Canada v. B & J Farms, 2003 FCT 396

Date: 20030403

Docket: T-624-01

Citation: 2003 FCT 396

Ottawa, Ontario, this 3^rd day of April, 2003

Present:           THE HONOURABLE MR. JUSTICE LEMIEUX

BETWEEN:

                                                        HER MAJESTY THE QUEEN

                                                                                                                                                          Plaintiff

                                                                                 and

                                                                 B & J FARMS and

BRENDA BELCHEFF and

JACKIE BELCHEFF

                                                                                                                                                    Defendants

                                               REASONS FOR ORDER AND ORDER

[1]                 Pursuant to Rule 221(1)(a) and Rule 369 of the Federal Court Rules, 1998 (the "Rules"), the Plaintiff moves in writing to strike the Defendants' Statement of Defence on the grounds that it discloses no reasonable defence to the Plaintiff's action, which claims the Defendants are in debt to Her because they defaulted on a cash advance agreement made in 1994 with the Canadian Wheat Board ("CWB") pursuant to the Prairie Grain Advance Payments Act (the "Act").

[2]                 On December 3, 2002, Justice Rouleau ruled that the Defendants' Statement of Defence be accepted for filing nunc pro tunc notwithstanding the Defendants were out of time for the filing of that defence, a time which had been fixed by order of Prothonotary Lafrenière dated October 1, 2002.

[3]                 In their Statement of Defence, the Defendants generally deny all of the allegations in the Plaintiff's Statement of Claim and, in addition, claim the right of set-off for damages. They say they suffered damages because they were unlawfully denied export permits for the sale of barley in breach of some unspecified statutory and fiduciary duties owed to them by the Plaintiff or the CWB. As I understand it, barley sales on the export market went ahead in any event and the Defendants had to pay a fine.

[4]                 The case law is clear that a pleading will not be struck except in plain and obvious cases where the pleading is beyond doubt without merit.

[5]                 In their opposition to the Plaintiff's motion to strike, the Defendants' solicitors appear to take issue with the "calculation of indebtedness including interest over an extended period of time". The Defendants also seem to raise an issue concerning the individual Defendant's understanding or lack of understanding of the guarantee each was signing. These defences are not apparent from the Statement of Defence but a defect in pleadings should normally lead to an amendment of those pleadings rather than their being struck out entirely so as not to drive the Defendants from the seat of judgment.

[6]                 The Defendants raise another problem with the Plaintiff's motion to strike. They say that the Plaintiff, in support of Her motion to strike, improperly included in that motion record evidence of the Defendants' application for advance payment on their barley crop then in storage (and I point out that the entire application was not put into the Plaintiff's motion record), the individual Defendant's guarantee with supporting declaration. The Defendants say that the Plaintiff is not entitled to rely on this evidence because of subsection 221(2) of the Rules which states:

[7]                 On this point, the Plaintiff counters by relying upon jurisprudence in Saskatchewan to the effect a Court is entitled on a motion to strike to look at any document referred to in the pleadings.

[8]                 The Defendants point to their Rule 186 set-off plea as a valid defence. The Plaintiff's reply that the cases relied on by the Defendants in their set-off defence are distinguishable and argue that the position of the Defendants that they were unable to make deliveries to the CWB as a result of a failed attempt at a prohibited transaction does not reflect on any action by the CWB to base a claim for set-off and should not be entertained as a defence.

[9]                 I am not prepared to strike out the Defendants' Statement of Defence at this stage essentially for the reason the real opposition of the Defendants has yet to be clearly articulated and, in terms of the Plaintiff, material facts and the case law on set-off are not evident from the record so as to make beyond doubt without merit the Defendants' set-off defence.

[10]            Discoveries should proceed in the matter as set out in Prothonotary Lafrenière's Order of October 1, 2002 and, if those dates have gone by, he should be asked to set up another schedule.

[11]            Discoveries will hopefully clarify the position of the parties and, if so, it may be opportune for the Plaintiff to move for summary judgment under section 213 of the Rules.

ORDER

THIS COURT ORDERS that:

1.         The Plaintiff's motion to strike is dismissed with costs of this motion in the cause.

         "François Lemieux"                                                                                                   Judge

                                                    FEDERAL COURT OF CANADA

                                                                 TRIAL DIVISION

                              NAMES OF COUNSEL AND SOLICITORS OF RECORD

DOCKET:                                             T-624-01

STYLE OF CAUSE :                          HER MAJESTY THE QUEEN and

B & J FARMS and BRENDA BELCHEFF

and JACKIE BELCHEFF

MOTION DEALT WITH IN WRITING WITHOUT THE APPEARANCE OF THE PARTIES                        

REASONS FOR ORDER OF THE HONOURABLE MR. JUSTICE LEMIEUX

DATED :                                               April 3, 2003

WRITTEN REPRESENTATIONS BY :

Marlon Miller                                                                                  FOR THE PLAINTIFF

Department of Justice

E.F. Anthony Merchant, Q.C.                                                        FOR THE DEFENDANTS

SOLICITORS OF RECORD :

Morris Rosenberg                                                                           FOR PLAINTIFF

Deputy Attorney General of Canada

Saskatoon, Saskatchewan

E.F. Anthony Merchant, Q.C.                                                        FOR DEFENDANTS

Merchant Law Group

Regina, Saskatchewan