Date: 20010330
Docket No.: T-824-00
Neutral Citation: 2001 FCT 268
Ottawa, Ontario, this 30th day of March, 2001
PRESENT: THE HONOURABLE MR. JUSTICE BLANCHARD
BETWEEN:
REDDY RAJAGOPAL CHAVALI, REDDY KRISHNAVENI CHAVALI,
and REDDY VENKATASUBBARAMI CHAVALI
Plaintiffs
- and -
HER MAJESTY THE QUEEN IN RIGHT OF CANADA;
HER MAJESTY THE QUEEN IN RIGHT OF ONTARIO;
ATTORNEY GENERAL OF CANADA; ATTORNEY GENERAL OF ONTARIO;
and THE CANADIAN JUDICIAL COUNCIL,
AND THE FOLLOWING:
THE LAW SOCIETY OF UPPER CANADA,
LAWYERS' PROFESSIONAL INDEMNITY COMPANY; CHARLES HARNICK;
W.D. CHILCOTT J; J.B. CHADWICK J; DOUGLAS CUNNINGHAM J;
PETER A. CUMMING J; DOUGLAS COO J; ARCHIBALD J;
THOMAS J. LOCKWOOD; LOCKWOOD & ASSOCIATES; NELLIGAN-POWER;
MARK GEDDES; DAVID CHICK; ARTHUR AULT;
GOWLING, STRATHY & HENDERSON;
ANDRIDGE CAPITAL CORPORATION; GEORGE GATY;
CHATEAU ROYALE PROFESSIONAL BUILDING INC;
LAURENTIAN BANK OF CANADA; PEAT MARWICK THORNE INC;
ROYAL TRUST CORPORATION OF CANADA; THE TORONTO DOMINION BANK;
ALLAN O'BRIEN; JAMES MORTON; JERRY LEVITAN; KANNY NG;
MAJESTIC KEY MANAGEMENT LTD; SAMUEL TALBERT;
COLETTE TALBERT; PIAZZA, BROOKS & SIDDONS;
THE CORPORATION OF THE CITY OF OTTAWA;
SOLMON ROTHBART GOODMAN; ANDRE BLUTEAU; MONICA CHARLES;
FELIX CHARLES; AND KAY CHARLES
Defendants
REASONS FOR ORDER AND ORDER
[1] On October 24, 2000, the Canadian Judicial Council, hereinafter the defendant, brought a motion in writing pursuant to rule 369 of the Federal Court Rules, 1998, SOR/98-106, as amended, to strike a statement of claim against it.
[2] The motion is for an order striking the statement of claim dated May 9, 2000, where Reddy Rajagopal Chavali, Reddy Krishnaveni Chavali, and Reddy Venkatasubbarami Chavali, hereinafter, the plaintiffs, issued in this Court a statement of claim against 42 defendants including the Canadian Judicial Council, Her Majesty the Queen in Right of Canada and in Right of Ontario, the Attorney Generals of Canada and Ontario and six judges of the Ontario Superior Court of Justice.
[3] The action consists of a number of claims alleging essentially: breach of a trust agreement; conflict of interest and professional misconduct of legal counsel; a biassed judiciary; allegations of conspiracies between various defendants to undermine the ability of the plaintiffs to finance or re-finance their numerous properties; and very significant damages for illegal and unnecessary foreclosures on properties of the plaintiffs by certain defendants; as well as other allegations of misconduct by the numerous defendants.
[4] The plaintiffs submit that they have suffered damages of $95,000,000 and are also seeking punitive damages of $10,000,000, interests, and costs, as well as declarations and orders from this Court.
[5] The defendant is seeking an order, pursuant to Rule 221 of the Federal Court Rules,1998,
striking the statement of claim and dismissing the action against it.
A) JURISDICTION
[6] Before analysing the motion to strike, I will first consider whether this Court has jurisdiction to deal with this motion. The issue of whether or not this Court has jurisdiction has not been raised by the defendant the Canadian Judicial Council. However, I feel that it is important to note that this Court is a statutory court without inherent jurisdiction. General and inherent jurisdiction rests with the Superior courts of the provinces. Moreover, even though the parties have not raised the jurisdiction issue, I feel compelled to address it. In Okanagan Helicopters Ltd., Mahoney J. stated:
... the Court's jurisdiction is a matter which the Court itself is bound to consider even though it is not raised in the pleadings.[1]
[7] The relevant provisions regarding the jurisdiction of this Court are s.3 of the Federal Court Act and s.101 of the Constitution Act of 1867[2] which read:
3. The court of law, equity and admiralty in and for Canada now existing under the name of the Federal Court of Canada is hereby continued as an additional court for the better administration of the laws of Canada and shall continue to be a superior court of record having civil and criminal jurisdiction.
