Date: 20070201
Docket: T-1427-06
Citation: 2007FC114
Toronto, Ontario, February 1, 2007
PRESENT: Madam Prothonotary Milczynski
BETWEEN:
JAZZ
AIR LP
Applicant
and
TORONTO PORT AUTHORITY
Respondent
and
CITY CENTRE AVIATION LTD., REGCO
HOLDINGS INC., PORTER AIRLINES INC.
and ROBERT J. DELUCE
Interveners
REASONS FOR ORDER AND ORDER
Overview
[1]
The
Applicant, Jazz Air LP (“Jazz”) commenced an application for judicial review in
Court File: T-431-06, on March 9, 2006 (Application #1). Following a number of
procedural motions, it was ordered that Application #1 be converted into an
action. This order was upheld on appeal, but
instead of appealing or converting Application #1 into an
action, on August 8, 2006 Jazz discontinued Application #1 and commenced this
proceeding, Application #2.
[2]
The
Respondent, Toronto Port Authority (the “TPA”) and the Interveners, City Centre
Aviation Ltd., Regco Holdings Inc., Porter Airlines Inc., and Robert J. Deluce
(the “Porter Parties”) have each brought a motion for an order striking the
notice of application in Application #2 and dismissing the application as an
abuse of process. The TPA and Porter Parties further submit in the
alternative, that the application should be dismissed on the grounds that it is
time-barred.
[3]
I agree
that the application ought to be dismissed. While a party may discontinue a
proceeding and commence a new one that involves the same subject-matter where
there has been no prior determination of the previous proceeding, it may be
prevented from doing so where a court finds such actions constitute abuse. In
that respect, I find that Jazz proceeded on the course of action it did because
it did not like the procedural rulings that were made in Application #1, which
would have required it to proceed for a determination of the merits by way of
action rather than application. All of the issues raised by Application #2
could have and would have been determined through the disposition of
Application #1, which the Court determined best suited for trial, but Jazz
wanted to avoid the process afforded by a trial.
[4]
In this,
Jazz made a strategic decision and took a calculated risk in discontinuing
Application #1 and commencing Application #2. Application #2 is simply a
pared down version of Application #1. It is worded without the allegations of
a criminal conspiracy or breaches of the Competition Act, but far from
being simplified or being appropriate for determination by way of
application, Application #2 contains the same allegations
that, as in Application #1, describes the same commercial dispute between Jazz
and the TPA regarding the TCCA, and puts in issue the long historical
relationship between the TPA and Jazz, and the more recent dealings between the
TPA
and the Porter Parties. Jazz could have simply pared down
its allegations in its statement of claim in the conversion of Application #1
to an action.
[5]
The issues
raised in Application #2 are the same as, and are subsumed by those raised in
Application #1. There is no new decision that is the subject of Application #2,
only a reiteration of earlier decisions that were the subject of Application
#1, perhaps with more factual detail provided to Jazz through the passage of
time and ongoing discussions or disclosure. This new detail is said to comprise
a “new decision” dated July 26, 2006 relied upon by Jazz for the purposes of
commencing Application #2. Yet the July 26 “decision” is one of a number or
series of confirmations of the TPA’s position that has been consistent all
along.
[6]
At best, the
July 26, 2006 correspondence could be said to have additionally provided a
response to the provocation on the part of Jazz to unilaterally and rather
brazenly announce its resumption of flights from the Toronto City Centre
Airport (“TCCA”) without a Commercial Carrier Operating Agreement (“CCOA”)
notwithstanding that Jazz knew, since February of 2006, that it needed to enter
into a new CCOA with the TPA before it could secure leased premises, resume any
flights or operate any scheduled passenger airline service at the TCCA.
[7]
Jazz asks
that it not be barred from the seat of judgment and submits that to grant the
TPA’s and the Porter Parties’ motions would be to deprive Jazz of any ability
to seek judicial review of the
TPA’s actions and obtain a determination of whether the TPA
exceeded its statutory authority. Jazz argues that to grant the motions would
have the effect of knocking Jazz out of the judicial box. This
may be so, but it is the consequence of Jazz’s own actions –
not that of a hapless or unsophisticated litigant but a considered strategic
decision - with the result that Jazz knocked itself out of the box.
