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Torts - Negligence - Regulatory Agencies. Paradis Honey Ltd. v. Canada (Agriculture and Agri-Food)
In Paradis Honey Ltd. v. Canada (Agriculture and Agri-Food) (Fed CA, 2026) the Federal Court of Appeal dismissed an appeal, this brought against the dismissal of a class action grounded in negligence where the appellants alleged that "the Canadian Food Inspection Agency (CFIA) had breached its private law duty of care by prohibiting the importation of live honeybee packages from the continental United States (US) after 2006, thereby causing them economic harm".
Here the court considers when and whether a regulatory agency might owe a private duty of care in negligence, focussing on the involved statutes and related public policy:[2] This case is not without significance, not only for the immediate parties but also in the wider context of the duty of care owed by regulatory agencies to those who are directly impacted by their decisions.
[3] Having carefully reviewed the record and considered the arguments put forward by the parties, I am of the view that the Federal Court did not err and properly found that the CFIA, at least in the particular circumstances of this case, did not owe a private law duty of care to the appellants in carrying out its public functions because of a lack of factual proximity. ....
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[77] It is by now well established that statutes with broad public purposes (such as protecting animal and human health) will rarely give rise to coexistent private duties of care to a particular segment of the population. On the contrary, they have often been interpreted as denying the possibility to ground private law duties arising out of interactions that are inherent or essential to a mandate, especially in a regulatory context.
[78] This principle was most helpfully elaborated by the Supreme Court in Imperial Tobacco. In that case, the highest court set out three scenarios where the applicable legislation plays a role in determining if a government actor owes a prima facie duty of care. In the first case, the statute itself will create the proximity sufficient to give rise to the duty of care. In the second, the duty of care will arise from interactions between the claimant and the government, as long as it is not negated by the statute. And in the third, proximity will be based on both the statute and the interactions between the parties. On the first scenario, the Supreme Court had this to say:[44] The argument in the first kind of case is that the statute itself creates a private relationship of proximity giving rise to a prima facie duty of care. It may be difficult to find that a statute creates sufficient proximity to give rise to a duty of care. Some statutes may impose duties on state actors with respect to particular claimants. However, more often, statutes are aimed at public goods, like regulating an industry (Cooper), or removing children from harmful environments (Syl Apps). In such cases, it may be difficult to infer that the legislature intended to create private law tort duties to claimants. This may be even more difficult if the recognition of a private law duty would conflict with the public authority’s duty to the public: see, e.g., Cooper and Syl Apps. As stated in Syl Apps, “[w]here an alleged duty of care is found to conflict with an overarching statutory or public duty, this may constitute a compelling policy reason for refusing to find proximity” […] See also Taylor at paragraphs 76-79 and Wu at paragraphs 54-58.
[79] On the basis of these authorities, the Federal Court did not err in concluding that the legislative scheme does not create a private law duty of care between the respondents and the appellants. As the Ontario Court of Appeal found in River Valley, and as the Ontario Superior Court of Justice found in Flying E Ranche, the purpose of the Act is clear from its text, its long title ("“An Act respecting diseases and toxic substances that may affect animals or that may be transmitted by animals to persons, and respecting the protection of animals”"), and its compensation scheme: it is to enable the Crown to protect the health of people and animals. It does not, expressly or by implication, aim to protect the economic interests of individual farmers.
