COURT OF APPEAL FOR ONTARIO
CITATION: Rausch v. Pickering (City), 2013 ONCA 740
DATE: 20131209
DOCKET: C56543
MacFarland, Watt and Epstein JJ.A.
BETWEEN
James Rausch
Plaintiff (Respondent)
and
The Corporation of the City of Pickering
Defendant (Appellant)
Stuart Zacharias, for the appellant
Yan David Payne and Andrew D. Pelletier, for the respondent
Heard: June 25, 2013
On appeal from the order of the Divisional Court (Justices Alison Harvison Young and David Aston, Justice John C. Murray dissenting), dated August 22, 2012, with reasons reported at 2012 ONSC 4688, dismissing the appeal from the order of Justice Elizabeth M. Stewart of the Superior Court of Justice, dated June 28, 2011, with reasons reported at 2011 ONSC 2797.
Epstein J.A.:
INTRODUCTION
[1] This appeal involves the relationship between statutory authority and civil liability. The respondent, James Rausch, raised a herd of wild boars on property he occupied within the jurisdiction of the appellant, the City of Pickering. The City, relying on a by-law that restricted keeping certain types of animals within its limits, forced Mr. Rausch to get rid of his herd. Mr. Rausch sued the City for damages suffered as a result of the loss of his wild boar business. Initially, his claim was advanced on the basis of trespass, abuse of process and malicious prosecution. Mr. Rausch later obtained an order, subsequently affirmed by an order of the Divisional Court, allowing him to add a claim in negligence. The City appeals this order, arguing that the negligence claim is not tenable and should not be allowed to proceed to trial.
[2] The viability of Mr. Rausch’s negligence claim turns on three issues: first, whether the City may be said to owe either a statutory or common law duty of care; second, if a common law duty of care may be said to exist, whether Mr. Rausch has pleaded such a duty; and, third, if so, whether it is statute-barred. In my view, the statutory framework imposes no explicit duty of care. That said, I would not foreclose the possibility that Mr. Rausch may be able to establish an implied statutory duty of care. I am also of the view that Mr. Rausch’s amended pleading advances a viable common law duty of care – one that is not out of time. I would therefore confirm the order of the Divisional Court and dismiss the City’s appeal.
Mr. Rausch’s Pleading
[3] In 2007, Mr. Rausch brought this action against the City seeking a remedy for the financial loss he suffered as a result of the City’s alleged wrongful enforcement of By-law No. 1769/83, (17 September 1984) (the “By-law”), which restricted having certain categories of animals on property within its limits.[^1]
[4] The allegations in Mr. Rausch’s original statement of claim can be summarized as follows:
• Mr. Rausch is a tenant on 10 acres of land within the City’s boundaries (para. 2).
• Pursuant to the Municipal Act, 2001, S.O. 2001, c. 25, the City has jurisdiction to enact by-laws, including those relating to animals’ being kept on land within its boundaries (para. 3).
• Between 1997 and 2006, Mr. Rausch invested time and money raising premium wild boars for human consumption (paras. 4-7).
• Late in January 2006, the City advised Mr. Rausch that his enterprise violated the By-law and that if he did not immediately remove the wild boars from his property, the City would issue an order to comply, charge Mr. Rausch for violating the By-law and forcibly remove the animals (paras. 9-10).
• Mr. Rausch protested the application of the By-law. The City refused to change its position and Mr. Rausch, under protest, got rid of his animals (paras. 10-11).
• The City then charged Mr. Rausch for breaching the By-law and proceeded with its investigation. In so doing, City representatives came onto Mr. Rausch’s property without permission (paras. 12, 16).
• A few days before Mr. Rausch’s trial for breaching the By-law, the City withdrew the charges without explanation (para. 14).
• Mr. Rausch later learned that the City acted on the advice of Transport Canada in taking these steps against him. The City conducted no investigation of its own (para. 15).
• The City charged him without reasonably believing it would obtain a conviction; rather, its goal was to remove him from the property (para. 17).
[5] Following examinations for discovery, Mr. Rausch brought a motion to amend his pleading to add a claim in negligence. In the proposed amendments Mr. Rausch alleged that the City owed him a duty of care pursuant to s. 6 of the Farming and Food Production Protection Act, 1998, S.O. 1998, c. 1 (the “FFPPA”), a provision that prevents a municipal by-law from restricting a normal farm practice that is part of an agricultural operation.
[6] The Master granted an order allowing Mr. Rausch to amend his pleading. However, in his endorsement, the Master did not explicitly rule on whether the negligence pleading was a legally tenable cause of action.
[7] As a result of the Master’s order, the following paragraphs were added to the statement of claim:
18A. Further, or in the alternative, the Plaintiff states that the said by-laws as referenced herein are not applicable to him pursuant to the provisions of s. 6 of the Farming and Food Production Protection Act…. Specifically, the Plaintiff states that his raising of wild boars as hereinbefore described constitute a “normal farm practice” as defined under the provisions of the Act and accordingly, pursuant to s. 6 thereof, the by-laws in question would not apply to him or to his property.
18B. The failure of the Defendant to comply with the terms of s. 6 of the Act rendered any enforcement proceedings as against the Plaintiff ultra vires of the Defendant. Additionally, by taking enforcement procedures as hereinbefore described as against the Plaintiff, the Defendant was in breach of the terms of the Act, as the by-laws in question did not apply in the circumstances.
18C. The Plaintiff states that the Defendant knew, or ought to have known, that the by-laws in question did not apply to him given the provisions of the Act and that they should not have taken any enforcement proceedings as hereinbefore described, whether advising him to remove the wild boars from his property as set out in the correspondence from Brad Suckling, dated January 20, 2006, charging him under any or all by-laws, or proceeding with the prosecution of him under the said by-laws.
18D. The Plaintiff states that the said statutory breach is a direct cause of damages as set out herein for which the Defendant is liable in negligence.
[8] The City then brought a Rule 21 motion to strike out the amendments as disclosing no cause of action. The motion judge dismissed the motion on the basis that the City may owe a duty under the FFPPA, and that it was therefore not plain and obvious that Mr. Rausch’s claim was doomed to fail. The majority of the Divisional Court dismissed the City’s appeal from the motion judge’s order and the City, with leave, appeals that decision to this court.
