Date: 20050729
Docket: T-2953-93
Citation: 2005 FC 1041
BETWEEN:
THE LOUIS BULL BAND AND CHIEF HERMAN ROASTING,
HENRY RAINE, JONATHAN BULL, THERESA BULL,
CLYDE ROASTING, DONNA TWINS, WINNIE BULL,
SOLOMON BULL, GEORGE DESCHAMPS,
the Chief and Councillors of the Louis Bull Band
suing on their own behalf and on behalf of all
the other members of the Louis Bull Band
Plaintiffs
- and -
HER MAJESTY THE QUEEN IN RIGHT
OF CANADA
Defendant
REASONS FOR ORDER
INTRODUCTION
[1] These reasons follow the hearing of a motion on behalf of the Plaintiffs for an Order granting them leave to file an amended statement of claim, costs and further and other relief. The motion was filed the 4th of February, 2005. The amendments to the statement of claim being
sought have a somewhat lengthy and tortuous history. A description of the amendments and an outline of the history follow.
BACKGROUND
[2] This action was commenced by statement of claim issued in 1993. It concerns, among other things, distribution of royalty revenues from oil and gas reserves on the Pigeon Lake Reserve, which revenues are shared by the Louis Bull Band and the Samson, Ermineskin and Montana Bands. Each of the four (4) Bands has outstanding litigation against the Crown dealing with, among other things, the distribution of royalty revenues from the Pigeon Lake Reserve. There is no interpleading among the four (4) actions and none of the Bands makes any claim against any of the other Bands, at least as regards the royalty revenues from the Pigeon Lake Reserve.
[3] Distribution of the royalty revenues from the Pigeon Lake Reserve, among the four (4) Bands, is made on a per capita basis. In this action, among other things, the Plaintiffs claim that such revenues should at all times have been distributed and should continue to be distributed on the basis of equal shares among the four (4) Bands. The proposed amendments to the Plaintiffs' statement of claim now before the Court would add a claim that, in the alternative to an equal-shares distribution, the membership of the Louis Bull Band was for some years understated by the Defendant with the result that, for those years, the Louis Bull Band's per capita share was understated. In the result, by the amendments, the Plaintiffs seek to claim damages against the
Defendant, once again, in the alternative to relief adjusting the basis of distribution to quarter shares.
[4] The Louis Bull Band commenced a second action against the Defendant on the 20th of November, 1998[1] also relating to the alleged under-counting of the membership of the Louis Bull Band from approximately the end of November, 1974 to in or about July, 1983. By Notice of Motion dated the 24th of January, 2003, the Plaintiffs sought leave to amend the statement of claim in that other action (the "Fayant Action"), essentially to add the same issue to that action that is now proposed to be added to this action. The Defendant in the Fayant Action opposed the Plaintiffs' motion and brought a cross-motion for an order consolidating the Fayant Action with this action or, in the alternative, for an Order staying the Fayant Action until the determination of certain issues in this action.
[5] By order dated the 30th of April 2003, Madame Prothonotary Aronovitch granted the Plaintiffs' motion in the Fayant Action and dismissed the Defendant's cross-motion.
[6] By motion dated the 2nd of May, 2003, the Defendant appealed Prothonotary Aronovitch's Order. My colleague Justice Snider, by order dated the 12th of June, 2003, granted
the Defendant's appeal, set aside Prothonotray Aronovitch's order and denied the Plaintiffs' motion for leave to amend. At paragraph [30] of her reasons[2], Justice Snider wrote:
It was acknowledged by the Plaintiff that, at some point in the 1993 action [that is to say, this 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 capitapayments, 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 Courts Rules, 1998. In my view, this action is not the appropriate forum for carrying out a redistribution and recalculation of royalties.
[emphasis added]
[7] The Plaintiffs appealed the order of Justice Snider to the Federal Court of Appeal. By judgment dated the 24th of March, 2004, the Federal Court of Appeal dismissed the Plaintiffs' appeal. In very brief reasons[3] delivered from the bench for the Court by Nöel J. A., he wrote at paragraph [3] ...
Without commenting on the other aspects of the decision under appeal, we endorse paragraph 30 of the reasons given by Snider J. and agree with her that the issue raised by the amendments are [sic] more appropriately dealt with in what the parties have broadly described as the 1993 action [that is to say, this action].
[8] The motion now before the Court, to amend the statement of claim in this action, followed.
