Educational Testing Service v. Maple Leaf International Consulting Inc, 2001 FCT 1161

Date: 20011025

Docket: T-550-01

                                                              Neutral citation: 2001 FCT 1161

BETWEEN:

EDUCATIONAL TESTING SERVICE

Respondent/Plaintiff

- and -

MAPLE LEAF INTERNATIONAL CONSULTING,

INC. and SUNDARAM ("SONNY") PITCHUMANI

Appellants/Defendants

REASONS FOR ORDER

GIBSON J.

Introduction

[1]                 By motion filed the 17^th of September, 2001, to be dealt with in writing under Rule 369 of the Federal Court Rules, 1998^[1], the Defendants' appeal from an Order of Associate Senior Prothonotary Giles, dated the 10^th of September, 2001. By that Order, Mr. Giles struck out from Mr. Pitchumani's statement of defence:

- the words "and in his capacity as the sole director of the Defendant Corporation", in paragraph 1;

- the words "an border on paranoia" in paragraph 7; and

- the words "is fraudulent and" in paragraph 9.

Mr. Giles further struck out Mr. Pitchumani's counterclaim in its entirety. Finally, Mr. Giles ordered costs of the motion before him in favour of the Plaintiff fixed in the amount of $750 payable forthwith, "...and before any further step is taken save for an appeal of this order". Mr. Giles gave no reasons for his Order.

Preliminary Matters

[2]                 Counsel for the Respondent/Plaintiff raises two preliminary matters: first, he notes that fresh evidence should not be permitted on an appeal and he therefore seeks that the affidavit of Mr. Pitchumani, sworn the 13^th of September, 2001, and forming part of the Appellants'/Defendants' motion record should be struck in its entirety; and secondly, he urges that an appeal from a decision of a Prothonotary to be dealt with under Rule 369 is inconsistent with Rule 51 which contemplates that an appeal of a Prothonotary's Order be conducted by way of an oral hearing.

[3]                 Much of Mr. Pitchumani's affidavit sworn the 13^th of September, 2001 sets out the history of this action. To the extent that it does so, I am satisfied that it is not "fresh evidence". I can only assume that Mr. Giles had before him, when he conducted the hearing giving rise to the order here under appeal, the whole of the Court file. Thus, Mr. Pitchumani's affidavit is, to some extent, a useful summary for this judge and I am satisfied, does not constitute "fresh evidence" on this appeal. The remaining elements of Mr. Pitchumani's affidavit are more in the nature of argument than sworn statements of fact. As such, I will give them no weight. That being said, those elements of Mr. Pitchumani's affidavit that fall into this category are repeated in his written argument that forms part of the same motion record. Thus, in ignoring these elements of Mr. Pitchumani's affidavit, nothing is lost.

[4]                 In all of the circumstances, no part of Mr. Pitchumani's affidavit sworn the 13^th of September, 2001, will be struck.

[5]                 Rule 51 reads as follows:

I agree with counsel for the Respondent/Plaintiff that at least Rule 51(2) contemplates that an appeal from an Order of a Prothonotary will be dealt with at a hearing. That being said, I am not satisfied that Rule 51(2) mandates that an appeal from an Order of a Prothonotary must be dealt with at a hearing.

[6]                 Rule 369 is all-encompassing in reciting the principle that a party may, in a notice of motion, request that the motion be decided on the basis of written representations. Rule 369(2) provides a procedure under which a respondent to a motion brought in accordance with Rule 369(1) may object to disposition of the motion in writing and provide reasons why the motion should not be dealt with in writing. Rule 369(4) provides discretion to the Court to dispose of a motion proposed to be dealt with in writing on the basis of written representations or following an oral hearing, whether or not an objection has been taken to the motion being decided on the basis of written representations.

