Date: 20110610
Docket:
A-307-09
Citation: 2011 FCA 198
CORAM: BLAIS
C.J.
DAWSON J.A.
STRATAS
J.A.
BETWEEN:
ST. JOHN'S PORT
AUTHORITY
Appellant
and
ADVENTURE
TOURS INC.
Respondent
REASONS FOR
JUDGMENT
STRATAS J.A.
[1]
This
is an appeal from the order of Justice de Montigny of the Federal Court (2009
FC 746), which dismissed an appeal from the order dated January 5, 2009 of
Prothonotary Aalto.
[2]
Before
Prothonotary Aalto was a motion brought by the appellant, St. John’s Port
Authority, to strike out virtually all of the statement of claim of the
respondent, Adventure Tours Inc. In that statement of claim, Adventure Tours
Inc. claims significant damages against St. John’s Port
Authority for the tort of abuse of public office.
[3]
The
issue on appeal in the Federal Court and this Court concerns the requirement
under Rule 174 that a party plead material facts in support of the allegations
it makes in its pleading. Specifically, in this case, must Adventure Tours
plead as a material fact in its statement of claim the identity of the
individuals at the Port Authority whose actions are said to constitute an abuse
of public office?
[4]
In
oral argument in this Court, Adventure Tours acknowledged that this Court’s
recent decision in Merchant Law Group v. Canada Revenue Agency,
2010 FCA 184 would likely lead to that question being answered in the
affirmative. Merchant postdates the orders made by the Federal Court
judge and the Prothonotary.
[5]
However, Adventure Tours submitted, with great force, that Merchant
was incorrectly decided and should not be followed.
[6]
Merchant represents one of the only cases in Canada concerning how the requirement of material
facts applies to the tort of abuse of public office, sometimes known as the
tort of misfeasance in public office – a notoriously complex tort whose precise
elements have only been settled recently: Odhavji Estate v. Woodhouse,
[2003] 3 S.C.R. 263, 2003 SCC 69.
[7]
In order to succeed in its submission that Merchant should
not be followed, Adventure Tours must establish that it is “manifestly
wrong”: Miller v. Canada (Attorney
General), 2002 FCA 370 at paragraph 10, (2002), 220 D.L.R. (4th) 149. In my view, for the reasons set out below, Merchant
is not manifestly wrong. It remains authority that binds us.
[8]
On the basis of Merchant, the statement of claim does not
plead sufficient material facts under Rule 174. Therefore, I would allow the
appeal with costs and strike out the statement of claim, but with leave to
Adventure Tours to amend.
A. The facts
[9]
For the purposes of a motion to strike and later appeals, the
allegations in the statement of claim, as particularized, are to be taken to as
true. The facts in this section of my reasons are taken from the allegations in
the statement in claim and have not been proven.
[10]
Adventure Tours alleges that the Port
Authority caused it $10 million in damages by injuring its tour business in the
Port of St. John’s, Newfoundland and Labrador.
[11]
Adventure Tours has conducted tours of the
Port using two boats: Lukey’s Boat (since 2003) and the Scademia (since
1986). The Scademia is the last wooden schooner built in Newfoundland and
Labrador.
[12]
In 1999, the Scademia was berthed at a location between
Piers 6 and 7 in the Port of St. John’s. In
that year, the Port Authority decided to develop Pier 7 as a tourism site. It
issued a request for proposals for the tourism development. Adventure Tours was
the successful proponent.
[13]
Almost immediately, relations between Adventure Tours and the Port
Authority withered, negotiations between the two stopped, and they parted ways.
The Port Authority continued with the tourism development of Pier 7. Adventure Tours
openly and publicly criticized the manner in which the Port Authority was
carrying out and funding the tourism development.
[14]
Several actions and events followed:
(a)
The Harbour Master, an employee of the Port Authority, allowed a
competitor to berth its tour boat where Adventure Tours’ boat, the Scademia,
normally was (statement of claim, paragraph 16).
