents shall attend a school conducted under Roman Catholic auspices, all unless the parents otherwise agree in writing. These requirements have been in the Act since 1894. HISTORY OF AIRS [36] In 1891 the Presbyterian Church in Canada founded AIRS on land owned by the Church. Until 1911 the Church operated the school with periodic financial assistance from Canada. In 1911 the Church and Canada entered into an agreement formalizing their arrangement. The Church agreed to manage the school in accordance with regulations and standards prescribed by Canada. Canada proved the funding for the operation of the school on a per capita basis. Although that agreement expired in 1916, AIRS continued to operate under the general principles set out in the 1911 contract with minor variations in, for example, the rate of payment. [37] In 1917 a fire destroyed the main buildings of AIRS. The Presbyterian Church proposed and Canada agreed to pay for the construction of a new school and residence. The Church conveyed to Canada 16 acres of land on which the new school was to be built and the remainder of the AIRS property of some 160 acres comprised of buildings and cultivated farm land was retained by the Church. On December 1, 1920 the new school now owned by Canada was opened. [38] In 1925 the United Church was formed and it took over the Presbyterian Church's role with AIRS. [39] The AIRS building burned again in 1937 and was rebuilt at Canada's expense. The new school reopened in 1940 and the arrangement between Canada and the Church for the operation of AIRS continued. [40] In the late 1950's Canada changed its method of funding residential schools from a per capita basis to a cost-controlled basis. In 1962 it entered into a new agreement with the Church for AIRS (as it did with other religious organizations for other residential schools in Canada). Classroom instruction at AIRS with the exception of kindergarten ceased in 1965 after which all the students were bussed daily to attend schools in Port Alberni. In 1969 Canada assumed responsibility for the administration of AIRS which continued to operate until 1973. THE 1911 AGREEMENT [41] Churches, Catholic and Protestant, began the operation of Indian Residential Schools in Canada in the late 1800's. An Order in Council was passed promulgating regulations governing the operation of residential (and industrial) schools. The buildings were to be the joint responsibility of the Government and the Church management. Maintenance, salaries and other operating expenses were to be paid by the churches with assistance from the Government by way of per capita grants. [42] By agreement made April 1, 1911 between His Majesty and Reverend MacKay of the Presbyterian Church in Canada, in return for the Government paying the Church an annual per capita amount, the Presbyterian Church agreed to support, maintain and educate Indian children at AIRS in a manner satisfactory to the Minister. The Church was responsible for employing at the school qualified teachers and officers, to supply the Indian children with suitable and sufficient provisions and accommodation, to keep and maintain the buildings and premises. The school was to be managed under regulations and standards passed by Canada and the Church was obliged to permit inspection of the building and premises by Canada. This was a standard form of agreement applicable to most Indian residential schools in Canada. [43] The agreement had a five year term and it was never renewed. However after the five year expiry date the parties continued to operate under the terms of the agreement, subsequent correspondence, verbal mutual understandings and a course of conduct until the further agreement was signed in 1962. [44] This nature of this continuing relationship was demonstrated in 1940 when the Church recorded: That the operation of Indian Residential Schools is carried on under an agreement entered into many years ago between the churches and the Government; that this has not been revoked nor abrogated; and that, while the rate of payment has been varied from time to time, the churches consider the contract to be in force ... The churches believe that if and when the Government finds it necessary to vary the contract, due notice should be given, consultation with the churches should immediately take place and any cut put into operation only after this. [45] The Church says Canada's position is described in the following statement made by the Superintendent of Welfare and Training Mr. Hoey: A number of years ago (1911) the Government and the Churches entered into an agreement with respect to the operation of residential schools. This agreement expired in 1916 and was not renewed. I am not of the opinion that it is necessary to enter into a formal agreement with the Churches at this time, but I do suggest that an understanding be reached with the Church Authorities whereby steadily increasing emphasis will be placed on the importance of vocational instruction at residential schools. [46] While the five year term of the 1911 agreement may have lapsed in 1916 without any formal renewal, it is clear that the parties had a continuing relationship at AIRS. This continuing relationship was presumably generally satisfactory to Canada since Hoey saw no necessity to enter into a formal agreement. The only change he appears to have been considering was to increase the emphasis on vocational instruction. BACKGROUND TO THE 1962 AGREEMENT [47] Prior to 1957 funding for the residential schools had been provided by Canada on a "per capita grant" basis. In 1957 Canada changed this to a "controlled cost" basis in which block funding was provided subject to certain maximum amounts set for each expenditure category. The 1962 agreement entered into by the parties reflected this change. This form of agreement was also used for other Indian residential schools in Canada. [48] The new controlled cost system of financing was implemented by Canada on January 1, 1957 after some 18 months of negotiations with church representatives, including Reverend Joblin from the United Church. On February 26, 1957 Canada reached an agreement in principle with the churches and further negotiations continued at a June 6, 1957 meeting. [49] On May 11, 1959 the church representatives met with Canada and agreed that new formal agreements ought to be entered into. A draft was prepared and circulated by Canada. At a further meeting between the parties on December 16, 1959, the draft was reviewed and at the end the Chairman noted that the agreement would be completely redrafted "in accordance with the discussions and that the revised draft would be sent out to the church denominations for their comments." [50] A further clause by clause review was conducted at a May 1, 1961 meeting. On June 22, 1962 the 1962 Agreement was signed by Canada and the Church. [51] The Church says that the terms of this agreement were essentially dictated by Canada. While it is clear that Canada took the steps it considered necessary to ensure that the text of the agreement complied with Canada's requirements, it is also clear that there were at least ongoing discussions with the Church (as well as other Churches) with respect to the terms of the agreement. And, of course, ultimately the Church elected to execute the agreement. TERMS OF THE 1962 AGREEMENT [52] As the Presbyterian Church had been in 1911, the United Church in 1962 was designated the management of AIRS and was referred to as the "Management" throughout the agreement. [53] The following clauses are the material provisions in the 1962 agreement: 1. The management shall nominate a person for appointment as Principal or officer-in-charge of the school, (hereinafter called "Principal") who shall, upon appointment by the Management, be responsible to the Management for the operation and management of the school, but no such person shall be appointed Principal by the Management without the prior approval of the Minister in writing. 