Executive Summary: Key Legal and Evidentiary Issues

• Scope and nature of the Canadian Food Inspection Agency’s (ACIA) legal obligations toward Olymel regarding the issuance of export certificates for pork shipments to China
• Determination of whether one or more distinct faults were committed by ACIA both in issuing allegedly invalid meat inspection certificates and in failing to assist after customs detention
• Causal connection between any ACIA fault and the prolonged detention of 207 pork consignments at Chinese customs, including the role of foreign regulatory and trade practices
• Extent to which complex regulatory norms (Canadian and Chinese export/import rules for pork) will shape the evidentiary record on fault and causation
• Procedural question of how to structure the trial: whether to confine the first stage to fault only (as urged by ACIA) or to include both fault and causation (as sought by Olymel)
• Litigation-efficiency considerations, including duplication of witnesses, costs, and prospects of settlement, arising from a phased determination of fault, causation, and then damages

Facts of the dispute

The case arises from a series of pork export operations from Canada to the People’s Republic of China between 2021 and 2022 involving Olymel S.E.C. and its related entities Agromex Inc. and OlyM S.E.C. (collectively referred to in the pleadings as “Olymel”). The defendant is the Canadian Food Inspection Agency (ACIA), the federal authority responsible, among other things, for issuing official inspection certificates for meat exports. According to the plaintiffs, ACIA issued 207 Official Meat Inspection Certificates covering 207 consignments of Olymel pork products bound from Canada to China. These certificates allegedly turned out to be invalid for export to China, with the result that the products were detained by Chinese customs for more than a year. Olymel claims that this extended detention caused it significant financial losses amounting to millions of dollars, as well as reputational harm with key business partners in the Chinese market.

Alleged faults and claimed losses

Olymel’s theory of liability is framed in extra-contractual (civil liability) terms under Quebec civil law. The core allegation is that ACIA “lourdement manqué à ses obligations et responsabilités” (gravely failed in its obligations and responsibilities) toward the plaintiffs in two distinct ways. First, Olymel asserts that ACIA committed a primary fault by issuing 207 meat inspection certificates that were invalid for export to China, rendering the consignments non-compliant from the standpoint of Chinese authorities. Second, Olymel alleges a separate, subsequent fault: once the export problem and customs detention became known, ACIA allegedly failed to adequately inform, assist, and correct the situation over a period of nearly a year. In Olymel’s view, these faults jointly caused or materially contributed to the prolonged detention of the pork products in China, the resulting financial losses, and the damage to its reputation. Although the originating application refers to damages in the millions of dollars, the judgment under review does not adjudicate or quantify any damages; it focuses instead on how the case should proceed procedurally.

Motion to split the instance and competing proposals

The judgment of the Quebec Superior Court (civil division) deals specifically with a motion by ACIA to split (scinder) the instance under article 211 of the Code of Civil Procedure. ACIA sought an order that the question of “fault” be determined first in a separate phase, before the issues of causation and damages. ACIA’s proposed first-stage question was relatively narrow: to determine, in a first step, the existence, nature, and extent of any fault committed by ACIA or its employees in the exercise of their functions. Olymel did not oppose the idea of splitting the proceeding in principle but disagreed strongly with ACIA’s attempt to confine the first phase to fault alone. Instead, Olymel argued that the first phase should cover three elements together: the nature and extent of ACIA’s obligations toward Olymel, the existence of one or more faults by ACIA, and the causal link between those faults and the prolonged detention of the pork shipments at Chinese customs. In Olymel’s submission, ACIA’s responsibility could not sensibly be evaluated by isolating a single event; a holistic and contextual analysis of the regulatory framework, ACIA’s conduct, and the resulting consequences was required.

Court’s analysis of the splitting criteria

The court reviewed the text of article 211 C.p.c., which authorises a court, even on its own initiative, to split an instance when appropriate having regard to the parties’ rights. It then applied the established jurisprudential criteria for splitting a proceeding: relative simplicity of the first-stage issues, the degree of linkage between first- and second-stage questions, the potential for the first decision to end or significantly narrow the dispute, the resources already invested by the parties, the timing and delay impacts, the advantages or disadvantages to the parties, and whether the motion is contested or by consent. The judge emphasised that these criteria are not cumulative, though most should be met. In assessing simplicity, the court noted that both fault and causation are heavily intertwined with complex regulatory norms—Canadian and Chinese rules governing pork exports. However, the court found that dealing with fault and causation together would actually be simpler in practice than splitting them, given that the alleged faults are not of the same nature (invalid certificates versus failure to assist) and that causation flows closely from ACIA’s acts and omissions. The court also stressed that in actions for damages, the trio of issues—fault, causal link, and damages—are all interrelated, and jurisprudence often groups fault and causation together for a first phase, leaving only quantification for a second phase. On the crucial question of whether the first-stage decision could realistically end or substantially narrow the case, the court was sceptical of ACIA’s narrow approach. If the first phase were limited to the validity of the certificates and resulted in a finding of fault, the case could not be settled without having addressed causation. Conversely, if both fault and causation were resolved together at the first stage, there would be a strong prospect that the case could resolve entirely or at least be significantly narrowed, leaving only quantum (if liability were established) for a later phase. The judge also observed that the file was in its early stages, with no expert reports yet commissioned or filed, so resource-investment and timing considerations were neutral. Both parties agreed that some form of split could promote judicial economy; their disagreement lay only in how broad the first-stage questions should be. Considering the advantages and disadvantages, the court concluded that limiting the first phase to fault alone would create duplication. ACIA would likely have to recall the same witnesses and officials at a second phase to address the alleged failure to assist and causation, while the complex and costly expert evidence on damages would remain for a later stage in any event. By contrast, treating fault and causation together up front would allow the court to hear a single, coherent story about ACIA’s alleged conduct and its consequences, and the same witnesses could address both aspects.

Outcome and implications

The court ultimately granted ACIA’s motion to split the instance only in part. It ordered that the proceeding be bifurcated into two stages, but adopted Olymel’s broader formulation of the first-stage issues. In the first phase, the court will determine: the nature and extent of ACIA’s obligations toward the plaintiffs; whether ACIA committed one or more faults; and whether there is a causal link between any such fault and the prolonged detention of the pork consignments at Chinese customs. Only if liability is established will a second phase address the quantum of damages. The judge expressly found that, given the plurality of alleged faults and their differing consequences, it would not serve the interests of justice to restrict the first phase to an analysis of the validity of the certificates alone. The court also awarded costs of the motion in favour of the plaintiffs. On this interlocutory motion, therefore, the successful party is Olymel (together with Agromex Inc. and OlyM S.E.C.), which obtained a split structured on its preferred terms and an order for legal costs. The judgment, however, does not determine or quantify the underlying damages claim or even the precise amount of the costs; it only recognises Olymel’s entitlement to costs for this motion. As a result, based on this decision alone, the total monetary award, including damages and the exact amount of costs, cannot be determined.