THE STATUTORY FRAMEWORK
[9] As the City is a statutory actor, any allegation of negligence against it must be analyzed in the context of the statutory scheme comprised of the Municipal Act, the FFPPA and the By-law.
[10] The main source of the City’s powers is the Municipal Act, which states that its purpose is to create municipalities that are “responsible and accountable governments with respect to matters within their jurisdiction” and that the powers given to municipalities under the Municipal Act and other provincial legislation is for the purpose of providing good government with respect to those matters: see s. 2. Section 8 makes it clear that municipalities have broad powers. These powers are enforced through various provisions, including those that permit the City to require a person who contravenes a by-law to discontinue the contravening behaviour: see s. 444.
[11] The City’s jurisdiction is, however, circumscribed by s. 14 of the Municipal Act, which states that a municipal by-law is ineffective to the extent of any conflict with a provincial or federal statute. Section 14(2) provides that a conflict exists if a by-law frustrates the purpose of the provincial or federal statute.
[12] Finally, the Municipal Act addresses the question of liability. Section 448 relieves a municipality from liability for damages that result from acts or neglect in exercising its authority in good faith. However, the municipality remains liable in tort: see s. 448(2). The statute also relieves the municipality of liability for the good faith exercise or non-exercise of discretion, so long as it is the result of a policy decision: see s. 450. Thus, while the Municipal Act grants the City immunity for many acts, it expressly does not relieve it of liability for torts, for damage that results from acts done in bad faith or for the exercise of discretion with respect to operational decisions.
[13] The purpose of the FFPPA is as narrow as the purpose of the Municipal Act is broad. As described in the preamble of the FFPPA, its goal is to promote normal farm practices in agricultural areas and to balance the needs of the agricultural community with provincial health, safety and environmental concerns. To further its goal of protecting farming operations, the FFPPA removes municipalities’ jurisdiction to enforce by-laws that interfere with “normal farm practices”. Specifically, s. 6(1) provides that “[n]o municipal by-law applies to restrict a normal farm practice carried on as part of an agricultural operation.” In the event of a dispute as to whether a particular operation constitutes a normal farm practice, the FFPPA establishes a tribunal, the Normal Farm Practices Protection Board, which is authorized to determine this issue.
[14] Significantly, there is neither an obligation on any party to bring an application to the Board for a determination nor any presumption as to whether a particular farming operation is or is not a normal farm practice.
[15] The Board has no authority to grant a remedy for damages and there is no compensation fund established in the statute: the Board’s powers are limited to determining whether a given operation is or is not a normal farm practice.
[16] The final relevant law is the By-law, passed pursuant to s. 11(3) of the Municipal Act, which authorizes the City to deal with animals. Under the terms of the By-law, residents are prohibited from keeping certain types of animals. Section 8 of the By-law creates a provincial offence for any breach of its provisions and provides that anyone who is guilty of violating its terms may be fined.
THE DECISIONS BELOW
The Master
[17] In granting Mr. Rausch leave to amend his pleading, the Master’s analysis focused on whether the proposed amendments were precluded by the Limitations Act, 2002, S.O. 2002, c. 24, Sch. B. The Master concluded that the negligence claim arose out of facts already contained in Mr. Rausch’s pleading and that the amendments were therefore not statute-barred. He did not deal with whether the proposed amendments disclosed a cause of action. Rather, he left that issue open by expressing the view that allowing the amendments did not preclude the City’s bringing a motion challenging them under Rule 21.
The Motion Judge
[18] The City subsequently brought a motion to strike the amendments. The motion judge, at para. 7 of her brief endorsement, described the amendments as asserting “a claim in negligence against the [City] for conduct which includes an alleged breach of s. 6 of the [FFPPA].” Relying on Her Majesty the Queen in Right of Canada v. Saskatchewan Wheat Pool, 1983 CanLII 21 (SCC), [1983] 1 S.C.R. 205, the motion judge observed that a breach of statute does not give rise to a separate cause of action, but is subsumed in the law of negligence. She concluded that whether or not the City actually breached the FFPPA and whether the City is therefore liable in negligence are questions that depend on the determination of what constitutes a “normal farm practice” under the FFPPA and whether Mr. Rausch’s operation falls within this definition.
[19] The motion judge went on, at para. 9, to say that “[i]f [Mr. Rausch] is able to prove at trial that the [City] breached the [FFPPA] by prosecuting him under the By-law when it knew or ought to have known that it did not apply to him and was negligent in so doing, [Mr. Rausch] may succeed in his claim.”
[20] On this basis, the motion judge held that it was not plain and obvious that Mr. Raush’s claim in negligence was doomed to fail and dismissed the City’s motion.
The Divisional Court
[21] Three different sets of reasons emerged from the Divisional Court’s decision to uphold the motion judge’s order.
[22] In dismissing the City’s appeal, Harvison Young J. reasoned that there may be an implicit statutory duty of care and that it was therefore not plain and obvious that the action could not succeed. She also found that the facts, as pleaded, may give rise to a “common law duty of care on the part of the City, even in the absence of a statutory duty of care.”
[23] Harvison Young J. considered this possibility using the test in Anns v. Merton London Borough Council, [1978] A.C. 728 (H.L.). The first branch of the test examines whether the relationship between the plaintiff and the alleged tortfeasor discloses sufficient foreseeability and proximity to establish a prima facie duty of care. Harvison Young J. answered this question in the affirmative. She held that Mr. Rausch was “individualized” by the City. Specifically, City representatives visited his property, took photos of his premises, corresponded directly with him and ultimately charged him under the By-law. She therefore concluded that it was not plain and obvious that there is no prima facie duty of care. Harvison Young J. also held that because there were no compelling policy reasons that negated the duty of care, the second branch of the test was satisfied. She explained her reasoning, in paras. 32-34, as follows:
Concerns about potentially overbroad liability may be addressed by the formulation of the standard of care. Mr. Rausch alleges that the City, in enforcing the By-law, had a duty to consider whether the By-law actually applied to him before charging him and\or advising him to get rid of his animals. In essence, the allegation is that a reasonable by-law enforcement officer should, in the circumstances, have considered whether s. 6(2) of the [FFPPA] applied. This will be a question of fact, as the issue of standard of care always is. If, at trial, Mr. Rausch establishes that the operation appeared farm-like, in other words, that the City knew that he was raising the animals with a view to slaughter them for commercial sale, the trial judge might conclude that the City knew or ought to have known that Mr. Rausch's operation could be a normal farm operation within the meaning of s. 6(2), and that the City failed to meet the standard of care when it did not consider referring the matter to the Board for determination.