2. The Management shall (a) operate and manage the school in accordance with such rules, regulations, directives and instructions that may be made or issued by the Minister from time to time, 4. The Management shall be responsible to the Minister for the operation and management of the school. 6. The Management shall employ in the school a competent domestic staff. 17. The Minister shall consult with the Management from time to time with respect to all matters pertaining to the operation and management of the school. 25. The Minister shall, subject to consultation with the Management, assign a teaching staff to the school. 26. Where the Management is of the opinion that the circumstances warrant a suspension of any member of the teaching staff, it may suspend such teacher. A full report shall be made to the Crown which shall determine what action is to be taken. 31. The Management shall not assign this Agreement without the written consent of the Minster. 36. The Management may authorize the Principal or any of its officers to perform and exercise any of the duties, powers and functions that may be or are required to be performed or exercised by the Management under this Agreement. THE PRINCIPAL/ADMINISTRATOR OF THE SCHOOL [54] Under the 1911 agreement the Presbyterians agreed to hire all staff for AIRS including the principal. Under the 1962 agreement the Church selected the principal, forwarded the nomination to Canada and if it was accepted, hired the principal. However Canada's approval of the Church's selection as a pre-condition to the appointment of the principal pre-dated the 1962 agreement. This procedure was followed for the appointment of A.E. Caldwell in 1944 and J. Dennys in 1958. [55] John Andrews similarly was appointed as principal of AIRS by the Church after it received Canada's approval. He was recruited in May or June of 1962 by George Jamieson, a local Church elder and a member of the Comox-Alberni Presbytery Advisory Committee which met periodically with the Principal of AIRS. He asked Andrews to submit an application. Andrews did so. The Committee interviewed Andrews and recommended him for the position to the Board of Home Missions of the Church. That Board had the responsibility within the Church for the Indian residential schools. On June 19, 1962 Canada approved Andrews for the position and he was appointed by the Board of Home Missions effective July 15, 1962. [56] Andrews testified that he considered himself, as principal, as being in the place of the children's parents and that as soon as the children were signed into AIRS they came under his care and responsibility. He understood he was the legal guardian of the children. THE PRINCIPAL AND THE CHURCH/CANADA ison Both the 1911 and 1962 agreements are silent as to which party had the right to dismiss the principal. None were ever so dismissed from AIRS. When Reverend R.C. Scott resigned as principal in 1944, his resignation was submitted to and accepted by the Church. However it appears that Canada was considering removing him from the principalship prior to his decision to resign. [58] At trial Andrews testified that he believed that since the Church through Reverend Joblin had hired him, "I guess he could have fired me." He also testified that Canada could not have dismissed him before it took over all management of AIRS in 1969. However Andrews also said that had Canada had a serious enough complaint about his performance or the performance of any other principal, it could have used its good offices and its financial control to have the Church discipline or fire him. He also testified that he sometimes felt he had "two bosses - one was the United Church and one was the Federal Government." [59] On the evidence in this case it is clear that the principal communicated regularly with both the Church and Canada. [60] Andrews testified that Reverend Joblin, the Assistant Secretary of the Board of Home Missions and the man responsible for the Church's involvement in the Indian residential schools was his supervisor and the person he reported to directly. Andrews believed that Joblin had the "final say" on his salary. He says that Joblin did not always conform to Canada's financial guidelines, sometimes reducing Andrews' salary to find funds for other purposes at AIRS. Andrews also had regular meetings with the Church's local Advisory Committee which provided advice to the principal. [61] Keith Johnson was the vice-principal at AIRS from July 1962 to March 1966. He testified that he was hired by Reverend Joblin and that it was always Johnson's understanding that the Church was running AIRS with the assistance of Canada supplying the funding. [62] The principal of AIRS was also required to provide the following reports to Canada: (a) Principal's monthly report including statistical information related to enrollment, attendance and absenteeism on the part of the students. These reports also included information on visits to the school by Federal and Provincial officials, parents and others. The reports also required the principal to report: incidents of corporal punishment, the absences of the principal and teachers and other matters. They were signed by the principal or his delegate - the senior teacher or the vice- principal. (b) Quarterly returns containing a listing of all students at the school for a given quarter, their date of birth, their grade and the number of days they were present during the reporting period, signed by the principal. ROLE AND PRESENCE OF THE CHURCH IN AIRS [63] At all times material to this action the Board of Home Missions as the administrative arm of the Church was responsible for the Church's involvement in the Indian residential schools. From 1955 to 1970 Reverend E. Joblin, the Assistant Secretary of the Board of Home Missions was responsible for liaison between the Church and Canada and he represented the Church at meetings with Indian Affairs officials. The Church's witness John Siebert described Joblin as the "most knowledgeable person in the Church with respect to the Church's involvement in Indian residential schools." [64] Reverend R. Henderson and Reverend L. Sieber were B.C. Superintendents of the Board of Home Missions. They were responsible at the provincial level for Church involvement in Indian residential schools including AIRS. The Board of Home Missions authorized local presbyteries to establish Advisory committees to, among other things, ensure that Board policies regarding Church residential schools were carried out and to advise the provincial superintendents of the Board on matters relating to the operation and program of the schools. An advisory committee in respect of AIRS was formed in 1961. [65] The Church was involved in all aspects of the operation and management of AIRS. It recruited and hired the principal after approval from Canada. The Church supervised the principal and it periodically inspected the school. It hired the Church workers at the school directly. The Church attended to the religious education of the students. [66] In 1993 as part of its Brief to the Royal Commission on Aboriginal Peoples, the Church described its role in Indian residential schools as follows: Government generally set policy and the church administration created the day-to-day atmosphere and activity in the schools. The churches were implementing agents of the federal government in the management of the schools, nominating the Principal/administrators, who had to be approved by