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Samaroo v. Canada Revenue Agency, 2013BCSC 482 (CanLII)

Date: 20130320Docket: 121154URL: http://canlii.ca/t/fwm3pCitation: Samaroo v. Canada Revenue Agency,

2013 BCSC 482 (CanLII),<http://canlii.ca/t/fwm3p> retrievedon 20130729

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IN THE SUPREME COURT OF BRITISH COLUMBIA

Citation: Samaroo v. Canada Revenue Agency, 2013 BCSC 482

Date: 20130320Docket: 12-1154

Registry: Victoria

Between:

Tony Samaroo and Helen SamarooPlaintiffs

And

Canada Revenue Agency, Brian David Jones,Brian D. Jones Law Corporation

Defendants

Before: The Honourable Mr. Justice R. Punnett

Reasons for Judgment

(In Chambers)

Counsel for the Plaintiffs: S.M. KelliherC. Funt

G. Mather, Articled Student

Counsel for the Defendants: D.J. StrachanS.A. Lord

K.M. Choy

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Place and Date of Hearing: Victoria, B.C.January 10, 2013

Place and Date of Judgment: Victoria, B.C.March 20, 2013

Nature of the Application

[1]   The plaintiff husband and wife were acquitted of various charges under the Income Tax Act,R.S.C., 1985, c. 1 and the Excise Tax Act, R.S.C., 1985, c. E-15. This action for maliciousprosecution arises as a result. They sue the defendants Brian Jones and his law corporation(“Jones”) in their personal capacities and Canada Revenue Agency (“CRA”) as a corporation liablefor the acts of its agent Jones.

[2]           The defendants in this application apply for particulars of certain claims advanced in thenotice of civil claim.

Law on Particulars

[3]           The function of particulars was summarized in Cansulex Ltd. v. Perry, [1982] B.C.J. No. 369(C.A.) at para. 15 as follows:

15 …(1) to inform the other side of the nature of the case they have to

meet as distinguished from the mode in which that case is tobe proved;

(2) to prevent the other side from being taken by surprise at thetrial;

(3) to enable the other side to know what evidence they ought tobe prepared with and to prepare for trial;

(4) to limit the generality of the pleadings;(5) to limit and decide the issues to be tried, and as to which

discovery is required, and(6) to tie the hands of the party so that he cannot without leave go

into any matters not included.

[4]           After a review of relevant authorities, the court also stated:

11 Those decisions delineate the difference between what is properly the subjectmatter of a Demand for Particulars and what is more properly the subject matter of aDemand for Discovery or material that should be obtained on an Examination forDiscovery. At the heart of the distinction between the two lies the question whetherthe material demanded is intended to, and does, delineate the issues between theparties, or whether it requests material relating to the way in which the issues will beproved.

[5]           This delineation is of particular relevance to the application before the court. Beforeconsidering the particulars sought, the foundation of the claim, that is the tort of maliciousprosecution, must be considered.

Elements of a Malicious Prosecution Claim

[6]           The tort of malicious prosecution requires that the plaintiffs prove the following:

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a)   they were prosecuted;

b)   the prosecution concluded in their favour;

c)   there were no objectively reasonable and probable grounds to believe that proof beyond areasonable doubt could be made out in a court of law; and

d)   the prosecution was initiated and/or continued for an improper purpose.

(Maizga v. Kvello Estate, 2009 SCC 51 (CanLII), 2009 SCC 51, paras. 3; 53-56)

Pleadings and Particulars

[7]           The requested particulars relate to allegations that the defendants were motivated by improperpurposes and that the defendant Jones was in a conflict. In addition the defendants submit that thepleadings are unclear as to whether Jones is sued in his personal capacity or as an agent of theCrown and as a result seek particulars on that issue as well. The precise requests and the pleadingsto which they relate follow.

[8]           The relevant pleadings raising the allegation that the defendants were motivated by improperpurposes are:

29. At material times, the CRA counselled, participated, and acquiesced to theinitiation and continuation of the Prosecution without objectively reasonable andprobable grounds to believe that some or all of the offences alleged in theInformation could be properly established beyond a reasonable doubt in a court oflaw.…31. In causing the ITOs to be sworn, the CRA was substantially motivated byimproper purposes.32. At material times in the course of the Prosecution, the CRA was substantiallymotivated by improper purposes.…37. At material times, Brian Jones counselled, participated in, and acquiesced tothe initiation and continuation of the Prosecution without objectively reasonable andprobable grounds to believe that some or all of the offences alleged in theInformation could be properly established beyond a reasonable doubt in a court oflaw.…38. At material times in the course of the Prosecution, Brian Jones wassubstantially motivated by improper purposes.

