Docket: T-1172-03
Ottawa, Ontario, this 14th day of October, 2005
Present: THE HONOURABLE MR. JUSTICE von FINCKENSTEIN
BETWEEN:
SANDER HOLDINGS LTD., DONALD PATENAUDE AND
MATHEW NAGYL
on their own behalf and on behalf of all persons who have been Producers,
shipping grain through the Canadian Wheat Board,
as defined under The Canadian Wheat Board Act,
and who do reside or have resided in Canada
between 1994 and the date of the decision
Plaintiffs
and
THE ATTORNEY GENERAL OF CANADA representing
The Minister of Agriculture of Canada
Defendant
REASONS FOR ORDER AND ORDER
[1] This is a motion brought by the Defendant (the Applicant in this motion) pursuant to Rule 369 of the Federal Court Rules, S.O.R./98-106 (the "Rules") for an order that portions of the Plaintiff's affidavit be struck. The Defendant requests that the Court issue a written order without an oral hearing. The Plaintiff does not object to this.
[2] The Plaintiffs (the Respondents in this motion) are agricultural producers who take part in the Net Income Stabilization Account ("NISA") Program (the Program). The purpose of the Program is to assist producers in stabilizing their farming income. The NISA Agreement and associated guidelines were executed in order to give effect to the Program. The Plaintiffs submit that amendments made to the guidelines are invalid.
[3] The Plaintiffs are seeking to have this action certified as a class action pursuant to Rule 299.18(1). They submitted an affidavit of Mr. Barry Jolly in support of the certification application.
[4] The Defendant asks that the Court strike paragraphs 2, 3, 5-20 (inclusive), 22-37 (inclusive), 40-45 (inclusive) and 50-56 (inclusive) of the affidavit of Barry Jolly, sworn on June 10, 2005, as they are a series of tendentious comments, expressions of opinion, and argument. These portions of the affidavit also contain the affiant's interpretations of the law, and his own explanations of documents that according to the Defendant speak for themselves.
[5] The Defendant argues three points:
1) under Rule 81 affidavits based on belief are not admissible;
2) the impugned paragraphs are tendentious, opinionated, argumentative and improper; and
3) the impugned paragraphs, if not struck, will cause prejudice to the Defendant.
[6] The Court does not accept the first point. An application for class certification is ultimately merely a procedural question. As it is an interlocutory matter, affidavits based upon information and belief are permitted.
[7] In Hoffman v. Monsanto Canada Inc., 2003 SKQB 174, a class certification case under Saskatchewan rules, Madam Justice Smith, as she then was, persuasively explained why such affidavits are allowed. She held:
54 I have no hesitation in concluding that a certification application is an "interlocutory motion" within the meaning of Rule 319, and that the Court therefore may, in appropriate circumstances, as set out in the rule, receive affidavit evidence sworn on information and belief.
55 Further, it is my view that, in particular, where the Act, the Rules, or the case law make it clear that the evidentiary onus to be satisfied by the affidavit in question is less than that of proof of its contents, this in itself may be sufficient to constitute a "special circumstance" sufficient to justify receiving an affidavit sworn on information and belief.
56 Thus, for example, insofar as courts have suggested that the proposed representative plaintiff has an onus to provide an "evidentiary basis" relevant to aspects of the merits of his or her claim, it is clear that the evidential standard the Court has in mind is not that of "proof", but only of some evidence to support the claim, for example, that the plaintiff has suffered loss and that a class exists of other persons who have suffered the same or a similar loss, sufficient to satisfy the Court of the existence of the requisite common issues. ...
Accordingly, the affidavit is not inadmissible under Rule 81.
[8] As to the second point, this argument is clearly based on Deigan v. Canada (Minister of Industry), [1996] F.C.J. 1360 where the Federal Court of Appeal struck out several paragraphs of an affidavit for precisely for that reason.
[9] The Defendant's argument is concisely stated in paragraph four of its Written Representations in Reply:
The deponent Jolly is not a party to the action, nor have the Plaintiffs attempted to qualify him as an expert. Mr. Jolly's prolix explanations, opinions and arguments are improperly included in an affidavit form and are obviously inadmissible, only serving to interfere with the orderly manner of proceeding with the class action certification motion. His argumentative dissertations concerning the NISA program and his non-qualified legal arguments do not serve to assist the court in determining the motion, but instead only serve to detract from a focus on the issues in the motion.
[10] However, it is clear from the submissions that the Defendant does not object to the admissibility of any of the exhibits to Mr. Jolly's affidavit, only to their relevance and to Mr. Jolly's interpretations. In light of this fact, the Court recalls the admonition of Malone J. in Canadian Tire Corp. v. P.S. Partsource Inc., 2001 FCA 8 at paragraph 18:
18 Nonetheless, I would emphasize that motions to strike all or parts of affidavits are not to become routine at any level of this Court. This is especially the case where the question is one of relevancy. Only in exceptional cases where prejudice is demonstrated and the evidence is obviously irrelevant will such motions be justified. In the case of motions to strike based on hearsay, the motion should only be brought where the hearsay goes to a controversial issue, where the hearsay can be clearly shown and where prejudice by leaving the matter for disposition at trial can be demonstrated.
[11] Thus, unless prejudice can be shown, this Court would be reluctant to strike the paragraphs in question merely relying on Deigan, supra. This brings us then to the third point of the Defendant: prejudice.
[12] The Defendant states that he will be prejudiced unless the impugned sections are struck because:
a) it would interfere with the orderly manner of the proceedings;
b) most of the information is superfluous as each of the Plaintiffs has already submitted its own affidavit; and
c) if the decision on admissibility is left until the hearing of the motion for certification, he won't know on what points to conduct the cross examination of Mr. Jolly. He thus will be prejudiced in having to cross-examine a non-party of its opinions, speculations, interpretations and arguments.
[13] The Court substantially accepts the Defendant's assertions in respect of points a) and b) above. However, the key issue to be determined in the upcoming certification motion is whether the Respondent has met the five-pronged test of Rule 299.18(1).
[14] The Plaintiff argues that Mr. Jolly's affidavit covers:
a) The narrative of how the Plaintiff's action was instituted because the NISA Appeals sub-committee and judicial review were ill suited to resolve the controversy.
b) An explanation that the impugned guidelines affected a significant change to how the NISA Administration dealt with how transportation and elevation costs were treated for the purpose of calculating a producer's eligible net sales. Such a controversy cannot be settled by Affidavit. As noted by the Federal Court of Appeal herein (2005 FCA 9):
43 Whether the Guidelines were inconsistent with the Agreement is not readily apparent from the record. There appears to be a conflict in the evidence as to whether freight and elevation costs have always been deducted from the calculation of the value of net sales or whether they only occurred after the adoption of the 1994 Guidelines. It is a reasonable, but not necessarily correct, inference from the 1998 instructions addressed to the producers (see exhibit I of the affidavit of Barry Jolly, A.B. p. 100 at 103 and 128 and 129) that, whereas post-sale freight and storage charges had previously been treated as expenses for the purpose of calculating producers' income, they were not taken off net sales so as to reduce the producers' contribution base. Finally, the fact that the chairperson of the NISA Committee regarded the 1994 Guidelines as having a significant financial impact suggests that they may well have involved more than the minor tinkering with the definition of the point of sale alleged by the respondent.
44 Considering that the respondent pleads that no change occurred, I conclude that the facts are in dispute.
c) The fact that there are inconsistencies in the representations made by the Defendant warranting a trial.
d) The fact that there are significant documents that have not been disclosed warranting the discovery process. The NISA Administration has stated Revenue Canada's position on the treatment of such expenses to the Court, but did not disclose to the Court an interpretation bulletin that it had obtained which says the opposite.
e) The fact that the NISA Administration was clearly aware of the invalidity of the guidelines by the documents provided by Mr. Jolly in the sub-committee appeal. The conduct of the NISA Administration warrants scrutiny by trial proceedings.
[16] Given the observations by the Federal Court of Appeal, it would be helpful if these facts were brought out by cross-examination. While large portions of Mr. Jolly's affidavit are not relevant and may well amount to mere speculation, little would be gained by the Court parsing the affidavit. A rigorous cross-examination will identify, much more effectively, what portions of the affidavit, if any, contain relevant evidence to the facts in dispute, and what portions amount to irrelevant speculation, conjecture or opinion.
[17] In summary, the Court is not convinced that there is sufficient prejudice to the Defendant so as to warrant the striking of the impugned portions of the affidavit.
[18] Accordingly, this application will not succeed.
ORDER
THIS COURT ORDERS that this application be dismissed. Costs of this motion to follow the cause.
A Konrad W. von Finckenstein @
Judge
FEDERAL COURT
SOLICITORS OF RECORD
DOCKET: T-1172-03
STYLE OF CAUSE:
SANDER HOLDINGS LTD., DONALD PATENAUDE AND
MATHEW NAGYL
on their own behalf and on behalf of all persons who have been Producers,
shipping grain through the Canadian Wheat Board,
as defined under The Canadian Wheat Board Act,
and who do reside or have resided in Canada
between 1994 and the date of the decision
Plaintiffs
and
THE ATTORNEY GENERAL OF CANADA representing
The Minister of Agriculture of Canada
Defendant
PLACE OF HEARING: Ottawa, Ontario
DATE OF HEARING: October 14, 2005
REASONS FOR ORDER
AND ORDER: The Honourable Justice von Finckenstein
APPEARANCES:
| Terry J. Zakreski |
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FOR THE PLAINTIFFS |
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| Brian Hay / Chara Drew |
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FOR THE DEFENDANT |
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SOLICITORS OF RECORD:
| Terry J. Zakreski Stevenson Hood Thornton Beaubier LLP Saskatoon, SK |
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FOR THE PLAINTIFFS |
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| John H. Sims, Q.C. Deputy Attorney General of Canada Winnipeg, MB |
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FOR THE DEFENDANT |
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