Harrison v. XL Foods Inc. et al.,

• Judge: Rooke
• Neutral Citation: 2014 ABQB 431
• Date: 05 September 2013
• Court: Court of Queen's Bench of Alberta (Canada)

Harrison v. XL Foods Inc. (2014), 592 A.R. 266 (QB)

MLB headnote and full text

Temp. Cite: [2014] A.R. TBEd. JL.071

Matthew Harrison, as Plaintiff Representative (plaintiff) v. XL Foods Inc. and Nilsson Bros. Inc. (defendants) and Canadian Food Inspection Agency (third party/defendant)

(1203 14727; 2014 ABQB 431)

Indexed As: Harrison v. XL Foods Inc. et al.

Alberta Court of Queen's Bench

Judicial District of Edmonton

Rooke, A.C.J.Q.B.

July 17, 2014.

Summary:

The representative plaintiff (Harrison) claimed on behalf of himself and other individuals who purchased and/or consumed contaminated beef products processed at the defendants' plant. The defendants denied liability and filed a third party claim against the Canada Food Inspection Agency (CFIA). The CFIA applied to have the third party claim struck out (rules 3.47(b) and 3.68), arguing that it had no private law duty to the plaintiff class. Harrison applied for a stay of the third party proceedings, pending certification of the class action.

The Alberta Court of Queen's Bench, in a memorandum of decision reported at [2013] A.R. Uned. 561, dismissed both applications. These are the full reasons for that decision. On the summary dismissal application, the Court found that "it is not plain and obvious that the Third Party Claim discloses no cause of action against CFIA, on the basis that CFIA owes no private law duty to the Plaintiff Class." On the stay application, the plaintiff had not convinced the Court that any cost or delay prejudice, that could not be covered by an award of costs or directions of the case management judge, would result to the Plaintiff from the Third Party Notice proceeding at or during the same time as the certification hearing, and any common issues trial resulting therefrom.

Practice - Topic 210.1

Persons who can sue and be sued - Individuals and corporations - Status or standing - Class or representative actions - Procedure - General (incl. venue, discovery, etc.) - The representative plaintiff (Harrison) claimed on behalf of himself and other individuals who purchased and/or consumed contaminated beef products processed at the defendants' plant - The defendants denied liability and filed a third party claim against the Canada Food Inspection Agency (CFIA) - Harrison applied for a stay of the third party proceedings, pending certification of the class action - The Alberta Court of Queen's Bench dismissed the application - "CFIA's ongoing participation permits it to act as a counter weight to issues in the certification process that may otherwise be omitted. The Representative Plaintiff is not significantly prejudiced by delay or costs because of the broad overlap between the Defendants and CFIA's relevant facts and issues. The bottom line is that the common issues between the Plaintiff Class and the Defendants blend naturally to the issues between the Defendants and Third Party, whether or not either action is successful on the substantive merits. ... [T]he Plaintiff Class vs Defendants, and Defendants vs CFIA sub-actions should proceed together. This promotes litigation and judicial efficiency, and offers protection against inconsistent decisions ... [T]he Plaintiff Class is not prejudiced as a consequence, subject to the remedy of costs of any delay or added complexity by the addition of the Third Party Claim. Indeed, the Plaintiff may benefit if settlement discussions are pursued" - See paragraphs 139 to 145.

