Aviation Roger Forgues Inc. v. Canada (Attorney General), 2001 FCT 196

                                                                                                                                            Date: 20010316

                                                                                                                                       Docket: T-1245-00

MONTRÉAL, QUEBEC, THE 16^TH DAY OF MARCH, 2001

Present:           Mr. RICHARD MORNEAU, PROTHONOTARY

Between:

AVIATION ROGER FORGUES INC.

and

ROGER FORGUES

Plaintiffs

AND

ATTORNEY GENERAL OF CANADA

and

MINISTER OF TRANSPORT OF CANADA

Defendants

ORDER

1.          The following paragraphs are struck from the plaintiffs' statement of claim:

(a)         121, 122, 123, 128, 130, 131, 175 and 179. In docket T-1239-00,the following allegations are struck: 133, 134, 135, 140, 142, 143, 187 and 191;

(b)         the paragraphs identified by the defendants in paragraph 9 (except in regard to paragraph 202 of the statement of claim (docket T-1239-00) and paragraph 190 (docket T-1245-00); paragraph 190, which shall be worded differently where it begins in order to reflect the striking out orders) and in paragraph 19 of their motion record filed September 13, 2000, in both proceedings.

2.          Within twenty (20) days after this decision has become final, the parties will submit a motion in writing under rules 369 and 384 accompanied by a draft schedule that will specify, inter alia, a deadline within which the plaintiffs will serve and file an amended statement of claim that will reflect the striking out orders and will provide further particulars concerning the facts or data intended to support their cause of action in disguised expropriation. The latter cause of action, which is the only one that is actionable (hence the retention of the allegations breaking down the damages) shall be against Her Majesty the Queen and not against the present defendants.

3.          This order is applicable mutatis mutandis to docket T-1239-00.

4.          The whole, costs to follow.

Richard Morneau

Prothonotary

Certified true translation

Suzanne M. Gauthier, LL.L., Trad. a.

Date: 20010316

                                            Docket: T-1245-00

Neutral Citation: 2001 FCT 196

Between:

AVIATION ROGER FORGUES INC.

and

ROGER FORGUES

Plaintiffs

AND

ATTORNEY GENERAL OF CANADA

and

MINISTER OF TRANSPORT OF CANADA

Defendants

REASONS FOR ORDER

RICHARD MORNEAU, PROTHONOTARY

[1]         This is a motion by the defendants in this proceeding as well as in docket T-1239-00 (proceedings that are for all intents and purposes similar) under paragraph 221(1)(a) of the Federal Court Rules, 1998 (the Rules) to strike out the plaintiffs' statement of claim in its entirety and dismiss their action on the ground that this statement of claim discloses no valid cause of action.

[2]         These reasons and the order accompanying them shall apply as well to docket T-1239-00.

State of the law on striking out

[3]         A pleading in an action may be struck out now under Rule 221.

[4]         This rule reads as follows:

[5]         This rule is the equivalent of Rule 419 of the old Federal Court Rules. The case law developed under that rule is therefore applicable to Rule 221.

[6]         Accordingly, under paragraph 221(1)(a) it must be plain and obvious (see [1980] 2 S.C.R. 735">Canada (A.G.) v. Inuit Tapirisat, [1980] 2 S.C.R. 735, at p. 740) that all or part of the statement of claim discloses no reasonable and valid cause of action.

Context

[7]         To summarize, the factual context appears to be as follows.

[8]         The plaintiffs, who were operating a float plane business aimed at a clientele almost exclusively composed of hunters and fishermen, began around 1984-85 to expand their operation by offering sightseeing flights from their base, located at Lac Saint-Augustin in the suburbs of Quebec City, to enable tourists (particularly Europeans) to tour Quebec City from the air aboard the plaintiffs' float planes.

[9]         At all relevant times until January 23, 1997, there is alleged to have been a relationship between the plaintiffs and the defendants that the plaintiffs characterize as contractual, by which the defendants encouraged, protected and promoted the growth and development of this aerial sightseeing business.

