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Federal Court - Striking Pleadings. Brink v. Canada
In Brink v. Canada (Fed CA, 2024) the Federal Court of Appeal considered the appellate standard of review (SOR) for issues of striking of pleadings, and as well here for the related legal step of certification of a class action:V. Standard of Review
[40] Whether a pleading discloses a cause of action is primarily a question of law. The standard of appellate review of the Federal Court’s decision on both the motion to strike and the first certification condition is thus that of correctness: Canada (Attorney General) v. Nasogaluak, 2023 FCA 61 at para. 21; Pioneer Corp. v. Godfrey, 2019 SCC 42 at para. 57; Canada (Attorney General) v. Jost, 2020 FCA 212 at para. 21. On this standard, this Court owes no deference to the Federal Court: Housen v. Nikolaisen, 2002 SCC 33 at para. 8. . Brink v. Canada
In Brink v. Canada (Fed CA, 2024) the Federal Court of Appeal considered an appeal from a denial of a Charter s.15 ['discrimination'] class action certification motion, here where the motion judge struck the claim (without leave to amend) on the basis that no Charter claim was made out on the pleadings. The claim was with respect to immigration process fees charged by the government to "non-Canadian born" individuals.
These quotes address the law of striking a claim, which here also resulted in the denial of a class action certification motion:[24] Citing this Court’s decision in Wenham v. Canada (Attorney General), 2018 FCA 199 at para. 29, the Federal Court recognized that its task was not to assess the odds of a cause of action ultimately succeeding. The test was, rather, "“whether a cause of action has been pleaded that is not plain and obvious to fail”": Wenham, above at para. 31. The appellants do not take issue with the test identified by the Federal Court, but rather with its application in this case.
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[38] The primary issue raised by the appellants is whether the Federal Court erred in law in failing to find that it was at least arguable that being "“non-Canadian born”" could qualify as an analogous protected ground for the purposes of section 15 of the Charter. The appellants further argue that the Federal Court erred in denying them leave to amend their statement of claim.
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VI. Principles Governing Motions to Strike
[42] As noted earlier, the parties agree that the Federal Court properly identified the principles governing motions brought pursuant to Rule 221(1)(a) of the Federal Court Rules, SOR/98-106 to strike statements of claim on the basis that they do not disclose a reasonable cause of action.
[43] That is, a statement of claim should not be struck unless it is plain and obvious that the action cannot succeed, assuming the facts pleaded in the statement of claim to be true: Hunt v. Carey Canada Inc., 1990 CanLII 90 (SCC), [1990] 2 S.C.R. 959, [1990] S.C.J. No. 93 at 980; Pro-Sys Consultants Ltd. v. Microsoft Corporation, 2013 SCC 57 at para. 63. In other words, the claim must have no reasonable prospect of success: R. v. Imperial Tobacco Canada Ltd., 2011 SCC 42 at para. 17.
[44] The onus is on the party who seeks to establish that a pleading fails to disclose a reasonable cause of action: La Rose v. Canada, 2023 FCA 241 at para. 19; Edell v. Canada, 2010 FCA 26 at para. 5. The threshold that a plaintiff must meet to establish that a claim discloses a reasonable cause of action is a low one: Brake v. Canada (Attorney General), 2019 FCA 274 at para. 70.
[45] Pleadings must, moreover, be read generously, in a manner that accommodates any inadequacies in the allegations that are merely the result of deficiencies in the drafting of the document: see Operation Dismantle Inc. v. The Queen, 1985 CanLII 74 (SCC), [1985] 1 S.C.R. 441, [1985] S.C.J. No. 22 at 451.
[46] Motions judges should not delve into the merits of a plaintiff’s argument, but should, rather, consider whether the plaintiff should be precluded from advancing the argument at all: Salna v. Voltage Pictures, LLC, 2021 FCA 176 at para. 77. Recognizing that the law is not static, motions judges must also err on the side of permitting novel, but arguable claims to proceed to trial: R. v. Imperial Tobacco, above at paras. 19-25; Mohr v. National Hockey League, 2022 FCA 145 at para. 48, leave to appeal to SCC refused, 40426 (20 April 2023).
