[1993] 3 F.C. 276
T-434-90
Grand Chief Michael Mitchell also known as Kanantakeron (Plaintiff)
v.
The Minister of National Revenue (Defendant)
Indexed as: Mitchell v. M.N.R. (T.D.)
Trial Division, Teitelbaum J.—Ottawa, February 15 and May 17, 1993.
Practice — Stay of proceedings — Application to stay Federal Court proceedings for declaratory relief as case before O.C.A. dealing with parallel issues, facts, evidence — Issue estoppel requirement parties be identical in both proceedings not satisfied — Plaintiff herein intervenor in provincial court — Relief sought in two cases different.
Practice — Pleadings — Motion to strike — Reference in statement of claim to historical events giving rise to Crown’s undertaking to recognize Aboriginal right to exemption from duty, taxes on goods imported from U.S.A. — Historical events sufficient to establish reasonable cause for action for breach of fiduciary duty to respect Aboriginal rights — O.C.A. case dealing with similar facts, evidence, issues not rendering these proceedings redundant, prejudicial, or delaying fair trial — No abuse of process — F.C. not bound by provincial court decision.
Estoppel — Requirement for issue estoppel that parties to previous judicial decision be identical to parties to proceedings in which estoppel raised — Plaintiff herein party-intervenor in provincial court action dealing with similar facts, evidence, issues — As not identical status, issue estoppel not applicable.
Native peoples — Taxation — Application to stay action for declaratory relief as to right of Aboriginal peoples to exemption from duty, taxes on goods imported from U.S.A. — Application to strike portions of statement of claim referring to historical events, treaties giving rise to rights — O.C.A. case based on similar facts, evidence, issues recently decided — Issue estoppel not applicable — Different relief sought — Reasonable cause of action raised — No abuse of process — F.C. not bound by provincial court decisions — Latter not dealing with all issues raised herein.
These were applications under Federal Court Act, subsection 50(1) to stay the proceedings, or to strike out portions of the statement of claim pursuant to Rule 419. Paragraph 50(1)(a) permits the stay of proceedings where the claim is being proceeded with in another Court or jurisdiction, and paragraph 50(1)(b) permits a stay where it is in the interest of justice to do so. Under Rule 419 a pleading may be struck out for failing to disclose a cause of action, because it may prejudice, embarrass or delay the fair trial of an action or otherwise is an abuse of process.
The plaintiff is the Grand Chief of the Mohawks of Akwesasne. In returning from a trip to the U.S.A. he declared certain goods. As he refused to pay duty and taxes, the goods were forfeited. He now seeks declarations that he had the right to bring goods into Canada without paying any duty or taxes; that certain treaties are recognized in Canada as valid and subsisting; that historical events pleaded result in the legal conclusion that the Crown, through its representatives, and the Indian Nations have made an undertaking which results in the existing treaty rights being entrenched in Constitution Act, 1982, sections 35 and 52; that the undertakings and duties under the treaties engage the defendant’s fiduciary and constitutional duty to protect these rights, ensure their free exercise and not to interfere with them. Issues of historical treaties and aboriginal rights were raised.
The defendant argued that the proceedings herein should be stayed under subsection 50(1)(a) until those in R. v. Vincent in the Ontario Court of Appeal were concluded. The plaintiff, as a Grand Chief, was a party-intervenor in the Vincent case, wherein it was argued that the plaintiff, an Indian, was entitled to bring commercial goods (i.e. cigarettes) into Canada without having to pay duties and taxes. The defendant also argued that it would be an injustice to allow this case to proceed as it paralleled the issues, facts and evidence litigated and decided upon in Vincent. The defendant submitted that a portion of the statement of claim referring to historical events which gave rise to the Crown’s undertaking to recognize the free right of passage by Indians through the now Canada-U.S.A. border, and to several treaties and the Constitution Act, 1982 which entrenched these rights should be struck out. The grounds for this motion were that the statement of claim failed to disclose a reasonable cause of action and because it would be redundant, prejudicial, a delay of the fair trial and otherwise an abuse of process to allow the impugned pleadings to remain since the historical facts and legal conclusions pleaded are similar to those dealt with in Vincent.
Held, the applications should be dismissed.
As the Vincent case has now been decided, it could no longer be argued that a similar action with the present plaintiff acting as intervenor was being heard in another Court.
