Fehringer v. Sun Media Corp.
PROCEEDING UNDER the Class Proceedings Act, 1992
Vanessa Fehringer, plaintiff, and
Sun Media Corporation, Sun Media (Toronto) Corporation and
Toronto Sun Publishing Corporation, carrying on business as
The Toronto Sun and Norm Betts, also known as Norman Betts,
 O.J. No. 2858
 O.T.C. 527
106 A.C.W.S. (3d) 701
Court File No. 00-CV-183721
Ontario Superior Court of Justice
Heard: June 21, 2001.
Judgment: July 10, 2001.
Torts -- Duty of care, particular relationships -- Fiduciary relationships -- What constitutes -- Practice -- Pleadings -- Striking out pleadings -- Grounds, failure to disclose cause of action or defence.
Motion by the defendants, Betts and Sun Media Corporation, for an order striking out certain paragraphs of the statement of claims of the plaintiff, Fehringer. The defendants argued that Fehringer's claims for breach of fiduciary duty should be struck out, as the facts alleged in the claim did not give rise to a fiduciary relationship between Fehringer and the defendants. Fehringer's claim, which she was attempting to have certified as a class proceeding, alleged that she and others were subjected to inappropriate conduct on the part of Betts during photographing sessions for the Sunshine Girl page contained in the Toronto Sun newspaper. Her claim for breach of fiduciary duty was based on Betts's position of power, authority and trust over the class while they were under his direction action and control. She alleged that they were vulnerable because of their age and sex.
HELD: Motion allowed. Nowhere in her pleadings did Fehringer claim that Betts or Sun Media undertook or had the obligation to act in the best interests of the prospective class members. Nor did Fehringer plead that she relied on the defendants to act in her best interests, or had any reasonable expectation that they would do so. Reprehensible conduct could not itself to give rise to a fiduciary duty. Fehringer's failure to allege that the defendants had an obligation to look after her interests and those of the prospective class members constituted a radical defect in the cause of action as pleaded. It was plain and obvious that her claim for breach of fiduciary duty could not succeed and those claims were struck out.
Statutes, Regulations and Rules Cited:
Class Proceedings Act.
Ontario Human Rights Code, s. 7(2), 7(3).
Ontario Rules of Civil Procedure, Rules 21.01(1)(b), 25.11.
Jeffrey Raphael and R.G. Colautti, for the plaintiff.
Paul Tushinski, for the defendants, Sun Media Corporation, Sun Media (Toronto) Corporation and Toronto Sun Publishing Corporation, carrying on business as the Toronto Sun.
Lois B. Roberts, for the defendant, Norman Betts.
The Class Action
1 The plaintiff, Vanessa Fehringer, has issued a claim against the publisher and distributor of the Toronto Sun daily newspaper (the "Sun Media defendants"), and against Norman Betts, a photographer employed by the Toronto Sun. She is seeking to have this action certified as a class proceeding under the Class Proceedings Act, 1992, S.O. 1992, c. 6 ("CPA"). The plaintiff alleges that she and the putative class members were subjected to inappropriate conduct on the part of the defendant, Norman Betts, during photographing sessions for the "Sunshine Girl" page contained in the Toronto Sun newspaper.
2 The plaintiff asserts a number of causes of action against the defendants including negligence, misrepresentation, intentional infliction of mental suffering, and occupier's liability. The plaintiff also claims that the defendants breached their fiduciary duty to the putative class members. The plaintiff further alleges that, as Mr. Betts' employer, the Sun Media defendants are vicariously liable for his actions.
3 The Sun Media defendants have brought a motion pursuant to rules 21.01(1)(b) and 25.11 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, for an order striking out paragraphs 9, 14, 16, 17, 40 and all but the first sentence of paragraph 15 from the plaintiff's statement of claim. They submit that the statement of claim discloses no reasonable cause of action for breach of fiduciary duty and the facts alleged in the statement of claim do not give rise to a fiduciary relationship between the Sun Media defendants and the plaintiff, Vanessa Fehringer.
4 The defendant Norman Betts has also brought a motion pursuant to rule 21.01(1)(b) for an order striking out all the plaintiff's claims based on any allegations of a fiduciary relationship between the plaintiff and himself, or on any allegations of a fiduciary duty owed by him to the plaintiff and breach thereof, including those contained in paragraphs 9, 10, 14 to 17, 30 and 40 of the statement of claim. He submits that the statement of claim discloses no reasonable cause of action for any breach of fiduciary duty against him and the allegations contained in the statement of claim do not give rise to a fiduciary relationship between himself and the plaintiff.
