Aylmer Meat Packers Inc v Ontario: (Limited) Progress in the Framework for Assessing the Negligence of Governmental Actors

Faisal K. Bhabha, 3L, Volume 81 Senior Editor

The Government owes a duty of care where it puts a party’s business interests at risk in the course of carrying out a regulatory function, or so suggests Aylmer Meat Packers Inc v Ontario, 2022 ONCA 579 (CanLII) [Aylmer]. In adopting this principle, the Court of Appeal for Ontario followed the Supreme Court of Canada’s lead in several recent cases concerning the negligence of government agencies. Aylmer shows that the framework set out in these cases is mostly workable yet leaves room for improvement. Namely, it fails to do justice to the fundamental insight implicit in the shift that Cooper v Hobart, 2001 SCC 79 (CanLII) [Cooper] instigated in negligence law: the analysis must begin and end with the parties’ legal relationship. A defendant can only be held responsible for violating a plaintiff’s rights.

The Decision

The Facts

In the August 2022 decision, Justice Lauwers, writing for the unanimous Court, held that the respondent, the Ontario Ministry of Agriculture, Food and Rural Affairs, was liable for economic losses suffered by the appellant, Aylmer Meat Packers Inc. These losses resulted from the Ministry’s occupation of Aylmer’s abattoir for 19 months, beginning in August 2003. Aylmer sued the Ministry for the loss of its business, including the value of the plant, the loss of profits, and the value of the meat destroyed that was destroyed as a result of the occupation that deprived Aylmer of the use of the plant (Aylmer Meat Packers v Ontario, 2020 ONSC 6053 (CanLII) at para 23). The Ministry had seized the plant pursuant to its statutory mandate to oversee the licensing and operation of provincial abattoirs. At trial, Aylmer sought recovery via tort action for negligence, trespass, and conversion, though only the negligence claim was at issue on the appeal.

The Law

An action in negligence must answer four questions:

  1. Did the defendant owe the plaintiff a duty of care?

  2. Did the defendant breach the standard of care?

  3. Did the defendant’s breach cause the plaintiff’s injury?

  4. What damages are available to the plaintiff?

The decision turned principally on whether the Ministry’s conduct breached any duty of care it owed to Aylmer. Following Cooper, three elements must be shown in order to ground a private law duty of care where the actions of public bodies harm the private interests of regulated entities:

  1. The harm must have been reasonably foreseeable.

  2. There must be sufficient proximity between the plaintiff and the governmental defendant.

  3. There must be no residual policy reasons for declining to impose such a duty.

Together, these requirements constitute the well-established Anns/Cooper test (Aylmer at para 22). Here, the Court deferred to the trial judge’s finding that Aylmer’s injuries were reasonably foreseeable, so only proximity and residual policy reasons were at issue (Aylmer at para 23).

Cooper established that in evaluating proximity a court must first consider whether the case falls within or is analogous to a category of cases in which a duty of care previously has been recognized. If not, the court must then consider whether the case is one for which a new duty of care should be recognized (Cooper at para 31). For governmental actors, a prima facie duty of care may be found where the legislation gives rise to one explicitly or by implication, or where a special relationship is established between the parties arising from a series of specific interactions (R v Imperial Tobacco Canada Ltd, 2011 SCC 42 (CanLII) at paras 43-46). Justice Lauwers read this directive along with Cooper’s instruction that proximity be determined in new situations by “looking at expectations, representations, reliance, and the property or other interests involved” (Aylmer at para 34).

The Analysis

The Court was not explicit as to whether it was recognizing a new duty of care or simply classifying this case under an existing category of proximity. Regardless, it found that the trial judge erred in failing to find sufficient proximity, owing to the Ministry’s specific interactions with Aylmer. Much like in Hill v Hamilton-Wentworth Regional Police Services Board, 2007 SCC 41 (CanLII), Aylmer was a “targeted suspect” whose interests were “directly affected,” and it “had a stake in the [Ministry’s] regulatory exercise of authority that attracted a duty of care” (Aylmer at para 52). The Court concluded the Anns/Cooper analysis by finding that there were no residual policy reasons for declining to recognize a duty of care.

Next, the Court turned to the standard of care. It found that the Ministry breached the standard of a reasonable health and food safety regulator. It regarded the excessive length of the occupation—19 months—as having no basis in the Ministry’s operational needs and as demonstrating “outrageous disregard for the interests of the regulated entity” (Aylmer at para 85).

Finally, the Court assessed causation. It determined that the Ministry’s breach was the factual and proximate cause of the relevant losses, namely, the value Aylmer could have foreseeably recouped by selling the plant were the Ministry to have ended the occupation within a reasonable timeframe.

