Fuller (Thomas) Construction Co. (1958) Ltd. v. Canada, (1992) 147 N.R. 313 (FCA)

• Judge: Marceau, Stone and Robertson, JJ.A.
• Court: Federal Court of Appeal (Canada)
• Case Date: October 06, 1992
• Jurisdiction: Canada (Federal)
• Citations: (1992), 147 N.R. 313 (FCA)

Fuller Constr. v. Can. (1992), 147 N.R. 313 (FCA)

MLB headnote and full text

Thomas Fuller Construction Co. (1958) Limited (plaintiff/appellant) v. Her Majesty the Queen in Right of Canada (defendant/respondent)

(A-919-91) (T-1036-87; T-1416-87)

Indexed As: Fuller (Thomas) Construction Co. (1958) Ltd. v. Canada

Federal Court of Appeal

Marceau, Stone and Robertson, JJ.A.

October 6, 1992.

Summary:

The plaintiff, as main contractor, entered two construction contracts with the federal Crown. The plaintiff and the subcontractors entered "litigation agreements" authorizing the plaintiff to sue, if necessary, on behalf of the subcontractors. The agreements also provided for a division of the proceeds of any judgments. The plaintiff launched two actions against the Crown respecting the contracts. The Crown applied for an order that the litigation agreements be declared void, or struck down, as offending the laws of maintenance and champerty.

The Federal Court of Canada, Trial Divi­sion, in a decision reported at 48 F.T.R. 44, allowed the Crown's application, holding that the litigation agreements were invalid because they were assignments of a bare right to litigate and they also offended the laws of maintenance and champerty. The plaintiff appealed.

The Federal Court of Appeal allowed the appeal.

Choses in Action - Topic 283

What may be assigned - Benefits or rights not assignable - Legal rights - The plain­tiff as main contractor entered two con­struction contracts with the Crown - The plaintiff and subcontractors entered "litiga­tion agreements" authorizing the plaintiff to sue, if necessary, on behalf of the sub­contractors - The agreements also pro­vided for a division of the proceeds of any judgments - The Federal Court of Canada, Trial Division, declared the "litigation agreements" invalid because, inter alia (1) the construction contracts between the plaintiff and the Crown prohibited assign­ments of rights; (2) the agreements were an attempt to assign a bare right to sue; and (3) the agreements were contrary to the doctrines of maintenance and champerty - The Federal Court of Appeal allowed an appeal and set aside the order of the Trial Division.

Practice - Topic 2201

Pleadings - Striking out pleadings - Juris­diction - The plaintiff as main contractor entered two construction contracts with the Crown - The plaintiff and subcontractors entered "litigation agreements" authorizing the plaintiff to sue on behalf of the sub­contractors - The agreements also pro­vided for a division of the proceeds - The Federal Court of Canada, Trial Division, declared the "litigation agreements" invalid because, inter alia (1) the construction contracts between the plaintiff and the Crown prohibited assignments of rights; and (2) the agreements were contrary to the doctrines of maintenance and champerty - The plaintiff appealed on the ground that the court lacked jurisdiction because there was no allegation in the statement of claim to strike - The Federal Court of Appeal allowed an appeal and set aside the order of the Trial Division - See paragraph 6.

Practice - Topic 5261

Trials - General - Trial of preliminary issues - Issues of law - The plaintiff as main contractor entered two construction contracts with the Crown - The plaintiff and subcontractors entered "litigation agreements" authorizing the plaintiff to sue, if necessary, on behalf of the subcon­tractors - The agreements also provided for a division of the proceeds of any judg­ments - The Federal Court of Canada, Trial Division, declared the "litigation agreements" invalid because, inter alia the agreements were contrary to the doctrines of maintenance and champerty - The plaintiff appealed on the ground that the court lacked jurisdiction to determine the matter as a preliminary question of law because it was not raised in the pleadings - The Federal Court of Appeal allowed an appeal and set aside the order of the Trial Division - See paragraph 6.

Torts - Topic 6280

Abuse of legal procedure - Maintenance and champerty - General - [See Choses in Action - Topic 283 ].

Cases Noticed:

Berneche et al. v. Canada, [1991] 3 F.C. 383; 133 N.R. 232 (F.C.A.), refd to. [para. 6].

Flexi-Coil Ltd. v. Bourgault (F.P.) Indus­tries (1991), 123 N.R. 235 (F.C.A.), refd to. [para. 6].

Counsel:

P. Donald Rasmussen and E. Schmidt, for the appellant;

Grant J. Sinclair, Q.C., and Robert P. Hynes, for the respondent.

Solicitors of Record:

Rasmussen Starr Ruddy, Ottawa, Ontario, for the appellant;

Grant J. Sinclair, Q.C., Ottawa, Ontario, and John C. Tait, Q.C., Deputy Attorney General of Canada, Ottawa, Ontario, for the respondent.

This appeal was heard in Ottawa, Ontario, on October 6, 1992, by Marceau, Stone and Robertson, JJ.A., of the Federal Court of Appeal. The court's decision was delivered orally on that date by Marceau, J.A.