The argument under paragraph 50(1)(b) focused on the principle of issue estoppel. The proceedings could not be stayed on that ground because the defendant had failed to establish that the requirement that the parties to the previous judicial decision were the same as those in these proceedings, had been met. The plaintiff herein was an intervenor as part of a class in the Vincent case, but a main party in these proceedings. An intervenor has different rights to make evidence and to cross-examine than has a plaintiff. While much of the same evidence will be used in both cases, that alone is insufficient to justify a stay. Furthermore, no stay of proceedings will be granted where the relief sought in one Court is different from that available in another. Here the plaintiff was seeking declaratory relief which was unlike the relief sought in Vincent.
Given that Rule 419 should be applied sparingly and only where it is clear that the impugned pleadings disclose no reasonable cause of action, this was not an appropriate case to strike the pleadings. The historical events, as pleaded and deemed to be true, were sufficient to sustain a reasonable cause of action against the Minister of National Revenue for breach of the fiduciary duty to respect Indian peoples’ right to be exempted from paying duty and taxes on goods imported into Canada from the U.S.A.
The motion to strike on the basis of issue estoppel failed because the requirement that the parties to the former action be identical to those in the latter proceeding was not satisfied. That the historical facts and legal conclusions flowing in Vincent closely paralleled those in the present case did not justify striking the pleadings on the ground that it would be an abuse of process for them to remain. It has been held that the existence of a prior action in a provincial court arising from the same factual circumstances as are pleaded in the Federal Court does not constitute abuse of process. Assuming that all of the issues raised by the plaintiff in the present action were the same as those in Vincent, this alone would not estop the plaintiff from taking proceedings in the Federal Court, which has not decided the issues raised. The Federal Court of Canada is bound only by the decisions of the Supreme Court of Canada. Since the decision in the Vincent case is not binding on the Federal Court, it would not be an abuse of process to allow the present case to proceed. Furthermore, although the treaty rights issue was determined in Vincent, the aboriginal rights issue was not even considered.
STATUTES AND REGULATIONS JUDICIALLY CONSIDERED
Constitution Act, 1982, Schedule B, Canada Act 1982, 1982, c. 11 (U.K.) [R.S.C., 1985, Appendix II, No. 44], s. 35.
Customs Act, R.S.C., 1985 (2nd Supp.), c. 1, s. 31.
Federal Court Act, R.S.C., 1985, c. F-7, ss. 18 (as am. by S.C. 1990, c. 8, s. 4), 50(1).
Federal Court Rules, C.R.C., c. 663, RR. 408, 412, 419(1).
Jay Treaty (1764), 12 U.S.B.S. 13.
Treaty of Ghent (1814), 12 U.S.B.S. 41.
Treaty of Utrecht (1713).
CASES JUDICIALLY CONSIDERED
APPLIED:
Musqueam Indian Band v. Canada (Minister of Indian and Northern Affairs), [1990] 2 F.C. 351; (1990), 31 F.T.R. 31 (T.D.); Western Pulp Inc. v. Roxburgh et al. (1990), 39 F.T.R. 134 (F.C.T.D.); Varnam v. Canada (Minister of National Health and Welfare) et al. (1987), 12 F.T.R. 34 (F.C.T.D.); Micromar International Inc. v. Micro Furnace Ltd. (1988), 22 C.I.P.R. 79; 23 C.P.R. (3d) 214 (F.C.T.D.); Prime Boilers Inc. v. Unilux Manufacturing Co. (1987), 14 C.I.P.R. 49; 15 C.P.R. (3d) 508 (F.C.T.D.); Attorney General of Canada v. Inuit Tapirisat of Canada et al., [1980] 2 S.C.R. 735; (1980), 115 D.L.R. (3d) 1; 33 N.R. 304; R. v. Imperial General Properties Limited, [1985] 1 F.C. 344; (1985), 16 D.L.R. (4th) 615; [1985] 1 CTC 40; 85 DTC 5045; 56 N.R. 358 (C.A.); Bertram S. Miller Ltd. v. R., [1986] 3 F.C. 291; (1986), 31 D.L.R. (4th) 210; 28 C.C.C. (3d) 263; 1 C.E.L.R. (N.S.) 16; 69 N.R. 1 (C.A.); Shogun Seafoods (1985) Ltd. v. Ship “Simon Fraser No. 1” et al. (1990), 36 F.T.R. 289 (F.C.T.D.).
CONSIDERED:
R. v. Vincent (1993), 12 O.R. (3d) 427 (C.A.).
REFERRED TO:
Hoysted v. Federal Commissioner of Taxation (1921), 29 C.L.R. 537 (Aust. H.C.); McIlkenny v. Chief Constable of the West Midlands, [1980] 1 Q.B. 283 (C.A.); Operation Dismantle Inc. et al. v. The Queen et al., [1985] 1 S.C.R. 441; (1985), 18 D.L.R. (4th) 481; 12 Admin. L.R. 16; 13 C.R.R. 287; 59 N.R. 1.
