Date: 20000524
Docket: T-1453-89
Ottawa, Ontario, this 24th day of May, 2000
| PRESENT: THE HONOURABLE MR. JUSTICE JOHN A. O"KEEFE |
BETWEEN:
LAN TECHNOLOGIES INC., TECHNOLOGY EQUITY CORP.,
LEXICALC INC., TECHNOLOGY SOLUTIONS INC. and
HIGH TECH SOLUTIONS INC.
Plaintiffs
- and -
HER MAJESTY THE QUEEN and
THE MINISTER OF NATIONAL REVENUE
Defendants
REASONS FOR ORDER AND ORDER
O"KEEFE J.
[1] This is an appeal from the Order of Prothonotary Roger Lafrenière dated March 3, 2000, dismissing the plaintiffs" action.
[2] This action was commenced by issuing a Statement of Claim on July 13, 1989. The pleadings were closed on May 26, 1995. No tangible action was taken by the plaintiffs to move the action forward until a Notice of Status Review was issued by this Court on October 8, 1998.
[3] The plaintiffs in their written response to that Notice of Status Review, asked that the action not be dismissed and proposed to deliver their affidavits by March 31, 1999 and to have examinations for discovery scheduled for April, 1999. The plaintiffs also agreed to comply with a timetable for completion of subsequent steps in the proceeding.
[4] By an order dated March 25, 1999, the Associate Senior Prothonotary, Peter A. K. Giles, ordered that the proceeding be allowed to continue as a specially managed proceeding. He also ordered that discoveries be completed by June 1, 1999 and that motions concerning any questions on discovery be brought by July 1, 1999. By motion of the plaintiffs, the deadlines were extended to October 1, 1999 and November 1, 1999 respectively.
[5] On September 15, 1999, counsel for the plaintiffs brought a motion to be removed as solicitors of record, but that motion appears to have been abandoned.
[6] No further steps were taken in this action by the plaintiffs to comply with the Court ordered schedule or to move the proceeding forward until the present show cause Order was issued on February 4, 2000.
[7] The Notice of Status Review issued on February 4, 2000 and stated in part:
| Pursuant to Rule 385(2) of the Federal Court Rules, 1998, the Plaintiffs are required, on a peremptory basis, to show cause by written submissions, to be served and filed no later than Friday, February 22, 2000, why this action should not be dismissed for delay, failing which the action shall be dismissed without further notice. |
| [8] There was also a tax appeal of an assessment made against Gavin Pitchford in his |
capacity as director of Technology Equity Corp. ("tax appeal").
| [9] The plaintiffs have stated that the extended completion times were not complied |
with due to the fact they lost track of the completion dates and because the plaintiffs" directing mind, Gavin Pitchford was in the midst of financial problems and in the midst of a difficult marital breakdown as his former spouse was also his former business partner.
| [10] It appears that steps were taken in the tax appeal but not in this action. |
| [11] There was also some suggestion by the plaintiffs that the discovery from the tax |
appeal could be used in this case, but there is no agreement on this proposal.
| [12] The plaintiffs have asked for an Order setting aside the Prothonotary"s Order |
dated March 3, 2000 and for an Order allowing the plaintiffs" action to proceed.
| [13] Issues |
| 1. What is the standard of review of an Order of the Prothonotary? |
| 2. Whether Prothonotary Lafrenière"s Order was clearly wrong. |
Law
| [14] McGuigan J.A. in Canada v. Aqua-Gem [1993] 2 F.C. 425 (F.C.A.) at |
pages 462-63 clearly set out the law followed by this Court when reviewing or deciding appeals from a discretionary decision of a prothonotary:
| I also agree with the Chief Justice in part as to the standard of review to be applied by a motions judge to a discretionary decision of a prothonotary. Following in particular Lord Wright in Evans v. Bartlam, [1937] A.C. 473 (H.L.) at page 484, and Lacourcière J.A. in Stoicevski v. Casement (1983), 43 O.R. (2d) 436 (Div. Ct.), discretionary orders of prothonotaries ought not to be disturbed on appeal to a judge unless: |
(a) they 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, or
(b) they raise questions vital to the final issue of the case.
