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Federal Court - Review (JR-Appeal) - 'Pleadings'. FU2 Productions Ltd. v. Canada
In FU2 Productions Ltd. v. Canada (Fed CA, 2024) the Federal Court of Appeal considers (and dismisses) an appeal from an interlocutory order in favour of the Respondent Canada that struck "passages from the notice of appeal and allowing the respondent to file its reply within 60 days of the Court’s order" (the court dealt with the Notice of Appeal as a 'pleading'), here where the respondent challenged the validity of the statute: "Economic Action Plan 2014 Act, No. 2", for inadequate Senate passage:[3] The appellant filed an appeal in the Tax Court, challenging, among other things, the validity of the EAP 2014 Act. Its position was that when the EAP 2014 Act was passed, the Senate had 17 vacancies, rendering the EAP 2014 Act invalid, according to the Constitution Act, 1867 (U.K.), 30 & 31 Vict., c. 3, reprinted in R.S.C. 1985, Appendix II, No. 5. The argument is that there was insufficient representation from the provinces and territories in the Senate, the Senate was not properly constituted and thus could not validly pass legislation.
[4] The respondent successfully moved to strike the passages in the notice of appeal relating to this argument, on the basis that it had no reasonable prospect of success.
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[6] Here, the standard of review is correctness, as the appeal raises a question of law — the Tax Court’s decision to strike the passages was based on its interpretation of sections 21, 22, and 35 of the Constitution Act, 1867.
[7] We see no error in the Tax Court’s decision requiring this Court’s intervention. The Tax Court correctly stated and applied the test for striking out pleadings — whether it is "“plain and obvious, assuming the facts pleaded to be true, that the pleading discloses no reasonable cause of action”": R. v. Imperial Tobacco, 2011 SCC 42 at para. 17; Canadian Imperial Bank of Commerce v. Canada, 2013 FCA 122 at para. 7; TCC Reasons at paras. 27-28.
[8] The Tax Court considered the respondent’s arguments in support of its motion to strike: (a) that the Tax Court does not have jurisdiction to review whether the Senate validly passed the EAP 2014 Act, as this is within the exclusive jurisdiction of Parliament; and (b) the Senate vacancy argument.
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[10] On the Senate vacancy issue, we agree with the Tax Court’s reasons: TCC Reasons at paras. 44-61. The Tax Court adopted an interpretation of sections 21, 22, and 35 of the Constitution Act, 1867 that is consistent with their text, context, and purpose. We disagree with the appellant’s submissions that the Tax Court took a purely textual approach.
[11] As the Tax Court concluded, the language of sections 21 and 22 — which concern the number of senators and the representation of provinces respectively — is "“subject to the Provisions of this Act”": TCC Reasons at para. 46. We reject the appellant’s argument that the "“subject to”" language is limited in its application to sections 26, 27 and 28 of the Constitution Act, 1867.
[12] Crucially, section 35 makes it clear that the Senate may exercise its powers notwithstanding any vacancies, as long as there is a quorum of senators:"Quorum of Senate "
"Quorum du Sénat"" "
"35 Until the Parliament of Canada otherwise provides, the Presence of at least Fifteen Senators, including the Speaker, shall be necessary to constitute a Meeting of the Senate for the Exercise of its Powers. "
"35 ""Jusqu’à ce que le parlement du Canada en ordonne autrement, la présence d’au moins quinze sénateurs, y compris l’orateur, sera nécessaire pour constituer une assemblée du Sénat dans l’exercice de ses fonctions." [13] Accordingly, it was plain and obvious that the appellant’s Senate vacancy argument had no reasonable prospect of success: TCC Reasons at para. 61. As noted at the hearing in this Court, the untenable implication of the appellant’s Senate vacancy argument is that any legislation passed by a quorum of the Senate when there are vacancies in the Senate could also be invalid. . Canadian National Railway Company v. Canada (Transportation Agency)
In Canadian National Railway Company v. Canada (Transportation Agency) (Fed CA, 2023) the Federal Court of Appeal considered a motion on an administrative tribunal appeal [under Canada Transportation Act, s.41] (though the case bears on JRs as well), here seeking disclosure of CTA case-related documents for entry into the record [under R317: 'Material in the Possession of a Tribunal'].
In these quotes the court places greater reliance on 'review pleadings' [ie. "the pleading: in the case of judicial reviews, the notice of application or in the case of statutory appeals, the notice of appeal"]:[13] What is “relevant to an application [or appeal]” under Rule 317? The answer is found in the pleading: in the case of judicial reviews, the notice of application or in the case of statutory appeals, the notice of appeal.
[14] The Court must read the pleading “with a view to understanding the real essence of the application [or appeal]” and gaining “‘a realistic appreciation’ of the [proceeding’s] ‘essential character’”. The Court must not fall for skilful pleaders who are “[a]rmed with sophisticated wordsmithing tools and cunning minds”. Instead, it must read the pleading “holistically and practically without fastening onto matters of form”. See JP Morgan Asset Management (Canada) Inc. v. Canada (National Revenue), 2013 FCA 250, [2014] 2 F.C.R. 557 at paras. 49-50.
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