Citation: 2009TCC197
Date: 20090417
Docket: 2006-1838(GST)I
BETWEEN:
VEITCH HOLDINGS LTD.,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR ORDER
V.A. Miller, J.
[1]
This is a motion by the
Respondent for an Order to strike out the Notice of Appeal, without leave to
amend; an Order granting such further and other relief as the court considers
just; and, an Order granting costs of this motion. The Grounds for the Motion
are that:
(a) The Notice of Appeal discloses no
reasonable grounds for appeal;
(b) It is frivolous and scandalous;
(c) It is an abuse of process of the court;
and,
(d) It contains
legal argument which the Appellant does not have the requisite standing to
assert.
The Respondent has referenced sections 4, 53, 58 and 65 of the Tax
Court of Canada Rules (General Procedure) (the “Rules”).
[2]
At the hearing of the
motion, counsel for the Respondent stated that he did not rely on those
sections of the Rules which he had referenced in his Notice of Motion.
However, his Written Representations are replete with references to the various
sections of the Rules and it is my opinion that counsel did in fact rely
on those sections which he had referenced in the Notice of Motion.
[3]
Counsel for the
Respondent acknowledged that the Appellant had elected the informal procedure
to apply to its appeal. He relied on the decision of Bowie, J in Hinz v.
M.N.R.[1]
for the principle that this court has the inherent jurisdiction to control
its proceedings.
[4]
I note that at
paragraph 4 of Hinz, Justice Bowie opined that only on occasions when a procedure
is required, should the Tax Court of Canada Rules (General Procedure) be
used in informal procedure appeals. He specifically stated that the Rules
should not be used to affect the rights of individuals. He stated:
Resort
to the General Rules of Procedure in informal appeals, and in EIA
and CPP appeals, should be limited to those occasions when a procedure
is required; there is no mandate to apply the General Rules of Procedure
to every situation in which the Rules Committee has not seen fit to make
provision in the Informal Procedure Rules or the EI and CPP
Rules. That is especially so where the matter at hand affects
established rights and not simply the procedure to be followed. (emphasis
added)
[5]
I agree with Justice
Bowie. The Respondent should not be allowed recourse to the Rules to
strike out pleadings in an appeal that is brought under the informal
proceedings. If the Respondent wanted the Rules to apply to this appeal,
the Attorney General could have requested, pursuant to section 18.3002, that
the General Procedure apply. This was not done.
[6]
When an appeal is filed
with this court under the informal procedure, no special form is required. See
section 18.15 of the Tax Court of Canada Act. The notice must only state
in general terms, the reasons for the appeal and the relevant facts. The Notice
of Appeal in this case conforms to this standard.
[7]
The chronology of
events in this appeal is as follows:
a)
The Notice of Appeal
was filed on June 22, 2006;
b)
The Reply to Notice of
Appeal was filed on August 28, 2006;
c)
A Notice of Hearing
dated May 22, 2007, was sent to the parties to inform them that the appeal was
scheduled for hearing on September 19, 2007;
d)
On September 11, 2007,
counsel for the Appellant requested an adjournment of the hearing. In his
letter he wrote that in order to put forward the best case for his clients, he
would require expert evidence. He had not been able to retain an expert and he
suggested that an appropriate rescheduling date was mid-January or early
February, 2008.
e)
By letter dated
September 11, 2007, the Respondent did not oppose the request for an
adjournment. In this letter, counsel stated that he had been in touch with
counsel for the Appellant with respect to the proposed testimony. The
Respondent requested that he receive a copy of the expert report as soon as it
was ready and in any case not less than 30 days prior to the hearing date,
notwithstanding that the Informal Procedure Rules apply. The Appellant agreed.
f)
On September 13, 2007,
the request for an adjournment was granted. The court asked the Appellant to
provide a Status Report in writing no later than January 31, 2008.
g)
By letter dated January
31, 2008, counsel for the Appellant informed the court and the Respondent that
the expert report was not available. Counsel had been successful in obtaining
an expert, but that person was very busy and would not be able to work on his
client’s case until June, 2008. He projected that the report would be available
by September 15, 2008. With his letter, counsel included the curriculum vitae
of the proposed expert.
h)
On February 8, 2008,
counsel for the Respondent informed the court that he did not oppose the filing
of the expert report on September 15, 2008 and that he would require sufficient
time to file a response to the expert report. He indicated that he would make
himself available for a case management conference call.
i)
On February 13, 2008,
the court granted the Appellant’s request for an extension of time until
September 15, 2008 to file the expert report. A case management conference call
was scheduled for September 5, 2008.
j)
On August 20, 2008,
counsel for the Appellant informed the court that the expert report would not
be completed until October.
k) There were two case management
conference calls with the court. They were held on September 5 and November 18.
At the November 18 conference call, counsel for the Respondent stated that he
had received the expert report on October 31 and that he had written to counsel
for the Appellant on November 14 to inform him that he intended to bring a
motion to strike the Notice of Appeal on the basis that the Appellant did not
have standing to assert aboriginal rights.