[47] That said, it must also be recognized that there is a cost to access to justice in allowing cases that have no substance to proceed. The diversion of scarce judicial resources to such cases diverts time away from potentially meritorious cases that require attention: Mohr, above at para. 50; Coote v. Lawyers’ Professional Indemnity Company, 2013 FCA 143 at para. 13.
[48] Insofar as the appellants’ certification motion is concerned, Rule 334.16(1) of the Federal Courts Rules identifies five conditions that must be satisfied for a proceeding in the Federal Court to be certified as a class proceeding. The first of these requires that the pleadings disclose a reasonable cause of action. This condition is assessed on the same standard that applies on a motion to strike out a pleading: Pro-Sys, above at para. 63; Salna, above at para. 72; Atlantic Lottery Corp. Inc. v. Babstock, 2020 SCC 19 at para. 14; Nasogaluak, above at para. 18.
[49] To fail at this stage of the test the claim must be "“bereft of any possibility of success”": Wenham, above at para. 33, citing Canada (National Revenue) v. JP Morgan Asset Management (Canada) Inc., 2013 FCA 250 at para. 47.
[50] As is the case with motions to strike, there is a heavy burden on a defendant trying to defeat a certification motion on the ground that the statement of claim fails to disclose a reasonable cause of action. Indeed, the burden resting on a defendant in such cases has been described by this Court as "“onerous”": Nasogaluak, above at para. 19; Canada v. Greenwood, 2021 FCA 186 at para. 144, leave to appeal to SCC refused, 39885 (17 March 2022). . La Rose v. Canada
In La Rose v. Canada (Fed CA, 2023) the Federal Court of Appeal considered a political plaintiffs' appeal from a trial court's striking of pleadings, here where aboriginal and youths sued the government for causing - and failing to mitigate - climate change.
In these quotes the court usefully reviews the law of motions to strike:IV. Motions to strike
[18] The relevant inquiry on motions to strike is whether it is plain and obvious that the pleaded claims have no reasonable prospect of success (Atlantic Lottery Corp. Inc. v. Babstock, 2020 SCC 19, [2020] 2 S.C.R. 420 at para. 14 [Atlantic Lottery]; Canada (Attorney General) v. Nasogaluak, 2023 FCA 61, 2023 CarswellNat 697 (WL Can) at para. 18, leave to appeal to SCC requested).
[19] Three ancillary principles inform the application of this test. First, the facts are to be taken as proven unless they are manifestly incapable of proof. Second, the pleading must be read generously, and, recognizing that the law is not static and evolves to address new and emerging situations, a motions judge must err on the side of permitting novel but arguable claims to proceed to trial (R. v. Imperial Tobacco Canada Ltd., 2011 SCC 42, [2011] 3 S.C.R. 45 at para. 21 [Imperial Tobacco]; Mohr v. National Hockey League, 2022 FCA 145, 472 D.L.R. (4th) 413 at para. 48, leave to appeal to SCC refused, 40426 (20 April 2023)). Third, the onus is on the defendant who seeks to establish that there is no reasonable cause of action (Edell v. Canada, 2010 FCA 26, 399 N.R. 115 at para. 5).
[20] The question in these appeals lies in whether the claims fail on the basis of justiciability, the substantive law, the pleadings, or perhaps on all three grounds. If the issues raised in the claims are not justiciable, that is a complete answer to the matter—the claims must be struck. But if the claims are justiciable, the claims may also fail on either the second objection—namely, that they disclose no reasonable cause of action—or on the third, a failure of the pleadings. The second objection, if successful, would normally be fatal; the third one, in appropriate circumstances, may be remedied by amendments. . Michaels of Canada, ULC v. Canada (Attorney General)
In Michaels of Canada, ULC v. Canada (Attorney General) (Fed CA, 2023) the Federal Court of Appeal considered an appeal from a successful 'motion to strike', here of a federal JR:[2] An order made on a motion to strike is of a discretionary nature. To intervene, this Court must detect an error of law or a palpable and overriding error on a question of fact or of mixed fact and law (Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235).
