The Parameters of Statutory Negligence Law in Canada (An Analytical Review)

The Parameters of Statutory Negligence Law in Canada

(A HISTORIC AND ANALYTIC REVIEW)

By: Brian Campbell

Supervisor: Professor Lorne Sossin

Submitted: December 30, 2003

Student # 201598812

INDEX

I. Introduction

II. The Anns/Kamloops Test for Determining Statutory Duty of Care

(a) Anns v. Merton (1978) H.L.

(b) Kamloops v. Neilson (1984) S.C.C.

III. Canadian Courts at the Crossroads

(i) Brewer v. The Queen (1991) F.C.A.

(ii) Swanson v. The Queen (1991) F.C.A.

(iii) Brown v. Province of British Columbia (1994) S.C.C.

(iv) Swinamer v. Attorney General of Nova Scotia (1994) S.C.C.

IV. The Doctrine of Expansion Return

(a) Lewis v. Province of British Columbia (1997) S.C.C.

(b) Ryan v. City of Victoria (1999) S.C.C.

V. A Parallel Universe (Murphy v. Brentwood) (1991) Ltd.

(a) Murphy v. Brentwood (1991) H.L.

(b) Canadian National Railways v. Norsk Pacific

VI. Retrenchment (Coopers & Edwards)

(a) Cooper v. Hobarts (2001) S.C.C.

(b) Duffus v. Minister of Financial Institutions (1994 Ontario

VII. The Post-Cooper Landscape (A Mixed Blessing!)

(i) Rogers v. Faught (Ont. C.A.) 2001

(ii) Haskett v. Equifax (Ont. C.A.) 2003

(iii) Cheltenham Estates v. The Queen (Ont. S.C.C.) 2003

(iv) Morgus v. Thompson Kernigham (Ont. C.A.) 2003

(v) Odhavji Estate v. Woodhouse [2003] S.C.J. No. 94

VIII. Summary and Conclusions

I. Introduction

This paper traces the development of the law of statutory negligence in Canada from the seminal pronouncement of the House of Lords in Anns v. Merton (1978)[1], adopted by the Supreme Court of Canada in City of Kamloops (1984), to the present date.[2]

I propose to review the circumstances in which statutory negligence has developed in the Canadian context, and discuss the many considerations that animate the determination of such negligence.

The Anns/Kamloops analysis proposes a two step test for determining on the facts of a case whether negligence within the relevant statutory framework exists. Stage one of the test considers the criteria required to create a prima facie duty of care. These involve considerations of foreseeability, proximity and reliance.

I consider whether these terms are exhaustive and whether or not they can be easily distinguished from each other. I suggest that considerable confusion exists over the meaning of “proximity” which dominates the first stage analysis in Anns/Kamloops, and that proximity is sometimes a function of forseeability, and sometimes a function of considerations of reliance.

In addition I discuss the analysis which characterizes stage two of the Ann/Kamloops test focusing initially on the distinction between policy and operational decisions which contribute to an overall lack of precision as to the parameters of statutory negligence.

I submit that more simplicity is required in applying the two stage Anns test to the law of statutory negligence in Canada and that the policy considerations affecting statutory bodies and their liability for negligence should be left to the standard of care analysis, once a duty of care has been determined.

I discuss certain additional considerations dealt with by the courts at the second stage of the Anns/Kamloops test as it applies to statutory negligence. These involve the problems of pure economic loss and indeterminate liability, and how the court’s preoccupation with these concepts tends to limit the scope of statutory negligence.

The paper reviews and analyzes in detail a number of cases at the Supreme Court of Canada, Federal Court of Appeal, Ontario Court of Appeal levels and traces through these cases how the law of statutory negligence has developed and changed in Canada through periods of both expansion and contraction in the scope of such negligence.

In the course of this paper I suggest there does not exist in Canada today a coherent doctrine of statutory negligence. At different times, the courts appear to widen the ambit of activity which gives rise to liability for statutory negligence while at other times, the courts pull back, thereby narrowing the scope of such liability. In the process, the law of statutory negligence has been left in a state of considerable uncertainty.

I suggest that the courts have struggled and continue to struggle with the meaning and intent of the statutory provisions under which such negligence can arise and that the courts continually confuse the notion of public interest with private law duty of care, leading to liability.

My conclusion is that the law of statutory negligence in the Canadian context is a flexible doctrine, subject to both growth and restriction, which is continually evolving, to a greater degree than in the United Kingdom where the two staged analysis was born. However, I believe the experience of the United Kingdom, in subsequently rejecting the Anns analysis, pervades the Canadian experience and hampers its development, with fears of indeterminate liability and opening the floodgates to claims against the Crown, on the basis that such liability would adversely affect the ultimate defendants, the taxpayers.

In Part II I review the Anns and Kamloops cases and show how these precedents influenced the Supreme Court of Canada in the Just decision as possibly the high water mark of a liberal, expansive approach to the notion of statutory negligence.

In Part III I review two Federal Court of Appeal (“FCA”) decisions, namely Brewer and Swanson, and compare them to two Supreme Court of Canada cases in the same time period, being Brown and Swinamer. I suggest that the FCA cases expand and increase the scope of statutory negligence in the Canadian context, while the S.C.C. cases in turn appear to arrest the development of such negligence, by returning to a more restrictive interpretation.

In Part IV I review three Supreme Court of Canada cases decided in the late 1990s wherein it appears the Supreme Court returns to where it left off in 1989 in that the law of statutory negligence expands in a logical way from the earlier Kamloops and Just authorities.

