R. v. Imperial Tobacco Canada Ltd., 2015 FCA 89

[2016] 1 F.C.R. 446 A-169-14 2015 FCA 89 Paradis Honey Ltd., Honeybee Enterprises Ltd. and Rocklake Apiaries Ltd. ( Appellants ) v. Her Majesty the Queen, the Minister of Agriculture and Agri-food and the Canadian Food Inspection Agency ( Respondents ) Indexed as: Paradis Honey Ltd. v. Canada (Attorney General) Federal Court of Appeal, Nadon, Pelletier and Stratas JJ.A.—Edmonton, November 3, 2014; Ottawa, April 8, 2015.

Animals — Appeal from Federal Court decision granting respondents’ motion to strike out appellants’ proposed class action as disclosing no reasonable cause of action — Appellants, commercial beekeepers, seeking damages for ban on importation of colonies of honey bees (packages) from U.S. — Importation prohibited by series of regulations — Honeybee Importation Prohibition Regulations, 2004 (HIPR 2004) continuing prohibition of honeybees until 2006, but excluding honeybee queen, attendant bees from prohibition pursuant to permit issued under Health of Animals Regulations (Regulations), s. 160 — HIPR 2004 not replaced upon expiry in 2006 — Respondent Minister adopting policy that no permits to be issued for importation of packages — Appellants alleging policy constituting de facto ministerial order or directive having no lawful authority — Owed duty of care arising from statutory scheme, interactions between respondents, beekeeping industry — Seeking monetary relief — Federal Court concluding, inter alia, no case establishing private law duty of care in similar circumstances; regulatory authority to protect animal health excluding private duty of care to protect economic interests — Rejecting claim of proximity — Duty of care exposing respondents to indeterminate liability — Policy reasons negating duty of care — Whether facts as pleaded supporting claim in negligence, bad faith — Per Stratas J.A. (Nadon J.A. concurring): Claim could not be struck — Federal Court erring in rejecting appellants’ allegations out of hand — Offending principle that, on motion to strike, allegations true unless “manifestly incapable of being proven” — Relationship between respondents, appellants sufficiently close, direct for respondents to be subject to duty to respect appellants’ interests — Federal Court also erring in finding that policy bar dooming appellants’ claim; that despite expiry of HIPR 2004, purpose behind regulations continued, supporting creation, enforcement of blanket guideline — Public policies, public duties expiring with regulations — No possibility of indeterminate liability as support for policy bar — Not plain, obvious claim for negligence, bad faith would fail — Question of whether monetary award based on public law principles possible remedy also considered — Concerns about indeterminate liability, exercise of legislative mandates part of exercise of remedial discretion — Question here whether plain, obvious court would exercise discretion against giving appellants monetary relief — Respondents’ conduct having flavour of maladministration, bad faith — Monetary relief required to fulfil clear, specific duty to act — No evidence monetary relief unavailable — Action proper way to proceed — Appeal allowed — Per Pelletier J.A. (dissenting): No relationship of proximity showed by appellants, no duty of care arising — Question whether pleadings disclosing reasonable cause of action in negligence — No error in Federal Court’s conclusion no relationship of proximity — Respondents acting as regulators — Private loss cannot be basis for relationship of proximity — Protection of economic interests of appellants not object of statutory scheme — Regulatory Impact Analysis Statements providing context for respondents’ actions — Remedy available in administrative law — Judicial review could have limited, prevented appellants’ losses — Not just, reasonable to impose duty of care in negligence when injury could have been limited or prevented by exercise of available remedy.

Damages — Public law — Federal Court granting respondents’ motion to strike out appellants’ proposed class action because no reasonable cause of action disclosed — Appellants seeking damages for ban on importation of colonies of honey bees (packages) from U.S. — Respondent Minister adopting policy that no permits to be issued for importation of packages — Appellants alleging policy constituting de facto ministerial order or directive having no lawful authority — Supreme Court in R. v.

Imperial Tobacco Canada Ltd. not establishing that decisions made under public duty, government policy or core policy protected from negligence claim — “General public duty”, “expressions of government policy” not defined therein —Claim for monetary relief in public law novel, should not be struck on motion to strike — Law of liability for public authorities should be governed by principles of public law —Traditional rules of Crown immunity not preventing monetary relief in public law — Public law relief rooted in constitutionally-based administrative law jurisdiction to relieve against improper public action — Such improper action not sufficient to support monetary relief — Additional circumstances needed — Compensatory objective of monetary relief, quality of public authority’s conduct must considered — Considerations governing discretion to award remedies in judicial review applying equally to granting of monetary relief in public law.

Crown — Torts — Federal Court granting respondents’ motion to strike out appellants’ proposed class action because no reasonable cause of action disclosed — Appellants seeking damages for ban on importation of colonies of honey bees from U.S. — Respondent Minister adopting policy that no permits to be issued for importation of packages — Appellants alleging policy constituting de facto ministerial order or directive having no lawful authority — Public authority against whom monetary relief awarded committing “fault” in Quebec, “tort” in rest of Canada within meaning of Crown Liability and Proceedings Act , s. 3 (a)(i), (b)(i) — “Tort” not only including named torts in private law such as negligence but also any legally recognized fault.

This was an appeal from a Federal Court decision granting the respondents’ motion to strike out the appellants’ proposed class action as disclosing no reasonable cause of action. The appellants, a group of commercial beekeepers, rely on the importation of honeybees to replace lost colonies. The subject matter of the litigation is the ban on importation of honey bees from the United States that has been in force since the 1980s. New bees can be imported either as a “package” holding a small colony (including a queen), or as a “queen”, a match-box-sized container holding a queen bee and a few attendant bees.

The importation of honeybees, governed by the Health of Animals Act , was prohibited by a series of regulations for various periods of time until 2006. The last regulation, the Honeybee Importation Prohibition Regulations, 2004 (HIPR 2004) continued the prohibition on the importation of honeybees but did not apply to the importation of a honeybee queen with its attendant bees from the United States pursuant to a permit issued under

section 160 of the Health of Animals Regulations (Regulations). Once the HIPR 2004 expired at the end of 2006, it was not replaced. The importation of “queens” continued to be allowed but, instead of

promulgating a new regulation dealing with the importation of packages, the respondent Minister adopted a policy that no permits would be issued for the importation of packages. The appellants alleged that this policy was communicated to the industry and constituted a de facto ministerial order or directive for which there is no lawful authority.

The appellants argued that the respondents owed them a duty of care with respect to the importation of bees from the United States, a duty that arose from the statutory scheme itself and from various interactions between the respondents and representatives of the beekeeping industry. The appellants further alleged that they suffered loss and damage as a result of the respondents’ negligence and sought monetary relief.

The respondents’ notice of motion to strike alleged that the appellants were not in such a close and direct relationship of proximity with the respondents so as to give rise to a private duty of care. The Federal Court considered the test for the existence of a duty of care as set out in Anns v. Merton London Borough Council .

It concluded, inter alia , that there was no case which established a private law duty of care in similar circumstances; and that the broad regulatory authority to protect animal health for the public good excludes any private duty of care to protect the economic interests of those who rely on imported animals in their commercial activity.

The Federal Court also concluded that the appellants did not establish a sufficient degree of proximity arising from their interaction with the respondents to give rise to a duty of care; that the finding of a duty of care would expose the respondents to indeterminate liability; and that there were policy reasons which would negate any prima facie duty of care, had one been found to exist under the first leg of the Anns test. The main issue was whether the facts as pleaded supported a claim in negligence and bad faith. Held (Pelletier J.A. dissenting), the appeal should be allowed.

Per Stratas J.A. (Nadon J.A. concurring): Taking the allegations in the claim as true, the claim could not be struck. The Federal Court weighed the appellants’ allegation that the respondents pursued an improper purpose or acted in bad faith in creating and implementing the blanket guideline but erred when it summarily rejected it out of hand because it was not convincing. This offended the principle that on a motion to strike, allegations must be taken as true unless they are “manifestly incapable of being proven”.