Practice - Topic 210.1

Persons who can sue and be sued - Individuals and corporations - Status or standing - Class or representative actions - Procedure - General (incl. venue, discovery, etc.) - The representative plaintiff (Harrison) claimed on behalf of himself and other individuals who purchased and/or consumed contaminated beef products processed at the defendants' plant - The defendants denied liability and filed a third party claim against the Canada Food Inspection Agency (CFIA) - Harrison applied for a stay of the third party proceedings, pending certification of the class action - The Alberta Court of Queen's Bench dismissed the application - "Some overlap is inevitable between primary and third party claims. However, I find that, in all the circumstances of this case, it would be very inefficient to grant a stay. This would cause a duplicated or bifurcated trial process ... in part because some of the common issues between the Plaintiff Class and the Defendants are the same as, or similar to, the issues between the Defendants and CFIA. ... There would be no complexity, delay, or expense due to CFIA being a begrudging bystander at certification. ... [J]oint trial of the primary and third party action achieves a 'fair and expeditious' result. This approach does not hinder the trial process. ... [D]ealing with the issues between the Representative Plaintiff and the Defendants at the same time as the Defendants and CFIA promotes coordinated decision making - that is, it minimizes the possibility of inconsistent decisions. The net result has been logistical benefit, rather than cost." - See paragraphs 159 to 172.

Practice - Topic 210.5

Persons who can sue and be sued - Individuals and corporations - Status or standing - Class or representative actions - Procedure - Pre-certification matters (incl. particulars, production, pleadings, etc.) - The representative plaintiff claimed on behalf of himself and other individuals who purchased and/or consumed contaminated beef products processed at the defendants' plant - The defendants denied liability and filed a third party claim against the Canada Food Inspection Agency (CFIA) - CFIA applied to have the third party claim struck (rules 3.47(b) and 3.68), arguing that it had no private law duty to the plaintiff class - CFIA argued that the alleged duty of care between CFIA and the plaintiff class was a novel one, i.e., in health-related scenarios, courts had rejected a duty of care between public regulators and downstream consumers - The defendants asserted that safety inspection cases were analogous to the CFIA's scenario - The Alberta Court of Queen's Bench stated that "I do not need to determine this issue on the basis of whether this is more likely than not a recognized or an analogous case - rather, the issue goes to whether the Third Party Claim should be struck as being plain and obvious that the Defendant cannot succeed . The case law here does not meet that threshold. ... I agree with the Defendants that the distinction between potential liability to 'upstream' producers vs 'downstream' consumer is sufficiently different that these two scenarios are not so similar that I can extrapolate from the former that the latter alleged duty of care cannot exist. In brief, the parallels between these two injuries, tortfeasors, and victims do not meet the high standard required on a Rule 3.68 motion to strike application." - See paragraphs 54 to 57.

Practice - Topic 210.5

Persons who can sue and be sued - Individuals and corporations - Status or standing - Class or representative actions - Procedure - Pre-certification matters (incl. particulars, production, pleadings, etc.) - The representative plaintiff claimed on behalf of himself and other individuals who purchased and/or consumed contaminated beef products processed at the defendants' plant - The defendants denied liability and filed a third party claim against the Canada Food Inspection Agency (CFIA) - CFIA applied to have the third party claim struck (rules 3.47(b) and 3.68), arguing that even if there was an obligation on the CFIA to compensate the general public for injury, it did not follow that there was a duty to prevent economic losses of middlemen in the food industry - The Alberta Court of Queen's Bench declined to strike economic loss - "[T]he law on recovery for economic loss is sufficiently unclear that it cannot be said that it is plain and obvious that the Plaintiff Class cannot succeed against the Defendants, or the Defendants against the Third Party. Instead there is no small potential for at least some 'novelty'. Given the current underdeveloped state of the law on this subject it is not the proper place of the Court to attempt to resolve these issues on an application to strike. ... I therefore decline to strike economic loss as defeat of the possibility of success is not plain and obvious." - See paragraphs 58 to 61.

