T-2695-75
Irving Refining Limited (Petitioner)
v.
National Harbours Board (Respondent)
Trial Division, Walsh J.—Montreal, January 12;
Ottawa, January 29, 1976.
Practice—Parties—Agreement providing for application by
lessee for determination of rental within 90 days—Whether
proceedings should have been against Queen and by way of
action—Federal Court Act, s. 17(2),(3) and Rules 319,
332(5)—National Harbours Board Act, R.S.C. 1970, c. N-8, s.
3(2),(3).
A lease provided that when notified of a rent increase lessee
had 90 days to apply to the Federal Court for determination of
appropriate rental. Notification was made April 22, 1975; the
letter was allegedly received May 6, and these proceedings
commenced August 1. While not arguing that petitioner is out
of time, respondent claims (1) that proceedings should have
been against the Queen, and (2) that proceedings should have
been by way of action, instituted by a statement of claim, and
not a motion under Rule 319. Success on either ground will put
petitioner beyond the time limit, and petitioner argues for
permission to make necessary amendments, if either is
successful.
Held, petitioner's motion is granted. (1) The Court has
jurisdiction under section 17(2) and (3) of the Federal Court
Act. The contract is between Irving and the National Harbours
Board, by its creating legislation, a body corporate and politic,
agent of the Crown, with capacity to contract, sue and be sued
in its own name. While respondent might have been designated
as the Queen as represented by the National Harbours Board,
there is no prejudice in directing proceedings directly against
the Board. (2) The agreement provides for an "application" to
the Court; the intention seems to be that the Court should
determine the rental after hearing evidence and contentions.
While a more detailed supporting affidavit would be necessary,
Rule 319 provides for filing of affidavits by the opposing party,
and that, with the Court's approval, a witness may be called.
There is no reason why, with the Court's approval, the neces
sary evidence could not be adduced without prejudice to either
side on a simple motion. To dismiss the motion now would
deprive petitioner of all recourse to have the matter determined
on the merits, as both parties contemplated.
North Shipping and Transportation Limited v. Le Conseil
des Ports nationaux [1969] 1 Ex.C.R. 12; Hunt v. The
Queen [1967] 1 Ex.C.R. 101; Aladdin Industries Inc. v.
Canadian Thermos Products Limited [1973] F.C. 942 and
Re Coles and Ravenshear [1907] 1 K.B. 1, applied.
MOTION.
COUNSEL:
C. Blondeau for petitioner.
J. C. Ruelland for respondent.
SOLICITORS:
Langlois, Drouin & Laflamme, Quebec, for
petitioner.
Deputy Attorney General of Canada for
respondent.
The following are the reasons for judgment
rendered in English by
WALSH J.: This is a motion by the petitioner
contesting the increase in rental to take effect May
1st, 1975, demanded by respondent for an ease-
ment for a pipeline which it rents from respondent
in Saint John Harbour by virtue of a lease com
mencing May 1st, 1965. By virtue of the provisions
of the said lease rental was to be $200 per annum
from May 1st, 1965, until April 30th, 1970, $279
per annum from May 1st, 1970 to April 30th,
1975, and for the period from May 1st, 1975 to
April 30th, 1980, at such revised rates as may be
fixed by the Board pursuant to subclause B of the
interpretation clause. Subclause B of the interpre
tation clause states that:
the Board may at any time up to 6 months after the commence
ment of the period fix a different rental which shall be effective
retroactively if necessary to the commencement of the period.
and goes on to say that should the rate be higher
than that in force immediately prior to the period
it is hereby agreed between Her Majesty in right of Canada, as
represented by the Board, on the one hand and the lessee on the
other hand, that the lessee may apply to the Federal Court for
determination by that Court of the appropriate rental for the
particular period in question.
The said clause provides further:
In any event the rental rate fixed by the Board shall be
conclusive and binding upon the lessee unless the lessee's
application for determination of rental rate by the Federal
Court be entered not later than 90 days after notification from
the Board to the lessee of the rate so fixed by the Board.
There is no appeal from the decision as to the rate
fixed by the Federal Court.
"Federal Court" is defined in another section of
the lease as the "Trial Division of the Federal
Court of Canada".
On April 22nd, 1975, the respondent advised the
petitioner of an increase in rental for the period
from May 1st, 1975 to April 30th, 1980 at the rate
of 12¢ per foot based on the diameter of the
pipeline, which represented an increase in rental
from $279 per annum to $558 per annum, or
double the amount previously charged. This letter
was allegedly received by the petitioner on May
6th, 1975. The present proceedings by way of
petition to have the Federal Court fix the rental
rate were filed on August 1, 1975.
The respondent in opposing the application does
not contend that the date of notification to peti
tioner of the increase in rental be taken as April
22nd, 1975, the date the letter was dated rather
than May 6, 1975, the date when it was allegedly
received and hence that the present proceedings
commenced on August 1st, 1975 were brought
after the expiration of the 90 day period to appeal
to the Federal Court, so that the rental rate fixed
by the Board becomes conclusive, but limits its
contestation to two grounds. First that it should
have been directed against Her Majesty the Queen
instead of the National Harbours Board and
secondly that proceedings should have been
brought by means of an action introduced by a
statement of claim rather than by a simple motion
made pursuant to the provisions of Rule 319 of the
Federal Court Rules. If the respondent succeeds
on either of these grounds, however, then the
petitioner is clearly beyond the 90 day delay for
institution of proceedings and for this reason the
petitioner argues that if the proceedings are direct
ed against the wrong respondent or if it is found
that they should have been brought by means of an
action rather than a motion then the Court should
permit the necessary amendments to overcome this
problem, since to dismiss the proceedings would
leave the petitioner without recourse.
