Date: 20041125
Docket: T-745-99
Citation: 2004 FC 1655
Toronto, Ontario, November 25th, 2004
Present: The Honourable Madam Justice Mactavish
BETWEEN:
GRANT R. WILSON
Plaintiff
and
REVENUE CANADA and HER MAJESTY THE QUEEN
Defendants
REASONS FOR ORDER AND ORDER
[1] Grant Wilson has been involved in income tax disputes with the defendants going back to the mid-1970's, which have resulted in a number of actions in this Court. In this action, which was commenced in 1999, Mr. Wilson claims $60 million in damages, along with other relief, for what he says was the illegal seizure of $441,641.13 from his bank account on December 18, 1991.
[2] In an Order dated July 16, 2003, Justice Hugessen found that Mr. Wilson had repeatedly failed to provide proper answers to undertakings and to produce documents as required. Justice Hugessen further noted that orders from the Court appear to have had no effect on Mr. Wilson. As a result, Justice Hugessen dismissed Mr. Wilson's action, with costs.
[3] Mr. Wilson filed no submissions in response to the defendants' motion for dismissal, which was dealt with in writing, pursuant to rule 369 of the Federal CourtRules. He now moves under Rule 399(1) to have Justice Hugessen's order set aside, asserting that his failure to respond to the defendants' motion for dismissal was the result of a mistake on the part of his counsel.
[4] Mr. Wilson says that he became aware of Justice Hugessen's July 16, 2003 order on August 13, 2003. This motion to set aside Justice Hugessen's order was served in late September, 2003, although the motion materials were defective. According to counsel for Mr. Wilson, it has taken 14 months to bring this motion on for hearing because of counsel's inexperience with Federal Court practice, and because counsel is doing this case pro bono.
[5] On October 15, 2004, Justice Hugessen directed that this matter be dealt with in General Sittings in Toronto.
Rule 399
[6] 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.
[7] Counsel for Mr. Wilson initially argued that his client's failure to file any responding materials meant that the motion was effectively dealt with ex parte. It is common ground, however, that Mr. Wilson was served with notice of the defendants' motion to have his action dismissed. As a result, I am satisfied that Rule 399(1)(a) has no application in this case.
[8] Mr. Wilson also relies on Rule 399(1)(b), asserting that his failure to respond to the defendant's motion was the result of negligence on the part of his solicitor. In order to properly address this argument, it is necessary to have some understanding of the sequence of events leading up to the issuance of Justice Hugessen's July 16, 2003 order.
Chronology of Events Leading up to the July 16, 2003 Order
[9] This litigation has suffered a long and tortuous history, and has been the subject of numerous motions, and at least three status reviews. I do not intend to review the entire history of the case, but will focus instead on the events directly giving rise to Justice Hugessen's July 16, 2003 order.
[10] Mr. Wilson was examined for discovery in May and September of 2000, at which time a number of undertakings were given. Not being satisfied with the answers to the undertakings provided by Mr. Wilson, the defendants obtained an order from Prothonotary Lafrenière on December 5, 2002, ordering Mr. Wilson to re-attend for discovery, at his own expense, prior to January 31, 2003, and to answer all reasonable questions arising from the answers to the undertakings provided to date, as well as questions arising out of the amendments to Mr. Wilson's Statement of Claim.
[11] Mr. Wilson's further examination for discovery was originally scheduled for December 19 and 20, 2002, but was adjourned at his request, based upon his representation that he would be retaining counsel within 10 days. The examination was rescheduled for January 16 and 17, 2003. Mr. Wilson attended at the examination, without counsel.
[12] In the course of this further examination for discovery, Mr. Wilson refused to answer one question, and took a number of other questions under advisement. He subsequently refused to answer most of these questions, submitting that they were not relevant to the issues in the case.
[13] Notwithstanding that the defendants' Direction to Attend asked that Mr. Wilson produce a number of documents relating to the corporations that he claims were driven out of business by the defendants' actions, Mr. Wilson failed to bring any of this documentation to the January, 2003 examination.
