Date: 20030612
Docket: T-2171-98
Citation: 2003 FCT 732
OTTAWA, ONTARIO, THURSDAY, THIS 12TH DAY OF JUNE, 2003
PRESENT: THE HONOURABLE MADAM JUSTICE SNIDER
BETWEEN:
THE LOUIS BULL BAND and CHIEF HELEN BULL,
HENRY RAINE, NORMAN DESCHAMPS,
SIMON THREEFINGERS, SOLOMON BULL,
THERESA BULL, TERRENCE RAIN,
ELAINE ROASTING and JOSEPH DESCHAMPS,
the Chief and Councillors of the Louis Bull Band suing in
their representative capacity on behalf of all the members of
the Louis Bull Band
Plaintiffs
- and -
HER MAJESTY THE QUEEN IN RIGHT OF CANADA
Defendant
REASONS FOR ORDER AND ORDER
[1] This is a motion brought by the Defendant seeking to set aside the Order of Prothonotary Aronovitch dated April 30, 2003 which granted the Plaintiffs' motion to amend their statement of claim and denied the Defendant's cross-motion to consolidate or stay this action.
[2] Specifically, the Defendant seeks the following:
1. An Order setting aside the Order of the Prothonotary dated April 30, 2003 granting the Plaintiffs' motion and the costs of the motions;
2. In the alternative, an Order setting aside the Order of the Prothonotary dated April 30, 2003 denying the Defendant's motion;
3. In the alternative, an Order consolidating this proceeding with the royalty payment amendments with action T-2953-93, or an Order staying this action until the issues of calculation of royalties in action T-2953-93 are finally determined;
4. An Order staying any further timetable for proceeding with the amendments pending a determination by this Court;
5. Such further and other relief as this Honourable Court may deem just.
[3] On consent of the parties, an Order staying any further timetable for proceedings with the amendments pending a determination by this Court was issued on May 28, 2003.
[4] The original statement of claim was filed by the Plaintiffs on November 20, 1998. It is a claim that the Louis Bull Band (the "Band") should not be responsible for the back pay of per capita distributions between 1974 and 1983, to the four "Fayant children", whose names were taken off the Band membership list in 1974 and reinstated in 1983 as a result of the decision in Canada (Minister of Indian Affairs and Northern Development) v. Ranville, [1982] 2 S.C.R. 518.
[5] In 1997, the Federal government paid out the back pay of per capita distributions and the interest accrued that were owing to the four Fayant children from the Band's trust accounts. In the original statement of claim, the Band disputed the legality of this withdrawal from their accounts. At issue is which of the parties ought to be responsible for the total back payment of $304,139.52.
[6] This action has been subject to case management under the direction of Prothonotary Aronovitch since July 26, 2000.
[7] With respect to the original statement of claim, examinations for discoveries have been completed as has document production. A pre-trial of this matter was scheduled for April 15, 2002. This pre-trial was adjourned to December 20, 2002 to allow the parties an opportunity to explore the possibility of settlement.
[8] Not long after examinations for discovery were held in this action, it occurred to the Plaintiffs that there was another consequence of the Fayant children not being on the Band list between 1975 and 1983. Since the Fayant children were removed from its membership list, the Band's population figure was reduced by four (4) people in each of those years, resulting in a corresponding reduction in the Band's share of Pigeon Lake royalty revenues. This is the subject matter of the amendments to the statement of claim.
[9] The Band is one (1) of four (4) Hobbema Bands (the others being the Samson, Ermineskin and Montana) who share in oil and gas royalties derived from the Pigeon Lake Reserve. As the annual distribution of these Pigeon Lake royalties between the bands entitled is done on a per capita basis, the share of those funds to which the Louis Bull Band and each of the other bands are entitled depends on the total number of members on each of the band lists at June 30 of any given year. Thus, during the period 1974 to 1983, the Band received an allocation of the royalties based on the number of persons in the Band which excluded the Fayant children. The Defendant's obligations with respect to the management, administration and investment revenues (the royalties) from the Pigeon Lake Reserve are in dispute and are the subject of ongoing litigation before this Court, in The Louis Bull Band et al v. the Queen, T-2953-93 (the "1993 action")1993 action (discussed further below at paragraph [29]).
