Date: 20070124
Docket: T-583-06
Citation: 2007 FC 70
Ottawa, Ontario, January 24,
2007
PRESENT: THE HONOURABLE MADAM JUSTICE DAWSON
BETWEEN:
ENVIREEN CONSTRUCTION (1997)
INC.
Plaintiff
and
HER MAJESTY THE QUEEN IN RIGHT OF CANADA
Defendant
And
Docket: T-960-03
BETWEEN:
ENVIREEN CONSTRUCTION (1997) INC.
Plaintiff
and
HER MAJESTY THE QUEEN IN RIGHT OF CANADA,
MINISTER OF NATIONAL DEFENCE and
MINISTER OF PUBLIC WORKS and
GOVERNMENT SERVICES CANADA
Defendants
REASONS FOR ORDER AND ORDER
[1] The main issue raised on the motions before
the Court is whether the statement of claim issued in the most recent action
should be struck out because it constitutes an abuse of process. For the
reasons that follow, I have concluded it should not.
[2] On
June 11, 2003, the plaintiff (Envireen) commenced an action in this Court in
Court file T-960-03 (first action). The first action named as defendants the
Minister of National Defence and the Minister of Public Works and Government
Services Canada. The first action sought damages against the Crown, allegedly arising
out of a contract awarded to Envireen with respect to the demolition of a
building located in Goose Bay, Labrador.
[3] The
first action did not proceed expeditiously. Counsel for the defendants took
the position that the proper defendant was “Her Majesty the Queen”, that the
Ministers had no liability in their personal capacity and that, in any event,
the Ministers were never personally served with the statement of claim. On
October 8, 2003, a draft amended statement of claim was served on counsel for
the Crown. The amended claim added “Her Majesty the Queen in Right of Canada”
as a defendant. On October 14, 2003, a statement of defence was delivered to
the amended statement of claim on behalf of the Crown. Counsel for the Crown
advised that the statement of defence was served in anticipation that the
irregularities in the claim would be corrected. On May 18, 2004, counsel for
the plaintiff served its affidavit of documents upon counsel for the Crown, and
inquired about discovery dates. Counsel for the Crown advised that he was
finalizing the Crown’s affidavit of documents, but he repeated that unless the
Ministers were deleted as defendants a motion to strike would follow.
[4] On
August 17, 2004, this Court sent a notice of status review to the parties. The
notice, issued pursuant to what is now Rule 380 of the Federal Courts Rules,
SOR/2004-283 (Rules) required the plaintiff to show cause, by written
submissions to be served and filed by September 20, 2004, why the first
action should not be dismissed for delay. No submissions were filed, and by
order dated October 5, 2004 Madam Justice McGillis dismissed the action for
delay.
[5] On
receipt of the order of Justice McGillis, on October 6, 2004 counsel for the
plaintiff wrote the Court and counsel for the Ministers. He acknowledged that
the Registry of the Court had informed him that the Court maintained a fax
confirmation that evidenced delivery of the notice of status review to him. He
stated, however, that the notice of status review “did not come to my
attention”. He closed by saying that “I will review the Rules to determine
what recourse is available to bring this matter back into good standing”.
However, no motion or other step was taken.
[6] Nothing
of any substance was communicated to the Court or counsel for the Crown until
March 31, 2006 (almost 18 months later) when a new statement of claim was filed
by Envireen in the present proceeding (second action) and served upon the
Crown. In the second action the named defendant is “Her Majesty the Queen in
Right of Canada”. Again, Envireen seeks damages with respect to the demolition
of the same building in Goose Bay, Labrador. Counsel for Envireen remains the
same.
[7] In
a letter discussing, among other things, the timing of the filing of a
statement of defense to the second action, counsel for the plaintiff
characterized the statement of claim issued in the second action to be
“virtually identical [to the first] (save for the addition of various items of
relief)”. While there are some differences between the two claims, I agree
with counsel’s characterization.
[8] On
October 5, 2006, the Crown moved for an order striking the statement of claim
in the second action on the ground that it is an abuse of process.