In the present case, it was difficult to find lack of proximity because of specific conduct and interactions and legislation that did not foreclose a finding of proximity. The relationship between the respondents and the appellants is sufficiently close and direct to make it fair and reasonable that the respondents be subject to a duty to respect the appellants’ interests, at least to the extent of making rational, evidence-based decisions following proper legislative criteria. The Federal Court erred in finding that a policy bar doomed the appellants’ claim to certain failure.

It also erred in acknowledging that, while the HIPR 2004 expired at the end of 2006, the purpose behind those regulations somehow continued, supporting the creation and enforcement of the blanket guideline. In this case, once the regulations expired, any public policies and public duties expressed in the regulations also expired. There was no possibility of indeterminate liability as support for a policy bar. The class of claimant is limited and the circumstances alleged to give rise to liability are most uncommon. The Supreme Court’s decision in R. v.

Imperial Tobacco Canada Ltd. does not establish any hard-and-fast rule that decisions made under a general public duty, government policy or core policy are protected from a negligence claim. The statement in paragraph 45 of Imperial Tobacco about a “general public duty” contains the word “may”, a qualifier. The Supreme Court is silent about when that qualifier applies. Further, the Supreme Court did not define what qualifies as a “general public duty”. Nor did it define the meaning of “expressions of government policy”.

Imperial Tobacco does not stand for any clear proposition that doomed the appellants’ claim to failure. If anything, Imperial Tobacco does not resolve when the policy bar will apply. It was not plain and obvious that the claim for negligence and bad faith would fail. This finding was sufficient to allow the appeal. However, because the allegations in the appellants’ claim, taken as true, could trigger an award of administrative law remedies, or more generally public law remedies, the question of whether a monetary award based on public law principles could be one of those remedies was considered.

In substance, the appellants alleged they were victims of abusive administrative action warranting monetary relief. A claim for monetary relief in public law is novel. Monetary relief based on public law principles qualifies as the sort of novel claim that should not be struck on a motion to strike. It is a responsible, incremental change to the common law founded upon legal doctrine and achieved through accepted pathways of legal reasoning.

It does not throw into doubt the outcomes of previous cases, but rather offers better explanations for them, leading to a more understandable, more coherent law of liability for public authorities. The law of liability for public authorities should be governed by principles of public law, not private law. Two components—unacceptability or indefensibility in the administrative law sense and the exercise of remedial discretion—supply a useful framework for analyzing when monetary relief may be had in an action in public law against a public authority.

This framework should govern whether monetary relief in public law may be had by way of action. Nothing in law obstructs this. In particular, the traditional rules of Crown immunity and the Crown Liability and Proceedings Act and its predecessors have not prevented the granting of monetary relief in public law. The jurisdiction of courts to grant public law relief is rooted in their constitutionally-based administrative law jurisdiction to relieve against improper public action.

Were it necessary to examine the Crown Liability and Proceedings Act , a public authority against whom monetary relief is awarded on public law principles must be regarded as having committed a “fault” (in Quebec) or a “tort” (in the rest of Canada) within the meaning of subparagraphs 3 ( a )(

i) and 3( b )(

i) of the Crown Liability and Proceedings Act . The word “tort” cannot be read as including only named torts in private law such as negligence but instead must extend to any legally recognized fault, otherwise Quebec and the rest of Canada would have a different liability rule. In public law, monetary relief has never been automatic upon a finding that governmental action is invalid or outside the range of acceptability or defensibility. There must be additional circumstances to support an exercise of discretion in favour of monetary relief.

The compensatory objective of monetary relief must be kept front of mind; the quality of the public authority’s conduct must also be considered. The considerations governing the discretion to award remedies in a judicial review apply equally to the granting of monetary relief in public law. Among other things, one must assess the circumstances surrounding the public authority’s conduct, its effects, and whether the granting of monetary relief would be consistent with public law values.

Concerns about public authorities being saddled with indeterminate liability and being left free, not chilled, from exercising their legislative mandates are well-supported by some of these public law values. In appropriate cases, those concerns must form part of the exercise of remedial discretion. In the case at bar, the question was whether it was plain and obvious that a court would exercise its discretion against giving the appellants monetary relief.

The respondents’ conduct had a flavour of maladministration associated with it, something that can prompt an exercise of discretion in favour of monetary relief. The additional element of bad faith buttressed that conclusion. As pleaded, the interactions between the respondents and the appellants suggested that monetary relief was required to fulfil a clear and specific duty to act. On the motion to strike, there was no evidence that monetary relief was unavailable or should have been denied. The appellants, who could not seek monetary relief by way of judicial review, properly proceeded by way of action.

Per Pelletier J.A. (dissenting): The appellants did not show that there was a relationship of proximity between them and the respondents such that a prima facie duty of care arose. Despite the various administrative law issues which the facts pleaded by the appellants raised,

this appeal was solely concerned with whether or not their pleadings disclosed a reasonable cause of action in negligence. There was noerror in the Federal Court’s conclusion that there is no relationship of proximity, and no corresponding prima facie duty of care, arisingfrom the statutory scheme. The facts were clear that the respondents acted in their capacity as regulators and did so in consultation withthe beekeeping industry. They did not assume a role outside their regulatory role.

It was difficult to conceive how the facts in the presentcase could constitute a course of conduct giving rise to a relationship of proximity. Statutory authority is given to public authorities sothat they can act in the public interest. When they do so, private interests may suffer. That private loss cannot be the basis of arelationship of proximity.

The protection of the economic interests of the appellants was not the object of the statutory scheme.Statements made in the Regulatory Impact Analysis Statements issued concurrently with the regulations go no further than providing acontext for the respondents’ actions. While the claim was framed as an action in negligence, all of the particulars of negligence were actsfor which a remedy is available in administrative law. Taking the pleadings at face value, the appellants were victims of abusiveadministrative action.

Had they sought judicial review of those abusive actions in a timely fashion, they could have limited, if notprevented, their losses. It is not just and reasonable to impose a prima facie duty of care in negligence when the injury complained ofcould have been limited or prevented entirely by the exercise of a readily available remedy. STATUTES AND REGULATIONS CITED Canadian Charter of Rights and Freedoms, being

Part I of the Constitution Act, 1982,

Schedule B, Canada Act 1982, 1982, c. 11 (U.K.)[R.S.C., 1985, Appendix II, No. 44]. Civil Code of Lower Canada, Art. 1053. Crown Liability and Proceedings Act, R.S.C., 1985, c. C-50. Federal Courts Act, R.S.C., 1985, c. F-7, ss. 18(3), 18.1(2), 39. Federal Courts Rules, SOR/98-106, rr. 75, 174, 175, 334.39. Federal Law—Civil Law Harmonization Act, No. 1, S.C. 2001, c. 4. Health of Animals Act, S.C. 1990, c. 21, s. 14. Health of Animals Regulations, C.R.C., c. 296, s. 160. Honeybee Importation Prohibition Regulations, 2004, SOR/2004-136, s. 1. CASES CITED APPLIED: R. v.

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Toronto Port Authority, 2011 FCA347, [2013] 3 F.C.R. 605; Conseil des Ports Nationaux v. Langelier et al., (SCC), [1969] S.C.R. 60, (1968), 2 D.L.R.(3d) 81; Roman Corporation Ltd. et al. v. Hudson's Bay Oil and Gas Co. Ltd. et al., (SCC), [1973] S.C.R. 820, (1973),36 D.L.R. (3d) 413; Catalyst Paper Corp. v. North Cowichan (District), 2012 SCC 2, [2012] 1 S.C.R. 5; Canada (Citizenship andImmigration) v. Khosa, 2009 SCC 12, [2009] 1 S.C.R. 339; McLean v. British Columbia (Securities Commission), 2013 SCC 67, [2013]3 S.C.R. 895; Canada (Transport, Infrastructure and Communities) v.

