River Valley Poultry Farm v. Can. (A.G.), 2009 ONCA 326

• Jurisdiction: Ontario
• Judge: Laskin, Borins and Feldman, JJ.A.
• Neutral Citation: 2009 ONCA 326
• Date: 22 October 2008
• Court: Court of Appeal (Ontario)

River Valley Poultry Farm v. Can. (A.G.) (2009), 248 O.A.C. 222 (CA)

MLB headnote and full text

Temp. Cite: [2009] O.A.C. TBEd. AP.073

River Valley Poultry Farm Ltd. (plaintiff/respondent) v. Attorney General of Canada , McKinley Hatchery (St. Mary's) Limited, Rick Swann, Aon Reed Stenhouse Inc., LRMS Insurance Services Ltd., Lloyd's Underwriters, London, England (defendants/ appellant )

(C48446; 2009 ONCA 326)

Indexed As: River Valley Poultry Farm Ltd. v. Canada (Attorney General) et al.

Ontario Court of Appeal

Laskin, Borins and Feldman, JJ.A.

April 22, 2009.

Summary:

River Valley, an egg producer, sued the Canadian Food Inspection Agency and Health Canada for damages for negligently investigating whether its flock was infected. The parties brought a pre-trial motion to determine questions of law, including whether the defendants owed a private duty of care.

The Ontario Superior Court concluded that the defendants each owed a duty of care and that the duty arose when River Valley was "targeted" for investigation. The Attorney General of Canada appealed the decision on three grounds: (1) River Valley failed to first bring a judicial review application; (2) neither government authority owed a duty of care to River Valley; i.e., that the relationship between the parties lacked "proximity"; and (3) the statutory immunity clause in s. 50 of the Health of Animals Act barred any action against the Agency.

The Ontario Court of Appeal allowed the appeal on the second ground. It was unnecessary to answer the third ground.

Animals - Topic 2421

Diseased animals - Regulation and control - General - [See Statutes - Topic 1782 ].

Animals - Topic 2425

Diseased animals - Regulation and control - Duty of Crown - [See Crown - Topic 1604 , Crown - Topic 1645 , Torts - Topic 9157.2 , and both Torts - Topic 9167 ].

Animals - Topic 2521

Diseased animals - Compensation - General - [See Crown - Topic 1643 , and Crown - Topic 1649 ].

Courts - Topic 5693

Provincial courts - General - Jurisdiction or powers - Respecting torts against Federal Crown - [See Courts - Topic 7402 ].

Courts - Topic 7402

Provincial courts - Ontario - Superior Court - Jurisdiction - General - An egg producer sued two government authorities for damages for negligently investigating whether its flock was infected - The Ontario Court of Appeal rejected the submission of the Attorney General (Can.) that the plaintiff could not maintain its action in the superior court because it had not first challenged the authorities' actions by a judicial review application in the Federal Court - The court set out its "recent quartet of cases" that decided that the superior court had jurisdiction to adjudicate a claim for damages for negligence against a federal agency - A successful judicial review application in the Federal Court was not a condition precedent to the exercise of that jurisdiction - See paragraphs 29 and 30.

Crown - Topic 1567

Torts by and against Crown - Negligence by Crown - Negligent investigation (incl. preparation of reports, criminal prosecutions, etc.) - [See Torts - Topic 9157.2 and both Torts - Topic 9167 ].

Crown - Topic 1604

Torts by and against Crown - Actions against Crown - Public authority protection legislation - Persons or acts protected - An egg producer sued the Canadian Food Inspection Agency for damages for negligently investigating whether its flock was infected - The Ontario Court of Appeal opined that the statutory immunity clause in s. 50 of the Health of Animals Act, shielding Agency inspectors from lawsuits for actions taken in carrying out their statutory duties, showed an absence of proximity - The broad immunity clause was not qualified by an express requirement that to be entitled to its protection, inspectors must be acting in good faith - Section 50 protected inspectors whether or not they were at fault - Moreover, it was precisely when they were alleged to be negligent that they would likely need to rely on this protection - At the very least, s. 50 strongly pointed to a legislative intent to preclude a private law duty - It was not necessary for the court to answer the question whether s. 50 barred any claim against the Agency itself - See paragraphs 77 to 79, 88.