Practice - Topic 210.5

Persons who can sue and be sued - Individuals and corporations - Status or standing - Class or representative actions - Procedure - Pre-certification matters (incl. particulars, production, pleadings, etc.) - The representative plaintiff claimed on behalf of himself and other individuals who purchased and/or consumed contaminated beef products processed at the defendant XL's plant in Brooks, Alberta - XL denied liability and filed a third party claim against the Canada Food Inspection Agency (CFIA), alleging that CFIA owed a private duty of care to individual consumers and to meat re-processors (commercial purchasers) - CFIA disagreed on the basis that CFIA did not have a proximate relationship with the identified groups - CFIA applied to have the third party claim struck (rules 3.47(b) and 3.68) - The Alberta Court of Queen's Bench stated that "[T]he factual scenario alleged by XL means that the existing case law principles simply do not support the argument of CFIA that it is clear and obvious that CFIA is so distant from the Plaintiff Class that a duty of care could not be imposed. ... With the facts as pled (and deemed true), including the integral participation of CFIA in the Brooks plant operations, and the implications of deficient inspection, proximity and liability in tort is not a remote possibility." - See paragraphs 69 to 89.

Practice - Topic 210.5

Persons who can sue and be sued - Individuals and corporations - Status or standing - Class or representative actions - Procedure - Pre-certification matters (incl. particulars, production, pleadings, etc.) - The representative plaintiff claimed on behalf of himself and other individuals who purchased and/or consumed contaminated beef products processed at the defendants' plant - The defendants denied liability and filed a third party claim against the Canada Food Inspection Agency (CFIA), alleging that CFIA owed a duty of care to individual consumers and to meat re-processors (commercial purchasers) - CFIA applied to have the third party claim struck - The Alberta Court of Queen's Bench concluded that there was no policy basis to reject a duty of care in the first stage of the Anns analysis - "[I]t is not plain and obvious that a strictly public law duty of a regulator involved with passive regulatory oversight ... blocks the existence of a private law duty of care when the regulatory oversight of the government body is significantly more involved, which of course is what was the alleged (and therefore deemed true) case here. ...The Third Party Claim may very well be ultimately defeated at trial on this point, but until then the facts deemed true are no basis to strike the pleading as beyond doubt or plainly and obviously to be unsuccessful." - See paragraphs 91 to 98.

Practice - Topic 210.5

Persons who can sue and be sued - Individuals and corporations - Status or standing - Class or representative actions - Procedure - Pre-certification matters (incl. particulars, production, pleadings, etc.) - The representative plaintiff claimed on behalf of himself and other individuals who purchased and/or consumed contaminated beef products processed at the defendants' plant - The defendants denied liability and filed a third party claim against the Canada Food Inspection Agency (CFIA), alleging that CFIA owed a duty of care to individual consumers and to meat re-processors (commercial purchasers) - CFIA applied to have the third party claim struck - The Alberta Court of Queen's Bench concluded that CFIA had failed to identify any residual policy considerations that negated the potential prima facie duty of care identified in the first stage of the Anns analysis - The Court rejected CFIA's argument that imposing such a duty of care would cause indeterminate liability - CFIA's operational role in meat inspection and the nature of possible "downstream" consequences meant that the potential range of injured parties was finite, though potentially large - The alleged negligence had an operational, rather than a policy, basis - Nor would recognition of that duty of care cause a conflict between CFIA's statutory duties and a private law duty to prevent risk of economic loss - Viewed in a broad, economic loss context, the two duties aligned rather than conflicted - See paragraphs 99 to 112.

Practice - Topic 1042

Parties - Third party or subsequent party procedure - Stay of third party claim - [See both Practice - Topic 210.1 ].

Practice - Topic 1138

Parties - Third party or subsequent party procedure - Third party notice - Striking out of - [See all Practice - Topic 210.5 ].

Practice - Topic 2230

Pleadings - Striking out pleadings - Grounds - Failure to disclose a cause of action or defence - [See all Practice - Topic 210.5 ].

Torts - Topic 9167

Duty of care - Particular relationships - Claims against public officials, authorities or boards - Regulators (e.g., Registrar of Mortgage Brokers, Department of Motor Vehicles, Canadian Food Inspection Agency, etc.) - [See all Practice - Topic 210.5 ].

Cases Noticed:

Hunt v. T & N plc et al., [1990] 2 S.C.R. 959; 117 N.R. 321, refd to. [para. 23].