the federal government and recruiting other personnel... In the United Church, supervision of the school operations was carried out either by the Board of Home Missions (or an earlier equivalent) or the Women's Missionary Society... [67] Prior to 1949 the Church hired all employees; after that Canada hired the teaching staff. In a 1960's position paper titled "Government-Owned Residential Schools Operated by the Churches Under Agreements Between the Churches and Indian Affairs" the Church described the relationship in the following terms: The Church has nominated the principal or administrator, subject to the approval of I.A.B. [Indian Affairs Branch], and the principal in turn has employed (and discharged) other staff members. The Church has therefore been the employer, and all other staff members have been considered church employees. The Church later in the document described the employees as "in fact, if not in name, Crown employees." [68] In a 1968 letter to Canada concerning the possible takeover of the Church schools by Canada, Reverend Joblin repeatedly made reference to the School workers as Church employees: I would point out that neither the administrators nor their staffs have shown any disposition to request such a move or an opportunity to be given bargaining rights of any kind. So far they have preferred to remain as church employees. [69] The Church had a pension plan for qualified lay employees of the school, including dormitory supervisors, although the employer's contributions were paid by Canada. As set out in a policy document drafted by Andrews, the principal's authority to dismiss employees was subject to review by the Church and dismissed employees could appeal to the Church Advisory committee. [70] The Church inspected the school annually. It signed the 1962 agreement for the operation of the school. It received an administrative assessment of $1.00 per pupil per quarter. The Church guaranteed AIRS overdraft negotiated with a local bank and set a limit to the school's line of credit. Any "considerable expenditures" contemplated by the principal were to be authorized by the Church. [71] Although virtually all of the school's budget was funded by Canada, the Church did make periodic small grants to AIRS to assist in the school's operation. The Christian education at the school was, for the most part, also provided at the Church's expense. ROLE AND PRESENCE OF CANADA IN AIRS [72] Canada funded AIRS pursuant to its statutory duty and agreements with the Church. It effectively controlled the school budget and as a consequence controlled to a great extent the quality of the education and care provided to the children resident at AIRS. [73] It was Canada's policy to remove Indian children from their homes and home communities when considered appropriate by Indian Affairs. Canada also controlled the admission of children to the Indian residential schools including AIRS. [74] On the initiative of the local Indian agent or a parent or guardian of a child, an application to residential school was completed and signed by either the local Indian agent or parent or guardian. It was then sent to the Regional Superintendent of Indian Schools for approval. Before granting approval, the Regional Superintendent confirmed with the Principal of the school designated in the application form that there was space available for the student at the school. The application forms designated the Principal as the student's guardian until Canada took over the operation of the school in 1968. [75] Andrews' evidence is consistent with the documentary evidence that Canada controlled all aspects of the admission and discharge of students, including arrangements for care of the students over holiday periods. All costs of transporting the students to and from the school were borne by the Crown. It was Andrews practice to involve a local Crown social welfare agency in the case of runaways. [76] Andrews testified that there were many and varied inspections of AIRS conducted by various Crown officials and agencies. The District Superintendent of Schools would visit approximately once a month, the Regional Superintendent of Schools, once a quarter. The Regional Director of the Department of Indian Affairs would also visit from Vancouver. The Engineering staff of Indian Affairs visited and there were regular inspections from Crown fire marshals and fire inspectors. Crown employees from the Health Department came on a number of occasions and made recommendations concerning the food. Andrews says that during his tenure as principal, Mr. Davey, Chief, Education Division, Department of Indian Affairs, came out from Ottawa perhaps three or four times. [77] In addition to the regular reports from the principal referred to in para. 62, Canada required guidance counselors to submit "Counselor's Monthly Reports" containing statistical information on the counselor's case load and any observations the counselor might wish to make as to work performed during the previous month. [78] Canada set standards and issued instructions and regulations for the operation of the school. The 1911 agreement required the Presbyterian Church to operate the school according to standards and regulations issued by Canada. [79] In 1953 Canada issued detailed instructions as to the operation of the Indian residential schools cited as "The Indian Residential School Regulations". These were the first non-financial regulations regarding residential schools passed by Canada. Regulation 13 required the principal to maintain standards acceptable to Canada in respect of, inter alia: (a) Number and qualifications of staff; (b) the diet; (c) clothing; (d) bedding and accommodation of the students; (e) counseling and guidance; and (f) classroom instruction. [80] Regulation 14 made the principal responsible for eight different areas of the operation of the school including: (g) the maintenance of the physical plant; (h) assignment of duties and supervision of the domestic staff; (i) provision of measures to ensure the "health, safety, welfare and educational progress" of the students; and (j) the preparation and dissemination of rules for the functioning of the school. [81] Canada ensured compliance with the 1953 Regulations by reviewing and monitoring the performance of the principals at Indian residential schools through audit reports, inspection reports and by reviewing the standard forms the Crown required to be submitted to it. These regulations remained in place after the 1962 agreement. [82] In 1960 Canada published the "Indian Affairs Branch Field Manual". [83] Various directives issued from time to time by Canada including the 1953 Regulations and the Policy Manual were not directed to the Church, but rather were sent to residential school principals including the principal or AIRS or to Crown officials. A review of these documents shows the detailed nature of the oversight Canada was exercising. [84] The Branch Field Manual covered virtually all aspects of the day to day operation of a residential school such as AIRS. These included: (a) the policies for the admission of children with reference to the religious denomination of the parent; (b) directions as to the discipline of children at the AIRS; (c) detailed listing of the specific items of classroom supplies, playground, sports and audiovisual equipment; (d) requirements for the principal to submit reports to the Crown; (e) directions concerning the purchase by the Crown of all furniture, machinery, equipment and vehicles pertaining to the operation of the residential school; (f) provision that the Department is responsible for all repairs to the school; (g) detailed instructions of the responsibilities and reporting requirements of Crown