IN THE SUPREME COURT OF NOVA SCOTIA
Citation: Banco De Inversion Y Comercio Exterior S.A. v. Bank of Nova Scotia,
2005 NSSC 109
Date: 20050506
Docket: SH 225484
Registry: Halifax
Between:
Banco de Inversion Y Comercio Exterior S.A.
Respondent/Plaintiff
v.
Bank of Nova Scotia
Applicant/Defendant
Judge: The Honourable Justice Glen G. McDougall
Heard: December 1, 2004, in Halifax, Nova Scotia
Counsel: W. Wylie Spicer, Q.C. and Harvey L. Morrison, Q.C. for the applicant/defendant
Marc de Man, for the respondent/plaintiff
By the Court:
[1] This application was filed on behalf of the defendant, the Bank of Nova Scotia (“BNS”) under Civil Procedure Rule 14.25(1). BNS is seeking an order to strike out the following paragraphs of the plaintiff’s Statement of Claim for the reasons indicated:
(a) All paragraphs alleging that the Plaintiff loaned money to the Defendant including, in particular, paragraphs 1, 6-23, 25, 26, 27 (subparagraphs d-f), 28, 29, and 31-33 as being vexatious and embarrassing under subparagraphs (b) and (c) of Rule 14.25(1).
(b) Paragraph 27 (subparagraphs b, c, e and g) as disclosing no reasonable cause of action under Rule 14.25(1)(a).
(c) Paragraph 27h as being an abuse of the process of the court under Rule 14.25(1)(d).
(d) Paragraph 30 as (i) disclosing no reasonable cause of action, under Rule 14.25(1)(a); (ii) being scandalous and vexatious under Rule 14.25(1)(b), and (iii) embarrassing within the meaning of Rule 14.25(1)(c).
(e) Paragraphs 34 and 40c as disclosing no reasonable cause of action under Rule 14.25(1)(a).
(f) Paragraph 35 as (i) disclosing no reasonable cause of action under Rule 14.25(1)(a), and (ii) as being frivolous and vexatious under Rule 14.25(1)(b).
(g) Paragraph 36 as disclosing no reasonable cause of action under Rule 14.25(1)(a).
(h) Paragraph 37 as being embarrassing under Rule 14.25(1)(c).
[2] Counsel for the plaintiff, Banco De Inversion Y Comercio Exterior S.A. (“BICE”) have agreed to strike from its Statement of Claim paragraphs 34, 35, 36 and 40c. By virtue of this acknowledgement the Court orders that these three paragraphs and one sub-paragraph be struck in their entirety.
[3] I need, therefore, only to consider BNS’s motion regarding paragraphs 1, 6-23, 25, 26, 27 (sub-paragraphs b-h), 28, 29, 30 and 37 of the Statement of Claim.
[4] An affidavit of Mr. Jose Luis Entin, a director of BICE, was filed in support of BICE’s opposition to the motion. BNS’s lawyers challenged the admissibility of most of the contents of his affidavit. I will first look at this issue before proceeding to make a ruling on the main application.
ISSUE (#1): Is the affidavit of Jose Luis Entin admissible, either in whole or in part, in this application under Civil Procedure Rule 14.25(1)?
[5] Counsel for BNS have referred me to the decision of the Honourable Justice John Davison in Waverley (Village Commissioners) et al. v. Nova Scotia (Minister of Municipal Affairs) et al. (1993), 123 N.S.R. (2d) 46 where at page 52, paragraph 20, where he wrote:
It would be helpful to segregate principles which are apparent from consideration of the foregoing authorities and I would enumerate these principles as follows:
1. Affidavits should be confined to facts. There is no place in affidavits for speculation or inadmissible material. An affidavit should not take on the flavour of a plea or a summation.
2. The facts should be, for the most part, based on the personal knowledge of the affiant with the exception being an affidavit used in an application. Affidavits should stipulate at the outset that the affiant has personal knowledge of the matters deposed to except where stated to be based on information and belief.
3. Affidavits used in applications may refer to facts based on information and belief but the source of the information should be referred to in the affidavit. It is insufficient to say simply that "I am advised".
