NOD Apiary Products Ltd. v. Her Majesty the Queen in Right of Canada, 2017 ONSC 4796

Court File No.: CV-12-0010-00 Date: 2017-11-07 Ontario Superior Court of Justice

Between: NOD Apiary Products Ltd. (Plaintiff) – and – Her Majesty the Queen in Right of Canada as represented by the Minister of Health and the Pest Management Regulatory Agency and the Attorney General of Canada (Defendants)

Counsel: R. Benjamin Mills and Shannel Rajan, for the Plaintiff J. Sanderson Graham, Aileen Jones and Tara DiBenedetto, for the Defendants

Heard: November 28, 29 & 30, 2016 and July 10 & 11, 2017

Before: Tausendfreund, J.

SUMMARY JUDGMENT MOTIONS REASONS

OVERVIEW

[1] This is a battle of Summary Judgment Motions. The Plaintiff (“NOD”) moves on the issue of liability, leaving damages for another day. The Defendants (collectively “A-G Canada” or “A-G” or “the Defendants”) seek to have the action dismissed. NOD’s claim is based on its allegation that officials within the Pest Management Regulatory Agency (“PMRA”) exercised their regulatory power in an unlawful and tortious manner which the PMRA knew would be injurious to NOD.

[2] NOD claims that the alleged improper and actionable conduct by the PMRA includes:

a) The granting of Emergency Use Registration (“EUR”) of competitor products, namely “Check-Mite +” in 2006 and “Apivar” from 2008 to 2011 inclusive, in a manner that was contrary to the Pest Control Products Act[^1] (“PCP Act” or “Act”) and Pest Control Products Regulations[^2] (“PCP Regulations” or “Regulations”);

b) Granting year-over-year EUR extensions of certain unregistered products which actions were contrary to the PCP Act;

c) Misrepresenting to NOD the need to register its formic acid products at a time when it permitted formic acid to be sold absent such a registration requirement;

d) Interfering with NOD’s economic interests by permitting continued sale of 65% formic acid; and

e) Permitting NOD’s competitors, as part of the registration process of their pest control products, to use and rely upon NOD’s exclusive test data.

[3] NOD alleges that this improper and actionable conduct by the PMRA was undertaken by it deliberately and with knowledge that it was likely to harm NOD economically.

[4] The A-G states that NOD has failed to show that the decisions at issue by the PMRA were unlawful and that they were made deliberately to bring economic harm to NOD. To the contrary, it states that the PMRA acted lawfully, reasonably, and in good faith, having regard for the relevant scientific considerations and the public interest, to make available safe and effective products. It further states that the PMRA administers the PCP Act for the health, safety and well-being of all Canadians and not to advance the commercial interests of any person or corporation.

[5] The Defendants maintain that NOD has failed to meet its burden of establishing its claim on a balance of probabilities and that its action, for that reason, should be dismissed.

FACTS

Note to CAPCO C94-05

[6] Beginning in the early 1990s, the beekeeping industry in Canada was confronted with widespread infestations of tracheal mites and varroa mites. These are parasites of honey bees that can cause the collapse of honey bee colonies.[^3]

[7] Researchers and beekeepers discovered that treatment of a honey bee hive with formic acid results in the diffusion of formic acid vapors through the hive, which can kill mites without appreciably harming the bees.

[8] In or about 1993, the Canadian Association of Professional Agriculturalists (“CAPA”), the Canadian Honey Council (“CHC”) and the beekeeping industry requested that Agriculture and Agri-food Canada (“Agriculture Canada”) facilitate the use by beekeepers of a solution of 65% formic acid in water to control mite populations. That request was made because, based on the then applicable legislation, the use of formic acid to control the mites would ordinarily have required registration as a controlled product.

[9] In response to that request, Agriculture Canada in 1994 recommended that the use of formic acid by beekeepers for the detection and control of tracheal and varroa mites be exempt from registration through a regulatory amendment by adding it to Schedule II of the then applicable Regulations.

[10] Agriculture Canada announced this proposed exemption on March 30, 1994, in a policy document entitled “Note to CAPCO C94-05”[^4] (“Note to CAPCO”). It included the information that:

• Agriculture Canada “has recommended that the use of formic acid by beekeepers, for both the detection and control of varroa mites of honey bees be exempt from registration and be regulated under the authority of Schedule II of the PCP Regulations;
• that the process to amend the PCP Regulations to accommodate formic acid in Schedule II is currently in progress and the completion of the amendment will formally sanction formic acid for use by beekeepers under the terms and conditions set out in the Schedule; and
• Agriculture Canada has not received adequate data to assess the efficacy of formic acid for honey bee mite control. However, the beekeeping industry is prepared to accept the level of efficacy indicated by preliminary data, despite reports that the efficacy achieved with formic acid treatments is inconsistent because of the variability of formic acid and the environment when it is used.”

“Note to CAPCO” contained specific instructions for the safe and effective use of this product.

[11] Although “Note to CAPCO” did not exempt 65% formic acid solution from the requirement for registration, it announced the policy of Agriculture Canada not to take enforcement action against beekeepers who used the solution in accordance with the prescribed method.

[12] When the PMRA was created as a branch of Health Canada in April 1995, and then assumed responsibility for the administration of the Act, it adopted and continued the policy expressed in “Note to CAPCO”. On December 5, 2000, the PMRA:

(a) confirmed that pending completion of the amendment to the Schedule of the Regulations to accommodate formic acid, beekeepers were given continued permission to use formic acid as per “Note to CAPCO”; and

(b) stated that as “Note to CAPCO” would not be revised, manufacturers of those formic acid products which differ from the use pattern outlined in “Note to CAPCO” should contact the PMRA to discuss registration requirements.

[13] Beekeepers generally supported that policy and encouraged its continuation. In 2008, CAPA, the CHC and the Provincial Apiarists confirmed again their position that permission for beekeepers to use 65% formic acid in accordance with the instructions in “Note to CAPCO” should continue.

[14] In the end, the Schedule was never amended. The policy of allowing 65% formic acid to be used without enforcement continued until “Note to CAPCO” was revoked in 2011.

Registration of NOD Formic Acid Pads

[15] NOD was established in 1997 to develop and sell safe formic acid-based pest control products to Canadian apiarists to protect honey bee colonies from parasitic mites, namely varroa and tracheal mites. NOD contacted the PMRA in 1997 to inquire whether a new formic acid formulation it was then developing required registration. The product consisted of presoaked formic acid pads. In response, the Scientific Review Committee (“SRC”) of the PMRA considered the matter and advised that this new formic acid formulation would have to undergo formal evaluation by the PMRA. NOD did not further pursue registration of its product until 2003, when it filed submissions for registration. In 2004 the PMRA had completed its assessment and proposed that the NOD products be eligible for registration. The PMRA concluded that these NOD products proposed for registration in fact reduced tracheal and varroa mite populations in honey bee colonies, but that the available data was not sufficient to support claims of “control” of such mites. The Proposed Regulatory Decision Document (“PRDD”) published by the PMRA in 2004 for these NOD products stated at para. 7.5.2:

Liquid formic acid (65%) is also available for use in Canada (proposed for exemption from registration and for regulation in the “Note to CAPCO”, under the authority of Schedule II of the PCP Regulations).

[16] The PMRA published a Regulatory Decision Document on April 20, 2005 confirming the registrations of NOD Formic Acid Pad and Mite-Away II Formic Acid Pad (“Mite-Away”). This document included the following comment by the PMRA:

The majority of comments received by the PMRA concerning PRDD 2004-05 were primarily regarding the need to clarify the status of 65% formic acid as a treatment for varroa mite and tracheal mite pests of honey bees as prescribed in “Note to CAPCO”.... Apiarists may continue to use 65% formic acid in bee hives consistent with the use directions prescribed in the “Note to CAPCO”.

[17] I accept and rely on the summary provided by the A-G in its factum at para. 29 concerning the differences in formulation, dose and application of the then registered NOD products from the uses outlined in the “Note to CAPCO”:

29. [T]he NOD products formulation was not just a solution of 65% formic acid and water, as it included a fibre board and perforated plastic wrapper; the amount of formic acid applied using the NOD product was higher than that outlined in “Note to CAPCO” (250 ml per NOD pad compared to 30 to 40 ml per application); the duration of treatment for the NOD product was longer (21 days) than that outlined in “Note to CAPCO” (1 to 7 days per application); and the NOD products were a single-dose application method as opposed the method outlined in “Note to CAPCO” which required 3 to 6 applications.

