Holland: An Overextension Of The Just Test?

The SCC’s recent decision in Holland v. Saskatchewan, 2008 SCC 42 is not a surprising one; it falls in line with the established position in Canadian jurisprudence on governmental liability for negligence. (For a summary of the case, read TheCourt.ca’s summary here.) The fact that the government can only be sued for “operational” negligence and not for “policy” decisions, falls in line with the position first established by the SCC in Barratt v. District of North Vancouver, [1980] 2 S.C.R. 418, refined in Kamloops v. Neilsen, [1984] 2 S.C.R. 2, and further refined into a more formal test by Just v. British Columbia, [1989] 2 S.C.R. 1228.

The Just test argues that governmental policy decisions should be exempt from liability in order to avoid a chilling effect that may hinder government actors from exercising their duty to formulate public policy. This is an eminently reasonable basis for the creation of the test. However, this writer has always felt that the test, as laid out in Just, is fundamentally flawed.

The Just test differentiates between “policy” and “operational” decisions. Policy decisions – the decision by the government about what acts to perform under a given statute – are exempt from liability. Operational decisions – the decision by the government about how to perform those acts once they have been decided – are not exempt from liability. In Just, the SCC took pains to emphasize that this distinction is necessary because a government is not an individual actor; its responsibilities lie to the entire municipality, province or country (depending on level of government).

However, this test essentially gives governments total fiat to design policy without concern for potential negligent acts. Certainly, we should have a test that allows for some level of exemption from liability that does not restrain the governments’ ability to create policy without the undue concern over litigation. However, the test as currently extant places a great deal of trust in government actors where there exists no provision for those government actors who design policy in the spirit of malicious negligence. (That we do not, as a country, have a history of such behaviour is besides the point; I would argue that a further judicial check on such behaviour is one that would be valuable to have in advance.)

Another aspect worth critiquing is the fact that this current test specifically protects high-level government actors who typically design public policy, rather than lower-level government actors who implement it on a day-to-day level. Granted, any punishment explicitly delivered by a judgement would be suffered by the government as a whole rather than by individual actors, the ripple effects of that judgement upon people’s careers can be devastating  (or, more bluntly, you wouldn’t want to be a minor government functionary when your department is held responsible for an occurrence of “operational” negligence). Thus, the Just test ,as it currently stands, has a definite element of political classism in it.

In relation to Holland, it is noteworthy to point out that this case extends the scope of the Just test somewhat by upholding the Saskatchewan Court of Appeal’s decision that government acting negligently outside the boundaries of lawful mandate is exempt from liability on policy grounds. Chief Justice MacLachlin compares the decision here to the precedent in The Queen v. Saskatchewan Wheat Pool, [1983] 1 S.C.R. 205. However, in that case, the SCC found that the tort of negligence was an incorrect remedy for breach of statutory duty. I would suggest that Holland is distinguished from Wheat Pool in this respect, where in Holland, the action was one of government initiative taken outside the bounds of statutory duty – namely by acting outside its prescribed mandate. In Wheat Pool, the SCC was presented with a case where the government was potentially negligent within the bounds of its statutory duty by failing to adequately carry out an existing duty. The distinction is fine but arguably an important one: failing to carry out a prescribed duty should be treated with more leniency than failing in the course of carrying out an improvised one, for obvious reasons.

2 Responses

  1. James G says:

    “Certainly, we should have a test that allows for some level of exemption from liability that does not restrain the governments’ ability to create policy without the undue concern over litigation.”

    I’d be interested in your thoughts on what such a test might look like. The seemingly simple “policy v. operational” distinction has itself led to a large body of jurisprudence on when a decision is a policy or operational one. This has included ostensibly operational decisions where there is some policy element. Trying to carve off some level of policy decision that would give rise to liability in negligence seems to me like it would lead to an even more horribly complex and irreconcilable series of judicial decisions.

    I’m also not sure that your characterization of Sask Wheat Pool is accurate. The SCC found that there was no tort of breach of statute in Canada; instead, like in the US, breach of a statutory duty can be used as evidence of negligence (assuming there is a duty of care between the parties).

    Finally, the policy/operational distinction already has built in safeguards to prevent what you refer to as “maliciously negligent” policy. In both Brown and Swinamer the Court indicated that it is possible that a policy decision could give rise to liability in negligence if it was not “bona fide” or was “so irrational that it could not constitute a proper exercise of discretion”

  2. Cameron Pallett says:

    One of the effects of Holland that has been overlooked in the discussion is that the SCC has now confirmed that no Crown liability tort of breach of statutory duty exists. The Sask Wheat Pool was a co-operative, not any form of Crown Corporation (now Viterra Inc.) and Ryan v. Victoria (City) was actually about the defendant CPR. It is still not intuitively obvious to me that while “public authorities are expected to implement a judicial decision” (para 14), they are not expected to obey their own laws. Oh well.

    As for the test of policy/operational, Holland has clarified and simplified this test enormously: “Policy decisions about what acts to perform under a statute do not give rise to liability in negligence. On the other hand, once a decision has been made, the government may be liable in negligence for the manner in which it implements that decision.” (para. 14)

    What is so hard to understand about that? Given that the CJC refernces Kamloops in the same paragraph, the corollary that covers government inaction can safely be presumed to remain good law: “In my view, inaction for no reason or inaction for an improper reason cannot be a policy decision taken in the bona fide exercise of discretion. Where the question whether the requisite action should be taken has not even been considered by the public authority, or at least has not been considered in good faith, it seems clear that for that very reason the authority has not acted with reasonable care.”

    So, once the Crown decides to act the implementation of the decision to act is operational. The decision-making function is policy. You cannot evade liabilty through inaction if you ought to have acted. This is the ratio from Anns written in small clear words so that, hopefully, everyone can get it right from here on.

    Plus, as James G correctly points out, the law as set down in Brown remains unchanged: “It will always be open to a plaintiff to attempt to establish, on a balance of probabilities, that the policy decision was not bona fide or was so irrational or unreasonable as to constitute an improper exercise of governmental discretion. This is not a new concept. It has long been recognized that government decisions may be attacked in those relatively rare instances where the policy decision is shown to have been made in bad faith or in circumstances where it is so patently unreasonable that it exceeds governmental discretion.”

    Crown liability issues just (pun intended) became far more straightforward.

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