Farwaha, 2014 FCA 56, [2015] 2 F.C.R. 1006; Pham v. Secretaryof State for the Home Department, [2015] UKSC 19 (BAILII), [2015] 1 All. E.R. 1015; Canada (Attorney General) v. Abraham, 2012FCA 266, [2013] 1 C.T.C. 69; Canada (Attorney General) v. Almon Equipment Limited, 2010 FCA 193, [2011] 4 F.C.R. 203; Da Huangv. Canada (Public Safety and Emergency Preparedness), 2014 FCA 228, [2015] 4 F.C.R. 437; Rotherham Metropolitan BoroughCouncil & Ors, R (on the application of) v. Secretary of State for Business Innovation and Skills, 2015 UKSC 6 (BAILII); Katz GroupCanada Inc. v.

Ontario (Health and Long-Term Care), 2013 SCC 64, [2013] 3 S.C.R. 810; Alberta v. Elder Advocates of AlbertaSociety, 2011 SCC 24, [2011] 2 S.C.R. 261; Enterprises Sibeca Inc. v. Frelighsburg (Municipality), 2004 SCC 61, [2004] 3 S.C.R. 304;Williams v. Canada (Attorney General), 2009 ONCA 378, 95 O.R. (3d) 401; Eliopoulos Estate v. Ontario (Minister of Health and Long-Term Care), , 82 O.R. (3d) 321 (C.A.); A.L. v. Ontario (Minister of Community and Social Services), , 83 O.R. (3d) 512 (C.A.); MiningWatch Canada v. Canada (Fisheries and Oceans), 2010 SCC 2, [2010] 1 S.C.R. 6; Mobil OilCanada Ltd. v.

Canada-Newfoundland Offshore Petroleum Board, (SCC), [1994] 1 S.C.R. 202, (1994), 115 Nfld. &P.E.I.R. 334; D’Errico v. Canada (Attorney General), 2014 FCA 95, 459 N.R. 167; Wilson v. Atomic Energy of Canada Limited, 2015FCA 17, 22 C.C.E.L. (4th) 234; Crevier v. Attorney General of Quebec et al., (SCC), [1981] 2 S.C.R. 220, (1981), 127D.L.R. (3d) 1; Welbridge Holdings Ltd. v. Metropolitan Corporation of Greater Winnipeg, (SCC), [1971] S.C.R. 957,(1970), 22 D.L.R. (3d) 470; R. in right of Canada v.

Saskatchewan Wheat Pool, (SCC), [1983] 1 S.C.R. 205, (1983),143 D.L.R. (3d) 9; Canada (Public Safety and Emergency Preparedness) v. LeBon, 2013 FCA 55, 2 C.R. (7th) 212; Mackin v. NewBrunswick (Minister of Finance); Rice v. New Brunswick, 2002 SCC 13, [2002] 1 S.C.R. 405; Vancouver (City) v. Ward, 2010 SCC 27,[2010] 2 S.C.R. 28; Al-Mhamad v. Canada (Radio-Television and Telecommunications Commission), 2003 FCA 45; Hinton v. Canada(Minister of Citizenship and Immigration), 2008 FCA 215, [2009] 1 F.C.R. 476; Canada (Attorney General) v. TeleZone Inc., 2010 SCC62, [2010] 3 S.C.R. 585; St. John's Port Authority v.

Adventure Tours Inc., 2011 FCA 198, 335 D.L.R. (4th) 312; Merchant Law Groupv. Canada Revenue Agency, 2010 FCA 184, 321 D.L.R. (4th) 301. AUTHORS CITED Cane, Peter. “Remedies Available in Judicial Review Proceedings” in David Feldman, ed. English Public Law, Oxford: OxfordUniversity Press, 2004. Daly, Paul. “Administrative Law: A Values-Based Approach” in John Bell et al., eds., Public Law Adjudication in Common LawSystems: Process and Substance, Hart: Oxford, 2015.

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Duplessis and Damages for Abuse of Power: For What Did It Stand in 1959 and For What Does It Stand in2009” (2010), 55 McGill L.J. 587. Regulatory Impact Analysis Statement, SOR/2006-147, C. Gaz. 2006.II.882. Siebrasse, Norman. “Liability of Public Authorities and Duties of Affirmative Action” (2007), 57 U.N.B.L.J. 84. The Law Commission.

Administrative Redress: Public Bodies and the Citizen, London: The Stationery Office, 2010, online:<https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/247853/0006.pdf>. appeal from a Federal Court decision (2014 FC 215, 449 F.T.R. 159) granting the respondents’ motion to strike out the appellants’proposed class action as disclosing no reasonable cause of action. Appeal allowed, Pelletier J.A. dissenting. APPEARANCES Daniel Carroll, Q.C. and Lily Nguyen for appellants. Jaxine Oltean and Marlon Miller for respondents. SOLICITORS OF RECORD Field LLP, Edmonton, for appellants.

Deputy Attorney General of Canada for respondents.

The following are the reasons for judgment rendered in English by Pelletier J.A. (dissenting): I. INTRODUCTION [ 1 ] This appeal arises from a proposed class action by a group of commercial beekeepers (the Beekeepers), who rely on the importation of honeybees to replace colonies lost due to winter-kill and other factors. The subject matter of the litigation is the ban on importation of honey bees from the United States which has been in force in one form or another since the 1980s.

The Beekeepers’ complaint is that since 2007, the respondents have adopted a policy of blanket prohibition on the importation of bee “packages”, a term which will be explained below.

While many of the Beekeepers’ allegations would, if proved, give them an administrative law remedy, they have sued in negligence, alleging that the respondents owe them a duty of care, have breached the associated standard of care and have caused them damage. [ 2 ] Counsel for the respondents, Her Majesty the Queen, the Minister of Agriculture and Agri-food (the Minister) and the Canadian Food Inspection Agency (the Agency) (collectively the respondents) moved to have the Beekeepers’ action struck out as disclosing no reasonable cause of action.

That motion was granted and the action was dismissed with costs, with reasons reported as Paradis Honey Ltd. v. Canada (Attorney General) , 2014 FC 215 , 449 F.T.R. 159 (reasons). [ 3 ] For the reasons that follow, I would allow the appeal in part, and set aside the Federal Court Judge’s order as to costs. I would confirm the dismissal of the Beekeepers’ statement of claim. II. THE FACTUAL MATRIX [ 4 ] Canada’s winter climate being what it is, beekeepers have always suffered losses of colonies over the winter, losses which have to be made up by the importation of new bees.

According to the Beekeepers, this can take one of two forms: either as a “package”, a cereal-box-sized container holding a small colony (including a queen) or as a “queen”, a match-box-sized container holding a queen bee and a few attendant bees. Not surprisingly, it appears that it is more efficient to replace an existing colony with another (i.e., a package).

Replacing a colony with a queen requires more inputs and carries more risk on the way to establishing a productive colony. [ 5 ] The Health of Animals Act , S.C. 1990, c. 21 (the Act) and its predecessor legislation have, at all material times, governed the importation of animals, including bees, into Canada.

Section 14 of the Act provides as follows: Regulations prohibiting importation 14. The Minister may make regulations prohibiting the importation of any animal or other thing into Canada, any part of Canada or any Canadian port, either generally or from any place named in the regulations, for such period as the Minister considers necessary for the purpose of preventing a disease or toxic substance from being introduced into or spread within Canada. [ 6 ] In the absence of specific regulations, importation of animals is managed by way of ministerial permits issued under

section 160 of the Health of Animals Regulations , C.R.C., c. 296 (the Regulations): 160.

(1) Any application for a permit or licence required under these Regulations shall be in a form approved by the Minister.

(1.1) The Minister may, subject to paragraph 37(1)(

b) of the Canadian Environmental Assessment Act , issue a permit or licence required under these Regulations where the Minister is satisfied that, to the best of the Minister’s knowledge and belief, the activity for which the permit or licence is issued would not, or would not be likely to, result in the introduction into Canada, or spread within Canada, of a vector, disease or toxic substance. [ 7 ] Between the late 1980s and December 31, 2006, the Minister made a series of regulations prohibiting the importation of honeybees into Canada from the continental United States for various periods of time.