[7]                 Rule 3 provides that the Federal Court Rules, 1998 shall be interpreted and applied so as to secure the just, most expeditious and least expensive determination of every proceeding on its merits. As an element of this action, I am satisfied that the Appellants'/Defendants' motion in appeal of Mr. Giles' Order of the 10^th of September, 2001 can most expeditiously and in the least expensive manner be determined in writing, as requested by the Appellants/Defendants. Further, I am satisfied that to do so would in no way interfere with securing the just determination of either the motion in appeal or this action.

[8]                 In the result, in the exercise of the discretion conferred on the Court by Rule 369(4), this matter will be dealt with on the basis of written materials, as requested by the Appellants/Defendants.

The Position of the Appellants/Defendants on the Appeal

[9]                 The Appellants/Defendants seek recision in its entirety of the learned Prothonotary's Order with costs of the appeal payable to them. They allege that Mr. Giles overlooked material facts relevant to the adjudication of the motion that was before him, gave no reasons for his Order, "...but merely appears to have ‘rubber stamped' the draft order the Plaintiff may have given him", was "clearly misinformed", did not use all relevant information available to him in reaching his decision reflected in the Order, "...allowed a motion that was brought before the Court in clear violation of Rule 364(3) relating to service and filing of a motion record and otherwise "...misapplied the law, and had misapprehension of facts".

The Position of the Plaintiff/Respondent

[10]            By contrast, the Plaintiff urges that, against the appropriate standard of review on an appeal from an Order of a Prothonotary, Mr. Giles made no reviewable error and thus, the Appellants'/Defendants' appeal by way of motion should be dismissed.

The Appropriate Standard of Review

[11]            In Canada v.Aqua-Gem Investments Ltd.^[2], Mr. Justice McGuigan, for the majority wrote at pages 462-463:

Following in particular Lord Wright in Evans v. Bartlam, ... and Lacourcière J.A. in Stoiceveski v. Casement ... discretionary orders of prothonotaries ought not to be disturbed on appeal to a judge unless;

(a) they 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, or

(b) they raise questions vital to the final issue of the case.

Where such discretionary orders are clearly wrong in that the prothonotary has fallen into error of law (a concept in which I include a discretion based upon a wrong principle or upon a misapprehension of the facts), or where they raise questions vital to the final issue of the case, a judge ought to exercise his own discretion de novo.      [Citations omitted].

I am satisfied that the portion of Mr. Giles' Order striking the individual Defendant's counterclaim in its entirety raises a question vital to a final issue in the case, that case being the counterclaim itself. Thus, in regard to that aspect of Mr. Giles' order, I am obliged to exercise my discretion de novo. In all other respects, I should not interfere with Mr. Giles' order unless I find that it was clearly wrong.

Striking the Counterclaim

[12]              A pleading, and in this I include a counterclaim, should not be struck unless it is plain and obvious that it discloses no reasonable cause of action^[3]. The Plaintiff alleges in its written submissions before me:... on a fair and generous reading of the Defendant's counterclaim, it suggests that the Defendant has sought damages on the basis of (1) being sued and (2) engaging in settlement communications with Plaintiff's counsel.

Further, the individual Defendant, by his counterclaim, seeks relief in the amount of $1,000,000 in damages for "mental anguish, pain and terror" inflicted by the Plaintiff upon the Defendant...".

[13]            The Plaintiff, in its written material before me, submits that the counterclaim filed by the Defendant, in addition to disclosing no reasonable cause of action, is scandalous, frivolous and vexatious in that it improperly casts a derogatory light on counsel for the Plaintiff and fails to make any rational argument based upon evidence or law.

[14]            I have carefully reviewed the individual Defendant's counterclaim. I am satisfied that, on its face, it is plain and obvious that it discloses no reasonable cause of action or, at least, no reasonable cause of action that is within the jurisdiction of this Court.