The Anns Legacy

I believe that this case was decided correctly. Nevertheless, it exemplifies the failure of Canadian courts to consummate the progress initiated in Cooper. What distinguishes the Anns/Cooper test from its predecessor, the Anns test, is its implicit recognition that the defendant’s duty must reflect the pre-existing right of the plaintiff. The Anns test equated proximity with foreseeability, that is, whether the reasonable person would have foreseen the plaintiff’s injury (Anns v London Borough of Merton, [1977] 2 All ER 492 (HL)). Apart from foreseeability, the defendant’s liability was limited only by policy considerations with respect to the social (un)desirability of imposing such liability as a rule. By contrast, Cooper, recalling Donoghue v Stevenson, [1932] AC 562, the foundational negligence case, recognized foreseeability and proximity as distinct (Cooper at paras 31-32). Proximity, not policy, was to dictate the limits of liability in the ordinary case.

Proximity goes to the “relationship”—read: legal relationship—between the parties (Cooper at paras 31–32). The parties’ legal relationship is constituted by their respective rights vis-à-vis each other. The content of these rights are their specifically legal interests. Together, the foreseeability and proximity analyses determine whether the defendant ought to have cared for the plaintiff's interests.

Cooper instigated a shift from a largely instrumentalist, policy-based analysis to a rights-based analysis with residual policy considerations only appearing in a manner consistent with rights. If we take this shift seriously, then we must also take seriously that negligence law protects against injuries only to rights-protected interests. The present framework does not fully realize this insight by framing each step of the negligence analysis in a manner that shows that, taken together, the various elements work together in a staged sequence to answer one question: whether the plaintiff had a right that in the particular circumstances constrained the defendant from causing the specific harm at issue in the specific manner in which it was caused.

The problem is not merely academic. The present framework encourages Canadian courts to treat the elements of an action in negligence as a disjointed, pragmatic mishmash of considerations aimed at striking a balance between competing interests, or perhaps worse, simply arriving at consistent results without regard for arriving at substantively just results. In doing so, it obscures the legitimate interests at stake and oftentimes makes it difficult to see how the outcome is justified, especially where a defendant is made to pay damages. I now return to the Court’s reasoning in Aylmer to demonstrate this point.

The decision does little to explain why the interests at stake were relevant. At the Anns/Cooper stage of the analysis, Justice Lauwers insisted that the Ministry owed a prima facie duty of care because the Ministry’s conduct in exercising its regulatory authority implicated Aylmer’s interests in a targeted manner (Aylmer at para 52). But, presumably, many of Aylmer’s interests are legally irrelevant because Aylmer has no right with respect to them. To impose a duty of care because Aylmer would be merely displeased with the Ministry’s conduct would fly in the face of the common law—let alone common sense—as we know it, even though pleasure is clearly an interest. Aylmer’s displeasure remains irrelevant despite the targetedness of the Ministry’s conduct, that is, the fact that the Ministry has singled out Aylmer. Evidently, the concepts of general interest and targetedness alone cannot do the analytical work necessary to obtain a legitimate result.

To be sure, Justice Lauwers goes on to specify that the Ministry’s duty of care extends only to safeguarding Aylmer’s business interests (Aylmer at para 52). While more intuitively attractive and consistent with common law doctrine, his reasoning still fails to explain why business interests (as opposed to other interests) are relevant and which business interests are of the kind that could justify recognizing a duty of care.

The decision also fails to adequately link the particular injury Aylmer suffered with the content of the duty of care - that is, Aylmer’s legal interests. As discussed previously, the Court ultimately found that the Ministry breached the standard of care by occupying the plant for an unreasonable amount of time, and that this breach foreseeably deprived Aylmer of the opportunity to sell the plant. While the opportunity to sell the plant plausibly falls among Aylmer’s business interests, there remain two points of concern. First, there is nothing in Justice Lauwers’ reasoning that distinguishes it as a protected interest of a kind the injury to which is a breach of the Ministry’s duty. Second, and relatedly, Justice Lauwers’ comment that “[t]he trial judge’s finding that ‘economic harm’ to Aylmer was reasonably foreseeable satisfies the remoteness inquiry” suggests that he was not thinking of proximate causation in terms of an injury to Aylmer’s specifically legal interests.

The fault lies not with Justice Lauwers but with the formulation of the proximity analysis in Cooper. To recall, Cooper instructs that courts are to determine proximity by “looking at expectations, representations, reliance, and the property or other interests involved” (at para 34, emphasis added). The last item, “other interests,” is the source of the ambiguity. The Cooper Court rightly formulated the list open-endedly to account for the many ways in which interests may become legally significant. However, it could have avoided much confusion by specifying that only legitimate or legal interests are relevant. In any case, I believe that this statement in Cooper must be thus read in order to reconcile it with the decision’s more general shift towards a rights-based approach.

