Date: 20051221
Docket: T-66-05
Citation: 2005 FC 1730
Ottawa, Ontario, the 21st
day of December 2005
Present: The Honourable Mr. Justice de Montigny
BETWEEN:
CANADIAN WORLD WIDE FILM
FESTIVAL
Applicant
- and -
ÉQUIPE SPECTRA INC.
and
REGROUPEMENT POUR LE FESTIVAL DE CINÉMA
DE MONTRÉAL
Respondents
REASONS FOR
ORDER
[1]
The case
at bar raises a number of procedural issues which were ruled on by Prothonotary
Richard Morneau in two orders on April 5 and 19, 2005. More generally, this
case is cognate with certain decisions made by Telefilm Canada to provide financing for a
film festival in Montréal.
FACTS
[2]
On
September 7, 2004, the day after the 28th World Film Festival (WFF),
Telefilm Canada (Telefilm) announced in a
press release that it was starting a bidding process for financial support for
the organization of a large-scale film event in Montréal. The bids were to be
submitted on, or before October 8, 2004.
[3]
The
applicant, which felt that the sole purpose of the bidding process was to do
away with the WFF, did not think it advisable to participate in this process.
As the four initial bids were not accepted by the boards of directors of
Telefilm and of the Société de développement des enterprises culturelles
(SODEC), the bidders were given the opportunity to submit their proposals again
before December 1, 2004.
[4]
After
having learned that four groups had filed improved proposals, the applicant, on
December 10, 2004, filed an originating motion for a declaratory judgment
and a permanent injunction in the Quebec Superior Court, asking the Court to
declare the bidding process of September 7, 2004 illegal and seeking
exemplary and moral damages amounting to $2,500,000.
[5]
On
December 17, 2004, Telefilm made its decision on the bidding process and
announced that it would financially support the proposal by the Regroupement
pour un festival de cinéma à Montréal, which would be implemented by Équipe
Spectra Inc. (Spectra).
[6]
On January
6, 2005, Telefilm filed a motion for a declaratory exception, alleging inter
alia that the Superior Court lacked jurisdiction to rule on the question of
the legality of the bidding process. In these circumstances, the applicant on
January 14, 2005 filed an application for judicial review of the two decisions
made by Telefilm Canada, one regarding the bidding
process on September 7, 2004 and the other regarding the selection of one
of the bids on December 17, 2004.
[7]
On March
10, 2005, Telefilm filed a motion to dismiss the application for judicial
review, and in the alternative to set aside the application for judicial
review, on the two grounds that the application (a) disclosed no valid cause of
action and should be struck out, and (b) contravened rules 302 and 303 of the Federal
Courts Rules and should be set aside pursuant to rule 59(c) of the Federal
Courts Rules.
[8]
On April
5, 2005, Prothonotary Morneau made an order in which he denied the respondents’
motion. Nevertheless, he found that the application for judicial review
regarding the bidding process had been filed after the 30-day deadline
specified in subsection 18.1(2) of the Federal Courts Act, and therefore
decided to stay the proceeding [translation]
“while the applicant seeks and obtains from a judge, if applicable, an
extension of the deadline specified in subsection 18.1(2) of the Act”.
This order was the subject of an initial appeal by Telefilm.
[9]
Further,
on March 23, 2005, the applicant filed a motion to amend its notice of
application and replace Telefilm as respondent by the Attorney General, and
also to add Équipe Spectra Inc. and Regroupement pour le festival de cinéma de
Montréal as respondents.
[10]
In an
order delivered on April 19, 2005, the prothonotary ordered that Telefilm’s
name be deleted from the style of cause and replaced by the respondents Équipe
Spectra and Regroupement pour le festival de cinéma de Montréal. This order was
challenged and was the subject of a second appeal by both Telefilm and WFF.
[11]
Finally,
on July 12, 2005, the applicant filed an amended notice of motion seeking an
extension of the 30-day deadline for filing an application for judicial review
of Telefilm’s decision of September 7, 2004 to proceed by way of a bidding
process, and asking the Court to order that these two applications for judicial
review be tried, heard and decided as a single proceeding.