5 The plaintiff had brought a motion for an order that the defendant, Norman Betts, not be entitled to refer to or rely on any evidence, specifically the affidavits of the plaintiff, Vanessa Fehringer, and of Stan Raphael, Q.C., and the transcripts from the cross-examinations of these affiants on their respective affidavits, at the hearing of this motion to strike out portions of the statement of claim. No evidence is admissible on a motion under rule 21.01(1)(b). The defendants agreed not to refer to such evidence.
6 In short, the issue in respect of the motions at hand is whether the portions of the plaintiff's statement of claim that allege the existence and breach of a fiduciary duty should be struck out.
7 The test to be applied under motions to strike pursuant to Rule 21 is whether, accepting the facts alleged in the statement of claim as proven unless they are patently ridiculous or incapable of proof, it is "plain and obvious" that the plaintiff's statement of claim discloses no reasonable cause of action and that the action cannot succeed. "Neither the length and complexity of the issues, the novelty of the cause of action, nor the potential for the defendant to present a strong defence should prevent the plaintiff from proceeding with [her] case." Portions of a plaintiff's statement of claim should only be struck out "if the action is certain to fail because it contains a radical defect". A cause of action with some chance of success should not be struck out. See: Hunt v. Carey Canada Ltd.,  2 S.C.R. 959 at 980.
8 Moreover, the statement of claim must be read as a whole and generously, making allowances for inadequacies due to drafting deficiencies. Arguments directed to the lack of a factual underpinning for the causes of action alleged or on the issue of damages should be resolved on the evidence called at trial. See: Hanson v. Bank of Nova Scotia (1994), 19 O.R. (3d) 142 at 145 (C.A.).
9 Determining whether the moving parties have met the high threshold on a Rule 21 motion requires an examination of the principles underlying fiduciary relationships and duties. Dickson J. in Guerin v. The Queen,  2 S.C.R. 335 at 384 ("Guerin") stated:
... where by statute, agreement, or perhaps by unilateral undertaking, one party has an obligation to act for the benefit of another, and that obligation carries with it a discretionary power, the party thus empowered becomes a fiduciary. Equity will then supervise the relationship by holding him to the fiduciary's strict standard of conduct.
It is sometimes said that the nature of fiduciary relationships is both established and exhausted by the standard categories of agent, trustee, partner, director, and the like. I do not agree. It is the nature of the relationship, not the specific category of actor involved that gives rise to the fiduciary duty. The categories of fiduciary, like those of negligence, should not be considered closed. [Emphasis added.]
10 In Hodgkinson v. Simms,  3 S.C.R. 377 ("Hodgkinson"), La Forest J., writing for the majority of the Supreme Court of Canada, had occasion to discuss the principles underlying the notion of fiduciary duty. Building upon earlier Supreme Court of Canada decisions on the subject, La Forest J. set out the following conclusions at pp. 408-12:
From a conceptual standpoint, the fiduciary duty may properly be understood as but one of a species of a more generalized duty by which the law seeks to protect vulnerable people in transactions with others.
... [T]he concept of vulnerability is not the hallmark of a fiduciary relationship though it is an important indicium of its existence. Vulnerability is common to many relationships in which the law will intervene to protect one of the parties. ...
... [T]he presence of loyalty, trust, and confidence distinguishes the fiduciary relationship from a relationship that simply gives rise to tortious liability.
... [In] relationships that have as their essence discretion, influence over interests, and an inherent vulnerability ..., there is a rebuttable presumption, arising out of the inherent purpose of the relationship, that one party has a duty to act in the best interests of the other party. ...
... [There are] situations in which fiduciary obligations, though not innate to a given relationship, arise as a matter of fact out of the specific circumstances of that particular relationship. ... In these cases, the question to ask is whether, given all the surrounding circumstances, one party could reasonably have expected that the other party would act in the former's best interests with respect to the subject matter at issue. Discretion, influence, vulnerability and trust ... [are] non-exhaustive examples of evidential factors to be considered in making this determination.
Thus, outside the established categories [of fiduciary relationships], what is required is evidence of a mutual understanding that one party has relinquished its own self-interest and agreed to act solely on behalf of the other party. ...
More generally, relationships characterized by a unilateral discretion, such as the trustee-beneficiary relationship, are properly understood as simply a species of a broader family of relationships that may be termed "power-dependency" relationships. ... [T]he concept of a "power-dependency" relationship ... accurately describes any situation where one party, by statute, agreement, a particular course of conduct, or by unilateral undertaking, gains a position of overriding power or influence over another party. ...
The existence of a fiduciary duty in a given case will depend upon the reasonable expectations of the parties, and these in turn depend on factors such as trust, confidence, complexity of subject matter, and community or industry standards.