officials in the education department in connection with residential schools. [85] The Manual also contains detailed financial instructions listing the authorized types of expenditures that could be made from the residential school's operating funds provided by Canada: (a) annual bonus to non-teaching staff; (b) employer's contribution to pension plan; (c) employer's contribution to unemployment insurance and Worker's Compensation; (d) transportation costs of pupils; (e) extracurricular activities; (f) food and clothing; (g) capital items; and (h) household supplies, prayer books, hymn books, catechisms, utilities, furnishings and supplies, school supplies, students' fees, bank charges, insurance, municipal charges for garbage collection. [86] The degree of oversight referenced in Canada's documents was not just theoretical. Canada not only set the budget for AIRS but it also conducted detailed audits to ensure that the School's expenditures were in accordance with Canada's policies. As an example an 18 cent overpayment in respect of the salary of a dormitory supervisor meant that the 1962 AIRS budget had to be adjusted to make up for this excess expenditure. On another occasion, the purchase of a copier was disallowed. [87] Canada also dictated, on occasion, the type of domestic staff that Andrews could hire. He testified he felt he needed the approval of Canada to hire study supervisors. His budget was limited to certain specified classes of employee which did not include study supervisors. Therefore the decision to add this category at AIRS had to be a Departmental decision. Another example was Canada's advice to the principals of residential schools that a maintenance man could be hired for residential schools provided that the person hired was "an Indian". Andrews agreed that this was an example of Indian Affairs dictating to him, as the principal, who and for what position he could hire an individual. Canada also set a recommended ratio of supervisors to pupils. [88] The importance of the education activity to Indian Affairs was also described in the Branch Field Manual in the following terms: "Education is the most important single activity of the Indian Affairs Branch." The purpose of the controlled cost system of expenditure control which replaced the per capita grant system in 1957 was referred to in these terms: The controlled cost system of financing the school is specifically designed to establish and maintain standards of supervision, food, clothing and accommodation throughout all schools. The amounts established by these regulations for the salaries, food and clothing are not intended only to place an upper limit on expenditures, but are also to indicate the level of expenditure which should be attained if basic standards are to be achieved. The established requirements will be reviewed regularly to ensure that they keep pace with requirements. [89] Canada was directly involved in employment and training at AIRS. At all times Canada could approve or decline the Church's nominee for Principal. After 1949 and until 1965, Canada hired and paid all the teachers at AIRS. Canada took the initiative for and funded training programs for dormitory supervisors at AIRS. [90] Canada hired guidance counselors. One of these, Claire Hunston, was employed at AIRS from 1966 to 1971. She testified that it was part of her duties as a guidance counselor to be involved in several cases where there were allegations of sexual improprieties with respect to the children at AIRS. In one case involving molestation of a child by a dormitory supervisor, she prepared and forwarded a report to her superior at Indian Affairs; she did not report to the Church. [91] In the mid-1960's Canada took the position before the Canada Labour Relations Board that the domestic employees working in the Indian residential schools were employees of the Crown. In its submission to the Board, Canada stated: The authority to build and operate schools for Indian children belongs to Parliament under principal (24) of s. 91 of the British North America Act which gives Parliament jurisdiction over 'Indians and Lands Reserved for the Indians'. Parliament has exercised this power in s. 113 of the Indian Act which authorizes the Minister to establish, operate and maintain such schools and, with the approval of the Governor in Council to enter into agreements with various governmental bodies or religious organizations for the education of Indian children. It is, therefore, the Minister who possesses the absolute legal authority to construct and operate these schools. The minister could, if he had wished, have had these schools built and operated by the Department, but for various reasons he has instead made agreements with a number of religious organizations to operate these schools for him. THE RELATIONSHIP OF CANADA AND THE CHURCH TO AIRS [92] As stated at the outset of these Reasons, Canada takes the position that, as stated in the 1962 agreement, the Church was the "management" at AIRS, that the principal who was hired by the Church carried out this mandate and that Canada's role was limited to providing the funding and to having in place sufficient checks and reporting to ensure that public funds were spent appropriately. [93] The Church says that by controlling the funding, Canada effectively controlled every aspect of the operation at AIRS. The Church says that although it was labeled as the "management" in the 1962 agreement drafted by Canada, if one examines what was really going on, the only conclusion is that the Church was acting solely as the agent of Canada. [94] In my view what is clear is that for more than a hundred years Canada and the churches including the United Church after 1925 were jointly involved in the education of Indian children. Many of the schools were originally founded by the churches as part of their missionary work. By 1892 Canada was providing per capita grants and by 1894 Canada's responsibility for the education of Indian children was entrenched by statute. [95] The joint character of this relationship is reflected in many of the communications. In 1929 the Assistant Deputy Minister of Indian Affairs wrote as follows: I have your letter...asking certain questions in connection with Indian schools on Vancouver Island. There are five residential schools and seven day schools for the Indian children on the Island. All are financed by grants from this Department, and all, with the exception of one day school, are managed by one or other of the churches that are co- operating with this Department in the education of Indian children. [96] "Co-operation" and a "co-operative spirit" are common themes in the documentary history of the relationship between the churches and Canada. In 1923 the Deputy Superintendent of Indian Affairs admonished the Indian Commissioner of B.C. when he said there was "no intention of altering cooperation between the government and religious denominations in Indian education." [97] In a 1935 meeting between Canada and the "Committee of Churches Cooperating with the Department of Indian Affairs in Indian Education", Canon Gould expressed the hope that the "cooperative spirit" that characterized the relationship might be renewed. That same Committee in a brief to Minister Crerar presented in 1943 said, in urging Canada to provide more funding: [Indian education] is a joint undertaking carried on under an agreement between the Government and the Churches... The operation of Residential Schools is a partnership between the Government and the Churches. [98] In 1943 the Churches made another joint presentation to Minister Crerar on the ongoing problems of financing the Indian residential schools. In that presentation they reminded