Date: 20110110
Docket: A-237-10
Citation: 2011 FCA 6
CORAM: DAWSON J.A.
LAYDEN-STEVENSON
J.A.
MAINVILLE
J.A.
BETWEEN:
ZOLTAN ANDREW SIMON
Appellant
and
HER MAJESTY THE QUEEN IN RIGHT
OF CANADA
Respondent
REASONS FOR JUDGMENT
DAWSON J.A.
[1] A Judge of the Federal Court struck out the
statement of claim filed by Mr. Simon in Federal Court file T-639-10 without
leave to amend. The Judge also decided that Mr. Simon should pay costs to the
defendant Crown set in the amount of $500.00. The Judge's decision was based
upon his conclusion that Mr. Simon’s claim did not fall within the jurisdiction
of the Federal Court. See: 2010 FC 617.
[2] Mr.
Simon appeals from the order of the Federal Court. He asks this Court to set
aside the order and to issue a number of declarations. The declarations sought
by Mr. Simon are not available on appeal from the order striking out the
statement of claim. Therefore, the sole issue for this Court is whether the
Federal Court was correct in law when it struck out the statement of claim
without leave to amend.
[3] For
the reasons that follow, I would allow this appeal in part and vary the order
appealed from so as to grant leave to Mr. Simon to file an amended statement of
claim or, alternatively, to seek an extension of time in order to bring an
application for judicial review.
The Facts
[4] The
relevant facts are set out in paragraphs 2 to 4 of the Judge's reasons. There
he wrote:
2. In January 1999 the
plaintiff sponsored Margarita Reyes, his then wife, and her two sons as
permanent residents of Canada. He signed a sponsorship
agreement with her whereby he undertook to provide her essential needs. He is
adamant that he had no such agreement with Canada.
3. In June 2000, she
and her sons left him and they began to receive social assistance benefits from
the Province of
British Columbia.
Mr. Simon was unaware of these payments or that the Province of British Columbia held him as their sponsor
liable to repay them until some time in 2007.
4. In 2008 and again
in 2009 the Province of British
Columbia
garnisheed funds standing to his credit in his tax account with Revenue Canada.
The Decision Under
Appeal
[5] The
defendant's motion to strike the statement of claim was brought on four
grounds. The defendant asserted that:
1.
The
statement of claim did not sufficiently disclose the material facts.
2.
The
statement of claim did not disclose a reasonable cause of action.
3.
The
statement of claim was frivolous, vexatious or constituted an abuse of process.
4.
The
statement of claim mirrored an action the plaintiff had commenced in the Supreme
Court of British Columbia.
[6] The
Judge characterized Mr. Simon's claim in the following terms:
8. Mr. Simon argues
that there is no “effective debt” owed by him because there was no agreement
between him and the Government of Canada to repay the payments that were made
by British Columbia, that the payments to Mrs. Reyes were excessive and
improper, and that, in any event, the amounts claimed from him are statute
barred. In short, his position is that he has never owed anything to the
Province of British
Columbia on
account of its payments to Mrs. Reyes and that it improperly garnisheed his tax
account with Revenue Canada.
The Judge found the
action the plaintiff had commenced in British Columbia to be irrelevant.
[7] On
this basis, the Judge reasoned as follows:
10. What is critical is
that the plaintiff’s financial dispute is not directly with Canada and the real dispute he has
does not fall within the jurisdiction of this Court. In my view, he should be
seeking his declaration and repayment of the funds taken illegally, in his
view, against the Provincial authorities in the B.C. Superior Court, either in
the action already commenced or in a new one.
Was the Federal Court
wrong to strike the statement of claim without leave to amend?
[8] Motions to strike are governed by Rule 221 of the Federal
Courts Rules which provides that a pleading may be struck out with or
without leave to amend. For such a motion to succeed it must be plain and
obvious or beyond reasonable doubt that the action cannot succeed. See: Hunt
v. Carey Canada Inc., [1990] 2 S.C.R. 959 at paragraphs 30 to 33. To this
I would add that to be struck without leave to amend any defect in the
statement must be one that is not curable by amendment. See: Minnes v.
Minnes (1962), 39 W.W.R. 112 (B.C.C.A.) cited by the Supreme Court in Hunt
v. Carey Canada Inc. at paragraph 28 and Ross v. Scottish Union and
National Insurance Co. (1920), 47 O.L.R. 308 (C.A.) cited by the Supreme
Court in Hunt Carey Canada Inc. at paragraphs 23 and 24.
[9] Without
doubt, the Federal Court was correct in striking Mr. Simon's statement of claim
for reasons including that:
1.
Contrary
to Rule 174, the statement of claim did not contain a concise statement of the
material facts on which Mr. Simon relied.
2.