[10] By motion dated January 24, 2003, the Plaintiffs filed a motion requesting leave to file an amended statement of claim. The amendments sought would add the claim in respect of the royalty payments. In addition to a number of minor or consequential amendments to the statement of claim, the most significant amendment was proposed in respect of "special damages". As proposed, paragraph 1 (B)(ii) would read as follows:
(ii) special damages, including but not limited to:
(a) a sum equal to the amount of Pigeon Lake Royalties that the Plaintiffs would have received from 1975 to and including 1983, but for the Defendant's actions in unilaterally removing the Fayant children from the Plaintiff's Band list, together with interest thereon;
(b) ^ an amount equal to the amount of back-pay withdrawn from the Plaintiffs' capital account together with any accrued interest thereon which was paid to the Fayant children for the period of their enfranchisement between 1974 and 1983;
(c) in the ^ alternative to (b) above, an amount equal to any interest payable on any back-pay of PCDs to the Fayant children,
as determined by the Honourable Court; (amendments marked)
The Prothonotary's Order
[11] By Order dated April 30, 2003, Prothonotary Aronovitch granted the Plaintiffs' motion to amend the statement of claim and denied the Defendant's cross-motion to consolidate or stay this proceeding in the alternative. By way of endorsement, the reasons of Prothonotary Aronovitch were as follows:
As to the plaintiffs' motion, I accept and endorse their submissions in support of the motion. In particular, I am satisfied that the proposed amendments will result in the determination of the real issues in this action, that the defendant is not prejudiced in a manner that is not compensable by costs, and that the amendments would serve the interests of justice.
Indeed, on the question of prejudice, the Crown's affidavit evidence as to further delays in the proceeding and the prolongation of the trial of the action, is not persuasive, as it is based on the erroneous assumption that the proposed amendments put at issue and entail the determination by the Court of the proper method for calculating royalties.
The facts and issue are not the same as those pleaded, in what the Crown refers to as, the "93" action, and the plaintiffs refer to as the "mismanagement or breach of trust" litigation. The amendments do not, in my view, constitute a duplication of proceedings. Each of the paragraphs cited by the Crown in argument, as duplicating the pleadings in the "93 action", were present, in the claim prior to the proposed amendment. The Crown did not however, on that basis, seek to consolidate prior to this motion.
Regarding the cross-motion, again, I concur with the submissions of the plaintiffs and will dismiss the cross-motion in essence for reasons I have given in respect of the motion to amend. In sum, the defendant has not discharged the burden of satisfying the Court that the conditions are met for either consolidation or a stay.
I) ANALYSIS
Standard of Review
[12] The parties agreed that the standard of review on an appeal from a decision of a Prothonotary was set out in Canada v. Aqua-Gem Investments Ltd., [1993] 2 F.C. 425 (C.A.)
("Aqua-Gem") at p. 463 by MacGuigan J.A.:
[...]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.[...]
[13] Aqua-Gem, supra, also stands for the proposition that, where the decision of the Prothonotary falls within the scope of either of the two categories outlined above, a reviewing Judge may exercise his or her discretion de novo.
[14] The decision of Prothonotary Aronovitch was made in the context of case management. The Plaintiffs drew my attention to a number of cases where the court declined to intervene in respect of discretionary decisions made by Judges or Prothonotaries involved in case management (James River Corp. of Virginia v. Hallmark Cards, Inc., [1997] F.C.J. No. 152 (T.D.) (QL); Sunbeam Products Inc. v. Mister Coffee & Services Inc., 2002 FCT 139 [2002] F.C.J. No. 169 (QL); Montana Band v. Canada, 2002 FCA 331, [2002] F.C.J. No. 1257 (QL). In particular, the Plaintiffs referred to a passage from the Court of Appeal decision in Montana Indian, supra at paragraph 7, as follows:
We would like to emphasize once again the heavy burden upon litigants seeking to overturn an interlocutory order by a case management judge. This Court is loathe to interfere with interlocutory orders in any case due to the delay and expense which such appeals add to any proceeding. This is all the more so where an appeal is taken from an interlocutory decision of a case management judge who is intimately familiar with the history and details of a complex matter. Case management cannot be effective if this Court intervenes in any but the "clearest case of a misuse of judicial discretion" to echo the words of Mr. Justice Rothstein in Sawridge Indian Band et al. v. Canada, 2001 FCA 339, (2001) 283 N.R. 112.