Canada that they were "partners" in the "great enterprise" of the schools and that the churches were involved in Indian education as part of their "missionary and humanitarian program" before the Government assumed any responsibility. They went on as follows: This is a joint undertaking carried on under an agreement between the Government and the Churches, which can shortly be summarized in this way: The Churches agree to provide teachers and staff necessary to look after the needs of the children admitted to the schools by authority of the Government. These needs include moral and religious instruction, teaching, physical needs (food, clothing, shelter, etc.) - all those up to the standard required by the Government. The Government provides the buildings and physical properties necessary and pays each pupil a sum agreed on for each school. [99] The United Church continued to view the relationship as that of a partnership as late as October 27, 1993 when it submitted its brief to the Royal Commission on Aboriginal Affairs stating that it had a partnership relationship with Canada with respect to Indian education generally and the residential schools in particular: The Residential School period coincides with the general partnership which existed between the established Christian churches and the Canadian Government in the process of nation-building, particularly the expansion of European-based settlement of the west and north. Church participation could be described as an inadvertent and unfortunate part of that shared nation-building project. Since the 1960's, the churches, including the United Church, have moved a considerable distance from this partnership role. The Residential School experience clearly indicates that an uncritical partnership with government holds great dangers for the churches. [100] The records disclose periodic meetings in the 1950's and 1960's between the United Church and Canada to discuss the following matters related to the operation and management of AIRS: (a) salary schedules and number of employees; (b) food and clothing budgets; (c) depreciation allowances; (d) building repairs; (e) capital expenditures; (f) financial instructions and regulations; (g) farm operations; (h) pensions; (i) staff training; (j) room and board deductions for resident staff; (k) religious furnishings and supplies; (l) policies relating to the admission of students; and (m) financing the schools generally. [101] In a 1968 submission to Treasury Board requesting funds for the training of dormitory supervisors (prior to the takeover of AIRS by Canada in 1969) Canada stated: The Indian Affairs Branch operates 62 residential institutions throughout Canada providing accommodations to approximately 9,000 Indian students. [102] Both Canada and the Church hired some School staff directly: Canada hired the teachers and guidance counselors (after 1949); the Church hired the Christian Education workers. Both Canada and the Church were involved in the appointment of the principal, who in turn hired the domestic workers. Both parties received reports form the principal and both inspected AIRS. Both Canada and the Church owned school assets: Canada owned the buildings and the land on which they were erected and most of the contents; the Church owned the farm land and buildings. [103] Canada controlled admissions but consulted with the Church about the admissions and policies. Standards and regulations for the operation of AIRS were established by Canada and communicated directly to the principal after some consultation with the Church. Canada set up and funded training programs for dormitory supervisors but the Church participated in the development of those programs. [104] I conclude that Canada did not effectively transfer all aspects of the operation of AIRS to the Church under the agreements and the practice both parties followed. Canada did not limit its communications to the Church with the expectation that the Church would take whatever steps it considered appropriate to forward these on to the principal at AIRS. Rather it is clear that Canada issued many instructions regarding the operation of AIRS directly to the principal. This is inconsistent with the purported transfer of all management responsibility to the Church as set out in the 1911 and 1962 agreements. Simply put, what the agreements say was not what the parties put into practice. [105] I also conclude that Canada was not the sole controlling entity of AIRS. Andrews considered Reverend MacKay to be his "boss". The Church's involvement at AIRS was not limited to simply carrying out the expressed requirements of Canada. The Church provided Christian education and it communicated frequently with the principal concerning a wide range of matters at the school. While many of the communications featured matters which could only ultimately be dealt with by Canada, it is clear in my view that the Church nevertheless had a role beyond that of being merely the conduit of money and messages between the principal and Canada. In fact to be found in the documents concerning the historical relationship between Canada and the Church are many references to their "partnership" and to this "joint undertaking". [106] In its submissions the Church conceded that there are various historical documents within the Archives at the Church which use language "suggestive of a management or controlling role by the United Church in the AIRS". However the Church says that these statements were not made in the context of an attempt to apply a legal definition to the role of the Church and it says that none of the individuals using such language were qualified by training to arrive at any such legal definition. [107] However the words which the parties used to describe their historical relationship, although not conclusive on the point, must nonetheless be weighed when considering the status of the Church and Canada. In my view it is appropriate to consider terms such as "joint enterprise" and "partnership" found in the documents written by the parties not in their legal sense, but rather having regard to their ordinary meaning. When I do this I conclude that these words selected by the parties themselves accurately describe their historical relationship with respect to AIRS. LAW ON VICARIOUS LIABILITY [108] The doctrine of vicarious liability is described by Professor Atiyah in The Law of Torts (London; Butterworths, 1967) at p. 1: Vicarious liability in the law of tort may be defined as liability imposed by the law upon a person as a result of 1) a tortious act or omission by another, 2) some relationship between the actual tortfeasor and the defendant whom it is sought to make liable, and 3) some connection between the tortious act or omission and that relationship. In the modern law there are three and only three relationships which satisfy the second requirement of vicarious liability namely that of master and servant, that of principal and agent, and that of employer and independent contractor. [109] Vicarious liability is the imposition of liability without fault. It is entirely dependent upon the relationship between the wrongdoer and the person or entity to whom a party seeks to attribute vicarious liability. The ultimate question for determination in this phase of the trial is, under the doctrine of respondeat superior, who bears the vicarious responsibility for assaults committed by Plint against the plaintiffs while they were students at AIRS. [110] In sexual assault cases when determining this question, the Court will focus on the total and actual relationship between the parties. (C.A. v. Critchley (1997), 35 B.C.L.R. (3d) 234 at 283 -284 (S.C.)). [111] When considering vicarious liability the Courts