Crown - Topic 1643

Torts by and against Crown - Actions against Crown - Defences, bars or exclusions - Receipt of compensation from consolidated revenue fund or Crown agency - The main question was whether the Canadian Food Inspection Agency (CFIA) and Health Canada owed a private duty of care to an egg producer allegedly economically harmed by their actions - The Ontario Court of Appeal considered the statutory compensation scheme in s. 51 of the federal Health of Animals Act - "A farmer whose animal is destroyed under a CFIA order or is injured during CFIA testing is entitled to apply for compensation. At the same time, the combination of s. 51 of the Health of Animals Act and s. 9 of the Crown Liability and Proceedings Act demonstrate an express legislative intent to preclude an action for negligence against CFIA where statutory compensation has been paid. ... [A] farmer whose animal is ordered destroyed or is injured during testing cannot refuse to apply for statutory compensation and by doing so maintain CFIA owes a private duty, the breach of which entitles the farmer to damages in the Superior Court. The farmer must seek compensation under the Act" - See paragraphs 70 to 75.

Crown - Topic 1645

Torts by and against Crown - Actions against Crown - Defences, bars or exclusions - Policies or "policy" decisions - The main question was whether the Canadian Food Inspection Agency (CFIA) and Health Canada owed a private duty of care to an egg producer allegedly economically harmed by their actions - Although it was unnecessary to the conclusion of the Ontario Court of Appeal that no private duty of care existed, the court saw at least one overriding policy consideration that also negated a private duty - Conflict might arise if CFIA inspectors had to worry about the economic interests of individual farmers as well as their obligation to the public to protect human and animal health - The conflict might arise over the extent of the testing necessary to determine whether an animal was diseased - See paragraphs 84 to 86.

Crown - Topic 1649

Torts by and against Crown - Actions against Crown - Defences, bars or exclusions - Existence of alternative remedy - An egg producer (River Valley) destroyed its entire flock before it received test results from the Canadian Food Inspection Agency showing that only part of the flock was infected - The Ontario Court of Appeal set out the plaintiff's options - "[I]t could have tried to pursue CFIA's recommendation to divert its eggs to pasteurization and thus minimize its losses; it could have tried to claim statutory compensation on the footing that CFIA's actions amounted to a 'constructive' destruction order; or it could do what it eventually did - obtain compensation from the industry fund, which is a residual safeguard for farmers, and from its own insurers. The one option River Valley did not have was a negligence action against CFIA" - See paragraph 76.

Crown - Topic 1785

Torts by and against Crown - Practice - Pleadings - The parties brought a pre-trial motion to determine whether Health Canada and the Canadian Food Inspection Agency owed a private duty of care to an egg producer allegedly economically harmed by their actions - The motion judge did not distinguish between the two entities; nor did the parties - The Ontario Court of Appeal thought that approach was wrong - Each entity played a different role in the investigation, each acted under a different statutory regime, and most important, the allegations in the statement of claim differed dramatically - "A rule 21.01(1)(a) motion is a motion for a determination of a question of law raised by a pleading" - The pleading raised no question of law concerning Health Canada - On this ground alone, the answer to the question "did Health Canada owe a duty of care" was "no" - See paragraphs 36 to 39, 83.

Statutes - Topic 1782

Interpretation - Intrinsic aids - General - Statement of purpose and objects - Effect of - An egg producer sued the Canadian Food Inspection Agency for damages for negligently investigating whether its flock was infected - At issue was whether the Health of Animals Act disclosed a legislative intention to exclude or confer a private law duty of care - The Ontario Court of Appeal gleaned the purpose of the statute from 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" - The court also considered the jurisprudence noting that the purpose of the Act was to enable the Crown to protect the health of people and animals - In exercising the broad discretionary powers, inspectors were not obliged to be mindful of the economic interests of individual farmers; their overriding concern was the protection and promotion of human and animal health - See paragraphs 68 and 69.