The prohibitions were designed to prevent the spread into Canada of the tracheal mite bee pest which, according to the Regulatory Impact Analysis Statements [ C. Gaz. 2006.II.882] (RIASs) issued concurrently with the regulations, threatened disastrous effects on Canada’s beekeeping industry. [ 8 ] The last such regulation was the Honeybee Importation Prohibition Regulations, 2004 , SOR/2004-136 (HIPR 2004). Subsection 1(1) of the HIPR 2004 continued the prohibition on the importation of honeybees into Canada from the continental United States, as of the coming into force of the regulation until December 31, 2006.

Subsection 1(2) provided that the prohibition in subsection 1(1) did not apply to the importation of a honeybee queen with its attendant bees from the United States pursuant to a permit issued under

section 160 of the Regulations . The result was that the prohibition on importation of “packages” was continued until the end of 2006, while the importation of “queens” was allowed pursuant to permits issued under the authority of

section 160 of the Regulations. [ 9 ] The kernel of the litigation underlying this appeal is the fact that once the HIPR 2004 expired at the end of 2006, it was not replaced. The importation of “queens” continued to be allowed pursuant to permits issued under

section 160 of the Regulations but, instead of promulgating a new regulation dealing with the importation of “packages”, the Minister simply adopted a policy that no permits would be issued for the importation of “packages”.

The statement of claim alleges that this policy was communicated to the industry and, in the words of the statement of claim, “constitutes a de facto ministerial order or directive for which there is no lawful authority”: see appeal book (A.B.), at page 63. [ 10 ] The Beekeepers plead that the purpose of the original restrictions on importation was to protect and promote the economic interests of the Canadian bee industry and Canadian beekeepers by insulating them from the risk of disease associated with the importation of bees from the United States.

They say that the respondents owed them a duty of care with respect to the importation of bees from the United States, a duty which arose from the statutory scheme itself and from various interactions between the respondents and representatives of the beekeeping industry, as particularized at paragraph 26 of both the statement of claim and the proposed amended statement of claim. In

summary, this duty of care arose from:

• The statutory scheme itself, • The respondents’ representations to the beekeeping industry that they were acting in the industry’s interest, • The respondents’ knowledge of the hardship to certain beekeepers and beekeeping region resulting from the prohibition on importation of bees from the United States, • The respondents’ consultation and cooperation with the beekeeping industry on bee import policy. [ 11 ] The statement of claim particularizes the content of the respondents’ duty of care (i.e. the standard of care) and sets out the ways in which standard of care was breached.

The members of the proposed class allege that they have suffered loss and damage as a result of the respondents’ negligence and seek damages in the amount of $200 000 000. See the A.B., at pages 59–67. [ 12 ] A Federal Court Judge (sometimes referred to simply as the Judge) was appointed to manage the Beekeepers proposed class action. The Beekeepers’ motion for certification was served and filed on or about September 12, 2013. In November 2013, the respondents served and filed their motion to strike out the Beekeepers’ action.

The notice of motion alleged that the Beekeepers were not in such a close and direct relationship of proximity with the respondents so as to give rise to a private duty of care. [ 13 ] In response, the Beekeepers filed a motion record including a memorandum of fact and law to which they attached a proposed amended statement of claim, in order to illustrate that any lack of particularity alleged by the respondents could be remedied by amendment.

When the respondents took the position that it was too late for the Beekeepers to amend their claim, the latter wrote to the case management judge to make clear that they were not seeking to amend their claim, indicating that “the Proposed Amended Statement of Claim was provided for illustrative purposes and that there is no motion before the Court at this time to amend the Statement of Claim”: A.B., at page 210. III.

THE DECISION UNDER APPEAL [ 14 ] After setting out in considerable detail the parties’ arguments, the Judge set out the test on a motion to strike out a statement of claim for failing to disclose a cause of action. He noted that the Court should take the facts pleaded as true, unless they are manifestly incapable of being proven, and should strike out a statement of claim only if it is plain and obvious that those facts disclose no cause of action. [ 15 ] The Judge then turned to the proposed amended statement of claim.

Relying on rule 75 of the Federal Courts Rules , SOR/98- 106, the Judge held that the Beekeepers could not amend their statement of claim without leave. Furthermore, since the matter was case- managed, it was incumbent on the Beekeepers to advise the Court of their intention to amend their pleadings. [ 16 ] The Judge found that the facts pleaded in the amended statement of claim were well known to the Beekeepers prior to the case management conference at which the date for the hearing of the respondents’ motion to strike was fixed.

Having reviewed the amendments, the Judge was not satisfied that they cured the deficiency with respect to the issue of proximity between the Beekeepers and the respondents. Relying on Apotex Inc. v. Bristol-Myers Squibb Company , 2011 FCA 34 , 91 C.P.R. (4th) 307, the Judge held that the Beekeepers should have been more forthright about their intention to amend their claim.

In the result, the Judge struck the amended paragraphs of the Beekeepers statement of claim as well as any other paragraph which referred to the proposed amendments. [ 17 ] The Judge then considered whether it was plain and obvious that the Beekeepers’ claim of negligence based on lack of lawful authority would fail. The Judge found that the Act and the Regulations provided the Minister with express authority to make decisions about the importation of regulated animals, including honeybees, into Canada.

He found that the facts pleaded by the Beekeepers could not establish liability since it is settled law that a breach of statutory duty is not, in and of itself, negligence: Holland v. Saskatchewan , 2008 SCC 42 , [2008] 2 S.C.R. 551, at paragraph 9 . [ 18 ] The Judge then turned to the test for the existence of a duty of care as set out in Anns v. Merton London Borough Council , [1977] UKHL 4 (BAILII), [1978] A.C. 728 ( Anns ) . He noted the parties’ agreement that the starting point in the analysis is to determine whether a duty of care has been recognized in similar cases.

After reviewing the case law put before him by the parties, the Judge concluded that there was no case which established a private law duty of care in similar circumstances. [ 19 ] The Judge then proceeded to apply the first leg of the Anns test, namely, whether the facts pleaded “reveal[ed] the existence of a relationship that is sufficiently close to create a duty on the [respondents] to take reasonable measures to protect the [Beekeepers] from foreseeable economic losses”: reasons, at paragraph 95. [ 20 ] The question was therefore whether there was sufficient proximity between the Beekeepers and the respondents to give rise to a duty of care.

The Judge noted that the Beekeepers based their allegation of a duty of care on the statutory scheme itself, as well as on the nature of the interaction between the respondents and the beekeeping industry. [ 21 ] After reviewing specific provisions of the Act and the Regulations, the Judge agreed with the respondents’ position that the legislative scheme is “aimed primarily at entrusting the [Agency] with broad regulatory authority to protect animal health for the public good”: reasons, at paragraphs 102–103.

This broad purpose excludes any private duty of care to protect the economic interests of those who rely on imported animals in their commercial activity. [ 22 ] The Judge rejected the Beekeepers contention that the statutory purpose could be found in the RIASs which accompanied the issuance of the regulations over the years.

While acknowledging that these statements had been accepted as an aid in construing the regulations with which they were associated, the Judge rejected the notion that they “established the purpose and intent of the governing statute”: reasons, at paragraph 107. [ 23 ] The Judge concluded his analysis on this leg of the Anns test by quoting from the Supreme Court’s decision in R. v. Imperial Tobacco Canada Ltd. , 2011 SCC 42 , [2011] 3 S.C.R. 45 ( Imperial Tobacco ), at paragraph 50 , to the effect that he failed to see how “it

could be possible to convert any of the Minister’s public law discretionary powers, to be exercised in the general public interest, intoprivate law duties owed to specific individuals”: reasons, at paragraph 109. As a result, the Judge rejected the claim of proximity basedon the statutory scheme. [24] I am in full agreement with the Judge’s analysis on this leg of the test and propose to say no more about it. [25] The Judge then examined the question of whether the course of conduct between the respondents and the beekeeping industrycould give rise to sufficient proximity to support a prima facie duty of care.

He noted the absence of a statutory obligation to consult theindustry which led him to comment that the fact that consultations took place did not alter the purpose of the Act. [26] The Judge noted the Beekeepers’ argument that the RIASs, particularly the one issued in conjunction with the HIPR 2004,discussed “costs and measures to alleviate the impact [of the import ban] on the industry, and that concerns related to the public at largewere barely mentioned”: reasons, at paragraph 111.