[14] Following a further exchange of correspondence between the parties and the Court, on May 5, 2003, Prothonotary Lafrenière directed that Mr. Wilson provide answers to the outstanding undertakings from the January, 2003 discoveries by no later than May 30, 2003. Prothonotary Lafrenière further directed that the defendants bring any motions to compel answers to questions refused, as well as answers to outstanding undertakings, by June 27, 2003.
[15] Not being satisfied with the information received from Mr. Wilson, on June 17, 2003, the defendants brought a motion under Rule 369 to have Mr. Wilson's action dismissed. The motion was served on Mr. Wilson the following day.
[16] No responding material was filed by Mr. Wilson within the 10 period provided for in the Rules, or at any time prior to the issuance of Justice Hugessen's order. Further, no request was ever made for an extension of time to respond to the motion.
[17] On July 16, 2003, Justice Hugessenissued his order dismissing Mr. Wilson's action.
[18] Mr. Wilson says that his failure to respond to the defendants' motion was the result of a mistake, which he identifies as negligence on the part of his counsel. As a result, Mr. Wilson submits that Justice Hugessen's decision should be set aside.
Was Mr. Wilson's Failure to Respond to the Motion the Result of a Mistake?
[19] Mr. Wilson's affidavit addresses his contention that his failure to respond to the defendants' motion was the result of negligence on the part of his counsel. The operative portions of his affidavit provide:
28. On April 17th, 2003, I retained new legal counsel; namely, Raphael Partners of Windsor, Ontario. Mr. Raymond Colautti agreed to deal with my outstanding undertakings and responses thereto and attend a status review requested by the Registrar dated April 3rd, 2003. Subsequently, he was also retained to address the directions issued by the Honourable Prothonotary Lafrenière dated May 5, 2003 ...
29. Mr. Colautti also agreed to act as Agent on the motions subsequently brought by the Defendants for (1) Additional Security for Costs and (2) An Order requesting Dismissal of the action or in the alternative, an Order specifying a date for the delivery of all answers to undertakings by the Plaintiff issued on June 18, 2003 and returnable June 26, 2003. This was confirmed to me in a letter of engagement dated June 13th, 2003 ...
30. Mr. Colautti of Raphael Partners confirmed the representation as my agent and would complete and file the materials on the Motions noted. I provided a retainer of $5,000.00 as agreed...
[20] Mr. Colautti has not himself provided an affidavit in this matter, and there is nothing before me to suggest that he is even aware of Mr. Wilson's allegations of professional negligence. However, attached to Mr. Wilson's affidavit are copies of an exchange of correspondence between Mr. Wilson and Mr. Colautti. A review of this correspondence discloses that Mr. Wilson's assertion that he retained Mr. Colautti on April 17th, 2003 to deal with this matter is demonstrably untrue.
[21] On June 13, 2003, Mr. Colautti wrote to Mr. Wilson, apparently following up on a meeting of the previous day. Mr. Colautti indicates that he thought it necessary to very clearly set out his position with respect to the various matters that Mr. Wilson had discussed with him. Far from being a "Letter of Engagement", this letter makes it very clear that Mr. Colautti hadnot been retained by Mr. Wilson. What Mr. Colautti does do is to explicitly set out for Mr. Wilson what it was that Mr. Colautti was prepared to do for him, provided the appropriate financial arrangements were made. Mr. Colautti also spells out exactly what it was that he was not prepared to do to assist Mr. Wilson.
[22] According to Mr. Colautti, he first met with Mr. Wilson on April 27, 2003. After reviewing the voluminous documentation that Mr. Wilson had evidently brought in, Mr. Colautti wrote to Mr. Wilson on April 28, 2003. Although Mr. Wilson has not produced a copy of Mr. Colautti's April 28 letter, Mr. Colautti summarizes that letter in his June 13 letter.