THE POSITION OF THE DEFENDANT, RESPONDENT
[9] The Defendant urges that, by the amendments proposed, the Plaintiffs seek relief on the basis of a breach of fiduciary relationship, or equitable or statutory duty, without pleading supporting material facts that would entitle them to the relief sought and that therefore, the alleged cause of action must fail. Further, the Defendant urges that, by failing to add the other three (3) Bands, that is to say the Samson, Ermineskin and Montana Bands as co-defendants, the proposed amendments are defective in that, in the absence of co-defendants, the Court will be frustrated in securing the most just, expeditious and inexpensive determination of this action on its merits. Finally, the Defendant urges that the Plaintiffs are proposing to incorporate in their statement of claim a new cause of action without pleading certain of the facts essential thereto that would disclose that the cause of action proposed is limitation barred.
[10] In the result, the Defendant urges that the Plaintiffs' motion be dismissed.
[11] In the alternative, if the Court determines to grant the Plaintiffs' motion, the Defendant urges that the grant be on terms that would: first, require that the proposed amendments to the statement of claim be expanded to include all material facts necessary to the establishment of a cause of action that would give rise to the relief sought; secondly, require the addition of the Samson, Ermineskin and Montana Bands as co-defendants; thirdly, specifically preserve the Defendant's right to "... argue limitations in its defence" and lastly, preserve certain procedural rights of the Defendant.
[12] In the further alternative, if the Court determines to grant the Plaintiffs' motion without conditions, the Defendant requests additional time, suggested by counsel to be fixed at two (2) months, to seek from the Plaintiffs further particulars, to file and serve an amended statement of defence and to seek instructions with regard to the filing of third party notices.
THE APPLICABLE RULES
[13] It was not in dispute before the Court that Rules 75(1) and 201, read together with Rule 3 of the Federal Courts Rules, 1998[4] are applicable to the motion before the Court. Those Rules read as follows:
| 75. (1) Subject to subsection (2) and rule 76, the Court may, on motion, at any time, allow a party to amend a document, on such terms as will protect the rights of all parties. ...
|
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75. (1) Sous réserve du paragraphe (2) et de la règle 76, la Cour peut à tout moment, sur requête, autoriser une partie à modifier un document, aux conditions qui permettent de protéger les droits de toutes les parties. ... |
| 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.
... |
| 3. These Rules shall be interpreted and applied so as to secure the just, most expeditious and least expensive determination of every proceeding on its merits. |
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3. Les présentes règles sont interprétées et appliquées de façon à permettre d'apporter une solution au litige qui soit juste et la plus expéditive et économique possible. |
GENERAL PRINCIPLES
[14] In Canderel Ltd. v. Canada[5], Justice Décary, for the Court, enunciated the general rule as to whether it is just, in a given case, to authorize an amendment to a pleading. He wrote at page 10 of the cited report:
... the general rule is that an amendment should be allowed at any stage of an action for the purpose of determining the real questions in controversy between the parties, provided, notably, that the allowance would not result in an injustice to the other party not capable of being compensated by an award of costs and that it would serve the interests of justice.
With regard to the interests of justice, Justice Décary quoted with approval the following passage from the reasons of Tax Court Justice Bowman, now Chief Justice of the Tax Court of Canada, in Continental Bank Leasing Corporation et al. v. The Queen[6]:
... I prefer to put the matter on a broader basis: whether it is more consonant with the interests of justice that the withdrawal or amendment be permitted or that it be denied. The tests mentioned in cases in other courts are of course helpful but other factors should also be emphasized, including the timeliness of the motion to amend or withdraw, the extent to which the proposed amendments would delay the expeditious trial of the matter, the extent to which a position taken originally by one party has led another party to follow a course of action in the litigation which it would be difficult or impossible to alter and whether the amendments sought will facilitate the court's consideration of the true substance of the dispute on its merits. No single factor predominates nor is its presence or absence necessarily determinative. All must be assigned their proper weight in the context of the particular case. Ultimately it boils down to a consideration of simple fairness, common sense and the interest that the courts have that justice be done.
[emphasis added]
[15] In Yeager v. Correctional Service of Canada et al[7], my colleague Justice O'Keefe noted at paragraph [10] of his reasons:
Factors to consider in determining whether non-compensable prejudice would result include: the stage the proceedings are at when the amendment is sought; the extent to which the amendment delays an expeditious trial; and the extent to which the position of the other party, taken in its pleadings and arguments, would be undermined or unalterable: ...
For the foregoing, Justice O'Keefe cited Scanner Industries v. Canada[8].
[16] Finally, Prothonotary Hargrave, in Houle v. Canada[9], wrote at paragraph 18 of his reasons:
... Nor ought I to anticipate whether the amendments will be successful at trial: ... "the motions Judge does not anticipate whether an amendment will be successful at trial, he merely decides whether or not it ought to be filed". This is in line with what the Court of Appeal said in Enoch Band of Stoney Plain Indians v. Canada ...: the test for disallowing a proposed amendment is that it be plain, obvious and beyond doubt that it will not succeed ...
