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. Flying E Ranche Ltd. v. Canada (Agriculture)

In Flying E Ranche Ltd. v. Canada (Agriculture) (Ont CA, 2023) the Court of Appeal considered the federal Crown Liability and Proceedings Act, s.9 ['No proceedings lie where pension payable'], here in the context of a class action lawsuit involving an outbreak of Bovine Spongiform Encephalopathy ("BSE"):

[24] I begin by setting out the provision contained in s. 9 of the CLPA. It reads:
No proceedings lie against the Crown or a servant of the Crown in respect of a claim if a pension or compensation has been paid or is payable out of the Consolidated Revenue Fund or out of any funds administered by an agency of the Crown in respect of the death, injury, damage or loss in respect of which the claim is made.
[25] Section 9 has been considered in many cases, the leading one of which is Sarvanis v. Canada, 2002 SCC 28, [2002] 1 S.C.R. 921 in which Iacobucci J. considered the scope of the section. In that case, an inmate in a federal penitentiary had sustained serious personal injuries. As a result, he qualified for Canada Pension Plan disability benefits. The inmate sued the Crown in tort soon after suffering his injuries. The Crown moved for summary judgment claiming that the action was statute-barred by s. 9 because the plaintiff was receiving Canada Pension Plan disability benefits.

[26] The Supreme Court of Canada found that s. 9 did not bar the plaintiff’s action. In his reasons, Iacobucci J. began by noting that the words “in respect of” are of the widest possible scope. He also noted, though, that the words are not “of infinite reach”: at para. 22. Iacobucci J. then set out the proper approach to the interpretation and application of s. 9. He said, at para. 24:
In both cases, we must not interpret words that are of a broad import taken by themselves without looking to the context in which the words are found. Indeed, the proper approach to statutory interpretation requires that we more carefully examine the wider context of s. 9 before settling on the correct view of its reach.
[27] Iacobucci J. reviewed the specific facts of the case that was before the court and concluded that s. 9 did not apply in the circumstances. In making that determination, Iacobucci J. set out a form of test for the application of s. 9. He said, at para. 28, that for s. 9 to apply, the pension or compensation paid or payable “must be made on the same factual basis as the action” that would be barred against the Crown. Iacobucci J. reiterated that the purpose of s. 9 was to bar double recovery “for the same claim where the government is liable for misconduct but has already made a payment in respect thereof”.

[28] The appellant resists the application of s. 9 to this case largely based on its argument that the various programs referred to above were designed to provide “financial assistance” to the class members but were not for the purpose of providing “compensation”. It points to the fact that none of the programs use the term “compensation” in describing its purpose.

[29] I find this submission unpersuasive. The application of s. 9 does not turn on whether the specific word “compensation” is used in relation to the payment made. It is the purpose of the payment, and whether it is “contingent” on an event of death, injury, damage or loss, that is important: Sarvanis, at para. 31. If the payment is made to a person in recognition of that “death, injury, damage or loss”, then that person has received compensation.[2]

[30] In my view, in the factual circumstances of this case, government’s purpose in paying assistance to the cattle farmers under the BSE-specific programs was clearly to compensate them, in particular, for the economic effects of the border closures that arose from the discovery of BSE in Canada, but also for the impact of BSE generally. It may be that some aspects of the programs were designed to accomplish other goals. It may also be that some payments under the programs were not made directly for losses sustained but in order to pre-empt other pending losses. But those observations do not change the fact that one of the principal purposes of these programs was to compensate farmers for the economic impact of BSE.