On the other hand, the Judge underlined that the Beekeepers’ allegations ofinteraction with the industry were based on consultations surrounding the need to prolong the ban on importation and were very general.In particular, the Judge noted that the Beekeepers did not plead that they had applied for and were refused a permit for the importation ofpackages.

He concluded that the Beekeepers’ pleadings did not establish a sufficient degree of proximity arising from their interactionwith the respondents to give rise to a duty of care. [27] By way of abundant caution, the Judge continued his analysis and considered the second leg of the Anns test, namely whetherthere were any overriding policy considerations which would negate any prima facie duty of care found to exist under the first leg of thetest. [28] The Judge agreed with the respondents’ contention that the finding of a duty of care would expose them to indeterminateliability.

Given that the Beekeepers are but one of many participants in the agricultural sector, a finding of a duty of care would open thedoor to claims by the other participants in that sector, putting the respondents in an untenable position, that of indeterminate liability,particularly in a case such as this where the claim was for pure economic loss. [29] The Judge went on to characterize the Minister’s decision to refuse import permits as a true policy decision, relying on dicta fromImperial Tobacco, cited above.

He found that the ban on the importation of packages represented “a course … of action based on abalancing of public policy considerations, such as social and economic considerations”: reasons, at paragraph 118. [30] These two intermediate conclusions supported the Judge’s ultimate conclusion that there were policy reasons which wouldnegate any prima facie duty of care, had one been found to exist under the first leg of the Anns test. [31] The Judge considered the Beekeepers’ allegations that the Minister had improperly delegated his discretion to a third party,which he rejected as deficient, since it was not pleaded that someone other than the Minister adopted the policy in question. [32] The Judge also rejected the Beekeepers’ allegations of improper relationships between the respondents and the Canadian HoneyCouncil. [33] In the end result, the Judge concluded that, even when the Beekeepers’ proposed amendments were considered, no reasonablecause of action was made out. [34] On the issue of costs, the Judge relied on the authority of Pearson v.

Canada, 2008 FC 1367, and found that since the action hadnot yet been certified as a class action, rule 334.39 [of the Federal Courts Rules] did not apply. Rule 334.39 precludes the making of anorder for costs against “any party to a motion for certification of a proceeding as a class proceeding” with certain exceptions, none ofwhich are relevant to these proceedings. IV. ISSUES [35] The issues raised by this appeal are the following: 1. What is the standard of review for our review of the Judge’s decision? 2. Is it plain and obvious that the Beekeeper’s claim in negligence is bound to fail? 3.

Assuming that they are successful, are the respondents entitled to costs? V. THE STANDARD OF REVIEW [36] The parties are agreed that a judge’s decision to strike a claim is discretionary; it should not be disturbed in the absence of anerror of law, a misapprehension as to the facts, a failure to give appropriate weight to all relevant factors or an obvious injustice: BauerHockey Corp. v. Sport Maska Inc. (Reebok-CCM Hockey), 2014 FCA 158, 122 C.P.R. (4th) 97, at paragraph 12; Apotex Inc. v. Canada(Governor in Council), 2007 FCA 374, 76 Admin. L.R. (4th) 20, at paragraph 15.

However, even where the judge has erred in theexercise of discretion, the appellants are not entitled to succeed unless they are able to show that a proper exercise of that discretionwould lead to a different result. [37] The test for striking out a statement of claim for failing to disclose a reasonable cause of action is whether it is “plain andobvious” that the claim must fail. A claim must not be struck simply because it is complex, or because the plaintiff puts forward a novelcause of action (Hunt v.

Carey Canada Inc., (SCC), [1990] 2 S.C.R. 959, at page 980): … assuming that the facts as stated in the statement of claim can be proved, is it “plain and obvious” that the plaintiff's statement ofclaim discloses no reasonable cause of action? As in England, if there is a chance that the plaintiff might succeed, then the plaintiffshould not be "driven from the judgment seat". Neither the length and complexity of the issues, the novelty of the cause of action, nor the

potential for the defendant to present a strong defence should prevent the plaintiff from proceeding with his or her case. [38] Since the Judge correctly identified the test, the question before this Court is whether he applied it properly. VI. IS IT PLAIN AND OBVIOUS THAT THE BEEKEEPERS’ CLAIM IN NEGLIGENCE IS BOUND TO FAIL? [39] Having regard to my colleague’s comments in his reasons as to the construction of pleadings, it is perhaps appropriate tosummarize the Beekeepers’ pleadings, if only to put my reasons in context.

After setting out the relevant facts in paragraphs 2 to 23, theBeekeepers plead, at paragraph 24, that they rely upon the Crown Liability and Proceedings Act, R.S.C., 1985, c. C-50, which providesfor the liability of the Crown in tort in the common law provinces. [40] In paragraph 25, the Beekeepers identify the stated purpose of the legislation, including the Regulations. Paragraph 26 begins“The Defendants owed a duty of care to the Plaintiffs”. This is followed by subparagraphs

a) to

f) which set out the facts from which thisduty of care arose. The proposed amendments to the Beekeepers statement of claim set out 16 new paragraphs containing furtherparticulars as to the basis of the duty of care. [41] Paragraph 27 of the statement of claim itemizes the elements of the duty of care which I take to be a statement of the standard ofcare the respondents owed to the Beekeepers. Subparagraphs

a) to

j) set out the particulars of the standard of care. [42] Paragraph 28 of the statement of claim then alleges that the respondents breached their duty of care by doing the various actswhich are itemized in subparagraphs

a) to j). In paragraph 29, the Beekeepers plead that the respondents knew or ought to have knownthat their negligence “and the improper continuation of the Prohibition [on importation]” would cause them loss and damage. [43] Paragraph 30 sets out the particulars of the loss and damage suffered by the Beekeepers. [44] In the introductory paragraphs of the statement of claim, the Beekeepers pleaded that they claimed damages as a result of therespondents “acting without lawful authority” in prohibiting the importation of honeybee packages after the expiry of HIPR 2004.

Intheir proposed amendments to the statement of claim, the Beekeepers abandoned their claim for damages based on the respondents’ lackof lawful authority. [45] The Beekeepers chose to sue the respondents in negligence. The fact that the pleadings allege facts which, if proved, would giverise to administrative law remedies does not, in and of itself, establish negligence: Holland, cited above, at paragraph 9.

The Beekeepersappear to have recognized this when they proposed to delete from their statement of claim the head of damages arising from therespondents’ lack of lawful authority to do what they did. [46] In my view, despite the various administrative law issues which the facts pleaded by the Beekeepers raise, this appeal is solelyconcerned with whether or not their pleadings disclose a reasonable cause of action in negligence. [47] As noted above, the law on the liability of public authorities in negligence is determined by the test in Anns v.

Merton LondonBorough Council, [1977] UKHL 4 (BAILII), [1978] A.C. 728 (Anns) [cited above], adopted by the Supreme Court of Canada inKamloops v. Nielsen, (SCC), [1984] 2 S.C.R. 2, and explained in Cooper v.

Hobart, 2001 SCC 79, [2001] 3 S.C.R. 537.This law was most recently canvassed in Imperial Tobacco, cited above. [48] The Anns test is a two part test: (1) do the facts disclose a prima facie duty of care, that is, a relationship of proximity whichmakes it just and reasonable to impose an obligation to take reasonable care to prevent foreseeable harm; and (2) are there policy reasonswhy this prima facie duty of care should not be recognized. [49] I would point out that there are two formulations in the jurisprudence, indeed within Imperial Tobacco itself, as to the first leg ofthe Anns test.

At paragraph 39 of Imperial Tobacco, the Supreme Court frames the test as “whether the facts disclose a relationship ofproximity in which failure to take reasonable care might foreseeably cause loss or harm to the plaintiff.” Further on, at paragraph 41, theCourt says: … Foreseeability must be grounded in a relationship of sufficient closeness, or proximity, to make it just and reasonable to impose anobligation on one party to take reasonable care not to injure the other. [50] The reference to “just and reasonable” underlines that there is a policy element in the first leg of the test, a fact which the Courtrecognized in Cooper v.