[citations omitted]
In the same reasons, Prothonotary Hargrave commented on the impact of an expired limitation period. He wrote at paragraph 38:
In summary where paragraphs sought to be added as amendments arise substantially out of the same facts as alleged in the original Statement of Claim it is irrelevant whether or not the amendments raise a new cause of action which is barred by a limitation period.
ANALYSIS
a) In the Interests of Justice
[17] While substantial time has elapsed since the facts underlying this motion to amend the Plaintiffs' statement of claim first came to the attention of the Plaintiffs, and since the issues of allocation of royalty revenues among the four (4) Bands participating in the revenues from the Pigeon Lake Reserve were consolidated into this action, I am satisfied that the Plaintiffs have pursued the subject matter of the proposed amendments with reasonable diligence having regard to the pace at which this action is proceeding. In particular, the efforts of the Plaintiffs to consolidate the same issues with the "Fayant Action", which consumed considerable time, were far from entirely misguided. When it became apparent with the decision of the Federal Court of Appeal with regard to those efforts that they would not be successful, given the guidance from this Court and from the Federal Court of Appeal that this action constituted a better "fit" for the amendments, the Plaintiffs acted with reasonable diligence and with a reasonable expectation that the amendments to the statement of claim herein, at least at the level of principle, would follow by consent.
[18] While this action has proceeded to the point where pleadings are closed, the Court was advised at hearing that discoveries have not yet commenced and that, by implicit if not explicit, agreement, trial of this action will remain in abeyance for some time to come. Thus, I am satisfied that any risk of undue delay through the granting of the motion before the Court is minimal.
[19] A substantial portion of the "... true substance of the dispute on its merits..." in this action has, for some years, been the appropriate allocation of the royalty revenues from the Pigeon Lake Reserve among the four (4) Bands sharing in those revenues. That subject matter is the essence of the amendments now proposed to the statement of claim. That such is the case is reflected in brief excerpts from the reasons of Justice Snider and of the Court of Appeal quoted earlier in the context of the motion to amend the statement of claim in the "Fayant Action".
[20] In the result, against a test of fairness, common sense and the interest that justice be done, in the words of Rule 3, in a manner to secure "... the just, most expeditious and least expensive determination of [this] proceeding on its merits ...", I am satisfied that this motion should, in the absence of non-compensable injustice to the Defendant, be granted.
b) Injustice to the Defendant Not Capable of Being Compensated by Damages
[21] Counsel for the Defendant urges that to grant the proposed amendments would result in injustice to the Defendant not capable of being compensated by damages by reason of the Plaintiffs' failure to join the Samson, Ermineskin and Montana Bands as Defendants, in the light of the fact that those Bands could potentially be directly and substantially affected by the outcome of this action on the proposed alternative basis for redistributive relief. That the Samson, Ermineskin and Montana Bands might be directly affected by the outcome of this action, at least if they were bound by the result, has existed as a possibility for a number of years.
To this point in time, the Defendant would appear to have been content to let the issue lie fallow, notwithstanding the fact that the risk of injustice to the Defendant would appear to be greater if a determination were reached on the current version of the statement of claim that the four (4) Bands should share equally in the royalty revenues from the Pigeon Lake Reserve.
[22] The insufficiency of the amendments proposed, as a factual basis to the proposed alternative claim, is, I am satisfied, a matter for another day, not for determination on this motion to amend the statement of claim.
[23] Finally on this issue, I am satisfied that the Defendant's right to plead a limitation defence can be adequately protected, as it should be, without invoking the very significant remedy of denying the amendments in question.
c) Conditions on Allowing the Amendments
[24] Counsel for the Defendant urges that the Court should require the Plaintiffs to more effectively detail the factual basis underlying the proposed alternative claim. I am satisfied that that is not a matter appropriate for consideration by the Court at this stage. It is for the Plaintiffs themselves to ensure that their proposed amendments to their statement of claim are sufficient in detail. If they prove not to be, there will be another opportunity for the consideration of that issue. Similarly, the issue of addition of further defendants is a matter in the discretion of the Plaintiffs. If the Plaintiffs choose not to add the other three (3) Bands that share in the royalty
revenues from the Pigeon Lake Reserve, it is open to the Defendant to seek to have those Bands added as third parties. As earlier noted, this is an issue that has been outstanding in this action for some years. It does not lie comfortably in the mouth of counsel for the Defendant to seek to force the Plaintiffs to add co-defendants at this late stage of the proceedings, in the context of a motion to amend that does relatively little to affect the implications of the reality that the other three (3) Bands have not been made parties to this proceeding.
