Arsenault et al. v. Canada, 2008 FC 299

• Judge: Martineau, J.
• Court: Federal Court (Canada)
• Case Date: January 18, 2008
• Jurisdiction: Canada (Federal)
• Citations: 2008 FC 299;(2008), 330 F.T.R. 8 (FC)

Arsenault v. Can. (2008), 330 F.T.R. 8 (FC)

MLB headnote and full text

Temp. Cite: [2008] F.T.R. TBEd. MR.014

Robert Arsenault, Joseph Aylward, Wayne Aylward, James Buote, Richard Blanchard, Executor of the Estate of Michael Deagle, Bernard Dixon, Clifford Doucette, Kenneth Fraser, Terrance Gallant, Devin Gaudet, Peter Gaudet, Rodney Gaudet, Taylor Gaudet, Casey Gavin, Jamie Gavin, Sidney Gavin, Donald Harper, Carter Hutt, Terry Llewellyn, Ivan MacDonald, Lance MacDonald, Wayne MacIntyre, David McIsaac, Gordon L. MacLeod, Donald Mayhew, Austin O'Meara and Boyd Vuozzo (plaintiffs) v. Her Majesty The Queen (defendant)

(T-378-07; 2008 FC 299)

Indexed As: Arsenault et al. v. Canada

Federal Court

Martineau, J.

March 5, 2008.

Summary:

Twenty-seven "traditional" snow crab fishers in Prince Edward Island sued the federal government for breach of contract, unjust enrichment, negligent misstatements, misfeasance in public office and breach of fiduciary duty. The fishers sought damages, specific performance of agreements entered into with the Crown and restitution of the value of snow crab quota wrongfully taken from them by the government. The government moved to strike the statement of claim on the basis that it disclosed no reasonable cause of action and/or it was an abuse of process. Alternatively, the defendants sought an order staying the action pursuant to s. 50(1)(a) of the Federal Courts Act. Finally, the defendants sought leave to defer the filing of their defence until the final disposition of the motion.

A Prothonotary of the Federal Court, in a decision not reported in this series of reports, struck out the plaintiffs request for specific performance and all the statements in the statement of claim that supported the claims for damages for breach of contract pursuant to Federal Court Rule 221(1)(a). The Prothonotary also ordered that the remaining tort action be stayed pending successful judicial review. If the plaintiffs did not commence the judicial review process within 30 days, or if they did and their application was ultimately dismissed, the plaintiffs' action was to be deemed struck without further judicial process. The plaintiffs appealed.

The Federal Court allowed the appeal and dismissed the motion to strike the statement of claim save and except that portion of the claim requesting specific performance of the agreements.

Courts - Topic 2583

Registrars and prothonotaries - Appeals from - Scope of review - The Federal Court, in reviewing a prothonotary's order, stated that "... discretionary orders of prothonotaries ought not be disturbed on appeal by 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 ... Here, the impugned order is 'vital to the final issue of the case' and the Court must therefore decide this appeal de novo. Indeed, even absent any errors in the underlying decision, the impugned order may still be set aside or varied if the Court is disposed to exercise its discretion 'differently' on the same record ... " - See paragraphs 29.

Courts - Topic 4039

Federal Court of Canada - Jurisdiction - Federal Court - Civil actions - The plaintiffs were "traditional" snow crab fishers in Prince Edward Island - They claimed that they suffered damages in connection with certain measures taken by or on behalf of the Minister of Fisheries and Oceans which significantly reduced what they alleged were their "guaranteed" snow crab fishing quotas - They claimed that the government, through a series of administrative actions, breached contractual obligations - They also alleged unjust enrichment, negligent misstatements, misfeasance in public office and breach of fiduciary duty - The government moved to strike the statement of claim, asserting, inter alia, that Grenier v. Canada (F.C.A.) stood for the proposition that administrative actions of a federal entity could not be attacked by way of an action - Grenier involved an action for damages by a federal inmate who claimed that he had been unlawfully placed into administrative segregation - The Federal Court dismissed the application - The court noted that cases, which shared similarities to the present case, had expressed several concerns respecting the application of Grenier - The court could not conclude that the plaintiffs' claims were completely devoid of any chance of success based on this jurisdictional ground - See paragraphs 30 to 43 and 55.

