Date: 20070612
Docket: T-1427-06
Citation: 2007
FC 624
Ottawa, Ontario, June 12, 2007
PRESENT: The Honourable Mr. Justice Hugessen
BETWEEN:
JAZZ
AIR LP
Applicant
and
TORONTO PORT AUTHORITY
Respondent
and
CITY CENTRE AVIATION LTD., REGCO HOLDINGS
INC., PORTER
AIRLINES INC., and ROBERT J. DELUCE
Interveners
REASONS FOR ORDER AND ORDER
INTRODUCTION
[1]
This is a motion pursuant to Rule 51 appealing the case
management prothonotary's order, dated February 1, 2007, in which she struck
out the applicant’s judicial review application on the ground of abuse of
process. She concluded it was an abuse of process for the applicant to commence
a judicial review that was based on the same facts and issues as raised by an
earlier judicial review application that the applicant had discontinued,
particularly because commencing a new application was an attempt to evade the
consequences of a procedural case management order made in the discontinued
application.
FACTS
[2]
The applicant brought an application on August 8, 2006, for
judicial review of what it claims was a final decision of the Toronto Port
Authority (TPA) of July 26, 2006. In that decision, the applicant alleges, the
respondent set out with finality the terms under which Jazz Air would be
permitted to operate at the Toronto Island Airport (TIA), also sometimes
referred to as the Toronto City Centre Airport (TCCA), and refused
consent to a sublease for premises at the airport. In brief, the applicant
argues that the respondent acted contrary to its statutory authority and in
excess of its jurisdiction by discriminatorily restricting Jazz Air’s access
to, and use of, the TIA.
[3]
The dispute extends back to the beginning of 2006. On January 31,
2006, Jazz Air received a notice of termination from its landlord at the TIA,
the intervener City Centre Aviation Ltd., terminating its leased spot. The
applicant tried to find alternative space and approached the respondent for
assistance. The respondent raised the issue of the applicant entering into a
new Commercial Carrier Operating Agreement (CCOA) and in February 2006 proposed
a new CCOA that Jazz Air did not agree with.
[4]
At the same time, the interveners announced their intention to
begin operating Porter Airlines out of the TIA.
[5]
The applicant first commenced an action in the Ontario Superior
Court on February 23, 2006, against the respondent and the interveners. The
litigation is ongoing and in it the applicant seeks damages arising from the
termination of its lease.
[6]
The applicant commenced its first judicial review application on
March 9, 2006. The same parties were involved. On motion by the interveners,
June 6, 2006, the prothonotary determined that the applicant’s March 2006
application should be converted into an action. Essentially, the basis for her
determination was that Jazz’s judicial review application challenged multiple
decisions over many years and raised issues of conspiracy and breaches of the Competition
Act, R.S.C., 1985, c. C-34 that could only be determined by way of viva
voce evidence. In addition, she held that the applicant’s judicial review
application was actually a complex commercial dispute. That decision was upheld
on appeal on July 20, 2006, by Justice Rouleau. No further appeal was taken
from his judgment.
[7]
During the appeal before Justice Rouleau, the applicant expressly
sought by way of alternative relief an order allowing it to file an amended
application for judicial review nunc pro tunc. The proposed amended
application was slightly narrower than the March 2006 application and removed
references to the conspiracy claims and to the interveners. Justice Rouleau
refused to deal with this request and that decision was neither appealed to the
Federal Court of Appeal nor was it renewed before the case management
prothonotary.
[8]
Meanwhile, negotiations continued between the applicant and
respondent from March to July 2006. At the applicant's insistence, these were
specified to be on a “without prejudice” basis.
[9]
In July 2006 the applicant negotiated another leasing arrangement
with Stolport Corporation (Stolport). On July 6, the applicant announced
publicly that it would resume flights out of the TIA. On July 26, 2006, the
respondent again communicated the refusal to allow Jazz Air to resume its
operations at the TIA and communicated to Stolport that the leasing arrangement
was contingent upon a concluded CCOA.
[10]
On August 8, 2006, at the very time when it was due to file a
statement of claim converting its first application into an action, the
applicant discontinued the March 2006 application. On the same day it commenced
the August 2006 application, naming only the TPA. The new application was
somewhat narrower than the old one in that it did not name the interveners and
did not raise the allegations of conspiracy or breaches of the Competition
Act.
