Narsimhalu v. Air Canada, 2003 FC 945

Date: 20030801

Docket: T-2148-01

Citation: 2003 FC 945

OTTAWA, ONTARIO, THIS 1^st DAY OF AUGUST, 2003

Present:           THE HONOURABLE MR. JUSTICE MARTINEAU                                 

BETWEEN:

                                                 DR. PUSHPALA NARSIMHALU and

MRS. LALITHA NARSIMHALU

                                                                                                                                                        Plaintiffs

                                                                                 and

                                                                 AIR CANADA and

SINGAPORE AIRLINES LTD.

                                                                                                                                                    Defendants

                                               REASONS FOR ORDER AND ORDER

[1]                 The Plaintiffs are making a motion for reconsideration pursuant to rule 397 of the Federal Court Rules, 1998, SOR/98-196 (the "Rules") of the order of this Court dated April 17, 2003 wherein I dismissed the statement of claim, in the present file, for delay.

Background

[2]                 The plaintiffs filed a Statement of Claim on December 6, 2001. The defendant, Singapore Airlines Ltd., filed a Statement of Defence on January 9, 2002. The defendant, Air Canada, filed a Statement of Defence on January 14, 2002 and an amended Statement of Defence on January 23, 2002.

[3]                 A Notice of Status Review was issued on February 24, 2003, requiring written submissions from the plaintiffs on or before March 17, 2003, as to why this action should not be dismissed for delay.

[4]                 On February 28, 2003, counsel for the plaintiffs sent a letter to the Federal Court of Canada signed by Badrul H. Chrishti purportedly on behalf of Zia H. Chishti seeking an extension until April 25, 2003 to provide written submissions.

[5]                 On March 17, 2003, the defendants filed a joint written submission responding to the Notice of Status Review.

[6]                 On April 17, 2003, I ordered that the action be dismissed for delay (the "impugned order").

[7]                 On April 25, 2003, the plaintiffs filed a motion pursuant to rule 397(1) of the Rules requesting reconsideration of the impugned order. On May 9, 2003, the defendants filed a joint response to the plaintiffs' motion. In the motion, counsel for the plaintiffs contends that I should reconsider the impugned order on the ground that it will result in great prejudice and injury due to unfortunate and unforeseen serious illness on his part. Essentially, he is raising an argument based upon the interests of justice, on compassionate grounds, which arises from the inherent jurisdiction of the Court.

[8]                 In the meantime, on April 1, 2003, Farley J. of the Ontario Superior Court of Justice granted an Initial Order for protection of the defendant, Air Canada, pursuant to the Companies' Creditors Arrangement Act, R.S.C. 1985, c. C-36 (the "CCAA") and appointed Ernst & Young Inc. as Monitor. The Initial Order provided for an interim stay of proceedings against the defendant, Air Canada or any of its present or future property, rights, assets or undertakings wheresoever located. The designated Monitor filed the Initial Order together with a Notice to Suspend Proceedings with the Federal Court of Canada on May 13, 2003.

[9]                 On May 27, 2003, I released a Direction which reads as follows:

The registry is directed to accept the filing of the notice to suspend proceedings and the attachment thereto, received on May 13, 2003 by the registry of Charlottetown, and transmit a copy of same to counsel in court file T-2148-01.

Counsel are directed to comment on the effects of said notice and the attached stay order of Farley J. dated April 1^st, 2003, if any, on the proceedings before this Court, and on the order made by this Court on April 17, 2003 dismissing the statement of claim for delay and for which the present request for reconsideration is made on behalf of the plaintiffs. Answers shall be given in writing and shall be served and filed on or before June 6, 2003.

[10]            Following this Direction, the plaintiffs filed comments on June 2, 2003, and the defendants filed a joint response on June 6, 2003 exposing their view with respect to the Initial Order of Farley J. which will be discussed further below.

Reconsideration

[11]            First, it is important to look at rule 397 of the Rules to determine the appropriate question in a Motion for reconsideration. This provision reads as follows:

[12]            It has also been established that reconsideration of a final decision is only allowed in the narrowest of circumstances. In Metodieva v. Canada (Minister of Employment and Immigration) (1991), 132 N.R. 38 ("Metodieva") and Rostamian v. Canada (Minister of Employment and Immigration) (1991), 129 N.R. 394, the Federal Court of Appeal concluded that it is essential to respect the finality of judgments and the Court should not set aside a decision lightly.