3. Tribunal de droit, d'equity et d'amirauté du Canada, la Cour fédérale du Canada est maintenue à titre de tribunal additionnel propre à améliorer l'application du droit canadien. Elle continue d'être une cour supérieure d'archives ayant compétence en matière civile et pénale.
101. The Parliament of Canada may, notwithstanding anything in this Act, from Time to Time provide for the Constitution, Maintenance, and Organization of a General Court of Appeal for Canada, and for the Establishment of any additional Courts for the better Administration of the Laws of Canada.
101. Le parlement du Canada pourra, nonobstant toute disposition contraire énoncée dans la présente loi, lorsque l'occasion le requerra, adopter des mesures à l'effet de créer, maintenir et organiser une cour générale d'appel pour le Canada, et établir des tribunaux additionnels pour la meilleure administration des lois du Canada.
[8] The Supreme Court of Canada in the ITO-International Terminal Operators Ltd. decision sets out a three prong test to be met to establish jurisdiction of the Federal Court in a particular case, namely:
A) there must be a statutory grant of jurisdiction by the federal Parliament;
B) there must be an existing body of federal law which is essential to the disposition of the case and which nourishes the statutory grant of jurisdiction; and
C) the law on which the case is based must be "a law of Canada" as the phrase is used in section 101 of the Constitution Act, 1867[3]
[9] In 1980, prior to the ITO decision, Laskin C.J., as he then was, gave a clear indication of the scope and the limits of this Court's jurisdiction when he stated:
Clearly, the fact that the Federal Court may need to apply provincial law in the resolution of a claim is not a bar to jurisdiction where the claim is validly founded on federal law. The determination of when the provincial law component is so great that the case is no longer based on federal law is more difficult.
(...)
The mere fact that the federal Crown is plaintiff does not entitle it to use the Federal Court as the forum in which to litigate its claims.(...) The effect of the McNamara case, shortly put, is that there must be existing and applicable federal law to support the claims made in these cases by the Crown; otherwise there would not be conformity with the prescriptions of s. 101 of the British North America Act which, inter alia, provides for the establishment by Parliament of "additional Courts for the better Administration of the Laws of Canada".[4]
[10] More recently, the Supreme Court of Canada in Canadian Liberty Net specified and confirmed the importance of the ITO test set out in 1986. Bastarache J. reiterated the limits of the mandate conferred to this Court by the Constitution:
The requirement that there be valid federal law which nourishes the statutory grant of jurisdiction serves primarily to ensure that federal courts are kept within their constitutionally mandated sphere. As Wilson J. noted in Roberts, supra, the second and third requirements set out in ITO, supra, of a nourishing body of federal law, and its constitutional validity, go hand in hand (at p. 330):
While there is clearly an overlap between the second and third elements of the test for Federal Court jurisdiction, the second element, as I understand it, requires a general body of federal law covering the area of the dispute, i.e., in this case the law relating to Indians and Indian interests in reserve lands . . . [Emphasis added.]
The dispute over which jurisdiction is sought must rely principally and essentially on federal law. If the dispute is only tangentially related to any corpus of federal law, then there is a possibility that assuming jurisdiction would take the Federal Court out of its constitutionally mandated role.[5]
[11] The case at bar is essentially a case based upon the common law of tort and is appropriately a case for a superior court of inherent jurisdiction.
[12] Applying, the above principles to the present case, I find that there is essentially no relationship between the claim against the Canadian Judicial Council and any existing and applicable federal law.
[13] Therefore, it is my opinion that this Court has no jurisdiction to hear the claim against the Canadian Judicial Council.
[14] However, in the event I have erred in finding that I have no jurisdiction to consider this motion, I will now deal with the motion to strike by the defendant, the Canadian Judicial Council as though I have jurisdiction.