[23] According to Mr. Colautti, on April 28, 2003, Mr. Wilson was advised that Mr. Colautti was not prepared to do anything on any of Mr. Wilson's files, including this action, until such time as Mr. Wilson provided him with a monetary retainer.
[24] Mr. Wilson and Mr. Colautti met again on June 12, 2003. According to Mr. Colautti's June 13 letter, Mr. Colautti "clearly and unambiguously" advised Mr. Wilson that he was not prepared to undertake any further work on this litigation until such time as Mr. Wilsonprovided him with a $20,000 retainer in order for Mr. Colautti to be able to retain a forensic accountant.
[25] Mr. Colautti goes on to say:
You expect to be met, soon, with a motion to dismiss the Revenue Canada litigation, and some other kind of motion arising from your refusals to answer certain questions put on the resumed examinations for discovery, which was to be confined to outstanding undertakings.
During the course of our June 12, 2003 meeting, I advised you that, without becoming solicitors of record [in this action and a second action that Mr. Wilson has against the Royal Bank] we would be prepared to assist you, as counsel, in representation on these two motions only, provided you came up with $5,000 in respect of each motion. I told you that we would not be prepared to do anything in the absence of these monies being paid up front.
I also advised you during the course of this meeting that we are not in a position to finance your litigation. I suggested other alternatives you might put into place. If you cannot obtain assistance in financing [the] litigation, we can do nothing further for you. (emphasis in the original)
[26] On June 18, 2003, Mr. Wilson wrote back to Mr. Colautti, with what was essentially a counter-proposal, which would have had Mr. Wilson provide Mr. Colautti with a $2,500 retainer 'up front', to prepare responding materials with respect to the defendant's motion to dismiss this action, which had been served on Mr. Wilson that same day. Once the materials were filed, and prior to any court attendance, Mr. Wilson would then provide Mr. Colautti with a further $2,500.
[27] It appears from later correspondence that Mr. Colautti responded to Mr. Wilson's letter on June 25, 2003. Mr. Wilson has elected not to produce a copy of this letter, and thus there is nothing before the Court to indicate that Mr. Colautti agreed to any modification of his retainer demands. Having failed to produce what was arguably the most important letter between Mr. Wilson and Mr. Colautti, given its timing, I am prepared to draw an adverse inference against Mr. Wilson, and to find that Mr. Colautti's June 25, 2003 letter would not have assisted Mr. Wilson in demonstrating that Mr. Colautti was agreeable to Mr. Wilson's counter-proposal, or that he was retained at that time.
[28] Having been served with the defendants' motion materials on June 18th, Mr. Wilson's responding materials were due on June 28, 2003. At no time prior to that date was either Mr. Colautti or Raphael Partners retained to assist Mr. Wilson with respect to this matter, nor did Mr. Wilson himself ever request an extension of time for filing his responding materials.
[29] On July 14, 2003, Mr. Wilson provided Raphael Partners with a retainer of $5,000. Justice Hugessen's order dismissing Mr. Wilson's action was issued two days later.
[30] Counsel for Mr. Wilson argues that Mr. Wilson honestly, albeit perhaps mistakenly, believed that Mr. Colautti was going to handle the defendants' motion to dismiss for him, and that Mr. Colautti would be preparing responding materials in a timely fashion. Further, Mr. Wilson provided Mr. Colautti with the requested retainer prior to Justice Hugessen issuing his July 16, 2003 order. As a result, counsel says, Mr. Colautti should have immediately contacted the Court to ensure that Mr. Wilson's rights were preserved.
[31] I do not accept Mr. Wilson's submissions in this regard. Mr. Wilson is clearly not a stupid man. No reasonable person could possibly read Mr. Colautti's April 28 and June 13, 2003 letters and come to the conclusion that Mr. Colautti was going to represent him on the motion for dismissal of this action. Indeed, it clear from Mr. Colautti's letters that he took great pains to ensure that Mr. Wilson could harbour no such illusions.
[32] It is true that Mr. Wilson did provide Mr. Colautti with a $5,000 retainer two days before Justice Hugessen issued his order of July 16, 2003. Nevertheless, in all of the circumstances, I am of the view that this was simply too little, too late.