[emphasis added]
The reasons for giving substantial deference to decisions of Judges or Prothonotaries in the context of case management are compelling. Case management involves an ongoing relationship between the parties and the Judge or Prothonotary, and any single decision may be part of an ongoing series of related motions and actions. For a Judge, on a motion for review of such a decision, this relationship requires a careful analysis of the principles set out in Aqua-Gem, supra. Nevertheless, this does not mean that such decisions are isolated from review.
[16] In respect of the Order before me, I note that the motion argued before Prothonotary Aronovitch related to a completely new matter. Prothonotary Aronovitch had not made a number of rulings or Orders with respect to the amendment; this was the first occasion upon which she examined the nature of the proposed amendments. In that respect, her Order was not a result of an ongoing management function but was, rather, a new matter in respect of which she had no special knowledge.
Vital to final issue of the case
[17] As noted above, the Court may intervene and exercise its discretion de novo if the addition of the amendments to the statement of claim raises questions vital to the final issue of the case. The Defendant submits that these amendments would create a whole new cause of action in the same way as the amendments sought in the case of Scannar Ind. Inc. (Receiver of) v. Canada, [1993] F.C.J. No. 1194 (T.D.) (QL), aff'd [1994] F.C.J. No. 984 (C.A.) (QL). The Defendant argues that a decision that can be either interlocutory or final, depending upon the result, must be considered vital to the final resolution of this case (Aqua-Gem, supra at 464-465). Accordingly, in the Defendant's view, the Order at issue here is vital to the final issue of the case and warrants the intervention of the Court.
[18] The Plaintiffs submit that, unlike the situations before the Court in Scannar, supra, and Anchor Brewing Co. v. Sleeman Brewing & Malting Co. 2001 FCT 1066, [2001] F.C.J. No. 1475 (QL), where no reasons were given by the Prothonotary, Prothonotary Aronovitch's endorsement clearly sets out the basis from which her Order was made. Moreover, the Plaintiffs submit that the present appeal may be distinguished from Scannar, supra. That case involved an appeal from a motion for leave to amend the statement of claim under the former Rules and not under the present Rules 75 and 201 of the Federal Court Rules, 1998. Rule 201 provides as follows:
| 201. An amendment may be made under rule 76 notwithstanding that the effect of the amendment will be to add or substitute a new cause of action, if the new cause of action arises out of substantially the same facts as a cause of action in respect of which the party seeking the amendment has already claimed relief in the action. |
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201. Il peut être apporté aux termes de la règle 76 une modification qui aura pour effet de remplacer la cause d'action ou d'en ajouter une nouvelle, si la nouvelle cause d'action naît de faits qui sont essentiellement les mêmes que ceux sur lesquels se fonde une cause d'action pour laquelle la partie qui cherche à obtenir la modification a déjà demandé réparation dans l'action. |
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[19] The Plaintiffs submit that, in deciding that it was a situation which called upon him to exercise his own discretion de novo, Denault J. did so in Scannar, supra, at paragraph 19, in large part because the Prothonotary gave no reasons but also "because the amendments, if allowed, would create a whole new cause of action"- a situation now contemplated by present Rule 201. The Plaintiffs argue that the Prothonotary's Order was not on a question vital to the final resolution of the case but was a straightforward motion dealing with a routine amendment to a pleading and should be contrasted with and distinguished from questions vital to the final issue of the case Stoicevski v. Casement (1983), 43 O.R. (2d) 436 (Ont. C.A.); Aqua-Gem, supra).
[20] It is clear that a decision of the Prothonotary that disallowed the addition of a new cause of action to the existing claim would have raised a question vital to the final issue of the case. The question is whether the converse is true; whether a decision to add a new cause of action raises a question vital to the final issue of the case. In my view it does, assuming that the amendments to the statement of claim in this case resulted in the addition of a new cause of action. This question is discussed below. In this view, I am supported by the words of MacGuigan J. in Aqua-Gem, supra, where he stated at pages 464 and 465 as follows:
The question before the prothonotary in the case at bar can be considered interlocutory only because the prothonotary decided it in favour of the appellant. If he had decided it for the respondent, it would itself have been a final decision of the case [citations omitted] It seems to me that a decision which can thus be either interlocutory or final depending on how it is decided, even if interlocutory because of the result, must nevertheless be considered vital to the final resolution of the case. Another way of putting the matter would be to say that for the test as to relevance to the final issue of the case, the issue to be decided should be looked to before the question is answered by the prothonotary, whereas that as to whether it is interlocutory or final (which is purely a pro forma matter) should be put after the prothonotary's decision. Any other approach, it seems to me, would reduce the more substantial question of "vital to the issue of the case" to the merely procedural issue of interlocutory or final, and preserve all interlocutory rulings from attack (except in relation to errors of law). [emphasis added]
[21] On this basis, I am of the view that a determination that a new cause of action is to be added to a statement of claim is vital to the final issue of the case and, accordingly, I may exercise my discretion de novo.