… I wish to be clear that I am not suggesting that, because the City has a duty to reasonably enforce the By-law, it will always have a duty to refer every single matter to the Board. What will be required of the City to meet its standard of care will be dependent on the particular facts of each situation. For this reason, it is not obvious to me that a floodgates argument could justify negating the duty of care, particularly at this preliminary stage. [Emphasis in original.]
[24] Harvison Young J. therefore found that the City may owe Mr. Rausch a common law duty of care. Examining the amended claim she held that, with one exception, Mr. Rausch’s pleadings were broad enough to cover such a duty. The exception was paragraph 18D, which explicitly referred to a “statutory breach”. Harvison Young J. therefore held that she would grant leave to amend paragraph 18D to remove the word “statutory” from the allegation of “statutory breach”, without prejudice to any argument under the Limitations Act, 2002.
[25] Aston J. (concurring with Harvison Young J. in the result) was not prepared to endorse her conclusion that the City owed Mr. Rausch a common law duty of care when that alternative theory was never part of Mr. Rausch’s submissions before the motion judge or the Divisional Court.
[26] While Aston J. found that the FFPPA imposed no positive obligation on the City, he concluded that the City may still have an obligation under it. Aston J. held that the FFPPA may sometimes impose a duty on the City to refrain from enforcing its by-laws on the basis that an activity is part of a “normal farm practice” carried on as part of an “agricultural operation”. Based on this conclusion, he found that s. 6(1) of the FFPPA may create a relationship of proximity sufficient to support a duty of care in particular cases. He concluded that a generous reading of the amended pleading alleged a valid cause of action in negligence.
[27] In dissent, Murray J. held that it was plain and obvious that a claim in negligence could not succeed. He shared Aston J.’s view that the amendments were not based on any common law duty. He viewed Mr. Rausch’s claim in negligence as being “inextricably tied to an alleged breach of the [FFPPA].”
[28] Murray J. found that the FFPPA imposed no duty of care on the City. If that conclusion were wrong, Murray J. identified two policy considerations negating the prima facie duty of care. First, he held that Mr. Rausch had an adequate alternative remedy: he could apply to the Board for a determination that he was engaged in a normal farm practice. Second, citing Pyke v. Tri Gro Enterprises Ltd. (2001), 2001 CanLII 8581 (ON CA), 55 O.R. (3d) 257 (C.A.), leave to appeal to S.C.C. refused, [2001] S.C.C.A. No. 493, Murray J. concluded that the question of whether an operation is a “normal farm practice” ought generally to be determined by the Board and that the existence of this specialized tribunal provided a further policy reason to negate a duty of care.
ISSUES
[29] There are three issues on appeal:
Should the appeal be dismissed as a collateral attack on the Master’s order allowing the amendments?
Did the majority of the Divisional Court err in refusing to strike the impugned paragraphs in the statement of claim by improperly concluding that Mr. Rausch’s pleading asserts a viable claim in negligence for
i. the breach of a statutory duty; or
ii. the breach of a common law duty?
- Are the impugned amendments to the statement of claim barred by the Limitations Act, 2002?
ANALYSIS
(1) Should the appeal be dismissed on the basis that it amounts to a collateral attack on the Master’s order?
[30] Mr. Rausch argues that the Rule 21 motion is a collateral attack on the Master’s order and should be dismissed. Mr. Rausch relies on the basic premise that on a motion to amend pleadings under Rule 26, the court is not permitted to allow the proposed amendment unless it asserts a tenable cause of action: Teva Canada Ltd. v. Bank of Montreal, 2012 ONCA 486, 294 O.A.C. 323; and Carom v. Bre-X Minerals Ltd. (1998), 1998 CanLII 14705 (ON SC), 41 O.R. (3d) 780 (Gen. Div.), at p. 784. Mr. Rausch therefore submits that the Master, by granting leave to add the claim in negligence, implicitly found that the amendments disclose a valid cause of action. As a result, Mr. Rausch argues that any subsequent challenge to the viability of the negligence claim is barred by the doctrine of res judicata.
[31] The City relies on a sentence in the Master’s reasons in which he specifically purported to leave the door open to a further legal challenge. For reasons the Master did not explain, near the end of his endorsement the Master said, “[c]ounsel [for the City] indicated that he was contemplating bringing a Rule 21 motion in the event that I permitted any of these amendments. I see no reason why these reasons in any way prevent his taking that step, if he chooses to do so.”
[32] In my view, the collateral attack argument is not properly before this court as it was neither raised before nor dealt with by the Divisional Court.
[33] I would therefore not give effect to this argument except to make the following comment. In my view, a disposition that allows amendments that raise a cause of action the tenability of which is in dispute and leaves the door open to a subsequent Rule 21 challenge of the amendments is a disposition that is internally contradictory and legally not available.
(2) Did the majority of the Divisional Court err by refusing to grant the motion to strike?
The Rule 21 test
[34] There is no dispute as to the test and associated principles that apply to a motion to strike pleadings for not disclosing a reasonable cause of action. The test is stringent, and the moving party must satisfy a very high threshold in order to succeed: Amato v. Welsh, 2013 ONCA 258, 305 O.A.C. 155, at paras. 32-33. Unless it is “plain and obvious” that there is no chance of success, a claim, even a novel one, ought to be allowed to proceed: Hunt v. Carey Canada Inc., 1990 CanLII 90 (SCC), [1990] 2 S.C.R. 959, at p. 980; and Odhavji Estate v. Woodhouse, 2003 SCC 69, [2003] 3 S.C.R. 263, at para. 15. The motion proceeds on the basis that the facts pleaded are true unless they are manifestly incapable of being proven: Operation Dismantle Inc. v. The Queen, 1985 CanLII 74 (SCC), [1985] 1 S.C.R. 441, at p. 455. While the facts pleaded are the basis upon which the possibility of success must be evaluated, the pleading must be read as generously as possible, erring on the side of permitting an arguable claim to proceed to trial.
