Holland v. Saskatchewan had the potential to fundamentally change the rules of the game

Mr. Holland is a game farmer and is also a class action representative who was trying to make fundamental changes to the relationship between the public and private spheres, as it pertains to splitting the burdens of ultra vires government action. In Holland v. Saskatchewan, 2008 SCC 42, one aspect to the statement of claim utilized the law of torts to bring forward a negligence argument against the government for breaching a statutory duty or for negligently acting outside the law. The novelty in this approach lies in the utilization of the private law of torts to seek grievance against a contested governmental policy decision. The Supreme Court rejected this line of argument that not only contravenes previous tort principles (Anns v. Merton London Borough Council, Anns v. Merton London Borough Council as adopted in  Cooper v. Hobart, [2001] 3 S.C.R. 537) but may lead to radical changes to a quiet traditional public/private relationship.

To situate this analysis in the facts of the case, I am reproducing the relevant facts, verbatim, as narrated by the Chief Justice in a most succinct and sufficient manner:

[2] The appellant, Roger Holland, represents a group of approximately 200 game farmers who refused to register in a federal program aimed at preventing chronic wasting disease (“CWD”) in domestic cervids, because they objected to a broadly worded indemnification and release clause in the registration form. As a result of their refusal to sign the form, the game farmers lost the CWD-free herd certification level which they had acquired by conforming to provincial CWD prevention rules, before the merging of the provincial and federal programs. The down-grading of the farmers’ certification status both reduced the market price of their product and diminished their ability to sell it. This resulted in a financial loss to the farmers.

[3] The game farmers successfully established on judicial review that the indemnification and release clauses had been invalidly included in the registration form.

[4] Despite the court’s declaration that the government’s reduction of the herd status was invalid, the government did not take the necessary steps to consider reinstating the farmers’ certification or take any steps to compensate the farmers for the revenue they lost through the wrongful cancellation of their prior certification level.

[5] Seeking a remedy for the financial loss they suffered as a result of the government’s wrongful reduction of certification status, the game farmers turned to the law of tort. They commenced a class action, in the name of the appellant, claiming damages on three alleged grounds: (1) the tort of misfeasance in public office; (2) the tort of intimidation; and (3) the tort of negligence.

[6] The government brought a motion to strike out the farmers’ claims. The motions judge, Laing C.J., struck the intimidation claim for lack of evidence of any threat ((2006), 277 Sask. R. 131, 2006 SKQB 99, at para. 36), granted leave to amend the statement of claim with regard to the misfeasance claim (para. 33), and denied the motion on the negligence claim (para. 34). The Court of Appeal of Saskatchewan allowed the government’s appeal from the ruling on negligence, holding that no action lies against public authorities for negligently acting outside their lawful mandates ((2007), 299 Sask. R. 109, 2007 SKCA 18, at para. 40).

The question to the Supreme Court was “whether the Court of Appeal erred in striking out the appellant’s negligence claim in its entirety” [6]. The Supreme Court determined it did but only in one limited exception.

The general claim that was struck out by both courts, being the one of interest, focused on two negligent government actions in 1- requiring the game farmers to enter into the broad indemnification agreement, and 2- down-grading the status of those who refused to do so. The Supreme Court agreed with the Court of Appeal in finding that these claims disclosed no cause of action recognizable by law. Historically, mere breaches of statutory duty were not considered as negligence. The Supreme Court further noted that even if one is to try to find a new duty of care using the two-step Anns inquiry, the second stage, which tackles residual policy considerations militates against finding a new cause of action for its “chilling effect and specter of indeterminate liability” [10].

Mr. Holland’s argument, which is basically saying that the government should be privately held liable for problems arising from its discretion in policy choices,  had the potential to make sweeping change to a dormant arrangement between the government and people. In fact, Richards J.A. from the Court of Appeal recognized this risk and shut it down by stating in Saskatchewan (Agriculture, Food and Rural Revitalization) v. Holland, (2007), 281 D.L.R. (4th) 349, that

. . . the respondent’s theory of liability would fundamentally shift the way in which the public and private spheres historically have carried the consequences or burden of governmental action which is shown to be ultra vires. I see no policy reason which would warrant such a dramatic revision in the shape of the law and, as indicated above, see much which cuts tellingly against shaping the law in the manner sought by the respondent [43].

For the purposes of this post, that was it for the radical potential in Holland (2008). The decision of the Supreme Court came down to strike out the aforementioned claims (paras. 58 to 63.1) save for one secondary aspect. Clause 61.1(f) was characterized by the Supreme Court as a different category of claim. It alleged that the Minister failed to implement Mr. Justice Gerein’s judicial decision that found the indemnification and release clauses invalid and that not restoring the CWD herd status to a level enjoyed before or to pay compensation for loss was unfair. The difference that the Supreme Court found is expressed in Welbridge Holdings Ltd. v. Greater Winnipeg, [1971] S.C.R. 957, at p. 970, where:

. . . the risk of loss from the exercise of legislative or adjudicative authority is a general public risk and not one for which compensation can be supported on the basis of a private duty of care. The situation is different where a claim for damages for negligence is based on acts done in pursuance or in implementation of legislation or of adjudicative decrees. [Emphasis added.]

In other words, the difference is between “policy” and “operational” decisions.  “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 to act has been made, the government may be liable in negligence for the manner in which it implements that decision: Kamloops (City of) v. Nielsen, [1984] 2 S.C.R. 2; Just v. British Columbia, [1989] 2 S.C.R. 1228; Laurentide Motels Ltd. v. Beauport (City), [1989] 1 S.C.R. 705; Lewis (Guardian ad litem of) v. British Columbia, [1997] 3 S.C.R. 1145.” [14]

The Supreme Court concluded that by not implementing a judicial decree, public authorities were making an ‘operational’ decision. So, as an action in negligence, there was no evidence to suggest that the argument cannot succeed if presented as a negligence claim for the breach of a duty to implement a judicial decree. The other claims against the government, being claims of neligence for breaching statutory duty or negligence in acting outside the mandates of law, are out of the question, for now.

Leave a Reply

Your email address will not be published. Required fields are marked *