ISSUES
[12]
The two
appeals before this Court raise a number of issues, which may be stated as
follows:
- What is the
applicable standard of review in the appeal at bar?
- Should
the Court grant the applicant an extension of time so it can file its application
for judicial review of the bidding process?
- Did
the prothonotary err when he refused to strike the application for judicial
review on the ground that it disclosed no valid cause of action?
- Did
the prothonotary err when he refused to set aside the application for judicial
review because it sought three separate orders in a single notice of
application?
- Could
the prothonotary make an order on April 19 whereas he had stayed the proceeding
in his order of April 5; if the answer is affirmative, did he err in deleting
Telefilm Canada as respondent entirely
without replacing it by the Attorney General of Canada?
ANALYSIS
(A) Standard of
review
[13]
The
applicable standard of review in an appeal from a prothonotary’s decision is
now well settled. In view of the essential part played by prothonotaries in the
management of proceedings, their extensive knowledge of cases and of the
parties and the wide latitude they must accordingly be given when they rule on
points of procedure, this Court will only intervene in one of the following
circumstances:
(a) the
prothonotary’s decision is clearly wrong, being based on a wrong principle or a
misapprehension of the facts; or
(b) his or
her decision concerns questions which are vital to the final issue of the case.
[14]
These
principles, which derive from Canada v. Aqua-Gem Investments Ltd.
(1993), 149 N.R. 273; [1993] 2 F.C. 425 (C.A.), have been repeated by the Court
of Appeal too many times for any further discussion to be necessary (see for
example Khalil v. Canada (2004), 252 F.T.R. 292; [2004] F.C.J. No. 878;
2004 FC 732 (QL); First Canadians’ Constitution Draft Committee, the United
Korean Government v. Canada (2004), 317 N.R. 352; [2004] F.C.J. No. 372;
2004 FCA 93 (QL).
[15]
At most we
should perhaps refer to the clarifications recently given by Mr. Justice Décary of the Federal Court of
Appeal regarding the sequence in which the two circumstances mentioned earlier
should be considered:
19
To avoid the confusion which we have seen
from time to time arising from the wording used by MacGuigan J.A., I think it
is appropriate to slightly reformulate the test for the standard of review. I
will use the occasion to reverse the sequence of the propositions as originally
set out, for the practical reason that a judge should logically determine first
whether the questions are vital to the final issue: it is only when they are
not that the judge effectively needs to engage in the process of determining
whether the orders are clearly wrong. The test would now read: “Discretionary
orders of prothonotaries ought not be disturbed on appeal to a judge unless:
(a) the questions raised in the motion are vital to the final issue of the
case, or (b) the orders are clearly wrong, in the sense that the exercise of
discretion by the prothonotary was based upon a wrong principle or upon a
misapprehension of the facts.”
Merck & Co., Inc. v.
Apotex Inc.
(2003), 315 N.R. 175; [2004] 2 F.C.R. 459 ; 2003 FCA 488 (QL).
[16]
Accordingly,
it is with these underlying principles in mind that I will examine the various
issues raised by the two appeals before the Court. In view of the critical
impact that a motion to strike may have on the final determination of the case,
the deference I will show with respect to the prothonotary’s decision will
obviously be less than with respect to the other issues. As to the extension of
time, that issue is not the subject of an appeal since it was not ruled on by
the prothonotary: accordingly, the foregoing principles are not applicable in
this regard.
(B) Extension of time
[17]
Section
18.1(2) of the Federal Courts Act provides that an application for
judicial review must be made within 30 days after the time the decision or
order was first communicated by the federal board, commission or other tribunal
to the party directly affected by it, or within any further time that a judge
of this Court may fix or allow.
[18]
As appears
from the notice of application, the bidding process was started on September 7, 2004 and was announced the
same day by way of a press release. Therefore, the applicant had to file its
application for judicial review by October 7, 2004 at the latest. It did not
file its notice of application for judicial review until January 14, 2005, 98
days after the deadline set in the Act for doing so had expired.