[8]
For the
reasons set out further below, I find that Jazz’s strategy in discontinuing
Application #1 and commencing Application #2 was to circumvent the orders of
this Court made in Application #1 regarding the process to be followed for the
determination of the matters in issue in this Court. As such, its actions
constitute an abuse undermining the integrity of the administration of justice,
a waste of judicial resources, and a burden on the TPA and Porter Parties that
together warrant the dismissal of the Application at this stage of the
proceeding.
Jazz Initiated Proceedings
[9]
Application
#2 is in fact, the third in the series of proceedings that have been brought by
Jazz against the TPA in relation to whether and/or on what terms Jazz can
operate a scheduled passenger airline service out of the TCCA. On February 23,
2006, the first of these proceedings was commenced as an action in the Ontario
Superior Court of Justice. In that action, which remains ongoing, Jazz seeks
damages from the TPA and the Porter Parties for the alleged harm arising out
of the termination of its lease at the TCCA, the alleged conspiracy between
the TPA and the Porter Parties and breach of the Competition Act, and
the TPA’s insistence that Jazz enter into a new CCOA as a requirement for its
continued operations at the TCCA, a CCOA that Jazz alleges is overly
restrictive.
[10]
In the Ontario action, Jazz brought a motion
for an injunction to prohibit one of the Porter Parties (City Centre Aviation
Ltd.), from terminating its lease with Jazz at the TCCA, and to enjoin
all Porter Parties from entering into or acting pursuant to
agreements with the TPA that Jazz alleged were contrary to the Competition
Act.
[11]
The motion
was brought before Mr. Justice Spence on February 27, 2006 on an urgent basis
and was dismissed summarily, with costs.
[12]
Shortly
thereafter, on March 9, 2007, Jazz commenced Application #1 in Federal Court seeking
judicial review of certain actions and decisions of the TPA relating to the
operation of the TCCA, the CCOA proposed by the TPA to Jazz and the TPA
arrangements with the Porter Parties. A number of interlocutory motions and
case management attendances ensued regarding a variety of procedural issues,
including the intervention of the Porter Parties, whether or not the hearing of
the application ought to expedited, the state of the TPA “record” for the
purposes of Rules 317 and 318 of the Federal Courts Rules, and finally,
the motion brought by the Porter Parties to convert the application into an
action – granted on June 6, 2006, (the “Order to Convert”), upheld on appeal
on July 20, 2006.
[13]
The Order
to Convert required Jazz to file its Statement of Claim within twenty days of
the Order. Although counsel to Jazz undertook to provide the pleading
expeditiously following the dismissal of the appeal, it was neither served nor
filed. Rather, on August 8, 2006, Jazz discontinued Application #1 and on the
same day, commenced Application #2, naming only the TPA as a party.
[14]
Jazz
commenced Application #2 in a form similar to a draft notice of application it
had proposed be accepted for filing as Amended Application #1, as an
alternative to converting Application #1 into an action when it argued its
appeal. Justice Rouleau declined to consider the amended application on appeal,
as it was not part of the motion to convert.
[15]
In any
event, not surprisingly, as in Application #1, the Porter Parties immediately
brought a motion in Application #2 for an order to be added as interveners.
The motion was vigorously opposed by Jazz, but granted on September 6, 2006.
Substance of Applications
[16]
Application
#2 seeks judicial review of the TPA’s decisions:
(i)
requiring Jazz
to abide by the terms of an allegedly “arbitrary, discriminatory and
exceptionally restrictive” CCOA;
(ii)
purporting
to terminate Jazz’s existing CCOA as of August 31, 2006; and
(iii)
refusing
to provide its consent to a sub-lease Jazz negotiated with Stolport Corporation
(“Stolport”).