4. The information as to the source must be sufficient to permit the court to conclude that the information comes from a sound source and preferably the original source.
5. The affidavit must state that the affiant believes the information received from the source.
[6] With regard to retaining the non-offending portions of an affidavit or retaining all or portions of an affidavit for limited purposes Davison, J., had this to say at page 54, paragraph 24:
It is clear that offending portions of affidavits can be deleted and the rest retained. Reference is made to Gordon, Dixon, Baillie and Munroe v Nova Scotia Teachers' Union (1983), 59 N.S.R. (2d) 124. Similarly affidavits can be retained for limited purposes.
[7] Civil Procedure Rule 37.09 (1) states:
37.09. (1) Evidence on a hearing may be given,
(a) by an affidavit or statutory declaration made pursuant to Rule 38;
(b) by a statement of facts agreed upon in writing by all the parties;
(c) with leave of the court, by any witness in person;
(d) by any evidence obtained on discovery and admissible under the applicable rule.
[8] Civil Procedure Rule 38 deals with the form, content and other matters pertaining ot the use of affidavits. CPR 38.02(1) states:
38.02. (1) An affidavit used on an application may contain statements as to the belief of the deponent with the sources and grounds thereof.
[9] CPR 38.11 indicates the Court’s discretion when dealing with the contents of alleged deficient or defective affidavits. It states:
38.11. The court may order any matter that is scandalous, irrelevant or otherwise oppressive to be struck out of an affidavit.
[10] In Waverley (Village Commissioners) v. Nova Scotia (Minister of Municipal Affairs), supra, Davison, J., distinguished between the facts required of an affidavit and those contained in pleadings. At page 50, paragraph 13 he wrote:
Great care should be exercised in drafting affidavits. Both pleadings and affidavits should contain facts but there are marked differences between the two types of documents. Affidavits, unlike pleadings, form the evidence which go before the court and are subject to the rules of evidence to permit the court to find facts from that evidence. They should be drafted with the same respect for accuracy and the rules of evidence as is exercised in the giving of viva voce testimony.
[11] Applying the principles laid out by Davison, J. to the affidavit of Mr. Entin, the following paragraphs or portions of paragraphs should be expunged:
1. Paragraph 11, page 3 - portion from line 3 “The allegations found at paragraph 6 describe and reflect the facts as they occurred, and BICE does not intend those allegations to be vexatious or embarrassing;”
2. Paragraph 12, page 3 - portion at line 6 “The allegations stated at said paragraph 7 describe and reflect the facts as they occurred, and BICE does not intend those allegations to be vexatious or embarrassing;”
3. Paragraph 13, page 3 - portion from line 5 “The allegations at said paragraph 8 describe and reflect the facts as they occurred and BICE does not intend those allegations to be vexatious or embarrassing;”
4. Paragraph 14, page 4 - portion from line 4 “The allegations at said paragraph 9 describe and reflect the facts as they occurred, and BICE does not intend those allegations to be vexatious or embarrassing;”
5. Paragraph 15, page 4 - portion from line 5 “The allegations at said paragraph 10 describe and reflect the facts as they occurred and BICE does not intend those allegations to be vexatious or embarrassing;”
6. Paragraph 16, page 4 - portion from line 6 “The allegations in said paragraph 11 describe and reflect the facts as they occurred and BICE does not intend those allegations to be vexatious or embarrassing;”
7. Paragraph 17, page 4 - portion from line 4 “The allegations in said paragraph 12 describe and reflect the facts as they occurred and BICE does not intend those allegations to be vexatious or embarrassing;”