APPLICATIONS to stay proceedings for declaratory relief pursuant to Federal Court Act, subsection 50(1) and to strike out portions of the statement of claim under Rule 419. Applications dismissed.
COUNSEL:
Peter W. Hutchins and Anjali Choksi for plaintiff.
Dogan D. Akman for defendant.
SOLICITORS:
Hutchins, Soroka & Dionne, Montréal, for plaintiff.
Deputy Attorney General of Canada for defendant.
The following are the reasons for order rendered in English by
Teitelbaum J.: This is an application by the defendant pursuant to subsection 50(1) of the Federal Court Act [R.S.C., 1985, c. F-7] (hereinafter FCA) and Rule 419(1)(a), (b), (d) and (f) of the Federal Court Rules [C.R.C., c. 663] (hereinafter FCR) to strike out pleadings in the amended statement of claim, based on certain historical facts made by the plaintiff in respect of an action for declaratory relief pursuant to section 18 [as am. by S.C. 1990, c. 8, s. 4] of the FCA commenced in this Court.
The first motion made by the defendant is for an order pursuant to subsection 50(1) of the FCA to stay the proceedings in the within action until such time as the proceedings in R. v. Vincent are concluded and the final judgment is rendered.
At the commencement of the hearing before me, counsel for the defendant informed me that he no longer desires to proceed with the said application for stay in that judgment was rendered in the said case by the Ontario Court of Appeal on January 22, 1993 [(1993), 12 O.R. (3d) 427].
The second motion made by the defendant is for:
1. an order pursuant to rule 419(1)(b), (d) and (f) of the FCR striking out
(a) all pleadings with respect to any and all Indian nations or groups other than the Indian Band (within the meaning of the Indian Act) which is located within Canada and of which the plaintiff is a member;
(b) all historical events other than those in which the plaintiff’s Band was directly involved and which are material and relevant to the claims advanced by the plaintiff on his own behalf;
2. in the alternative, an order pursuant to rule 473 of the Federal Court Rules for special directions for the conduct of the action;
3. an order pursuant to rule 3 of the Federal Court Rules extending the time for the filing of the defence until after the Ontario Court of Appeal has delivered judgment in the Vincent case ….
The grounds for the above motion are based on the allegation that the plaintiff’s pleadings are:
- ambiguous
- inconsistent
- plead a substantial number of matters in respect of aboriginal groups outside of Canada and, as such, are immaterial to the narrow issues raised and will therefore prejudice, embarrass and delay the fair trial
- are an abuse of process because of the principle of res judicata and issue estoppel (given that the plaintiff, as a Grand Chief, is a party-intervener in the Vincent case, supra).
The third motion, as stated in the amended notice of motion, is for:
1. an order pursuant to rule 419(1)(a), (b), (d) of the Federal Court Rules striking out all the pleadings based on:
a) The alleged promises and undertakings given by representatives of the Crown, i.e. on August 15, 1791 by Lord Dorchester, on August 29, 1795 by Lieutenant Governor Simcoe, on April 30, 1796 by Colonel McKee, on April 27, 1815 and on August 30 and September 1, 1815 by William Claus, Deputy Superintendent General Indian Affairs;
b) The Treaty of Utrecht of 1713;
c) The Jay Treaty of 1795;
d) The Treaty of Ghent of 1815;
e) The Law of Nations (International Law);
f) Aboriginal rights;
g) Fiduciary obligations of the Crown; and
h) Section 35(1) of the Constitution Act, 1982.
The grounds for this order, as stated in the amended notice of motion are:
… that on the weight of judicial authorities, the said pleadings do not disclose a reasonable cause of action, are immaterial and will prejudice, embarrass and delay the fair trial of the action.
BACKGROUND
These matters arise within the context of an application for declaratory relief, commenced by the plaintiff, in this Court, by statement of claim filed on February 16, 1990, and by an amended statement of claim, filed on May 19, 1992, concerning the aboriginal right of the plaintiff to pass and repass freely across what is now the Canada-U.S. boundary with his goods without having to pay any duty or taxes to any Canadian government or authority.