EUR of Check-Mite

[18] On August 17, 2001, the PMRA published DIR 2001-05. Relevant parts of this directive are as follows:

The purpose of this document is to inform registrants, user groups, government agencies and other interested stakeholders about the procedure for registering pesticides for emergency control of pest infestations where no other efficacious registered pest control products or alternative method of control exists.

This regulatory directive replaces DIR 94-05, Registration of Pesticides for Emergency Use, dated March 30, 1994.

1.0 The process outlined in this document addresses emergency pest situations. It is not intended to serve as a regulatory option in ongoing pest problems or where there is an ongoing need for a registered product to fill a void where no registered product is available.

An emergency is generally deemed to exist when the following criteria are met:

• a pest outbreak or pest situation occurs that can cause significant economic, environmental or health problems;
• there is no effective product or application method registered in Canada for the control of the pest; and
• there is no effective, alternative control method available.

Under the provision of Section 17(1) [now s. 18] of the PCPA Regulations, the Minister may register a control product, for a period not exceeding one year, for the emergency control of pest infestations that are seriously detrimental to public health, domestic animals, natural resources or other things. …

2.0 Emergency registration must be sponsored by the provincial or federal agency involved in the direct management of the pest problem. The sponsor is responsible for providing the necessary information to the PMRA to support the proposed registration and for obtaining any additional support letter required. …

4.03 Information Requirements

3. Letters of provincial support for the emergency use … indicate that, based on the information available to the sponsoring agency (e.g., agriculture), an emergency situation exists. …

4. A thorough description of the emergency situation should be provided. It must include the following:

• nature and scope of the problem;
• an explanation of why the pest was not previously a problem;
• explanation of when an emergency exists…; and
• rationale indicating how emergency criteria have been met.

10. Applicants should discuss the anticipated benefits, economic or otherwise, and losses that would occur with and without the emergency registration.

11. All pesticides currently registered for the stated site and pest combination, as well as all relevant alternative control measures, must be identified. Also, an in-depth explanation must be given explaining why these are ineffective or cannot be used to cope with emergency.

12. Emergency registrations are not intended as a solution to an ongoing pest management problem. Occasionally, an emergency may exist in a subsequent year. Absent a long-term interest by the registrant, and evidence that users and the sponsoring agencies are actively working towards satisfying the data and information requirements for a long term solution (i.e., registration), emergency registration for a third year will not normally be considered. [emphasis added]

[19] EUR is an exception to the PCP Act’s scientifically-based national regulatory system of pest control products. An early example of such an exception is the use of formic acid by beekeepers under “Note to CAPCO” issued on March 30, 1994. On May 28, 1999, the PMRA wrote to the Canadian Food Inspection Agency addressing a number of issues, including “Note to CAPCO”. Included was the following:

Formic Acid

It has been proposed that the use of formic acid by beekeepers, for both the detection … and control of tracheal and varroa mites of honey bees, be exempt from registration and be regulated under the authority of the Schedule II of the PCP Regulations (“Note to CAPCO”…)…. The amendment of Schedule II to include formic acid has not happened to date. However, beekeepers may continue to use formic acid in the manner as prescribed in the CAPCO document.

[20] On June 6, 2006, the present PCP Act and its Regulations came into force. Section 18 of the 2006 PCP Regulations provides that:

18 [I]f a pest control product is registered for, or the registration of a pest control product is amended to permit its use in, the emergency control of a seriously detrimental infestation,

(a) the validity period must not be longer than one year and may not be extended;

(c) The registration may not be renewed. [emphasis added]

[21] Section 18 is supplemented by DIR 2001-05. It states that the Minister may register a control product, for the period not exceeding one year, for the emergency control of pest infestations that are seriously detrimental to public health, domestic animals, natural resources or other things.

[22] Between 2002 and 2006, the PMRA granted annual EURs of Check-Mite, a product manufactured by Bayer Inc. (“Bayer”) for the control of varroa mites. Check-Mite is a pesticide-impregnated plastic strip. The pesticide is “coumaphos”. Prior to being granted the EUR, Check-Mite underwent a full risk assessment by the PMRA.

[23] The EUR applications for the use of Check-Mite were sponsored by provinces, in accordance with DIR 2001-05. It was generally the Ministry of Agriculture for each applicable province. Each sponsor province was expected to provide sufficient information to the PMRA to support the proposed EUR. This included a description of the emergency situation, supporting data, the discussion of the anticipated benefits and losses that would occur with or without the EUR, and an explanation of why currently registered products and alternative control methods were seen as insufficient.

[24] In granting the EURs for the use of Check-Mite for the control of varroa mites in the years 2002 to 2005, the PMRA took into account the fact that in those years a EUR was the only option for providing access to Check-Mite for beekeepers. As an EUR is granted for the maximum of one year, applications for EURs of Check-Mite were considered by the PMRA as a fresh application each year. Following the registration of NOD’s products in 2005, beekeepers then had a registered product available to them as an option for the treatment of mites.

[25] In 2004, the PMRA completed its re-evaluation of coumaphos, the active ingredient in Check-Mite. It found it to be acceptable. In April 2005, Bayer filed a “Category B” submission. Section 28(1)(a) of the PCP Act states that public consultation is only required when granting or denying an application in two named circumstances set out in that section. A “Category B” submission did not fall into either of these two circumstances; rather, it applied where the registrant of an active ingredient sought to register a new pest control product containing that active ingredient and the product was not a major new use. The PMRA accepted that the Bayer application was a standard “Category B” submission for registration of Check-Mite. Accordingly, it did not require a public consultation.

[26] The PMRA granted a further EUR of Check-Mite in 2006, followed by a conditional registration in 2007 for two years. Following a 2008 application by Bayer, the PMRA granted a full registration of Check-Mite on January 21, 2010 for five years. I will return to these decisions in my analysis.

EUR of Apivar

[27] Apivar is the marketing name of a plastic strip embedded with Amitraz to treat and control certain pests, including varroa mites in bee hives. It is owned and marketed by Veto-Pharma.

[28] In February 2008, Alberta wrote to the PMRA to ask about the possibility of an EUR of Apivar for varroa mite control. It was the view of Alberta that varroa had developed a resistance to both Check-Mite and Apistan, a registered product to control the mites. The PMRA responded that “formic and oxalic acid were not being considered in resistance management, that NOD’s formic acid products should be used for the control of varroa mites in bees and that emergency use of Apivar should be strictly limited to colonies which were proven to have multiple chemical resistance and that it should not be freely available.”

[29] On July 10, 2008, the CHC also requested an EUR of Apivar. Its letter stated that:

• It had the support of all provincial apiculturists and beekeeper associations, among others.
• Continuing high losses of honey bee colonies had had a serious impact on the bee industry. The major reason for high losses was the impact of varroa mites, a parasite that had arrived in Canada in the 1990s. Two synthetic chemical treatments and two organic acid treatments including formic acid were available to beekeepers. Mites had developed a resistance to the two synthetic treatments. The two organic acid treatments only worked if the weather cooperated. In many regions of Canada, the window of opportunity was closed for fall treatments.
• The bee industry requested an EUR for Apivar.

[30] On July 15, 2008 the PMRA responded that it would review an EUR for Amitraz, the chemical in Apivar, if it received a submission containing the appropriate information, as detailed in DIR 2001-05. Such a submission was to include data demonstrating a lack of performance of registered alternatives, including weather data for each region if the lack of performance was based on a temperature argument for certain products. Also required were letters of support from appropriate provincial authorities. The submission would then proceed as a regular EUR process and risk assessment.

[31] The CHC response of July 18, 2008 indicated that:

• the application of formic acid products was weather dependant;
• the average temperature in the Prairie Provinces for spring treatment did not meet the required minimum temperature for some of the alternative products;
• an effective alternative product was needed to save the bee industry; and
• temperature restrictions for fall applications were also of concern for certain provinces, based on their regional climate.