8. Paragraph 18, page 4 - portion from line 5 “The allegations in said paragraph 13 describe and reflect the facts as they occurred and BICE does not intend those allegations to be vexatious or embarrassing;”
9. Paragraph 19, page 5 - entire paragraph
10. Paragraph 20, page 5 - entire paragraph
11. Paragraph 21, page 5 - portion from line 5 “The said allegations contained in paragraph 16 describe and reflect the facts as they occurred and BICE does not intend those allegations to be vexatious or embarrassing;”
12. Paragraph 22, page 5 - portion from line 5 “The said allegations contained in paragraph 17 describe and reflect the facts as they occurred, and BICE does not intend those allegations to be vexatious or embarrassing;”
13. Paragraph 23, page 5/6 - portion from line 7 on p. 6 “The said allegations contained at paragraph 18 describe and reflect the facts as they occurred and BICE does not intend those allegations to be vexatious or embarrassing;”
14. Paragraph 24, page 6 - portion from line 5 “The said allegations contained at paragraph 19 describe and reflect the facts as they occurred and BICE does not intend those allegations to be vexatious or embarrassing;”
15. Paragraph 25, page 6 - portion from 8 “The said allegations contained at paragraph 20 describe and reflect the facts as they occurred and BICE does not intend those allegations to be vexatious or embarrassing;”
16. Paragraph 26, page 6 - portion from line 5 “The said allegations contained at paragraph 21 describe and reflect the facts as they occurred and BICE does not intend those allegations to be vexatious or embarrassing;”
17. Paragraph 27, page 6/7 - portion from line 2 on page 7 “and in the future until payment of the principal sums of the said call loans. The said allegations contained at paragraph 22 describe and reflect the facts as they occurred, and as they occur presently, and BICE does not intend those allegations to be vexatious or embarrassing;”
18. Paragraph 28, page 7 - portion from line 5 “The said allegations contained in paragraph 23 describe and reflect the facts as they occurred, and as they occur presently, and BICE does not intend those allegations to be vexatious or embarrassing;”
19. Paragraph 29, page 7 - portion from line 6 “BICE shall prove said allegations contained at paragraph 25 by the appropriate currency values at examinations on discovery or at the hearing. Those allegations describe and reflect the facts as they occurred and BICE does not intend those allegations to be vexatious or embarrassing;
20. Paragraph 30, page 7 - entire paragraph
21. Paragraph 31, page 8 - entire paragraph. Affiant does not provide any factual information nor does he state that he believes the source.
22. Paragraph 33, page 8 - portion from line 5 “The said allegations contained at paragraph 27 subparagraph d describe and reflect the facts as they occurred, and BICE does not intend those allegations to be vexatious or embarrassing;”
23. Paragraph 34, page 8/9 - portion from line 3 on page 8 “The allegations contained at paragraph 27 sub-paragraph f describe and reflect the facts as they occurred and BICE does not intend those allegations to be vexatious or embarrassing;”
24. Paragraph 35, page 9 - portion from line 10 “The allegations contained at paragraph 28 describe and reflect the facts as they occurred and BICE does not intend those allegations to be vexatious or embarrassing;”
25. Paragraph 36, page 9 - portion from line 5 “This will be clearly established with evidence adduced at examinations on discovery and at the hearing. The allegations contained at paragraph 28 describe and reflect the facts as they occurred and BICE does not intend those allegations to be vexatious or embarrassing;
26. Paragraph 37, page 9/10 - entire paragraph. No facts but rather the conclusion that he wants Court to reach.
27. Paragraph 38, page 10 - entire paragraph. Not a statement of facts but rather a conclusion that he wants the Court to make.
28. Paragraph 39, page 10 - entire paragraph. Not a statement of facts but rather a conclusion that he wants the Court to make.