[9]           The defendants’ request for particulars relating to para. 31 is:

With respect to paragraph 31, specify what improper purpose is alleged tohave motivated the CRA in causing the ITOs to be sworn …

[10]        The requested particulars respecting para. 32 are:With respect to paragraph 32, specify what improper purpose isalleged to have motivated the CRA in the course of the Prosecution …

[11]        The request for particulars respecting para. 38 states:With respect to paragraph 38, specify the improper purpose alleged to

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have motivated Brian Jones during the course of the Prosecution …

[12]        With respect to the issue of the alleged conflict of interest between Jones’ private interests andhis duty to the public the notice of civil claim states:

33. On or before June 12th, 2008, Brian Jones agreed to act as the counselprosecuting the Samaroos pursuant to an agreement with the Public ProsecutionService of Canada (the "Retainer").34. The full particulars of the Retainer with respect to remuneration, supervision,and performance evaluation are not within the knowledge of the Samaroos.35. At material times, the Retainer created substantial conflicts of interest betweenBrian Jones' private interests and the duty he owed to the public interest in the dueenforcement of the law.

[13]        The requested particulars demanded are:With respect to paragraph 35 specify what private interest of BrianJones was in conflict with his duty to the public interest in the dueenforcement of the law …

[14]        The request for particulars respecting the capacity in which Jones is sued is:With respect to the malicious prosecution claim against Brian Jones,specify whether the claim is against Brian Jones in his personalcapacity or as an agent of the Crown …

Position of the Defendants

[15]        The defendants say they seek the particulars demanded in order to enable them to understandand respond to the claim, define the scope of discovery and refine the issues for determination by thecourt, both with respect to preliminary applications and at trial.

Position of the Plaintiffs

[16]        The plaintiffs submit that with respect to the issue of malice they have gone beyond a bareallegation of improper purposes unsupported by the pleading of material facts. They submit thatthey have only declined to ascribe a particular motive for the intentional improper conduct.

[17]        With respect to the alleged conflict of interest they submit the pleadings sufficientlyparticularize the nature of the claim, noting that further particulars lie within the control andknowledge of the defendants.

[18]        On the issue of the capacity in which the defendant Jones is being sued, they confirm that theintention was to sue Jones in his personal capacity, not as agent of the Crown.

Discussion

Improper Purpose

[19]        While the pleadings refer to “improper purpose”, as stated by Lamer J. in Nelles v. Ontario,1989 CanLII 77 (SCC), [1989] 2 S.C.R. 170 at 639 “[t]he required element of malice is, for allintents, the equivalent of “improper purpose”. As a result the defendants request for particulars ofthe alleged improper purpose is a request for particulars of “malice”.

[20]        Rule 3-7(17) provides:(17) It is sufficient to allege malice, fraudulent intention, knowledge or other

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condition of the mind of a person as a fact, without setting out thecircumstances from which it is to be inferred.

[21]        Its predecessor (Rule 19(23)) was considered in Curry v. Vancouver (City) (1996), 62A.C.W.S. (3d) 45 (B.C.S.C.), by Shaw J. on an application by the defendant to strike the statementof claim for malicious prosecution on the grounds that it disclosed no reasonable claim and failed toplead the elements necessary to support such a claim. Specifically, that the statement of claim didnot set out the conduct which constituted the alleged abuse of the office of the Crown counsel.

[22]        Shaw J. held that the allegation of malice was sufficient. It was a state of mind and thereforewithin the application of Rule 19(23) (para. 20). He relied on Prete v. Ontario (Attorney-General)1993 CanLII 3386 (ON CA), (1993), 16 O.R. (3d) 161 (C.A.), as follows at paras. 17-19:

17 Plaintiff's counsel cites Prete v. Ontario 1993 CanLII 3386 (ON CA), (1993),16 O.R. (3d) 161 (C.A.), a claim for damages in which the plaintiff alleged that aprosecution was undertaken maliciously, arbitrarily, capriciously and withoutreasonable grounds and that the plaintiff's rights under s. 7 of the Canadian Charterof Rights and Freedoms were violated. The defendants (the police, the prosecutors,the Crown and the Attorney-General) moved to strike out the statement of claim onthe grounds that: (1) it failed to disclose a reasonable cause of action, and (2) it wasan abuse of process. The statement of claim made the following allegations:

18. The preferral of the direct indictment was made arbitrarily,capriciously and without reasonable and probable grounds andtherefore constituted an abuse of process and an infringementof the plaintiff's rights under section 7 of the CanadianCharter of Rights and Freedoms.