are reluctant to rely on only one test. In Odin v. Columbia Cellulose Co. Ltd. (1967), 66 D.L.R. (2d) 278 at 281 (B.C.S.C.) this Court held: ...there is no single test and the whole of the circumstances must be considered to determine the relationship between the parties. [112] An example of this broad analysis is seen in Re Nelson et al. v. Gubbins (1979), 106 D.L.R. (3d) 486 (B.C.S.C.); affirmed on appeal (1981), 122 D.L.R. (3d) 340 (B.C.C.A.). In Gubbins a Human Rights complaint was made when applicants for rental accommodation were denied because they were Indians. The matter came to the Supreme Court on a stated case. Mrs. Gubbins managed the residential complex and had refused the applicant. The issue was who employed her. Gubbins was "employed and paid" by the owner of the townhouse complex; the appellant rental agent was responsible for the administration of the complex and gave instructions to Gubbins on a day-to-day basis. [113] In finding that the rental agent was Gubbin's employer, Taylor J. held that the existence of a master-servant relationship or a so-called contract of service is not dependent on the right either to employ or discharge, nor on the payment of the servant's wages being the responsibility of the alleged master. In Taylor J.'s view the present law: ...places emphasis not on the right to hire and discharge and the duty to pay wages, but on control of the method of doing the work, as pointing to the servant's master. He referred to the statement of Lord Thankerton cited with approval by the Alberta Court of Appeal in Marine Pipeline and Dredging Ltd. v. Canadian Fina Oil Ltd. (1964), 46 D.L.R. (2d) 495 to the effect that: ...the Principal requirement of a contract of services is 'the right of the master in some reasonable sense to control the method of doing the work' and that this factor of 'superintendence and control' may be decisive of the existence of the relationship. He went on to uphold the adjudicator's finding that Mrs. Gubbins was in fact employed by the rental agent since she was accountable to the rental agent and took day-to-day directions from the agent. [114] In the case at bar I have found as a fact that the Church and Canada jointly controlled the activities of the dormitory supervisors including Plint at AIRS through the office of the Principal. The question then becomes whether two entities can be simultaneously in control of a single employee or agent, for the purposes of determining vicarious liability. [115] The question as to whether there can be more than one employer was considered in Sinclair v. Dover Engineering Services Ltd. (1987), 11 B.C.L.R. (2d) 176 (S.C.). This was a wrongful dismissal case. Sinclair was held out to be an employee of Dover although he was actually paid by Cyril Management Ltd. which handled Dover's payroll. Cyril billed Dover each month for the gross amount of the employees' wages plus an administration fee. It then used this money to pay the employees, make remittances to governments and keep a certain profit. It also leased office furniture and cars to Dover. [116] At trial the judge "lifted the corporate veil", finding that Dover and Cyril were essentially owned by the same people and hence jointly and severally liable for damages for wrongful dismissal. On appeal the Court of Appeal agreed with the result but not the analysis. Wallace J.A. speaking for an unanimous Court, decided that it was not necessary to "lift the corporate veil" and that the interrelationship between the two companies was not relevant. He stated: My opinion differs in some respects from the rationale expressed by the learned trial judge as to the relevance of the interrelationship of the various corporations referred to in his reasons for judgment. In my respectful opinion there is no need to concern oneself with the concept of "lifting the corporate veil" or with the vicarious responsibility of one company for the acts of another, since I consider the issue to be one of determining the company or companies with which the respondent Sinclair had a contract of employment. It must be kept in mind that one may be employed by a number of companies at different times for different purposes, or even at the same time. This is a matter of agreement reached between the employee and his respective employers and as long as they are aware of the employee's various activities or roles it is a matter with respect to which the parties can reach what they consider the most commercially convenient arrangement (p. 299) ... In my opinion, all of the circumstances of this case clearly supports the inference that the plaintiff was employed under a contract of service with Cyril Management Ltd. and Dover Engineering Services Ltd. both of whom exercised control over Mr. Sinclair and his affairs. This arrangement, with which the plaintiff, Mr. Sinclair acquiesced, was devised because of the various beneficial aspects to the employer companies. They cannot, in my opinion, now deny its existence or the responsibility which it imposes upon them respecting their employee and the notice to which he is entitled upon dismissal. (p.301). [117] As stated by Atiyah on Vicarious Liability in the Law of Torts at p. 149: There is, of course, no reason why two employers should not jointly employ a servant, and this would normally be the case with the employees of a partnership. Here the servant is the servant of each partner and of all jointly, and they are all jointly and severally liable for the servant's torts. [118] This proposition was applied by the Court of Appeal in Sinclair. [119] Although there was no formal partnership in the case at bar, there was in my view at the very least an informal one. I have found that each of the parties exercised control over the activities of the dormitory supervisors through the office of the principal. "Partnership" was the word used by each of the parties from time to time to describe their relationship and in my view it was accurate. The decision in Sinclair was based on a finding that both companies exercised control over the employee and that both companies benefited from the arrangement. The facts in the case at bar are similar and hence support a conclusion that both Canada and the Church are vicariously responsible for Plint's activities. CANADA'S VICARIOUS LIABILITY [120] Canada argues that the traditional "control" test ought to be used in the analysis as to who was Plint's superior and hence liable for his wrongful acts. Canada says that the Church selected and, with Canada's approval, hired the principal who directed Plint's activities. Canada says that as stated in the 1962 agreement, the Church was in fact the "management" and hence is the entity vicariously responsible for Plint's activities. It says that the Church had a great degree of freedom and autonomy in fulfilling its contractual obligations to the Crown and that the principal, as representative of the Church, had a high degree of control over Plint. Therefore says Canada, vicarious liability cannot flow through the Church to Canada. [121] However I do not think it accurate to characterize the principal as the representative of the Church alone. For the reasons earlier set out I consider that both the Church and Canada were directly involved with and exerted effective control over the principal's activities in the furtherance of their joint and several objectives. [122] Canada says that it is appropriate to "look upwards" to define the employer and that when one does so, it is clear that the employer was the Church. Canada says that the essential question to be asked is "Which of the two entities controls the method in which the wrongdoer performs his work or duties?" Canada also emphasizes de jure rather than