(b)
The Port Authority leased a kiosk at Pier 7 to Adventure Tours. Adventure
Tours anticipated that, as a result, the Scademia
would be allowed to berth, alone, directly in front of Pier 7, but the Port
Authority did not allow this to happen (statement of claim, paragraphs 17-25).
Unlike Adventure Tours, in a later year a competitor was able to berth its boat
near its kiosk (statement of claim, paragraph 39).
(c)
In 2004, the Port Authority assigned the Scademia to a
berthing place where passenger traffic was obstructed by fences and signs and
where there was a smell caused by a sewage outlet (statement of claim,
paragraphs 26-28).
(d)
In 2005, the Port Authority refused to change the Scademia’s
berthing place. Later that year, Adventure Tours’ lease of its kiosk at Pier 7
was nearing expiration. But the Port Authority’s Harbour Master terminated the
lease before it expired. After that, the Port Authority advised Adventure Tours
that the Scademia could be berthed anywhere in the Port except for Pier
7 (statement of claim, paragraph 29) or except for “the two berths immediately
east and west of the center boardwalk of the Pier 7 development” (statement of
claim, paragraph 30).
(e)
Soon afterward, the Port Authority advised Adventure Tours that it
would have to pay a passenger levy and enter into a licence agreement. In
response, Adventure Tours complained to the Canadian Transportation Agency
about the passenger levy. Although the complaint was still outstanding before
the Agency, the Port Authority refused to allow Adventure Tours to operate its
tour boats until it signed the licence agreement and paid the passenger levy.
(See statement of claim, paragraphs 29-32.)
(f)
Within two weeks after Adventure Tours complained to the Canadian
Transportation Agency about the passenger levy, the Port Authority obtained a
detention order against Adventure Tours’ two boats. The purported basis for
this was Adventure Tours’ failure to pay the passenger levies. The Port
Authority obtained the detention order just before the St. John’s Day
long weekend. (See statement of claim, paragraphs 33-34.)
(g)
At one point, while the detention order was in effect, Adventure
Tours’ principal took the Scademia out on a tour of the Port. The Port
Authority responded by laying charges against the principal. The charges were
later dismissed. (See statement of claim, paragraphs 29-32.)
(h)
In the same month as the detention order, Adventure Tours “was
forced to execute a lease agreement for one of the small kiosks at Pier 7
because the [Port Authority] had detained [Adventure Tours’] boats” and
Adventure Tours had to “return its boats to operation in order to earn income.”
Other damaging acts are mentioned, including the extended negotiations for a
lease and a licence and the construction of a restaurant which blocked access
to the Scademia. (See statement of claim, paragraphs 36-37.)
(i)
In November 2005, Adventure Tours notified the Port Authority that
it was going to terminate its lease at Pier 7 for the remainder of the 2005
year but did not wish to give up a renewal right it had for the 2006-2007
seasons. The Port Authority “responded by improperly and duplicitously
suggesting” that Adventure Tours did not want a lease for the 2006-2007
seasons. (See statement of claim, paragraphs 40-41.)
(j)
In February 2006, the Port Authority announced a new policy
(statement of claim, paragraph 42). This policy had the effect of designating
all areas of the Port outside of Pier 7 as restricted, and limiting the number
of tour boat operators to three. In doing so, it gave preference to those
operators already leasing kiosks at Pier 7. Adventure Tours was
not one of them.
(k)
Adventure Tours asked the Port Authority for
permission to operate Lukey’s Boat at Pier 7 and to lease a kiosk.
However, the Port Authority denied this because Pier 7 had reached capacity. As
a result, Adventure Tours was forced to move its boats to Petty
Harbour, and this caused it damage. (See statement of claim, paragraphs 45-46.)
(l)
A further policy decision by the Port Authority Board in 2007 led
to greater restrictions at Pier 7. One of Adventure Tours’ competitors became
the only tour boat operator at Pier 7. The Port Authority entered into an
exclusive contract with that operator without issuing a request for proposals
from other operators, including Adventure Tours. (See statement of claim,
paragraphs 47 and 50-51.)