[31] This purpose is reflected not only in the programs’ substantive provisions, as described in the facts section above, but also in their surrounding documents provided in the record. For instance, the TISP Direct Payment Form and Guide published by the Ministry states that “The Direct Payment is designed to provide assistance to producers in meeting the financial challenges resulting from the market impacts of Bovine Spongiform Encephalopathy (BSE)” (emphasis added). The Questions and Answers document published with the FIP Program explains that it “is targeted to producers of animals directly impacted by the BSE outbreak and the resulting border closures.” Additionally, the preambles to the province-Canada agreements establishing the BSE Recovery Program read:
WHEREAS the federal and provincial and territorial ministers of agriculture, representing their respective governments, recognize the important economic contribution of the beef industry to Canada, and the difficulty facing that industry as a result of the current suspension by the United States of America of imports of Canadian ruminants and ruminant products; [Emphasis added.]
[32] In support of its view that “compensation” is distinct from “assistance”, the appellant submits, based on Berardinelli v. Ontario Housing Corp., 1978 CanLII 42 (SCC), [1979] 1 SCR 275, that s. 9 should receive a restrictive meaning because it circumscribes the rights of citizens. This submission is also unpersuasive. I begin by questioning whether it can be properly said that the terms of s. 9 involve an ambiguity, as the appellant contends. The words used in s. 9 each have a clear meaning. Further, no apparent ambiguity arises from the sentence structure. Irresolvable ambiguity obtains only when it is not possible to determine which of two equally plausible meanings were intended by Parliament. The mere fact that a party can conceive of an alternative meaning does not mean there is any ambiguity: an alternative interpretation can simply be wrong. Furthermore, difficulty in applying a provision to a particular set of facts is not necessarily the result of any ambiguity. Meaning and application are two different concepts: Bell ExpressVu Ltd. Partnership v. Rex, 2002 SCC 42, [2002] 2 S.C.R. 559, at paras. 29-30.

[33] In any event, the interpretative approach of treating some statutes as requiring restrictive interpretations was abandoned some time ago. There is now only one interpretive principle or approach, namely, “the words of an Act are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament”: Rizzo & Rizzo Shoes Ltd. (Re), 1998 CanLII 837 (SCC), [1998] 1 S.C.R. 27, at para. 21, citing Elmer Driedger, Construction of Statutes, 2nd ed. (Toronto: Butterworths, 1983), at p. 87.

[34] The conclusion that the absence of the word “compensation” from the BSE-specific schemes does not determine the application of s. 9 is also consistent, either explicitly or implicitly, with various other decisions. One is North Bank Potato Farms Ltd. v. Canadian Food Inspection Agency, 2019 ABCA 344. That action arose from a decision by the Canadian Food Inspection Agency to quarantine the plaintiffs’/appellants' lands and destroy their seed potato crops, after it discovered potato cyst nematode spores in soil samples from the appellants' land. As a consequence, both the United States and Mexico had closed their borders to seed potatoes. Potato farmers had received some assistance from the federal and provincial governments arising from these events.

[35] The issue was whether those payments constituted compensation under s. 9 such that the plaintiffs’/appellants’ negligence claim against the federal government was barred. The chambers judge concluded that it was and dismissed the action. The Alberta Court of Appeal upheld that decision. In that case, the appellant had advanced very much the same argument, as the appellant does here, regarding the submitted difference between compensation and assistance and the absence of the word “compensation” from the particular program. Both the chambers judge and the court of appeal rejected the argument.

[36] The case law is clear that s. 9 bars an action for damages for a loss that has already been compensated, even if the action attempts to frame the loss differently. In Vancise v. Canada (Attorney General), 2018 ONCA 3, the plaintiff/appellant brought a claim in negligence against the federal government arising out of damages he suffered when his cattle became infected with anaplasmosis – a bacterial infection that was considered to be a foreign animal disease requiring the destruction of any infected animal. His claim was dismissed on a summary judgment motion because s. 9 was found to bar his claim.

[37] On appeal, the plaintiff/appellant argued that his claim for negligence was separate and apart from the loss arising from the destruction of his animals, for which he acknowledged he had been compensated by the respondents. This court rejected that argument. In doing so, Paciocco J.A. said that the reach of s. 9 was “settled”. He went on to say, at para. 15: “The framing of the appellant's action as a damage claim for negligence regarding the importation of the cattle and the ensuing quarantine of the herd, as distinct from the destruction of the diseased animals and treatment of the herd, does not place this case outside the restrictive sweep of s. 9 of the CLPA.”

[38] Yet another case is Begg v. Canada (Minister of Agriculture), 2005 FCA 362, 261 D.L.R. (4th) 36, where the plaintiffs/appellants had brought an action for damages against the Minister for losses suffered as a result of the destruction of their herd of elk by Agriculture Canada. The destruction followed the discovery of tuberculosis in one of the animals. The plaintiffs/appellants had received compensation under a statutory compensation scheme.