[13]            Specifically, the Court in Metodieva, supra stated that:

I think it is important to point out that the Court does not have jurisdiction to decide the matter again, and that this is so whatever the reason for dismissing the first application for leave. In the case at bar, the order of December 18, 1990 read as follows: "The application, being unsupported by affidavit or other material, is dismissed", and counsel for the applicant used this wording as a basis for telling his client " that as she is a foreigner in Canada, she cannot be a victim of procedural error by her counsel". That statement seems to me to be incorrect in three ways. First, the fact that an application was dismissed for a procedural defect does not in any way change the fact that the order made is final and not subject to be reconsidered, apart from the allowable cases. Second, the absence of an affidavit is a substantive defect: Rule 9(1) of the Federal Court Immigration Rules makes the filing of an affidavit an integral part of the application and an application for leave not supported by an affidavit is incomplete and cannot be allowed by the Court. Thirdly, the fact that the applicant is "a foreigner in Canada" does not confer on her any privilege to be ignorant of Canadian law or any special status in respect of errors which may be made by her or by her counsel.

[14]            The impugned order under review here set out the elements that need to be considered when analysing a Notice of Status Review. The Court needs to analyse two questions:

1.         Do the reasons why the case has not moved forward justify the delay?

2.         What is the nature of the measures the party proposes to take to move the case forward?

[15]            In that instance I concluded that:

...Declarations of intent and desire to proceed are not enough. The plaintiff is responsible for carriage of the case and the plaintiff bears the onus of explaining the delay in prosecuting the action. The party's written submissions are given significant weight and the delaying party must present the Court with concrete and positive steps to advance the case. See Baroud v. Canada (Minister of Citizenship and Immigration) (1998), 160 F.T.R. 91 (T.D.); Grenier v. Canada, [2001] F.C.J. No. 147 (F.C.A.); Bell v. Bell Estate (2000), 187 F.T.R. 64 (Proth.); and Importations Alimentaires Stella Inc. v. National Cheese Co. (2000), 2000 CarswellNat 2676, 273 N.R. 392, 10 C.P.R. (4^th) 392 (F.C.A.).

...

...the plaintiffs filed a statement of claim on December 6, 2001. The defendant, Singapore Airlines Ltd., filed a statement of defence on January 14, 2002 and an amended statement of defence on January 23, 2002. Neither of the defendants have had any communication whatsoever with the plaintiffs since the date the statement of claim was filed. The plaintiffs' solicitor has not taken any steps to move this matter forward prior to leaving the country. Plaintiffs' counsel has been informed of the situation and has chosen not to act. The request, dated February 28, 2003, for an extension to April 25, 2003 is a further delay without any indication of a plan to move forward. Neither of the defendants have consented to an extension of time to file a response to the notice of status review. To date, the plaintiffs have not filed any further documentation with the Court nor have they requested a pre-trial conference. Since the announced return to Canada of the plaintiffs' counsel, no steps have been taken by him to regularize the situation. The request for an extension of time does not comply with the Rules, is not substantiated by an affidavit and fails to satisfy the requirements established by the jurisprudence of this Court. Accordingly, I am not satisfied that this action should continue.

[16]            In his submissions, counsel for the plaintiffs explains that he fell in the bathroom in or about November 2000 and injured three vertebras in his neck. Initially, there appeared to be no harm done, but eventually on or about March 2002, he suffered a stroke paralysing 80% of his right hand and leg and 30% of his left hand and leg, making him unable to walk, and use his hands. As a result of this stroke, the law office which is a single lawyer's office, stopped functioning. His doctor advised that he should move to a warmer climate, because of the severity of the Canadian winter. Accordingly, in November 2002, he moved to Karachi to be looked after by his brother and sisters there. The plaintiffs' counsel returned to Canada on April 9, 2003.