11 La Forest J. also noted in Hodgkinson, supra, at p. 409, that the three guidelines or characteristics identified by Wilson J. in Frame v. Smith,  2 S.C.R. 99 at 136, "constitute indicia that help recognize a fiduciary relationship rather than ingredients that define it." These indicia are:
(1) The fiduciary has scope for the exercise of some discretion or power.
(2) The fiduciary can unilaterally exercise that power or discretion so as to affect the beneficiary's legal or practical interests.
(3) The beneficiary is peculiarly vulnerable to or at the mercy of the fiduciary holding the discretion or power.
12 In light of the above, I am of the view that the plaintiff could seek to establish a breach of fiduciary duty in two ways. She may establish the existence of a fiduciary relationship between herself and the defendants, and that the defendants breached a resulting duty. She may also succeed in her claim by establishing that the defendants owed her a fiduciary obligation or obligations which, though not innate to their relationship, arose as a matter of fact out of the specific circumstances of their particular relationship, and that they breached this obligation. In either case, the plaintiff must establish that the defendants had an obligation to act for her benefit. As Dickson J. stated in Guerin, supra, a party's obligation to act for the benefit of another may arise by statute, agreement, or unilateral undertaking. Whether or not a fiduciary duty exists depends on the nature of the relationship, not the specific category of actor involved.
13 For purposes of this motion, I must assume that the facts pleaded by the plaintiff in her statement of claim and in the particulars provided to the defendants are true. In light of the principles set out above, has the plaintiff pleaded the material facts needed to establish a breach of fiduciary duty?
14 In para. 9 of her statement of claim, the plaintiff alleges that Mr. Betts had a fiduciary relationship with the plaintiff and putative class members. This paragraph states as follows:
The Defendant, Betts, had many privileges and benefits provided by The Sun as a result of his position there. He occupied a position of power, authority and trust over the class. By reason of his position as photographer for The Sun, and his power and authority over the class while the class members were under his direction and control, Betts was in a special relationship with the class members and in law, had a fiduciary relationship with the class members.
15 In response to requests for particulars, the plaintiff alleges that "Mr. Betts could or stated that he could or implied that he could, exercise power or discretion so as to affect the class member's interest in furthering their career and publishing their photographs." See: Tab 9, Plaintiff's Pleading Record. Furthermore, she alleges that "[c]lass members were vulnerable because of their age and sex. They were often left alone with Mr. Betts." See: Tab 8, Plaintiff's Pleading Record.
16 In para. 14 of her statement of claim, the plaintiff alleges that "[t]he Defendants owed a duty of care and had a fiduciary duty to the class. The duty is elevated to a parental duty when they are dealing with young women, such as the class."
17 Finally, in para. 16 of her statement of claim, the plaintiff states: "The duty owed to the class is fiduciary where The Sun vests powers, privileges and stature in its employee, which empowers that employee to manipulate, exploit and abuse women who might reasonably come into contact with that employee."
18 Therefore, on a broad reading of the statement of claim, it appears that the plaintiff has pleaded the existence of the indicia set out in Frame v. Smith, supra, in general terms. However, as La Forest J. stated in Hodgkinson, supra, at p. 409, they "constitute indicia that help recognize a fiduciary relationship rather than ingredients that define it." Similarly, Sopinka J. (dissenting in part) noted in Lac Minerals v. International Corona Resources,  2 S.C.R. 574 at 599 ("Lac Minerals") that "[i]t is possible for a fiduciary relationship to be found although not all of these characteristics are present, nor will the presence of these ingredients invariably identify the existence of a fiduciary relationship." [Emphasis added.] The fundamental issue remains whether the defendants had an obligation to act for the benefit of the plaintiff and putative class members.
19 This is to be determined by looking at all the surrounding circumstances in order to establish the nature of the relationship in question. The plaintiff does not allege that the defendants were her agents or employers. In fact, the plaintiff does not really allege that she and the putative class members had a relationship with the defendants. Most of the incidents occurred in the context of one-time encounters akin to arm's length commercial transactions. The photo session was for the mutual benefit of the plaintiff and defendants. The plaintiff wanted to further her career and the defendants needed a model to pose for photographs for publication in the Toronto Sun newspaper.
20 Nowhere does the plaintiff plead that Mr. Betts and the Sun Media defendants undertook or had the obligation to act in the best interests of Ms. Fehringer or the putative class members. Nor does the plaintiff plead that she relied on the defendants to act in her best interests or had any reasonable expectation that they would do so. These elements are not pleaded explicitly and cannot be implied from the mere allegation that Mr. Betts was or purported to be a professional photographer nor from the allegation that Mr. Betts approached the plaintiff and told her that her pictures would run in the Toronto Sun. See: Carom v. Bre-X Minerals Ltd.,  O.J. No. 1428 at paras. 29-34 (Gen. Div.), per Winkler J. Moreover, "it will be a rare occasion where parties, in all other respects independent, are justified in surrendering their self-interest such as to invoke the fiduciary principle." See: Hodgkinson, supra, at p. 414, per La Forest J. and Lac Minerals, supra, at pp. 595-96, per Sopinka J.