B) Rule 221(1) of the Federal Court Rules, 1998
[15] On a motion to strike the Court is governed by Rule 221 of the Federal Court Rules, 1998, SOR/98-106, as amended, which reads:
221. (1) On motion, the Court may, at any time, order that a pleading, or anything contained therein, be struck out, with or without leave to amend, on the ground that it
(a) discloses no reasonable cause of action or defence, as the case may be,
(b) is immaterial or redundant,
221. (1) À tout moment, la Cour peut, sur requête, ordonner la radiation de tout ou partie d'un acte de procédure, avec ou sans autorisation de le modifier, au motif, selon le cas :
a) qu'il ne révèle aucune cause d'action ou de défense valable;
b) qu'il n'est pas pertinent ou qu'il est redondant;
(c) is scandalous, frivolous or vexatious,
(d) may prejudice or delay the fair trial of the action,
(e) constitutes a departure from a previous pleading, or
(f) is otherwise an abuse of the process of the Court, and may order the action be dismissed or judgment entered accordingly.
c) qu'il est scandaleux, frivole ou vexatoire;
d) qu'il risque de nuire à l'instruction équitable de l'action ou de la retarder;
e) qu'il diverge d'un acte de procédure antérieur;
f) qu'il constitue autrement un abus de procédure. Elle peut aussi ordonner que l'action soit rejetée ou qu'un jugement soit enregistré en conséquence.
[16] Further, it must be noted that the onus is clearly on the moving party to establish that there are appropriate grounds to strike the statement of claim.
[17] In Canada (A.G.) v. Inuit Tapirisat of Can., the Supreme Court of Canada set the appropriate standard to be applied on motions to strike pleadings:
As I have said, all the facts pleaded in the statement of claim must be deemed to have been proven. On a motion such as this a court should, of course, dismiss the action or strike out any claim made by the plaintiff only in plain and obvious cases and where the court is satisfied that "the case is beyond doubt" (...).[6]
[18] However, in operation Operation Dismantle v. The Queen, the Supreme Court of Canada held that the rule enunciated in Inuit Tapirisat, supra, does not require that allegations based on assumptions and speculations be taken as true. The Court stated:
...The very nature of such an allegation is that it cannot be proven to be true by the adduction of evidence. It would, therefore, be improper to accept that such an allegation is true. No violence is done to the rule where allegations, incapable of proof, are not taken as proven.[7]
[19] The defendant submits that the statement of claim does not set out any allegations whatsoever against it specifically and that the claim provides no factual basis for asserting the defendant's involvement in any alleged wrongdoing.
[20] In reviewing the statement of claim, I accept the defendant's position, I cannot find any specific allegations against the defendant. In fact, I see no factual basis on which the plaintiffs can rely upon in their claim against the defendant. In my view the statement of claim does not link the defendant to any of the assertions made by the plaintiffs, or to the damages claimed by the plaintiffs.
[21] A cause of action must lie on material facts and not on assumptions. A claim, which an individual may enforce through the judicial system, can only emanate from material facts. If a statement of claim lacks a cause of action, it cannot stand and should be struck.
[22] For these reasons, I find that the statement of claim is void of any material facts upon which to base the allegations against the defendant, the Canadian Judicial Council. I therefore find no cause of action against the defendant and will order the statement of claim against the Canadian Judicial Council struck.
ORDER
THIS COURT ORDERS that:
1. The plaintiffs' claim against the Canadian Judicial Council is dismissed for lack of jurisdiction.
2. In the event this Court has jurisdiction, the motion to strike out the Statement of Claim against the defendant, the Canadian Judicial Council is allowed, without leave to amend.
3. Cost in favour of the defendant Canadian Judicial Council.
"Edmond P. Blanchard"
Judge
[1] Okanagan Helicopters Ltd. v. Canadian Pacific Ltd. [1974] 1 F.C. 465
[2] The Constitution Act, 1867 [30 & 31 Vict., c. 3 (U.K.) (as amended by Canada Act 1982, 1982, c. 11 (U.K.), Schedule to the Constitution Act, 1982, Item 1)].The Constitution Act, 1867, 30 & 31 Victoria, c. 3. (U.K.)
[3] ITO - International Terminal Operators Ltd. v. Miida Electronics Inc. et al., [1986] 1 S.C.R. 752, at p. 766.
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