THE DECISION OF THE PROTHONOTARY
[11]
The prothonotary concluded that the reason the applicant
commenced the second application was to circumvent her case management order of
June 6, 2006, where she had ordered that the application be converted to an
action. She also considered that a party may discontinue a proceeding and
commence a new one involving the same subject matter where there has been no
prior determination on the merits, but it may be prevented from doing so where
a Court finds the actions constitute abuse. On the law, the prothonotary noted
that in Sauve v. Canada, 2002 FCT 721, it was held that a contravention
of a case management order could constitute an abuse of process.
[12]
She also concluded that even though the applicant dropped some of
its allegations, the revised application still involved litigation over a
commercial dispute between Jazz Air and the TPA. She further concluded that the
July 26, 2006, letter did not constitute a new decision, as it was merely a
continuation of decisions that were made in February 2006 and were the subject
of the March 2006 application. The prothonotary noted that the revised
application was similar to the amendments to the March 2006 application which
the applicant had proposed to Justice Rouleau. Thus, there was no substantial
difference between the two applications.
[13]
With respect to the evidence, the prothonotary noted that the
proposed CCOA that formed the subject of the judicial review application in the
March 2006 application was also the subject of the August 2006 application. She
also noted that the applicant knew since February 2006 that Stolport would not
grant the lease until the applicant had entered into a CCOA with the
respondent. The subject matter of the dispute had not changed from February
2006.
[14]
She concluded at paragraph 33 that:
[…] I cannot conclude that
discretion should be exercised in Jazz’s favour. Jazz has brought or opposed
motions needlessly, and there have been duplicative interlocutory proceedings.
Jazz has created circumstances requiring the other parties to respond,
sometimes on an urgent basis, and it has brought and abandoned or neglected
proceedings using the court’s process for other collateral purposes in its
attempt to re-establish itself at the TCCA. Jazz has sought to avoid the orders
of this Court regarding how the determination of this matter should best
proceed as part of a thought out and considered strategy […]
[15]
The prothonotary did not address the issue as to whether the
judicial review application was time-barred.
ISSUES
[16]
a. Did
the prothonotary err by concluding that the commencement of the August 2006
application constituted an abuse of process because it was factually and
legally similar to the March 2006 application and was taken specifically for
the purpose of avoiding the earlier case management order converting the first
application into an action?
b. Absent reviewable error, ought this Court to
exercise its own discretion differently?
c.
Is the application time-barred?
THE OVERLAPPING CHARACTER OF THE
TWO APPLICATIONS
[17]
The prothonotary focused extensively in her finding of abuse on
the fact that the applicants essentially discontinued one application and,
instead of abiding by her case management order that the application should
continue as an action, commenced essentially the same application again, with
only slight differences.
[18]
The
applicant claims that the two applications are very different and puts emphasis
on the fact that the first application attacked three separate decisions made
in February 2006, and included allegations of conspiracy and anti-competitive
behaviour, whereas the second application concentrates on only one decision,
that of July 26, 2006, and is based primarily on an alleged failure by the TPA
to abide by the terms of the Canada Marine Act, S.C. 1998, c.10.
The respondent, for its part, however, highlights several aspects of the
notices of applications, the affidavits and accompanying materials filed in
support of them. These demonstrate quite convincingly that there is little
difference in substance between the two applications. The two key factors
underlying both applications, namely that the applicant could not receive a
lease without a CCOA and the CCOA itself, were unchanged from the March 2006
application.
[19]
While the second notice of application sets out slightly narrower
grounds for seeking review, it is clear that the applicant knew at the time of
the first application that Stolport could not enter into a lease with the
applicant unless the applicant signed a CCOA.
[20]
While the applicant has dropped its claims of conspiracy and
restraint of trade under the Competition Act, the new application raises
the exact same questions of fact and results from the same dispute, which the
prothonotary properly found to be a commercial suit between the operator of an
airport and one of the airlines making use of that facility.
[21]
With respect to the CCOA, in both the March 2006 application and
the August 2006 application, the applicant notes that the respondent has
purported to terminate the existing CCOA as of August 31, 2006. The applicant
notes in paragraph 19 of the August 2006 application that although negotiations
ensued, the TPA continues to rely on the CCOA as unilaterally proposed,
refusing to meaningfully negotiate the terms of its proposed CCOA.