The plaintiff’s claim is founded on allegations of breach of fiduciary obligation and non-compliance with historical treaties and aboriginal rights made pursuant to undertakings accepted by the Crown at several historical conferences; contained in the Treaty of Utrecht (1713), the Treaty of Ghent [(1814), 12 U.S.B.S. 41], the Jay Treaty [(1794), 12 U.S.B.S. 13]; and entrenched in the Constitution Act, 1982 [Schedule B, Canada Act 1982, 1982, c. 11 (U.K.) [R.S.C., 1985, Appendix II, No. 44]].
The relief sought by the plaintiff consists of a variety of declarations. I have endeavoured to summarize them, and they include that:
1. The plaintiff has the right to bring goods into Canada without having to pay any duty or taxes to any Canadian government or authority;
2. The above-stated treaties are recognized in Canada as valid and subsisting treaties;
3. The historical events pleaded result in the legal conclusion that the Crown, through its representatives and the Indian Nations have made an undertaking which results in the existing treaty rights being entrenched in sections 35 and 52 of the Constitution Act, 1982.
4. The undertakings and the duties under the treaties engage the defendant’s fiduciary and constitutional duty to protect these rights, ensure the free exercise of these rights and not to interfere with these rights.
(See paragraph 42 of the amended statement of claim for the details for the relief sought by the plaintiff.)
Particulars of the claim were provided to the defendant on November 25, 1992.
The pertinent facts, as alleged in the amended statement of claim, are as follows:
1. The Plaintiff, Michael Mitchell is a Grand Chief of the Mohawks of Akwesasne, who are part of the Six Nations of the Iroquois Confederacy.
2. The Plaintiff resides at Cornwall Island, in Ontario, at what is known as the St. Regis Indian Reserve No. 15.
3. On or about March 22, 1988 the plaintiff entered Canada, in a vehicle at the Cornwall International Bridge, from New York state, with the following goods:
- 1 washing machine
- 10 blankets
- 20 bibles
- used clothing
- 1 case lubricating Motor oil
- 10 loaves of bread
- 2 pounds of butter
- 4 gallons of whole milk
- 6 bags of cookies
- 12 cans of soup
4. Plaintiff alleges that these goods were a gift to the Mohawks of Tyendinaga and that with the exception of the motor oil (which was destined for re-sale) all the goods were for personal or community consumption.
5. Upon arrival at the Canadian border point, the plaintiff made a formal oral declaration and was asked to pay duty and taxes on the goods.
6. The plaintiff declined, stating his alleged aboriginal rights under the treaties and the Constitution. He left and, on or about Sept. 15, 1989 he was served with a notice of ascertained forfeiture stating that he willfully evaded payment of the required duty, pursuant to section 31 of the Customs Act [R.S.C., 1985 (2nd Supp.), c. 1].
ISSUES
There are several issues raised by the following motions:
1. Whether the impugned pleadings should be struck out pursuant to rule 419(a), (b), (d) and (f)?
a) Are the pleadings redundant, prejudicial, embarrass, delay the fair trial and otherwise an abuse of process because the issues and facts raised therein are res judicata and issue estopped?
RELEVANT STATUTORY PROVISIONS
The relevant provisions [of the Federal Court Rules] are as follows:
Rule 408.(1) Every pleading must contain a precise statement of the material facts on which the party pleading relies.
(2) Without limiting the generality of paragraph (1), the effect of any document or the purport of any conversation referred to in the pleading must, to the extent that it is material, be briefly stated, and the precise words of the document or conversation should not be stated, except in so far as those words themselves are material.
…
(4) A statement that a thing has been done or that an event has occurred, being a thing or event the doing or occurrence of which, as the case may be, constitutes a condition precedent necessary for the case of a party, is to be implied in his pleading.
…
Rule 412.(1) A party may by his pleading raise any point of law.
(2) Raising a question of law or an express assertion of a conclusion of law … shall not be accepted as a substitute for a statement of material facts on which the conclusion of law is based.
…
Rule 419.(1) The Court may at any stage of an action order any pleading or anything in any pleading to be struck out, with or without leave to amend, on the ground that
(a) it discloses no reasonable cause of action or defence, as the case may be,
(b) it is immaterial or redundant,
(c) it is scandalous, frivolous or vexatious,
(d) it may prejudice, embarrass or delay the fair trial of the action,
(e) it constitutes a departure from a previous pleading, or
(f) it is otherwise an abuse of the process of the Court,
and may order the action to be stayed or dismissed or judgment to be entered accordingly.
(2) No evidence shall be admissible on an application under paragraph (1)(a).