de facto control. [123] However when one "looks up" in this case, one sees not only the terms of the 1962 Agreement defining the Church as the "Management" as stressed by Canada, but also the provisions of the Indian Act which casts a statutory duty on Canada for the education of Indian children. This is not a case where the Church was hired as an independent contractor and then left to manage the school subject only to periodic overview. The direct communications that passed between Canada and the principal are inconsistent with that type of relationship. [124] In this case, Canada exercised the degree of control over the principal and over the activities at AIRS necessary to support a finding of vicarious liability in law. It was not simply a de facto control arising from the direct communications that passed between the Crown and the principal; nor was it the de jure control flowing from the provisions of the Indian Act. [125] Rather, it was a combination of both. Canada's control over the manner in which Plint discharged his duties flowed from Canada's obligations under the Indian Act coupled with the purported exercise of that duty by issuing directives directly to the principal of AIRS in the form of correspondence, regulations, budget reviews etcetera. In my view this degree of control distinguishes this case from cases such as Mochinski v. Trendline (1997), 220 N.R. 148; and Lewis and Holt v. B.C. (1997), 220 N.R. 81 in which the Crown was relieved of vicarious (although not direct) liability because the Crown did not exercise the degree of control necessary to bring the independent contractor's employees into the ambit of service of the Crown. [126] Accordingly I conclude that under the "looking upward" control test it proposes, Canada had the authority to and did in fact exercise control over the manner of execution of the activity in question and hence is vicariously liable for the wrongful acts of Plint. THE CHURCH'S VICARIOUS LIABILITY [127] The Church says that more than just "control" must be examined. It relies on the more complete test set out by the Privy Council in Montreal v. Montreal Locomotive Works Ltd. et al., [1947] 1 D.L.R. 161 (J.C.P.C.). That test requires the Court to examine, in addition to control, additional factors such as ownership of the tools of the business, the chance of profit and the risk of loss. [128] The Montreal Locomotives case involved a plant in Montreal that was used for war production. The issue before the Privy Council was whether the Montreal Locomotive Works Company was carrying on business on its own behalf and therefore subject to city taxes, or operating as merely a manager or agent of the Federal Government in which case no city taxes would be payable. Under their agreement Montreal Locomotive sold its property to the Crown and built at the direction and expense of the Crown a new plant for the production of war materiel. The Company was paid a fee for each item produced; quality control was at the sole discretion of the Crown which could reject any production or required it to be redone at the Crown's sole expense. In all of the contracts the company's obligations were referred to as "for and on behalf of the Government and as its agent." [129] The Privy Council specified a four-part test to be applied in determining the relationship between the parties: (a) Control; (b) ownership of the tools; (c) chance of profit; and (d) risk of loss. [130] After setting out this test the Privy Council went on to state: In many cases the question can only be settled by examining the whole of the various elements which constitute the relationship between the parties. In this way it is in some cases possible to decide the issue by raising as the crucial question whose business is it, or in other words by asking whether the party is carrying on the business, in the sense of carrying it on for himself or on his own behalf and not merely for a superior. [131] Applying the test to the facts the Privy Council concluded that the Montreal Locomotive Works was properly considered the business of the Government relying on a number of factors including the following: (a) the property, the land on which it was built, the plant and machinery all belonged to the Government; (b) the materials were the property of the Government; (c) the Corporation supplied no funds and took no financial risks; and (d) the fee payable from the Crown to the Corporation was solely as a reward for managing the undertaking, which was different from the risk of profit or loss. [132] The Church contends that there is a clear analogy between the relationship of the parties in Montreal Locomotive and the relationship between the Church and Canada in the operation of AIRS. It points out that the relationship between the parties in Montreal Locomotive included the following elements: (a) An enterprise to further a Crown purpose (the production of war materiel versus the education of Indian children); (b) The operation of the enterprise was totally financed by the Crown utilizing physical plant and equipment owned by the Crown; (c) There was a contract providing for the management of the enterprise. [133] However there are some significant factual differences between this case and the case at bar. Montreal Locomotive concerned the liability of that company for the payment of real estate taxes in circumstances in which it was neither the owner nor occupant of the premises in question within the meaning of that term as specifically defined in the Charter of the City of Montreal. In that case the Privy Council decided that the company was acting solely as agent for the Government and not for itself in the manufacture of war materiel. The premises were thus both owned and occupied by Canada and hence the company was not liable for the real estate taxes. [134] In Montreal Locomotive the contracts expressly stated that the company was acting on behalf of the Government and as its agent in all matters pertaining to the performance of the contract. The Government also agreed to indemnify the company from "all claims and liabilities of any nature whatsoever arising out of the performance of the contract and from responsibility for any failure or delay in carrying out the contract except in cases of bad faith or willful neglect on the part of the [company]." [135] In the case at bar the Church was never designated as Canada's "agent" in either contract. Neither did Canada ever agree to the type of indemnity seen in the Montreal Locomotive case. Finally the issue as to which party would have been liable for torts committed by employees did not arise in that case which had nothing to do with the issue of vicarious liability of either the Government of Canada or the company for the actions of employees in the factory. [136] However if one considers the Montreal Locomotive tests in the context of the case at bar, arguably only the "ownership of the tools" test supports the Church's position since the building and contents at AIRS were owned by Canada (leaving aside the agricultural land). [137] I have earlier made the factual finding that both Church and Canada exercised control over AIRS through the principal. The chance of profit and risk of loss factors are of questionable application when considering institutions such as the Church or Canada. However when dealing with other than private sector organizations, these Montreal Locomotive tests can perhaps be restated as the chance of advancing or the risk of diminishing the interests of the institution. [138] Canada had a statutory obligation to educate Indian children. Leaving aside the question as to whether that statutory duty was delegable, Canada nonetheless chose the Church as its instrument to