[9] In
response, the plaintiff filed a cross-motion, seeking relief in the event that
the second action was struck out. The relief sought is an order setting aside
the order of Justice McGillis.
[10] Turning
to the motion to strike the statement of claim in the second action on the
ground that it is an abuse of process, there is some jurisprudence relevant to
this issue. In Lifeview Emergency Services Ltd. v. Alberta Ambulance
Operators’ Assn., [1995] F.C.J. No. 1199, Mr. Justice Rothstein,
then of this Court, considered a motion to strike a claim on the ground that it
was an abuse of process. Briefly stated, the facts were that the plaintiffs
had commenced an action in the Court of Queens’ Bench of Alberta. Little was
done to pursue the action because the plaintiff was awaiting the outcome of
related criminal proceedings. The action was later dismissed due to the
application of a new Alberta rule of practice that required actions to be
dismissed on request if nothing had been done for a period of five years to
materially advance the action. Following this, the plaintiffs commenced an
action in this Court claiming the same relief. Justice Rothstein dismissed the
motion to strike, writing at paragraphs 13 and 14 that:
13. As to whether it
is an abuse of the process to discontinue in one court and commence action in
another having concurrent jurisdiction, I do not think that there is any
general rule of law to this effect. Of course, in particular cases,
discontinuing and commencing afresh may be found to be abusive whether it be in
the same or a different court. But such a finding would be based on the facts
of the case. Further, it may be that in the case of particular statutory
schemes or particular schemes of the rules of court, a second action in a court
of concurrent jurisdiction will be precluded if a party has first elected to
proceed in one court. See for example Re Security Storage Limited and Dominion
Furniture Chain Stores Limited, [1943] 1 W.W.R. 433 (B.C.S.C. per Farris,
C.J.S.C.). But neither the facts nor the Alberta Rules of Court nor relevant
statutory provisions at issue here suggest that proceeding now in the Federal
Court in some way runs afoul of those rules or statutory provisions or is
abusive.
14. Perhaps the
plaintiff should have proceeded with more dispatch in the Court of Queen's
Bench. On the other hand it is not illogical to await the outcome of related
criminal proceedings. Unfortunately the plaintiff ran afoul of the new non
discretionary rule 244.1(1). I see nothing in the circumstances here that
is an abuse of the process in the plaintiff commencing this action in this
Court.
[underlining
added]
[11] In
Sauve v. Canada, [2002] F.C.J. No. 1001 my colleague Mr. Justice Lemieux
considered a motion to strike where an action had been dismissed by this Court
on status review and the plaintiff then filed a new statement of claim that was
virtually identical to that filed in the first action. At paragraph 19,
Justice Lemieux summarized the relevant legal principles relating to abuse of
process as follows:
19.
As I see it, the case law has established the following
parameters surrounding the doctrine of abuse of process:
(1) it is a flexible
doctrine, not limited to any set number of categories;
(2) its purpose is a public
policy purpose used to bar proceedings that are inconsistent with that purpose;
(3) its application depends
on the circumstances and is fact and context driven;
(4) its aim is to protect
litigants from abusive, vexatious or frivolous proceedings or otherwise prevent
a miscarriage of justice;
(5) a particular scheme of
the rules of court may provide a special setting for its application.
[12] Applying
those principles, Mr. Justice Lemieux struck the second claim as an abuse of
process. However, the facts in Sauve were materially different than
those now before the Court. In Sauve, after a first notice of status
review was issued by the Court an order was made to allow the action to
continue on terms that a reply to the Crown’s statement of defence would be
filed within 20 days and that the action would be pursued in accordance with
the Rules. The plaintiff then failed to comply with that order and a second
notice of status review issued. The action was then ordered to be struck out.
On appeal to the Federal Court of Appeal the order striking out the action was
upheld due to the plaintiff’s unjustified failure to comply with the order that
issued after the first status review.
[13] Applying
the principles articulated by Mr. Justice Lemieux in Sauve, I am to
review all of the circumstances in evidence because the exercise of discretion
whether to strike a pleading is fact and context driven. Litigants are to be
protected from abusive, vexatious or frivolous proceedings.