ANALYSIS
Defendant’s Motion to Stay the Proceedings per Subsection 50(1)
With respect to the subsection 50(1) argument, in my opinion, there is, as all parties agree, no longer a basis to sustain a motion on this ground. The Vincent case was heard on September 15-18, 1992 and a decision of the Ontario Court of Appeal was rendered on January 22, 1993. As such, the claim that the present proceedings should be stayed as a similar action, with the present plaintiff acting as intervenor, is being heard in another court, is no longer relevant.
Furthermore, if my understanding of defendant’s submission is correct and notwithstanding that counsel for defendant stated, I believe, that he withdrew his section 50 application, he continued to make submissions with regard to paragraph 50(1)(b).
The second ground submitted by the defendant/applicant with regard to section 50, if my understanding of the submissions is correct, is based on paragraph 50(1)(b) of the FCA. Specifically, the defendant submits that it would be an injustice to allow the instant case to proceed given that this action parallels the issues, facts and evidence litigated and decided on by the Ontario Court of Appeal in the Vincent case. Here, the defendant argues that having the Court relitigate on matters previously dealt with would be prejudicial to the defendant, delay a fair trial, and waste Court time, human energy and monetary expenses.
This argument is focused on the principle of issue estoppel/res judicata. In dealing with this principle of law it is worthy to cite the summary provided by Mr. Justice Joyal in Musqueam Indian Band v. Canada (Minister of Indian and Northern Affairs), [1990] 2 F.C. 351 (T.D.), at pages 361-369. Joyal J. attempts to explain the distinction between res judicata and issue estoppel. Citing from the decision of Hoysted v. Federal Commissioner of Taxation (1921), 29 C.L.R. 537 (Aust. H.C.) at pages 560-561, Mr. Justice Joyal writes [at page 362]:
I fully recognize the distinction between the doctrine of res judicata where another action is brought for the same cause of action as has been the subject of previous adjudication, and the doctrine of estoppel where, the cause of action being different, some point or issue of fact has already been decided (I may call it “issue-estoppel”).
There are three requirements necessary to find issue estoppel. They are as follows: (1) that the same question has been decided; (2) that the judicial decision which is said to create estoppel was final; (3) that the parties to the judicial decision or their privies were the same persons as the parties to the proceedings in which the estoppel is raised or their privies. See Musqueam, supra, at page 362.
I am satisfied that the issue estoppel argument cannot succeed for failure to meet all three of the requirements. Although the defendant submits that the plaintiff was represented in Vincent by virtue of the intervenor, the Grand Chiefs of Ontario, I disagree. In Vincent the plaintiff was an intervenor as part of a class, however, in the instant case the plaintiff is a main party to the proceedings.
Moreover, I believe the conclusions of Strayer J. in Western Pulp Inc. v. Roxburgh et al. (1990), 39 F.T.R. 134 (F.C.T.D.) are extremely applicable to this issue. In this case Strayer J. considered the question whether it was appropriate for the Federal Court to exercise its discretion against granting certiorari where the applicant appeared as an intervenor in the same action brought before the B.C. Supreme Court. In rendering judgment, His Lordship, at page 138, reasoned as follows:
I can see no injustice in the certiorari application being dealt with in the present proceedings in which the plaintiffs in the Supreme Court action have appeared only as intervenors. [Also intervenor may not be granted same rights as a party to make evidence, to cross-examine, etc. and thus would be an injustice for this reason alone. I would stay proceedings.]
I agree with this finding. An intervenor is a different party than a plaintiff in a subsequent action, therefore the defendant has failed to meet the test to establish issue estoppel and, as such, the proceedings should not be stayed on these grounds.
Notwithstanding that there are insufficient grounds to sustain an argument for issue estoppel, it is still open to the Court to stay the proceedings where to permit the claim to proceed would be an abuse of process. In Musqueam Indian Band, supra, at pages 368-369, Joyal J. commented on when it is appropriate for the Court to stay an action based on grounds other than issue estoppel. Citing with approval the words of Goff L.J. in McIlkenny v. Chief Constable of the West Midlands, [1980] 1 Q.B. 283 (C.A.) at pages 330-331, Joyal J. states [at page 364]:
… the court clearly has a discretionary power to stay an action on the ground that the plaintiff is seeking to raise again a question already judicially decided against him, where he has had a full opportunity of presenting his whole case, even though the parties are different so that there is technically no estoppel. In my judgment also this power can be exercised at an early stage on application to strike out, although its exercise then calls for great caution ….