[17]
Jazz
argues that Application #2 puts in issue the jurisdiction of the TPA under the Canada
Marine Act and whether it “tied its hands” or contracted out of its
obligations under the Act by entering into its arrangements for the TCCA
with and on terms favourable to the Porter Parties, with the effect of
restricting Jazz’s access or ability to operate at the TCCA, in respect of the
number of take-off and landing slots, and destination routes flown to and from
the TCCA.
[18]
Application
#1, however, similarly made reference to whether the TPA exceeded its
jurisdiction under the Canada Marine Act, and sought review of:
(i) the requirement that Jazz
abide by the terms of an allegedly “extremely arbitrary and exceptionally
restrictive” and “discriminatory” CCOA proposed to Jazz by the TPA;
(ii) the termination of Jazz’s
access to the TCCA effective as of August 31, 2006 unless Jazz agrees to the
proposed CCOA;
(iii) the refusal by the TPA to
lease or make available to Jazz, any passenger aircraft facilities;
(iv) the refusal by the TPA to approve any
sub-lease arranged by Jazz with Stolport without Jazz’s agreement to the
proposed CCOA; and
(v) the agreements between the TPA
and the Porter Parties for the TCCA on terms favourable to the Porter Parties,
which agreements allegedly have the effect of restricting Jazz’s access to the
TCCA and ability to operate, in respect of both slots and destinations or
routes.
[19]
In
Application #2, Jazz seeks review of the TPA’s decision to terminate Jazz’s
existing CCOA, effective August 31, 2006. Application #1 was worded slightly
differently. Jazz sought review of the TPA’s decision threatening to terminate
Jazz’s access to the TCCA as of August 31, 2006. In each of Application #1 and
#2, Jazz relies on the letter of Lisa Raitt dated February 28, 2006, in which
she advised:
We wish to notify you that any and all
agreements and other arrangements which may exist between the TPA and New Jazz
(or any of its predecessors) will terminate on August 31, 2006 (or such earlier
date on which they may conclude) unless a mutually agreeable CCOA has been
entered into between New Jazz and TPA on or before that date.
[20]
The same
CCOA is the subject of both Application #1 and #2, and the complaints are the
same – the number of slots, the limitations on routes that may be flown and
whether to insist on the terms exceeds the authority of the TPA under the Canada
Marine Act. This CCOA was first provided to Jazz in February of 2006, and
the TPA’s position was simply reiterated in its correspondence of July 26,
2006. Whatever conciliatory gesture or offer the TPA made that deviated from
the terms of the proposed CCOA was simply a without prejudice offer to permit
Jazz some access to the TCCA, pending the judicial determination of Application
#1. The TPA was prepared to allow Jazz to fly from the TCCA post August 31,
2006, but only if it agreed to be bound by the terms of the proposed new CCOA
in the interim and until such time as a new CCOA was agreed to and executed.
This was communicated to Jazz in May and in June, 2006.
[21]
With
respect to the sub-lease negotiated by Jazz with Stolport, it is clear that in
Application #1 and #2, the complaint is that the TPA would improperly withhold
its consent to any sub-lease arranged by Jazz on the grounds that a prerequisite
for its consent was that a CCOA be executed by Jazz. As noted in the Order to
Convert, Stolport was aware of this condition and refused to deal with Jazz
unless it had entered into a CCOA with the TPA. Jazz was aware of this
requirement since February 2006 – that it had until August 31, 2006 to enter
into a new CCOA, failing which it would be prevented from operating at the
TCCA, and that the TPA’s consent to any sublease negotiated by Jazz was
contingent upon Jazz entering into a new CCOA.
[22]
Nonetheless,
notwithstanding the above and under notice that its existing CCOA terminated on
August 31st and within days of the Order to Convert, Jazz issued a
press release on July 6, 2006
and held a press conference in which it announced that it
was resuming flights from the TCCA effective August 28, 2006. It sold tickets
to the public for those flights, (and continued to sell tickets until ordered
to stop by the Competition Bureau for misleading advertising).