[33] By July 14, 2003, Mr. Wilson was already several weeks in default with respect to the motion to dismiss.
[34] Further, although not a lawyer, Mr. Wilson is by no means an unsophisticated litigant. Indeed, the record discloses that he has been involved in numerous lawsuits over the last 25 years, in which he has frequently represented himself. Mr. Wilson was well aware of the consequences that could flow from his refusal to answer questions on his examination for discovery, having already had his Statement of Defence and Counterclaim struck out in an Ontario action because of his refusal to answer questions. Nevertheless, while Mr. Wilson has frequently corresponded with the Court on his own behalf, at no time did he request an extension of time to respond to the defendants' motion while he sorted out the retainer issue with Mr. Colautti.
[35] Mr. Wilson has not, therefore, persuaded me that his failure to respond to the defendants' motion to dismiss was the result of a mistake. As a result, he is not entitled to relief under Rule 399.
Has Mr. Wilson Disclosed a Prima Facie CaseWhy Justice Hugessen's July 16, 2003 Order Should Not Have Been Made?
[36] There is a further basis for dismissing Mr. Wilson's motion.
[37] Even if I were to accept that Mr. Wilson's failure to respond to the defendants' motion to dismiss was the result of a mistake, he has not disclosed a prima facie case why Justice Hugessen's July 16, 2003 order should not have been made.
[38] The majority of Mr. Wilson's submissions in this regard are directed to what he says are the merits of his action. He has made only very limited submissions as to why Justice Hugessen's order should not have been made.
[39] Mr. Wilson claims more than $60 million from the defendants. The bulk of his claim relates to the financial losses that he says he and his companies sustained as a result of the actions of the defendants in seizing $441,641.13 from his bank account on December 18, 1991. The majority of the disputed questions relate to the financial position of these companies in the period leading up to the seizure of the money from Mr. Wilson's account.
[40] It is clear that the defendants' position is that Mr. Wilson's companies failed for reasons that have nothing to do with their actions. As a result, the majority, if not all, of the disputed questions appear to be completely relevant and proper, and Mr. Wilson has provided me with no reason to think otherwise.
[41] Further, a review of the record in this matter demonstrates a history of delay, obstruction and non-compliance on the part of Mr. Wilson.
[42] As a result, Mr. Wilson has failed to disclose a prima facie case why Justice Hugessen's July 16, 2003 order should not have been made.
[43] For these reasons, Mr. Wilson's motion to set aside Justice Hugessen's July 16, 2003 order is dismissed, with costs.
ORDER
THIS COURT ORDERS that
1. This motion is dismissed.
2. The Defendants shall have their costs.
"A. Mactavish"
J.F.C.
FEDERAL COURT
Names of Counsel and Solicitors of Record
DOCKET: T-745-99
STYLE OF CAUSE: GRANT R. WILSON
Plaintiff
and
REVENUE CANADA and HER MAJESTY THE QUEEN
Defendants
PLACE OF HEARING: TORONTO, ONTARIO
DATE OF HEARING: NOVEMBER 22, 2004
REASONS FOR ORDER
AND ORDER BY: MACTAVISH J.
APPEARANCES BY:
Mr. Michael G. Forrester
FOR THE PLAINTIFF
Ms. Wendy J. Linden
Ms. Maria Vujnovic
FOR THE DEFENDANTS
SOLICITORS OF RECORD:
Michael G. Forrester
Barrister & Solicitor
Grand Bend, Ontario
FOR THE PLAINTIFF
Morris Rosenberg
Deputy Attorney General of Canada
Toronto, Ontario FOR THE DEFENDANTS
FEDERAL COURT
Date: 20041125
Docket: T-745-99
BETWEEN:
GRANT R. WILSON
Plaintiff
and
REVENUE CANADA and HER MAJESTY THE QUEEN
Defendants
REASONS FOR ORDER AND ORDER