[80] In River Valley, the issue was whether the CFIA and Health Canada owed a private duty of care to an egg producer that alleged it had suffered economic loss as a result of their actions. More specifically, the appellant claimed that the respondents had negligently investigated whether its flock was infected with salmonella. Although testing eventually showed that only part of the flock was infected, the appellant argued that it suffered economic losses because the testing took too long, forcing it to destroy the entire flock. After a lengthy analysis of the legislative scheme and the relevant jurisprudence, the Ontario Court of Appeal concluded that the CFIA did not owe the appellant a prima facie duty of care. The Ontario Court of Appeal then considered an overriding policy consideration that also negated a private duty of care: the potential for conflict if the CFIA were required to be mindful not only of animal and public health, but also of the economic interests of individual farmers (albeit in the analysis of the second step of the Anns/Cooper test), at paragraph 86:In some instances, and this case is perhaps a good example, the potential for conflict between the economic interests of an individual farmer and the public interest does exist. The conflict may arise over the extent of the testing necessary to determine whether an animal is diseased. In this case, initial testing of River Valley’s barn 4 showed no DT104 in any of the samples. With those negative test results in hand and having regard to its own economic interests, River Valley may well have fairly claimed that it should have been able to market its eggs. However, CFIA, with the benefit of Health Canada’s expertise, took a more cautious approach in the public interest and insisted on further testing at the point where the hens were about to lay their eggs. CFIA fairly claimed that this further testing was needed to be fully satisfied that the [page21] [sic] flock in barn 4 was not contaminated. Undoubtedly, other kinds of conflict may arise if CFIA inspectors have to worry about the economic interests of individual farmers as well as their obligation to the public to protect human and animal health. [81] In Flying E Ranche, a similar finding was made in the context of a class action brought on behalf of all Canadian farmers who raised cattle in 2003, alleging that the CFIA had negligently failed to prohibit the importation of cattle feed and cattle to prevent the spread of bovine spongiform encephalopathy (BSE). The only difference between that case and the present one is that, in Flying E Ranche, the industry alleged that the CFIA had negligently permitted importation, whereas here the appellants claim that the CFIA negligently failed to permit importation. Interestingly, the plaintiff in that case did not argue that proximity arose from the Act, possibly in recognition of the Ontario Court of Appeal’s decision in River Valley, and relied instead on the Feeds Act, R.S.C., 1985, c. F-9 and the Animal Disease and Protection Act, R.S.C., 1985, c. A-13. The Ontario Superior Court nevertheless found that there was nothing in those two statutes, just as there was nothing in the Act, to suggest that one of their purposes was to protect the interests of individual farmers; accordingly, they did not create a duty of care owed to cattle producers.
[82] On the basis of these persuasive authorities and, more generally, the jurisprudence concerning private duties of care in the context of statutes aimed at protecting or advancing the public good, I reach the same conclusion as the Trial Judge: neither the Act nor the Regulations suggest that one of their purposes is to protect the economic interests of individual beekeepers. They therefore do not, expressly or by implication, create a private law duty of care between the respondents and the appellants.
(c) Implicit foreclosure and general policy considerations
[83] The Federal Court went further than finding that the legislation did not create a duty of care, and found that the legislative scheme "“implicitly forecloses”" such a duty, presumably because it would conflict with the CFIA’s overarching statutory or public duty (Decision at para. 329). In my view, that analysis is better left to the second stage of the Anns/Cooper test.
[84] I say this because there is jurisprudence supporting the notions that statutes can create proximity – explicitly and implicitly – as well as explicitly foreclose it (Imperial Tobacco at paras. 44 and 47; Syl Apps at paras. 27 and 29; Just at p. 1244). On the other hand, I am not aware of any Supreme Court decision to the effect that a statute can implicitly foreclose proximity. While some decisions seem to suggest that a legislative scheme could implicitly preclude a private law duty of care, such references were generally made in passing, without the issue being squarely argued or decided, and often in cases where the facts did not require the court to determine whether proximity had been implicitly foreclosed by statute or regulations. The notable exception is paragraphs 77 to 79 of Taylor, where the Ontario Court of Appeal addressed the point more directly, although again in passing as the facts of the case did not require more. In my view, however, Taylor should not be taken as establishing a general rule that courts may find proximity implicitly foreclosed by statute. The cases cited at these paragraphs of Taylor do not, for the most part, support that proposition. They rely on express statutory language either to infer the existence of proximity rather than foreclose it, to clarify the interests that the regulator must prioritize or to confirm the regulator’s immunity. Courts have not gone so far as to say that a statute can implicitly foreclose a private law duty of care. And there is good reason for that.
[85] At the first stage of the Anns/Cooper analysis, the issue to be determined is whether there is a prima facie duty of care. At that juncture, only the policy factors relating to the relationship between the parties can be taken into consideration. They can be relevant to determine if there is proximity or if an existing proximity category should be extended to a new situation. It is only at the second step of the Anns/Cooper analysis that questions of policy, in the general sense of the word, will be factored in. In my view, these two steps must be kept separate and apart, to ensure that residual policy considerations of a general nature do not creep into the analysis of proximity and are not confused with other kinds of factors more closely linked to the relationships between the parties. Otherwise, there is considerable risk of falling into the analysis of residual policy considerations at the first stage of the test. This risk is well exemplified by Taylor. Where the Ontario Court of Appeal listed considerations that may assist in identifying the implicit preclusion of a private law duty, it included legislation that "“impose[s] duties on the regulator that conflict with a private law duty of care to an individual”" (Taylor at para. 78). This consideration more closely aligns with the second step of the Anns/Cooper analysis than the first step.