[17]            However, as emphasised by the defendants, and evidenced in the affidavit of Colleen Atkinson sworn on May 6, 2003, counsel for the plaintiffs made appearances in court during the period he allegedly was unable to proceed with the case, between January 23, 2002 and April 17, 2003. Among other cases, three decisions of the Supreme Court of Prince Edward Island have been filed to show that counsel for the plaintiffs appeared in court and argued lengthy trials which would have been unbearable to attend according to his submissions with respect to his illness: see Prince Edward Island (Director of Child Welfare) v. S.P.L. (2002), 218 Nfld. & P.E.I.R. 197; R. v. Doyle, [2002] P.E.I.J. No. 90; and R. v. Poulin (2002), 218 Nfld. & P.E.I.R. 68. These cases demonstrate that counsel for the plaintiffs appeared in court between May 8 and October 21, 2002. Therefore, I cannot accept that his illness prevented him from meeting the deadlines in this case.

[18]            In light of the reasons exposed above, and even if I consider the explanations now given by plaintiffs' counsel, the plaintiffs did not satisfy me that while making the above order there was a matter that should have been dealt with has been overlooked or accidentally omitted.

Effect of Initial Order

[19]            In the case at bar, the defendants submit that neither the Initial Order of Farley J. dated April 1, 2003, nor the Notice to Suspend Proceedings is effective as against the defendant, Singapore Airlines Ltd. Therefore, the impugned order dated April 17, 2003, dismissing the action for delay would be valid as against this defendant. Both defendants argue that the impugned order is valid considering that the submissions in answer to the Notice of Status Review were filed on March 17, 2003 before the Initial Order of Farley J. At that point, no further action had been taken in the proceedings and the parties were awaiting the decision of this Court. The defendants argue that the Initial Order of Farley J. does not fall within the meaning of proceedings as contemplated by section 11 of the CCAA.

[20]            The plaintiffs on the other hand contend that the impugned order is invalid considering that the Initial Order by Farley J. stays all proceedings against or in respect of Air Canada and renders the impugned order infructuous. Therefore, the plaintiffs contend that the order should be deemed as if it had not been passed and their Statement of Claim should remain in force as it was on April 1, 2003.

[21]            It is essential to first read the applicable paragraph of the Initial Order of Farley J. which states as follows:

70.    THIS COURT REQUESTS the aid and recognition of any court or any judicial, regulatory or administrative body in any province or territory of Canada (including the assistance of any court in Canada pursuant to Section 17 of the CCAA) and the Federal court of Canada and any judicial, regulatory or administrative tribunal or other court constituted pursuant to the Parliament of Canada or the legislature of any province and any court or any judicial, regulatory or administrative body of the United States of America and the states or other subdivisions of the United States and any other nation or state to act in aid of and to be complementary to this Court in carrying out the terms of this order.

[22]            This Court analysed the consequences of the Initial Order of Farley J. in a recent decision by Hugessen J. In Always Travel Inc. et al. v. Air Canada et al., 2003 FCT 707, [2003] F.C.J. No. 933 ("Always Travel") he stated clearly at paragraphs 5, 9, 12 and 18 that:

First, let me say that in my view, an order made under sections 11.3 and 11.4 of the CCAA does not have the effect of automatically staying proceedings in this Court. More particularly, the order made by Justice Farley on April 1st, 2003 and subsequently extended, does not have that effect. I draw that conclusion primarily from a reading of the CCAA, sections 11.3 and 11.4 and section 16 and from a reading of paragraphs 3 and 70 of Justice Farley's order in the case of Air Canada and from a reading of the equivalent paragraphs of his recognition order in the case of United Airlines.

...

It seems to me to be quite clear from the statutory provisions that Parliament did not intend that orders made by the superior courts of the provinces in the exercise of their CCAA jurisdiction should extend so as to oblige this Court to suspend its proceedings in any matter properly belonging to its jurisdiction. There are examples, and section 16 of the CCAA is one of them, where Parliament has given specific jurisdiction to one superior court to stay proceedings in another superior court. In my view, such a disposition requires express language.

...