Hobart, at paragraph 30: In brief compass, we suggest that at this stage in the evolution of the law, both in Canada and abroad, the Anns analysis is bestunderstood as follows. At the first stage of the Anns test, two questions arise: (1) was the harm that occurred the reasonably foreseeableconsequence of the defendant's act? and (2) are there reasons, notwithstanding the proximity between the parties established in the firstpart of this test, that tort liability should not be recognized here?

The proximity analysis involved at the first stage of the Anns testfocuses on factors arising from the relationship between the plaintiff and the defendant. These factors include questions of policy, in thebroad sense of that word.

If foreseeability and proximity are established at the first stage, a prima facie duty of care arises. [Emphasis inoriginal.] [51] The point of this observation is to underline that proximity cannot simply be treated as an aspect of foreseeability in the sensethat it addresses the question: was the defendant so situated relative to the plaintiff that it was foreseeable that the latter might be harmedby the former’s conduct? Proximity is to be seen as a limitation on foreseeability.

As the Supreme Court pointed out in ImperialTobacco, at paragraph 41, “not every foreseeable outcome will attract a commensurate duty of care.” The proximity requirement seeks toidentify within the universe of all relationships in which the acts of one party might injure another, those relationships in which it is justand reasonable to impose a duty of care to avoid that foreseeable harm. [52] My conclusion is that the articulation of the proximity found at paragraph 41 of Imperial Tobacco is a fuller expression of the

test than is the articulation found in paragraph 39, which I take to be a shorthand expression of the test. [ 53 ] The question in this case is whether there was a sufficient degree of proximity between the Beekeepers and the respondents to give rise to a duty of care. Proximity may arise from the statutory scheme itself or it may arise from the interactions between the parties.

I have already indicated that I see no error in the Judge’s conclusion that there is no relationship of proximity, and no corresponding prima facie duty of care, arising from the statutory scheme. [ 54 ] These reasons deal with the issue of proximity arising from the course of conduct between the parties. In addressing that question, we may look at “expectations, representations, reliance, and the property or other interests involved”; there is no single unifying characteristic: Cooper v.

Hobart , at paragraphs 34–35 . [ 55 ] This case is similar to Imperial Tobacco in that it involves the decisions of a regulatory authority. It is different in the sense that the Beekeepers are not, per se , the regulated entity. They are one group, among others, who may be affected by the regulators’ decisions. Other affected groups include agricultural producers who rely upon pollination of their crops by honeybees, as well as processors who use those agricultural products as an input for their products.

That said, the difference is admittedly one of degree and not one of kind. [ 56 ] The conduct which gave rise to a relationship of proximity in Imperial Tobacco was Canada’s departure from its role as regulator and its assumption of that of “designer, developer, promoter and licensor of tobacco strains”: see Imperial Tobacco , at paragraph 54. [ 57 ] What facts have the Beekeepers pleaded which could give rise to a relationship of proximity with the respondents? The statement of claim recites the history of the ban on importation of honeybees from the continental United States.

At paragraph 20 and following of the statement of claim they note that, with the expiry of HIPR-2004, the respondent adopted a policy of banning the importation of honey bee packages from the United States, without conducting a risk assessment. [ 58 ] The Beekeepers identify representations made to the Canadian beekeeping industry to the effect that the respondents regulated bee imports for the purpose of protecting the beekeeping industry, that the restrictions on importation would be maintained only so long as the risk to the honeybee population existed, that the respondents would continuously monitor the situation to determine when the restrictions could be lifted.

These representations were made in the RIASs which accompanied each exercise of the regulatory power. The Beekeepers do not plead that they relied on these representations. [ 59 ] The Beekeepers also plead that the respondents’ actions were aimed at fostering and protecting the viability of the beekeeping industry, and that the respondents knew of the economic hardship suffered by certain beekeepers and beekeeping regions as a result of the restrictions on importation.

In addition, the Beekeepers also plead that the respondents originally consulted and cooperated with the Canadian Honey Council, provincial beekeeping associations, individual beekeepers and other stakeholders. After 2006, the respondents consulted exclusively with the Canadian Honey Council which it knew or ought to have known was dominated by a faction which had an economic interest in maintaining the restriction on importation of honey bees. [ 60 ] As I read the statement of claim, these are the facts pleaded by the Beekeepers which could give rise to a relationship of proximity.

They plead other facts, specifically the particulars of the actions which caused them harm. It is important to recognize that an analysis of proximity based on a course of conduct cannot rest on the very conduct which is alleged to have caused damage to the plaintiff. Such an analysis would make existence of the prima facie duty of care a function of the occurrence of damage. At that point, the Anns test becomes a tautology. It is the relationship of proximity which imposes on the defendant the obligation not to do that which has caused harm to the plaintiff.

As a result, the plaintiff must be able to establish proximity without reference to the acts which it claims caused it harm. [ 61 ] It is clear from these facts that the respondents acted in their capacity as regulators and did so in consultation with the beekeeping industry. They did not assume a role outside their regulatory role, though it is alleged in the rest of the statement of claim that they discharged their regulatory responsibilities badly.

This distinguishes this case from Imperial Tobacco where the relationship of proximity was found to exist by reason of the additional non-regulatory roles adopted by Canada’s officials. Imperial Tobacco is not the only template for proximity based on a course of conduct but, at the very least, it can be said that these facts do not fit that template. [ 62 ] I have difficulty conceiving how these facts could constitute a course of conduct giving rise to a relationship of proximity. Statutory authority is given to public authorities so that they can act in the public interest.

When they do so, private interests may suffer. That private loss cannot be the basis of a relationship of proximity. To find that it did would be to find that, where a relationship of proximity is not created by a statutory scheme, it can be created by actions taken to give effect to the statutory scheme.

As the relationship of proximity cannot rest upon the conduct causing the harm, such a conclusion is illogical. [ 63 ] In the same vein, one must be cautious about treating representations made in the course of exercising a regulatory power as a basis for a relationship of proximity, particularly when reliance on those representations is not pleaded. In this case, the Judge found that the protection of the economic interests of the Beekeepers was not the object of the statutory scheme. I agree with that conclusion.

As a result, statements made in the RIASs go no further than providing a context for the respondents’ actions. [ 64 ] As for the question of the respondents’ relationship with the Canadian Honey Council, one presumes that the respondents dealt with this organization because it is or was the beekeeping industry’s national industry organization. It is a rare organization whose members’ interests are all perfectly aligned. There are always rump groups within and without national organizations who claim that their interests are not being properly represented.

If the fact that the government chooses a national organization as its privileged interlocutor is taken to create a relationship of proximity, governments would be disinclined to consult, a trend which ought not to be encouraged. [ 65 ] My colleague raises the issue of bad faith on the part of the respondents. The Beekeepers did not specifically plead bad faith. I do not believe that facts which they did plead lend themselves to that characterization.

The Beekeepers plead that the respondents knew that the Canadian Honey Council was dominated by a faction that had an economic interest in maintaining the prohibition on importation. They also plead that the respondents at some point ceased to consult with anyone other than the Canadian Honey Council. But they do not plead that the respondents acted with a view to advancing the faction’s interests, or that they misrepresented their motives.

[66] Bad faith is generally taken to refer to deliberate conduct. I am aware of the Supreme Court’s decision in Finney v. Barreau duQuébec, 2004 SCC 36, [2004] 2 S.C.R. 17 (Finney), in which the issue was whether the Barreau could rely on the immunity granted to itby statute so long as it was acting in good faith. The Supreme Court held that bad faith “must be given a broader meaning thatencompasses serious carelessness or recklessness”: see Finney, at paragraphs 38–39. I would suggest that the Supreme Court decided thatcase on a wider ground than was necessary.

The issue before it was the absence of good faith; persons who act recklessly may not beacting in good faith but they are not necessarily acting in bad faith.