[32] On August 27, 2008, the PMRA issued EURs of Apivar for the period August 2008 to April 2009 for six provinces. This was subject to certain conditions including that Apivar could only be used if Apistan, coumaphos, formic acid and oxalic acid products could not effectively control varroa mites.

[33] The PMRA granted successive EURs of Apivar in 2009, 2010 and 2011, relying each year on data submitted by provincial apiarists and the CHC. The sponsors for these requests consistently stated that formic acid treatments were unreliable if treatment occurred outside the optimal temperature range.

[34] On July 27, 2010 Veto-Pharma, which owned and marketed Apivar, submitted a “Category A” application to register Apivar. On July 6, 2012, the PMRA had completed its review of the Apivar application and granted a conditional registration for a period to December 13, 2013.

Emergency Use Survey by Ontario

[35] Ontario and B.C., along with six provinces, had also applied for an EUR of Apivar in 2008. That request for these two provinces was initially refused, as

• they had failed to provide information to demonstrate that alternative products to NOD were insufficient; and
• data submitted by Ontario did not support the conclusion that weather was unlikely to allow NOD products to meet the registered product label directions.

However, the PMRA stated that, “it might be possible to support the Ontario request for an EUR of Apivar, provided that documented incidents of controlled failures of NOD products were provided.”

[36] Doug McRory, the Provincial Apiarist for Ontario, testified about Ontario’s continued request for an EUR of Apivar:

[B]oth the provincial and the federal government were under a lot of pressure from the beekeepers at this time [September, 2008]. The beekeepers of Ontario were aware that this emergency use was being put forward for … Apivar … and that they had problems trying to keep … varroa under control using formic acid.… [T]hey wanted something that was more consistent.… [T]hey had phoned the Minister of Agriculture in Ontario, several of them, they had phoned the Minister of Health in Ottawa … to see if they could not get this emergency use in place. So after we heard that Ottawa had rejected ours … Kurt [Kurt Randall, Senior Evaluation Officer at PMRA] and I talked.… Kurt came back and he said: “If you, in Ontario, can find the answers to these questions, we will reconsider this.” …

Q. Who first suggested this … for the EUR back to Apivar?

A. [I] probably suggested, there’s got to be a way, Kurt, that we can figure out something. I responded to this by developing a questionnaire and sending it out to beekeepers with over 50 colonies in Ontario…. [T]he time was really of essence at this point. We were at the end of September. If any treatment was going to happen, this had to happen … within a week.… I sent it off to Kurt for his review. Then I – being a good civil servant, I sent it through my whole system of managers for their approval too.… So this was why this was sent to him … and he suggested: “Why don’t you put down the number of colonies treated and then a number of treated colonies lost – percentage treated”…. I added that to the questionnaire…. The survey was sent out….

Q: Who did it go to?

A: Beekeepers with over 50 colonies.

Q: Did PMR ever ask who you distributed this survey to?

A: No. [In September, 2008] beekeepers were trying to come up with a solution of how to treat the bees. They had used the formic acid in the spring, but … they found [the mites] were just too high.… [T]hat’s why they were so adamant that we had to try to get Apivar available to them…. [T]hey were really concerned for their bees going into the fall that year....

Q. [D]id the PMRA specify that it wanted the information collected by way of a questionnaire?

A. No … it was up to us to collect the information by whatever means we could … and do it quickly.

Q. [D]id the PMRA dictate what the questionnaire should be titled?

A. No, I came up with that….

Q. [D]id the [Ontario Ministry of Agriculture] management team have the final approval on the questionnaire…?

A. Yes.

[37] It was Ontario which drafted the survey form and sent it out to its recorded list of beekeepers. One change was made to the draft survey at the request of Kurt Randall. He recommended that Ontario add a line for the number of colonies treated and percentage of treated colonies lost. Mr. Randall informed Ontario that the PMRA wanted to see at least five cases of control failure of NOD’s formic acid products before it would consider granting Ontario an EUR of Apivar.

[38] On September 23, 2008, Mr. McRory provided the PMRA nine completed survey forms to support Ontario’s request for an EUR of Apivar.

[39] On September 25, 2008, the PMRA granted Ontario’s request for an EUR of Apivar, subject to use limitations. The EUR specified that Apivar could only be used where formic acid products would likely not be effective. The EUR for Ontario was granted for the period ending April 27, 2009, subject to a number of conditions, including:

• Apivar was limited for use only in circumstances in which then available controlled products [including formic acid] could not be effectively used to control varroa mites (e.g., due to resistance or weather conditions);
• The amount of Apivar distributed to the end-user was to be limited to the quantity of product required for immediate use in those hives identified as requiring the emergency-use product; and
• [A]ll Apivar strips were to be removed from hives by April 27, 2009 and properly disposed of.

B.C. Application for EUR of Apivar

[40] On September 24, 2008, B.C. requested for its province an EUR of Apivar. It stated that its beekeepers had experienced failures using formic acid due to cold weather. The PMRA responded that it would entertain this request, provided that, in addition to the requirements outlined in the DIR 2001-05 (i.e., demonstrating critical need due to unacceptably high losses from varroa mite), B.C’s rationale included documented cases of formic acid failures (similar to that submitted by Ontario).

[41] It was the decision of B.C. to also conduct a survey. The PMRA neither requested nor prepared this survey.

[42] In October 2008, B.C. provided eight completed survey forms to the PMRA to support its EUR application of Apivar. Some of these surveys from beekeepers stated that formic acid was dependant on appropriate weather conditions and, as such, did not deliver consistent results. B.C. also stated that NOD products did not appear to be marketed in B.C. and were therefore not available as an alternative product.

[43] On October 8, 2008, the PMRA granted B.C. the EUR for use of Apivar, subject to the same conditions that the PMRA had imposed on Ontario.

Registration of Apivar

[44] In 2009, Manitoba submitted an application to the PMRA on behalf of nine provinces for an EUR of Apivar for a further one year. The CHC submitted its own application for the same request. British Columbia, in its 2009 rationale document for an EUR extension of Apivar, included the following statement:

The end-use product Mite-Away II (formic acid) is currently not marketed in B.C. The B.C. Ministry of Agriculture and Lands recently surveyed three main bee supply distributors and none carried this product. The registrant may not have promoted or marketed the product in B.C. as it has in eastern Canada.

[45] The PMRA granted the EUR of Apivar for a further one-year period to June 30, 2010.

[46] In 2010, Saskatchewan applied on behalf of eight provinces for a further one year extension. P.E.I. was one of these eight provinces. In its application, PEI pointed to a lack of effective alternatives for varroa mite treatments currently available, such as formic acid. To support that position in its application, P.E.I. stated as follows:

Formic acid has been available for beekeepers to use to control varroa mite since the mid 1990’s (Note to CAPCO C94-05) and subsequently Mite-Away II since the mid 2000’s. Formic acid based treatments have been used in P.E.I. for a number of years providing effective control in some seasons and not in others, again, “it depends on the weather”. The most effective treatment time for varroa mite control is in the fall, after the last honey flow. In P.E.I., this will usually occur sometime after mid-September. The weather data in the tables provided indicate that the average daily temperature for September is below 15°C, the minimum effective temperature required for formic acid to be effective. The risk of relying solely on suitable weather for use of formic acid is therefore not acceptable for commercial beekeepers.

[47] The EUR of Apivar was extended by the PMRA for one year to June 30, 2011.

[48] On July 27, 2010, Veto-Pharma submitted a “Category A” application for registration of Apivar Strips, a major new use of the already registered active ingredient Amitraz. On July 6, 2012, the PMRA granted a conditional registration to December 13, 2013, subject to the provision of additional toxicology information.

Analysis

[49] The Plaintiff in its pleadings and on this summary judgment motion advances these causes of action:

• Misfeasance in Public Office;
• Injurious Falsehood;
• Negligence;
• Negligent Misrepresentation; and
• Tort of intentional interference with economic relations.

[50] The Plaintiff seeks summary judgment only on the matter of liability for these causes of action. If successful, the issue of damages is to await another day.

[51] The Defendants counter with their summary judgment motion. They urge that there is no genuine issue requiring a trial and that this action against them should be dismissed.

[52] The evidence on these motions is by way of documents, affidavits and transcripts of cross-examinations on these affidavits.