[35] I do not accept the City’s submission that in determining the issues raised, the analysis is restricted to a consideration of whether the amendments, taken in isolation, raise a tenable cause of action. The amendments are part of the amended claim and the legitimacy of the claim or claims they advance must be considered in the context of the amended pleading as a whole: Canada v. J.D. Irving Ltd., [2000] F.C.J. No. 558 (C.A.), at paras. 3-6.
[36] It is with this test and these principles in mind that I turn to the main issue on this appeal – whether the amended claim alleges that the City owed Mr. Rausch a duty of care recognized by law.
The legal principles regarding the duty of care
[37] The foundation of a claim in negligence is the recognition of a duty of care owed by the defendant to the plaintiff. A duty of care is not a duty to do anything specific: the duty is to take reasonable care to avoid causing foreseeable harm to those with whom one is in a relationship of proximity.
[38] An error frequently made is conflating the duty of care with the standard of care. They are discrete concepts. As the Supreme Court of Canada wrote in Stewart v. Pettie, 1995 CanLII 147 (SCC), [1995] 1 S.C.R. 131, at para. 32, “the question of whether a duty of care exists is a question of the relationship between the parties, not a question of conduct.” The question of what conduct is required to satisfy the duty is a question of the appropriate standard of care. This important point is expressed in Carolyn Sappideen & Prue Vines, Fleming’s The Law of Torts, 10th ed. (Sydney: Thomson Reuters, 2011), at pp. 123-24:
The general standard of conduct required by law is a necessary complement of the legal concept of "duty". There is not only the question "Did the defendant owe a duty to be careful?" but also "What precisely was required of the defendant to discharge it?" Indeed, it is not uncommon to encounter formulations of the standard of care or of some particular precaution that an actor in the defendant’s position should take in terms of "duty", as when it is asserted that a motorist is under a duty to keep a proper lookout or that a person has (or has not) a duty to warn another of a certain risk. But this method of expression is best avoided. In the first place, the duty issue is already sufficiently complex without fragmenting it further to cover an endless series of details of conduct. "Duty" is more appropriately reserved for the problem of whether the relation between the parties (like manufacturer and consumer or occupier and trespasser) warrants the imposition upon one of an obligation of care for the benefit of the other, and it is more convenient to deal with individual conduct in terms of the legal standard of what is required to meet that obligation. Secondly, it is apt to obscure the division of functions between judge and jury or the distinction between questions of law and fact. It is for the court to determine the existence of a duty relationship and to lay down in general terms the standard of care by which to measure the defendant's conduct; it is for the jury or judge sitting alone to translate the general into a particular standard suitable for the case in hand and to decide whether that standard has been attained or the duty breached.
[39] The existence of a duty of care simply means that the defendant is in a relationship of sufficient proximity with the plaintiff that he or she ought to have the plaintiff in mind as a person foreseeably harmed by his or her wrongful actions. It is not a duty to do anything specific; it is a duty to take reasonable care to avoid causing foreseeable harm: Ryan v. Victoria (City), 1999 CanLII 706 (SCC), [1999] 1 S.C.R. 201, at paras. 25-27.
[40] If a duty of care is recognized, then the standard of care necessary to discharge the duty and whether it has been breached will be determined at trial.
Could the City owe a statutory duty of care under the FFPPA?
[41] The City’s basic argument, with which Murray J. agreed in his dissenting reasons, is that since Mr. Rauch’s negligence action is based on a breach of the FFPPA and since that statute imposes no explicit duty on the City, there can be no breach and therefore no claim in negligence.
[42] I agree that the FFPPA does not explicitly impose a duty on the City to do anything relevant to Mr. Rausch’s complaint. There is nothing in s. 6(1) of the FFPPA that specifies that a municipality has a duty to take or refrain from taking any action. Under s. 6(2), a municipality “may” apply to the Board “for a determination as to whether a practice is a normal farm practice for purposes of the non-application of a municipal by-law.” But, the legislation does not require the municipality to make such an application. In fact, the only requirement s. 6 of the FFPPA explicitly imposes on a municipality is found in s. 6(13). It requires municipalities to provide the Board with landowners’ addresses to enable the Board to give notice of a hearing. This obligation has no relevance to the negligence alleged against the City.
[43] The absence of a specific statutory duty of care imposed by the FFPPA means that a negligence claim based on the breach of a duty explicitly set out in the statute has no chance of success and should not be allowed to proceed to trial.
[44] Before I turn to the other aspect of the majority decision, Harvison Young J.’s conclusion that the City may owe Mr. Rausch a common law duty of care, I feel it is necessary to make one additional comment about a statutory duty of care. A statutory duty of care may be explicit or implied. I have found that in these circumstances, the legislation imposed no explicit statutory duty on the City. However, while not raised in the courts below or on appeal, in my view this decision does not foreclose the possibility that there may be an implied statutory duty of care arising out of the statutory scheme.
Could the City owe a common law duty of care?
[45] Although I would reject Mr. Rausch’s claim that there is an explicit statutory duty of care, I do not agree with the City that this is the end of the matter. In my view, when negligence is alleged against a government actor, the reach of the duty of care divining rod is not restricted to the legislative scheme and whether it imposes a statutory duty of care. In R. v. Imperial Tobacco, 2011 SCC 42, [2011] 3 S.C.R. 45, at paras. 43-45, the Supreme Court recognized that in addition to a statutory duty of care set out in the governing legislation, there may be a common law duty of care that arises by virtue of interactions between the statutory actor and a private individual.
[46] Before analyzing whether there may be a common law duty of care, the statutory scheme must be examined to determine whether it forecloses such a duty.
[47] In my view, the statutory scheme in play in this case does not preclude the recognition of a common law duty of care. I see nothing in either the FFPPA or the Municipal Act that impedes a finding that such a duty may exist in appropriate circumstances.
[48] As I noted earlier, while the Municipal Act relieves the City from liability for many acts, it expressly does not relieve it of liability for torts, for damage that results from acts done in bad faith or for the exercise of discretion with respect to operational decisions: see ss. 448-450.
[49] It is true that the FFPPA created a tribunal to determine whether a farm operation is protected by s. 6. However, this court has held that the FFPPA does not preclude a court’s making the determination, if warranted by the circumstances: Pyke, at para. 55.