Thus, according to the jurisprudence, the Court should only grant a stay in the clearest of cases. In Varnam v. Canada (Minister of National Health and Welfare) et al. (1987), 12 F.T.R. 34 (F.C.T.D.), the Court summarized the test and upon whom the burden rests to meet the test to grant a stay of proceedings. McNair J. states, at page 36:
A stay of proceedings is never granted as a matter of course. The matter is one calling for the exercise of a judicial discretion in determining whether a stay should be ordered in the particular circumstances of the case. The power to stay should be exercised sparingly and stay will only be ordered in the clearest of cases. In an order to justify a stay of proceedings two conditions must be met, one positive and the other negative: (a) the defendant must satisfy the court that the continuance of the action would work an injustice because it would be oppressive or vexatious to him or would be an abuse of the process of the court in some other way; and (b) the stay must not cause an injustice to the plaintiff. On both the burden of proof is on the defendant. Expense and inconvenience to a party or the prospect of the proceedings being abortive in the event of a successful appeal are not sufficient special circumstances in themselves for the granting of a stay: Communications Workers of Canada v. Bell Canada, [1976] 1 F.C. 282 (T.D.); Weight Watchers Int’l Inc. v. Weight Watchers of Ontario Ltd. (1972), 25 D.L.R. (3d) 419 (F.C.T.D.); Baxter Travenol Laboratories Ltd. v. Cutter (Canada) Ltd. (1981), 54 C.P.R. (2d) 218 (F.C.T.D.).
Turning to the case at bar, the defendant submits that the proceedings should be stayed (struck) because the evidence being led and the historical facts relied upon are substantially similar to that which was used in the Vincent case. In support of this allegation, the defendant relies upon the evidence attached to the affidavit of Margaret Watts, employee with the Department of Justice. Specifically, at Tab “E” is Exhibit “A”, which is a true copy of the factum filed on behalf of the Chiefs of Ontario in the Vincent case, it may be noted that much of the evidence and legal issues and historical facts argued in Vincent are being relied upon by the plaintiff in the instant case. Thus, the defendant submits that requiring them to relitigate, with respect to these matters, will cause them a prejudice but will not harm the plaintiff because the Chiefs of Ontario continue to have access to other Courts, and may return to this Court to have the stay removed.
While I am satisfied that much of the same evidence will, in all likelihood, be used in the present case, the fact that evidence in one action is similar to evidence led in another is, in and of itself, insufficient to justify a stay: Micromar International Inc. v. Micro Furnace Ltd. (1988), 22 C.I.P.R. 79 (F.C.T.D.) at page 84.
In addition, the Federal Court has held in Prime Boilers Inc. v. Unilux Manufacturing Co. (1987), 14 C.I.P.R. 49 (F.C.T.D.), a case which was cited with approval in Micromar, supra, at page 82, that no stay of proceedings will be granted where the relief sought in one Court could be distinguished from the relief available in another. I am of the view that this principle is equally applicable to the case at bar. Here the plaintiff is seeking declaratory relief which is unlike the nature of the relief sought in Vincent before the Court of Appeal.
In sum, I am satisfied that the defendant has not met the heavy burden of proof placed upon him, pursuant to a paragraph 50(1)(b) motion. This is not a clear case of whether the stay should be granted, and in the absence of this clarity of vision, I believe I should allow the claim to proceed to trial.
However, while the defendant’s first motion, to stay the proceedings, cannot be sustained, it is still important for me to determine if there are grounds to strike the whole or a portion of the plaintiff’s statement of claim pursuant to Rule 419.
Defendant’s Motion to Strike Out Pleadings in the Statement of Claim
General principles of law
The defendant submits that a portion of the pleadings contained in the statement of claim should be struck out as it discloses no reasonable cause of action, is prejudicial, repetitive, will delay the fair trial and is otherwise an abuse of process, pursuant to Rule 419(1)(a), (b), (d) and (f).
The provisions of Rule 419 afford the Federal Court a prompt and summary method of disposing of what may be termed as groundless actions. As the Court is proceeding in a summary fashion, the facts pleaded in a statement of claim are deemed to be true. See Attorney General of Canada v. Inuit Tapirisat of Canada et al., [1980] 2 S.C.R. 735, at page 740; Operation Dismantle Inc. et al. v. The Queen et al., [1985] 1 S.C.R. 441, at pages 486-487.