[53] R. 20.4(2)(a) of the Rules of Civil Procedure[^5] provides that the court shall grant summary if satisfied that there is no genuine issue requiring a trial with respect to a claim or defence.

[54] As is now well settled, the approach a court is to take on a motion for summary judgment must reflect the comments in Hyrniak v Mauldin.[^6] The summary judgment rule should be interpreted broadly, favouring proportionality and fair access to affordable, timely and just adjudication of claims.

[55] Courts must determine only on the evidence presented whether there is a genuine issue requiring a trial. If the court finds that there is no genuine issue, then the motion shall be granted. Where there is a genuine issue, the motion judge shall consider whether the need for a trial can be avoided by ordering a presentation of oral evidence under R. 20.04(2.2) or relying on the fact finding powers in R. 20.04(2.1), namely:

a) weighing the evidence;

b) evaluating the credibility of a deponent; and

c) drawing any reasonable interference from the evidence.

[56] These powers can only be exercised where doing so would not be against the interests of justice. In Hyrniak, the Supreme Court clarified, at para. 66, that the use of these powers “will not be against the interest of justice if they will lead to a fair and just result and will serve the goals of timeliness, affordability and proportionality in light of the litigation as a whole.”

Misfeasance in Public Office

[57] NOD alleges that the PMRA failed to comply with the PCP Act and its Regulations by:

(a) permitting the use of unregistered 65% formic acid solution as a pest control product; and

(b) granting EURs and subsequent conditional registrations of Check-Mite and Apivar.

[58] The Defendants deny that the PMRA acted unlawfully with the intention to harm NOD. They deny that there was any deliberate and unlawful conduct by the PMRA whose decisions were made in the public interest and after careful risk assessment. They further state that there is no evidence of bad faith or dishonesty by the PMRA and no evidence of proof of causation.

[59] To establish misfeasance in public office, NOD must demonstrate two elements:

(a) that a public officer at the PMRA engaged in deliberate and unlawful conduct in his or her capacity as a public officer; and

(b) that the public officer was aware both that his or her conduct was unlawful and that it was likely to harm NOD.[^7]

[60] In actions against the federal Crown, liability is statutory and vicarious only.[^8]

[61] Accordingly, NOD must identify the specific public officer or officers at the PMRA who engaged in the alleged deliberate and unlawful conduct.[^9] In addition, NOD must:

(a) establish that the public officer at the PMRA was subjectively aware, or at least subjectively reckless or willfully blind, to the possibility that harm was a likely consequence of the alleged misconduct;[^10]

(b) demonstrate an element of bad faith or dishonesty on the part of the public official.[^11] This tort is not directed at a public officer who inadvertently or negligently fails adequately to discharge his or her obligations,[^12] and cannot be made out simply by there being some doubt as to whether a decision by a public agent is correct. What is needed is that the decision-maker take action that he/she knowingly does not have the authority to take;[^13] and

(c) establish that the alleged unlawful conduct of the public official was the cause of its injuries and that those injuries are compensable in tort law.[^14]

Unregistered Use of 65% Formic Acid

[62] Section 6 of the PCP Act provides that “no person shall … use a pest control product that is not registered under this Act, except as otherwise authorized under … s. 41(1) … or the regulations.”

[63] Section 41(1) states that “[t]he Minister may … authorize a person to use an unregistered pest control product for a specified purpose”.

[64] To recap, Agriculture Canada had agreed to permit the use of formic acid by beekeepers for the detection and control of varroa mites and that it be exempt from registration. It announced that decision in the “Note to CAPCO”. It contains specific instructions to permit the product to be used in a safe and effective manner. This policy by the PMRA remained in effect until revoked as of March 2, 2011.

[65] In or about 1997, NOD started a process to register a particular format of the use of 65% formic acid for the treatment of mite pests of honey bees. This process culminated on April 20, 2005 in the Regulatory Decision of the PMRA to register NOD Formic Acid Pad and Mite-Away. This decision document, under “Comments and Responses”, included the following:

The majority of comments received by the PMRA concerning [this application] were primarily regarding the need to clarify the status of the use of 65% formic acid as a treatment for varroa mite and tracheal mite pests of honeybees as prescribed in “Note to CAPCO”.… Apiarists may continue to use 65% formic acid in beehives consistent with the use directions prescribed in the “Note to CAPCO”.

[66] September 23, 2008, CAPA wrote to NOD in response to NOD’s request for CAPA’s position on “Note to CAPCO”. It states in part that the CHC, the Provincial Beekeeping Associations and the Provincial Apiarists do not support the removal of the uses of formic acid as described in the “Note to CAPCO”.

[67] Based on the evidence, I find that:

(a) The PMRA did not represent that “Note to CAPCO” would be revoked once NOD’s products were registered. In fact, the evidence is to the contrary (as expressed by the PMRA on December 5, 2000 to confirm its policy to continue “Note to CAPCO”).

(b) The Regulatory Decision Document of April 20, 2005 announcing the registration of NODs formic acid products provided that apiarists may continue to use 65% formic acid as prescribed in “Note to CAPCO”.

(c) The issue of continued use of formic acid under “Note to CAPCO” had not been raised with the PMRA by NOD prior to the registration of its products in 2005. In fact, the evidence would indicate that the topic was not raised by NOD until 2008, when it apparently sought CAPA’s support to urge the PMRA to revoke “Note to CAPCO”. CAPA, the Provincial Beekeeping Associations and the Provincial Apiarists did not support NOD in this endeavor. They maintained their position that the use of unregistered 65% formic acid as prescribed in “Note to CAPCO” should remain available to beekeepers.

[68] In 2009, the PMRA received written positions from beekeepers across the country urging the PMRA to continue the availability of unregistered 65% formic acid for use in bee hives for mite control. The following are excerpts of some of these submissions:

• “Formic acid is an essential tool for keeping our bees alive…. [T]he whole bee industry very much relies of 65% formic acid to control both tracheal and varroa mites…. [P]lease re-registrar 65% Formic Acid to be used in their hives for mite control.”
• “The Manitoba Cooperative Honey Producers Ltd. requests that the PMRA reconsider their proposal to phase-out the ‘Note to CAPCO’ by December 2010.”
• “We have used 65% formic acid to control mites since the early 1990s. It has been an excellent tool to control mites and is a ‘soft’ chemical…. My son and I cannot imagine not using this treatment…. [O]ne cannot help but wonder where the ‘push’ to withdraw this effective treatment is coming from.”
• “It would be a great disservice to the honey industry if formic acid was not freely available for general use by all Canadian Beekeepers.”
• “Given the importance of formic acid as a tool for Ontario beekeepers, we would support an extension of the phase-out proposal to 2014.”
• “The Ontario Beekeepers Association would like to express our desire for the continued use of 65% formic acid for the control of mites in honey bees.”
• “I am a commercial beekeeper in Alberta and I have found 65% formic acid to be an effective control for both varroa and Tracheal mites in my bees.”

[69] Section 4(1) of the PCP Act states:

Primary Objective

4 (1) In the administration of this Act, the Minister’s primary objective is to prevent unacceptable risks to people and the environment from the use of pest control products.

[70] On the issue of the continued permission for the use of unregistered 65% formic acid consistent with the use directions prescribed in “Note to CAPCO” until its revocation on March 2, 2011, I find that there is no evidence that anyone within the PMRA acted contrary to the mandate of the PCP Act, as prescribed in s. 4(1) of the Act.

[71] In the absence of evidence of misfeasance by a public official in the PMRA regarding the continued use of 65% formic acid under “Note to CAPCO”, I dismiss this part of the Plaintiff’s claim. I also grant summary judgment to the Defendants for a dismissal of this part of the Plaintiff’s claim as it relates to the continued permission by the PMRA until March 2, 2011 of the use of unregistered 65% formic acid under “Note to CAPCO” as amended by DIR 2001-05.

Negligent Misrepresentation

[72] The Plaintiff pleads that:

(a) The PMRA represented and insisted that NOD must proceed with a registration process for its then proposed product – Mite-Away II Formic Acid Pads and NOD Formic Acid Pads.

(b) This representation by the PMRA was untrue, inaccurate and/or misleading, as shown by its continued permission for apiarists to use 65% Formic Acid under “Note to CAPCO”.