[10]       However, as a result of pressure from certain local mayors, the Minister of Transport announced on January 23, 1997 that he would be prohibiting this type of aerial sightseeing flights from Lac Saint-Augustin effective January 1, 1998.

[11]       On January 1, 1998, through SOR/98-20, section 105.01 of the Canadian Aviation Regulations, SOR/96-433 (hereinafter the C.A.R.) came into force. This provision reads as follows:

105.01 (1) In this section, "aerial sightseeing flight" means a flight carried out as part of a sightseeing operation or any other commercial flight in an aircraft conducted for the purpose of sightseeing from the air.

(2) No person shall conduct an aerial sightseeing flight, or any portion of an aerial sightseeing flight, in the control zone of the Québec/Jean Lesage International Airport unless the flight commences at that airport.

[12]       According to the plaintiffs' statement of claim, this section 105.01 had the effect of completely eliminating aerial sightseeing flights by aircraft to or from Lac Saint-Augustin. Thus section 105.01 eliminated the plaintiffs' entire aerial sightseeing business since that business accounted for about 95% of their activities and sales.

[13]       That is why the plaintiffs claim to have suffered damages of $3,376,765 for which they are asking to be compensated by the defendants for "[Translation] acts or omissions, errors, complicity, carelessness, promises and guarantees, bad faith, unlawful acts and unlawful appropriation". (See, for example, paragraph 190 of the statement of claim.)

Analysis

[14]       The parties appear to agree that the statement of claim is based on four (4) causes of action. The plaintiffs present them as follows:

I.          contractual liability;

II.          extracontractual liability;

III.        disguised expropriation without compensation;

IV.         breach of the Canadian Bill of Rights and the Canadian Charter of Rights and Freedoms.

[15]       I intend to discuss these causes in the reverse order of their presentation.

I.          Breach of the Canadian Bill of Rights and the Canadian Charter of Rights and Freedoms

[16]       It seems clear to me that the facts in this case in no way engage sections 1(b) of the Canadian Bill of Rights and 15 of the Canadian Charter of Rights and Freedoms. In view of the extremely large number of allegations contained in the statement of claim, I refer to the categorization of the allegations performed by the defendants in their motion record.

[17]       Consequently, the allegations numbered as follows will be struck from the statement of claim: 121, 122, 123, 128, 130, 131, 175 and 179. In docket T-1239-00, it is the following allegations that will be struck out: 133, 134, 135, 140, 142, 143, 187 and 191.

II.          Disguised expropriation without compensation

[18]       As to this cause of action, it does not seem to me at this point that it is clear and obvious that it is not valid (although, to be complete in regard to these facts or data, the plaintiffs' statement of claim will have to be amended).

[19]       In fact, it seems to me that the statement of claim (see, inter alia, paragraphs 173 and 188) ensures that the following dynamic expressed by the plaintiffs in paragraphs 30 and 31 of their respondent's motion record, concerning the dispossession and appropriation necessary to support a disguised expropriation likely to justify monetary compensation, cannot be clearly ruled out:

[Translation]

By prohibiting all aerial sightseeing to and from Lac St-Augustin, which is the only lake in the greater Quebec City area with an airport certificate, that is, the only lake from which hydroplanes, planes on floats, can be operated commercially, and by allowing such aerial sightseeing to be conducted over a distance of a few kilometres, at the Jean Lesage International Airport, by identical planes but on wheels, there has been a dispossession and appropriation by others by virtue of Government intervention.

The respondents' business of aerial sightseeing by float planes has been expropriated and its entire clientele and goodwill built up over the years has been appropriated by the applicants themselves at the Jean Lesage International Airport they operate and by those owner-operators or lessees of wheeled planes who are carrying on their activities to and from that airport.