Where such discretionary orders are clearly wrong in that the prothonotary has fallen into error of law (a concept in which I include a discretion based upon a wrong principle or upon a misapprehension of the facts), or where they raise questions vital to the final issue of the case, a judge ought to exercise his own discretion de novo.
[15] Rule 382(2)(a) outlines one of the powers of the Court on status review:
| 382(2) Powers of Court on status review " At a status review, the Court may (a) require a plaintiff, applicant or appellant to show cause why the proceeding should not be dismissed for delay and, if it is not satisfied that the proceeding should continue, dismiss the proceeding; |
382(2) Pouvoirs de la Cour " À l'examen de l'état de l'instance, la Cour peut : a) exiger que le demandeur ou l'appelant donne les raisons pour lesquelles l'instance ne doit pas être rejetée pour cause de retard et, si elle n'est pas convaincue que l'instance doit être poursuivie, rejeter celle-ci; |
Analysis and Decision
[16] Issue 1
What is the standard of review of an Order of the Prothonotary?
Aqua-Gem, supra, clearly defines the standard of review in reviewing discretionary decisions of the prothonotary. In the present case, since the Prothonotary dismissed the action, the issue raised a "question vital to the final issue of the case". As well, the plaintiffs have alleged the Prothonotary"s Order was clearly wrong. Therefore, in these circumstances, I must exercise my discretion de novo .
[17] Issue 2
Whether Prothonotary Lafrenière"s Order was clearly wrong.
I have reviewed the Prothonotary"s Order and I do not find that he took into account matters which arose before the Federal Court Rules, 1998 came into force nor did he use as a basis for his decision, matters that were covered by a previous Notice of Status Review. Indeed, the first seven paragraphs of his Order merely give the history of the action. Paragraph 8 of his Order outlines what he believes to be the spirit of the Federal Court Rules, 1998. In paragraph 9 of his Order, he has stated when the action was commenced and that it has survived a status review. I do not take this as saying that the Prothonotary, for the purposes of his decision, utilized delays covered by the previous Notice of Status Review. Quite to the contrary, he addresses the fact that discoveries have not yet been embarked on, let alone completed as contemplated by the extension of time granted by the Court in the May, 1999 Order of the Court, for the plaintiffs to complete discoveries (by October 1, 1999).
[18] In paragraph 10 of his Order, the Prothonotary comments on the plaintiffs" failure
to give a reasonable explanation for their failure to comply with the schedule they themselves requested from the Court. I agree with the Prothonotary that no reasonable explanation was given. In Fabricant v. Canada, (February 11, 1999), Docket T-1783-94 (F.C.T.D.), Lutfy J. (as he then was) found at page 2:
The directions issued by Joyal J. on February 7, 1997 provided ample notice to the plaintiff to perfect the Court record. Neither the plaintiff"s current health condition nor his inability to retain counsel, through legal aid or otherwise constitutes a satisfactory explanation for the failure to move this action forward since the filing of the statement of defence. . . .
Lutfy J. (as he then was) dismissed the action for delay.
[19] In paragraph 10 of his decision, he also makes reference to the plaintiffs" proposal
to use the discoveries from the tax appeal as a substitute for discoveries in this action. This suggestion was opposed by the defendants. This is not a proposal which does anything to move this action along unless there is agreement from the defendants.
[20] I have reviewed the Order of the Prothonotary and in particular, paragraphs 9, 10
and 11 of the Order and I cannot find that his Order is clearly wrong in that he has fallen into error of law (which includes an exercise of his discretion based on a wrong principle or upon a misapprehension of the facts).
[21] In conclusion, I would have exercised my discretion in the same manner as did the
Prothonotary.
[22] The appeal is therefore dismissed.
ORDER
[23] IT IS ORDERED that the appeal is dismissed with costs.
"John A. O"Keefe"
J.F.C.C.
Ottawa, Ontario
May 24, 2000