In a decision that is creating quite a buzz in class action and administrative law circles, the Federal Court of Appeal in Paradis Honey Ltd. v. Canada established a new “better way forward” for determining the liability of public authorities based on public law principles. In so doing, the Court modified traditional private law notions such as duty of care, standard of care, remoteness, proximity, foreseeability, causation and damages.
This decision may impact the number and nature of class actions asserted against public authorities and may attract the attention of the Supreme Court of Canada.
New Policy Prevents Import Of Honeybees
The plaintiff commercial beekeepers in this $200 million dollar class action sued the Minister of Agriculture and Agri-Food and the Canadian Food Inspection Agency (collectively, the “defendants”) for losses because a new, stricter policy prohibited them from importing honeybee colonies. The plaintiffs argue that the defendants acted without lawful authority in adopting this import policy and breached their duty of care.
Motion Judge Finds No Duty Of Care And No Cause Of Action
Before certification, the defendants moved to strike the plaintiffs’ statement of claim for failing to disclose a reasonable cause of action. The case management judge granted the motion. He found that the defendants did not owe the plaintiffs a duty of care pursuant to the Anns test, which asks whether the facts pleaded give rise to a relationship of proximity in which the government’s failure to take reasonable care might foreseeably cause harm to the plaintiff beekeepers and, if so, whether there are there policy reasons why a duty of care should not be recognized.
Court of Appeal Overturns And Dismisses Motion To Strike
Justice Stratas allowed the appeal, with Justice Nadon concurring.
Applying the second step of the Anns test, Justice Stratas held that there were not any policy reasons to negate finding a duty of care. He considered the recent Supreme Court decision in R. v. Imperial Tobacco Canada Ltd., but concluded that the top court did not establish “any hard-and-fast rule that decisions made under a general public duty, government policy or core policy are protected from a negligence claim” but rather, had “[left] us more uncertain than ever as to when the policy bar will apply.” Justice Stratas therefore held that the test for a motion to strike was not met, as it was not plain and obvious that the plaintiffs’ claim would fail.
Although that would have been enough to decide the appeal, Justice Stratas went on to propose a “better way forward” for tortious liability of public authorities. His new framework would allow individuals to claim against public authorities who had acted in an indefensible or unacceptable manner. The monetary relief for such a claim would be subjected to the court’s remedial discretion.
The New Framework
First, with respect to unacceptability or indefensibility, Justice Stratas borrowed from the administrative law notion of reasonableness. Turning to a body of case law bearing his imprint, he observed that the range of acceptable and defensible decisions fall along a spectrum depending on the nature of the question and the circumstances. On the one end, where the decision is clear-cut or constrained by jurisprudence or statutory standards, the margin of appreciation is narrow. On the other end, where the decision is imbued with discretion, policy considerations and regulatory experience, the margin of appreciation will be broader.
Second, Justice Stratas noted that the court’s remedial discretion in granting monetary relief would be informed primarily by the compensatory objective of monetary relief, as well as other considerations such as the acceptability and defensibility of the decision, the circumstances surrounding it, its effects, and the public law values that would be furthered by monetary relief.
By way of specific guidance, Justice Stratas pointed to cases where courts have allowed monetary recovery in cases involving “abuse of power", “bad faith”, “pursuits of improper purposes”, “fundamental breakdown of the orderly exercise of authority”, or conduct that is “clearly wrong”, “reckless”, “irrational”, or “inexplicable and incomprehensible”.
In dissent, Justice Pelletier preferred orthodoxy, warning that judicial abolition of the entrenched boundary between public law and private remedies may result in complex repercussions that exceed the ability of the courts to anticipate and address.
The novelty of the framework and the abandonment of private law limits on liability may lead to enthusiastic uptake by plaintiffs currently claiming against public authorities for tortious conduct.
If that happens, this new analytical framework has significant ramifications. For one, it is unclear how the common issues element of the test for class certification would operate in a context without familiar concepts such as proximity, foreseeability, causation and damages. This is particularly problematic given that governmental actions may impact millions of people.
Moreover, Justice Stratas’ decision suggests a convergence of principles between an application for judicial review and civil action for tortious liability; however, it is unclear how such convergence would play out procedurally in the context of a class action. For example, in situations where the alleged tortious conduct is not a singular event like the statement of a new policy, but a multitude of discrete actions and administrative decisions taken under similar contexts, would a class action be the preferable procedure over individual applications for judicial review?
All things considered, while Justice Stratas’ “better way forward” is technically obiter, it nevertheless represents an interesting departure from the status quo from a leading jurist. In light of the uncertainties presented by the new framework, time will tell whether this “better way forward” will lead to the land of milk and honey.
Update: on October 29, 2015, the Supreme Court of Canada denied leave to appeal for this case. Our post on this new development can be found here.