Courts - Topic 4039

Federal Court of Canada - Jurisdiction - Federal Court - Civil actions - The plaintiffs were "traditional" snow crab fishers - They claimed that they suffered damages in connection with certain measures taken by or on behalf of the Minister of Fisheries and Oceans which significantly reduced what they alleged were their "guaranteed" snow crab fishing quotas - They claimed that the Minister, through a series of administrative actions, breached contractual obligations - They also alleged unjust enrichment, negligent misstatements, misfeasance in public office and breach of fiduciary duty - A Prothonotary held that, although two prior decisions might have held that the taking of quota to finance the Minister's activities was illegal, the plaintiffs first had to obtain a declaration of invalidity of the Minister's decisions under s. 18 of the Federal Court Act before pursuing an action in damages against the Crown (Grenier v. Canada (F.C.A.)) - The Federal Court disagreed - It was unnecessary to determine whether the legality issue was res judicata because the plaintiffs had also alleged that the taking of quota was in violation of contractual obligations - In any event, there was an estoppel issue and the Crown was barred from ascertaining in any judicial proceeding that the taking of quota was a lawful act - Accordingly, it would be a waste of judicial resources to force the plaintiffs to first obtain a declaration of invalidity of such illegal ministerial actions prior to the pursuance of its present action - See paragraphs 43 and 44.

Courts - Topic 4057

Federal Court of Canada - Jurisdiction - Federal Court - Judicial review of interlocutory decisions - [See Courts - Topic 2583 ].

Courts - Topic 4073

Federal Court of Canada - Jurisdiction - Federal Court - Practice - Striking out pleadings - The Federal Court reviewed the "plain and obvious" test applicable to a motion to strike a statement of claim under Federal Court Rule 221(1) - The court rejected an assertion that the test did not apply when the application was based on a question of jurisdiction - The particular nature of the arguments made by a party in support of a motion to strike, whether they were jurisdictional or not, did not change the test - The judge always had a discretion on whether or not to strike a statement of claim - It had to be remembered that in cases contemplated by rule 221(1)(a), the court lacked the benefit of reviewing evidence or hearing witnesses - If the claim had some chance of success, the action had to be permitted to proceed - Additionally, novelty of the claim would not militate against the plaintiffs - See paragraphs 21 to 27.

Courts - Topic 4073

Federal Court of Canada - Jurisdiction - Federal Court - Practice - Striking out pleadings - The plaintiffs were "traditional" snow crab fishers - They claimed that they suffered damages in connection with certain measures taken by or on behalf of the Minister of Fisheries and Oceans which significantly reduced what they alleged were their "guaranteed" snow crab fishing quotas - They claimed that the Minister, through a series of administrative actions, breached contractual obligations - They also alleged unjust enrichment, negligent misstatements, misfeasance in public office and breach of fiduciary duty - The Crown moved to strike the statement of claim asserting, inter alia, that the legislative scheme did not authorize the Minister to fetter the Minister's discretion respecting the allocation of fishing quotas - Accordingly, there was no reasonable cause of action - The Federal Court stated that, assuming that the Minister entered into agreements, the issue was whether the agreements were enforceable and could support an action in damages for breach of contract or, alternatively, in tort - The legality or enforcement of the agreements was a mixed question of fact and law - Any misstatement or promise made by Crown was a factual issue which ought to be determined after witnesses were heard - The court was unable, at this stage, to find that the plaintiffs' claims did not disclose a reasonable cause of action - The fettering issue was a complex question of fact and law which should not be resolved on a motion to strike - To grant the motion implied that the court had accepted that the agreements were illegal or unenforceable, a determination that the court was not in a position to make in the abstract - See paragraphs 46 to 54.

Estoppel - Topic 386

Estoppel by record (res judicata) - Res judicata as a bar to subsequent proceedings - Issues decided in prior proceedings (incl. validity of statutes) - [See second Courts - Topic 4039 ].