[50] Having concluded that the statutory scheme does not foreclose the existence of a common law duty of care, two issues must be determined in order to resolve the question of whether Mr. Rausch’s negligence claim based on such a duty is viable and should otherwise be allowed to proceed to trial, subject to the limitation period issue. First, in these circumstances, can it be said that the City may owe a common law duty to Mr. Rausch? Second, does the amended pleading, read generously, advance such a claim?
[51] The parties take the position, and I agree, that in the context of by-law enforcement actions, the relationship between municipal by-law enforcement officers and farmers against whom they are enforcing a by-law is not a settled or analogous category that automatically gives rise to a common law duty of care. Therefore, to determine whether a cause of action in negligence based on a common law duty of care has a reasonable prospect of success in these circumstances, consideration must be given to whether the general requirements for liability in tort are met according to the two-stage Anns test, as honed and consistently applied by the Supreme Court in subsequent decisions, most notably, Cooper v. Hobart, 2001 SCC 79, [2001] 3 S.C.R. 537; and Edwards v. The Law Society of Upper Canada, 2001 SCC 80, [2001] 3 S.C.R. 562.
[52] In the first step of the Anns test, the plaintiff must establish a prima facie duty of care by demonstrating reasonable foreseeability of harm and a proximate relationship between the plaintiff and the defendant. At this stage, the court must also examine whether policy considerations arising out of the relationship support a finding of proximity. If the court finds both foreseeability and proximity, it then proceeds to the second step, in which the evidentiary burden shifts to the defendant to raise additional policy factors that should eliminate or limit the prima facie duty found under the first branch of the test.
[53] While they differ in nature, policy considerations are relevant to both steps in the analysis. In Syl Apps Secure Treatment Centre v. B.D., 2007 SCC 38, [2007] 3 S.C.R. 83, at para. 32, Abella J. explained that policy factors in the first step pertain to the relationship between the parties whereas at the second step they address broader issues reflecting the need to shield specific activities from judicial control or to prevent the floodgates of litigation from opening into areas of potentially unlimited liability. That said, so long as the relevant factors are considered at some point in the analysis, it may not matter at which “stage” any particular policy consideration is examined: Cooper, at para. 27.
Step one – does the relationship establish a prima facie duty of care?
[54] In this appeal, we are considering the relationship between a municipality’s by-law enforcement officer and a farmer against whom a by-law was enforced. The requirement of foreseeability is clearly made out. A by-law enforcement officer who takes steps to ensure a farmer’s compliance with a by-law, the effect of which may be to restrict a farm operation, must surely be aware that any missteps carry a real potential of harm to the farmer.
[55] Therefore, the only remaining issue at this stage is whether Mr. Rausch is able to establish a relationship of proximity.
[56] Since Cooper, proximity has been the focus of the analysis of whether a public body owes a common law duty of care. Because the City may only exercise powers delegated to it by statute, the legislative scheme is at the core of the proximity analysis: see Cooper, at para. 43; and Edwards, at para. 9. As previously noted, the Municipal Act, the FFPPA and the By-law affect the City’s responsibilities to Mr. Rausch by defining the parameters of its jurisdiction to enforce by-laws against farming operations. Consequently, and as I will discuss below, they all provide context to the proximity analysis: see River Valley Poultry Farm Ltd. v. Canada (Attorney General), 2009 ONCA 326, 95 O.R. (3d) 1, leave to appeal to S.C.C. refused, [2009] S.C.C.A. No. 259; and Attis v. Canada (Minister of Health), 2008 ONCA 660, 93 O.R. (3d) 35, leave to appeal to S.C.C. refused, [2008] S.C.C.A. No. 491.
[57] The existence of a “close and direct” relationship between the wrongdoer and the victim is a basic factor relevant to proximity. The presence or absence of a personal relationship between the parties is an important – but not determinative – consideration: Hill v. Hamilton-Wentworth Regional Police Services Board, 2007 SCC 41, [2007] 3 S.C.R. 129, at paras. 29-30; and Fullowka v. Pinkerton’s of Canada Ltd., 2010 SCC 5, [2010] 1 S.C.R. 132, at para. 40.
[58] Here, we are not concerned with every resident in the municipality. The by-law enforcement officer approached Mr. Rausch after receiving a complaint. His attention was focused on Mr. Rausch in the same way as the attention of the police was focused on the suspect in Hill - not as one of a “universe of all potential suspects” or city residents potentially in contravention of a by-law, but as a particular person being specifically investigated. The City communicated directly with him regarding his alleged breach of the By-law, threatened to issue an order to comply and informed him that it would lay provincial offence charges and remove his wild boars if he did not do so himself. In so doing, the City targeted Mr. Rausch.
[59] The finding of a close and direct relationship is bolstered by the type of steps open to the City to ensure compliance with the By-law. Among other powers, the City has the ability to restrain activities that violate by-laws; to issue orders to comply; to order remedial action; and, in the case of this By-law, to levy a fine and lay provincial offence charges: see Municipal Act, ss. 440-46; and the By-law, s. 8. These are all actions – particularly the order to comply – that carry the potential of seriously damaging a farmer. In this case, at stake was a business Mr. Rausch had spent almost a decade developing. This high interest supports a finding of a proximate relationship giving rise to a duty of care: see Hill, at para. 34.
[60] Reliance is another factor that affects the proximity analysis. Here, I am referring to Mr. Rausch’s reliance on the City’s taking precautions to avoid the harm he suffered: Fullowka, at para. 30. In my view, a reasonable citizen would assume that if a by-law enforcement officer decided to enforce a by-law that had the potential to destroy a business or create other serious consequences, the officer would first put his or her mind to whether there was jurisdiction to do so. Mr. Rausch’s actions are consistent with this proposition. Based on the City’s insistence that he had violated the By-law and in reliance on its jurisdiction to enforce compliance, Mr. Rausch took steps that caused him to lose his animals, his business and his investment of considerable time and money.
[61] Another consideration relevant to proximity is whether there are adequate alternative remedies for the wrongful enforcement of the By-law: Hill, at para. 35. I do not agree with Murray J.’s conclusion that Mr. Rausch’s ability to apply to the Board for a determination that he was engaged in a “normal farm practice” constituted an adequate alternative remedy.
[62] When Mr. Rausch received the City’s letter alleging that he was in violation of the By-law and ordering him to get rid of his herd, he was faced with only two options apart from complying with the order: (i) apply to the Board for a determination that his operation was a “normal farm practice” and therefore exempt from the By-law, or (ii) bring an application for judicial review of the City’s decision, seeking a declaration, injunction or order of prohibition.