21 The fact that the photo session may not have furthered the plaintiff's career as she had hoped does not change the nature of the relationship and its resulting duties. The fiduciary duty must pre-exist the impugned conduct. Reprehensible conduct cannot itself give rise to a fiduciary duty - it constitutes the breach of a pre-existing duty. See: Lac Minerals, supra, at p. 600, per Sopinka J.
22 In my view, the plaintiff's failure to allege that the defendants had an obligation to look after her interests and those of the putative class members constitutes a radical defect in the cause of action as pleaded. As McLachlin J. stated in Norberg v. Wynrib,  2 S.C.R. 226 at 272 ("Norberg"), "[t]he essence of a fiduciary relationship ... is that one party exercises power on behalf of another and pledges himself or herself to act in the best interests of the other." Such a relationship is neither expressed nor implied by the material facts set forth in the plaintiff's statement of claim and the particulars provided. Moreover, a "mutual understanding" that the defendants had relinquished their own self-interest and agreed to act solely on behalf of the plaintiff and putative class members, which could have given rise to fiduciary obligations, is neither explicitly nor implicitly alleged by the material facts set forth by the plaintiff. See the quote from Hodgkinson, supra.
23 The plaintiff also relies on ss. 7(2) and (3) of the Ontario Human Rights Code, R.S.O. 1990, c. H.19 ("Code"), as giving rise to a fiduciary duty. I do not accept this argument. First, the plaintiff does not allege that she and the defendants had an employer-employee relationship, therefore, s. 7(2) of the Code does not apply in any event. Second, s. 7(3) of the Code deals with the right to freedom from "a sexual solicitation or advance made by a person in a position to confer, grant or deny a benefit or advancement" and from "a reprisal or a threat of reprisal for the rejection" of such an advance. It does not state that a person in a position to confer, grant or deny a benefit or advancement owes a fiduciary duty to the recipient of the advance. Rather, the Code sets out rights and by implication, conduct which is prohibited. It does not give rise to a fiduciary duty in and of itself and a breach of the Code does not necessarily constitute a breach of fiduciary duty. Nor does it render a relationship fiduciary if the prohibited conduct is carried out. As noted above, reprehensible conduct cannot itself give rise to a fiduciary duty. However, it may constitute the breach of a pre-existing duty.
24 With respect to the existence of a parental duty pleaded at para. 14 of the plaintiff's statement of claim, the only additional element the plaintiff relies upon is the fact that some of the putative class members were under the age of 18 at the time of the incidents in question. In my view, there is no basis in the case law for concluding that on the facts as pleaded, the defendants owed the plaintiff and putative class members a parental duty. This would require the existence of a true parent-child relationship or a quasi-parental relationship. There is no allegation of a pre-existing relationship between the defendants and the plaintiff and putative class members. As stated above, most of the incidents occurred in the context of one-time encounters akin to arm's length commercial transactions. On the facts as pleaded, there is nothing to support the claim that the defendants stood in loco parentis vis ‡ vis the plaintiffs.
25 The law with respect to fiduciary obligations and the contexts in which they arise continues to be developed by the courts. As the courts have reiterated on a number of occasions, the categories of relationships giving rise to fiduciary duties are not closed. I am also mindful of the fact that "[m]atters of law which have not been settled fully in our jurisprudence should not be disposed of at this stage of the proceedings." See: R.D. Belanger & Associates Ltd. v. Stadium Corp. of Ontario Ltd. (1991), 5 O.R. (3d) 778 at 782 (C.A.) and Nash v. Ontario (1995), 27 O.R. (3d) 1 (C.A.). Nonetheless, there are limits to the fiduciary principle. I conclude that even on a broad interpretation of the case law, it is plain and obvious that the plaintiff's claim for breach of fiduciary duty cannot succeed.
26 Although the allegations made by the plaintiff, if proven, may constitute other causes of action, they do not give rise to a fiduciary relationship or duty nor to any breach thereof on the part of the defendants. As a result, for the reasons given, the motions brought by the defendants are granted and the plaintiff's claim for breach of fiduciary duty is struck out.
27 Counsel may meet with me in a case conference for the purpose of determining the appropriate deletions and changes to the statement of claim to give effect to these Reasons for Decision.