Re: 419(1)(a)—no reasonable cause of action
The test to strike out pleadings under Rule 419(1)(a) has been clearly established in the jurisprudence of the Supreme Court of Canada and applied in the case law emanating from this Court such that the Court should only strike out a pleading in plain and obvious cases. This has been authoritatively stated by Estey J. in Tapirisat, supra, at page 740:
As I have said, all the facts pleaded in the statement of claim must be deemed to have been proven. On a motion such as this a court should, of course, dismiss the action or strike out any claim made by the plaintiff only in plain and obvious cases and where the Court is satisfied that “the case is beyond doubt”: Ross v. Scottish Union and National Insurance Co. (1920), 47 O.L.R. 308 (App. Div.).
Accordingly, the jurisdiction afforded this Court, by virtue of Rule 419, should be applied sparingly. See also Operation Dismantle, supra.
In accordance with Rule 408, which governs the principles of pleading, every pleading must contain a precise statement of the material facts on which the party pleading relies. Based on this general principle of law, combined with the jurisprudence on when the Court can invoke Rule 419(1)(a), if the Court is not persuaded that material facts have been pleaded which can sustain the causes of action alleged, the statement of claim must be struck out. However, the motion to strike cannot be granted unless it is clear that the impugned pleading discloses no reasonable cause of action. If the action is not absolutely unsustainable then the Court must allow the case to go forward and allow the Judge, hearing the merits of the case, to settle the matters at hand.
In the present case, the impugned pleadings consist largely of historical facts, which are contained at paragraphs 24 and 27 through 39 of the amended statement of claim. Summarily, these paragraphs make reference to historical events which gave rise to the Crown’s undertaking to recognize the free right of passage of Indians through the now Canada-U.S. border, and to several treaties and the Constitution Act, 1982 which entrenched these rights.
These historical events are, by virtue of Rule 419, deemed to be true and pursuant to Rule 419(2) “No evidence shall be admissible on an application under paragraph (1)(a).” Having consideration to the truth of the pleadings, I believe that there lies herein a reasonable cause of action. For example, in paragraph 29, the plaintiff specifies that Article III of the Jay Treaty recognizes and affirms the Indians’ right of free passage and to freely carry on trade and commerce across the boundary line and to pass and repass the line with their own proper goods and effects without the imposition of tax or duty. At paragraph 32 reference is made to the Treaty of Ghent and how this treaty again restored the above-stated right of passage.
I am satisfied that these historical facts, as pleaded and deemed to be true, are sufficient to sustain a reasonable cause of action against the Minister of National Revenue, for breach of the fiduciary duty to respect Indian peoples’ right to be exempted from paying duty and taxes on goods imported into Canada from the U.S.
Thus, given that Rule 419(1)(a) of the Federal Court Rules should be applied by the Court sparingly, only in cases where it is clear that the impugned pleadings disclose no reasonable cause of action, I do not believe that this is an appropriate case where the impugned pleadings in the statement of claim should be struck out.
Re: Rule 419(1)(b), (d) & (f)—redundant, prejudice, delay & otherwise abuse of process
The defendant submits that since the historical facts and legal conclusions, as pleaded, are similar to those pleaded and dealt with in the Vincent case, it would be redundant, prejudicial, delay the fair trial and otherwise be an abuse of process to allow the impugned pleadings to remain.
The impugned pleadings are, as previously stated, contained largely at paragraphs 24, 27-39 of the amended statement of claim. It is also argued that all pleadings which make reference to the general class of Indians, as compared to the specific plaintiff, should be struck out on the basis that the pleadings are too general, and unnecessarily enlarge the issues at hand.
It is entirely appropriate, by virtue of the rules of pleadings stated in Rule 408 and Rule 412, for the plaintiff to plead material facts and the legal results flowing therefrom. Where conclusions of law are pleaded this does not mean, however, that the pleader is bound by that result: R. v. Imperial General Properties Limited, [1985] 1 F.C. 344 (C.A.); Bertram S. Miller Ltd. v. R., [1986] 3 F.C. 291 (C.A.). Thus, with reference to the present case, it is entirely appropriate for the plaintiff to have pleaded references to the various treaties, undertakings and international law conventions, and the anticipated legal results flowing therefrom which give rise to the alleged exemption from duty and taxes.
However, as I understand the defendant’s submissions, the motion to strike the pleadings is founded on the doctrine of issue estoppel, and in the alternative on the position that it would be an abuse of process. The defendant argues that the Court is being asked to entertain pleadings which have already been fully adjudicated and the issues, with respect to the legal rights of Indians to be exempted from paying duty and taxes on goods imported into Canada from the U.S. Therefore, the defendant argues that these issues and those pleadings of historical facts, upon which the legal determinations are based, should not now be resurrected.
The test to strike a pleading under Rule 419(1)(f) is as stringent as the test under Rule 419(1)(a), if not more so (see Micromar, supra).