[22] Nevertheless, my conclusion on this matter need not be totally determinative since I am also of the view that the Prothonotary's exercise of discretion was based upon a wrong principle or misapprehension of the facts, as discussed below.
Characterization of the Proposed Amendments to the Statement of Claim
[23] Both parties before me acknowledge that a critical determination in this appeal was a characterization of the proposed amendments to the statement of claim. The Defendant argues that the proposed amendments constitute a new cause of action in that they are based on entirely different legal and factual questions from the issue in the original statement of claim of the legality of the per capita distributions paid out of the Band's account to the four Fayant children. In contrast, the Plaintiffs argue that the action is about the consequences of the Fayant children having been removed from the list of Band members for a nine (9) year period. In their
submissions, the consequences are two fold:
1) following their reinstatement as Band members in 1983, the Fayant children became once again entitled to share in per capita distributions;
2) by reasons of the Fayant children having been removed from the list of members, the Band's share of the Pigeon Lake Royalty revenues was reduced.
[24] Thus, the Plaintiffs submit that the material facts upon which the amendments are based are the same as have been pleaded in the original statement of claim and do not constitute a new cause of action.
[25] I cannot accept the Plaintiffs' submission that these were routine amendments to a pleading. In my view, the amendments can best be characterized as a claim for a recalculation of the distribution of the Pigeon Lake royalties for the nine (9) year period to take into account the addition of four (4) children on the role and a payment to the Band for that amount. In contrast, the original claim was for the recovery of monies taken from the Band capital account to repay the four (4) children. Thus I would characterized the amendments as a new cause of action which does not arise out of substantially the same facts as the original cause of action. Further,
there are significant differences between the two matters:
1. The monies available to pay out any claim, if successful, would come from two completely different sources. With respect to the original claim, the money that was taken by the Defendant from the Band's capital account would be paid as a discrete amount by the government calculated on the basis of what was originally taken from the account. With respect to the amendment, the amount that would be repaid to the Band is currently held by the three other Hobbema Bands.
2. Since success in respect of the amendments would require a redistribution of royalties paid to the four Hobbema Bands during the period in question, there would be a requirement to involve new parties; that is, the other Hobbema Bands.
[26] In essence, the only thing in common between the original statement of claim and the amendments is that both involve the Fayant children who were not on the role for nine (9) years. In every other aspect, the claims have a different factual basis' most significantly, as to the parties involved and the characterization of the money being claimed.
[27] Thus, the proposed amendments do not, in my view, fall within Rule 201 and should not have been allowed. Accordingly, in exercising my discretion de novo, I would disallow the amendments.
Misapprehension of Facts
[28] In her decision, the Prothonotary stated that the Defendant had made "the erroneous assumption that the proposed amendments put at issue and entail the determination by the Court of the proper method for calculating royalties." The Defendant disputes this statement and relies on the affidavit of Martin Reiher, Senior Counsel in the Department of Indian Affairs and Northern Development Legal Services, where he sets out the method of recalculating the royalties to provide for a per capita payment to the Fayant children. The Plaintiffs submit that the amendments do not put in issue the manner in which the Pigeon Lake royalties have and continue to be calculated and that no determination is required to quantify the Band's loss of income in missed royalties resulting from the Fayant children's omission from the Band List. This, in the Plaintiffs' submission, requires a mere arithmetic calculation in much the same manner as was required to determine the amount set out in the original statement of claim.