[23]
The TPA
immediately wrote to Jazz on July 6th:
We have made it clear to you that we will
not permit Jazz to make use of the TCCA or its facilities without Jazz first
entering into a Commercial Carrier Operating Agreement with TPA…In February
2006, TPA offered use of the TCCA and its facilities to Jazz on terms which TPA
considers necessary to fulfill its mandate to operate the TCCA as a financially
viable and self-sustaining airport. Jazz refused our offer and we have been
negotiating with Jazz in good faith since that time. Notwithstanding that,
Jazz commenced a lawsuit in the Ontario Superior Court and the Federal Court of
Canada against TPA and others challenging, among other things, the propriety of
the proposed terms offered to Jazz for the utilization of the TCCA.
[24]
By letter
dated July 26, 2006, the TPA reiterated the same position it had communicated
in February of 2006:
We have repeatedly told you that we will
not permit Jazz to operate to or from the TCCA until you have entered into a
contract with us…Without such an agreement with TPA, Jazz will not be permitted
to access the TCCA or use any of its facilities.
[25]
Far from
being a new decision or fresh exercise of discretion, the July 26, 2006
correspondence shows that the TPA’s position had not changed from that
communicated in February, 2006, and that the subject matter of Application #1
and Application #2 is the same.
Abuse of Process
[26]
The issue
on this motion is whether it is an abuse of process for Jazz to have commenced
Application #2 instead of converting Application #1 into an action, and if so,
whether the Court should dismiss the application on those grounds.
[27]
Whether
the actions of a party constitute an abuse of process depends upon the facts
and surrounding circumstances, and must be approached on a case-by-case basis.
Further, even if an abuse is found, the Court has discretion to allow the
matter to proceed. The Federal Court has applied the doctrine of abuse of
process:
-
to prevent
misuse of the Court’s procedure in a way which, although not inconsistent with
the literal application of its procedural rules, would be manifestly unfair to
a party or otherwise bring the administration of justice into disrepute;
-
for
failure to comply with Court orders, including case management orders, or to
prevent the use of the Court process for an improper purpose;
-
to ensure
the finality of litigation and avoid repetitive proceedings, potentially
inconsistent results and inconclusive proceedings;
-
to prevent
repeated attempts to litigate essentially the same dispute by naming slightly
different parties, applying in different capacities and relying on slightly
different statutory provisions when earlier attempts have failed;
-
to prevent
seeking to re-litigate on a different legal basis an action or proceeding based
on the same facts as in a previously determined proceeding;
-
to prevent
a waste of time and resources both for the adverse party and for the
administration of justice; and
-
to prevent
a litigant from repeatedly changing litigation tactics.
(See: Sauvé v. Canada, [2002] F.CJ. No. 1001 (T.D); Bernath v.
Canada,
[2005] F.C.J. No. 1496 (T.D.); Black v. NSC Diesel Power Inc., [2000]
F.C.J. No. 725 (T.D.) aff’d [2003] F.C.J. 1071 (C.A.); Shilling v. MNR (2004),
248 D.L.R. (4th) 1 (F.C.A.))
[28]
In Toronto
(City) v. Canadian Union of Public Employees (CUPE), Local 79, [2003]
S.C.J. No. 64, 2003 SCC 63, Madam Justice Arbour set out the principles
underlying the doctrine of abuse of process:
…Canadian Courts have applied the
doctrine of abuse of process to preclude re-litigation in circumstances where
the strict requirements of issue estoppel (typically the privity/mutuality
requirements) are not met, but where allowing the litigation to proceed would
nonetheless violate such principles as judicial economy, consistency, finality
and the integrity of the administration of justice.
***
In all of its applications, the primary
focus of the doctrine of abuse of process is the integrity of the adjudicative
functions of courts. Whether it serves to disentitle the Crown from proceeding
because of undue delays…or whether it prevents the civil parties from using the
courts for an improper purpose…the focus is less on the interests of parties
and more on the integrity of judicial decision-making as the branch of the
administration of justice.
[29]
In this
case, Jazz was ordered to convert Application #1 to an action. Instead, Jazz
discontinued Application #1 and commenced a second application for judicial
review that was essentially the same. Jazz did so, advising the Court that it
was a strategic decision, but with cap somewhat in hand, submitted at the
hearing of this motion that it was in effect, attempting to comply with or live
up to the spirit of the previous interlocutory decisions to simplify or focus
the application. This attempt was, however, already tried before Justice
Rouleau on the appeal from the Order to Convert when Jazz proposed to file a
revised Application #1, and it disregards the basis for the Order to Convert.