19. The subsequent prosecution of the direct indictment wasconducted maliciously and without reasonable and probablecause and therefore also breached the plaintiff's rights undersection 7 of the Charter.

18 By a two to one majority, the Ontario Court of Appeal refused to strike out theaction. The majority judgment of Carthy J.A. (McKinlay J.A. concurring) relied uponthe Ontario counterpart to Rule 19(23) in British Columbia. Carthy J.A. said at p.170:

Do the pleadings disclose a reasonable cause of action? To the extentthat the allegations rely on malice, rule 25.06(8) provides that thismay be alleged as a fact without pleading the circumstances fromwhich it is to be inferred. This means that a court cannot treat this as abald allegation and must assume that there is substance behind theallegation for purposes of testing the pleading.

19 While the third judge, Weiler J.A., dissented on another point, her decision inrespect of the pleading of "malice" was in substantial agreement with the majority.She said, at p.176:

The malice alleged in para. 19 is a question of fact and no particularsneed be pleaded.

[23]        Notwithstanding the fact that Rule 3-7(17) specifically states that particulars of malice are notrequired the defendants submit an order for particulars is discretionary and the general principlesnoted earlier should be applied. In addition they submit that Rule 3-7(18) can be relied on to orderparticulars, as the pleading is tantamount to fraud.

[24]        Rule 3-7(18) provides:

(18) If the party pleading relies on misrepresentation, fraud, breach of trust, wilfuldefault or undue influence, or if particulars may be necessary, full particulars, withdates and items if applicable, must be stated in the pleading.

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[25]        In saying the pleading of malice or improper purpose is tantamount to fraud the defendantsrely on the observation of the British Columbia Court of Appeal in Strauss v. Jarvis,2007 BCCA 605 (CanLII), 2007 BCCA 605 at para. 16, that “[m]alice requires proof of adeliberate and improper use of office which amounts to the perpetration of a fraud on the process ofcriminal justice”.

[26]        The Court of Appeal in Strauss also said this:

[16] … Allegations of malicious prosecution impugn the character and reputationof each defendant and should not be made lightly. Nonetheless, a plaintiff cannot beexpected to plead more facts than those reasonably within his means of knowledge.The respondent has alleged facts that separate him from any connection to thecharges against him. From those facts an inference sufficient for pleading purposescan be drawn that the appellants acted without an honest belief in his guilt and for anulterior motive. To require the respondent to plead more would place an unfairburden on him having regard to the relative means of knowledge of the respondentand the appellants as to their state of mind. … In British Columbia, Rule 19(23)obviates the requirement to provide particulars of malice. I am not persuaded thatthe test on strike out applications in actions for malicious prosecution should berelaxed to discourage misguided actions.

[27]        The defendants specifically rely on para. 20 of Strauss where the court stated:

[20] At some stage before trial the appellants may be entitled to particulars ofspecific allegations against each appellant to refine the factual issues for trial, but anapplication for particulars will be premature until the respondent has had theopportunity to explore individual involvement through discovery. I agree with thechambers judge that the respondent has provided a sufficient context to the elementsof malicious prosecution to have satisfied the requirement to plead material facts. Anyadditional clarification of the pleadings to assist the appellants in knowing the casethey will have to meet at trial should be made through particulars when therespondent has had sufficient disclosure of the facts within the knowledge of theappellants to reasonably provide those particulars.

[28]        They further submit that “[t]his distinguishes malicious prosecution claims against the Crownfrom the type of malice underlying Rule 3-7(17) and more closely aligns them with the types ofclaims referenced in Rule 3-7(18).”

[29]        This raises two issues. The first is whether a pleading of malice in a claim against the Crownis a pleading of fraud within the meaning of Rule 3-7(18) and the second is whether Rule 3-7(18)must be read subject to the more specific Rule 3-7(17). In my view the answers to the respectivequestions are no and yes.

[30]        I say this because the specific takes priority over the general but also because the purpose ofRule 3-7(17) is to permit a plea that is founded in a “condition of the mind of a person as a fact”. That is, the subjective intent of the party is an essential element and necessarily lies within theknowledge of that person. I am not satisfied that the role of Jones as ad hoc prosecutor for theCrown changes the nature of the claim.