[19]
The
criteria that should guide the Court in granting an extension of time have been
discussed several times by the Court of Appeal and by this Court. Generally,
the fundamental issue is whether in the circumstances the extension of time is
necessary for justice to be done between the parties. More specifically, the
extension of time will be granted to an applicant who establishes:
(i) an ongoing intent
to pursue his application;
(ii) the existence of
an arguable case;
(iii) that the defendant
will suffer no prejudice as a result of the delay;
(iv) that there is a
reasonable explanation to justify the delay.
See Tarsem
Singh Grewal v. Minister of Employment and Immigration (1985), 63 N.R.
106; [1985] 2 F.C. 263 (QL);
- Independent
Contractors and Business Assn. v. Canada (Minister of Labour) (1998), 225 N.R. 19; [1998]
F.C.J. No. 352 (QL);
- Canada (Attorney General) v.
Hennelly
(1999), 244 N.R. 399; [1999] F.C.J. No. 846 (QL) ;
- 047424
NB Inc. v. Canada (Minister of National
Revenue)
(1998), 157 F.T.R. 44; [1998] F.C.J. No. 1292 (QL).
[20]
As to the
first test, the applicant submitted that it always intended to challenge the
legality of the call for tenders. Not only did it cause to be published in La
Presse and Le Devoir on September 18 and 24 letters attacking
Telefilm’s decision to start a bidding process, it also commenced proceedings
before the Superior Court as soon as it learned that four groups had filed bids
in response to the bidding process. It would undoubtedly have been better for
the applicant to resort to the courts rather than to public opinion through the
media, especially since, in a legal opinion referred to in the article
published on September 24, its counsel opined that the bidding process was
illegal.
[21]
However, I
accept the explanation given by the applicant, that it did not want to occasion
a multiplicity of legal proceedings and did not know that the decision to start
a bidding process could be considered a separate decision from that to make a
grant to one of the bidders. I am also of the view that the applicant made no
mystery of its intention to challenge the legality of the actions made by
Telefilm in this matter, so that the respondent cannot claim that it was taken
by surprise when this application for judicial review was filed.
[22]
In
addition, a summary analysis of the application for judicial review of the
decision to start a bidding process leads the Court to find that the
application is not perverse or capricious and prima facie raises a
question that should be decided by a court of law. The WFF intends to show that
the decision by Telefilm to start a bidding process was illegal in that its
only purpose was to exclude the WFF from the organization of the festival which
the latter had been organizing for many years, by urging the WFF’s competitors
to come forward and supporting them with the grant which the WFF had been
receiving for many years. Without in any way expressing an opinion on the
merits of this argument, I feel that it could be the subject of a legal argument
the outcome of which would not be a foregone conclusion.
[23]
The
respondent submitted that the WFF does not have the required legal standing to
ask that the bidding process be declared null and void, since it refrained from
participating in the process and so was not directly affected thereby. As this
argument was also made in connection with the decision by Telefilm dated
December 17, 2004 to accept the proposal that was to be implemented by Spectra,
I will deal with it below when I discuss the issue of whether the application
for judicial review should be struck out.
[24]
Finally,
the respondent did not allege it would suffer any prejudice if an extension of
time were granted. In any case, the judge of the merits will probably have to
rule on the legality of the bidding process in order to determine the legality
of the final decision. For all these reasons, and because I am of the view that
it is in the interest of justice that the application be heard, I will,
pursuant to rule 55 of the Federal Courts Rules, grant the motion
for an extension of time in respect of the application for judicial review to
set aside the call for tenders issued by the respondent on September 7,
2004, for a period of 30 days from the date of this order.
(C) Whether
application for judicial review should be struck out
[25]
There is
no provision in the Federal Courts Rules expressly addressing the
striking out of an application or notice of motion.
Mr. Justice Strayer, as he then was, explained the reason for this in
David Bull Laboratories (Canada) Inc. v. Pharmacia Inc. (1994), 176 N.R.