[22]
With respect to the grounds of relief, the August 2006
application encompasses most of the same grounds as in the March 2006
application, with the exception, again, of any claims under the Competition
Act and regarding restraint of trade.
[23]
In sum, an examination of the two notices of application suggest
that the July 26, 2006, letter was just the latest communication in a series of
incidents arising out of the initial decision-making process in February 2006.
[24]
Based on a reading of the two applications I conclude, as did the
prothonotary, that they raise virtually the same issues and arise out of the
same factual matrix. The conclusion that the applicant filed the August 2006
application to circumvent the order of the prothonotary to turn the original
application into an action was certainly, in my view, a permissible inference
in the circumstances. The issue thus becomes a question of law as to whether
the prothonotary was correct that she could find an abuse of process where a
party seeks to circumvent an order of the Court.
[25]
There is no need to address the jurisprudence respecting whether
a party may commence another proceeding after having discontinued a previous
proceeding on the same facts and issues, if there has been no final decision on
the merits. All the parties to this motion, as well as the prothonotary, appear
to agree that this is permissible. What is at issue is how the doctrine of
abuse of process may overlap and mitigate the general rule under these
circumstances.
[26]
The respondent and interveners rely on the definition of abuse of
process at paragraph 38 of the Supreme Court decision in Toronto (City) v.
Canadian Union of Public Employees (CUPE), Local 79, [2003] 3 S.C.R. 77,
2003 SCC 63. There is also a succinct definition of abuse of process at paragraph
37 of that judgment, relying on an earlier decision of Justice Goudge:
The doctrine of abuse of process
engages the inherent power of the court to prevent the misuse of its procedure,
in a way that would be manifestly unfair to a party to the litigation before it
or would in some other way bring the administration of justice into disrepute
[…]
[27]
The applicant is correct that abuse of process, because it
prevents a party from seeking redress from a court, may only be invoked in the
“clearest of cases” and such cases will be “extremely rare”: Blencoe v.
British Columbia (Human Rights Commission), [2000] 2 S.C.R. 307,
2000 SCC 44 at paragraph 120.
[28]
While relitigation of the same issues is sometimes permissible,
there can be abusive attempts to relitigate. The key case appears to be the one
highlighted by the prothonotary, Sauve. In that case, Justice Lemieux
outlined the following parameters surrounding the doctrine of abuse of process
at paragraph 19:
(1) it is a flexible doctrine, not limited to any set number of
categories;
(2) its
purpose is a public policy purpose used to bar proceedings that are
inconsistent with that purpose;
(3) its
application depends on the circumstances and is fact and context driven;
(4) its
aim is to protect litigants from abusive, vexatious or frivolous proceedings or
otherwise prevent a miscarriage of justice;
(5) a
particular scheme of the rules of court may provide a special sitting for its
application.
[29]
Justice Lemieux reviewed the circumstances of the case, in which
the plaintiff’s action had been dismissed on procedural grounds for not
proceeding in a timely fashion under a case management order, and the plaintiff
had begun another. The applicant submits that the order did not relate to
procedure, but involved determination on the merits. The applicant is wrong: by
definition dismissal for failure to proceed is not dismissal on the merits and
in Sauve Justice Lemieux stated explicitly at paragraph 20 that the
claim never received adjudication on the merits.
[30]
Justice Lemieux noted that the second statement of claim was
virtually identical to the original in terms of material facts giving
rise to the cause of action, cause of action itself and the relief sought. He
concluded at paragraph 20:
Applying those principles in the particular
circumstances of the case before me, I agree with counsel for the respondent
that, notwithstanding that the plaintiff’s claim has not been adjudicated on
the merits, his refiling of his statement of claim after its dismissal under
the case management rules constitutes an abuse of process. In my view, he had
every reasonable opportunity to advance his case to an adjudication on its
merits, was given an opportunity to do so by order of Justice Dubé of this
Court, but violated that order and so the dismissal of his first action.
[31]
And further at paragraph 23, emphasizing the importance of not
making a mockery of case management rules and ordered, a consideration relevant
to the present file:
Case management judges make a
multitude of orders for the purpose of ensuring the orderly progress of an
action. To allow a plaintiff to disregard such orders leaving a plaintiff at
liberty to simply refile a new mirror action would be contrary to the very
purposes of those Rules.