[31]        In Siddon v. Mair, 1997 CanLII 2021 (BC SC), 1997 CanLII 2021 (B.C.S.C.), a defamationaction, the master considered the predecessor rule (19(23)) and stated at para. 54 that:

[54] I am satisfied that the issue of malice is not to be determined solely from thefour corners of the words mouthed by a defendant and must be considered by anexamination of other matters and circumstances.

[32]        The master determined that the request for particulars of the malice “would unduly limit the

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plaintiff’s case on a plea of malice” and dismissed the application of the defendant. Although thesuit in that case was quite different, and the request for particulars in that case was with respect tocertain alleged statements as opposed to the state of mind of the defendants, I find the ruling helpfulin that it illustrates that a claim of malice should not be unduly limited at an early stage in the trial.

[33]        The defendants submit that the court has ordered particulars in cases involving improperconduct. They rely on Olympic International Agencies Ltd. v. Clancy, 2011 BCSC 661 (CanLII),2011 BCSC 661, where the court applying the principles in Cansulex ordered that particulars beprovided. In my view Olympic does not assist the defendants as the allegations in Olympic involvedbreaches of contract and the duty of confidentiality as well as breach of obligations and duties owedas a director and officer of the plaintiff. The substance of the plea was a breach of fiduciary duty. There was no allegation of malice and Rule 3-7(17) did not come into play. As a result I do notaccept that particulars were ordered where the improper conduct was an allegation of malice.

[34]        While according to Gamble v. Canada (Attorney General), 2011 BCCA 488 (CanLII), 2011BCCA 488 at para. 39, it may be arguable that the reasoning in Miazga at para. 52 requires areconsideration of the required form of pleadings relating to a claim for malicious prosecution untilthat is decided Strauss remains the law.

[35]        It may be that further particulars will be required later in the proceeding (and I make nofinding respecting that) however in my view, given the specific wording of Rule 3-7(17) and itsrationale, it would not be appropriate at this time to exercise the court’s discretion in favour of thedefendants. As in Siddon to do so would “unduly limit the plaintiffs’ case on a plea of malice. InStrauss at para. 13 the court notes that despite the plaintiff providing some particulars of malice“[t]here is no good reason why a plaintiff who tries to provide some particulars of malice should bedeprived of the benefit of Rule 19(23) for pleading purposes”. The court notes as well that suchparticulars would be “redundant” to the general plea of malice itself.

[36]        Turning to the conflict of interest alleged to exist between the private interests of Jones andhis public duty, the defendants submit particulars are required respecting what private interest was inconflict with Jones’ public duty. They submit particulars are required because on the pleadings theycannot determine whether the conflict arises purely from the fact that Jones was counsel and thatconflicted with private interests of contract counsel generally or whether it was a private interestparticular to him alone. In their submission that leads to uncertainty respecting what is relevant fordiscovery.

[37]        The plaintiffs note that the defendants have refused to disclose any document discoveryrespecting the retainer. The terms of the retainer are therefore solely in the control of the defendantshence the plaintiffs say they cannot provide particulars. Additionally they say that the pleadings aresufficient as they alert the defendants to the plaintiffs’ claim arising from Jones having a financialstake in the case because his accounts and their payment are within the decision making powers ofthe CRA. They have in their responses to the defendants’ demands for particulars made clear thatthe private interests are the personal financial interests of the defendant Jones.

[38]        The plaintiffs’ pleadings allege that Jones’ private interests conflict with his public duty. Theplaintiffs in their response to the demand for particulars state that it is the financial interests of Jonesand the retainer that is alleged to conflict with his public duty. Given the information concerningsuch matters lies within the control of the defendant Jones it is difficult to see how the plaintiffs’could provide further particulars. As a result further particulars of his “private interests” are notrequired.

[39]        It would be unfair to require particulars at this time either with respect to the issue of malice orthe issue of a conflict of interest given both issues are within the knowledge of the defendants, notthe plaintiffs. Any attempt to provide particulars would of necessity be based on speculation orsuspicion. As such they would not be true particulars as they would not be material facts. Ratherthe requests relate not to the delineation of issues but instead seek “material relating to the way inwhich the issues will be proved”. (Cansulex at para. 11).

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[40]        Finally, with respect to the capacity in which the defendants are sued the plaintiffs have madeclear that they are pursuing the defendants in their personal and corporate capacities, not as agents ofthe crown. Although this appears clear from the pleadings the plaintiffs have now confirmed that tobe the case.

[41]        The application of the defendants is dismissed with costs to the plaintiffs.

“Punnett J.”

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