Tottrup v. Lund et al. (2000), 255 A.R. 204; 220 W.A.C. 204; 2000 ABCA 121, refd to. [para. 23].

G.H. v. Alcock et al., [2013] A.R. Uned. 38; 2013 ABCA 24, refd to. [para. 24].

Arabi v. Alberta et al. (2014), 589 A.R. 249; 2014 ABQB 295, refd to. [para. 24].

Decock et al. v. Alberta et al. (2000), 255 A.R. 234; 220 W.A.C. 234; 186 D.L.R.(4th) 265; 2000 ABCA 122, leave to appeal granted (2000), 266 N.R. 200; 293 A.R. 388; 257 W.A.C. 1 (S.C.C.), refd to. [para. 25].

Odhavji Estate et al. v. Woodhouse et al., [2003] 3 S.C.R. 263; 312 N.R. 305; 180 O.A.C. 201; 233 D.L.R.(4th) 193, refd to. [para. 26].

British Columbia v. Imperial Tobacco Canada Ltd. et al. (2011), 419 N.R. 1; 308 B.C.A.C. 1; 521 W.A.C. 1; 2011 SCC 42, refd to. [para. 26].

Attis et al. v. Canada (Minister of Health) et al., [2007] O.T.C. Uned. 770 (Sup. Ct.), affd. (2008), 254 O.A.C. 91; 300 D.L.R.(4th) 415; 2008 ONCA 660, leave to appeal denied [2009] 1 S.C.R. v; 396 N.R. 397; 260 O.A.C. 394, refd to. [para. 28].

Drady v. Canada (Minister of Health) (2008), 270 O.A.C. 1; 300 D.L.R.(4th) 443; 2008 ONCA 659, refd to. [para. 28].

Donoghue v. Stevenson, [1932] A.C. 562 (H.L.), refd to. [para. 31].

Nielsen v. Kamloops (City) and Hughes, [1984] 2 S.C.R. 2; 54 N.R. 1; 10 D.L.R.(4th) 641, refd to. [para. 31].

Cooper v. Registrar of Mortgage Brokers (B.C.) et al., [2001] 3 S.C.R. 537; 277 N.R. 113; 160 B.C.A.C. 268; 261 W.A.C. 268; 2001 SCC 79, refd to. [para. 31].

Cooper v. Hobart - see Cooper v. Registrar of Mortgage Brokers (B.C.) et al.

Edwards et al. v. Law Society of Upper Canada et al., [2001] 3 S.C.R. 562; 277 N.R. 145; 153 O.A.C. 388; 2001 SCC 80, refd to. [para. 31].

Anns v. Merton London Borough Council, [1978] A.C. 728 (H.L.), refd to. [para. 33].

Eliopoulos et al. v. Ontario (Minister of Health and Long-Term Care) (2006), 217 O.A.C. 69; 82 O.R.(3d) 321; 276 D.L.R.(4th) 411 (C.A.), leave to appeal refused (2007), 372 N.R. 392; 239 O.A.C. 198 (S.C.C.), refd to. [para. 44].

Williams v. Canada (Attorney General) et al. (2009), 249 O.A.C. 150; 310 D.L.R.(4th) 710; 2009 ONCA 378, refd to. [para. 44].

Klein v. American Medical Systems Inc. et al. (2006), 219 O.A.C. 49; 278 D.L.R.(4th) 722; 84 O.R.(3d) 217 (Div. Ct.), refd to. [para. 44].

Holtslag v. Alberta (2006), 380 A.R. 133; 363 W.A.C. 133; 265 D.L.R.(4th) 518; 2006 ABCA 51, refd to. [para. 45].

Adams et al. v. Borrel et al. (2008), 336 N.B.R.(2d) 223; 862 A.P.R. 223; 297 D.L.R.(4th) 400; 2008 NBCA 62, refd to. [para. 46].

Childs v. Desormeaux et al., [2006] 1 S.C.R. 643; 347 N.R. 328; 210 O.A.C. 315; 2006 SCC 18, refd to. [para. 47].