[32]
Although the present case involves two proceedings that are not
entirely identical, it is clear on a review of the evidence, as outlined above,
that the general substance and purpose of the claims, is identical. Also, like Sauve,
the applicant was given an opportunity to proceed with its litigation, if in a
different form than it desired.
[33]
As the applicant points out in reply, Justice Dawson appears to
have decided to the contrary in Envireen Construction (1997) Inc. v. Canada,
2007 FC 70, where the first action was dismissed for delay after a status
review and then a new one commenced 18 months later. Justice Dawson
distinguishes the situation in Envireen Construction from the
circumstances in Sauve. She cites several reasons for concluding there
was no abuse of process, and distinguishing the case from Sauve,
including that allowing the second proceeding to go forward resulted in no
prejudice to the defendant’s ability to defend the action, the Court could
impose conditions to ensure the action moved forward and the defendant’s costs
could be compensated. Thus, Justice Dawson appears to have decided on the
specific facts of that case. Furthermore, one of the factors she relied on was
that counsel was unfamiliar with the Court processes, a consideration
irrelevant to the present file. She explicitly recognized that the new
proceeding was not an attempt to circumvent the processes of the Court (see
paragraph 14). To the contrary, the prothonotary in this case found that the
commencement of new proceedings was directly intended to circumvent the
processes of the Court. The evidence supports this finding.
[34]
Furthermore, the Federal Court of Appeal in Fieldturf Inc. v.
Winnipeg Enterprises Corp., 2007 FCA 95 at paragraph 5 seems to have at
least indirectly affirmed that the approach taken in Sauve is a
legitimate course of action open to the Court where it finds on the facts an
abuse of process.
[35]
On the other hand, there are other cases that have held that to
bypass a procedural order and commence new litigation is not, at least not
necessarily, an abuse of process. In Arbutus Environmental Services Ltd.
v. Peace River (Regional District), 2000 BCCA 261, the British Columbia
Court of Appeal suggested that in some circumstances it will not be an abuse of
process to recommence a new litigation with the intention of bypassing a
procedural barrier barred under the first action. However, Justice Hollinrake
noted at paragraph 10 that his decision did not constitute a general
rule, but was decided purely on the facts of that case. Similarly, in Hunter
v. Anderson (1997), 29 O.T.C. 95, 34 C.P.C. (4th) 307, the
decision was based on the fact that Justice Lederman held that the second
action commenced by the plaintiff was not an attempt by the plaintiff to
circumvent the order of the Master but rather to expeditiously make the
pleading comport with his findings (see paragraph 3). Finally, as noted by the
respondent, in Murray Duff Enterprises Ltd. v. Van Durme (1981),
23 C.P.C. 151 (Ont. Div. Ct.), at paragraph 2, Justice Van Camp of the
Divisional Court noted that the plaintiff who commenced a new litigation still
was in compliance with the order under the old litigation. The plaintiff accepted
the need to amend and did so in the special endorsement in the new action,
instead of appealing. Justice Grange dissented and held at paragraph 34 that
“it cannot be that a party may repeatedly re-issue writs with a few changes of
form or even of substance”. These cases suggest that the applicant’s decision
to commence another application on narrower grounds, with the intention that it
would bypass all of the reasons the prothonotary raised for having the initial
application transformed into an action, may in certain situations be considered
a legitimate pursuit. However, although these cases do in some regard
support the position of the applicant, they are in many respects, as
highlighted, distinguishable from the matter in issue.
[36]
Furthermore in light of the decision in Sauve, the fact
that the applicant did this purely to circumvent the order of the prothonotary
would appear to support a finding of abuse of process. On the evidence this
remains the same commercial dispute that the prothonotary determined should be
adjudicated as an action. Again, this fact was affirmed on appeal by Justice
Rouleau.
[37]
I conclude from the foregoing that it was open to the
prothonotary, in the exercise of her discretion, to find that the applicant had
abused the Court's process and accordingly to impose the sanction that she did.
It remains, however, that that decision was a matter for the exercise of
discretion and, even though it displays no error of law and is not based on any
clearly wrong finding of fact, it may still be subject to be overturned on
appeal.