[63] Inherent in these options is the assumption that Mr. Rausch was aware of his legal rights. The amended claim is pleaded on the basis that he was not. It follows that because the City’s letter gave Mr. Rausch just a little over a week to comply with its order, to obtain meaningful relief, in short order he would have had to secure legal advice from someone familiar with this area of the law. Moreover, absent the City’s consent to forestall enforcement while he established his rights, Mr. Rausch would have had to bring an urgent motion for a stay of the enforcement of the By-law.
[64] However, after Mr. Rausch complied with the City’s sudden demands and got rid of his herd, his only meaningful avenue of redress for his financial loss was a civil action, given that neither the Board nor a court conducting judicial review has the jurisdiction to award damages. I agree with Feldman J.A.’s comments in Haskett v. Equifax Canada Inc. (2003), 2003 CanLII 32896 (ON CA), 63 O.R. (3d) 577 (C.A.), at para. 50, that a legislative scheme that does not provide a remedy in damages may not be an adequate alternative to recognizing a cause of action.
[65] The absence of an adequate remedy means that unless a duty of care is recognized, Mr. Rausch will have no recompense for the harm he suffered because of the City’s taking potentially unwarranted steps. To deny a remedy in tort would deny justice. This supports recognition of the tort of negligent assumption of jurisdiction to enforce a by-law that may result in the restriction of a farming operation.
[66] In considering the issue of alternative remedies, the real question is whether there is anything in the FFPPA that suggests that tort liability should not exist alongside the statutory scheme at issue. As I see it, the answer is no.
[67] One final relevant factor is whether the recognition of a prima facie duty of care would conflict with an overarching statutory or public duty: Syl Apps, at para. 28; and Cooper, at para. 44. It may be argued that recognizing a duty of care in this case would conflict with the City’s duty to the public by rendering it more difficult to enforce by-laws. However, as emphasized in Hill, at para. 43, “a prima facie duty of care will be negated only when the conflict, considered together with other relevant policy considerations, gives rise to a real potential for negative policy consequences.”
[68] The Supreme Court considered this issue in Hill, in which it was argued that if police officers owed a duty to take reasonable care toward a suspect, it would conflict with their crime prevention duties. The Supreme Court was not persuaded that this was a policy reason sufficient to negate the duty of care. The Chief Justice found, at para. 41, that “[t]he officer’s duty to the public is not to investigate in an unconstrained manner. It is a duty to investigate in accordance with the law.” The implication is that the duties to the public and to the suspect are not at odds; rather, they are consistent with each other.
[69] The same logic applies here. The by-law enforcement officer’s duties to the municipality and its residents will not be affected by recognizing a duty of care between officers and farmers whom they are investigating for possible violation of a by-law that may restrict their farming operation. These are co-extensive duties. It is in everyone’s interest that by-laws not be enforced in an “unconstrained manner”.
[70] Furthermore, I note that s. 444 of the Municipal Act begins the section on remedial actions and orders premised on the municipality’s being “satisfied” that a contravention has occurred. A “satisfaction” requirement in the context of contraventions may add support for the argument that the City has a duty to take reasonable steps to satisfy itself that there has been a violation of such a by-law before taking enforcement steps.
[71] I therefore do not see a serious potential for conflicting duties in this case. As set out in the Municipal Act, the purpose of delegating powers to municipalities is to promote good government over areas within their jurisdiction. When warranted, holding municipalities to an obligation to take reasonable steps to consider whether they have jurisdiction before enforcing a by-law furthers this goal.
[72] These factors lead me to conclude that a municipality considering whether to enforce a by-law that may restrict a farm operation is in a relationship that is close and direct such that a prima facie duty of care should be recognized.
Step two – do policy considerations negate the prima facie duty of care?
[73] The second stage of the Anns test requires an examination of whether the City is able to establish that there are any policy concerns that negate or limit the prima facie duty of care. As the Supreme Court stated in Cooper, at para. 37, the policy considerations at this stage “are not concerned with the relationship between the parties, but with the effect of recognizing a duty of care on other legal obligations, the legal system and society more generally.” Policy concerns raised against a duty of care must raise a real possibility of negative consequences: such concern cannot be speculative: Hill, at para. 48.
[74] I note at the outset that because this appeal arises out of a Rule 21 motion and is therefore based on a limited motion record, this court should be reluctant to find that policy reasons conclusively negate a duty of care at this early stage: Equifax, at para. 52.
[75] Although there are several potentially relevant policy considerations, in my view, they do not militate against recognizing a duty of care. On the contrary, they support the recognition of a duty of care.
[76] Whenever a government or statutory actor is alleged to owe a duty of care, the court must consider whether the decision in issue is an operational or policy decision. It is generally considered inappropriate to hamper legislative action by imposing liability in negligence for policy decisions; however, statutory actors may be liable for operational decisions: Cooper, at para. 38. Policy decisions are “dictated by financial, economic, social or political factors or constraints,” while operational decisions are based on “administrative direction, expert or professional opinion, technical standards or general standards of reasonableness”: Brown v. British Columbia (Minister of Transportation and Highways), 1994 CanLII 121 (SCC), [1994] 1 S.C.R. 420, at p. 434. In keeping with this general approach, s. 450 of the Municipal Act protects the City from liability arising out of policy decisions but not out of operational decisions.
[77] In my view, the decision to enforce the By-law against Mr. Rausch is operational in nature. It involved a decision to enforce a specific by-law against him: it was not motivated by broader policy concerns. There is therefore no concern that imposing a duty of care in this situation would undermine the City’s ability to legislate or set policy.
[78] A common policy consideration under the second stage of the Anns test is whether there is a risk of overbroad or indeterminate liability. It was on this basis that the Supreme Court held that a government actor did not owe a duty of care to ensure it acted within the law in Holland v. Saskatchewan, 2008 SCC 42, [2008] 2 S.C.R. 51. The City argues that there is no material distinction between Mr. Rausch’s claim and the one advanced in Holland; it therefore submits that Holland is dispositive of the issue.