Manolakos v. Vernon (City), [1989] 2 S.C.R. 1259; 102 N.R. 249; 63 D.L.R.(4th) 449, refd to. [para. 50].

Just v. British Columbia, [1989] 2 S.C.R. 1228; 103 N.R. 1; 64 D.L.R.(4th) 689, refd to. [para. 50].

Fullowka et al. v. Pinkerton's of Canada et al., [2010] 1 S.C.R. 132; 398 N.R. 20; 474 A.R. 1; 479 W.A.C. 1; 2010 SCC 5, refd to. [para. 50].

Los Angeles Salad Co. et al. v. Canadian Food Inspection Agency et al., [2011] B.C.T.C. Uned. 779; 24 B.C.L.R.(5th) 83 (S.C.), affd. (2013), 334 B.C.A.C. 24; 572 W.A.C. 24; 358 D.L.R.(4th) 581; 2013 BCCA 34, leave to appeal denied (2013), 464 N.R. 398; 357 B.C.A.C. 320; 611 W.A.C. 1 (S.C.C.), refd to. [para. 52].

Design Services Ltd. et al. v. Canada, [2008] 1 S.C.R. 737; 374 N.R. 77; 2008 SCC 22, refd to. [para. 59].

Hill et al. v. Hamilton-Wentworth Regional Police Services Board et al., [2007] 3 S.C.R. 129; 368 N.R. 1; 230 O.A.C. 260; 2007 SCC 41, refd to. [para. 67].

Taylor v. Canada (Attorney General) (2012), 293 O.A.C. 312; 2012 ONCA 479, refd to. [para. 67].

Winnipeg Condominium Corp. No. 36 v. Bird Construction Co. et al., [1995] 1 S.C.R. 85; 176 N.R. 321; 100 Man.R.(2d) 241; 91 W.A.C. 241; 121 D.L.R.(4th) 193, refd to. [para. 68].

Ryan v. Victoria (City) et al., [1999] 1 S.C.R. 201; 234 N.R. 201; 117 B.C.A.C. 103; 191 W.A.C. 103; 168 D.L.R.(4th) 513, refd to. [para. 94].

755165 Ontario Inc. v. Parsons et al. (2006), 259 Nfld. & P.E.I.R. 82; 781 A.P.R. 82; 273 D.L.R.(4th) 11; 2006 NLTD 123, leave to appeal denied (2006), 260 Nfld. & P.E.I.R. 222; 786 A.P.R. 222; 273 D.L.R.(4th) 1; 2006 NLCA 60, refd to. [para. 103].

783783 Alberta Ltd. v. Canada (Attorney General) et al. (2009), 466 A.R. 1; 2009 ABQB 149, varied on other grounds (2010), 482 A.R. 136; 490 W.A.C. 136; 322 D.L.R.(4th) 56; 2010 ABCA 226, refd to. [para. 103].

Ring et al. v. Canada (Attorney General) et al. (2007), 268 Nfld. & P.E.I.R. 204; 813 A.P.R. 204; 2007 NLTD 146, revd. on other grounds (2010), 297 Nfld. & P.E.I.R. 86; 918 A.P.R. 86; 2010 NLCA 20, refd to. [para. 104].

River Valley Poultry Farm Ltd. v. Canada (Attorney General) et al. (2009), 248 O.A.C. 222; 310 D.L.R.(4th) 152; 2009 ONCA 326, leave to appeal denied (2009), 402 N.R. 399 (S.C.C.), refd to. [para. 109].

Stewart v. Enterprise Universal Inc. et al. (2010), 489 A.R. 153; 2010 ABQB 259, refd to. [para. 121].

T.L. v. Director of Child Welfare (Alta.) (2008), 436 A.R. 217; 2008 ABQB 114, refd to. [para. 121].