[20]       For a taxpayer to be compensable, within the meaning of [1979] 1 S.C.R. 101">Manitoba Fisheries Ltd. v. The Queen, [1979] 1 S.C.R. 101 and R. (B.C.) v. Tener, [1985] 1 S.C.R. 533, he must first be dispossessed. It is plausible in this case to argue that the plaintiffs have been dispossessed of their business, their clientele, by the effect of section 105.01 C.A.R. Secondly, there must be an appropriation, and therefore pre-emption, by the dispossessing authority. As paragraph 31 of the plaintiffs' motion record indicates, it cannot be excluded at this stage of the proceedings that this logic was present, thus that there was an appropriation of the clientele by the Jean Lesage Airport or by some wheeled aircraft operators.

[21]       Even if it were arguable by the defendants that they gained nothing owing to the privatization of the airports, it does not seem clear and obvious to me at this point that the appropriation by third parties thanks to the intervention of the Governor in Council is a theory that is excluded by Manitoba Fisheries and Tener. Moreover, any privatization and the consequences thereof were not (and could not be, in the context of this motion) put in evidence by the defendants.

[22]       As mentioned in paragraph [18], supra, the plaintiffs will, in the context of producing an amended statement of claim that reflects the striking out orders, have to provide further particulars in this regard.

[23]       When all is said and done, this cause of action may remain in the statement of claim because it does not appear to me that it must obviously be struck out.

III.        Contractual and extracontractual liability

[24]       I intend to deal with these two causes of action together since it seems to me they are linked in this case through their treatment by the plaintiffs.

[25]       It is obvious that a complete reading of the plaintiffs' statement of claim leads to the central conclusion that it is the enactment of section 105.01 on January 1, 1998 that, in the plaintiffs' eyes, constitutes the source of all the errors, contractual or otherwise, that they cite. Now, the cases are clear that the establishment of regulations is a policy decision in nature for which the Crown or one of its ministers cannot be held liable. See, to this effect, the decision of the Superior Court of Ontario in Ontario Black Bear/Ontario Sportsmen & Resource Users Assn. v. Ontario (2000), 19 Admin. L.R. (3d) 29. In that case the Court allowed some motions to strike out in opposition to actions taken by some outfitters following the amendment of a regulation that covered the hunting of black bears, an amendment the effect of which was to prohibit the spring hunt for black bears and thus caused serious damage to the plaintiffs' businesses.

[26]       In that decision, which raises a number of points similar to the dynamic that concerns us, the Court made a number of comments that are worth reproducing.

[27]       Citing, inter alia, Gustavson Drilling (1964) Ltd. v. Minister of National Revenue (1975), [1977] 1 S.C.R. 271">[1977] 1 S.C.R. 271 (S.C.C.) at pages 282-93; Cosyns v. Canada (Attorney General) (1992), 7 O.R. (3d) 641 (Ont. Div. Ct.) at pages 655-656; A & L Investments Ltd. v. Ontario (Minister of Housing) (1997), 36 O.R. (3d) 127 (Ont. C.A.) at page 135; and Reclamation Systems Inc. v. Ontario (1996), 27 O.R. (3d) 419 (Ont. Gen. Div.), the Court stated the following at pages 41 to 43 in regard to the non-existence of a cause of action for the enactment of regulations that entail a change in law:

The law is clear that no one has a vested right in the continuance of a law or a cause of action against the government or the Crown based upon the passing of a valid statute or regulation which deprives the plaintiff of a benefit he or she had before the change in the law and which does not constitute an expropriation by government. ...

It is fundamental to a liberal democracy that the government must be free to change its policy and change legislation to meet changing societal needs: Reclamation Systems at p. 448.

...

Policy or planning decisions by governments or municipal councils, being those based on financial, economic, social or political factors, and generally made by high ranking government officials, are immune from private claims in tort even if the decisions are ultimately held by a court to be invalid. Governments should not be restricted by the courts in making policy decisions. Operational decisions, being administrative decisions, adjudicative decrees or decisions implementing policy and generally made by lower ranking government officials, do not carry such immunity and may be the subject of tort liability (...)

