The Rural Voice, 2006-09, Page 58Agrilaw
Livestock destruction — whose risk?
Paul G.
Vogel, a
partner in the
London law
firm of Cohen
Highley LLP.
By Paul Vogel
The Federal Health of Animals Act
authorizes the Federal Minister of
Agriculture to order the destruction
of animals contaminated or suspected
of being contaminated, and related
regulations authorize the Minister to
impose caps on compensation paid to
the livestock owners. Where the
contamination results from the
alleged negligence of Agriculture
Canada officials, can livestock
owners recover from the federal
government the full market value of
their animals and other financial
losses?
The Federal Court of Appeal
recently considered an appeal of a
lower court decision restricting
available compensation in such
circumstances to the limited amount
determined by the Minister. In this
case, the Minister had ordered the
destruction of an elk herd consisting
of 258 animals following the
discovery of ,tuberculosis in one of
the animals. Acting under authority
of the federal regulations, the
Minister awarded compensation to •
the owners of the elk herd in an
amount substantially less than the
appraised market value of the
animals. The elk owners sued the
federal government for additional
compensation equivalent to the fair
market value of the animals
destroyed alleging that Agriculture
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Canada officials were negligent in
allowing tuberculosis to enter
Canada.
The claim was summarily
dismissed by the lower court on the
basis of a provision in the Crown
Liability Act which prohibits a claim
being brought against the federal
government "if a pension or
compensation has been paid or is
payable out of (federal funds) in
respect of the death, injury, damage
or loss in respect of which the claim
is made." In coming to this
conclusion, the lower court stated:
` ... the Minister chose to transfer
the health risk of elk ranching to
the ranchers, instead of absorbing
it entirely through use of public
funds. I find that by the Act and
Regulations the Minister was
entitled so to do. I respect the
Plaintiffs' attempt to have the
Minister account for the authority
used, but find that the action
taken, while unpalatable to them,
was legal."
In affirming this lower court
decision and dismissing the appeal,
the appellate court rejected the
plaintiffs' contention that the
prohibition in the Crown Liability Act
did not apply to a claim for losses in
excess of the compensation awarded
where the loss was caused by the
failure of federal officials to take all
reasonable steps to prevent the entry
of tuberculosis into Canada and to
eradicate the disease when first
discovered. The appellate court
stated:
"The question to be asked ... is
whether the factual basis of the
compensation received by the
appellants and that of the action
which they have commenced
against the (federal government) is
the same. If the answer to that
question is a yes, then the action
cannot continue.
The factual basis of the
compensation received by the
appellants is the destruction of
their animals and the loss which
results therefrom. As to the
factual basis of the appellants'
action, it appears to me to be
undistinguishable from that of the
compensation which they received
I cannot see how it can be argued
that the factual basis of the
compensation and the action
differ. In my view, they are one
and the same. Whether the
destruction of the appellants'
animals results from the
negligence of officials in failing to
prevent the entry of tuberculosis
into Canada or by reason of any
other ground of negligence, is, in
my respectful view, irrelevant.
The plain fact is that both the
compensation received and
recovery sought by way of the
appellants' action result from the
same occurrence, i.e. the
destruction of their herd."
Livestock owners seeking
compensation for the destruction of
their animals by federal authorities
should be aware that available
compensation may be substantially
less than the market value of their
animals. These farmers bear the risk
of financial losses which may result
from the destruction of their animals
in excess of available compensation
regardless of whether the losses have
been caused or contributed to by the
conduct of federal officials.0
Agrilaw is a syndicated column
produced by the full service London
law firm of Cohen Highley LLP. Paul
G. Vogel, a partner in the firm,
practices in the area of commercial
litigation and environmental law.
Agrilaw is intended to provide
information to farm operators on
topics of interest and importance.
The opinions expressed are not
intended as legal advice. Before
acting on any information contained
in this column, readers should obtain
.legal advice with respect to their own
particular circumstances and
geographical area.
SEPTEMBER 2006 55