Date: Sat, 12 Jul 2008 06:00

From: Neil Foster

Subject: Refreshing encore

Dear Colleagues

Absolutely agree with Jason and Lewis - short, disappointing. In the end it seems to me that this is a classic case for "misfeasance in public office" - the government was told a particular act they had taken was illegal, they have refused to remedy the situation, and as Lewis says, intentionally, not negligently. The MPO action was not struck out. Conceptually it would have saved confusion if some court had gone ahead and determined the MPO action before allowing the claim in negligence to go so far. Agree with Lewis, too, that the Court is very clearly reaffirming Saskatchewan Wheat Pool. (Although it would be nice if at [9] they hadn't described that case as standing for the proposition that "mere breach of statutory duty does not constitute negligence" - the case is about a separate tort altogether, and not at all about the tort of negligence.)

But I really query whether they needed to say anything about SWP. I can't see what the claimed "statutory duty" here would have been. Sure, the government has a duty to administer its schemes in accordance with the law. But no specific duty imposed by a specific statutory provision was alleged here. What the government was in breach of was a general "public" or "constitutional" duty to behave lawfully. So in my view comments about SWP here are really obiter.

But the tendency to brevity is taken to an extreme here. The guts of the judgment should have been a detailed analysis of why the "residual policy considerations" counted against imposing a duty of care on the government to behave lawfully. All we get is para [10]. I suppose one is supposed to go back and incorporate by reference what the Saskatchewan Court of Appeal said.

Yet what we find later is the assertion by the SCC at [14] of the general proposition that "once a decision to act has been made, the government may be liable in negligence for the manner in which it implements that decision" (their emphasis). Leaving aside the fact that there seems to be confusion here between the "policy/operational" distinction and the "misfeasance/nonfeasance" distinction (and the fact that "policy/operational" is spoken of as a "more recent" concept!) - what makes the failure of the government to comply with a court order here not "operational"? And since when are duties of care defined in terms of the nature of the fault ("failure to implement a judicial decree"), as opposed to the nature of the loss suffered?

And did anyone else notice that the House of Lords dealt with a case of "failure to implement a judicial decree" in Her Majesty's Commissioners of Customs and Excise v Barclays Bank plc [2006] UKHL 28, and analysed it on the basis of general principles governing recovery of economic loss, rather than creating a special fault-defined category?

Regards
Neil F

Neil Foster
Senior Lecturer, LLB Program Convenor
Newcastle Law School
Faculty of Business & Law
MC158, McMullin Building
University of Newcastle
Callaghan NSW 2308
AUSTRALIA
ph 02 4921 7430
fax 02 4921 6931

>>> Lewis KLAR 12/07/08 7:43 >>>

Hello:

The Holland judgment is very unclear, and frankly disappointing. (I could not sleep last night in anticipation of it. And for this I lost a whole night's sleep?)

For starters, one might diminish its importance by arguing that the SCC merely decided that when taking a "generous view" of one paragraph in the statement of claim (if it was "read broadly") the Court could not say that the claim could not succeed at trial. Thus it allowed this claim to proceed. The SCC pointedly would not comment "on whether the evidence and the applicable law will in fact establish a claim for negligence ... at the time of trial." As we know, however, many important judgments which contribute to our understanding of the law have been made within the context of motions to strike. The court could have, had it wished, expanded on the difficult issues of public tort liability which this case raises. It chose not to, for whatever reason.

There are however certain statements in this case which are important.

First the court reaffirmed Saskatchewan Wheat Pool. According to the Court, there is no tort claim "against the government authority for negligent beach of statutory duty by acting outside or contrary to the law".

"The law to date has not recognized an action for negligent breach of statutory duty. It is well established that mere brief of statutory duty does not constitute negligence."

"The proper remedy for breach of statutory duty by a public authority, traditionally viewed, is judicial review for invalidity."

These statements in my view reaffirm Canadian law's refusal to convert a breach of a statutory duty into a private law remedy.

Second the court seemed to acknowledge that "a legislative and regulatory matrix" can establish proximity between private parties and a statutory authority, although the court again pointedly decided not to make that decision on the facts of this case. I do not know what the court meant by the words “legislative and regulatory matrix”. I have argued that statutory provisions cannot create proximity although they can result in relationships which the courts can recognize as proximate relationships. I am heartened to see that the court did not talk about statutory provisions creating proximity and perhaps the word “matrix” and not “provisions” is supportive of my argument. That might be wishful thinking of course.

Third, the court did recognize that a claim in negligence can be brought for the failure of government “to implement an adjudicative decree”. This is probably the most puzzling part of the judgment. The court characterizes this as a negligence claim. But surely there was no negligence here; there was an intentional decision of the government not to implement a judicial decree. I would have thought that this would be remedied best by an administrative law remedy (mandamus or mandatory injunction) although I concede that I am not an administrative law lawyer. Alternately it could be a claim for misfeasance in a public office, which is already part of this action. How this failure will be rationalized and argued as a negligence claim will be interesting to see. The court, for example, did not deal with proximity or policy in relation to this negligence failure. This will have to be done.

Fourth, the court reverted back to the policy/operational dichotomy (which I thought we had almost dispensed with, by focusing on proximity instead). The failure to implement a judicial decision was seen as a matter of operations and not policy, somewhat similar to the City of Kamloops decision. The question however is: operations in relation to what? The Court seems to be saying that there is a tort duty to implement a judicial decree (without really explaining the source of this duty) and then arguing that the failure to execute the duty is a matter of operations and not policy. It seems to me that once the court defines the duty so specifically, the policy/ operational dichotomy has no role to play.

Fifth, in answer to Jason’s query, the intimidation action was struck at trial and I believe that was the end of the matter. The misfeasance action will continue alongside this negligence claim “for failing to implement a judicial decree”.

There we have it. It’ll be interesting to see what the counsel and the next trial judge make of this negligence claim.

<<<< Previous Message  ~  Index  ~  Next Message >>>>>