In Part V I pause to discuss the U.K. experience and show how the Murphy case in the House of Lords (1991), has arrested the development of the law in the U.K. and has led to a re-assessment of and subsequent check upon the development of the law of statutory negligence in Canada.

In Part VI I review the Coopers and Edwards Supreme Court of Canada cases with particular reference to an earlier Ontario case (Duffus) and suggest the S.C.C. cases herald a retrenchment of law of statutory negligence due in part to the influence of the U.K. experience in Murphy.

In Part VII I look at recent case law after Cooper and Edwards, which in my view demonstrates that the Courts particularly in Ontario continue to struggle with the impact of Cooper in the context of the Anns/Kamloops analysis.

Lastly in Part VIII I conclude the paper with a summary of the Canadian historical experience and speculate as to the future of the law of statutory negligence in Canada.

II. The Anns/Kamloops Tests for Determining Duty of Care in a Statutory Context[3]

The starting point in the analysis of the law of statutory negligence in Canada begins with Anns v. Merton, a decision of the House of Lords in 1978 which is of importance to Canadian law because it has, for the most part been assiduously followed by the Canadian authorities since then, notwithstanding that the House of Lords in the United Kingdom has reversed itself in respect of the Anns precedent in the Murphy[4] case in 1991.

The development of the law of statutory negligence in both Canada and the U.K. began in cases concerned with the responsibility of municipalities to enforce building construction and inspection by-laws. Municipal supervision of such construction concerns the safety and health of the public and the need to protect such interests in circumstances where the public is reliant upon the municipality or regulatory body to inspect and to warn of potential threats to safety and/or health, which may occur during the construction process if appropriate supervision and inspection is not carried out.

The facts in the Anns case were that the plaintiffs were lessees of certain maisonettes in a two storey block of townhouses in London, England.

The local municipal authority approved building plans for the erection of the maisonettes, which plans were deposited pursuant to the provisions of specific building by-laws enacted by the municipality. Some years later while the plaintiffs were in occupancy of one of the maisonettes constructed pursuant to approved plans, the structure in question began to move, resulting in cracks in the walls and sloping of the floors.

The plaintiffs claimed against the London Borough Council (the “Council”) in negligence for the cost of repair of the structural damage caused by the negligence of the Council in allowing the builders to construct the building upon foundations which were not in accordance with the deposited plans. In the alternative the plaintiffs claimed the Council failed to carry out the necessary inspections with sufficient care so as to avoid structural damage.

The plaintiffs asserted under the Public Health Act of 1936 that the Council was under a duty to ensure that the building was built in accordance with the plans and that the structure should have been inspected before the foundations were covered in.

The House of Lords determined that the Crown was under a duty to give proper consideration to the question of whether or not there should be building inspections under the by-laws of the Council and that their immunity from attack in the event of a failure to inspect, though great, was not absolute.

The question of whether the Council by itself or through its officers, came under a duty of care towards the plaintiffs, had to be considered in relation to the powers, duties and discretion of the Council arising under the provisions of the Public Health Act 1936.

Lord Wilberforce set out his now famous determination of how a duty of care is established in modern negligence law at page 751 as follows:

“Through the trilogy of cases in this house, Donoghue v. Stevenson (1932) A.C. 562, Hedley Byrne and Company Limited v. Heller and Partners Limited (1964) A.C. 465 and Dorset Yacht Company Limited v. Home Office (1970) A.C. 1004 the position has now been reached that in order to establish that a duty of care arises in a particular situation, it is not necessary to bring the facts of that situation within those previous situations in which a duty of care has been held to exist. Rather the question has to be approached in two stages. First one has to ask whether as between the alleged wrong doer and the person who has suffered damage there is a sufficient relationship of proximity or neighbourhood such that in the reasonable contemplation of the former, carelessness on his part may be likely to cause damage to the latter in which case a prima facie duty of care arises. Secondly, if the first question is answered affirmatively it is necessary to consider whether there are any considerations which ought to negative, or to reduce or limit the scope of the duty of care of the person to whom it is owed or the damages to which a breach of it may give rise.”[5]

Lord Wilberforce determined that the Public Health Act 1936 was designed to protect health and safety and to that end provided for certain construction standards, through by-laws proposed for the inspection of various stages of construction within the municipality’s jurisdiction.[6]

Lord Wilberforce applied his two-stage analysis, as set out above, together with consideration of the statutory provisions to the facts of the case to determine whether or not a prima facie duty of care existed. He believed that although the Council discharged statutory functions, that alongside of these functions lay a private law duty of care on the part of the statutory body towards certain individuals which would allow these individuals to sue the Council for damages.[7]

Lord Wilberforce stated that the intention of most statutes and in particular those passed in the area of public health and safety was to protect and further the public interest; however, he believed policy as opposed to operational activities of statutory bodies must be distinguished.

“Although this distinction between the policy area and the operational area is convenient and illuminating it is probably a distinction of degree; many operational powers or duties have in them some elements of discretion. It can be safely said that the more operational a power or duty may be the easier it is to superimpose upon it a common law duty of care. … local authorities are public bodies operating under statute with a clear responsibility for public health in their area. They must and in fact do, make their discretionary decisions responsibly and for reasons which accord with statutory purpose; … if they do not exercise their discretion in this way they can be challenged in the courts.” (emphasis added)[8]

Under the circumstances Lord Wilberforce found there was a duty to exercise reasonable care with respect to inspection on the part of the Council, arising from its statutory responsibilities.

He determined that the duty of care was owed in accordance with the following proposition: