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Federal Court - Striking Pleadings (2). Iris Technologies Inc. v. Canada
In Iris Technologies Inc. v. Canada (SCC, 2024) the Supreme Court of Canada dismisses an appeal regarding "the shared statutory jurisdiction in tax matters of the Tax Court of Canada and the Federal Court of Canada".
Here the court reviews the test for striking pleadings (here a JR):[26] There is no dispute on the proper test to be applied on a motion to strike in this context. A court seized of a motion to strike assumes the allegations of fact set forth in the application to be true and an application for judicial review will be struck where it is bereft of any possibility of success (JP Morgan Asset Management (Canada) Inc. v. Canada (National Revenue), 2013 FCA 250, [2014] 2 F.C.R. 557, at para. 47). It is understood to be a high threshold and will only be granted in the “clearest of cases” (Ghazi v. Canada (National Revenue), 2019 FC 860, 70 Admin L.R. (6th) 216, at para. 10). . Davis v. Canada (Royal Canadian Mounted Police)
In Davis v. Canada (Royal Canadian Mounted Police) (Fed CA, 2024) the Federal Court of Appeal considers the test for striking claims, and it's cost in 'access to justice':VIII. Did the Associate Judge Err in Striking Ms. Davis’ Statement of Claim?
[56] The next question for determination is whether the Associate Judge erred in striking Ms. Davis’ statement of claim.
[57] The RCMP’s motion to strike was brought under Rules 221(a) and (f) of the Federal Courts Rules, alleging that the Federal Court lacked the jurisdiction to entertain Ms. Davis’ action by virtue of subsection 236(1) of the FPSLRA.
[58] The case law tells us that 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. 21.
[59] 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. A claim 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.
[60] Judges should refrain from delving into the merits of a plaintiff’s argument on a motion to strike, 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, 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).
[61] 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.
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