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[5] The motion judge identified the correct legal test to be applied on a motion to strike—the absence of any prospect of success—and applied the relevant jurisprudence. . Berenguer v. Sata Internacional - Azores Airlines, S.A.
In Berenguer v. Sata Internacional - Azores Airlines, S.A. (Fed CA, 2023) the Federal Court of Appeal considered (and partially allowed) an appeal of a dismissal of a federal airline class action.
In these quotes the court considers federal law of striking pleadings:[7] In the other motion, the respondent moved to have the amended statement of claim struck out without leave to amend pursuant to r. 221(1)(a) of the Rules on the ground that it failed to disclose a reasonable cause of action. The Federal Court granted this motion on two grounds. First, it determined that the action was doomed to fail because the Federal Court lacked jurisdiction to hear the matter. ...
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IV. Applicable principles regarding striking out pleadings for failure to disclose a reasonable cause of action
[22] Rule 221(1)(a) provides that a pleading may be struck out for failure to disclose a reasonable cause of action:221 (1) On motion, the Court may, at any time, order that a pleading, or anything contained therein, be struck out, with or without leave to amend, on the ground that it
221 (1) À tout moment, la Cour peut, sur requête, ordonner la radiation de tout ou partie d’un acte de procédure, avec ou sans autorisation de le modifier, au motif, selon le cas :
(a) discloses no reasonable cause of action or defence, as the case may be,
a) qu’il ne révèle aucune cause d’action ou de défense valable;
. . . [23] Rule 221(1)(a) is a high bar. To strike out a pleading on this basis, it must be plain and obvious that the pleading fails to disclose a reasonable cause of action (Nevsun Resources Ltd. v. Araya, 2020 SCC 5, [2020] 1 S.C.R. 166 at para. 64 [Nevsun]; R. v. Imperial Tobacco Canada Ltd., 2011 SCC 42, [2011] 3 S.C.R. 45 at para. 17).
[24] The Supreme Court has held that Rule 221(1)(a) may be applied if it is plain and obvious that the Federal Court lacks jurisdiction to hear a matter (Windsor (City) v. Canadian Transit Co., 2016 SCC 54, [2016] 2 S.C.R. 617 at para. 24 [Windsor]).
[25] More generally, in a motion under r. 221(1)(a) the facts as pleaded are assumed to be true except to the extent that they are “manifestly incapable of being proven” (Nevsun at para. 64).
[26] In addition, the Court may not rely on any evidence (r. 221(2)), except where the evidence concerns a question of jurisdiction. This Court has recognized that evidence may be considered for purposes of Rule 221(1)(a) if the issue concerns a jurisdictional question (MIL Davie Inc. v. Société d’Exploitation et de Développement d’Hibernia Ltée (1998), 1998 CanLII 7789 (FCA), 226 N.R. 369, 85 C.P.R. (3d) 320 at paras. 7-8 (F.C.A.)). . Asghar v. Canada
In Asghar v. Canada (Fed CA, 2023) the Federal Court of Appeal considers motions to strike pleadings under R221(1) ['Striking Out Pleadings'] of the Federal Court Rules:[4] Orders made on motions to strike brought under subsection 221(1) of the Federal Courts Rules, SOR/98-106 are discretionary in nature (Lafrenière v. Canada (Attorney General), 2020 FCA 110 at para. 2; Keenan v. Canada, 2022 FCA 190 at para. 4). In order to intervene in such matters, this Court must be satisfied that the Federal Court erred on a question of law or committed a palpable and overriding error on a question of fact or of mixed fact and law (Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 23; Hospira Healthcare Corporation v. Kennedy Institute of Rheumatology, 2016 FCA 215). The palpable and overriding error standard is a highly deferential one, meaning that the Court will only interfere with the impugned order where the alleged error is obvious and affects the outcome of the case (Benhaim v. St‑Germain, 2016 SCC 48, [2016] 2 S.C.R. 352 at para. 38; H.L. v. Canada (Attorney General), 2005 SCC 25, [2005] 1 S.C.R. 401 at paras. 55‑56 and 69‑70).