Words Struck From the Statement of Defence

[15]            The words struck by Mr. Giles from paragraph 1 of the statement of defence clearly contemplate that the individual Defendant is speaking in that paragraph, not only on his own behalf, but as "... the sole director of the Defendant Corporation". The Defendant corporation was not at liberty to file a statement of defence by reason of an earlier Order of this Court, and it was therefore clearly wrong for the individual Defendant, on the fact of his statement of defence, to imply that he was speaking not only for himself but for the corporate Defendant as well. I am satisfied that Mr. Giles' decision to strike the words from paragraph 1 that are earlier referred to was certainly not "clearly wrong". Indeed, I am satisfied that it was correct.

[16]            The words struck from paragraph 7 and paragraph 9 can only be described as "scandalous" or "vexatious". Once again, I am satisfied that Mr. Giles was in no sense "clearly wrong" in determining to strike the words from those paragraphs that he did.

Costs as Awarded by the Associate Senior Prothonotary

[17]            By Rule 400(1), the Court has full discretionary power over the amount and allocation of costs and the determination of by whom they are to be paid. Further, I am satisfied that the Court's discretion extends as well to the issue of when they shall be paid in relation to further steps in an action. Here, Mr. Giles determined that, on the motion that was before him, the Plaintiff should be entitled to its costs, that such costs should be fixed in the amount of $750 and that those costs should be payable "... forthwith and before any further step is taken save for an appeal of this [his] order.". This appeal followed, as contemplated as Mr. Giles' costs award. I am satisfied that Mr. Giles' costs award was entirely within the scope of his discretion as contemplated by theFederal Court Rules, 1998. His costs award was not "clearly wrong" and I therefore find no basis upon which I could reasonably interfere with that award.

Conclusion

[18]            In the result, the Appellants'/Defendants' appeal by way of motion from the decision of Associate Senior Prothonotary Giles dated the 10^th of September, 2001, will in all respects be dismissed.

Costs on This Appeal

[19]            The Respondent/Plaintiff on this appeal seeks costs fixed and payable forthwith in the amount of $2000. As the successful party on this appeal by way of motion, I am satisfied that it is appropriate that the Respondent/Plaintiff should have its costs. However, I have no material before me that satisfies me that a fixed award in any particular amount, let alone $2000, is justified. Further, the Respondent/Plaintiff has provided me with no submissions supporting its request that costs should be payable to it forthwith. In the result, an Order will go for costs on this appeal by way of motion in favour of the Plaintiff to be taxed on the ordinary scale and to be payable to the Plaintiff in any event of the cause.

"Frederick E. Gibson"

                                                                                                      J.F.C.C.                        

Toronto, Ontario                       

October 25, 2001

FEDERAL COURT OF CANADA

Names of Counsel and Solicitors of Record

COURT NO:                                           T-550-01

STYLE OF CAUSE:                                   EDUCATIONAL TESTING SERVICE

Respondent/Plaintiff

- and -

MAPLE LEAF INTERNATIONAL CONSULTING,

INC. and SUNDARAM ("SONNY") PITCHUMANI

Appellants/Defendants

CONSIDERED AT TORONTO, PURSUANT TO RULE 369 OF THE FEDERAL COURT RULES 1998.

REASONS FOR ORDER BY:             GIBSON J.

DATED:                                                   THURSDAY, OCTOBER 25, 2001

WRITTEN SUBMISSIONS BY:      A. Kelly Gill

For the Respondent/Plaintiff

Sundaram Pitchumani

For the Appellants/Defendants

SOLICITORS OF RECORD:           Gowling Lafleur Henderson LLP

Barristers & Solicitors

Suite 4900, Commerce Court West

Toronto, Ontario

M5L 1J3

For the Respondent/Plaintiff

Page: 2

Sundaram Pitchumani

1145-27 St. Clair Avenue East

Toronto, Ontario

M4T 2P4

For the Respondent

FEDERAL COURT OF CANADA

                              Date: 20011025

                                                                                                        Docket: T-550-01

BETWEEN:

EDUCATIONAL TESTING SERVICE

Respondent/Plaintiff

- and -

MAPLE LEAF INTERNATIONAL CONSULTING, INC. and SUNDARAM ("SONNY") PITCHUMANI

Appellants/Defendants

REASONS FOR ORDER