The Plaintiff's statements of claim allege that the decision to cancel the spring bear hunt was made for political reasons, namely to reduce the political opposition at the next election and so improve the government's chances of electoral success. It was a decision made at the highest level of government. It was inherently a policy decision in nature, there being no policy which it might be said to implement. Accordingly O. Reg. 88/89 implementing the policy decision cannot be the foundation for an action in tort.

Even if the regulation is ultimately held to be invalid because it was passed in bad faith, or for improper reasons or as being technically invalid, it cannot found a cause of action for conspiracy inducing breach of contract, detrimental reliance, negligence, or misfeasance of public office.

The plaintiff suggests in its statement of claim that the Premier and Minister acted for an improper purpose, namely political and electoral concerns, to reduce the campaigning threatened by the Schads against the government's candidates in the upcoming provincial election with a view to persuading voters to vote against the government's candidates. In reacting to such threats the government was doing nothing more than assessing public opinion, or its potential, and reacting to that assessment. Governments frequently amend laws for these reasons. These reasons are the political reasons to which the Supreme Court of Canada has referred in Welbridge and Just as justifying, in whole or in part, policy decisions which the court has said should be immune from tort liability. As Chief Justice Dickson said in [1983] 1 S.C.R. 106">Thorne's Hardware Ltd. v. R., [1983] 1 S.C.R. 106 (S.C.C.) at p. 113:

It is neither our duty nor our right to investigate the motives which impelled the federal Cabinet to pass the Order in Council...

and at p. 115

... the government's reasons for expanding the harbour are in the end unknown. Governments do not publish reasons for their decisions; governments may be moved by any number of political, economic, social or partisan considerations.

The political history of Canada is replete with government decisions to do, or to refrain from doing, some act within its powers for purely or substantially political reasons. It is not the business of the courts to interfere in such decisions, subject to passing on their validity based on compliance with the Constitution Act and constitutional conventions. The government is answerable directly to the voters for politically motivated decisions. The voters render their decision at the ballot box.

The plaintiff has cited cases permitting claims against Ministers of the Crown for damages based on malicious prosecution, for false imprisonment and for abuse of process: McTaggart v. Ontario (1991), 6 O.R. (3d) 456 (Ont. Gen. Div.), citing Nelles v. Ontario, [1989] 2 S.C.R. 170 (S.C.C.), Temilini v. Ontario Provincial Police Commissioner (1990), 73 O.R. (2d) 664 (Ont. C.A.). The allegation of malice is essentially a deliberate and improper purpose in the use of the office of a minister. However the law is clear that enacting legislation for a political purpose is not improper: see Dickson C.J.C. in Thorne's Hardware, above. Further, a prosecution could fairly be said to be an administrative rather than a policy decision and so not subject to immunity: see Cory J. in Just at p. 1242 above.

[My underlining]

[28]       As to the plaintiffs' expectations that their relations with the defendants in future would be based on the past state of those so-called contractual relations, it is appropriate to adopt the following remarks by the Court, at page 45:

It is clear from Gustavson Drilling, Cosyns, A & L Investments and Reclamation Systems, cited above, as enunciated in Gustavson Drilling at pp. 282-283:

No one has a vested right of continuance of the law as it stood in the past. In tax law it is imperative that legislation conform to changing social needs and governmental policy. A taxpayer may plan his financial affairs in reliance on the tax laws remaining the same; he takes the risk that the legislation may be changed.

The doctrine of legitimate expectations does not apply to a body exercising purely legislative functions including a purely ministerial decision based on broad grounds of public policy. A minister cannot fetter his or her own freedom, or that of Parliament or the Legislative Assembly, to change laws.

A government and a legislature must be left free to change policy to reflect changing social needs; to permit otherwise in the name of legitimate expectations would paralyze parliament, the legislature and ministerial powers to respond to changing social circumstances: see Reference re Canada Assistance Plan (Canada), [1991] 2 S.C.R. 525 (S.C.C.) at pp. 557-560.

