Claims For Negligence In Implementing Court Orders May Succeed

Yesterday’s Supreme Court of Canada decision in Holland v. Saskatchewan, 2008 SCC 42 says governments can be sued for negligence when they negligently fail to implement a judge's orders. It is important to note that the ruling merely says the claim could succeed – it is a pleadings decision.

The appellant represented a group of game farmers who refused to register in a federal program aimed at preventing chronic wasting disease in domestic cervids, because they objected to the broadly worded indemnification and release clauses in the registration form. As a result, the farmers’ herd status was down‑graded to the lowest level, reducing the market price of their product and diminishing their ability to sell it. On judicial review, the farmers established that these clauses had been invalidly included in the registration form and obtained a declaration that the government’s action of reducing the herd certification status was unlawful.

Despite the court’s ruling, the government took no steps to reinstate the farmers’ certification or compensate them for the revenue they lost. They commenced a class action against the Minister, claiming damages on three grounds, including the tort of negligence. The motions judge denied the government’s motion to strike the farmers’ claims in negligence, but the Court of Appeal held that no action lies against public authorities for negligently acting outside their lawful mandates and struck out the cause of action in negligence in its entirety.

The Supreme Court allowed the appeal but only in part.

The statement of claim, read generously as required in an application to strike, focused mainly on two alleged acts of negligence: requiring the game farmers to enter into the broad indemnification agreement and down‑grading the status of those who refused to do so. In both cases, the alleged fault was the failure of the public authority to act in accordance with the authorizing acts and regulations. The Court of Appeal correctly held that the appellant’s claim for negligently acting outside the law, or breach of statutory duty, does not constitute negligence and rightly struck the paragraphs of the statement of claim asserting this cause of action. Even if the requirement of proximity were established, policy considerations, including the chilling effect and specter of indeterminate liability, militate against recognizing this new instance of negligence.

However, the Court of Appeal failed to address the appellant’s central claim alleging negligent failure to implement a judicial decree to remedy the wrongful reduction of the appellant’s herd status. The implementation of a judicial decision is an "operational" act that public authorities are expected to carry out. Therefore, in this case, it is not clear that an action in negligence based on the breach of a duty to implement a judicial decree could not succeed in law. Read broadly, the pleading was sufficient to put the government on the notice of the essence of the appellant’s claim and it should not have been struck out.