48; [1995] 1 F.C. 588 (QL)(F.C.A.), at paragraph 10:
10
The basic explanation for the lack of a
provision in the Federal Court Rules for striking out notices of motion
can be found in the differences between actions and other proceedings. An
action involves, once the pleadings are filed, discovery of documents,
examinations for discovery, and then trials with viva voce evidence. It
is obviously important that parties not be put to the delay and expense
involved in taking a matter to trial if it is “plain and obvious” (the test for
striking out pleadings) that the pleading in question cannot amount to a cause
of action or a defence to a cause of action. Even though it is important both
to the parties and the Court that futile claims or defences not be carried
forward to trial, it is still the rare case where a judge is prepared to strike
out a pleading under Rule 419. Further, the process of striking out is much
more feasible in the case of actions because there are numerous rules which
require precise pleadings as to the nature of the claim or the defence and the
facts upon which it is based. There are no comparable rules with respect to
notices of motion. Both Rule 319(1) [as am. by SOR/88-221, s. 4], the general
provision with respect to applications to the Court, and Rule 1602(2) [as
enacted by SOR/92-43, s. 19], the relevant rule in the present case which
involves an application for judicial review, merely require that the notice of
motion identify “the precise relief” being sought, and “the grounds intended to
be argued.” The lack of requirements for precise allegations of fact in notices
of motion would make it far more risky for a court to strike such documents.
Further, the disposition of an application commenced by originating notice of
motion does not involve discovery and trial, matters which can be avoided in
actions by a decision to strike. In fact, the disposition of an originating
notice proceeds in much the same way that an application to strike the notice
of motion would proceed: on the basis of affidavit evidence and argument before
a single judge of the Court. Thus, the direct and proper way to contest an
originating notice of motion which the respondent thinks to be without merit is
to appear and argue at the hearing of the motion itself.
[26]
Although
Mr. Justice Strayer thus did not expressly recognize that an
originating notice of motion could be struck, he did not close the door
completely. Following that decision, judges of this Court and even of the
Federal Court of Appeal have from to time used rule 221 to strike out an
application for judicial review even before the case is heard on the merits.
However, this solution will only be used in the rarest cases, when the Court is
convinced that there is no doubt as to the outcome of the proceeding. In other
words, a judge will only exercise this power if the application for judicial
review is so clearly groundless that it has no chance of being allowed: Mackie
v. Drumheller Institution (1997), 134 F.T.R. 76; [1997] F.C.J. No. 1000
(QL); Wenzel v. Canada, [2003] F.C.J. No. 373; 2003 FCTD 252 (QL); Sweet
v. Canada (1999), 249 N.R. 17 (F.C.A.); [1999] F.C.J. 1539; Agawa v.
Hewson, Federal Court, [1998] F.C.J. No. 877 (QL); Canadian Pasta
Manufacturers’ Assn. v. Aurora Importing & Distributing Ltd., [1997]
F.C.J. No. 493 (QL).
[27]
The
respondent submitted that the applicant was not directly affected by the
decisions of September 7 and December 17, 2004 as it refrained from participating
in the bidding process. Therefore, it could not file an application for
judicial review since it did not meet the requirements of subsection 18.1(1) of
the Federal Courts Act.
[28]
The
applicant replied that it had the required standing inasmuch as it risked
having to face competition making use of the grant which the WFF would then no
longer have. The reason why it did not participate in the bidding process was
that it felt that the dice were loaded and that the sole purpose of the process
started by Telefilm was to exclude it from the organization and presentation of
a film festival in Montréal.
[29]
In view of
the increasingly broad interpretation given to the notion of standing by the
courts in the past few years, and the ongoing involvement by the WFF in the
international film world in Montréal since 1977, as well as of the impact which
the disputed Telefilm decisions could not fail to have on the activities,
participation and even existence of the WFF, I have no difficulty in ruling
that the applicant has sufficient legal standing to apply for judicial review
of the bidding process and of the selection of a competing organization by
Telefilm at the conclusion of that process. Although Prothonotary Morneau did
not give reasons for his decision to deny the motion to strike made by the
respondent, this Court has no reason to think that he erred in his
interpretation of the facts or in applying the principles developed by the
courts in this area.