[5] After having carefully considered the appeal material and having heard the appellant’s oral submissions, we are all of the view that this appeal cannot succeed. We are satisfied that the Federal Court applied the correct legal test as set out by the Supreme Court of Canada in R v. Imperial Tobacco Canada Ltd., 2011 SCC 42, [2011] 3 S.C.R. 45 at paragraph 17 (Imperial Tobacco) in determining the respondent’s motion to strike, and that it committed no palpable and overriding error, or any error for that matter, in applying that test to the impugned pleading. This test is the absence of any reasonable prospect of success. In other words, the Federal Court correctly identified the applicable legal principles and committed no error in concluding that the Statement of Claim was replete with deficiencies that justified its summary dismissal and that could not be cured by amendments.
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[7] As the Supreme Court explained in Imperial Tobacco, although motions to strike must be used with care, they remain a “valuable housekeeping measure essential to effective and fair litigation [as they] unclutter [sic] the proceedings, weeding out the hopeless claims and ensuring that those that have some chance of success go on to trial.” (Imperial Tobacco at para. 19). In our view, they are such a valuable housekeeping measure in this case. . IMS Incorporated v. Toronto Regional Real Estate Board
In IMS Incorporated v. Toronto Regional Real Estate Board (Fed CA, 2023) the Federal Court of Appeal considers an unintuitive aspect of the law of striking pleadings:[44] Contrary to what the motion judge indicated in her reasons, a party may move to strike a pleading that it alleges raises an issue that has been finally determined in an earlier proceeding under either rule 221(1)(a) or rule 221(1)(f) of the Federal Courts Rules (see, e.g., Apotex Inc v. Pfizer Ireland Pharmaceuticals, 2011 FCA 77, 93 C.P.R. (4th) 42; and Apotex Inc. v. Laboratoires Servier, 2007 FCA 350, 286 D.L.R. (4th) 1).
[45] Rule 221(1)(a) permits the Court to strike a pleading where it discloses no reasonable cause of action, and rule 221(1)(f) permits the Court to strike a pleading where it is an abuse of process — both either with or without leave to amend. If the party proceeds under rule 221(1)(a), by virtue of rule 221(2), no evidence is admissible, but evidence is admissible in a motion to strike a pleading brought under rule 221(1)(f).
[46] Where, as in the case at bar, there is no evidence before the Court, the Court must assess whether the same issues were determined in the earlier case by comparing what was decided in the earlier case with what is pleaded in the statement of claim. This will sometimes require an assessment of what the facts were in the prior case. This is not so much an act of taking judicial notice of a fact, but rather an assessment of what was decided in a previous proceeding and whether issue estoppel applies (Pfizer Canada Inc. v. Teva Canada Limited, 2016 FCA 161, 400 D.L.R. (4th) 723 at paras. 79-80 (citing to Danyluk v. Ainsworth Technologies Inc., 2001 SCC 44, 201 D.L.R. (4th) 193)). . Democracy Watch v. Canada (Prime Minister)
In Democracy Watch v. Canada (Prime Minister) (Fed CA, 2023) the Federal Court of Appeal considered an appeal of a denied judicial review challenging the date of the last federal election, advanced by a well-known public interest group.
In this quote the court considers the standard of review (SOR) for federal motions to strike:[11] Decisions made on motions to strike are discretionary in nature (Lafrenière v. Canada (Attorney General), 2020 FCA 110 at para. 2; Feeney v. Canada, 2022 FCA 190 at para. 4). They are subject, on appeal, to the standards of review set out in Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 23 (Housen); (Imperial Manufacturing Group Inc. v. Decor Grates Incorporated, 2015 FCA 100, [2016] 1 F.C.R. 246 at para. 29; Hospira Healthcare Corporation v. Kennedy Institute of Rheumatology, 2016 FCA 215, [2017] 1 F.C.R. 331 at para. 28; Bewsher v. Canada, 2020 FCA 216 at para. 7). This means that the Court will only intervene in such matters if it is satisfied that the Federal Court erred on a question of law or committed a palpable and overriding error on a question of fact or of mixed fact and law (Housen, at paras. 8, 10 and 36-37). . Mohr v. National Hockey League
In Mohr v. National Hockey League (Fed CA, 2022) the Federal Court of Appeal considers the purpose of motions to striking pleadings, here under the federal rules:[47] Once a judge finds that legislation is capable of being interpreted in at least two different ways, it is not open to the judge to conclude that it is plain and obvious that the action has no reasonable chance of success.