[79] However, Holland is distinguishable. In that case, the plaintiff argued that acting without statutory authority constituted negligence in and of itself, an argument that had already been rejected in Saskatchewan Wheat Pool because a cause of action in negligence on this basis would open the door to liability based on nothing more than the fact that the impugned action was ultra vires. Such a proposition would dramatically revise the law that applies to the consequences of ultra vires action: see Holland, at paras. 10-11. Here, the proposed common law duty of care is not based on the City’s acting without statutory authority. It is based on its failing to take care in considering whether it had statutory authority. Such a duty would not have the far-reaching consequences that were of concern in Holland: it would arise in limited situations involving municipalities enforcing by-laws against farmers in the context of a statutory scheme that precludes the enforcement of by-laws that restrict normal farm practices.
[80] In addition, any concerns about overbroad liability may be addressed by the formulation of the standard of care. For example, if the standard of care is ultimately defined as an obligation to consider the provisions of the FFPPA when enforcing a by-law against an operation that appears farm-like, there will be no risk of indeterminate liability. Such a formulation would limit liability to a narrow range of situations in which there is some uncertainty over whether the targeted farming operation constitutes a “normal farm practice”.
[81] Finally, it is not clear that in a situation in which enforcement officers are investigating potential by-law contraventions, indeterminate liability could be thought to exist in any event. The duty of care only exists between the municipality and the limited class of people that it is investigating at any given time. Therefore, “the class of persons to whom the duty would be owed is a group that is not only wholly within the knowledge, but also the control” of the municipality: Equifax, at para. 45; and Hercules Managements Ltd. v. Ernst & Young, 1997 CanLII 345 (SCC), [1997] 2 S.C.R. 165, at pp. 197-98. In a situation such as this, in which the class of defendants and their identity is known, indeterminate liability does not arise.
[82] The argument that recognizing a duty of care would have a chilling effect on by-law enforcement is based on the proposition that if the City can be sued in negligence, it will be overly restrained in enforcing its by-laws against farmers. It will have no choice but to refer every case to the Board. This would be costly and time-consuming and may also arguably impose a duty on the municipality that could have been specified in the FFPPA but was not.
[83] In my view, this argument does not justify refusing to recognize a duty of care in these circumstances. In many cases, whether the use of the property constitutes a normal farm practice will be clear and the City will have no trouble determining whether or not it can enforce its by-laws. It is antithetical to good government to suggest that in those few cases in which it is unclear whether the property is being used in a manner that constitutes a normal farm practice, there is no duty to conduct some form of jurisdictional due diligence before taking steps to enforce a by-law that could cause reasonably foreseeable harm.
Conclusion on the common law duty of care
[84] In my view, no compelling reason has been shown to negate a prima facie common law duty of care. I therefore conclude that the City may owe Mr. Rausch a common law duty of care to exercise its considerable powers over farmers in a manner that reduces risk of unwarranted harm.
The standard of care
[85] This naturally takes me to the issue of the standard of care.
[86] Although the arguments with respect to the sufficiency of Mr. Rausch’s negligence pleadings were properly confined to the question of whether the City owes a duty of care, various analyses in the decisions below considered the standard of care as well.
[87] The approach to determining the standard of care in these circumstances would be to assess what a reasonable by-law enforcement officer would have done in considering whether to enforce the By-law against Mr. Rausch. It is at this stage of the analysis that the court must define the conduct required to satisfy this standard, bearing in mind that the FFPPA imposes no obligation on the City to apply to the Board for a determination as to whether a targeted farming operation is a “normal farm practice”.
[88] Municipalities are presumed to know the law: Boundary Bay Conservation Committee v. British Columbia (Agricultural Land Commission), 2008 BCSC 946, [2008] B.C.J. No. 1369, at para. 71. Further, this court has held that enforcement officers are obliged to (i) act in good faith in relation to their decisions as to how a by-law will be enforced, and (ii) act with reasonable care in any steps they take to enforce a by-law: Foley v. Shamess, 2008 ONCA 588, 297 D.L.R. (4th) 287, at para. 29; see also Butterman v. Richmond (City), 2013 BCSC 423, [2013] B.C.J. No. 461, at para. 38. The combination of these two factors – presumed knowledge of the law and an obligation to act reasonably and in good faith in enforcing it – and the wording of s. 444 of the Municipal Act mentioned above, may be relevant to the determination of the standard of care. Specifically, it may permit a finding that when attending at Mr. Rausch’s premises and observing livestock in circumstances that appeared farm-like, the by-law enforcement officer ought to have considered the implications of the FFPPA before proceeding with enforcement steps.
[89] As already discussed, the question of the type of conduct necessary to meet the standard of care is a matter for trial as it is a fact-driven assessment. In Ryan, at para. 28, the Supreme Court stated that when determining the conduct required to satisfy the standard of care, courts must consider the likelihood of a known or foreseeable harm occurring, the gravity of that harm and the cost that the defendant would incur in preventing the harm. Here, relevant factors that might be raised include the ease with which the foreseeable risks may have been avoided (i.e. by informing Mr. Rausch of the opportunity to seek judicial review or apply to the Board); the relevant policy decisions of the municipality with respect to by-law enforcement; and the City’s internal standards, guidelines or directives pertaining to the enforcement of by-laws.
[90] I emphasize that it is both for the sake of completeness and to respond to the City’s concern that recognizing a duty may conflict with the FFPPA that imposes no duty on the City to seek a determination of the Board that I have briefly addressed the standard of care.
Are Mr. Rausch’s pleadings broad enough to support a negligence claim based on a common law duty of care?
[91] The City argues that the question of whether Mr. Rausch’s negligence claim is tenable must be approached on the basis of the true character of the amended pleading, which grounds the negligence claim against the City in a breach of s. 6 of the FFPPA.
[92] I agree that the thrust of the negligence alleged in the amended pleading is based on the breach of a statutory duty under the FFPPA. However, in my view, when read generously, the amended statement of claim also advances a claim based on the breach of a common law duty of care owed by the City to Mr. Rausch. I refer to the following aspects of the amended claim:
• The City’s jurisdiction to enact and enforce by-laws is found in the Municipal Act (para. 3).
• This jurisdiction is circumscribed by s. 6 of the FFPPA. Specifically, no by-law applies to restrict a “normal farm practice” (para. 18A).
• The City enforced the By-law against Mr. Rausch without taking any steps to determine whether the By-law could be enforced against his operation. In fact, the City relied solely on the advice of representatives of Transport Canada (paras. 15, 18).