Torts - Topic 9157.2

Duty of care - Particular relationships - Claims against public officials, authorities or boards - Public health authorities - An egg producer sued Health Canada for damages for negligently investigating whether its flock was infected - The Ontario Court of Appeal concluded that the motion judge erred in holding that Health Canada owed a duty of care to the plaintiff - First, the statement of claim implicated Health Canada in only one paragraph - The remainder of the pleading made no claim against Health Canada - Second, the evidence showed that as between the plaintiff and Health Canada, the requirement of proximity was absent - The Agency brought Health Canada into the investigation for its scientific expertise, and when Health Canada tested the samples and did its risk assessment, it reported not to the plaintiff but to the Agency - See paragraphs 36 to 42.

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.) - An egg producer sued the Canadian Food Inspection Agency for damages for negligently investigating whether its flock was infected - The motion judge concluded that the Agency owed a duty of care not only to the public at large but also to individual farmers; its duty arose when it "targeted" the plaintiff for investigation - The Ontario Court of Appeal disagreed with the motion judge's analysis of proximity - First, none of the considerations that raised a triable issue on proximity in "Correia" (2008) (Ont. C.A.) existed in this case - Second, targeting in the context of a statutory regime under which a government agency was responsible for preventing and controlling disease in the interest of animal and public health was not enough to establish proximity - Third, the limited reliance by the plaintiff on the Agency's investigation was overborne by factors pointing against proximity - Finally, although the motion judge correctly looked at the legislation to determine whether it reflected a parliamentary intent to give farmers a private remedy, the provisions relied on did not come into play - See paragraphs 46 to 61.

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.) - An egg producer sued the Canadian Food Inspection Agency for damages for negligently investigating whether its flock was infected - The Ontario Court of Appeal held that the motion judge misapprehended the record by relying on the seizure and detention provisions of the Health of Animals Act and two other federal statutes to establish proximity - In the court's view, the Health of Animals Act disclosed an intention to exclude a private law duty - Specifically, the Act's purpose, its statutory compensation scheme, and its immunity clause showed the absence of proximity between the Agency and the plaintiff, and instead showed that the Agency's duty was to the public as a whole, not to individual egg producers or farmers - See paragraphs 61 to 67.

Cases Noticed:

Grenier v. Canada (2005), 344 N.R. 102; 262 D.L.R.(4th) 337 (F.C.A.), not folld. [para. 29].

G-Civil Inc. - see TeleZone Inc. v. Canada (Attorney General).

Fielding Chemical Technologies Inc. - see TeleZone Inc. v. Canada (Attorney General).

McArthur - see TeleZone Inc. v. Canada (Attorney General).

TeleZone Inc. v. Canada (Attorney General) (2008), 245 O.A.C. 91; 2008 ONCA 892, folld. [para. 29].

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

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].

Odhavji Estate et al. v. Woodhouse et al., [2003] 3 S.C.R. 263; 312 N.R. 305; 180 O.A.C. 201, refd to. [para. 31].

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; 285 D.L.R.(4th) 620; 2007 SCC 41, dist. [para. 47].

Adams et al. v. Borrel et al. (2008), 336 N.B.R.(2d) 223; 862 A.P.R. 223 (C.A.), dist. [para. 48].

Correia v. Canac Kitchens et al. (2008), 240 O.A.C. 153; 2008 ONCA 506, dist. [para. 53].

Eliopoulos et al. v. Ontario (Minister of Health and Long Term Care) (2005), 198 O.A.C. 377; 82 O.R.(3d) 32 (C.A.), refd to. [para. 57].

Attis v. Canada (Health), 2008 ONCA 660, refd to. [para. 58].

Drady v. Canada (Health), 2008 ONCA 659, refd to. [para. 58].

Vona et al. v. Canada (1996), 94 O.A.C. 390; 30 O.R.(3d) 687 (C.A.), refd to. [para. 68].

Statutes Noticed:

Crown Liability and Proceedings Act, R.S.C. 1985, c. C-50, sect. 9 [para. 72].

Health of Animals Act, S.C. 1990, c. 21, sect. 38(1)(d), sect. 38(1)(e) [para. 64]; sect. 50 [para. 77]; sect. 51(1)(a) [para. 70]; sect. 51(2) [para. 71].

Counsel:

Miriam Flynn and Melanie Toolsie, for the appellant;

Norman Peel and Susan N. Peel, for the respondent.

This appeal was heard on October 22, 2008, by Laskin, Borins and Feldman, JJ.A., of the Ontario Court of Appeal. The judgment of the court was delivered by Laskin, J.A., and released on April 22, 2009.