(m)
In June 2007, Adventure Tours requested that the Port Authority give
it access to Pier 7 but the Board of the Port Authority denied the request,
invoking two reasons: the fact that capacity at Pier 7 had been reached and
Adventure Tours’ “overall lease history” with the Port Authority (statement of
claim, paragraph 48).
B. The
decisions of the Prothonotary and the Federal Court and the standard of review
[15]
The Prothonotary found that the statement of claim pleaded
sufficient material facts. It supplied the names of two board members and
mentioned the conduct of the Harbour Master. It added that further names might
emerge during the course of productions and discoveries. On an issue not
before us in this appeal, the Prothonotary ordered that references in the
statement of claim to subsection 50(1) of the Canada Marine Act, S.C.
1998, c. 10, be struck.
[16]
On appeal to the Federal Court, the Port Authority raised the
issue whether it was incumbent on Adventure Tours to identify in its statement
of claim all of the specific individuals alleged to have engaged in
misfeasance. It acknowledged that Adventure Tours had named two board members
in its pleadings but complained that it had not pleaded any misfeasance on the
part of those individuals. Finally, it alleged that the Prothonotary erred by
not ordering further and better particulars of the individuals, officers or
natural persons alleged to have engaged in deliberate and unlawful conduct.
[17]
In his reasons, the Federal Court judge stated that the only issue
was whether further and better particulars of the individuals, officers, or
natural persons alleged to have engaged in deliberate and unlawful conduct
should have been pleaded. He considered that the issue was vital to the
determination of the case and exercised his discretion de novo, without
any deference to the Prothonotary’s decision.
[18]
In looking at the matter de novo, the Federal Court judge
appears not to have considered whether Adventure Tours had pleaded sufficient
material facts concerning the identity of individuals at the Port Authority.
Instead, he regarded the matter as being whether the cause of action of abuse
of public office could succeed on the basis of the facts pleaded in the
statement of claim. He concluded (at paragraph 23) that “[a]t this preliminary
stage, I have not been convinced that the Statement of Claim is bereft of any
likelihood of success.” However, the main issue before the Federal Court judge was
whether the statement of claim was a pleading that complied with the Federal
Courts Rules by setting out all necessary material facts, including the
identity of relevant Port Authority individuals – not whether
the tort, as pleaded, was viable.
[19]
Both the Prothonotary and the Federal Court judge did not have the
benefit of this Court’s decision in Merchant. Merchant was
decided later. To some extent, Merchant clarified the law concerning the
material facts that must be pleaded when asserting the tort of abuse of public
office.
[20]
In these circumstances, it is appropriate that this Court examine
the matter afresh without deference to the decisions below.
C. The tort of abuse of public office
[21]
Before analyzing Adventure Tours’ statement of claim, I wish to
set out the elements of this tort.
[22]
As mentioned above, the Supreme Court’s decision in Odhavji
Estate, supra, settled the precise essential elements of the tort of
abuse of public office.
[23]
In setting out the precise essential elements of the tort in Odhavji
Estate, the Supreme Court tells us that there are two ways in which the
tort can be established. The Supreme Court discusses these two ways, and the
essential elements associated with them, at paragraphs 22 and 23:
[22] What then are the
essential ingredients of the tort, at least insofar as it is necessary to
determine the issues that arise on the pleadings in this case? In Three
Rivers, the House of Lords held that the tort of misfeasance in a public
office can arise in one of two ways, what I shall call Category A and Category
B. Category A involves conduct that is specifically intended to injure a
person or class of persons. Category B involves a public officer who acts
with knowledge both that she or he has no power to do the act complained of and
that the act is likely to injure the plaintiff….It is important, however, to
recall that the two categories merely represent two different ways in which a
public officer can commit the tort; in each instance, the plaintiff must prove
each of the tort’s constituent elements. It is thus necessary to consider
the elements that are common to each form of the tort.