• The City enforced the By-law against Mr. Rausch when it knew, or ought to have known, that the By-law did not apply to his farming operation (para. 18C).
• The steps the City took to enforce the By-law singled Mr. Rausch out for enforcement and involved personal and direct contact with him (paras. 9-14).
• Mr. Rausch removed the wild boars from his property because of the City’s insistence that he was violating the By-law and its threat that it would charge him under the By-law and forcibly remove the wild boars if he refused to comply (paras. 9-11).
• For nearly a decade, Mr. Rausch invested a great deal of time and money in cultivating his wild boar herd, and because of the City’s actions, he now has to begin cultivating his herd from scratch. As a result, he has lost the revenue that he would have been able to earn from his herd (paras. 4-7, 21-22).
[93] It is true that Mr. Rausch’s amended claim is faulty in many respects. It is also true that his negligence claim focuses on the breach of a duty of care imposed by the FFPPA. However, in my view, the amended pleading also contains allegations sufficient to support a negligence claim based on the breach of a common law duty of care.
[94] I appreciate that this interpretation of Mr. Rausch’s amended statement of claim requires a charitable reading of the pleading. However, as I have said, the Supreme Court has mandated that pleadings are to be construed as generously as possible with a view to accommodating any inadequacies in the form of the allegations due to drafting deficiencies: Operation Dismantle, at p. 451. This mandate advances the fundamental objective that guides the application of rule 1.04 of the Rules of Civil Procedure – the just determination of cases on their merits.
[95] In determining whether pleadings disclose a cause of action, the focus must be on the substance of the pleading, not its form: Jane Doe v. Metropolitan Toronto (Municipality) Commissioners of Police (1990), 1990 CanLII 6611 (ON SC), 74 O.R. (2d) 225 (Div. Ct.), at p. 239. Courts have refused to strike pleadings even in cases in which the plaintiff has not specifically pleaded all elements of the cause of action, so long as those elements are implicit in the rest of the pleadings: Jane Doe, at pp. 238-39; and 1309489 Ontario Inc. v. BMO Bank of Montreal, 2011 ONSC 5505, 107 O.R. (3d) 384, at paras. 26-27. As Lauwers J. (as he then was) emphasized in BMO Bank of Montreal, at para. 27, as long as the existing pleading “raises the factual matrix of concern to the plaintiff and within which [the defendant’s] possible liability is to be located[,] it successfully asserts a cause of action within the meaning of rule 21.01(1)(b).” Thus, even if the plaintiff does not explicitly set out the technical cause of action on which it relies, if the facts as pleaded implicitly advance such a claim, the court ought not to strike the pleadings: BMO Bank of Montreal, at paras. 26-27.
[96] Applying these principles in this case, I conclude that Mr. Rausch’s amended pleading contains the factual matrix necessary to support a negligence claim based on a common law duty of care. The statutory framework of the City’s jurisdiction, including the Municipal Act and the FFPPA, is pleaded. Certain indicia relevant to establishing a relationship of proximity are pleaded. The fact that the by-law enforcement officer took no steps to consider jurisdiction is pleaded. Reliance is pleaded. Causal damages are pleaded. To strike his pleading, one that pleads breach of a duty of care arising out of a statutory framework because it does not explicitly refer to its being a common law duty would be to privilege form over substance. In my view, this narrow approach is not called for here.
[97] I would therefore not give effect to the argument that Mr. Rausch’s pleadings do not support a negligence claim based on a common law duty of care.
[98] For these reasons, I conclude that it is not “plain and obvious” that Mr. Rausch’s negligence claim based on a common law duty of care has no chance of success. Subject to the limitation argument to which I now turn, it should be allowed to proceed to trial.
(3) Are the impugned amendments to the statement of claim barred by the Limitations Act, 2002?
[99] The City alleges that the statutory limitation period precludes Mr. Rausch from claiming negligence based on a common law duty. Mr. Rausch submits that a claim for negligence at common law is simply a claim based on a different theory of legal liability that flows from facts already pleaded and that it is therefore not statute-barred.
[100] The law is clear that after the limitation period has expired, amendments are permissible if they advance an alternative theory of liability based on the same facts whereas they are not permissible if they advance a new cause of action: see BMO Bank of Montreal.
[101] There is no issue about whether the negligence claim was added after the expiry of the limitation period. It was. Therefore, the question is whether Mr. Rausch’s negligence claim based on a common law duty of care advances a new cause of action or merely an alternative theory of liability.
[102] My answer to that question is the latter. As set out above, the Supreme Court in Imperial Tobacco recognized two avenues of liability in negligence arising out of the interaction between a government actor and a private citizen: negligence based on the breach of a statutorily imposed duty of care and negligence based on the breach of a common law duty of care arising out of conduct within the statutory framework. Relying on a common law duty as opposed to a statutory one is merely relying on a different legal path to reach the same conclusion. Moreover, Mr. Rausch’s pleadings already allege the material facts necessary to support such a claim. Thus, in relying on a common law duty of care, Mr. Rausch asserts an alternative theory of liability flowing from the facts as pleaded. His claim is therefore not barred by the limitations period.
[103] I would therefore not give effect to this ground of appeal.
CONCLUSION
[104] In my view, Mr. Rausch’s amended claim, read broadly, pleads breach of a common law duty of care. It is not clear that the claim cannot succeed, and the claim is not statute-barred. Furthermore, as I previously indicated, I would also not foreclose the possibility of an implied duty in the statute. The amendments should therefore be allowed to remain part of Mr. Rausch’s pleading for the purposes of trial.
DISPOSITION
[105] While my reasoning differs somewhat from those expressed by the majority of the Divisional Court, in my view the decision to allow Mr. Rausch’s negligence claim to proceed to trial was correct.
[106] I would therefore dismiss the appeal with costs to the respondent fixed in the amount of $15,000, including disbursements and applicable taxes.
Released: December 9, 2013 (“J. MacF.”)
“Gloria Epstein J.A.”
“I agree. J. MacFarland J.A.”
“I agree. David Watt J.A.”
[^1]: The City also advised Mr. Rausch that his herd violated the City of Pickering Zoning By-law 3037, (3 August 1965); however, the City ultimately laid charges under By-law 1769/83.