Contrary
to Rule 174, the statement of claim extensively pleaded evidence.
3.
Contrary
to Rule 221(1)(a), the statement of claim did not disclose a reasonable
cause of action.
4.
Contrary
to Rule 221(1)(c), the statement of claim was frivolous or vexatious because
it was so deficient that the defendant could not know how to answer the claim.
As well, the Court would be unable to regulate or manage the proceeding. See:
Kisikawpimootewin v. Canada, 2004 FC 1426, [2004]
F.C.J. No. 1709, citing Ceminchuk v. Canada, [1995] F.C.J. No. 914
(Proth.).
5.
Finally,
while a party may raise any point of law in a pleading (Rule 175), a statement
of claim cannot consist of legal argument. The extensive legal submissions
contained in the statement of claim violate Rule 174 because Mr. Simon's submissions,
including the extensive references to case law and hypothetical cases, are not
concise statements of material fact.
[10] However,
the Judge did not strike the claim on this basis. Instead, he found that the
matters set out in the statement of claim did not fall within the jurisdiction
of the Federal Court.
[11] I
agree that large aspects of Mr. Simon's narrative do not fall within the
jurisdiction of the Federal Court because they relate solely to the propriety
of British
Columbia's
claim to reimbursement for social assistance benefits paid to Mr. Simon’s
former wife. For the Federal Court to have jurisdiction the three-stage test
articulated by the Supreme Court of Canada in ITO-International Terminal
Operators Ltd. v. Miida Electronics Inc., [1986] 1 S.C.R. 752 (ITO) must be
met. Neither the Federal Courts Act nor other federal legislation
grants jurisdiction to the Federal Court to adjudicate upon the existence or
extent of any liability owed by Mr. Simon to the government of British
Columbia
in respect of social assistance benefits. The absence of such legislation is
fatal to the first stage of the ITO test.
[12] That
said, in my view the Judge overlooked an important aspect of Mr. Simon's claim:
whether the Canada Revenue Agency improperly paid monies owing to Mr. Simon
under the Income Tax Act to the government of British Columbia, without
any notice or explanation to Mr. Simon. There is no suggestion that any
garnishment order issued from a court of competent jurisdiction. It may be
that monies otherwise owing to Mr. Simon were applied to Mr. Simon’s
alleged sponsorship debt pursuant to subsection 164(2) of the Income Tax
Act, R.S.C. 1985, (5th Supp.), c. 1. The propriety of the
Canada Revenue Agency’s treatment of monies otherwise owing to Mr. Simon
unquestionably falls within the jurisdiction of the Federal Court. It follows,
in my respectful view, that the Federal Court erred in law by concluding that
none of the matters complained of by Mr. Simon fell within its jurisdiction.
[13] The
Federal Court was correct to strike the statement of claim, but not on the
ground that the Court lacked jurisdiction.
[14] After determining that a pleading will be struck, Rule 221 requires
consideration of whether a pleading is struck with or without leave to amend.
[15] It is not plain and obvious that if amended Mr. Simon’s claim that
the Canada Revenue Agency erred in its treatment of monies he was otherwise
entitled to would not disclose a reasonable cause of action. Therefore, the Federal
Court erred in striking the statement of claim without leave to amend.
[16] Three
points should be made concerning Mr. Simon’s right to amend, or file a further
pleading.
[17] First,
it is important to caution Mr. Simon that any further pleading must comply with
all of the rules of the Federal Court governing pleadings. Failure to comply
with those rules would expose the pleading to the risk of being struck out.
[18] The
requirement that a pleading contain a concise statement of the material facts relied
upon is a technical requirement with a precise meaning at law. Each
constituent element of each cause of action must be pleaded with sufficient
particularity. A narrative of what happened and when it happened is unlikely
to meet the requirements of the Rules. Mr. Simon would be well advised to seek
legal advice, at least with respect to the elements that must be contained in
any pleading he may wish to file.
[19] Second,
materials relating to the propriety of the claim to reimbursement advanced by authorities
in British
Columbia
are unlikely to fall within the jurisdiction of the Federal Court. Any claim
not within the jurisdiction of the Federal Court will again be liable to be
struck out.
[20] Third,
as a matter of law, certain relief sought against federal entities may only be claimed
by way of a notice of application seeking judicial review. This is a legal issue
of some complexity where Mr. Simon would again benefit from legal advice.
Conclusion
[21] For
these reasons, I would allow the appeal in part and vary the order of the
Federal Court so as to grant leave to file an amended statement of claim, or,
alternatively, to seek an extension of time to file an application for judicial
review.
[22] In the
circumstances, I would make no award of costs.
“Eleanor R. Dawson”
“I agree.
Carolyn Layden-Stevenson J.A.”
“I agree.
Robert M. Mainville J.A.”
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