[23] In my view, there are two such
elements. First, the public officer must have engaged in deliberate and
unlawful conduct in his or her capacity as a public officer. Second, the
public officer must have been aware both that his or her conduct was unlawful
and that it was likely to harm the plaintiff. What distinguishes one form
of misfeasance in a public office from the other is the manner in which the
plaintiff proves each ingredient of the tort. In Category B, the plaintiff
must prove the two ingredients of the tort independently of one another.
In Category A, the fact that the public officer has acted for the express
purpose of harming the plaintiff is sufficient to satisfy each ingredient of
the tort, owing to the fact that a public officer does not have the authority
to exercise his or her powers for an improper purpose, such as deliberately
harming a member of the public. In each instance, the tort involves
deliberate disregard of official duty coupled with knowledge that the misconduct
is likely to injure the plaintiff.
[24]
I
would add that extremely lucid and helpful explanations of the requirements of
this complex tort, based on Odhavji Estate, can be found in A.L. v.
Ontario (Minister of Community and Social Services) (2008), 83 O.R. (3d)
512 (C.A.) and O’Dwyer v. Ontario (Racing Commission) (2008), 293 D.L.R.
(4th) 559 (Ont. C.A.).
[25]
In order to plead this tort successfully, a plaintiff must cover
each essential element of the tort, setting out all material facts (Rule 174),
with necessary particularity as to “any alleged state of mind of a person,”
“wilful default,” “malice,” or “fraudulent intention” (Rule 181).
[26]
Due to the complexity of the tort of abuse of public office and
the requirements of pleading, many choose to assert other causes of action
against public authorities. But if the tort of abuse of office is to be
pleaded, it must be pleaded properly.
D. Analyzing
the allegations in the statement of claim pertaining to the tort of abuse of
public office
[27]
For the purposes of this appeal, the statement of claim under
consideration is the statement of claim as it existed following the
Prothonotary’s order. As mentioned above, the Prothonotary ordered that
references in the statement of claim to subsection 50(1) of the Canada Marine
Act, supra, be struck. Adventure Tours did
not appeal that. Therefore, I shall analyze the statement of claim with all
references to subsection 50(1) of the Canada Marine Act deleted.
[28]
As
I have mentioned in paragraph 8 above, I will be proposing that the appeal be
allowed and the statement of claim be struck out, but with leave to amend. I
offer comments in this section in the hope that future pleadings motions may be
avoided and the action may proceed efficiently. I note that the Prothonotary
offered some similar comments in his reasons.
[29]
My
analysis of the statement of claim shows that, in its present form, it does not
plead all of the elements of the tort (see paragraphs 21-26, above) with necessary
material facts and particulars, especially on the mental state, knowledge and
intentions of the Port Authority. Unless these matters are addressed, this
action, which might have merit, will flounder: we will see more pleadings
motions, documentary and oral discoveries complicated by objections based on relevance,
and an objection-laden trial festooned with delays caused by confusion and
uncertainty about what exactly is in issue. To avoid this, Adventure Tours’
revised statement of claim should identify each action that is alleged to
constitute the tort of abuse of public office and plead, with all necessary
material facts and particularity, each essential element of the tort concerning
the action. There may be a way to group certain actions together or to raise
the issue of a pattern of conduct, but the requirements of all necessary
material facts and particularity concerning all essential elements of this tort
must still be met.
[30]
Specifically,
I would note the following.
[31]
In paragraph 55 of the statement of claim, Adventure Tours pleads
that a “pattern of decisions” made by the Port Authority and the Port Authority
Board constitute the tort. To what decisions does this refer? And what is
pleaded concerning the decisions?
[32]
The statement of claim identifies only a few “decisions”: the Port
Authority’s decisions to develop Pier 7 (statement of claim, paragraph 12), to
limit the number of tour boats operating in St. John’s Harbour (statement of
claim, paragraph 42), to deny Adventure Tours permission to operate Lukey’s
Boat at Pier 7 (statement of claim, paragraphs 45-46, 50), to reduce
capacity at Pier 7 from three boats to one (statement of claim, paragraph 53),
and to grant an exclusive contract to Adventure Tours’ competitor at Pier 7
(statement of claim, paragraph 53). The only damage resulting from these decisions
is said to be business losses in the 2006 tourist season (statement of claim,
paragraph 46).