The argument to strike the impugned pleadings on the basis of issue estoppel must fail because of the necessary requirement that the parties to the former action be identical to those in the latter proceeding is not satisfied. However, the Court has demonstrated a willingness to strike pleadings if it would be an abuse of process to allow them to stand.
In the instant case, the defendant relies heavily on the decision of the Ontario Court of Appeal in Vincent, to justify striking the impugned pleadings. As such, I believe it is important to briefly outline the facts of that case and the decision rendered by the Court (I have been informed by counsel for plaintiff that an application is to be made by Vincent to the Supreme Court of Canada for leave to appeal the Ontario Court of Appeal decision [Supreme Court of Canada. Bulletin of Proceedings, 1993, page 933]). The plaintiff in the first instance and appellant before the Court of Appeal was Elizabeth Vincent, a Huron Indian who re-entered Canada at the Cornwall International Bridge with several cartons of cigarettes. The Ontario (Provincial Court) found her liable to pay the necessary duties and taxes on the imported goods. On appeal, the plaintiff and her intervenor, the Chiefs of Ontario, argued that she was, as an Indian, entitled to bring goods into Canada of a commercial nature without having to pay the duties and taxes. The issue before the Court of Appeal hinged upon the determination of whether this historical right existed and, if so, whether this right was entrenched in the Constitution Act, 1982.
In rendering its decision, the Court of Appeal found that: (1) the international law relied upon was not binding upon the Sovereign, Canada; (2) the Jay Treaty did entitle Indians to bring into Canada goods and effects for personal or community use; but (3) even if the Jay Treaty was entrenched under subsection 35(1) of the Constitution Act, 1982, in light of several Supreme Court of Canada decisions, this did not confer upon the appellant the right to import goods for commercial use without paying duty and taxes on them.
Although the historical facts and legal conclusions flowing in Vincent closely parallel those in the instant case, this alone does not justify striking the pleadings on the ground that it would be an abuse of process for them to remain. It has been held that the existence of a prior action in provincial court arising from the same factual circumstances as are pleaded in the Federal Court action does not constitute an abuse of process: Shogun Seafoods (1985) Ltd. v. Ship “Simon Fraser No. 1” et al. (1990), 36 F.T.R. 289 (F.C.T.D.).
However, counsel for defendant submits that the Ontario Court of Appeal in Vincent in arriving at its decision considered not only the treaty rights but also considered the aboriginal rights of the native people and thus all of the issues raised by the plaintiff in the present case have been decided. It, thus, would be an abuse of process to allow the plaintiff’s claim to proceed.
Assuming it to be correct to say that all of the issues raised by the plaintiff in the present action are the same issues raised in the Vincent case or any other case decided by a Court other than the Federal Court of Canada, this alone does not mean that the plaintiff is estopped from proceedings in the Federal Court of Canada which Court has not decided the issues raised.
The Federal Court of Canada is not bound by the decisions of any other court of Canada other than the decisions of the Supreme Court of Canada. Thus, a Trial Court Judge of the Federal Court of Canada is bound by no other court other than the Supreme Court of Canada and the decisions of the Federal Court of Appeal.
Thus, the decision in the Vincent case is not binding on the Federal Court of Canada. This is not to say that I should give no weight to a decision of a court of appeal of a province of Canada.
Defendant submits that all of the issues raised by the plaintiff in the present action have been decided on a number of occasions by various courts and particularly in the Vincent case. Counsel for defendant submits that the Vincent case not only determined the issue of the treaty rights of the plaintiff but also determined the issue of aboriginal rights. He submits that inasmuch as both the treaty rights and aboriginal rights of plaintiff have been determined, it would be an abuse of process to allow the present case to proceed any further.
I am satisfied from having read the decision in the Vincent case that the treaty rights issue has been determined. I am not satisfied that the aboriginal rights issue was determined or even considered by the Justices of the Court of Appeal in handing down their decision in the Vincent case.
Counsel for defendant submits that this issue, aboriginal rights, was considered and determined by the Justices of the Court of Appeal. After reading the material filed by the defendant, I am not satisfied that I can conclude that the Ontario Court of Appeal in the Vincent case gave consideration concerning aboriginal rights.
Assuming the Ontario Court of Appeal, in deciding as it did, gave consideration to the issue of aboriginal rights, the Trial Division of the Federal Court of Canada is not bound by this decision. I do not believe that it would be an abuse of the Court’s procedure to allow the present case to proceed.
The applications to strike and to stay are denied. Costs in the cause.