29. Paragraph 40, page 10 - entire paragraph
30. Paragraph 41, page 10/11 - portion from line 6 “BICE says that offer constitutes an admission of liability by the Bank of Nova Scotia constituting clear proof and confirming the fact that the Bank of Nova Scotia overtly backed and approved the call loans requested by Scotiabank Quilmes S.A., assuming full responsibility for the reimbursement/payment of said call loans. The above facts shall be adduced in evidence during the examinations on discovery and at the hearing, as well as the fact that the 7% was rejected and unacceptable to BICE. BICE does not intend the allegations set out at paragraph 27 h to be an abuse of process of this Honourable Court, as they reflect and describe the facts as they occurred, and said facts go to the root of the role assumed by the Bank of Nova Scotia in its process of obtaining the call loans from BICE;”
31. Paragraph 42, page 11 - Entire paragraph
32. Paragraph 43, page 11 - portion from line 13 “Moreover BICE says the failure to pay an acknowledged debt, such as the present call loans, is a fraud and the breach of payment obligation, such as the present one, is an act of insolvency or bankruptcy. On date of maturity, the Bank of Nova Scotia/Scotiabank Quilmes S.A. failed to reimburse the call loans to BICE. BICE does not intend the allegations contained at paragraph 30 to be scandalous, vexatious or embarrassing and it says those allegations describe and reflect the facts as they occurred;
33. Paragraph 44, page 11/12 - entire paragraph. We are not dealing here with an application by the defendant for security for costs. As to the remainder of the affidavit, the Court will allow it to be admitted under CPR 14.25 (2) and will consider it in deciding the merits of BNS’s application under CPR 14.25(1)(a).
ISSUE (#2): What, if any, portions of the plaintiff’s Statement of Claim (in addition to paragraphs 34, 35, 36 and 40c which counsel for the plaintiff have already agreed should be struck) should be struck under Civil Procedure Rule 14.25(1)(a), (b), (c) and (d)?
[12] Counsel for the defendant have categorized their concerns regarding various paragraphs or portions of paragraphs based on the grounds enunciated in Civil Procedure Rule 14.25(1)(a) to (d) which reads as follows:
14.25. (1) The court may at any stage of a proceeding order any pleading, affidavit or statement of facts, or anything therein, to be struck out or amended on the ground that,
(a) it discloses no reasonable cause of action or defence;
(b) it is false, scandalous, frivolous or vexatious;
(c) it may prejudice, embarrass or delay the fair trial of the proceeding;
(d) it is otherwise an abuse of the process of the court; and may order the proceeding to be stayed or dismissed or judgment to be entered accordingly.
[13] The table or chart created by counsel for the defendant is reproduced here for ease of reference:
|
Statement of Claim Paragraph Number |
Reason Why Paragraph Should be Struck Out |
|
1, 6-23, 26, 27 (subparagraphs d-f), 28, 29, and 31-33 |
Vexatious: Rule 14.25(1)(b) Embarrassing: Rule 14.25(1)(c) |
|
27 (subparagraphs b, c, e, and g) |
No reasonable cause of action: Rule 14.25(1)(a) |
|
27 subparagraph h |
Abuse of the process of the court: Rule 14.25(1)(d) |
|
30 |
No reasonable cause of action: Rule 14.25(1)(a) Scandalous and vexatious: Rule 14.25(1)(b) Embarrassing: Rule 14.25(1)(c) |
|
34, 40 subparagraph c [struck with the agreement of counsel for the plaintiff] |
No reasonable cause of action: Rule 14.25(1)(a) |
|
35 [struck with the agreement of counsel for the plaintiff] |
No reasonable cause of action: Rule 14.25(1)(a) Frivolous and vexations: Rule 14.25(1)(b) |
|
36 [struck with the agreement of counsel for the plaintiff] |
No reasonable cause of action: Rule 14.25(1)(a) |
|
37 |
Embarrassing: Rule 14.25(1)(c) |
[14] In addition to Civil Procedure Rule 14.25, Civil Procedure Rules 14.04 to 14.13 outline the rules applicable to all proceedings. In particular, Civil Procedure Rule 14.04 states:
14.04. Every pleading shall contain a statement in a summary form of the material facts on which the party pleading relies for his claim or defence, but not the evidence by which the facts are to be proved, and the statement shall be as brief as the nature of the case admits.