[33]
The Port Authority’s mental state is pleaded in respect of only
some of these decisions:
a.
The decision to limit the number of tour boats operating in St.
John’s Harbour (statement of claim, paragraph 42) is said to have been
“intentionally and specifically done…to prevent [Adventure Tours] from being
able to operate from [Port Authority] property, and in order to harm [Adventure
Tours’] business” (statement of claim, paragraph 43).
b.
The decision to deny Adventure Tours permission to operate Lukey’s
Boat at Pier 7 (statement of claim, paragraphs 45-46, 50) is said to have
been done with knowledge that this would affect Adventure Tours’ ability to
earn income (statement of claim, paragraph 45).
c.
The decisions to reduce capacity at Pier 7 from three boats to one
and to grant an exclusive contract to Adventure Tours’ competitor (statement of
claim, paragraph 53) are said to have been made “with an express intention of
harming [Adventure Tours] by discriminating against [Adventure Tours]”
(statement of claim, paragraph 53).
[34]
The decision referenced in (a) is said to have been made beyond
its capacity and outside of the Act (statement of claim, paragraph 42). The decisions
referenced in (c) are said to have been made for an unlawful purpose (statement
of claim, paragraph 53). The decisions referenced in (b) do not appear to be
said to be in excess of authority.
[35]
As mentioned in paragraph 14 of these reasons, Adventure Tours
pleads a number of other actions on the part of the Port Authority. Are some
of these meant to be decisions? Or was the word “decision” in paragraph 55 of
the statement of claim meant to include these other actions? The answers to
these questions are unclear. Certainly, some damage is said to have been caused
by some of these actions (see statement of claim, paragraphs 28, 37, 49) and
some of them are said to be beyond the Port Authority’s jurisdiction (see
statement of claim, paragraphs 26, 31, 34), but the main complaint for most of
the actions is “undue disadvantage,” “discrimination,” or “punishment,” not
damage (see statement of claim, paragraphs 16, 27, 34, 35, 38, 39, 43, 45, and
53).
[36]
In paragraph 56 of the statement of claim, Adventure Tours pleads
that the “Defendants’ [sic] actions” have resulted in “loss of [Adventure
Tours’] reputation as a reliable tour boat operator providing superior service
in St. John’s Harbour” but there is no allegation of specific damage from this.
Further, the pleading does not make it clear how all of the actions pleaded in
the statement of claim (summarized at paragraph 14 of these reasons, above)
could have affected Adventure Tours’ reputation.
[37]
At various places in the statement of claim, it is said that certain
actions (not decisions or possible decisions) done by the Port Authority were
done with intention to harm (statement of claim, paragraphs 16, 27, 35, 39, 43
and 51), knowledge that harm might result (statement of claim, paragraphs 26,
27, 35 and 45), and duplicitousness (statement of claim, paragraph 41). It is
unclear as to which branch of the tort of abuse of public office is being
pleaded, what “duplicitousness” might mean in the context of this tort, and
whether the other elements of the tort are present in respect of each impugned
action or decision.
E. Must Adventure Tours
plead as a material fact the identity of the individuals whose actions on
behalf of the Port Authority are said to constitute an abuse of public office?
[38]
The
Port Authority properly admits that the tort of abuse of public office can lie
against a corporate entity such as itself. It contends, however, that where
that tort is alleged against a corporate entity, the pleadings must identify
and attribute such conduct to an individual or natural person whose conduct is
that of the corporate entity.
[39]
There
is no doubt that, for the most part, the statement of claim does not do that.
The vast majority of the allegations of misconduct in the statement of claim
are directed to the Port Authority itself, and not individuals. Only a few
allegations concern the Harbour Master and the Board of the Port Authority.
