Court of Appeal for Ontario clarifies the duty of care test for cases of regulatory negligence

July 17, 2012

In the recent decision in Taylor v. Canada (Attorney General), the Court of Appeal for Ontario addressed the requirements for a plaintiff to establish sufficient proximity between the plaintiff and the defendant in a claim brought against a governmental body for regulatory negligence.

The matter came before the court as a “special case” arising from an apparent inconsistency in the court’s prior decisions in Drady v. Canada (Health), leave to appeal to S.C.C. refused, [2008] S.C.C.A. No. 492, and Attis v. Canada (Health), leave to appeal to S.C.C. refused, [2008] S.C.C.A. No. 491, on the one hand, and Sauer v. Canada (Attorney General), leave to appeal to S.C.C. refused, [2007] S.C.C.A. No. 454, on the other.

The underlying issue was whether the pleadings in this case were sufficient to support the allegation that Health Canada was negligent in regulating a joint implant manufactured in the US and sold in Canada (see the decision of the Divisional Court in Taylor v. Canada (A.G.)).

The court acknowledged that, arguably, Drady and Attis require a more direct connection between a plaintiff and the regulator before the latter can be said to owe a duty of care.  In Drady and Attis, the court looked first at the relevant legislative scheme and found that it imposed no private law duty of care. The court then turned to the pleadings in each case to determine whether the interactions between the regulator and the plaintiff set forth in the pleadings created a relationship of proximity such as to justify a finding of a prima facie duty of care. Unlike Drady and Attis, which addressed the proximity requirement in detail, Sauer considered proximity only briefly and appeared to focus on the regulator’s public representations to the plaintiffs.

In Taylor, the Court of Appeal held that the requirements for proximity are diverse and depend on the facts of each particular case.   In reaching this conclusion, the court found that while public representations by a regulator as to its public duties and obligations do not of themselves establish a relationship of proximity between the regulator and an individual plaintiff, they are properly included in the factual matrix to be considered in determining whether the interactions between a regulator and a plaintiff are sufficiently direct and close to warrant a finding of proximity.  In particular, the court held that a finding of proximity based entirely on a regulator’s public acknowledgement of its public duties to those affected by its actions, coupled with reliance by those affected on the regulator’s public statements, would be inconsistent with the Supreme Court of Canada’s rejection in R. v. Imperial Tobacco Canada Ltd., 2011 SCC 42, of the claim that Health Canada owed a private law duty of care to consumers of low-tar cigarettes because it had made public representations as to the relative safety of those cigarettes.

In the result, it was not plain and obvious that the allegations in plaintiff’s statement of claim could not support a finding that Health Canada owed the plaintiff a prima facie private law duty of care.  The plaintiff was given a reasonable opportunity to reframe and streamline her pleadings in light of the court’s reasons.

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