Fish and Game - Topic 223

Right to fish - Licensing - Issuance of licence - The plaintiffs were "traditional" snow crab fishers - They claimed that they suffered damages in connection with certain measures taken by or on behalf of the Minister of Fisheries and Oceans which significantly reduced what they alleged were their "guaranteed" snow crab fishing quotas - They claimed that the Minister, through a series of administrative actions, breached contractual obligations - They also alleged unjust enrichment, negligent misstatements, misfeasance in public office and breach of fiduciary duty - They sought, inter alia, specific performance of their agreements - The Minister applied to strike the statement of claim - The Federal Court stated that it was clear that the plaintiffs could not, by this action, force the Minister to exercise his discretion under s. 7 of the Fisheries Act respecting the issuance of licences - Therefore the specific performance claim was affected by a serious defect - That portion of the statement of claim was to be struck - See paragraphs 56 and 61.

Practice - Topic 2239.1

Pleadings - Striking out pleadings - Grounds - Abuse of process - Hopeless suit - [See Fish and Game - Topic 223 ].

Practice - Topic 2241

Pleadings - Striking out pleadings - Grounds - Lack of jurisdiction (incl. alternative remedy) - [See first Courts - Topic 4039 ].

Practice - Topic 2249

Pleadings - Striking out pleadings - Bars - Issues to be tried - [See first Courts - Topic 4039 and second Courts - Topic 4073 ].

Cases Noticed:

R. v. Marshall (D.J.), Jr., [1999] 3 S.C.R. 456; 246 N.R. 83; 178 N.S.R.(2d) 201; 549 A.P.R. 201, refd to. [para. 7].

Larocque v. Canada (Minister of Fisheries and Oceans) (2006), 352 N.R. 133; 2006 FCA 237, refd to. [para. 9].

Association des crabiers acadiens et al. v. Canada (Attorney General) (2006), 301 F.T.R. 297; 2006 FC 1241, refd to. [para. 9].

Hodgson et al. v. Ermineskin Indian Band et al. (2000), 180 F.T.R. 285 (T.D.), affd. (2000), 267 N.R. 143 (F.C.A.), leave to appeal dismissed (2001), 276 N.R. 193 (S.C.C.), refd to. [para. 13].

Grenier v. Canada, [2006] 2 F.C.R. 287; 344 N.R. 102; 2005 FCA 348, consd. [para. 18].

Hunt v. T & N plc et al., [1990] 2 S.C.R. 959; 117 N.R. 321, refd to. [para. 22].

Hunt v. Carey Canada Inc. - see Hunt v. T & N plc et al.

Tyhy et al. v. Schulte Industries Ltd., [2004] F.T.R. Uned. 839; 2004 FC 1421, refd to. [para. 23].

Shubenacadia Indian Band v. Canada (Attorney General) et al. (2002), 291 N.R. 393; 2002 FCA 255, refd to. [para. 23].

Sokolowska v. Minister of National Revenue (2005), 331 N.R. 176; 2005 FCA 29, leave to appeal refused (2005), 346 N.R. 195 (S.C.C.), refd to. [para. 24].

Transamerica Life Canada Inc. et al. v. ING Canada Inc., [2003] O.A.C. Uned. 565; 68 O.R.(3d) 457 (C.A.), refd to. [para. 26].

Dalex Co. v. Schwartz Levitsky Feldman (1994), 19 O.R.(3d) 463 (Gen. Div.), refd to. [para. 27].

Visx Inc. v. Nidek Co. et al. (1998), 234 N.R. 94; 82 C.P.R.(3d) 289 (F.C.A.), refd to. [para. 27].

Merck & Co. et al. v. Apotex Inc. (2003), 315 N.R. 175; 30 C.P.R.(4th) 40; 2003 FCA 488, refd to. [para. 29].

Jazz Air LP v. Toronto Port Authority et al. (2007), 314 F.T.R. 54; 2007 FC 624, refd to. [para. 29].

Tremblay v. Canada (Procureur général) (2004), 327 N.R. 160; 2004 FCA 172, refd to. [para. 30].

White (Peter G.) Management Ltd. v. Canada (2007), 314 F.T.R. 284; 2007 FC 686, refd to. [para. 35].

Gestion Complexe Cousineau (1989) Inc. v. Canada (Ministre des Travaux publics et Services gouvernementaux), [1995] 2 F.C. 694; 184 N.R. 260 (F.C.A.), refd to. [para. 36].