[14] In
my view, material considerations before me are:
1. The statement of claim issued in the second action is not, on
its face, abusive, vexatious or frivolous.
2. I conclude that the plaintiff’s difficulties arise from its
counsel’s self-admitted lack of familiarity with the practice, Rules and
procedures of the Court. The evidence does not establish a conscious disregard
of the processes of this Court.
3. There is no evidence that the Crown is prejudiced in its
ability to defend the second action as a result of the approximately 18-month
delay from the time that the first action was dismissed until the second action
was commenced.
4. Rule 3 of the Rules requires the Rules to be applied so as to
secure the just, most expeditious and least expensive determination of every
proceeding on its merits. The purpose of status review is not to dismiss valid
claims without a hearing, but rather to allow the Court to move cases forward in
a timely and efficient manner.
5. The plaintiff’s past failure to comply with the content and
spirit of the Rules can be addressed, through the ability of the Court,
pursuant to Rule 53(1), to impose such conditions as the Court considers just.
A suitable condition is that the second action may only proceed as a specialty
managed proceeding. It is to be expected that the plaintiff will at all times
cooperate with respect to the scheduling of case management conferences and
will be punctilious with respect to deadlines.
6. When the first action was dismissed, the Court made no award
of costs. As a condition of allowing the second action to proceed, the
defendant in the second action may be substantially indemnified against the
costs thrown away as the result of the plaintiff’s conduct.
[15] Therefore,
in the exercise of my discretion, the defendant’s motion to strike shall be
dismissed on the conditions more particularly set out in the order that
follows.
[16] The
plaintiff’s cross-motion will be dismissed for two reasons. First, the second
action has not been dismissed and this motion was conditional upon that event.
[17] Second,
Rule 399(1) provides:
|
399. (1) On motion, the Court may
set aside or vary an order that was made
(a) ex parte; or
(b) in the absence of a party who
failed to appear by accident or mistake or by reason of insufficient
notice of the proceeding,
if the party against whom the order is
made discloses a prima facie case why the order should not have been made. [underlining
added]
|
399. (1) La
Cour peut, sur requête, annuler ou modifier l’une des ordonnances suivantes, si la partie contre laquelle elle a été rendue présente une
preuve prima facie démontrant pourquoi elle n’aurait
pas dû être rendue :
a) toute ordonnance rendue sur requête ex parte;
b) toute
ordonnance rendue en l’absence d’une partie qui n’a pas comparu par suite
d’un événement fortuit ou d’une erreur ou à cause d’un avis insuffisant
de l’instance.
[Le souligné est de moi.]
|
[18] Accepting
that the plaintiff failed to respond to the notice of status review by accident
or mistake, the plaintiff’s motion materials fail to disclose a prima facie
case why the order of Justice McGillis should not have been made.
ORDER
THEREFORE,
THIS
COURT ORDERS THAT:
1. The motion to strike the statement of claim in this proceeding
as being as an abuse of process is dismissed on the following conditions.
2. This action shall proceed as a specially managed proceeding.
The Chief Justice will assign a case management officer.
3. Within 20 days of the date of this order, the parties shall
file with the Court a joint schedule for the prosecution of this action.
4. The plaintiff shall pay to the defendant Crown forthwith the
costs thrown away, determined on the basis of a substantial indemnity to the
defendant. If such costs are not agreed, within 20 days of the date of
this order the defendant shall serve and file written submissions with respect
to costs. These submissions are not to exceed 3 pages in length. Thereafter,
within 27 days of the date of this order, the plaintiff shall serve and file
responsive submissions with respect to costs, not to exceed 3 pages in length.
The Court shall then make an award of costs.
5. Following the issuance of such order as to costs, the
plaintiff shall not take any step in this proceeding until it has paid the
costs awarded to the defendant.
6. The cross-motion of the
defendant is dismissed.
7. The defendant is entitled to its costs of its motion, and the
costs of the plaintiff’s cross-motion, in the cause.
“Eleanor
R. Dawson”
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