Ottawa, Ontario, January 24, 2007
PRESENT: THE HONOURABLE MADAM JUSTICE DAWSON
BETWEEN:
ENVIREEN CONSTRUCTION (1997) INC.
Plaintiff
and
HER MAJESTY THE QUEEN IN RIGHT OF CANADA
Defendant
And
Docket: T-960-03
BETWEEN:
ENVIREEN CONSTRUCTION (1997) INC.
Plaintiff
and
HER MAJESTY THE QUEEN IN RIGHT OF CANADA,
MINISTER OF NATIONAL DEFENCE and
MINISTER OF PUBLIC WORKS and
GOVERNMENT SERVICES CANADA
Defendants
REASONS FOR ORDER AND ORDER
[1] The main issue raised on the motions before the Court is whether the statement of claim issued in the most recent action should be struck out because it constitutes an abuse of process. For the reasons that follow, I have concluded it should not.
[2] On June 11, 2003, the plaintiff (Envireen) commenced an action in this Court in Court file T-960-03 (first action). The first action named as defendants the Minister of National Defence and the Minister of Public Works and Government Services Canada. The first action sought damages against the Crown, allegedly arising out of a contract awarded to Envireen with respect to the demolition of a building located in Goose Bay, Labrador.
[3] The first action did not proceed expeditiously. Counsel for the defendants took the position that the proper defendant was “Her Majesty the Queen”, that the Ministers had no liability in their personal capacity and that, in any event, the Ministers were never personally served with the statement of claim. On October 8, 2003, a draft amended statement of claim was served on counsel for the Crown. The amended claim added “Her Majesty the Queen in Right of Canada” as a defendant. On October 14, 2003, a statement of defence was delivered to the amended statement of claim on behalf of the Crown. Counsel for the Crown advised that the statement of defence was served in anticipation that the irregularities in the claim would be corrected. On May 18, 2004, counsel for the plaintiff served its affidavit of documents upon counsel for the Crown, and inquired about discovery dates. Counsel for the Crown advised that he was finalizing the Crown’s affidavit of documents, but he repeated that unless the Ministers were deleted as defendants a motion to strike would follow.
[4] On August 17, 2004, this Court sent a notice of status review to the parties. The notice, issued pursuant to what is now Rule 380 of the Federal Courts Rules, SOR/2004-283 (Rules) required the plaintiff to show cause, by written submissions to be served and filed by September 20, 2004, why the first action should not be dismissed for delay. No submissions were filed, and by order dated October 5, 2004 Madam Justice McGillis dismissed the action for delay.
[5] On receipt of the order of Justice McGillis, on October 6, 2004 counsel for the plaintiff wrote the Court and counsel for the Ministers. He acknowledged that the Registry of the Court had informed him that the Court maintained a fax confirmation that evidenced delivery of the notice of status review to him. He stated, however, that the notice of status review “did not come to my attention”. He closed by saying that “I will review the Rules to determine what recourse is available to bring this matter back into good standing”. However, no motion or other step was taken.
[6] Nothing of any substance was communicated to the Court or counsel for the Crown until March 31, 2006 (almost 18 months later) when a new statement of claim was filed by Envireen in the present proceeding (second action) and served upon the Crown. In the second action the named defendant is “Her Majesty the Queen in Right of Canada”. Again, Envireen seeks damages with respect to the demolition of the same building in Goose Bay, Labrador. Counsel for Envireen remains the same.
[7] In a letter discussing, among other things, the timing of the filing of a statement of defense to the second action, counsel for the plaintiff characterized the statement of claim issued in the second action to be “virtually identical [to the first] (save for the addition of various items of relief)”. While there are some differences between the two claims, I agree with counsel’s characterization.
[8] On October 5, 2006, the Crown moved for an order striking the statement of claim in the second action on the ground that it is an abuse of process.
[9] In response, the plaintiff filed a cross-motion, seeking relief in the event that the second action was struck out. The relief sought is an order setting aside the order of Justice McGillis.