fulfill at least part of its statutory obligations. This arrangement clearly advanced Canada's interests. [139] The arrangement at AIRS also served to advance the interests of the Church. Beyond the rather obvious conclusion that the Church presumably would not have continued the arrangement with Canada for over 50 years unless it was beneficial to the Church's interests, the arrangement clearly allowed the Church to advance its ministry amongst the First Nations people. It allowed the Church to provide Christian education in parallel to the secular education being provided by the teaching staff in the direct employ of Canada. [140] And so I conclude that their participation in AIRS advanced the interests of both Canada and the Church and hence the chance of profit/risk of loss tests set out in Montreal Locomotive are satisfied. To the extent that the Montreal Locomotive tests apply they support a conclusion that both the Church and Canada are vicariously responsible. [141] An alternative to the four part Montreal Locomotive test is the so-called "organization test" described by Denning L.J. in Stevenson Jordan and Harrison Ltd. v. MacDonald & Evans, [1952] 1 T.L.R. 101. In considering the "troublesome" question of the distinction between a contract of service and a contract for services, Denning L.J. said: It is often easy to recognize a contract of service when you see it, but difficult to say wherein the difference lies. A ship's master, a chauffeur and a reporter on the staff of a newspaper are all employed under a contract of service; but a ship's pilot, a taxi man and a newspaper contributor are employed under a contract for services. One feature which seems to run through the instances is that, under a contract of service, a man is employed as part of a business, and his work is done as an integral part of the business; whereas under a contract for services, his work, although done for the business, is not integrated into it, but is only accessory to it. (p. 111) [142] It has been pointed out by Professor Atiyah in his text Vicarious Liability in the Law of Torts (London; Butterworths, 1967) that the "organization test" formulated by Denning L.J. in the Stevenson case is not dissimilar to the "crucial question" framed by Lord Wright in the Montreal Locomotive case: whose business is it? [143] In my view the answer to the "organization test" or to the "whose business test" is the same. The "business" at AIRS was the "business" of both the Church and Canada. AIRS fulfilled parallel objectives: on the part of Canada to have its statutory duty under the Indian Act fulfilled by providing for the secular education of Indian children, and on the part of the Church to continue the work of the Church in ministering to its First Nations members by providing for the Christian education of the Indian children. [144] In Re Delta Parking Systems Ltd. and Township of Toronto (1964), 48 D.L.R. (2d) 130 (Ont. H.C.) the issue in question was whether Delta was carrying on its own independent business which would then be assessable by the Township of Toronto for either property or business tax. The Federal Government appointed Delta to manage and operate a parking structure at Pearson Airport in Toronto. The contract stipulated that Delta was to be the "agent" of Canada although the Court noted that this descriptor was not absolutely decisive. The parkade was owned by the Crown and it was on Crown land. The parties each supplied some of the equipment for the parkade operation. The agreement provided that the "said services to be performed by the company should in every particular, be under and subject to the control and supervision of the airport manager." [145] In Delta the Court concluded that: It would seem that the parking structure was under the full control of the Crown and that the occupation thereof by the applicant for the performance of the said services was on behalf of the Crown and was the occupation of the Crown and for the purposes of or in connection with the business of the Crown in providing parking convenience for its customers, the users of the airport and it might be added for the purpose of profit to the Crown. (p. 133) [146] The Court considered Montreal Locomotive and concluded that: The activities of the applicant in the operation of the parking services and the parking structure of the Crown, were carried on or performed by the applicant as the agent or servants of the Crown...I do not think that worker services to be performed by the applicant could be considered as being for a profit as that term is usually understood. I would not consider the fee to be paid the applicant as profit in the sense of indicating the carrying on of a business. I do not find anything in the Agreement giving the applicant the right to share in the parking fees paid by members of the public. I would not so describe the provision in the Agreement that the fee paid to the applicant is to be increased in the event that parking fees exceed a certain amount, even if such increase is a percentage of such excess. there is no evidence that the applicant can by his acts have any part in creating such excess. Such at least would be necessary to say that it was operating for the purposes of a profit. Nor was the applicant working or performing services for a gain, any more than a servant or employee working or performing services for a salary, wages, or other remuneration. Activities in the operation of the parking services and the parking structure of the Crown were carried on or performed by Delta as the agent or servant of the Crown. [147] In my view Delta turns on the Court's finding that the parking structure was under the "full control" of the Crown and that Delta had no right to profit from the business other than the fees it was entitled to receive. The Church says that the degree of control exercised by Canada in the case at bar exceeded the Crown's control in Delta. The Church points to the 18 cent overexpenditure item as an illustration of the extent of Canada's oversight. [148] However in my view the careful monitoring of the manner in which public funds are expended cannot be necessarily equated with sole control. In the case at bar if one focuses on the "total relationship between the parties" as referred to by Allan J. in Critchley, it is clear that both the Church and Canada exercised control over the activities at AIRS through the office of the principal. [149] The Church also relies on a passage in Critchley in which Allan J. concluded that: Through its funding and the direct involvement in the operations of [name omitted], the Crown controlled Critchley and determined the extent of the resources available, including staffing levels. The Crown had control over all aspects of [name omitted] including the placement of children there and the level of supervision and monitoring. (para. 226) [150] While that does support a finding of vicarious liability against Canada, it must be remembered that Critchley did not feature the type of relationship seen between the Church and Canada in the case at bar. While it does support a finding of vicarious liability against Canada, it does not provide a basis for relieving the Church of vicarious liability. CONCLUSION [151] In my view there was sufficient joint control and a co-operative advancement of the respective interests of the parties in this case that the term joint venture is apt. This conclusion is not only supported on the facts and the law, but it also coincides with the language used by the parties themselves to describe their relationship. Accordingly I conclude that both the Church and Canada are vicariously liable for the sexual assaults committed against the plaintiffs by Plint. "D. Brenner, J."