This week the Ontario Court of Appeal released the decision in Taylor v. Canada (Attorney General), 2012 ONCA 479, in a special case motion assessing the sufficiency of fresh pleadings. The conflicting law related to the alleged negligence of Health Canada in applying the Food and Drugs Act by allowing unsafe temporomandibular joint (TMJ) implants.
Justice David Doherty framed the case by opening as follows:
 Government regulation impacts on most facets of modern life, particularly matters of public health and safety. If a government regulator exercises its powers in a negligent way, people can be hurt and suffer substantial damages. The question in this proceeding, and it is far from a novel or easy one, is when does the regulator owe aprima facie private law duty of care to the individual harmed by the regulator’s negligence?
The conflicting case law under review focused on Drady v. Canada (Minister of Health) and Attis v. Canada (Minister of Health), where a more direct connection between a regulator and the plaintiff was required, and Sauer v. Canada (AG), where a duty of care was found without a strong connection.
The proceedings are extensive, and commenced in 1999. The original certification motion decision was not released until 2007, when Justice Cullity stated,
 … In these circumstances, I believe it would be open to a court to find that Health Canada’s course of conduct – including the dissemination of misinformation in its database – increased the risk to the health of the plaintiff and other potential recipients of the implants and gave rise to a relationship of proximity with them.
… On the basis of the pleading alone, I do not consider it to be plain and obvious that Ms. Taylor has no chance of success in establishing that a relationship of proximity – as required to establish a private law duty of care – existed in connection with operational acts of Health Canada. …
[emphasis in ONCA decision]
However, this decision was based in party by Sauer, and Drady and Attis were released soon after leave for appeal was denied. Justice Lang in Drady specifically rejected the reasoning used in this case by Justice Cullity on certification. Justice Cullity then expressed difficulty reconciling these cases on the decertification motion, and allowed the plaintiff to file a Fresh Statement of Claim, stating,
 It is fundamental in cases under section 5 (1) (a) of the CPA, as well as in motions under rule 21.01 (1) (b), that the question is not whether proximity existed but whether it could be found to exist if the allegations of fact in the pleading are proven at trial. In Hunt v. Carey Canada Ltd., 1990 CanLII 90 (SCC),  2 S.C.R. 959 – still the leading case on the plain and obvious test – it was stated that, for this purpose, pleadings are to be read generously without regard to drafting deficiencies, and that questions that are important and difficult should be left to be dealt with on the basis of a full evidentiary record at trial. Thus, it has been held repeatedly that a finding that no cause of action has been disclosed should not be made if it is dependent on a resolution of a question of law that is not fully settled in the jurisprudence: Anderson v. Wilson 1999 CanLII 3753 (ON CA), (1999), 44 O.R. (3d) 673 (C.A.), at page 679; Toronto-Dominion Bank v. Deloitte Haskins & Sells, (1991), 5 O.R. (3d) 417 (G.D.); Nash v. Ontario 1995 CanLII 2934 (ON CA), (1995), 27 O.R. (3d) 1 (C.A.), at para. 11; R. D. Belanger and Associates Ltd v. Stadium Corporation of Ontario Ltd. 1991 CanLII 2731 (ON CA), (1991), 5 O.R. (3d) 778 (C.A.), at page 782.
 In these circumstances, I believe I should accept the amended pleading on the ground that – when it is read generously – it is not plain and obvious that a finding of proximity could not be made at trial if the factual allegations pleaded are proven. At the very least, in view of the need for clarification of the requirements for an effective public assumption of a private law duty of care, I consider that this is a case in which it should be held that the particular issue on which proximity turns is not fully settled in the jurisprudence within the meaning of the decisions cited in paragraph 47 above. In such cases it has been held that the issue in dispute is best left to be dealt with at trial on the basis of a full evidentiary record.
The unusual circumstances in this case led the parties to agree to the special motion under Rule 22.03.
In order for the statement of claim to properly allege a reasonable cause of action against AG Canada, it must contain two elements:
- the representative plaintiff, and not some other members of the class, must demonstrate a private law duty of care owed by AG Canada
- a reasonable prospect on the alleged facts that Health Canada owed a private law duty of care
The court looked at the approach employed by Drady and Attis, which found that the relevant legislative scheme did not provide a duty of care, and the facts lacked significant proximity. Sauer, however, did not explore the proximity issue in depth, leading Doherty J. to conclude that there is no definitive requirements in the jurisprudence for proximity in pleadings,
 In my view, a finding of proximity based entirely on a regulator’s public acknowledgement of its public duties to those affected by its actions, coupled with reliance by those affected on the regulator’s public statements, is inconsistent with the Supreme Court’s rejection in Imperial Tobacco of the claim that Health Canada owed a private law duty of care to consumers of low-tar cigarettes because it had made public representations as to the relative safety of those cigarettes.
 Although public representations by a regulator as to its public duties and obligations do not establish a relationship of proximity between the regulator and an individual plaintiff, they are properly included in the factual matrix to be considered in determining whether the interactions between a regulator and a plaintiff are sufficiently direct and close to warrant a finding of proximity.
 For the reasons set out above, a regulator’s public statements acknowledging its public duties and obligations and its commitment to the performance of those duties, combined with the reliance on those public statements by members of the public affected by the performance of those duties, cannot, standing alone, create a relationship of proximity between individual plaintiffs and the regulator. In my view, to assert that the kind of representations made by Health Canada and relied on in the Fresh Statement of Claim can, coupled with reliance on those representations, create a relationship of proximity, is in reality to assert that the public duties set out in the legislative scheme can become a private law duty of care if relied on by an individual member of the public. The legislative scheme does not create any private law duty of care. An individual’s reliance on public representations that the regulator will do its public and statutory duty cannot by itself create one.
The plaintiff did not have any direct contact with Health Canada, and there was no allegation that Health Canada’s direct action caused the harm. Rather, the alleged harm was claimed through their function as a regulator and alleged misrepresentations about the safety of the implants which describe a relationship between Health Canada and the users of those implants,
 …There is nothing inconsistent with a finding of a private law duty of care owed to individuals in a particular situation and the existence of the public duties owed by Health Canada under the legislation. The private law duty of care claimed by Ms. Taylor can coexist with the duties and obligations owed by Health Canada to the public.
However, misrepresentations that enhance risk themselves do not address the proximity issue alone. The failure of Health Canada to correct misrepresentations in face of known serious and ongoing risks that could create proximity which would warrant a private law duty of care,
 The nature of any representations made by the regulator, and the nature of any reliance placed on those representations by the plaintiff, are part of the entirety of the circumstances to be considered in determining the directness of the relationship between the regulator and the plaintiff. Representations made specifically to a plaintiff and relied on by that plaintiff can clearly forge a direct connection between the regulator and the plaintiff. General representations made by the regulator to the public and relied on by the plaintiff as a member of the public do not, standing alone, create a direct relationship. However, general representations and reliance on those representations can, in combination with other factors, create a relationship between the regulator and the plaintiff that is sufficiently close and direct to render it fair and just to impose on the regulator, in the conduct of its duties, an obligation to be mindful of the plaintiff’s legitimate interests.
The court noted that the fresh pleadings were “lengthy (61 pages, 268 paragraphs), prolix, and somewhat disorganized,” but on a generous reading it was not plain and obvious that the claim as pleaded was bound to fail. The plaintiff was given an opportunity to reframe and streamline the proceedings in light of the reasons, and the class action will be allowed to proceed, and hopefully shed further light on the private law duty of care of regulators.