AgustaWestland International Ltd. v. Canada (Minister of Public Works and Government Services) et al. (2006), 307 F.T.R. 62; 2006 FC 767, refd to. [para. 38].

Haj Khalil et al. v. Canada (2007), 317 F.T.R. 32; 2007 FC 923, refd to. [para. 39].

G-Civil Inc. v. Canada (Minister of Public Works and Government Services Canada), [2006] O.J. No. 5092 (Sup. Ct.), refd to. [para. 40].

TeleZone Inc. v. Canada (Attorney General), [2007] O.J. No. 4766 (Sup. Ct.), refd to. [para. 40].

Genge v. Canada (Attorney General) (2007), 270 Nfld. & P.E.I.R. 182; 822 A.P.R. 182; 2007 NLCA 60, refd to. [para. 42].

Terra Vista Ltd. v. Newfoundland and Labrador (Minister of Fisheries and Aquaculture) (2006), 260 Nfld. & P.E.I.R. 344; 786 A.P.R. 344; 277 D.L.R.(4th) 117; 2006 NLCA 61, refd to. [para. 47].

St. Anthony Seafoods Limited Partnership v. Newfoundland and Labrador (Minister of Fisheries and Aquaculture) (2004), 241 Nfld. & P.E.I.R. 97; 716 A.P.R. 97; 245 D.L.R.(4th) 597; 2004 NLCA 59, leave to appeal dismissed (2005), 339 N.R. 198 (S.C.C.), refd to. [para. 47].

Pacific National Investments Ltd. v. Victoria (City) et al., [2000] 2 S.C.R. 919; 263 N.R. 1; 144 B.C.A.C. 203; 236 W.A.C. 203; 2000 SCC 64, refd to. [para. 49].

Adefarakan et al. v. Toronto (City), [2000] O.T.C. Uned. E38 (Sup. Ct.), leave to appeal denied [2001] O.J. No. 2491 (Div. Ct.), refd to. [para. 51].

Wells v. Newfoundland and Board of Commissioners of Public Utilities (Nfld.), [1999] 3 S.C.R. 199; 245 N.R. 275; 180 Nfld. & P.E.I.R. 269; 548 A.P.R. 269, refd to. [para. 53].

Joncas v. Canada et al. (1993), 75 F.T.R. 277 (T.D.), refd to. [para. 56].

Reference Re Canada Assistance Plan (B.C.) - see Reference Re Constitutional Question Act (B.C.).

Reference Re Constitutional Question Act (B.C.), [1991] 2 S.C.R. 525; 127 N.R. 161; 1 B.C.A.C. 241; 1 W.A.C. 241, refd to. [para. 57].

United States v. Winstar Corp. (1996), 518 U.S. 839, refd to. [para. 58].

Ontario Public Service Employees' Union v. Ontario (Attorney General) (1996), 87 O.A.C. 219; 26 O.R.(3d) 740 (Div. Ct.), refd to. [para. 58].

Huzar et al. v. Canada et al. (1997), 139 F.T.R. 81 (T.D.), refd to. [para. 61].

Premakumaran v. Canada (2006), 351 N.R. 165; 2006 FCA 213, leave to appeal dismissed (2006), 362 N.R. 390 (S.C.C.), refd to. [para. 62].

Trojan Technologies Inc. v. Suntec Environmental Inc. (2004), 320 N.R. 322; 2004 FCA 140, leave to appeal dismissed (2004), 333 N.R. 393 (S.C.C.), refd to. [para. 62].

Authors and Works Noticed:

Hogg, Peter W., and Monahan, Patrick J., Liability of the Crown (3rd Ed. 2000), p. 234 [para. 57].

Counsel:

Kenneth L. Godfrey and Brandon MacKenzie, for the plaintiffs;

Reinhold M. Endres, Q.C., and Patricia MacPhee, for the defendant.

Solicitors of Record:

Campbell, Lea, Charlottetown, Prince Edward Island, for the plaintiffs;

John H. Sims, Q.C., Deputy Attorney General of Canada, Halifax, Nova Scotia, for the defendant.

This appeal was heard at Charlottetown, Prince Edward Island, on January 18, 2008, before Martineau, J., of the Federal Court, who delivered the following decision on March 5, 2008.