(c) PMRA owed a duty of care to NOD.

(d) PMRA was negligent in making the representation, as it had taken no reasonable or any steps to inform itself prior to making the representation.

(e) NOD relied on the representation and wasted costs to secure the registration for its product.

[73] The Defendants’ pleadings on this issue state that:

(a) They deny that the Minister and PMRA owed a duty of care to the Plaintiff.

(b) The Minister and PMRA were acting exclusively in a regulatory capacity exercising statutory discretionary authority in the general public interest.

(c) Neither the statutory scheme, the actions of the Minister nor the PMRA gave rise to a relationship of proximity.

(d) Neither the Minister nor the PMRA represented to the Plaintiff that upon registration of its products, the PMRA would terminate “Note to CAPCO”.

(e) The Plaintiff was informed in 2001 that beekeepers were permitted to use 65% formic acid and that NOD’s products did not fall within the proposed exemption.

[74] The PMRA memo of August 22, 1997, states:

…PMRA received a letter from Dr. Nasr [on behalf of NOD].… [T]he letter requested that the PMRA amend the proposed schedule for Formic Acid to accommodate a new application method which involves the use of pre-packed Formic Acid soaked pads … to control varroa and tracheal mites in honey bees.… It was decided that this formic acid formulation would have to undergo formal evaluation by PMRA evaluators. Currently, there are no end-use products containing formic acid or the technical active ingredient registered in Canada. Therefore, this application will be processed as a “Category A” submission.

[75] On January 14, 2003, NOD submitted its application for registration. Its letter to the PMRA included the following:

Attached is the … submission for our Mite-Away II single application Formic Acid pad, designed for use in honey bee colonies to control varroa and tracheal mites.

Formic acid has been used as a mite control active ingredient in Canada since 1994 under PMRA document C95-05. Formic Acid has never been fully registered as an EP [end product] and PMRA has told the beekeeping industry it needs to complete the registration, or face the possibility of losing Formic Acid as a pest control product. NOD … had taken the initiative to do so.… Under PMRA research permit, we developed a next generation of Mite-Away II … to work under a wider range of conditions…. We are pleased to submit this submission for the registration of Mite-Away II, which we believe will be the mite control product of the future….

[76] Kurt Randall, a PMRA employee, testified on this issue as follows:

[T]he NOD products were substantially different from the use outlined in “Note to CAPCO” in formulation, dose and application method:

• the NOD product’s formulation was not just a solution of 65% formic acid in water, as it included a fibre-board and perforated plastic wrapper;
• the amount of formic acid applied using the NOD product was higher than that outlined in “Note to CAPCO”;
• the duration of treatment for the NOD product was longer; and
• the NOD products were a single-dose application method, as opposed to the method outlined in “Note to CAPCO”, which required 3-6 applications.

[77] On November 5, 2004, the PMRA published its proposed Regulatory Decision Document for Mite-Away II. It states in part:

The PMRA has carried out an assessment of available information … and has found it sufficient … to allow a determination of the safety, merit and value of the active ingredient formic acid and the NOD Formic Acid Pad and Mite-Away II Formic Acid Pad. The Agency has concluded that the use of the active ingredient formic acid and the NOD Formic Acid Pad and Mite-Away II Formic Acid Pad in accordance with the label has merit and value … and does not entail an unacceptable risk.… Therefore … the use of the active ingredient … is proposed for full registration….

[78] NOD’s products were registered April 20, 2005.

[79] Based on the uncontradicted evidence of the Defendants which I accept, I find that the NOD products were substantially different from the uses of 65% formic acid as outlined in “Note to CAPCO”. On the basis of these differences and as there were then no end-products containing formic acid already registered in Canada, the decision made by the PMRA to require registration for NOD products was reasonable and scientifically justified. If I should be incorrect in this finding, I now turn to consider whether NOD has established the required elements for the tort of negligent misrepresentation, as outlined by the Supreme Court in Queen v. Cognos Inc.[^15]

[80] To succeed on its claim for negligent misrepresentation, on these facts, NOD must establish the following five elements:

(a) there must be a duty of care based on a “special relationship” between NOD and the PMRA;

(b) the representation by the PMRA must have been untrue, inaccurate, or misleading;

(c) the PMRA must have acted negligently in making such misrepresentation;

(d) NOD must have relied, in a reasonable manner, on the negligent misrepresentation; and

(e) the reliance must have been detrimental to NOD in the sense that damages resulted.[^16]

[81] The B.C. Court of Appeal in Los Angeles Salad Co. v. Canadian Food Inspection Agency[^17] considered the question of whether a private law duty of care arose as a result of a decision made by a government agency. The facts were as follows: the plaintiffs were food importers who brought carrots into Canada for retail sale. The defendant, as represented by the Crown in right of Canada, was a food inspector with the Canadian Food Inspection Agency (CFIA). He had a statutory duty to prevent the spread of food-born illness. The CFIA inspected the plaintiffs’ carrots in an alleged negligent manner and determined that the carrots were likely the source of a bacterial outbreak. The CFIA issued a public health warning concerning the carrots. The plaintiffs recalled the carrots and suffered an economic loss as a result. The CFIA brought an application for an order striking the plaintiffs’ pleadings as disclosing no known cause of action. The application was granted and the action was dismissed. The plaintiffs appealed.

[82] On the appeal, B.C. Court of Appeal stated that:

55 [T]he clear purpose of the relevant legislative scheme is to protect the health of Canadians by preventing the sale of contaminated food in Canada. To recognize a private law duty of care to food sellers would conflict with that purpose. It would put food inspectors in the untenable position of having to balance the paramount interests of the public with the private interests of food sellers and would thereby have a chilling effect on the proper performance of their duties. Thus, the statutory scheme excludes the possibility of sufficient factual proximity to make it just and reasonable to impose a prima facia duty of care in the circumstances of this case…

56 … The appellants’ claim does not fit within a settled category of negligent misrepresentation, as the law has not yet recognized the relationship between a government food inspector and the subject of a food inspection as giving rise to a duty of care such that a prima facia duty might be presumed in this case.

[83] I find that the above noted principle applies to the facts before me.

[84] I refer again to the first paragraph in the preamble of the PCP Act: “An act to protect human health and safety and the environment by regulating products used for the control of pests”.

[85] I am satisfied that the PMRA decision to require registration of the NOD products was based on the consideration of health and safety and was properly justified, as based on scientific data. NOD’s claim for negligent misrepresentation based on the registration requirement of its products is dismissed.

[86] In the even that I should be incorrect in my finding that NOD has failed to establish the necessary elements for the tort of negligent misrepresentation by the PMRA, I note that pursuant to s. 65 of the PCP Act, the Crown would not be liable to NOD for any costs or damages resulting from the requirement to seek registration prior to the sale of its products.

EURs and Conditional Registrations of Check-Mite

[87] Section 41(1) of the PCP Act provides that the Minister, in accordance with the regulations, may authorize a person to use an unregistered pest control product for a specified purpose.

[88] The PCP Regulations address the emergency registration of a pest control product:

18. [I]f a pest control product is registered for … the emergency control of a seriously detrimental infestation,

(a) the validity period must not be longer than one year and may not be extended;

(c) the registration may not be renewed. [emphasis added]

[89] The Regulatory Directive DIR 2001-05 sets out the PMRA’s policy regarding the grant of EURs. Excerpts include:

• Emergency registration must be sponsored by a provincial or federal agency involved in the direct management of the pest problem.
• There must be letters of provincial support for the emergency use.
• All pesticides currently registered for the stated site … as well as all relevant alternative control measures, must be identified.
• Emergency registrations are not intended as a solution to an on-going pest management problem. Occasionally, an emergency situation may exist in a subsequent year. In the absence of long term interest by the registrant, emergency registration for a third year will not normally be considered.

[90] Between 2002 and 2006, the PMRA granted annual EURs for Check-Mite, a product manufactured by Bayer Inc., for the control of varroa mites. Check-Mite is a pesticide-impregnated plastic strip used as a carrier for powdered coumaphos, an organophosphate insecticide and neurotoxin. Applications were made by the provinces which maintained that varroa mites had developed wide-spread resistance to Apistan, a product which was, until the registration of NOD products in 2005, the only registered product available to control the mites. Sixty-five percent formic acid, which was available for use under “Note to CAPCO”, did not always provide acceptable control of varroa mites.

