Canada: Farmer's Odyssey: Prolonged Class Action Proceedings Against Saskatchewan Ministry Of Agriculture Ends In Summary Dismissal

Last Updated: August 21 2017
Article by Canadian Class Actions Monitor and Iain Mingo

Most Read Contributor in Canada, September 2018

In Holland v Saskatchewan (Ministry of Agriculture), 2017 SKQB 172, the Saskatchewan Court of Queen's Bench dismissed a class action brought by a group of deer and elk farmers against the Saskatchewan Ministry of Agriculture. The class action alleged damages caused by the Ministry's negligent implementation of a Chronic Wasting Disease monitoring program. The Court of Queen's Bench concluded that the Ministry had statutory immunity for their actions and granted summary dismissal of the class action. The history of the case leading up to the summary dismissal reveals a legal odyssey lasting 13 years and taking the parties all the way to the Supreme Court of Canada and back.

Background

A group of game farmers (the "Farmers") refused to register for a federal monitoring program (the "Program") designed to curtail the spread of Chronic Wasting Disease. As a result of their refusal, the Saskatchewan Ministry of Agriculture (the "Ministry") downgraded the Farmers' livestock to the lowest certification level – "surveillance" status. The market value of the Farmers' livestock dropped.

The Farmers objected to provisions in the Program that required farmers to indemnify the Ministry for any damages incurred in the course of the monitoring program. The Farmers applied for judicial review of the Program. The indemnification provisions were found to be ultra vires and the court declared that the certification downgrades were invalid.1 This placed the Ministry in a legal dilemma. By this point in time, the regulatory environment had changed and the Ministry no longer had the power to undo the certification downgrades. As a result, the Ministry was unable to implement the judicial decree.

The Class Action

The Farmers started a class action against the Ministry to recover the financial damages resulting from the invalid certification downgrades. The Farmers' statement of claim (the "Claim") could be broadly summarized as alleging two acts of negligence on the part of the government:

  1. Requiring the Farmers to enter into a broad indemnification agreement with the Ministry as part of the Program; and
  2. Downgrading the herd status of the Farmers who objected to the Program.

The Ministry moved to strike the Claim. The motions judge denied the Ministry's motion, and the Ministry appealed to the Saskatchewan Court of Appeal.2 The Court of Appeal followed Saskatchewan Wheat Pool and concluded that a breach of statutory duty is insufficient on its own to ground a claim of negligence.3 The Court of Appeal struck the claims of negligence, and the Farmers appealed to the Supreme Court of Canada.

The Supreme Court allowed the appeal in part.4 The Supreme Court struck the Farmers' claim that the government negligently acted outside the law, but upheld the claim that the government negligently failed to implement a judicial decree. The Supreme Court explained the distinction between "policy" and "operational" decisions. A "policy" decision occurs when the government decides what acts to perform under a statute. Policy decisions do not give rise to liability in negligence. An "operational" decision is the manner in which the government implements a policy decision and does open the government up to liability in negligence. The Ministry's failure to implement the judicial decree was an "operational" decision, and therefore this aspect of the Claim was not struck.

The Application for Summary Judgment

The Supreme Court's ruling reduced the Claim to a single allegation. Was the government liable for the Farmers' damages due to the government's negligent implementation of a judicial decree? The class proceedings were certified and both parties moved for summary judgment.5

The Saskatchewan Court of Queen's Bench accepted that in principle there exists a tort of negligent implementation of a judicial decree, and that in principle the Ministry was negligent in implementing the judicial decree. However, the Court of Queen's Bench was quick to note that the question of negligence was academic. The more important question was whether the Ministry had legal immunity for their actions under The Animal Products Act (the "Act").6

The "Good Faith Shield"

The Ministry was operating under the Act at the time they implemented the Program. In Section 18.1 of the Act, the Ministry is given immunity for actions made in "good faith" with the intention of assisting the game industry.7

The Court of Queen's Bench surveyed the case law relating to similar immunity provisions, or "good faith shields". In Deren v SaskPower and Saskatchewan Watershed Authority, 2015 SKQB 366, the court enumerated the "badges" of bad faith, and noted that it is possible to act in good faith while committing a tortious or unlawful act. The Court of Queen's Bench concluded that good faith provisions are remedial, and courts should give them a broad and liberal interpretation. The Court of Queen's Bench then turned to discuss the badges of bad faith.

There was no evidence that the Ministry acted with the intention of doing harm. While reasonable people could disagree on the best course of action, it would not be reasonable to conclude that the Ministry's actions were in bad faith. Further, the Ministry was proactive in attempting to avoid the dilemma that resulted from the judicial review. During the application for judicial review, the Ministry had attempted to notify the court that the Ministry no longer had the ability to undo the certification downgrades.

There was no evidence of bad faith and therefore the Ministry had legal immunity. The Court of Queen's Bench granted the Ministry's application for summary dismissal. Reflecting on the heroic length of the legal odyssey, the Court of Queen's Bench remarked that "they had no appetite to award costs."

Footnotes

[1] 2004 SKQB 478.

[2] 2006 SKQB 99.

[3] 2007 SKCA 18.

[4] [2008] 2 SCR 551.

[5] 2017 SKQB 172.

[6] RSS 1978 (Supp), c A-20.2.

[7] RSS 1978 (Supp), c A-20.2.

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