Dealing with the first ground of objection this
Court has jurisdiction by virtue of section 17(3) of
the Federal Court Act to hear and determine the
matter of
(a) the amount to be paid where the Crown and any person
have agreed in writing that the Crown or that person shall
pay an amount to be determined by
(i) the Federal Court.
The easement agreement in question is not a con
tract between the Crown and Irving Refining Ltd.
but between the National Harbours Board and the
said company. Section 3(2) of the National Har
bours Board Act, R.S.C. 1970, c. N-8 states:
3. (2) The Board is a body corporate and politic and, for the
purposes of this Act, is and shall be determined to be an agent
of Her Majesty in right of Canada.
Subsection (3) states:
(3) The Board has the capacity to contract and to sue and be
sued in the name of the Board.
The easement agreement itself provides as stated
(supra) that, in fixing the amount of an increase
it is hereby agreed between Her Majesty in right of Canada, as
represented by the Board, on the one hand and the lessee on the
other hand, that the lessee may apply to the Federal Court for
determination by that Court of the appropriate rental rate for
the particular period in question.
If there were any doubt as to the jurisdiction of the
Court it can also be found in section 17(2) which
gives the Trial Division jurisdiction in all cases "in
which the claim arises out of a contract entered
into by or on behalf of the Crown".
While the respondent might perhaps have been
designated as Her Majesty the Queen as represent
ed by the National Harbours Board I can see no
prejudice in directing the proceedings as in the
present case directly against the National Har
bours Board in view of the provisions of section
3(3) of the National Harbours Board Act (supra)
nor do I find that the Court lacks jurisdiction to
hear the proceedings so directed rather than
against Her Majesty the Queen. (See North Ship
ping and Transportation Limited v. Le Conseil des
Ports nationaux [1969] 1 Ex.C.R. 12 at page 18
which refers to Hunt v. The Queen [1967] 1
Ex.C.R. 101 at page 102.)
A more serious objection is that the present
proceedings should have been brought in the form
of an action which would enable motions for par
ticulars to be made, examinations for discovery
held, and specifically define the issue for hearing
on the merits so that the Court would have before
it all the necessary evidence to enable the proper
amount of rental to be determined. However, the
easement agreement itself permits the lessee to
"apply to the Federal Court for determination by
that Court of the appropriate rental rate" and
later refers to the "lessee's application for determi
nation of rental rate" having to be entered not
later than 90 days after notification of the
increase. The word "application" is not one having
special legal significance and while it would not
perhaps exclude proceeding by way of a statement
of claim in the ordinary way, it is certainly more
consistent in its common usage with a less formal
application such as a petition or motion, and it
appears that the intention was simply that the
Federal Court should determine the appropriate
rental after hearing the evidence and contentions
of the parties respecting same. Rule 319 under
which the motion was made provides that such a
motion shall be "supported by an affidavit as to all
the facts on which the motion is based that do not
appear from the record". The simple affidavit
supporting the present motion merely stating that
all the facts alleged in same are true does not of
course give any indication as to why the rental
should not have been increased to $558 per annum
or indicate what is an appropriate rental, and a
more detailed affidavit or affidavits would certain
ly have to be submitted before the Court would
have any evidence before it on which a decision
could be based. The Rule provides, however, that
the opposite party may also file affidavits and that
by leave of the Court a witness may be called to
testify in open Court. Rule 332(5) permits cross-
examination of the parties on an affidavit. This
frequently takes place in industrial property
injunctions, so that there is no real reason why,
with the approval of the Court, the necessary
evidence could not be adduced, without prejudice
to either party, on a simple motion rather than by
an action instituted in the usual way by a state
ment of claim.
In the case of Aladdin Industries Inc. v.
Canadian Thermos Products Limited' Mr. Justice
Kerr, in taxing a bill of costs at a higher amount
than that allowed by the Tariff without prior
special direction having been given by him for this,
referred to the judgment of Collins M.R., in Re
Coles and Ravenshear 2 where the learned Master
of Rolls stated:
[1973] F.C. 942 at page 945.
2 [1907] 1 K.B. 1 at page 4.
Although I agree that a Court cannot conduct its business
without a code of procedure, I think that the relation of rules of
practice to the work of justice is intended to be that of
handmaid rather than mistress, and the Court ought not to be
so far bound and tied by its rules, which are after all only
intended as general rules of procedure, as to be compelled to do
what will cause injustice in the particular case.
I fully agree with this quotation and I believe it
is applicable in the present case. If the petitioner's
motion were to be dismissed at this stage of the
proceedings it would have lost all recourse to have
the amount of the rental determined on the merits
by this Court as was contemplated by both parties
in the easement agreement. On the other hand,
there is no prejudice to the respondent in having
the matter so determined on the merits unless such
prejudice arises merely from the fact that unless
this matter can be determined on the present
proceedings, petitioner will have lost its recourse.
Under the circumstances, therefore, petitioner's
motion will be granted but as the proceedings may
not have been brought in the most appropriate
manner the motion will be granted without costs.
ORDER
Petitioner's motion is granted without costs. The
petitioner will be permitted to file an appropriate
affidavit or affidavits as to the facts which may
support its contentions as to the appropriate rental.
Respondent will have the right to examine the
affiants on these affidavits and to submit an
affidavit or affidavits in contestation thereof, with
petitioner being permitted to examine the affiants
on these affidavits. When the examinations have
been completed either party may set the motion
down for hearing and argument.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.