[91] Although an EUR may not exceed one year, applications for an EUR in subsequent years are considered each time by the PMRA as a fresh application.

[92] NOD’s Formic Acid Pads and Mite-Away II were registered in April 2005. In the same month, the B.C. Ministry of Agriculture requested an EUR for Check-Mite. In its application, B.C. noted that formic acid was not suitable to reduce mite populations in the fall “as its efficacy is temperature dependant”.

[93] Also, in February 2005, the CHC submitted a Canada-wide request for an EUR for the use of Check-Mite. Each province provided its own rationale, including evidence that the then registered products failed to provide effective control of varroa mites. The PMRA, as a fresh application, granted an EUR for the use of Check-Mite for 2005.

[94] On December 13, 2005, the B.C. Ministry of Agriculture and Lands, on behalf of all provinces, submitted a request for an EUR of Check-Mite for control of varroa mites in honey bees for the period February 1, 2006 to December 31, 2006. Its application stated in part:

In 2001, field reports indicated that varroa mites were showing resistance to Apistan, then the only chemical pesticide registered for control of varroa mites in Canada…. Weak colonies and high overwintering mortality have been documented in beekeeping operations that have historically managed varroa mites effectively with an integrated approach using sanitation, Apistan and formic acid…. Since emergency registration of Check-Mite was initiated in 2002, colony losses have decreased…. Check-Mite is the only reliable alternative product available at this time.

[95] The PMRA proceeded with a scientific review of this application. Its Science Management Committee noted in its briefing report of January 5, 2006 that:

• this was a repeat request, as an EUR had been granted for this product for the years 2002 to 2005;
• current alternatives were Apistan, formic acid (including NOD Formic Acid Pad and Mite-Away II Formic Acid Pad) and oxalic acid;
• formic acid and oxalic acid could only be used during brood-less periods (i.e., late winter to early spring) and were more labour-intensive and timing-sensitive to apply than Check-Mite;
• there was then a “Category B” submission for Check-Mite under evaluation with no identified deficiencies to hold up the complete evaluation [for registration for Check-Mite].

[96] Approval of this EUR for 2006 was granted January 23, 2006.

[97] NOD takes issue with this decision by the PMRA to grant an EUR for the use of Check-Mite for 2006, as it was granted after NOD had obtained full registration of its products. NOD states that:

• it was a prohibited renewal or extension and, as such, it contravened the regulatory and policy requirements of the PCP Act;
• the PMRA failed to engage in a good faith assessment of NOD’s products, which by then had been registered and were available for the treatment of mites in bee colonies; and
• the permitted continued use of an unregistered pest control product was an unlawful act directed toward NOD’s products and was an intentional interference with NOD’s economic interests.

[98] NOD alleges that this decision by the PMRA is misfeasance in public office by representatives of the PMRA.

[99] For reasons that follow, I disagree.

[100] This decision by the PMRA in 2006 to grant an EUR for the use of Check-Mite, as had been the case for the years 2002 to 2005, was based on applications from provincial sponsors to control varroa mites in honey bees colonies. In each of those years, the provinces submitted applications which satisfied the requirements of DIR 2001-05.

[101] I accept the position of the Defendants that the EUR of Check-Mite in 2006 was not an improper renewal or extension of the previous EURs. I adopt and rely on the explanation of this issue given by Kurt Randall in his affidavit of May 16, 2016:

A renewal is a specific type of registration process. By definition, an EUR submission is not a submission for a renewal. Even though the EUR submission for Check-Mite in 2006 was a repeat request from previous years (no new information was submitted and no changes were made to the proposed label), it was a new decision on a new EUR, not a renewal of an existing registration.

[102] I find and accept that the material of the Defendants demonstrates that a complete application package, including a rationale from each provincial applicant, was submitted and reviewed by the PMRA before the EUR was granted in 2006.

[103] I also note that the serial decisions of the PMRA to grant an EUR of Check-Mite for five consecutive years from 2002 to 2006 is consistent with DIR 2001-05. The registrant, Bayer Inc., had demonstrated a continued intention to pursue full registration of Check-Mite. In 2005, Bayer Inc. was finally in a position to submit its application for full registration and did so. That application was conditionally granted in 2007, followed by full registration in 2010.

[104] At the time of the request for the 2006 EUR of Check-Mite, NOD’s products had been registered. However, as noted in the Decision Document for the registration of NOD’s products, these did not demonstrate to the PMRA a level of efficacy sufficient to warrant a claim of “control” of varroa mites. Accordingly, the label claims were limited to a reduction of mite numbers. The application documents of the provinces for this EUR referenced that varroa mites were not adequately controlled by available products and that this was a critical issue for the beekeeping industry. The conditions attached to the EUR of Check-Mite for 2006 stated that the use of Check-Mite was only permissible where other registered products had been shown to be ineffective.

[105] The PMRA decision to grant an EUR in 2006 for the use of Check-Mite, as had been the case from 2002 to 2005 inclusive, was a decision consistent with DIR 2001-05.

[106] Although NOD has pleaded that this decision was an unlawful act, the pleadings do not state the specific tort on which NOD relies. I will now address the application of these facts to both the tort of misfeasance in public office and the tort of injurious falsehood.

Misfeasance in Public Office

[107] I addressed above the particulars of the application of the tort of misfeasance in public office. On these facts, in relation to the issue of the granting of the EUR for 2006 to permit the use of Check-Mite, I find that there is no evidence:

(a) that any public official at the PMRA engaged in deliberate and unlawful conduct in his or her capacity as a public officer;

(b) that a public officer was aware that his or her conduct was unlawful; and

(c) that the officer was aware that it was likely to harm the plaintiff.

Accordingly, I find that NOD has failed to establish, on a balance of probabilities, that on these facts anyone at the PMRA engaged in misfeasance in public office.

Injurious Falsehood

[108] The following are the applicable elements for the tort of injurious falsehood:

(a) the publication of false statements, either orally or in writing;

(b) which reflect adversely on the plaintiff or its property;

(c) are calculated to induce others not to deal with the plaintiff;

(d) were made maliciously; and

(e) the plaintiff suffered special damages.[^18]

[109] As already stated, the request for an EUR of Check-Mite in 2006 came from B.C. on behalf of all provinces. The granting of the EUR made no explicit reference to NOD’s products. The conditions attached to the granting of this EUR provided that Check-Mite should only be used where registered products were shown to have been ineffective. I find that the implication of this term is that NOD’s products could only have been used where beekeepers had experienced mite control problems. There is no evidence on these motions from beekeepers that any decision they may have made to stop using NOD products was influenced by the issue of this EUR. In fact, the evidence is to the contrary. Beekeepers had petitioned the provinces for access to Check-Mite, as they were dissatisfied with the performance of formic acid products generally.

[110] I find that there is no evidence to support the test for a finding of injurious falsehood, as it relates to the facts of granting an EUR of Check-Mite for 2006.

Conditional Registration of Check-Mite

[111] On May 20, 2004, the PMRA wrote to Bayer Inc. to advise that PMRA’s re-evaluation of coumaphos was completed and that continuing registration for the active ingredient coumaphos and associated end-uses was acceptable. The letter further stated that continued registration of coumaphos was conditional on Bayer Inc. submitting an application for registration of the end-use product for beehive use.

[112] The PMRA regulatory note 2003-01 dated February 14, 2003 is entitled “Guidance on Selecting the Correct Category for Pest Control Product Submissions”. This document is paraphrased by Kurt Randall in his affidavit of May 16, 2016:

The PMRA has four different categories of applications relating to the registration of pest control products in Canada. These categories are determined by the nature of the application. “Category A” submissions, which require a full or substantial data package, are for new active ingredients to Canada or for major new uses.

“Category B” submissions include submissions such as those to register a new pest control product (must contain an active ingredient that is currently registered for use in Canada) or to amend existing products.

A “Category A” submission was not required for Check-Mite because the active ingredient coumaphos was already registered in Canada and an end-use product for coumpahos was already registered … as Check-Mite. Public consultation under para. 28(1)(a) of the Act is not required for a “Category B” submission.