SHOULD THIS COURT INTERFERE?
[38]
The case law on the standard of review to be applied by a judge
of this Court when reviewing a discretionary decision of a prothonotary
establishes a clear distinction between decisions which are
"discretionary" and those which are not.
[39]
A discretionary decision is one respecting a question on which by
definition two equally reasonable people may, without error on the part of
either one, reach diametrically opposed conclusions. Error, whether of fact or
of law will always, of course, open a decision to appellate review. But even
where there is no error a discretionary decision may still, in some
circumstances invite the reviewing Court to make a fresh and different exercise
of its own discretion.
[40]
Until recently, the standard of review of decisions by
prothonotaries appeared to have been definitively settled by a specially
constituted five judge panel of the Federal Court of Appeal in Canada v.
Aqua-Gem Investments Ltd. (C.A.), [1993] 2 F.C. 425, 149 N.R. 273 where
MacGuigan J.A., speaking for the majority, said at page 463:
[…] discretionary orders of
prothonotaries ought not to be disturbed on appeal to a judge unless:
(a) they
are clearly wrong, in the sense that the exercise of discretion by the
prothonotary was based upon a wrong principle or upon a misapprehension of the
facts, or
(b) they raise questions vital
to the final issue of the case.
Where such discretionary orders
are clearly wrong in that the prothonotary has fallen into error of law (a
concept in which I include a discretion based upon a wrong principle or upon a
misapprehension of the facts), or where they raise questions vital to the final
issue of the case, a judge ought to exercise his own discretion de novo.
[41]
In a separate and dissenting opinion Chief Justice Isaac adopted
the following wording for the test at page 454:
I am in agreement with counsel
for the appellant that the proper standard of review of discretionary orders of
prothonotaries in this Court should be the same as that which was laid down in Stoicevski
for masters in Ontario. I am of the opinion that such orders ought to be disturbed
on appeal only where it has been made to appear that
(a) they
are clearly wrong, in the sense that the exercise of discretion by the
prothonotary was based upon a wrong principle or upon a misapprehension of the
facts, or
(b)
in making them, the prothonotary improperly exercised his discretion
on a question vital to the final issue of the case.
In each of these classes of
cases, the Motions Judge will not be bound by the opinion of the prothonotary;
but will hear the matter de novo and exercise his or her own discretion.
(emphasis added)
[42]
Support for the view that the two formulations of the test are
the same may be found in the fact that Justice MacGuigan specifically stated
(at page 463) that he agreed in part with the Chief Justice's statement
of the standard of review. It remains, however, that there is a significant
difference in the wording adopted by the two: the word “improperly” is absent
from Justice MacGuigan's formulation. Since we are dealing with discretionary
decisions, it is difficult to see how an exercise of discretion which does not
reveal an error of law or of fact can still be said to have been improper.
[43]
It is not, I think, an indiscretion to reveal that the reason
that Aqua Gem was heard and decided by a five judge bench was that there
was some disagreement among the then members of the Court of Appeal over the
correctness of an earlier decision in the case of Canada v. Jala Godavari
(The) (F.C.A.) (1991), 135 N.R. 316, 40 C.P.R. (3d) 127 (F.C.A.) In that
case I, speaking for a unanimous Court, said:
[…] contrary to a view that has
sometimes been expressed in the Trial Division, [footnote appended to
judgments] a judge who hears an appeal from a prothonotary on a matter
involving the exercise of discretion is called upon to exercise his own
discretion and is not bound by the prothonotary’s opinion. He may, of course,
choose to give great weight to the views expressed by the prothonotary,
but the parties are, in the final analysis, entitled to the discretion of a
judge and not that of a subordinate officer.
[44]
Until quite recently the decision in Aqua Gem has been
consistently followed both in this Court and in the Court of Appeal. However,
in the case of Z.I. Pompey Industrie v. ECU-Line N.V.,
[2003] 1 S.C.R. 450, 2003 SCC 27, Justice Bastarache, speaking for a unanimous
Court, while purporting to quote and follow the majority decision of MacGuigan
J.A. in Aqua Gem, in fact quotes the dissenting opinion of Chief Justice
Isaac and resurrects the difficult notion of an improper exercise of discretion
as a prerequisite to the exercise by the appellate judge of his own discretion.