In any event, the Beekeepers did not plead recklessness or grossnegligence. [67] To the extent that bad faith is used to anchor a claim in negligence, it suffers from the same defect as other acts which causeharm, namely they cannot be the basis for a finding of proximity. [68] The source of the difficulty in dealing with this claim is that while it is framed as an action in negligence, all of the particulars ofnegligence are acts for which a remedy is available in administrative law. Taking the pleadings at face value, the Beekeepers have beenthe victims of abusive administrative action.

Had they sought judicial review of those abusive actions in a timely fashion, they couldhave limited, if not prevented, the losses of which they now seek to recover in their negligence action. This is not a case in which theBeekeepers were victims of misconduct for which there is or was no other recourse. There was a readily available remedy which theychose not to exercise.

In my view, it is not just and reasonable to impose a prima facie duty of care in negligence when the injurycomplained of could have been limited or prevented entirely by the exercise of a readily available remedy. [69] One could argue that the better course would be to find a duty of care but to take the availability of another remedy into accountunder the heading of mitigation. With respect, this reasoning is more appropriate to a case where the alternative remedy offers only apartial solution.

Where, as here, a prompt application for judicial review on an expedited basis could have prevented or radicallyminimized the losses which are being claimed, I believe that the better policy is to require plaintiffs to exercise the rights they alreadyhave rather than finding new remedies. [70] To the extent that this case concerns the boundary between public law and private remedies, I would say, despite my colleague’sthoughtful analysis, that the distinction is now firmly entrenched in our law. Though the sentiments expressed by Iacobucci J. in FraserRiver Pile & Dredge Ltd. v.

Can-Dive Services Ltd., (SCC), [1999] 3 S.C.R. 108 (Fraser River) may seem quaint inlight of recent developments, I believe they remain relevant and worthy of consideration (Fraser River, at paragraph 43): Fraser River has also argued that to relax the doctrine of privity of contract in the circumstances of this appeal would be to introduce asignificant change to the law that is better left to the legislature. As was noted in London Drugs, supra, privity of contract is anestablished doctrine of contract law, and should not be lightly discarded through the process of judicial decree.

Wholesale abolition of thedoctrine would result in complex repercussions that exceed the ability of the courts to anticipate and address. It is by now a well-established principle that courts will not undertake judicial reform of this magnitude, recognizing instead that the legislature is betterplaced to appreciate and accommodate the economic and policy issues involved in introducing sweeping legal reforms. [71] In

summary, I find that the Beekeepers have not shown that there was a relationship of proximity between them and therespondents such that a prima facie duty of care arose. That being the case, I do not need to address the second leg of the Anns test. [72] As a result, I agree with the Judge’s disposition of the application to strike out the statement of claim. VII. ARE THE RESPONDENTS ENTITLED TO COSTS? [73] This statement of claim in this matter relates to a proposed class action. On the authority of Pearson v.

Canada, cited above, theJudge held that the respondents were entitled to costs because the action had not yet been certified as a class proceeding. [74] It is unfortunate that this Court’s decision in Campbell v. Canada (Attorney General), 2012 FCA 45, [2013] 4 F.C.R. 234, wasnot brought to the Judge’s attention.

In that case, this Court held that the immunity from costs provided for in subsection 334.39(1) of theFederal Courts Rules SOR/98-106, applied from the time the motion for certification is served on the defendants because that is thepoint in time at which the plaintiffs become a “party to a motion for certification of a proceeding as a class proceeding”. In this case, themotion for certification was served before the motion to strike was served or heard. As a result, the Beekeepers (i.e. the plaintiffs in theaction) are entitled to the immunity from costs contemplated by subsection 334.39(1) [of the Rules].

To the extent that it might beargued that the plaintiffs lost that immunity because of the submission of their proposed amended statement of claim, it appears that theJudge misconstrued the Beekeepers’ intentions. [75] As a result, I would allow the appeal in part and vary the judgment of the Federal Court to remove the award of costs in favour ofthe respondents. In all other respects, I would dismiss the appeal without costs. *** The following are the reasons for judgment rendered in English by [76] Stratas J.A.: I agree with my colleague’s account of the relevant background to this appeal and the facts.

I agree with him that, ona motion to strike, all allegations in the claim must be taken as true and that the claim is to be struck only where it is plain and obviousthe claim will fail. Further, I agree with his observation in paragraph 68, above, that if we take the allegations as true, the beekeepershave been victims of abusive administrative action on the part of the respondents (Canada). [77] The Federal Court and my colleague conclude that it is plain and obvious that the beekeepers’ claim for damages must fail. Idisagree. In my view, taking the allegations in the claim as true, the claim cannot be struck.

In my view, the facts as pleaded support aclaim in negligence and bad faith. Were it necessary, I would also conclude that the facts pleaded support a claim for monetary relief inpublic law. A. The claim for negligence and bad faith

(1) Identifying the alleged conduct of Canada that is the subject of the claim [78] The first step is to identify the conduct attacked in the claim. Here, two documents are relevant: the statement of claim and aproposed amended statement of claim. The latter particularizes some of the conduct alleged in the former. [79] The Federal Court viewed the proposed amended statement of claim as an improper attempt to amend the statement of claimafter Canada had moved to strike it.

Despite that, the Federal Court considered the conduct set out in both documents: Federal Court’s,reasons, at paragraph 84. [80] In this Court, the beekeepers say that delivering a proposed amended statement of claim was proper. I agree. The beekeepers didnot move to amend their claim. Instead, they delivered it to show that certain problems raised by Canada—for example, a lack ofparticularity in the allegations—could be overcome. This is proper and accepted practice: Collins v. Canada, 2011 FCA 140, [2011] 4C.T.C. 157.

The proposed amended statement of claim is properly before us and sheds light on some of Canada’s alleged conduct.

(2) The alleged conduct [81] On a motion to strike, all of the beekeepers’ allegations must be taken as true. Therefore, these reasons recount the allegations asif they have been definitively established. They have not. Only after a trial will we know whether Canada conducted itself as thebeekeepers say. [82] The Honeybee Importation Prohibition Regulations, 2004, SOR/2004-136 prohibited the importation of packages of honeybeesfrom the United States. At the end of 2006, those regulations expired according to their terms. Canada did not enact new regulationsextending or re-establishing the prohibition.

Rather, Canada implemented and enforced a blanket guideline—not a law—that did thesame thing that the expired regulations did. The blanket guideline prohibited the importation of packages of honeybees from the UnitedStates. [83] Resting alongside this blanket guideline, however, is

section 160 of the Health of Animals Regulations, C.R.C., c. 296. Underthat section, the beekeepers can apply for importation permits on a case-by-case basis. They are entitled to receive permits and importhoneybees where the importation “would not, or would not be likely to, result in the introduction into Canada, the introduction intoanother country from Canada or the spread within Canada, of a vector, disease or toxic substance.” [84] In short,

section 160 conditionally allows imports. But, say the beekeepers, the bureaucrats have created and enforced a guidelinethat unconditionally prevents the beekeepers from accessing

section 160 under any circumstances. The beekeepers’ claim basicallyasserts that the bureaucrats have no right to trump the law expressed in

section 160 that permits imports in certain circumstances. [85] As my colleague suggests, the facts the beekeepers allege could prompt an award of administrative law remedies against theguideline: • The guideline is tantamount to a regulation that should have been passed as a regulation: see, e.g., Ainsley Financial Corp. v.Ontario (Securities Commission), , 21 O.R. (3d) 104 (C.A.). • The guideline imposes an absolute prohibition against importation and, thus, conflicts with the law on the books,

section 160 ofthe Health of Animals Regulations, above. • The guideline is unreasonable within the meaning of Dunsmuir v. New Brunswick, 2008 SCC 9, [2008] 1 S.C.R. 190, as it is notsupported by any scientific evidence of a risk of harm due to importation.

The last risk assessment was several years out of date. • A faction of commercial beekeepers, acting for their own financial advantage, captured the bureaucracy and induced it to makethe guideline; thus, the guideline was enacted for an improper purpose: see, e.g., Re Multi-Malls Inc. et al. and Minister ofTransportation and Communications et al., , (1977), 14 O.R. (2d) 49 (C.A.); Re Doctors Hospital and Minister ofHealth et al. (1976), (ON SC), 12 O.R. (2d) 164 (Div. Ct.).