Further, in response to a demand for particulars and the order dated May 14,
2008 of Prothonotary Morneau, Adventure Tours identified two Port Authority
Board members as having made certain statements or representations to it.
[40]
In
my view, under the authority of Merchant, supra, the Port
Authority’s submissions must be accepted and the statement of claim must be
struck.
[41]
On
this issue, in Merchant this Court held as follows:
[36] The Federal Court
also found (at paragraph 23) that the pleading was deficient because the
Crown’s liability is vicarious (see section 10 of the Crown Liability and
Proceedings Act, R.S.C. 1985, c. C-50) and so the identity of
the particular individuals who are alleged to have
engaged in misfeasance in public office must be named. As noted above, in this
case, paragraphs 5 and 12 of the amended statement of claim implicate entire
departments and potentially others in the Government of Canada. The pleading
fails to identify, with any particularity, the officials allegedly involved in
the misfeasance.
[37] In this Court, the
respondents submit that plaintiffs pleading this tort must always state the
actual name of the individuals who committed the alleged misfeasance. In my
view, such a requirement, if applied strictly in every case, would impose too
onerous a burden upon plaintiffs in some cases. In addition, it would go beyond
the level of particularity necessary to fulfil the purposes of pleadings in
civil proceedings.
[38] I
do agree that the individuals involved should be identified. The plaintiff is
obligated under Rule 174 to plead material facts and the identity of the
individual who are alleged to have engaged in misfeasance is a material fact
which must be pleaded. But how particular does the identification have to be?
In many cases, it may be impossible for a plaintiff to identify by name the
particular individual who was responsible. However, in cases such as this, a
plaintiff should be able to identify a particular group of individuals who were
dealing with the matter, one or more of whom were allegedly responsible. This
might involve identifying job positions, an organizational branch, an office, or
a building in which those dealing with the matter worked. Often such
information is readily available from the oral and written communications and
dealings among the parties that gave rise to the claim. In cases such as this,
identification at least at this level of particularity will usually be
sufficient. The purposes of pleadings will be fulfilled: the issues in the
action will be defined with reasonable precision, the respondents will have
enough information to investigate the matter and the respondents will be able
to plead adequately in response within the time limits set out in the Rules.
[42]
With
the exception of the above-mentioned particulars that named individuals on the
Board and the references in the pleading to the Board and to the Harbour Master,
the pleading does not comply with the standards described in paragraph 38 of Merchant.
F. Is Merchant
to be followed?
[43]
This
Court is bound by its decision in Merchant, supra, unless
Adventure Tours establishes that it is “manifestly wrong”: Miller, supra
at paragraph 10. In my view, Merchant
is not “manifestly wrong.”
[44]
Adventure
Tours submitted that
the tort of abuse of public office, when committed by a corporate entity, does
not require proof that a particular person associated with the corporate entity
committed acts or had a particular mental state. Accordingly, the statement of
claim need not address that issue.
[45]
I
disagree.
[46]
The
foremost authority is Odhavji Estate, supra. In setting out the
essential elements of the tort in paragraphs 22 and 23, reproduced above, the
Supreme Court repeatedly referred to a “public officer” engaging in the
impugned conduct. It could have used the phrase “public authority,” but did
not.
[47]
There
are several additional authorities on point.
[48]
The
omissions and knowledge of the officials of the Banking Supervision Division of
the Bank of England grounded the tort of abuse of public office against the
Bank of England in Three Rivers District Council v. Bank of England (No. 3),
[2001] 2 All E.R. 513. To similar effect is O’Dwyer, supra at
paragraph 51 where the Court of Appeal for Ontario found that
the subjective state of mind of Ontario Racing Commission officials gave rise
to liability.
[49]
In
A.L. v. Ontario, supra, the Court of Appeal for Ontario held that
the amended statement of claim failed to plead facts sufficient to satisfy the
requirements of the tort of abuse of public office. In words apposite to the
statement of claim in this case, the Court observed (at paragraph 37) that the
“pleading makes bald allegations that recite the basic elements of the tort in
very general terms” but “fails to provide material facts sufficient to
demonstrate an intentional wrongdoing by a specific public officer”
[emphasis added].