[25] Finally regarding conditions, as earlier indicated, the Court is satisfied that a condition to protect the Defendant against prejudice flowing from impact on any limitations defence that might lie in respect of the proposed amendments can effectively be achieved without resorting to the more or less draconian measure of denying the Plaintiffs the right to amend, as proposed.
d) Extension of Time to Allow the Defendant to Effectively Respond to the
Proposed Amendments
[26] The Court is satisfied that the Defendant's request in this regard is reasonable and should not result in any real delay in bringing this action to trial.
CONCLUSION
[27] Against the foregoing brief analysis, and more particularly against the general guidance provided by jurisprudence in the area of motions to amend, and taking into account the quoted comments of Justice Snider and of the Court of Appeal in reasons flowing from the earlier
motion to amend the statement of claim in the "Fayant Action", this motion to amend will be granted. The Plaintiffs will have fifteen (15) days from the date of the Order herein to serve and file a Further Amended Statement of Claim (No. 2) substantially in the form included under Tab 5 of the Plaintiffs' Motion Record herein filed the 4th of February, 2005, such Further Amended Statement of Claim (No. 2) to be without prejudice to any limitations defence that the Defendant might choose to raise based on the reality that the amendments effected by the Further Amended Statement of Claim (No. 2) were only served on the actual date of service.
[28] Following the service of the Further Amended Statement of Claim (No. 2), the Defendant will have ninety (90) days in which to seek further particulars, if considered necesssary, to seek instructions with regard to the filing of a third-party notice or notices and to serve and file an amended statement of defence.
COSTS
[29] Counsel for the Defendant referred the Court to Rule 410(1) regarding costs occasioned by an amendment to a pleading made without leave or, in the French version of the same Rule, "sans autorisation". Here, the amendments before the Court will be made "with leave". In the circumstances, I am satisfied that Rule 410(1) has no application.
[30] Counsel for the Plaintiffs urged that, if successful on the motion, and given the earlier expressions of opinion by this Court and the Federal Court of Appeal that this action is the
preferable context in which to have the issue raised by the proposed amendments adjudicated, and counsel for the Defendant's apparent concurrence in that view in the context of the proposal to make the amendments in a different action between the same parties, the failure of counsel for the Defendant to consent to the amendments and the defence of this motion have been, and this is my term, not that of counsel for the Plaintiffs, "unconscionable". In the result, counsel for the plaintiffs urged that costs of this motion should go in favour of the Plaintiffs, that such costs should be fixed at $7,500.00 (Seven Thousand Five Hundred Dollars), and that such costs should be payable forthwith.
[31] I would have greater sympathy for the urgings of counsel for the Plaintiffs were it not for the fact that I am satisfied that the issues raised on this motion on behalf of the Defendant are issues of substance which may, at a later stage in this action, prove to be of merit.
[32] Given my concern and the lack of any evidence before the Court of any effort at accommodation, costs of the motion, fixed at $3,000.00 (Three Thousand Dollars), not the amount requested on behalf of the Plaintiffs, will go in favour of the Plaintiffs, payable forthwith.
| "Frederick E. Gibson" |
| J.F.C. |
Ottawa, Ontario
July 29, 2005
FEDERAL COURT
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: T-2953-93
STYLE OF CAUSE:
THE LOUIS BULL BAND AND CHIEF HERMAN ROASTING,
HENRY RAINE, JONATHAN BULL, THERESA BULL,
CLYDE ROASTING, DONNA TWINS, WINNIE BULL,
SOLOMON BULL, GEORGE DESCHAMPS,
the Chief and Councillors of the Louis Bull Band
suing on their own behalf and on behalf of all
the other members of the Louis Bull Band
Plaintiffs
- and -
HER MAJESTY THE QUEEN IN RIGHT
OF CANADA
Defendant
PLACE OF HEARING: Ottawa, Ontario
DATE OF HEARING: July 18, 2005
REASONS FOR ORDER
AND ORDER BY: The Honourable Mr. Justice Gibson
DATED: July 29, 2005
APPEARANCES:
Sylvie M. Molgat FOR PLAINTIFFS
Lynn Cunningham FOR DEFENDANT
SOLICITORS OF RECORD:
Sylvie Molgat
Dubuc, Osland - Barristers and Solicitors
Ottawa, Ontario FOR PLAINTIFFS
Lynn Cunningham
Justice Canada
Edmonton, Alberta FOR DEFENDANT