[48] Courts must be careful not to inhibit the development of the law by applying too strict an approach to motions to strike. The law must be allowed to evolve to respond to new issues and factual matrices. Therefore, statements of claim are to be read generously with a view to accommodating any inadequacies in the allegations. The fact that the law has not yet recognized a particular claim, interpretation, or cause of action is not determinative of the outcome of the motion. Novel but arguable claims must be allowed to proceed to trial as new developments in the law often find their provenance in surviving motions to strike (R. v. Imperial Tobacco Canada Ltd., 2011 SCC 42, [2011] 3 S.C.R. 45 at para. 21 [Imperial Tobacco]). As an example of how restraint in the application of motions to strike contributes to the evolution of the law, see the treatment of the plea of non-infringing alternative in patent litigation: Merck & Co., Inc. v. Apotex Inc., 2012 FC 454, 408 F.T.R. 139 (Eng.); Apotex Inc. v. Merck & Co., 2015 FCA 171, 387 D.L.R. (4th) 552.
[49] There is, however, a countervailing principle. Motions to strike serve an important screening or gatekeeping function. They are essential to effective and fair litigation and prevent unnecessary effort and expense being devoted to cases that have no reasonable prospect of success. This is particularly true in the context of class actions, where plaintiffs may have fundraised to cover their expenses and where they are relieved from paying costs when they are unsuccessful on interlocutory matters along the way.
[50] There is also a broad cost to access to justice. The diversion of scarce judicial resources to cases which have no substance diverts time away from cases that require attention. The point was well made by Stratas J.A. in Coote v. Lawyers’ Professional Indemnity Company, 2013 FCA 143, 229 A.C.W.S. (3d) 935 at paragraph 13 when he wrote that "“[d]evoting resources to one case for no good reason deprives the others for no good reason.”"
[51] The appellant contends that as the interpretive questions before the Federal Court had not been previously considered, they could not be conclusively considered to be bereft of success. The appellant presses the proposition further and, relying on the decision of this Court in Arsenault v. Canada, 2008 FC 299, 330 F.T.R. 8 at para. 27, aff’d., 2009 FCA 242, 395 N.R. 377 [Arsenault], says that to succeed on a motion to strike, there must be a binding decision which has definitively determined the point in question. In this case there has been no judicial consideration of section 48 and limited tangential consideration of section 45. This, he contends, required that the motion to strike be dismissed.
[52] As a general proposition, definitive legal pronouncements on the meaning of legislation should not be made on a motion to strike where there are competing, credible interpretations. A motions judge should not reach a conclusion on an honestly disputed point of statutory interpretation—there is no "“correct”" or preferred interpretation on a motion to strike. The only task is to determine whether there is a conflicting interpretation worth considering or that has a reasonable prospect of success. The low bar for determining whether a claim has a reasonable prospect of success applies equally where a question of statutory interpretation is at the heart of the motion to strike (Apotex Inc. v. Laboratoires Servier, 2007 FCA 350, 286 D.L.R. (4th) 1 at para. 34).
[53] That said, a cause of action is not presumptively "“reasonable”" simply because it has no antecedence in jurisprudence. Some legal analysis may be needed to determine if a claim has any reasonable prospect of success (McCain Foods Limited v. J.R. Simplot Company, 2021 FCA 4, [2021] F.C.J. No. 37 (QL) at para. 21; Das v. George Weston Limited, 2018 ONCA 1053, 43 E.T.R. (4th) 173 at para. 75; Merck & Co. Inc. v. Apotex Inc., 2014 FC 883, 128 C.P.R. (4th) 410 at para. 38). There is a duty to assess the reasonableness or viability of a plea and separate the wheat from the chaff. This aligns with the obligation of courts to improve the affordable, timely and just adjudication of civil claims (Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87 at paras. 2, 28-29, 31-33).