[10] Turning to the motion to strike the statement of claim in the second action on the ground that it is an abuse of process, there is some jurisprudence relevant to this issue. In Lifeview Emergency Services Ltd. v. Alberta Ambulance Operators’ Assn., [1995] F.C.J. No. 1199, Mr. Justice Rothstein, then of this Court, considered a motion to strike a claim on the ground that it was an abuse of process. Briefly stated, the facts were that the plaintiffs had commenced an action in the Court of Queens’ Bench of Alberta. Little was done to pursue the action because the plaintiff was awaiting the outcome of related criminal proceedings. The action was later dismissed due to the application of a new Alberta rule of practice that required actions to be dismissed on request if nothing had been done for a period of five years to materially advance the action. Following this, the plaintiffs commenced an action in this Court claiming the same relief. Justice Rothstein dismissed the motion to strike, writing at paragraphs 13 and 14 that:
13. As to whether it is an abuse of the process to discontinue in one court and commence action in another having concurrent jurisdiction, I do not think that there is any general rule of law to this effect. Of course, in particular cases, discontinuing and commencing afresh may be found to be abusive whether it be in the same or a different court. But such a finding would be based on the facts of the case. Further, it may be that in the case of particular statutory schemes or particular schemes of the rules of court, a second action in a court of concurrent jurisdiction will be precluded if a party has first elected to proceed in one court. See for example Re Security Storage Limited and Dominion Furniture Chain Stores Limited, [1943] 1 W.W.R. 433 (B.C.S.C. per Farris, C.J.S.C.). But neither the facts nor the Alberta Rules of Court nor relevant statutory provisions at issue here suggest that proceeding now in the Federal Court in some way runs afoul of those rules or statutory provisions or is abusive.
14. Perhaps the plaintiff should have proceeded with more dispatch in the Court of Queen's Bench. On the other hand it is not illogical to await the outcome of related criminal proceedings. Unfortunately the plaintiff ran afoul of the new non discretionary rule 244.1(1). I see nothing in the circumstances here that is an abuse of the process in the plaintiff commencing this action in this Court.
[underlining added]
[11] In Sauve v. Canada, [2002] F.C.J. No. 1001 my colleague Mr. Justice Lemieux considered a motion to strike where an action had been dismissed by this Court on status review and the plaintiff then filed a new statement of claim that was virtually identical to that filed in the first action. At paragraph 19, Justice Lemieux summarized the relevant legal principles relating to abuse of process as follows:
19. As I see it, the case law has established the following parameters surrounding the doctrine of abuse of process:
(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 setting for its application.
[12] Applying those principles, Mr. Justice Lemieux struck the second claim as an abuse of process. However, the facts in Sauve were materially different than those now before the Court. In Sauve, after a first notice of status review was issued by the Court an order was made to allow the action to continue on terms that a reply to the Crown’s statement of defence would be filed within 20 days and that the action would be pursued in accordance with the Rules. The plaintiff then failed to comply with that order and a second notice of status review issued. The action was then ordered to be struck out. On appeal to the Federal Court of Appeal the order striking out the action was upheld due to the plaintiff’s unjustified failure to comply with the order that issued after the first status review.
[13] Applying the principles articulated by Mr. Justice Lemieux in Sauve, I am to review all of the circumstances in evidence because the exercise of discretion whether to strike a pleading is fact and context driven. Litigants are to be protected from abusive, vexatious or frivolous proceedings.
[14] In my view, material considerations before me are:
1. The statement of claim issued in the second action is not, on its face, abusive, vexatious or frivolous.
2. I conclude that the plaintiff’s difficulties arise from its counsel’s self-admitted lack of familiarity with the practice, Rules and procedures of the Court. The evidence does not establish a conscious disregard of the processes of this Court.
3. There is no evidence that the Crown is prejudiced in its ability to defend the second action as a result of the approximately 18-month delay from the time that the first action was dismissed until the second action was commenced.
4. Rule 3 of the Rules requires the Rules to be applied so as to secure the just, most expeditious and least expensive determination of every proceeding on its merits. The purpose of status review is not to dismiss valid claims without a hearing, but rather to allow the Court to move cases forward in a timely and efficient manner.
