https://www.ontariocourts.ca/decisions/2022/2022ONCA0567.htm

Some excerpts:

(ii)       Ontario’s position

[57]        Ontario attacks the finding that it owed fiduciary duties to the respondents, making three central points.

[58]        First, Ontario argues that the finding is based on a misinterpretation of the MHA. Properly interpreted, the MHA does not impose any duty at all. It is therefore incapable of being a statutory imposition of responsibility that can satisfy the requirement for a fiduciary duty that there be an undertaking by the fiduciary to act in the beneficiary’s best interests.

[59]        Second, Ontario submits that the trial judge erred in failing to find that to impose a fiduciary duty would put Ontario in a conflict of interest, given its public interest and other statutory duties.

[60]        Third, Ontario argues that the trial judge erred in relying on vulnerability of the respondents that pre-existed their relationship with Ontario at Oak Ridge, when the issue is whether there was vulnerability that arose from that relationship.

[61]        In our view, the trial judge did not err in finding that Ontario owed fiduciary duties to the respondents. To explain our conclusion, we first outline the general principles applicable to when a government may be found to owe fiduciary duties; we then turn to Ontario’s specific complaints.

[…]

[77]        We reject Ontario’s argument that “[t]he statutory authorization for the observation, care and treatment of patients was not for the benefit of the [respondents]” but, rather, was “for the benefit of the public – to treat dangerous patients so that they could be safely released back into the community.” Put simply, a statutory obligation of a psychiatric facility of observation, care, and treatment of a patient suffering from a mental disorder is one that necessarily implies that in the exercise of the psychiatric facility’s power and responsibility in connection therewith, it will act solely in the patient’s best interests. There would be little meaning to the concept of “observation, care and treatment” of a person with a mental disorder in a medical facility were it otherwise. And there is a strong correspondence, given the statutory imposition of responsibility, with the relationship that exists between a patient and doctor, which, as we discuss below, is a fiduciary relationship: Norberg v. Wynrib,[1992] 2 S.C.R. 226, at pp. 271-72.

[…]

(vi)     Vulnerability of respondents properly considered

[84]        Ontario argues that the trial judge found a fiduciary duty solely on the basis of the respondents’ vulnerability and, moreover, on the basis of vulnerability that pre-existed their relationship with Ontario at Oak Ridge. The fact that some of the respondents had pre-existing vulnerabilities – that some were minors, that they suffered from mental disorders, and that they were confined in a secure psychiatric facility due to those disorders, their dangerousness, and court and Review Board orders – could not give rise to a fiduciary duty.

[85]        We reject this argument.

[86]        First, the trial judge did not find a fiduciary duty solely by considering vulnerability. He cited Elder Advocates,which holds, at para. 28, that vulnerability alone is not a sufficient basis to find such a duty. And he examined factors beyond vulnerability; for example, he considered the MHA, the nature of the duty it imposed, and how the statutory duties and undertakings in it led to a fiduciary duty according to the principles in Elder Advocates.

[87]        Second, the trial judge cannot be faulted for having considered the respondents’ pre-existing vulnerabilities, as they were relevant to understanding the vulnerability that would arise from the relationship with Ontario at Oak Ridge. Vulnerability that arises from matters external to the relationship with the alleged fiduciary is a relevant consideration; the more relevant consideration is vulnerability that arises from the relationship itself: Galambos v. Perez, 2009 SCC 48, [2009] 3 S.C.R. 247, at para. 68.

[88]        From his reasons as a whole, it is clear that the trial judge focused on, and did not overlook, the more relevant consideration of vulnerability arising from the relationship. He expressly referred to the control Ontario, through its employees, had over every aspect of the respondents’ care and treatment as persons suffering from mental disorders. We interpret him to have found that a person being observed, cared for, and treated for a mental disorder is vulnerable to the way the observation, care, and treatment is administered by the person who has complete control over it. There is no error in this finding.