[8]
At the hearing, counsel
for the Respondent stated that he was no longer relying on the ground that the
Appellant did not have standing.
[9]
If it is plain and
obvious that the Notice of Appeal discloses no reasonable grounds for appeal
and it is frivolous and scandalous, why did it take the Respondent over two
years to file a motion to strike? The Appellant has incurred the expense of
hiring an individual who has prepared an expert report. It was not until the
report was sent to counsel for the Respondent that the Respondent decided to
bring this motion. I think that it is too late. This is an informal procedure
matter and the Appellant should not be denied its day in court.
[10]
Counsel for the
Respondent stated that as soon as it became apparent that the Appellant was
raising an issue that would be resource intensive, the Respondent brought its
motion. This is not a proper reason to bring a motion to strike pleadings.
[11]
I realize that there
have been situations where pleadings under the informal procedure have been
struck. However, a review of the reported decisions disclosed that in those
appeals one of the following conditions existed:
a) There were no grounds stated for the
appeal[2];
or,
b) It was an appeal of a nil assessment[3]; or,
c) The pleadings totally failed to meet the requirements of
subsection 18.15[4].
[12]
A motion to strike
pleadings will only be granted when it is “plain and obvious” that the notice
of appeal discloses no reasonable cause of action. The Supreme Court of Canada
stated the test at page 980 of Hunt v. Carey Canada Inc.[5]:
…assuming that the facts as stated in the statement of
claim can be proved, is it "plain and obvious" that the plaintiff's
statement of claim discloses no reasonable cause of action? As in England, if there is
a chance that the plaintiff might succeed, then the plaintiff should not be
"driven from the judgment seat". Neither the length and
complexity of the issues, the novelty of the cause of action, nor the potential
for the defendant to present a strong defence should prevent the plaintiff from
proceeding with his or her case. Only if the action is certain to fail
because it contains a radical defect ranking with the others listed in Rule
19(24) of the British Columbia Rules of Court should
the relevant portions of a plaintiff's statement of claim be struck out under
Rule 19(24)(a).
[13]
As well, Justice Bonner, as he
then was, in Morris v. R[6].,
summarized the principles that govern motions to strike pleadings:
7 Certain
principles emerge from the cases dealing with applications to strike out
pleadings or parts thereof.
1. Generally speaking, allegations
of fact in a statement of claim should be taken as being true or capable of
being proven. The reference for that is Unterreiner v. Wilson (1982), 40
O.R. (2d) 197, 142 D.L.R. (3d) 588 (H.C.), which was later affirmed by the
Court of Appeal ( (1983), 41 O.R. (2d) 472).
2. There is a heavy burden on the
attacking party to show that it is clear and obvious that the pleading is
scandalous, frivolous or vexatious, or that it is otherwise an abuse of the
process of the Court. The authority for that proposition is Erasmus v.
Canada, [1991] 1 C.T.C. 337, 91 D.T.C. 5415 (F.C.T.D.).
3.
"Embarrassing" means that the allegations are so irrelevant that to
allow them to stand would involve useless expense and would also prejudice the
trial of the action by involving the parties in a dispute that is wholly apart
from the issues. "In order that allegations should be struck out from the
defence upon that ground, it seems to me that their irrelevancy must be quite
clear and, so to speak, apparent at the first glance. It is not enough that on
considerable argument it may appear that they do not afford a defence."
That is a quotation from City of London v. Horner (1914), 111 L.T. Rep.
512 (C.A.) at 514, a decision of Pickford, L.J.
[14]
The issue raised by the Notice of
Appeal is whether the land on which the Appellant is situated is a reserve. In
the Notice of Appeal, counsel for the Appellant stated three alternative
reasons to support its position. It is these three reasons or alternatively
some portion of them that the Respondent seeks to have struck.
[15]
The reasons given by the Appellant
are:
a)
The land description on the
Certificate of Title establishes that the Appellant is situated on a reserve;
b)
The 1906 surrender of land to the
Federal Crown was invalid;
c)
Estoppel.
[16]
The Respondent’s main arguments
with respect to the motion were: (1) The Certificate of Title doesn’t say that
the land is vested in the Queen or held aside which it must assert if the land
is a reserve; (2) The court would have to make a declaration in order to
resolve reasons one and two as stated by the Appellant. This court does not
have the jurisdiction to make a declaration.
[17]
On reviewing all of the
Respondent’s arguments, I am of the opinion that these are arguments which
should properly be made at the hearing of the appeal not by way of an
interlocutory proceeding on a motion to strike. They deal with the substantive
issue before the court and require evidence.
[18]
The Respondent’s argument that the
court must make a declaration to decide the issue is incorrect. This will
require the court to make a finding of fact. See the decision in Jeddore v.
The Queen[7].
[19]
For all these reasons the motion
to strike is dismissed. Costs of the motion are in the discretion of the trial
judge.
Signed at Halifax, Nova Scotia, this 17th day of April 2009.
“V.A. Miller”
Email this Content