[30]
With
respect to the respondent’s arguments that the wording of the application for
an injunction is too vague and uncertain for the purposes of enforcement, I do
not think that at this stage they warrant the dismissal of the application for
judicial review or even the striking out of this pleading. Once again, we
should never lose sight of the fact that dismissing an application is a radical
measure which the courts should only use with extreme caution and which should
only be allowed in exceptional circumstances. Therefore, I am of the view that
it will be better to leave for the judge who must rule on the application for
judicial review the task of deciding whether to grant the relief sought by the
applicant, subject to possible limitation of its scope if the applicant
considers that appropriate.
(D) Multiplicity of
orders sought in single notice of application
[31]
Rule 302
of the Federal Courts Rules provides that an application for judicial
review “shall be limited to a single order in respect of which relief is
sought”. In the case at bar, the applicant is, as indicated in its original
notice of application and its amended notice of motion, seeking: (a) an order
declaring the decision of December 17, 2004 null and void; (b) an order
declaring the call for tenders to be null and void; and (c) an order
prohibiting the respondent from making any attempt or doing anything which
would have the effect of creating a new film festival in Montréal or helping an
existing festival to create such a festival so as to take the place of the
World Film Festival.
[32]
The
applicant objected to this approach and argued that this Court should deny the
motion made by the applicant on July 12, 2005 asking that both applications for
judicial review and all the orders sought be tried in a single proceeding. It
alleged that this would be a roundabout way of obtaining an extension of time
to file an application for judicial review of the decision of
September 7, 2004 (a point which I have already disposed of in a
previous part of these reasons), and that the two applications were concerned
not with a single ongoing process but rather two separate decisions by
Telefilm.
[33]
Now, our
case law clearly establishes that two or more decisions which have been taken
by the same body in the same case may (with leave) be the subject of a single
judicial review proceeding, in order to simplify the proceedings. After having
reviewed the relevant case law on the point (Mahmood v. Canada (1998),
154 F.T.R. 102 (F.C.); [1998] F.C.J. No. 1345 (QL); Puccini v. Canada
(1993), 65 F.T.R. 127; [1993] 3 F.C. 557 (F.C.); 047424 NB Inc. v. Canada
(M.N.R.) (1998), 157 F.T.R. 44 (F.C.); [1998] F.C.J. No. 1292 (QL); Lavoie
v. Canada (Correctional Service) (2000), 196 F.T.R. 96 (F.C.); [2000]
F.C.J. No. 1564), my colleague Mr. Justice Campbell said the following in Truehope
Nutritional Support Ltd. v. Canada (Attorney
General)
(2004), 251 F.T.R. 155; [2004] F.C.J. No. 806; 2004 FC 658 (QL) (at paragraph
6):
Continuing acts or decisions may be reviewed under
s.18.1 of the Federal Court Act without offending Rule 1602(4) [now Rule
302], however the acts in question must not involve two different factual
situations, two different types of relief sought, and two different
decision-making bodies . . .
[34]
There
seems to be no doubt that the issues to be decided are closely inter-related:
in fact, the two disputed decisions are connected, each being the outcome of
the other. We are dealing here with a series of events and an ongoing process,
involving a single decision-making body. Contrary to what the respondent argued,
indeed, I hardly see how the evidence and legal arguments could be completely
separate and distinct.
[35]
Accordingly,
I am prepared to grant this motion by the applicant and allow the two disputed
decisions to be addressed in the same application for judicial review and to be
tried at the same time. The application to set aside the bidding process is
directly related to the application to set aside the decision on that bidding
process, so that judicial review of these two “decisions” as part of a single proceeding
will simplify matters and make possible a complete resolution of the dispute
between the parties, while avoiding the risk of conflicting decisions.