[54] Therefore to insist, as does the appellant, that the absence of a definitive precedent on the meaning of sections 45 and 48 would significantly reduce the utility of motions to strike in cases of statutory interpretation. It would mean that every case which raised a point of interpretation for the first time, no matter how futile the argument, would survive a motion to strike, as there would never be a precedent, let alone a binding precedent. Although the judge used incorrect terminology, he did not err in conducting some legal analysis to determine whether the claim had any reasonable prospect of success, and that analysis supported his conclusion that the claim had no reasonable prospect of success. . Canada (National Revenue) v. Sharp
In Canada (National Revenue) v. Sharp (Fed CA, 2022) the Federal Court of Appeal considered motions to strike in an action under the Federal Rules:[45] The Minister moved to strike the Respondent’s statement of claim under rule 221 of the Federal Courts Rules, S.O.R./98-106 (Rules) on the basis that the Respondent’s claim disclosed no reasonable cause of action; was scandalous, frivolous, or vexatious; and was otherwise an abuse of the process of the Court (rr. 221(1)(a), (c), and (f), respectively).
[46] On a motion to strike under r. 221(1)(a) for failure to disclose a reasonable cause of action, a motion judge must consider whether, assuming the facts as stated in the statement of claim can be proved, it is "“plain and obvious”" that the plaintiff’s statement of claim discloses no reasonable cause of action (Hunt v. Carey Canada Inc., 1990 CanLII 90 (SCC), [1990] 2 S.C.R. 959 at 980, 74 D.L.R. (4th) 321; R. v. Imperial Tobacco Canada Ltd., 2011 SCC 42, [2011] 3 S.C.R. 45 at para. 17 [Imperial Tobacco]). The statement of claim must be construed generously (Mancuso v. Canada (Minister of Health and Welfare), 2015 FCA 227, 476 N.R. 219 at para. 16 [Mancuso]).
[47] In Mancuso, this Court provided guidance on the distinction between material facts and bald allegations:[18] There is no bright line between material facts and bald allegations, nor between pleadings of material facts and the prohibition on pleading of evidence. They are points on a continuum, and it is the responsibility of a motions judge, looking at the pleadings as a whole, to ensure that the pleadings define the issues with sufficient precision to make the pre-trial and trial proceedings both manageable and fair.
[19] What constitutes a material fact is determined in light of the cause of action and the damages sought to be recovered. The plaintiff must plead, in summary form but with sufficient detail, the constituent elements of each cause of action or legal ground raised. The pleading must tell the defendant who, when, where, how and what gave rise to its liability. [48] In addition to striking a pleading for failure to disclose a reasonable cause of action, the Court may strike a pleading on the ground that it is scandalous, frivolous, or vexatious (r. 221(1)(c) of the Rules). Rule 221(1)(c) has been applied in a variety of circumstances, including to pleadings that did not sufficiently reveal the facts on which the plaintiff bases his cause of action to make it possible for a defendant to answer them or for a court to regulate the proceedings (Murray v. Canada (Public Service Commission) (1978), 21 N.R. 230 at para. 10, [1978] 2 A.C.W.S. 337 [Murray]).
[49] Finally, this Court may strike pleadings under r. 221(1)(f) of the Rules where the pleading is an abuse of the process of the Court. The guidance to be applied under r. 221(1)(f) of the Rules is that set out in Toronto (City) v. C.U.P.E., Local 79, 2003 SCC 63, [2003] 3 S.C.R. 77 [C.U.P.E.]. The doctrine of abuse of process is a flexible doctrine that engages the Court’s inherent power to prevent the misuse of its procedure in a way that would bring the administration of justice into disrepute (C.U.P.E. at para. 37).
[50] Evidence is not admissible on a motion under r. 221(1)(a), but is admissible on a motion under rr. 221(1)(c) or (f). (Rules, r. 221(2); Kremikovtzi Trade v. Phoenix Bulk Carriers Limited, 2007 FCA 381, 370 N.R. 317 at para. 32).
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