[86] The other reason why these two steps must remain distinct is that, at the second stage, the state bears the onus of demonstrating that the alleged novel duty of care would conflict with broader policy considerations or an overwhelming public duty and, therefore, that no duty of care should be found (Imperial Tobacco at para. 44; Fullowka at para. 39; River Valley at paras. 33-34).
[87] There is no clear indication in the legislative scheme of the Act that it forecloses a private law duty either to protect the economic interests of individual honeybee keepers or to consider mitigation measures. It was therefore incumbent on the Federal Court to assess whether proximity could be established through the conduct of the parties before addressing the residual policy considerations, as it ultimately did. As we have seen in Imperial Tobacco, when the statute itself does not create (expressly or by necessary implication) a private relationship of proximity giving rise to a prima facie duty of care, proximity can arise from specific interactions between government officials and a claimant. It is only if a relationship of proximity (through the statute, as a result of interactions between the parties or both) seems to emerge that residual policy considerations will have to be considered. As stated in Syl Apps at paragraph 28:Where an alleged duty of care is found to conflict with an overarching statutory or public duty, this may constitute a compelling policy reason for refusing to find proximity (Cooper, at para. 44; Edwards, at para. 6). Such a conflict exists where the imposition of the proposed duty of care would prevent the defendant from effectively discharging its statutory duties. In Cooper, for example, a duty to individual investors on the part of the Registrar of Mortgage Brokers was rejected because it was found to “potentially conflict with the Registrar’s overarching duty to the public” (para. 44). Similarly, in Edwards a private law duty of care on the part of the Law Society to the victim of a dishonest lawyer was rejected at the proximity stage since “[d]ecisions made by the Law Society require the exercise of legislatively delegated discretion and involve pursuing a myriad of objectives consistent with public rather than private law duties” (para. 14). In both cases, the serious negative policy consequences of these conflicting duties were found to justify denying a finding of proximity. [88] With this caveat, I conclude that the Trial Judge did not err in her analysis of the legislative scheme. Neither the Act nor the Regulations gives rise to a private law duty of care to protect the Class’s economic interests with respect to the importation of US honeybee packages or to consider mitigation measures.
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[93] It was clearly not an error for the Trial Judge to start her analysis on the basis that the CFIA is a regulator. In such a context, mere consultation between the regulator and the regulated industry will obviously not be sufficient to establish proximity. As stated in Flying E Ranche at paragraph 614, quoted by the Trial Judge at paragraph 512 of the Decision:... Similarly, consultations with industry, do not on their own create a duty of care. Governments are expected to consult with those affected by their actions and do so frequently, especially with regulated industries. This is not to ensure, however, that government is doing what an industry wants or is acting in the interests of that industry, but to ensure that government is acting in the public interest on the best information available, including input from affected stakeholders, and that those stakeholders are aware of what the government is doing, or not, and why. [94] This is not to say that regulators will never have a duty of care towards members of the regulated industry and will never be liable for damages. Each case will turn on its own facts. That being said, the jurisprudence involving regulatory agencies suggests that one of the factors to be considered is whether the facts point to a relationship with the regulated industry that is more direct than the relationship between the regulator and other members of the public who might be affected by the exercise of those regulatory powers. ....
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[104] When the state sets out to pursue broad public policy objectives, the interactions between government officials and various stakeholders, including the regulated industry, must be viewed through a different prism. The purpose of those interactions is not to enforce a particular set of predetermined requirements, but rather to ensure that the contemplated measures will best achieve the legislative objective and will not produce unexpected or unforeseen adverse consequences for the public at large. Consultation allows the government to obtain the information and stakeholder input necessary to act in the public interest. That different perspective will naturally result in interactions with those likely to be affected by the decisions to be made that differ in nature, duration, scope and frequency. It is for that very reason that mere consultations between a regulator and a regulated industry will not establish proximity. As noted above, such consultations are inherent in the exercise of the CFIA’s public duty. So long as they do not go beyond what is to be expected in the fulfilment of that duty, they will not give rise to the special relationship required to establish proximity.
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