[39] The plaintiffs’ claim was again dismissed on a summary judgment motion. The dismissal was upheld by the Federal Court of Appeal. In dismissing the appeal, Nadon J.A. said, at para. 32:
Whether the destruction of the appellants' animals results from the negligence of officials in failing to prevent the entry of tuberculosis into Canada or by reason of any other ground of negligence, is, in my respectful view, irrelevant. The plain fact is that both the compensation received and the recovery sought by way of the appellants' action result from the same occurrence, i.e. the destruction of their herd.
[40] To the same effect is the decision in Langille v. Canada (Minister of Agriculture) (CA), 1992 CanLII 14834 (FCA), [1992] 2 F.C. 208 (C.A.), where the Federal Court of Appeal allowed an appeal from a motion judge and struck out that part of a statement of claim claiming damages for negligence arising from the destruction of cattle owned by the respondents resulting from the positive presence of brucellosis in some of the animals. The Federal Court of Appeal found that the claim was barred by subsection 4(1) of the Crown Liability Act, R.S.C. 1970, c. C-38 – the predecessor section to s. 9.

[41] The plaintiffs/respondents in that case had advanced the same argument regarding the distinction between compensation for the animals destroyed and the losses sustained from the alleged negligence of the appellant. In rejecting that distinction, Stone J.A. said, at para. 12:
The only difference here is that respondents, by way of this action in tort, are seeking to enhance recovery in respect of that destruction beyond the level of the compensation they were paid in 1978 out of the Consolidated Revenue Fund. In our view, subsection 4(1) of the Crown Liability Act bars them from doing so.
[42] In the end result, all of these cases make the same point. Section 9 bars a claim if the plaintiff has received monies by way of compensation for losses arising from the same factual basis that the action is based upon. It is clear that the appellant in this case received payments under various programs that the federal government had set up to address the financial impacts that arose from the presence of BSE in this country. Indeed, the trial judge made that specific finding. He said, at para. 530: “As a practical matter, therefore, whether characterized as incentives, or assistance, or compensation, monetary payments were made to farmers that had the effect of compensating them for at least some of their losses, and this was how they were regarded at the time.”

[43] The appellant’s efforts to draw a distinction between compensation schemes and “stabilization programs” also fails to address the fundamental point that the claims arise from the same factual foundation upon which the payments were made. The appellant’s further efforts to draw a distinction between “compensation” and “assistance” does not find any support in the case law nor does the appellant point to any.

[44] I find further support for this conclusion in the decision of Brownhall v. Canada (Ministry of National Defence) (2007), 2007 CanLII 31749 (ON SCDC), 87 O.R. (3d) 130 (Div. Ct.), where Swinton J. restated the test from Sarvanis. At para. 37, she said: “Does the same loss or injury underlie both? If it is plain and obvious, on the facts as pleaded, that the same loss underlies both, the action is barred by s. 9 of the CLPA.”

[45] I would note that, in this case, we are not dealing with a summary dismissal based solely on the pleadings. Rather, we have both the facts as pleaded and the factual findings of the trial judge. The conclusion is made clearer and stronger as a result. The appellant (and the other class members) received monies under the BSE-specific programs for losses arising from the presence of BSE in Canada, which is the same factual basis underlying the class claims. The trial judge’s conclusion that the claims are barred by s. 9 is correct.
. Bigeagle v. Canada

In Bigeagle v. Canada (Fed CA, 2023) the Federal Court of Appeal considered that crown liability (here under the federal Crown Liability and Proceedings Act) does not impose liability on the Crown directly, but only vicarious liability on agents of the Crown:
[31] I recognize that the CLPA does not require that a claimant name a specific department, ministry or bureaucratic division. However, under the CLPA, the Crown itself is immune to liability in tort and can only be held liable for the actions or omissions of its servants or agents (CLPA at s. 3; Hinse v. Canada (Attorney General), 2015 SCC 35 at para. 58). A certain level of particularity is necessary to identify the servants or agents against whom liability is alleged (Canada (Attorney General) v. Jodhan, 2012 FCA 161 at paras. 87-89). This is so in order to allow for the determination of whether the person or body named is really a servant or agent of the Crown, and to provide that person or body the opportunity to respond to the allegations directed against them (Merchant Law Group v. Canada Revenue Agency, 2010 FCA 184 at para. 38).
. Rebello v. Canada (Justice)