[30]
In Sauvé,
the plaintiff failed to comply with a case management order. The case was
dismissed for delay and the dismissal was affirmed on appeal. When the
plaintiff sought to re-file a mirror action, Justice Lemieux dismissed the
action as an abuse of process, stating at paras. 22-23:
I agree with counsel for the respondent,
in the circumstances of this particular case, to allow the plaintiff to proceed
with a second action which is simply a mirror of his first action would make a
mockery of the Case Management Rules.
Case management judges make a multitude
of orders for the purpose of ensuring the orderly progress of an action. To
allow a plaintiff to disregard such orders leaving a plaintiff at liberty to
simply re-file a new mirror action would be contrary to the very purposes of
those Rules.
[31]
Jazz
similarly disregarded the case management orders in Application #1 by
commencing the same case in the form of Application #2:
(i)
it is the
same commercial dispute between the same parties;
(ii)
Jazz
commenced Application #2 without naming the Porter Parties, thereby requiring
the same motion for the Porter Parties to added to be brought, with the same
result;
(iii)
the
decisions sought to be reviewed in Application #2 are same as in Application
#1;
(iv)
the
evidence filed in Application #2 mirrors that filed in Application #1 – the
same affiants make virtually the same statements of fact and opinion;
(v)
the TPA
record to be filed would be the same in Application #2 as it would have been in
Application #1 – involving some sixteen years of history of commercial dealings
between the parties;
(vi)
further
court attendances and materials filed with the court in Application #1 have
been or will be repeated in Application #2, including a motion to convert the
application to an action; and
(vii)
the same
interests are at stake, issues of credibility and the same legal issues need to
be determined as between Applications #1 and #2.
[32]
Jazz could
have advanced its case and proceeded on the merits though Application #1. Through
the filing of its statement of claim pursuant to the Order to Convert, it could
have narrowed and focussed the issues as it purports to do in Application #2,
by removing the allegations of a criminal conspiracy and breach of the Competition
Act. The only reasonable inference that can be drawn from Jazz having
discontinued Application #1 and commencing Application #2 is that it did so for
tactical reasons. Jazz did not want to proceed by way of action and trial. It
sought to avoid and circumvent the Order to Convert, which found the
disposition of the issues in dispute, which are the same in Application #2 as
in Application #1, better suited to a trial and which process offered broader
procedural benefits through each parties’ productions and examinations for
discovery.
[33]
This
course of action is improper and undermines the integrity of justice. It wastes
judicial resources and the resources of the TPA and Porter Parties. Each of
the TPA and the Porter Parties have expended considerable resources defending
against Jazz’s three proceedings and in Application #1, succeeding on the
motion to convert to preserve the procedural protections and benefits of a
trial. With respect to whether or not discretion should be exercised to permit
the proceeding to continue, I cannot conclude that discretion should be
exercised in Jazz’s favour. Jazz has brought or opposed motions needlessly,
and there have been duplicative interlocutory proceedings. Jazz has created
circumstances requiring the other parties to respond, sometimes on an
urgent basis, and it has brought and abandoned or neglected
proceedings using the court’s process for other collateral purposes in its
attempt to re-establish itself at the TCCA. Jazz has sought to avoid the
orders of this Court regarding how the determination of this matter should best
proceed as part of a thought out and considered strategy. It is appropriate in
these circumstances to grant the TPA and Porter Parties’ motions to strike on
the grounds that such strategy ought not to be countenanced. Accordingly, it
is not necessary to review whether Application #2 is time-barred.
ORDER
THIS COURT ORDERS that:
1. The
Notice of Application is struck without leave to amend, and the application is
dismissed.
2. In the
event the parties cannot agree on costs, the matter of costs of this motion
will be heard at a special sitting on a date and at a time to be fixed.
“Martha
Milczynski”
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