[45]
Has Z.I. Pompey changed the law? With great respect I
think not. I have two primary reasons for finding this to be the case.
[46]
In the first place, any discussion of the applicable standard in
cases where the impugned decision reveals no error of law or fact is clearly obiter
dictum since the Supreme Court was unanimous in its finding in Z.I.Pompey
that all the lower Courts had applied a wrong legal test to the subject matter
of the appeal. The application of the wrong test is a classic example of a
decision which is reviewable for error of law.
[47]
Second, other than simply stating the test and citing Aqua Gem,
Justice Bastarache provides no discussion whatsoever of the standard of review.
It would seem to me to be unlikely in the highest degree that the Court would
have undertaken to modify a principle which had been consistently followed in
the lower Courts without discussing and explaining why it was doing so.
[48]
There is a third reason: following Z.I. Pompey the Federal
Court of Appeal has revisited and restated the standard as originally stated by
Justice MacGuigan in Aqua Gem. In Merck & Co. v. Apotex Inc.,
2003 FCA 488, leave to appeal refused [2004] S.C.C.A. No. 80, Justice Décary
correctly cited Justice MacGuigan’s identification of the standard in Aqua-Gem
and went on, at paragraph 19, to restate the test, stating that there has been
confusion arising from the wording used by Justice MacGuigan.
[…] I will use the occasion to
reverse the sequence of the propositions as originally set out, for the
practical reason that a judge should logically determine first whether the
questions are vital to the final issue: it is only when they are not that the
judge effectively needs to engage in the process of determining whether the
orders are clearly wrong. The test would now read:
Discretionary orders of
prothonotaries ought not to be disturbed on appeal to a judge unless:
a) the
questions raised in the motion are vital to the final issue of the case, or
b)
the orders are clearly wrong, in the sense that the exercise of
discretion by the prothonotary was based upon a wrong principle or upon a
misapprehension of the facts.
[49]
Interestingly, Justice Décary did not make reference to the
decision in Z.I. Pompey on this point. Instead, he only referred to the
decision of the Supreme Court when outlining the standard to be applied to
appeals of Federal Court judges. Notably, although Justice MacGuigan’s test was
reformulated somewhat, the phrase “improperly exercised his discretion” was
still excluded from the standard. Obviously, Justice Décary did not think that
Justice Bastarache had significantly altered the test.
[50]
I would conclude that the proper meaning of the word “improperly”
as used by the Supreme Court in Z.I.Pompey is not to be equated with
“erroneously” or “wrongly” but rather that of “differently” in the sense that
the reviewing judge, exercising his or her own discretion, would have come to a
different conclusion. Since there can be no question that the prothonotary's
decision here under review was vital to the final outcome of the case, I now
turn to ask myself whether I would have concluded as she did.
[51]
Let me begin by stating again that in my view the prothonotary committed
no error of law. She did not take into account any irrelevant considerations.
She did carefully consider all those which required her attention. Her findings
of fact were fully consistent with the materials before her and were clearly
based upon her own intimate knowledge of the file which had been under her
personal intensive management (subject only to my general supervision as case
management judge) from the very outset. She was fully aware of the drastic
nature of the remedy which was being sought and which she granted.
[52]
That said, however, I cannot in all honesty say that I would have
granted the same remedy. The dismissal of the judicial review without the
possibility of any further recourse by the applicant seems to me to go too far,
not only in what must be done to discipline this particular applicant, but also
as a matter of judicial policy in governing the conduct of other litigants who
may be tempted to abuse the Court's process. Other avenues were and are open.
[53]
Accepting, as I do, the prothonotary's finding that the
applicant's actions were purely tactical and designed to circumvent the
prothonotary's order, confirmed by Justice Rouleau, converting the application
into an action, I am of the view that it would be enough for the Court to design
an order whose effect would be to frustrate that misguided strategy while
appropriately penalizing the applicant in costs.
[54]
The prothonotary found, correctly, that the new application did
not differ in any significantly relevant respect from the earlier discontinued
application. That application was properly converted into an action following
two hearings in which the applicant had every opportunity to make its views
known. In those circumstances, and while I think that the prothonotary was
right not to simply dismiss the motion to strike, even with a heavy punitive
costs order against the applicant, I think that the applicant should still be
entitled to its day in Court on the merits, if any, of its application.