In Rebello v. Canada (Justice) (Fed CA, 2023) the Federal Court of Appeal comments on the liability status of some provincial and federal officials under the federal Crown Liability and Proceedings Act:
[20] I would add, as this Court has recently held, that provincial public officials as well as federally appointed provincial judges are not servants or agents of the Federal Crown within the meaning of the Crown Liability and Proceedings Act, R.S.C. 1985, c. C-50 (the CLPA). Therefore, they cannot engage, by their conduct, the liability of the Federal Crown (Feeney v. Canada, 2022 FCA 190 at paras. 10-19 (Feeney)). The allegation that somehow the liability of the respondents is engaged simply because the various provincial Crown actors that are referred to in the appellant’s Statement of Claim run their operations presumably using federal funds has very little, if any, traction in Federal Crown liability law. As stated in Feeney,
[14] […] the Federal Crown – which, until the enactment of the Crown Liability Act, S.C. 1952-53, c. 30 in 1953, could not be sued in tort as of right – can only be held liable for the fault of its servants, and not on its own account (Hinse v. Canada (Attorney General), 2015 SCC 35, [2015] 2 S.C.R. 621 at para. 58 ; Peter W. Hogg, Patrick J. Monahan and Wade K. Wright, Liability of the Crown, 4th ed (Toronto: Carswell, 2011)).
[21] The terms "“servants”" or "“agents”" of the Federal Crown within the meaning of the CLPA refer to someone working under the control or direction of the Crown (Feeney at para. 14, referring to Northern Pipeline Agency v. Perehinec, 1983 CanLII 167 (SCC), [1983] 2 S.C.R. 513 at 519-521; R. v. Eldorado Nuclear Ltd.; R. v. Uranium Canada Ltd., 1983 CanLII 34 (SCC), [1983] 2 S.C.R. 551 at 573-574). This simply can not be in the case of the Ontario Crown actors (the Premier of Ontario, the Ontario Minister of Transportation, Service Ontario, the Ontario Superior Court Services, the Ontario Minister of Government and Consumer Services, Ontario Provincial Police, the Toronto Police Services, Hydro One and Hydro One employees) and the members of the Ontario judiciary named in the Statement of Claim. Moreover, there are no allegations in the appellant’s Statement of Claim that the respondents exert any control over these actors, and, if so, how and to what degree.

[22] Furthermore, courts have held that funding and resource allocations do not establish a duty of care, as the relationship that they engage lacks sufficient proximity; in sum, they do not in their own right, provide the basis for a lawsuit (see, for example, Riddle v. Canada, 2018 FC 641 at para. 55; Ontario v. Phaneuf, 2010 ONCA 901 at paras. 12-13; Desautels v. Katimavik, 2003 CanLII 39372 (ONCA) at para. 23).
. Feeney v. Canada

In Feeney v. Canada (Fed CA, 2022) the Federal Court of Appeal, in the course upholding a dismissal of an action against the federal Crown for lack of jurisdiction, sets out the nature of the Federal Court system and it's judges. In this quote it explains basics of federal Crown tort liability:
[14] Indeed, the Federal Crown – which, until the enactment of the Crown Liability Act, S.C. 1952-53, c. 30 in 1953, could not be sued in tort as of right – can only be held liable for the fault of its servants, and not on its own account (Hinse v. Canada (Attorney General), 2015 SCC 35, [2015] 2 S.C.R. 621 at para. 58 ; Peter W. Hogg, Patrick J. Monahan and Wade K. Wright, Liability of the Crown, 4th ed (Toronto: Carswell, 2011)). Importantly, however, judges – including federally appointed judges – are not employees of the Federal Crown. They are also not "“servants”" or "“agents”" of the Crown within the meaning of the CLPA, as these terms refer to someone working under the control or direction of the Crown (Northern Pipeline Agency v. Perehinec, 1983 CanLII 167 (SCC), [1983] 2 S.C.R. 513 at 519-521 ; R. v. Eldorado Nuclear Ltd.; R. v. Uranium Canada Ltd., 1983 CanLII 34 (SCC), [1983] 2 S.C.R. 551 at 573-574).


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