[29] As stated above, the 1993 action currently before this Court is broad ongoing litigation involving the same Plaintiffs against the same Defendant with respect, in part, to the total annual amounts of past royalties and how those royalties should have been divided among the four Hobbema Bands from 1946 onwards. In 1999, the Plaintiffs attempted to begin a separate action to specifically impugn and claim separate and distinct relief for the manner in which the royalty payments have been credited and paid out to the Hobbema Bands. In Montana Band v. Canada, [1999] F.C.J. No. 1631 (T.D.) (QL) (the "1999 action"), MacKay J. determined, at paragraph 27, that the 1993 action and the 1999 action, although they set out distinct claims and seek different relief, were "based upon the same factual and evidentiary base, the same transactions or occurrences for the legal relationship between the parties." MacKay J. ordered that the 1999 action be consolidated with the 1993 action. As a result of the consolidation, in the 1993 action, the Plaintiffs claim a 25% share in royalties, as opposed to the per capita distribution that has been in effect for the Hobbema Bands.
[30] It was acknowledged by the Plaintiff that, at some point in the 1993 action, a complex recalculation of the royalties payable to each of the bands will be undertaken. Accordingly, while it would be possible to recalculate the Band's share of the Pigeon Lake royalties prior to the final determination of the 1993 action on the narrow basis of past per capita payments, to do so would be an unnecessary duplication. Further, while the claim of the amendments in this action was to reassess the royalties on a per capita basis, the claim being made by the same Plaintiffs in the 1993 action is for a 25% share of the royalties. Thus, at best, the amendment is an unnecessary duplication of royalty calculations and, at worst, a case of inconsistent pleadings contrary to Rule 180 of the Federal Court Rules, 1998. In my view, this action is not the appropriate forum for carrying out a redistribution and recalculation of royalties.
[31] Even if there were not another action outstanding, I would conclude that the proposed amendments put at issue the determination by the Court of the proper method for calculating royalties. This calculation may not go beyond a redistribution but it is a recalculation nonetheless. This redistribution would require the involvement of the other Hobbema Bands whose share of the overall Pigeon Lake royalties for the years in question would be consequently reduced. Involving the other bands - and I believe it would be unrealistic and unreasonable to expect otherwise - would open up a "can of worms" related to the band lists of the other Hobbema Bands and to other royalty related issues. Managing this action in the face of these complexities would result in very real and substantial delays. Given the investment of time and resources of the parties and the Court since this action was commenced in 1998 and the stage of these proceedings absent the amendments, it is a better use of the Court's scarce resources to deal with the original claim on its own.
Conclusion
[32] For the foregoing reasons, I am convinced that the decision of the Prothonotary should not stand. Accordingly, I am prepared to grant an Order allowing the appeal of the Order of Prothonotary Aronovitch granting the Plaintiffs' motion. Exercising my discretion de novo, I would disallow the proposed amendments.
[33] Since the balance of the requests of the Defendant were posed in the alternative, I do not need to address them.
ORDER
THIS COURT ORDERS THAT:
1. The appeal is allowed and the Order of the Prothonotary dated April 30, 2003 granting the Plaintiffs' motion and the costs of the motion is set aside.
2. The Plaintiffs' motion for an Order granting the Plaintiffs leave to amend the Statement of Claim is denied.
3. Costs of the motion before the Prothonotary, fixed by the Prothonotary at $3,000, are payable by the Plaintiffs.
4. Costs of this appeal, fixed in the amount of $1000, will be payable by the Plaintiffs.
"Judith A. Snider"
_________________________________
Judge
FEDERAL COURT OF CANADA
TRIAL DIVISION
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: T-2171-98
STYLE OF CAUSE: THE LOUIS BULL BAND and others v. HER
MAJESTY THE QUEEN IN RIGHT OF CANADA
MATTER DEALT WITH IN WRITING WITHOUT THE APPEARANCE OF
PARTIES
REASONS FOR ORDER AND ORDER OF THE HONOURABLE MADAM
JUSTICE SNIDER
DATED: JUNE 12, 2003
WRITTEN REPRESENTATIONS BY:
Ms. Sylvie M. Molgat FOR PLAINTIFFS
Mr. Robert MacKinnon FOR DEFENDANT
SOLICITORS OF RECORD:
DUBUC OSLAND FOR PLAINTIFFS
Ottawa, Ontario
MORRIS ROSENBERG FOR DEFENDANT
Deputy Attorney General of Canada