[50]
In
Longley v. Canada (M.N.R.), 2000 BCCA 241, the British Columbia Court of
Appeal found that Revenue Canada committed abuse of public office by not being
honest when it gave advice to the plaintiff. That conclusion was grounded on
findings made by the British Columbia Supreme Court concerning the actions and
knowledge of several senior civil servants with Revenue Canada: (1999), 99
D.T.C. 5549.
[51]
Price
v. British Columbia, 2001 BCSC 1494 at paragraph 15 stands for the
proposition that “the pleading must be clear as to which office-holder has the
necessary intention” and this holding was approved in B.K.Tree Services Ltd.
v. British Columbia (Hydro and Power Authority), 2002 BCSC 1432 at
paragraph 37.
[52]
In
Barbour v. U.B.C., 2006 BCSC 1897 at paragraph 45, the British Columbia
Supreme Court stated that “[a] party alleging the tort must identify the
individuals who engaged in the deliberate and unlawful conduct.” The statement
of claim was deficient because it failed to make allegations against the
governing Board or its individual members.
[53]
Finally,
in Jones v. Swansea City Council, [1990] 3 All E.R. 737, the House of
Lords found that the plaintiff would have had a good cause of action against
the council for misfeasance in public office if she had alleged and proven that
a majority of the councillors present, having voted for the resolution, had
done so with the object of damaging her. In the Court of Appeal in Jones v.
Swansea City Council, [1989]
3 All E.R. 162, Slade L.J
considered the essence of this tort to be that “someone” holding public
office “misconducted himself” by purporting to exercise powers “which
were conferred on him not for his personal advantage but for the
benefit of the public” with the “intent to injure or in the knowledge that he
was acting” beyond his power (at page 175, emphasis added).
[54]
At
the level of legal theory, it makes sense that the particular public officer
engaging in the conduct must be pleaded. Corporate entities and public
authorities are artificial entities. To the extent they act, they act through
individuals. To the extent they have mental states, the mental states derive
from human beings that are associated in some way with them. As Viscount
Haldane put it in Lennard's Carrying Co. v. Asiatic Petroleum Co., [1915] A.C. 705 at 713 (H.L.):
My Lords, a corporation is an
abstraction. It has no mind of its own any more than it has a body of its own;
its active and directing will must consequently be sought in the person of
somebody who for some purposes may be called an agent, but who is really the
directing mind and will of the corporation, the very ego and centre of the
personality of the corporation.
[55]
Lord
Denning put it this way in H. L. Bolton (Engineering) Co. v. T.
J. Graham & Sons Ltd., [1957]
1 Q.B. 159 at
page 172:
A company may in many ways be
likened to a human body. It has a brain and nerve centre which controls what it
does. It also has hands which hold the tools and act in accordance with
directions from the centre. Some of the people in the company are mere servants
and agents who are nothing more than hands to do the work and cannot be said to
represent the mind or will. Others are directors and managers who represent the
directing mind and will of the company, and control what it does. The state of
mind of these managers is the state of mind of the company and is treated by
the law as such.
[56]
The
classic authority in Canada on this point is Canadian
Dredge & Dock Co. v. The Queen, [1985] 1 S.C.R. 662. There,
Estey J., writing for the unanimous Supreme Court, held that the mental state
of the corporation can be found in “the board of directors, the managing
director, the superintendent, the manager or anyone else delegated by the board
of directors to whom is delegated the governing executive authority of the
corporation” (at page 693).
[57]
In Rhône (The) v. Peter A.B. Widener (The), [1993] 1 S.C.R.
497, Iacobucci J., writing for the majority of the Supreme Court, commented on
Estey J.’s judgment in Canadian Dredge & Dock, supra, as
follows (at pages 520-521):
As Estey J.'s reasons
demonstrate, the focus of inquiry must be whether the impugned individual has
been delegated the “governing executive authority” of the company within the
scope of his or her authority. I interpret this to mean that one must determine
whether the discretion conferred on an employee amounts to an express or
implied delegation of executive authority to design and supervise the
implementation of corporate policy rather than simply to carry out such policy.