That is not the end of the matter. If a party to proceedings in this Court thinks that a stay should not be granted in comity and in aid of a provincial superior court order, it is at liberty to oppose the stay or, if the stay is granted, apply to this Court to have it lifted. The plaintiffs would thus have been free to bring evidence today and make representations to me that for some reasons or other these proceedings ought not to be stayed, but matters did not develop in that way. Let me be quite clear. The burden is on a person seeking in this Court to avoid the consequences of this Court acting in aid of a provincial superior court exercising its jurisdiction under the CCAA. The burden is on that person to show this Court that it should not act in aid. Nothing that I say or do today forecloses the plaintiffs from making an application if they so wish. I say that simply because in the way in which these proceedings developed, it was agreed between counsel and the Court that we should deal with this matter today strictly on issues of law, matters of fact being left to another day, if necessary.

...

Plaintiffs have leave, if they so desire, to move this Court to lift the stay order. It has been given without evidence and solely on the basis of this Court's duty to act in aid of the Ontario Superior Court of Justice. If plaintiffs, upon reflection, decide that this is what they want to do, they should take an appointment with the registrar and we would conduct a quick telephone conference to set a time table and we would all meet again.

(My emphasis)

[23]            Section 16 of the CCAA mentioned in the above extract reads as follows:

[24]            Other relevant provisions of the Act such as sections 2 and 17 read as follows:

[25]            These provisions establish clearly that the Federal Court is not included in the term "court" and is not bound by a stay order made by "the court in any province" in accordance with the CCAA. That said, I share Hugessen J.'s view that cooperation between superior courts is "essential", and that in this respect, "the proper attitude of respectful cooperation ... will require that, as a matter of course, in virtually every case where an order is given by a provincial superior court in the exercise of its CCAA jurisdiction, and that orders requests this Court's aid, this Court will give such aid on proper application being made" (Always Travel, supra, at paras. 10 and 11). However, the current situation is quite different. Here, the Statement of Claim was dismissed before the filing of the Notice to Suspend Proceedings (If I am to assume that said notice is a "proper application being made" by the Monitor). Granting the present Motion for Reconsideration presented by the plaintiffs who seek to take advantage of the Initial Order directly goes against the purpose behind the Initial Order which was made with the objective to allow "a structured environment in which [Air Canada] can attempt to reorganize and go forward with its business in possession of its assets": see Always Travel, supra, at para. 14.

Conclusion

[26]            In the case at bar, the plaintiffs have not satisfied me that while making the impugned order there was a matter that should have been dealt with that has been overlooked or accidentally omitted.    Supposing I should have dealt with the Initial Order of Farley J., which is not the case, it should have at the least been brought to the attention of this Court by the plaintiffs who had the burden of justifying the delay and providing a plan to move the case forward which they failed to do at the time of the impugned decision. Moreover, they did not provide any reasons why I should be bound by the Initial Order of Farley J. Accordingly, I will dismiss the present request for reconsideration. The impugned order was a final one and should be changed in the narrowest of circumstances.

                                                  ORDER

THIS COURT ORDERS that the Motion for Reconsideration of the Order of this Court dated April 17, 2003 dismissing the action for delay, is dismissed.

                                           __________________________________

                                                                                                           Judge                                

                                    FEDERAL COURT OF CANADA

             NAMES OF COUNSEL AND SOLICITORS OF RECORD

DOCKET:                                      T-2148-01

STYLE OF CAUSE:                     DR. PUSHPALA NARSIMHALU AND OTHERS v. AIR CANADA AND OTHERS

MOTION DEALT WITH IN WRITING WITHOUT THE APPEARANCE OF

PARTIES

REASONS FOR ORDER AND ORDER OF THE HONOURABLE MR. JUSTICE MARTINEAU    

DATED:                                        AUGUST 1, 2003

WRITTEN REPRESENTATIONS BY:

Ms. Zia H. Chisti                                                                      FOR PLAINTIFFS

Mr. Bruce M. Gordon                                                             FOR DEFENDANT -

SINGAPORE AIRLINES LTD.

Mr. Robert MacGregor                                                           FOR DEFENDANT -

AIR CANADA

SOLICITORS OF RECORD:

Zia H. Chisti Law Office                                                          FOR PLAINTIFFS

Charlottetown, P.E.I.

Norton Steward                                                                       FOR DEFENDANT -

Vancouver, British Columbia                                                   SINGAPORE AIRLINES LTD.

Patterson Palmer                                                                      FOR DEFENDANT

Charlottetown, P.E.I.                                                               AIR CANADA