[113] In April 2005, Bayer Inc. filed a “Category B” submission for registration of Check-Mite. The PMRA states that a “Category B” submission in this case was appropriate. Coumpahos, the active ingredient of Check-Mite, was already registered in Canada and this product was not a major new use. Therefore, public consultation was not required and none was undertaken.

[114] On February 15, 2007, the PMRA granted a conditional registration of Check-Mite. On December 19, 2008, Bayer Inc. filed a further “Category B” submission to amend the conditional registration of Check-Mite to a full registration. The PMRA states and I accept that it conducted a thorough review of these submissions. On January 21, 2010, it granted full registration of Check-Mite until December 31, 2015.

[115] On January 22, 2007, NOD wrote to the PMRA to state its position that the application by Bayer Inc. for Check-Mite should be treated as a “Category A” submission. This would have required a public consultation process.

[116] The PMRA provided a written response on March 21, 2007. Included are the following statements:

[W]ith regards to your concerns on the categorization … for the registration of Check-Mite … as a “Category B” rather than a “Category A” submission, please refer to REG 2003-01…. To summarize, “Category A” submissions are for new active ingredients into Canada or for a major new use. A major new use is defined as the addition of a new Use Site Category (USC) to a currently registered active ingredient.… [C]oumaphos is currently registered in Canada…. Furthermore, an end-use product for coumaphos is already registered…. Therefore, the registration of Check-Mite does not result in the addition of a new USC for coumaphos….

The public consultation process which occurred during the registration process for NOD 65% Formic Acid … is not the same procedure which is applicable to Check-Mite…. Public consultations are conducted for all major registration decisions, such as for new active ingredients, or major new uses of a pesticide, in accordance with the PCPA and regulations. These types of submissions are classified as “Category A” submissions. However, the submission for the end-use product Check-Mite … was classified as a “Category B” submission.… [P]ublic consultation will not be conducted, as it is for major registration decisions.

[117] NOD has not accepted this written explanation by the PMRA. Its Statement of Claim addresses this concern at para. 33:

NOD Apiary Products states and the fact is that the granting of the two year conditional registration to Bayer Pharmaceuticals for Check-Mite from 2007 to 2008 was tantamount to the granting of sixth and seventh consecutive annual emergency use registrations for Check-Mite.

NOD further raises this concern in its Notice of Motion for Summary Judgment at para. 38 (d):

When NOD raised the objections to the multiple consecutive grants of emergency use registrations being granted to Check-Mite and Apivar, the PMRA granted conditional use registrations to these products solely for the improper purpose of permitting these products to be sold in Canada while avoiding the requirements for full registration.

[118] There is no evidence before me that the PMRA granted the conditional use registration for Check-Mite for any improper purpose, as alleged by NOD. I find that the decision by the PMRA to treat the conditional registration application of Check-Mite as a “Category B” submission was a decision which the PMRA has adequately explained and properly justified.

[119] In the event that I should be incorrect in my finding that it was a properly justified decision by the PMRA, it would at most be a decision made inadvertently or negligently by the PMRA. Misfeasance in public office is not directed at this type of a decision.[^19]

[120] NOD’s claim as it related to the conditional registration of Check-Mite is dismissed.

EUR of Apivar

[121] As I reviewed above, in 2008 the PMRA was contacted by Alberta and the CHC on behalf of beekeeping associations in all provinces. The concerns raised were the continuing high losses of bee colonies due to varroa mites which were represented to have developed resistance to formic and oxalic acid treatments. To counter the problem, the PMRA was asked to grant an EUR of Apivar.

[122] On July 15, 2008 the PMRA responded to the CHC and the Provincial Apiarists stating that:

• PMRA would review an emergency request for Apivar upon receipt of a submission pursuant to DIR 2001-05.
• The documentation must include a strong rationale supported by scientific data demonstrating a lack of performance of registered alternatives, including weather data for each region, if it is based on a temperature argument for certain products.

[123] The CHC response on July 18, 2008, included:

• “Applications of formic and oxalic acid are weather dependant. Oxalic is a fall treatment and formic is fall and spring.”
• “Weather data for 2008 for the Prairie Provinces showed that the average daily temperature for the period of March 15-May 30 (treatment period) did not meet the required minimum temperature for some of the alternative products.”
• “[T]he impact of varroa resistance to Apistan and Check-Mite is enormous on Canadian beekeeping. Thousands of colonies have been lost because the chemical treatments had failed to control varroa mites. We need an effective residue free alternative product to save the industry.”

[124] On August 27, 2008 the PMRA issued EURs of Apivar for the period August 26, 2008 to April 27, 2009 for six provinces. Not included initially were Ontario, Quebec and British Columbia. The registration grant included the following limitation:

• Apivar was limited for use only in circumstances in which then available control products (fluvalinate-tau, coumaphos, formic acid and oxalic acid) could not effectively be used to control varroa mites (e.g., due to resistance or weather conditions).
• The amount of Apivar distributed to the end-users must be limited to the quantity of product required for immediate use in those hives identified as requiring the emergency-use product.
• All Apivar strips must be removed from hives by April 27, 2009.

[125] The PMRA again granted EURs of Apivar in 2009, 2010 and 2011, all based on yearly submissions by provincial apiarists and the CHC. Sponsors for these EURs for those years consistently stated that the formic acid treatments had been unreliable, if treatment at the optimal temperature range was not possible. The following are examples:

• CHC: May 6, 2009:

“While no mite resistance to formic acid and oxalic acid have been recorded, the efficacy of organic acids remains highly variable and hence, less reliable at lower temperatures in the fall when producers prepare their colonies for winter.”

• Alberta: May 19, 2009:

“In the fall of 2008 most beekeepers using Mite-Away II … fail to control mites…. The temperature in those locations dropped below the recommended temperature for applying Mite-Away II.”

• PEI: February 12, 2007:

“In any given season, the question is whether formic acid treatments can be relied on to provide the initial varroa mite control in the fall to protect the wintering population from irreversible injury. The answer is “it depends on the weather”…. [T]he risk of relying solely on suitable weather for use of formic acid is therefore not acceptable for commercial beekeepers.”

• Saskatchewan: April 20, 2011:

“In many cases due to poor weather conditions, the window of opportunity for effective formic acid treatments in the fall is extremely limited on the Prairies…. [F]ormic acid was not able to keep varroa mite levels below economic threshold levels. This resulted in winter loss in excess of 80%.”

[126] On July 27, 2010, Veto-Pharma submitted a “Category A” application to register Apivar Strips, then a major new use of the registered active ingredient, Amitraz.

[127] On July 6, 2012, PMRA granted a conditional registration of Apivar to December 13, 2013

[128] NOD pleads that in granting Apivar consecutive annual EURs and then a conditional registration, the PMRA was in deliberate contravention of the provisions of the PCP Act and its Regulations and which actions amounted to an unlawful interference with NOD’s economic interests. Essentially, NOD’s issue and complaint here is identical to NOD’s complaints involving Check-Mite. To repeat, NOD states the PMRA decision to grant EURs and then the conditional registration of Apivar:

• was a prohibited renewal or extension and, as such, it contravened the regulatory and policy requirements of the PCP Act;
• the PMRA failed to engage in a good faith assessment of NOD’s products which by then had been registered and were available for the treatment of mites in bee colonies; and
• the permitted continued use of an unregistered pest control product was an unlawful act directed toward NOD’s products and was an intentional interference with NOD’s economic interests.

[129] I note that the submissions to grant the EURs of Apivar for the years 2008-2011 came to the PMRA from the provinces and the CHC. I find that the decision in each of these years was consistent with DIR 2001-05.

[130] For reasons which I already detailed with respect to NOD’s claim in relation to Check-Mite, I find that NOD has failed to demonstrate that the PMRA engaged in unlawful conduct. I further find that the PMRA decision in relation to Apivar was not directed against any third party. I find and accept that the PMRA granted theses EURs lawfully after a full assessment of the submissions by the provinces and the CHC.

[131] As was my finding with respect to Check-Mite, the conditional registration granted by the PMRA for Apivar followed a full scientific assessment of the submission by Veto-Pharma.