Windsor v. Canadian Pacific Railway Ltd. (2006), 402 A.R. 162; 2006 ABQB 348, varied (2007), 417 A.R. 200; 410 W.A.C. 200; 2007 ABCA 294, refd to. [para. 122].

Cooper v. Registrar of Mortgage Brokers (B.C.) et al. (1999), 14 B.C.T.C. 201; 35 C.P.C.(4th) 124; 68 B.C.L.R.(3d) 293 (S.C.), revd. (2000), 135 B.C.A.C. 266; 221 W.A.C. 266; 184 D.L.R.(4th) 287; 2000 BCCA 151, leave to appeal denied [2001] 3 S.C.R. 537; 277 N.R. 113; 160 B.C.A.C. 268; 261 W.A.C. 268; 2001 SCC 79, refd to. [para. 129].

Holland v. Saskatchewan et al. (2009), 341 Sask.R. 187; 2009 SKQB 334, refd to. [para. 129].

Witting v. Tauber et al., [2006] A.R. Uned. 73; 147 A.C.W.S.(3d) 906; 2006 ABQB 23, refd to. [para. 129].

Endean v. Canadian Red Cross Society et al., [1997] B.C.T.C. Uned. 766; 36 B.C.L.R.(3d) 350; 148 D.L.R.(4th) 158 (S.C.), revd. (1998), 106 B.C.A.C. 73; 172 W.A.C. 73; 157 D.L.R.(4th) 465 (C.A.), leave to appeal allowed (1998), 235 N.R. 400; 120 B.C.A.C. 158; 196 W.A.C. 158 (S.C.C.), refd to. [para. 129].

Campbell et al. v. Flexwatt Corp. et al. (1996), 25 B.C.L.R.(3d) 329; 50 C.P.C.(3d) 290 (S.C.), affd. (1997), 98 B.C.A.C. 22; 161 W.A.C. 22; 44 B.C.L.R.(3d) 343 (C.A.), leave to appeal denied (1998), 228 N.R. 197; 120 B.C.A.C. 80; 196 W.A.C. 80 (S.C.C.), refd to. [para. 129].

Ward-Price v. Mariners Haven Inc. et al., [2002] O.T.C. 871; 36 C.P.C.(5th) 189 (Sup. Ct.), refd to. [para. 129].

Robertson v. ProQuest Information and Learning LLC et al., [2010] O.T.C. Uned. A3; 97 C.P.C.(6th) 131; 84 C.P.R.(4th) 224 (Sup. Ct.), refd to. [para. 146].

Rice v. Atlantic Lottery Corp. (2011), 310 Nfld. & P.E.I.R. 234; 963 A.P.R. 234; 2011 NLTD(G) 65, refd to. [para. 146].

Sutherland v. Canadian Red Cross Society (1994), 17 O.R.(3d) 645; 112 D.L.R.(4th) 504 (Gen. Div.), refd to. [para 149].

Statutes Noticed:

Class Proceedings Act, R.S.A. 2000, c. C-16.5, sect. 13(1) [para. 120]; sect. 14 [para. 119].

Rules of Court, Alta. Reg. 124/2010, rule 3.47(b) [para. 22]; rule 3.68 [para. 20].

Authors and Works Noticed:

Brown, Russell, Pure Economic Loss in Canadian Negligence Law (2011), pp. 6 to 34 [para. 59].

Counsel:

Richard Mallett (James H. Brown & Associates), Clinton G. Docken, Q.C. (Docken Klym), and Linda Visser (Siskinds LLP, London, Ont.), for the representative plaintiff;

Eric Dolden and Diana Dorey (Dolden Wallace Follick LLP), for the defendants;

Bruce Hughson and Kerry Boyd (Department of Justice Canada), for the third party defendant.

These applications were heard on August 22 and 23, 2013, before Rooke, A.C.J.Q.B., of the Alberta Court of Queen's Bench, who delivered a memorandum of decision on September 5, 2013, and the following full reasons for that decision, dated at Edmonton, Alberta, on July 17, 2014.