5. The plaintiff’s past failure to comply with the content and spirit of the Rules can be addressed, through the ability of the Court, pursuant to Rule 53(1), to impose such conditions as the Court considers just. A suitable condition is that the second action may only proceed as a specialty managed proceeding. It is to be expected that the plaintiff will at all times cooperate with respect to the scheduling of case management conferences and will be punctilious with respect to deadlines.
6. When the first action was dismissed, the Court made no award of costs. As a condition of allowing the second action to proceed, the defendant in the second action may be substantially indemnified against the costs thrown away as the result of the plaintiff’s conduct.
[15] Therefore, in the exercise of my discretion, the defendant’s motion to strike shall be dismissed on the conditions more particularly set out in the order that follows.
[16] The plaintiff’s cross-motion will be dismissed for two reasons. First, the second action has not been dismissed and this motion was conditional upon that event.
[17] Second, Rule 399(1) provides:
|
399. (1) On motion, the Court may set aside or vary an order that was made (a) ex parte; or (b) in the absence of a party who failed to appear by accident or mistake or by reason of insufficient notice of the proceeding, if the party against whom the order is made discloses a prima facie case why the order should not have been made. [underlining added]
|
399. (1) La Cour peut, sur requête, annuler ou modifier l’une des ordonnances suivantes, si la partie contre laquelle elle a été rendue présente une preuve prima facie démontrant pourquoi elle n’aurait pas dû être rendue : a) toute ordonnance rendue sur requête ex parte; b) toute ordonnance rendue en l’absence d’une partie qui n’a pas comparu par suite d’un événement fortuit ou d’une erreur ou à cause d’un avis insuffisant de l’instance. [Le souligné est de moi.] |
[18] Accepting that the plaintiff failed to respond to the notice of status review by accident or mistake, the plaintiff’s motion materials fail to disclose a prima facie case why the order of Justice McGillis should not have been made.
ORDER
THEREFORE, THIS COURT ORDERS THAT:
1. The motion to strike the statement of claim in this proceeding as being as an abuse of process is dismissed on the following conditions.
2. This action shall proceed as a specially managed proceeding. The Chief Justice will assign a case management officer.
3. Within 20 days of the date of this order, the parties shall file with the Court a joint schedule for the prosecution of this action.
4. The plaintiff shall pay to the defendant Crown forthwith the costs thrown away, determined on the basis of a substantial indemnity to the defendant. If such costs are not agreed, within 20 days of the date of this order the defendant shall serve and file written submissions with respect to costs. These submissions are not to exceed 3 pages in length. Thereafter, within 27 days of the date of this order, the plaintiff shall serve and file responsive submissions with respect to costs, not to exceed 3 pages in length. The Court shall then make an award of costs.
5. Following the issuance of such order as to costs, the plaintiff shall not take any step in this proceeding until it has paid the costs awarded to the defendant.
6. The cross-motion of the defendant is dismissed.
7. The defendant is entitled to its costs of its motion, and the costs of the plaintiff’s cross-motion, in the cause.
Judge
FEDERAL COURT
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: T-583-06
STYLE OF CAUSE: ENVIREEN CONSTRUCTION (1997) INC., Plaintiff
and HER MAJESTY THE QUEEN IN RIGHT OF CANADA, Defendant
DOCKET: T-960-03
STYLE OF CAUSE: ENVIREEN CONSTRUCTION (1997) INC., Plaintiff
and HER MAJESTY THE QUEEN IN RIGHT OF CANADA, MINISTER OF NATIONAL DEFENCE and MINISTER OF PUBLIC WORKS and GOVERNMENT SERVICES CANADA, Defendants
PLACE OF HEARING: TORONTO, ONTARIO
DATE OF HEARING: JANUARY 15, 2007
APPEARANCES:
JOHN VAMVAKIDIS FOR THE PLAINTIFF
SANDRA NISHIKAWA FOR THE DEFENDANTS
SOLICITORS OF RECORD:
JOHN VAMVAKIDIS FOR THE PLAINTIFF
BARRISTER AND SOLICITOR
VAUGHAN, ONTARIO
JOHN H. SIMS, Q.C. FOR THE DEFENDANTS
DEPUTY ATTORNEY GENERAL OF CANADA