In other words, the courts must consider who has been left with the decision‑making
power in a relevant sphere of corporate activity.
[58]
It is not every person employed by a corporate entity who will
“count” for the purposes of the tort of abuse of public office. This suggests
that it is not enough simply to plead that a public authority, agency, or, in
the case of Merchant, “government” engaged in the impugned conduct.
[59]
At
the hearing of this appeal, Adventure Tours forcefully submitted that Merchant
was wrong and should not be followed because it places too great a burden on
plaintiffs who are attempting to assert the tort of abuse of public office. In
its view, governments and other public authorities who have engaged in
wrongdoing will be immunized from liability for this tort because of the overly
strict pleadings requirement imposed by Merchant.
[60]
I disagree for two reasons.
[61]
First, Merchant does not impose pleadings requirements that
will stop plaintiffs from asserting genuine claims. It is true
that Merchant requires that a statement of claim asserting this tort
must identify the individuals who “count” for the purposes of this tort. But Merchant
makes it clear that names are not necessarily required. As said in Merchant
(at paragraph 38), it may suffice to plead a “particular group of individuals
who were dealing with the matter,” “job positions,” an “organizational branch,
an office, or a building in which those dealing with the matter worked.” This
information is usually “readily available from the oral and written
communications and dealings among the parties that gave rise to the claim.” In
cases such as the case at bar, there have been many communications and dealings
and so there should be little practical difficulty in satisfying this
requirement.
[62]
My second reason for rejecting Adventure Tours’ submission that Merchant
places too great a burden on plaintiffs is that Merchant identified a
competing policy consideration:
If the requirement of
pleading material facts did not exist in Rule 174 or if courts did not enforce
it according to its terms, parties would be able to make the broadest, most
sweeping allegations without evidence and embark upon a fishing expedition. As
this Court has said, “an action at law is not a fishing expedition and a
plaintiff who starts proceedings simply in the hope that something will turn up
abuses the court’s process”: Kastner v. Painblanc (1994), 58 C.P.R. (3d)
502, 176 N.R. 68 at paragraph 4 (F.C.A.).
[63]
In
my view, it was not “manifestly wrong” for this Court in Merchant to be
mindful of this policy concern and insist that the requirement to plead material
facts be followed, without any relaxation, for the tort of abuse of public
office. The concern in Merchant was that it is all too easy for a
plaintiff who is aggrieved by governmental conduct to assert, perhaps without
any evidence at all, that “the government” acted, “knowing” it did not have the
authority to do so, “intending” to harm the plaintiff. Such a bald and idle
assertion is insufficient to trigger the defendant’s obligation to file a
defence, let alone its later obligation to disclose its documents and produce a
witness for examination in discoveries. The price of admission to documentary
and oral discoveries is the service and filing of an adequately particularized
pleading that asserts all of the essential elements of a viable cause of action.
[64]
Therefore,
in my view, Merchant is not “manifestly wrong” within the meaning of Miller,
supra. It binds this Court in this appeal.
G. Conclusion and
proposed disposition
[65]
As
the statement of claim does not comply with Merchant, it is insufficient
and must be struck.
[66]
I
would allow Adventure Tours the opportunity to file a fresh statement of claim
that complies with the guidance in these reasons, and, in particular, with the
requirements of Rules 174 and 181. In my view, the allegations in the statement
of claim suggest that it may be possible for Adventure Tours to plead all of
the elements of this complex tort properly and it should be given another
chance to do so.
[67]
Therefore,
I would allow the appeal, set aside the order of the Federal Court, and strike
the statement of claim, with leave to Adventure Tours to file a fresh statement
of claim. I would grant the Port Authority its costs here and below.
“David
Stratas”
“I
agree
Pierre Blais C.J.”
“I
agree
Eleanor R. Dawson J.A.”
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