[My underlining]

[29]       Moreover, it is also clear from the cases that the establishment of regulations by the Governor in Council is an act of a "federal board, commission or other tribunal" within the meaning of the Federal Court Act, R.S.C. 1985, c. F-7. (See on this point Saskatchewan Wheat Pool v. Canada (1993), 17 Admin. L.R. (2d) 243, at p. 246.)

[30]       As the Court held in the latter case, at page 247:

It would appear from these provisions that in challenging a decision or order of the Governor in Council made pursuant to statutory authority, the correct and only procedure is to proceed by way of originating notice under s. 18.1 of the Federal Court Act as was originally done here.

[31]       An application for judicial review is the appropriate procedure even if one is arguing that a decision of a federal board, commission or other tribunal is in the nature of a tort of misfeasance in public office. (See to this effect paragraphs 41 et seq. of Radil Bros. Fishing Co. Ltd. v. The Queen et al., an unreported decision of McKeown J. of November 21, 2000 in docket T-382-99, a decision appealed on December 13, 2000, docket A-786-00.)

[32]       However, in the case at bar the plaintiffs have not made such an application for review in this Court.

[33]       Consequently, the following paragraphs of the statement of claim will be struck out: the paragraphs identified by the defendants in paragraph 9 (except in regard to paragraph 202 of the statement of claim (docket T-1239-00) and paragraph 190 (docket T-1245-00); paragraph 190, which shall be worded differently where it begins in order to reflect the striking out orders) and in paragraph 19 of their motion record filed September 13, 2000, in both proceedings.

[34]       It should be noted in regard to paragraphs 202 (T-1239-00) and 190 (T-1245-00), that since it is difficult to assess which head of damages pertains to which cause of action, none of these heads should be struck out at this stage of the proceedings.

[35]       Within twenty (20) days after this decision has become final, the parties will submit a motion in writing under rules 369 and 384 accompanied by a draft schedule that will specify, inter alia, a deadline within which the plaintiffs will serve and file an amended statement of claim that will reflect the striking out orders and will provide further particulars concerning the facts or data intended to support their cause of action in disguised expropriation. The latter cause of action, which is the only one that is actionable (hence the retention of the allegations breaking down the damages) shall be against Her Majesty the Queen and not against the present defendants.

[36]       The whole, costs to follow.

Richard Morneau

Prothonotary

Montréal, Quebec

March 16, 2001

Certified true translation

Suzanne M. Gauthier, LL.L., Trad. a.

Federal Court of Canada

Trial Division

Date: 20010316

                                                         Docket: T-1245-00

Between:

AVIATION ROGER FORGUES INC.

and

ROGER FORGUES

Plaintiffs

AND

ATTORNEY GENERAL OF CANADA

and

MINISTER OF TRANSPORT OF CANADA

Defendants

REASONS FOR ORDER

FEDERAL COURT OF CANADA

NAMES OF COUNSEL AND SOLICITORS OF RECORD

DOCKET NO:                          T-1245-00       

STYLE:                                       AVIATION ROGER FORGUES INC.

and

ROGER FORGUES

Plaintiffs

AND

ATTORNEY GENERAL OF CANADA

and

MINISTER OF TRANSPORT OF CANADA

Defendants

PLACE OF HEARING:            Québec, Quebec

DATE OF HEARING: February 28, 2001

REASONS FOR ORDER OF Mr. RICHARD MORNEAU, PROTHONOTARY

DATED:                                     March 16, 2001

APPEARANCES:

Pierre G. Gingras                                                                            for the plaintiffs

Rosemarie Millar                                                                            for the defendants

Francis Archambault

SOLICITORS OF RECORD:

Des Rivières Vermette                                                        for the plaintiffs

(Pierre G. Gingras)

Québec, Quebec

Morris Rosenberg                                                                           for the defendants

Deputy Attorney General of Canada