(3) The Federal Court’s decision [86] The Federal Court struck the beekeepers’ claim on the ground that it was plain and obvious it could not succeed. In my view, theFederal Court erred on some of the issues before it and should not have struck the pleading. [87] First, in my view, the Federal Court erred in dealing with the beekeepers’ allegation that Canada pursued an improper purpose oracted in bad faith in creating and implementing the blanket guideline. The Federal Court weighed the allegation and summarily rejectedit out of hand, saying it is “not … convincing”: Federal Court’s reasons, at paragraph 119.

This offends the principle that on a motion tostrike, allegations must be taken as true unless they are “manifestly incapable of being proven”: R. v. Imperial Tobacco Canada Ltd.,2011 SCC 42, [2011] 3 S.C.R. 45, at paragraph 22. True, the allegations in the original statement of claim are not well-particularized, butCanada pleaded to them, waiving whatever rights it had to object on that basis. Here, the allegations, as particularized in the proposedamended statement of claim, can be proven through evidence obtained from discovery, access to information requests and trialproceedings.

And these allegations can succeed in law. Damages may be had against those who acted in bad faith or followed animproper purpose: see, e.g., Roncarelli v. Duplessis, (SCC), [1959] S.C.R. 121; Chaput v. Romain, (SCC), [1955] S.C.R. 834; Gershman v. Manitoba (Vegetable Producers’ Marketing Board) (1976), (MB CA), 69D.L.R. (3d) 114 (Man. C.A.); Proulx v. Quebec (Attorney General), 2001 SCC 66, [2001] 3 S.C.R. 9 (Crown attorneys, as publicofficials, pursuing an improper purpose).

Further, while, as we shall see, a claim of negligence can be barred for policy reasons, that bardoes not apply where the conduct is “irrational” or “taken in bad faith”: see Imperial Tobacco, above, at paragraphs 74 and 90. [88] The Federal Court next considered whether the beekeepers’ claim could succeed in negligence. In particular, it examinedwhether Canada owed the beekeepers a duty of care. Following the well-established approach, it asked itself two questions:

(1) Do the facts pleaded give rise to a relationship of proximity in which Canada’s failure to take reasonable care might foreseeablycause loss or harm to the beekeepers?

(2) Are there policy reasons why a duty of care should not be recognized? (Imperial Tobacco, above, at paragraph 39, citing Anns v. Merton London Borough Council, [1977] UKHL 4 (BAILII), [1978] A.C. 728,adopted and reformulated in Kamloops v. Nielsen, (SCC), [1984] 2 S.C.R. 2 and Cooper v. Hobart, 2001 SCC 79,[2001] 3 S.C.R. 537.) [89] On the first question, the Federal Court accepted that, on the facts pleaded, the claim should not be struck for want of proximity:Federal Court’s reasons, at paragraph 114.

On this point, the Federal Court did not err. [90] The Supreme Court itself has observed that where there are “specific conduct and interactions” supporting proximity and thelegislation does not foreclose a finding of proximity, it “may be difficult” to find lack of proximity: Imperial Tobacco, above, atparagraph 47; see also Cooper, above, at paragraphs 34–35 and Hill v. Hamilton-Wentworth Regional Police Services Board, 2007 SCC41, [2007] 3 S.C.R. 129, at paragraphs 29–30. This is the situation here.

The beekeepers plead that in specific interactions, Canadaassured them that imports affecting their economic interests would be banned only as long as there was scientific evidence of risk: seeparagraph 26 of the statement of claim, as particularized by the proposed amended statement of claim. Absent that evidence of risk andbut for the blanket guideline, Canada had to issue importation permits under

section 160 of the Health of Animals Regulations, above. Inlight of these considerations, the relationship between Canada and the beekeepers is sufficiently close and direct to make it fair andreasonable that Canada be subject to a duty to respect the beekeepers’ interests, at least to the extent of making rational, evidence-baseddecisions following proper legislative criteria: Cooper, above, at paragraphs 32–36; Hill, above, at paragraph 29; Sauer v.

Canada(Attorney General), 2007 ONCA 454, 31 B.L.R. (4th) 20. [91] Put another way, the relationship between the beekeepers and Canada, as pleaded, is one of well-defined rights and entitlementsbased on specific legislative criteria, alongside specific interactions and assurances between the two. It is not one where someone isseeking a general benefit that may or may not be granted depending on a subjective weighing and assessment of policy factors. [92] As mentioned above, the second question for determining whether a duty of care is present asks whether there is a policy bar.The Federal Court said there was one.

In its view, the blanket guideline implemented Canada’s important public duty to protectCanadians’ health and safety. Recognizing a duty of care—in effect requiring Canada to have regard to the beekeepers’ interests—wouldconflict with that public duty: Federal Court’s reasons, at paragraph 92. Accordingly, the Federal Court held that Canada must becompletely immunized from suit: Federal Court’s reasons, at paragraph 103.

In reaching this result, the Federal Court interpreted andapplied Imperial Tobacco, above, and relied heavily upon it. [93] I do not agree that a policy bar dooms the beekeepers’ claim to certain failure. Further, I do not agree with the Federal Court’sinterpretation and application of Imperial Tobacco. These points deserve closer examination.

(4) The policy bar and Imperial Tobacco [94] Taking the allegations in the statement of claim as true, I find nothing that implicates public policies or public duties in such away that would trigger a policy bar. The Federal Court erred in finding to the contrary. [95] As mentioned above, the beekeepers’ claim focuses on their inability to import honeybees from the United States under section160 of the Health of Animals Regulations, above.

Section 160 says that permits “shall” be granted on a case-by-case basis where theimportation will not bring a “vector, disease or toxic substance” to Canada. In other words, the public policy established by the law onthe books favours importation in appropriate circumstances. According to the beekeepers, those circumstances existed, and importationshould have been allowed. Thus, in this case, there is no inconsistency between the existence of a private law duty of care to thebeekeepers and the public duty Canada owed.

This case is on all fours with Hill, above, where the Supreme Court found (at paragraphs36–41) that the imposition upon the police of a private duty of care to an individual suspect in the circumstances of the case before it wasconsistent with the broader public duty upon the police to investigate criminal activity effectively and fairly. [96] The Federal Court suggested that the old regulations, the Honeybee Importation Prohibition Regulations, 2004, above, wereaimed at protecting Canadians’ health and safety and support a broad public interest policy bar in this case: Federal Court’s reasons, atparagraph 106.

The Federal Court acknowledged that those regulations expired at the end of 2006 but found that the purpose behindthem somehow continued, supporting the creation and enforcement of the blanket guideline: Federal Court’s reasons, at paragraph 106. [97] On this, the Federal Court erred. It is trite law that administrative action can only be supported by the law on the books: ApotexInc. v. Canada (Attorney General), (FCA), [1994] 1 F.C. 742 (C.A.), affd (SCC), [1994] 3 S.C.R.1100; Janssen Inc. v. Teva Canada Limited, 2015 FCA 36. Expired laws are no longer on the books.

In this case, once the regulationsexpired, any public policies and public duties expressed in the regulations also expired. [98] In support of its conclusion that the beekeepers’ claim was subject to a policy bar and should be struck, the Federal Court heldthat recognizing a duty of care “could have” a chilling effect on Canada’s performance of its duties: Federal Court’s reasons, atparagraph 92. Here, again I disagree. In law, this standard—“could have”—sets the bar far too low. One can always speculate thatrecognizing a duty of care could have a chilling effect.

Such a low standard would immunize government from liability in every case ofbureaucratic ineptitude, no matter how substandard or damaging the misconduct may be. No court anywhere has set the bar that low. [99] In any event, if the beekeepers recover damages, I cannot see any regulator, including the Minister, being chilled from exercisingjurisdiction in any way. The Minister is being sued for improperly refusing to consider

section 160 applications. If the beekeepers

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