[15] Counsel for the defendant provided a number of excellent authorities dealing with the proper drafting of pleadings. I will not cite all of them however two in particular are worth mentioning. In the case of Petten v. E.Y.E. Maine Consultants (1994), 120 Nfld & P.E.I.R. 313 at p. 340-41, Green, J., wrote:
... pleadings should be so framed that they contain all material facts in a sufficiently clear, organized and concise form such that all the constituent elements of each cause of action being alleged are set out. The defendant is entitled to know the causes of action to which he or she must respond and the nature of the factual basis upon which each of the causes of action is alleged to be founded. This is merely an exemplification of one of the general themes of the Rules: conduct of proceedings must be characterized by disclosure so that other parties will not be taken by surprise. The defendant must not be left to speculate or guess the particulars of the case alleged against him or her or of the remedy sought.
[16] Also in the caes of 353903 Ontario Ltd. v. Nova Scotia (1998), 169 N.S.R. (2d) 88, at p. 90, Tidman, J., quoting from the decision of McQuaid, J. (as he was then) in Touche Ross Ltd. v. McCandle (1987), 66 Nfld & P.E.I.R. 257 at p. 258 wrote:
The essence of a properly drawn pleading is clarity and disclosure. With respect to a statement of claim in particular, the defendant, or each defendant if there by more than one, must know from the fact of the record precisely what case he, or each of them, has to answer. He must not be left to speculate or to guess the particulars of the case alleged against him and of the remedy sought from him. He must not be left to ascertain this through some esoteric process of divination.
Perhaps the est test of a well and properly drawn pleading is this, that a stranger to the proceeding, reasonably versed in legal terminology, might pick up the document and upon first reading readily ascertain the particulars of the cause of action, the specific nature of the defendant’s alleged breach of duty or other deficiency, the precise nature of the remedy sought and the reason why such a remedy is, in fact, sought. Unless all of this information is patently and readily available on the fact of the record, then, it seems to me, the pleading is, itself, defective.
[17] I agree with what was said in these two decision and I propose to apply the same approach as I consider each of the paragraphs challenged by the defendant.
[18] The defendant asserts that paragraphs 1, 6 to 23, 26, 27 d to f, 28, 29 and 31-33 should be struck because they are both “vexatious” as contemplated by Civil Procedure Rule 14.25(1)(b) and “embarrassing” as contemplated by Civil Procedure Rule 14.25(1)(c).
[19] The defendant further asserts that paragraph 27, sub-paragraphs b, c, e and g fail to establish a cause of action and so should be struck in accordance with Civil Procedure Rule 14.25(1)(a).
[20] As to paragraph 27 h, the defendant suggests that this constitutes an abuse of process under Civil Procedure Rule 14.25(1)(d).
[21] The reasons advanced for striking paragraph 30 are threefold:
1. abuse of process under Civil Procedure Rule 14.25(1)(a);
2. scandalous and vexatious under Civil Procedure Rule 14.25(1)(b);
3. embarrassing under Civil Procedure Rule 14.25(1)(c).
Finally, the defendant seeks to strike paragraph 37 claiming that it is embarrassing under Civil Procedure Rule 14.25(1)(c).
[22] It is unclear from reading the plaintiff’s Statement of Claim just which legal entity is being referred to and just exactly what the cause of action might be. This obviously creates a hardship, if not an impossibility, for the defendant to properly respond by way of a defence. The plaintiff’s failure to properly frame the pleadings results in ambiguity and confusion. Furthermore it would appear that in some, if not most, instances the plaintiff should have framed the allegations in the alternative particularly those that allegedly pertain to the named defendant or in the alternative the Argentinian subsidiary of the BNS.
[23] I therefore order that the following paragraphs and sub-paragraphs of the statement of claim be struck, however, with leave to amend:
- paragraph 1;
- paragraphs 6 to 23 inclusive;
- paragraph 26;
- paragraph 27, sub-paragraphs b, c, d, e, f and g; and,
- paragraphs 30 and 37.
[24] With regard to paragraph 37, if the plaintiff seeks to invoke Argentinian law, it must plead specifics of that law to enable the defendant to properly respond.
[25] Sub-paragraph 27 h should be struck in its entirety. It is highly improper to include any reference to any settlement discussions that might have taken place.
[26] If counsel wish to be heard on costs I will arrange to make myself available. In the meantime I would ask counsel for the applicant/defendant to draft an order reflecting my decision.
J.