[55]
Thus, while it would be wrong simply to send the parties back to
fight out the second application, with the virtual certainty that there would
be a new, and successful, motion to convert it into an action with its
attendant costs and delays, I believe that the Court's powers, (see Rule 53(2)
of the Federal Court Rules, SOR/92-106), especially when read in the
light of the obligation cast upon both the prothonotary and myself in Rules 3
and 385(1)(a) to promote the “just, most expeditious and least expensive
determination of the proceeding on its merits”, would allow me here and now to
convert the second application into an action right away.
[56]
In my opinion the power given to the Court in subsection 18.4(2)
of the Federal Courts Act is one which may be exercised on the Court's
own initiative and the text does not indicate that it is a necessary
prerequisite that one of the parties bring a motion to that effect. I note that
this interpretation is also consistent with the text of Rule 47 although the
latter is not, of course, by its terms applicable to the statute itself.
[57]
At the hearing before me the question of the substantial identity
of the first and second applications was fully canvassed. I do not think that
anything more can be usefully said on the subject. The decision that the first
application should proceed as an action rather than an application was final
and definitive. The nature of the factual dispute is such that the Court will
have to look at the entire commercial relationship between the applicant and
the TPA and that will still be best and most fairly achieved in an action, with
the interveners being named as defendants.
LIMITATION PERIOD
[58]
The prothonotary did not find it necessary to rule on the
argument that, in any event, the second application was out of time. While she
did not give any reason for that view, it seems obvious to me that it was based
on the fact that the question was now moot in light of the conclusion that she
had reached on the first part of the motion to strike. Since I have reached a
different conclusion I should deal with the matter, if only briefly.
[59]
There is a compelling argument that an application should not be
struck solely on the basis of a time bar. In Hamilton-Wentworth (Regional
Municipality) v. Canada (Minister of Environment) (2000), 187
F.T.R. 287 (T.D.), Justice Dawson stated at paragraphs 39-40:
I note that even in actions
where, as the Court of Appeal noted in David Bull Laboratories, supra,
striking out is much more feasible, a limitation defence is not sufficient
ground to strike out a statement of claim, but rather is a defence to be raised
in a statement of defence. By analogy, where a proceeding is commenced by
application, any issue of application of a time bar ought, in the usual case,
to be argued at the hearing of the application, and not on a motion to strike.
That is not to say that in no
case could an application be struck for being commenced out of time, but it
would, in my view, be only in an exceptional case.
[60]
This was the same conclusion reached in John McKellar Charitable
Foundation v. Canada (Revenue Agency) (2006), 46 Admin. L.R.
(4th) 249, 2006 FC 733 at paras. 10-19.
[61]
A consideration of the limitation defence will also require the
Court to weigh and appreciate not only the effect but also the admissibility of
an exchange of correspondence which, at the applicant's own insistence, was
initiated on a “without prejudice” basis. That, too, will best be done after
full discovery, oral and documentary, and possibly a preliminary motion in the
context of an ordinary action in this Court. This is an additional
consideration in my decision to convert the applicant's second application into
an action.
CONCLUSION
[62]
I conclude that, for the reasons stated, the appeal should be
allowed without costs, that the order of the prothonotary should be set aside
and that there should be substituted therefor an order allowing the motion to
strike in part and converting the present application into an action in which
the plaintiff shall serve and file a statement of claim within 30 days naming
the present respondent and interveners as defendants. The respondents and
interveners shall have their costs of the motion before the prothonotary and
written submissions as to the amount of such costs may be made within 30 days.
I believe that any costs order should reflect the abusive nature of the
applicant's conduct as found by both the prothonotary and myself.
ORDER
THIS COURT ORDERS that
The motion is allowed without costs and the
order of the prothonotary is set aside; there is substituted therefor an order
allowing with costs the motion to strike in part only and directing that the
application shall proceed as an action instead of as an application; the
applicant shall within 30 days serve and file a statement of claim in which the
respondent and the interveners shall be named as defendants, failing which the
application shall be dismissed with costs; the respondent and the interveners
shall file written submissions on costs within 30 days and the applicant may
reply within 20 days.
“James
K. Hugessen”
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