Towards a Unified, Rights-Based Negligence Analysis

A fully rights-based approach to the negligence analysis requires us to understand it in the following way. Parties have general rights that correspond to the general duties of other parties. Your right to a thing, for example, land or a chattel, corresponds to my duty to refrain from using or interfering with the thing without your permission. The question for negligence law, as with tort law generally, is whether the plaintiff’s general rights entail a more particular right that the defendant refrain from the specific conduct at issue in the action. In this last section, I explain how the various elements of the negligence analysis respond to this question, using the facts of Aylmer to show how the rights-based approach makes for a more clear and complete analysis.

The first stage of the negligence analysis, regarding the existence of a duty of care, asks whether the defendant’s conduct even implicated one of the plaintiff’s general rights in the first place. This is reflected in the Anns/Cooper test. Proximity, that is, a legal relationship between the parties with respect to the interest at stake, must be established because only the plaintiff’s rights may enforceably constrain the defendant’s conduct. There are many valid exercises of rights that harm a party’s interests without injuring her rights. If I have a shop and you open one up next door that sells the same goods at a better price, I may suffer a loss of profit, but you nevertheless have breached no duty. I do not have a right to the business of my customers, only to what is already mine. Furthermore, it must have been foreseeable that the plaintiff’s rights could be implicated in the defendant’s conduct, for otherwise the defendant could not possibly have taken precautions to respect the plaintiff’s rights.

Applying these steps of the Anns/Cooper analysis to the facts of Aylmer, we can state much more precisely which relevant interests were at stake, generating the Ministry’s duty of care. Aylmer has a general right to the plant and its goods, which the Ministry’s conduct foreseeably implicated.

Cases in which the negligence of governmental actors is at issue are peculiar because it is therein that the final stage of the Anns/Cooper test, regarding residual policy considerations, comes to the fore. You have rights to your person and things vis-à-vis all other parties, including the state. However, the state has a right to change your legal relationships in pursuit of legitimate policy goals. The policy-operation distinction appears here. While the state may curb the scope of your rights through policy, whatever portion of your rights that is not curbed by the policy decision remains intact such that any merely operational decision that comes into conflict with it is wrongful. Thus understood, policy enters the analysis not as an instrumental imposition on the rights-based analysis but only as the public side of the rights coin.

The Ministry is a governmental actor. The operative legislation authorizes it to seize goods and occupy private property for the sake of public health in circumstances that the Court found to obtain. In effect, this policy decision limited Aylmer’s rights such that some of the Ministry’s conduct was immune from liability. Key word: “some.” Significantly, there were also merely operational decisions that exceeded the Ministry’s legislative authorization. The most important of these decisions was to continue the occupation of the plant for 19 months, which clearly implicated Aylmer’s residual property rights.

Having established that the defendant owed a duty of care, the next step is to assess the standard of care. The issue here is whether the defendant unreasonably exposed the plaintiff’s rights to injury.

Justice Lauwers found that the occupation of the plant for 19 months was not a reasonable action for a health and food safety regulator to take. We may explain this finding with reference to the risks of the lengthy occupation to, among other things, Aylmer’s ability to exploit the value of the property.

Finally, there is the question of causation, both factual and proximate. Evidently, if the defendant did not in fact cause the plaintiff’s loss, she cannot be held responsible for infringing a right. Proximate causation is more interesting. There is no injury to the plaintiff’s rights unless the manner in which the damage occurred was foreseeable. This element ensures that the plaintiff’s loss resulted from one of the specific risks to which the defendant unreasonably exposed the plaintiff’s rights. If the course of the damage was not foreseeable, then it was not the defendant’s breach of the standard of care which actually caused it. The risk of damage was not of a kind against which the defendant ought to have taken precautions. In other words, the plaintiff’s rights did not require the defendant to refrain from causing the damage that actually materialized.

Seen in this light, it is obviously insufficient to meet the standard of proximate causation that “economic harm” to Aylmer was the foreseeable result of the Ministry’s breach. Nevertheless, credit to the Court for not stopping there and making the further finding that the Ministry ought to have foreseen the owner’s inability to sell the plant. This kind of loss is precisely of the kind for which it was wrongful for the Ministry to have occupied the plant for so long. The owner had a right, subject to the abovementioned policy limit, that the Ministry not interfere with the plant such that it would not be open to his uses, which include the opportunity to sell. In occupying the plant for 19 months, the Ministry created a risk that the owner would be deprived of the plant’s use, and the risk materialized. (In fact, the Ministry did more than merely create a risk. It used the plant for its own purposes, suggesting that the case ought to have been adjudicated under trespass law.)

I recommend that courts adopt this more explicitly rights-based language, which is no philosophical imposition on the law—rights-skepticism, not the rights-based approach, is the revisionary force in the common law. Adopting this language will draw courts’ attention to the appropriate interests and facilitate a more focused and coherent analysis, ultimately ensuring that defendants are held responsible only for actually wronging plaintiffs, that is, injuring their rights.