[132] I find that NOD has failed to establish, on the balance of probabilities, that on these facts anyone in the PMRA engaged in misfeasance in public office. There is no evidence before me that any of the decisions made by the PMRA in relation to these facts in the granting of EURs of Apivar and the decision to grant the conditional registration were made for the purpose of intentionally causing harm to NOD or indeed to any third party. I agree with and adopt the submissions of the A-G that these decisions by the PMRA in relation to Apivar were made for the purpose of addressing the emergency circumstances identified by the provinces and for the purpose of granting conditional registration to a pest control product that the PMRA had determined to be safe and effective.

Use of the Ontario Survey

[133] As I already reviewed, the PMRA had initially refused to grant an EUR of Apivar in 2008 for Ontario and British Columbia, as those provinces had not provided sufficient information.

[134] I accept the uncontradicted evidence of Doug McRory, the Provincial Apiarist for Ontario. It includes the following:

• Beekeepers of Ontario were aware that the emergency use of Apivar had been requested by all provinces;
• Ontario also had problems keeping varroa mites under control using formic acid. Its beekeepers wanted a product that was more consistent. They urged the granting of an EUR of Apivar; and
• He spoke to Kurt Randall, the Senior Evaluation Officer at the PMRA, about this matter.

[135] I further accept the un-contradicted evidence of Kurt Randall that:

• PMRA initially denied Ontario’s request, as the submitted data did not support a rationale that weather was unlikely to allow the effective use of NOD’s registered formic acid products; and
• if the PMRA were to consider a new application, it would require documentation to show “incidents of substantial control failures of Mite-Away and NOD Formic Acid Pads” to support an EUR application.

[136] It was Ontario which determined that the most effective way to gather the type of information that the PMRA apparently needed was to survey the beekeepers who had claimed that NOD’s formic acid products had not been effective at controlling varroa mites. The PMRA neither proposed such a survey, nor did it draft the survey form. The decision to proceed with the survey and to disseminate it among beekeepers of Ontario was entirely the decision of that province.

[137] Within two weeks, Ontario provided nine completed surveys to the PMRA. These surveys referred to unacceptable losses of bee hives due to varroa mite infestation even after using NOD’s formic acid products. Based on these surveys, the PMRA granted Ontario the EUR of Apivar. It included the restriction that Apivar could only be used where formic acid products did not perform effectively.

[138] Neither Ontario nor the PMRA published or made any statements regarding the efficacy of NOD’s products.

[139] NOD in its pleadings and in its summary judgment motion alleges that the EUR of Apivar for Ontario was based on PMRA’s instructions to Ontario to send out the survey. NOD further states that the survey included the title “Control failures of Mite-Away and NOD formic acid pads” which is a false statement made recklessly made by the PMRA. As I already noted, the PMRA did not direct Ontario to undertake a survey. It was by then September and colder weather was expected. Time was of the essence. It was the decision of Ontario to proceed with the survey, which it deemed to be most time effective vehicle to obtain the information it felt the PMRA needed to grant Ontario the EUR. The survey and its wording, including the title, was entirely Ontario’s undertaking.

[140] The evidence is insufficient for me to conclude that the tort of injurious falsehood has been made out. NOD’s claim, as it relates to the Ontario survey, is dismissed.

Use of the B.C. Survey

[141] NOD in its motion does not seek summary judgment on any alleged action by the PMRA in relation to the B.C. survey. However, as the Statement of Claim appears to allege involvement by the PMRA in the production and dissemination by B.C. of the survey and as the A-G in its motion seeks summary judgment for the dismissal of the entire action, I will now briefly address this issue.

[142] As was the case with Ontario, the PMRA was not involved in the preparation or distribution of the B.C. survey nor did it authorize or direct its distribution. I find that it was entirely the decision of B.C. to have proceeded with the survey.

[143] I accept as reasonable for the PMRA to have relied on statements of officials of the B.C. government that NOD’s products were then not marketed in British Columbia and that three main bee supply distributors had been contacted and none then carried NOD products.

[144] The decision to grant B.C. the EUR of Apivar was based on the results of the B.C. survey which indicated that in certain instances, formic acid products failed to adequately control varroa mites in B.C.

[145] As was the case with Ontario, the EUR of Apivar granted to B.C. for 2008 was subject to the limitation that Apivar products were to be used only where other registered products, including NOD products, could not be used effectively.

[146] I find that the evidence in relation to the B.C. survey is insufficient for me to conclude that the tort of injurious falsehood has been made out. NOD’s claim as it relates to the B.C. survey is dismissed.

Exclusive Use Test Data

[147] In 2011, Medivet Pharmaceutical and Univar Canada Ltd. each applied and were granted registration by the PMRA of their respective formic acid pest control products.

[148] NOD asserts that the approval by the PMRA for registration of these products was based on test data supplied and relied upon by NOD, including “Note to CAPCO”, in the context of its 2005 registration of its formic acid end-use products. NOD urges that the PMRA in that regard breached s. 17.5 of the 2006 PCP Regulations which states in part:

17.5(1) The registrant of a new active ingredient has the exclusive use of the following test data for 10 years after the date of registration:

(a) test data that was provided in support of the initial application to register the active ingredient …

[149] The Defendants, in response, state and I accept their un-contradicted evidence that neither Medivet nor Univar made reference to NOD’s test data in their respective registration submissions. I further accept that the PMRA, in evaluating these submissions, made no use of any exclusive test data it had received from NOD during its application process some six years earlier. I also accept PMRA’s position, as detailed in its May 18, 2011 letter to NOD, that:

Registrants cannot claim exclusive use of certain information which can be submitted in support of a registration. Information which is in the public domain (e.g. published scientific studies) is not protected nor is information gathered from Crown publications (e.g. Note to CAPCO C94-05). With regards to NOD test data, exclusive use protection is limited to test data as outlined above which were submitted by NOD in support of a registration. This does not include information on application methods or use directions.

It is common for products with similar use patterns to have similar or identical use directions, even when those products are from different registrants.

[150] Accordingly, I find that the PMRA did not contravene s. 17.5 of the 2006 PCP Regulations. I do not accept NOD’s proposition that the PMRA improperly allowed NOD’s competitors to use, or that the PMRA otherwise relied upon, NOD’s exclusive use test data with respect to the registration of the Medivet and Univar pest control products.

CONCLUSION

[151] NOD’s motion for summary judgment with respect to liability is dismissed.

[152] The motion of the Defendants for summary judgment to dismiss NOD’s action is granted and this action is dismissed.

[153] In the ordinary course, the Defendants would be entitled to their costs not only on the summary judgment motions, but also for the action itself which is now dismissed. Unless either side advises in writing within 45 days of the release of these reasons that further submissions are required on the issue of costs, this matter will be deemed to be concluded.

Honourable Mr. Justice Wolf Tausendfreund

Released: November 7, 2017

[^1]: S.C. 2002, c. 28. [^2]: SOR/2006-124. [^3]: In addressing the history of formic acid in the beekeeping industry in Canada, I draw substantially on the affidavit evidence of Kurt Randall, an employee of the PMRA. [^4]: “CAPCO” is an acronym for “Canadian Association of Pest Control Officials”. [^5]: R.R.O. 1990, Reg. 194. [^6]: 2014 SCC 7, 2014 SCC7, at para. 49. [^7]: Odhavji Estate v. Woodhouse, 2003 SCC 69, at para. 23. [^8]: Crown Liability and Proceedings Act, R.S.C. 1985, c. C-50, ss. 3, 10. [^9]: Merchant Law Group v. Canada, 2009 FC 755, at para. 18. [^10]: Odhavji, at para. 38. [^11]: Odhavji, at para. 28. [^12]: Odhavji, at paras. 26 and 37. [^13]: Norquay Developments Ltd. V Kasprzyk, 2015 ONSC 5292, at paras. 83-85. [^14]: Odhavji, at para. 32. [^15]: 1993 CanLII 146 (SCC), [1993] 1 S.C.R. 87. [^16]: Ibid, at para. 34. See also Hashemi-Saveet Estate v Mazzulla, 2015 ONSC 4611, at para. 24. [^17]: Los Angeles Salad Co. v. Canadian Food Inspection Agency, 2013 BCCA 34. [^18]: Lysko v. Braley (2006), 2006 CanLII 11846 (ON CA), 79 OR (3d) 721 (C.A.), at para. 133. [^19]: Odhavji, at para. 26.