(E)
Order
of April 19, 2005
[36]
As
mentioned earlier, on March 23, 2005, the applicant filed a written notice of
motion pursuant to rule 369 of the Federal Courts Rules amending its
notice of application by replacing Telefilm Canada as respondent by the
Attorney General of Canada and adding Équipe Spectra Inc. and Regroupement pour
le festival de cinéma de Montréal as respondents. This motion was further to
the motion filed by the respondent on March 11, 2005, alleging inter alia
failure to comply with rule 303 on account of the fact that the Attorney
General of Canada should have been named as a respondent in this case rather
than Telefilm. In its reply record, the applicant inter alia asked the
Court to allow it to correct this irregularity, and the motion of March 23 was
accordingly made in connection with this request.
[37]
I will
first deal with the argument of the respondent that the prothonotary could not
decide the applicant’s motion to amend since he had stayed the proceeding in
his order of April 5, 2005. This argument appears specious to the
Court, inasmuch as the order of April 5 can certainly be construed as
directed solely at proceedings on the merits of the case, not interlocutory
motions such as a motion for an extension of time or the already pending motion
by the WFF for leave to amend.
[38]
As to the
merits, I have no hesitation in ruling that the motion to amend filed by the
WFF is valid. Rule 303 clearly establishes that any person directly affected by
the order sought shall be named as a respondent “other than a tribunal in
respect of which the application is brought”. Therefore, Telefilm cannot be named
as a respondent since it is the body which made the decisions challenged by
this application for judicial review.
[39]
However,
this error is not fatal since rules 75(1) and 104 allow a document to be
amended by motion so long as no harm is caused to the other party. In the case
at bar, the substitution of the Attorney General for Telefilm causes no
prejudice in that it is the Attorney General who in fact appeared and received
the service of the proceedings at the same time as Telefilm.
[40]
In
addition, I note that the representative of the Attorney General of Canada
said, in his written submissions dated July 12, 2005 (Telefilm Canada
motion record appealing prothonotary’s order dated April 5, 2005), he agreed
with the amendment sought by the applicant. At paragraphs 44 to 46, he wrote:
[translation]
44. The
applicant designated Telefilm Canada as respondent in the instant proceeding.
45. Telefilm
Canada should not appear as respondent in these proceedings since it is the
tribunal in respect of which the application is made and rule 303(1) of the Federal
Courts Rules clearly provides that the applicant shall initially name as
respondent every person directly affected by the order sought in the
application other than a tribunal in respect of which the application is made.
46. The
Attorney General of Canada should instead be named as respondent in the
instant proceeding.
[41]
By
striking Telefilm from the style of cause and replacing it as respondents by
Équipe Spectra Inc. and Regroupement pour le festival de cinéma de Montréal,
Prothonotary Morneau went beyond what the applicant was seeking and, as it
were, excluded from the proceeding the party directly affected by the order
sought. The decisions which the applicant is seeking to have set aside were
made by Telefilm, represented by the Attorney General of Canada: the other two
respondents were interested only in so far as the relief sought might affect
them.
[42]
It is the
Attorney General of Canada who has the duty of defending decisions rendered by
a federal tribunal within his jurisdiction. The striking out of the latter as a
respondent would essentially amount to disposing of the case, a result which I
find difficult to reconcile with the prior order of April 5, 2005.
[43]
In view of
the numerous motion records, in answer or in reply, which crossed each other in
connection with the two motions, and the duplication of similar submissions
made by Telefilm/the Attorney General of Canada in connection with the motions,
I am inclined to think that the prothonotary simply made an error which, in the
circumstances, was quite understandable. Therefore, I will reverse his order of
April 19, 2005 and allow the motion to amend the style of cause of the
applicant’s notice of application, so as to replace Telefilm as respondent by the
Attorney General of Canada and to add Équipe Spectra Inc. and Regroupement pour
le festival de cinéma de Montréal as additional respondents.
[44]
In view of
the procedural complexity underlying these applications for judicial review and
the wishes expressed by both parties, I am of the view that this proceeding
should be referred back to the Chief Justice so that it may be treated as a
specially managed proceeding, in accordance with rules 383 et seq.
of the Federal Courts Rules.
[45]
Costs will
be awarded to the applicant.
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