T-4673-73
The Queen (Plaintiff)
v.
Perry J. Rhine (Defendant)
Trial Division, Cattanach J.—Ottawa, March 16,
1979.
Practice — Application for judgment in default of defence
— No statement of defence filed — Letters opposing motion
for default judgment indicate defence if allegations in letters
substantiated — Whether or not judgment in default of
defence should be granted — Federal Court Rules 324, 402(2).
In an action by plaintiff to recover an advance granted
defendant under the Prairie Grain Advance Payments Act, the
matter to be considered is plaintiff's application for judgment
in default of defence. An earlier application for default judg
ment had been withdrawn, and the present application is
reconsidered because of the Court of Appeal's decision over
turning this Court's decision to deny the application for want of
jurisdiction to entertain the statement of claim. Although
defendant never filed a statement of defence in accordance with
the mechanical rules of pleading, he consistently alleged in
letters directed to the Court, a fact or facts which, if substan
tiated, would constitute a defence to the statement of claim.
Held, the application is dismissed. Although no statement of
defence, in the form which a competent lawyer would draft, has
been filed and although no semblance of defence was filed by
defendant within 30 days of service of the statement of claim
upon him in accordance with Rule 402(2), the defendant made
written representations in opposition to the motion for default
judgment. In these letters addressed to the Court, defendant
denied owing the plaintiff; alternatively, he alleged that the
Board "welched" on its agreement and in effect alleged set off,
while at the same time expressing a willingness to pay in
instalments he could afford. The grant of judgment in default
of defence is discretionary. In view of defendant's repeated
views that he owes the Board nothing, the circumstances are
not appropriate that default judgment should be given.
APPLICATION under Rule 324.
SOLICITORS:
Deputy Attorney General of Canada for
plaintiff.
Perry J. Rhine for himself.
The following are the reasons for judgment
rendered in English by
CATTANACH J.: By statement of claim dated
November 7, 1973 and filed on November 13,
1973 the plaintiff seeks to recover from the
defendant the sum of $417, interest thereon and
costs of the action being an advance which had
been granted to the defendant, a Prairie grain
farmer, pursuant to his application therefor under
the Prairie Grain Advance Payments Act, R.S.C.
1970, c. P-18.
By notice of motion dated December 12, 1974
the plaintiff applied for judgment in default of
defence.
The material was served on the defendant and
elicited a response from him by an undated letter
enclosed in an envelope addressed to the Court
Registry and which bears the post mark of 5-I1I-
1977. It was received in the Registry at 8:36 a.m.
on March 10, 1977 and reads:
Please read this statement of defense on my account with
Canadian Wheat Board (attention of Mr. Thiessen) or the
Judge.
I have really not refused to pay this account as in 1969 and
1970 the Wheat Board of Farm assistance board were to pay
10.00 per acre for seeding ground down to hay which I did they
paid me $5.00 per acre for 110 acres but refused to pay the
balance of 5.00 per acre.
Therefore I feel they owe me $550.00 plus interest at 6% per
annum which amounts to 701.64 app. Therefore I did not feel
that I owe this amount that they have charged against me.
I do not own any land as of now I dont have a steady job and I
do not own any property therefore it will be very hard for you
to collect this money from someone as broke as I am you are
very lucky I am not on welfare as a lot of people I know are,
but perhaps that will come.
I am sorry that you have refused to pay me what is do [sic] me
therefore why should I pay my account with you they are about
equal.
You have all the money of the farmers now and we are most of
us broke. I would be willing to pay the origenal [sic] amount of
417.00 providing I could make it at about 25.00 per month is
all I could aford. [sic]
The defendant was quite within his rights in
opposing the plaintiff's application by written
representations by virtue of Rule 325 but he
apparently omitted to send a copy of his written
representations as required by the Rule to the
adverse party but the representations were brought
to the plaintiff's attention by an officer of the
Registry in any event.
It was also pointed out to the plaintiff's solici
tors by the Registry that the notice of motion
could not be processed because certain essential
material had been omitted by the plaintiff.
In the result the application dated December 12,
1974 was abandoned and replaced by a notice of
motion dated February 4, 1977 to the same end as
the prior motion, both events occurring some three
years later.
The amount now sought in the default judgment
had escalated by an accumulation of interest.
The matter came before me pursuant to Rule
324, that is for hearing without the appearance of
counsel for the plaintiff. The question of the juris
diction of this Court to hear the matter was raised
by me and counsel for the plaintiff was invited to
and did make representations.
For reasons expressed in reasons for judgment
dated May 10, 1977 [[1978] 1 F.C. 356] I con
cluded [at pages 364-365] that:
... there is no statutory basis for the Crown's suit ... and
accordingly the application for judgment against the defendant
in default of defence ... [is] refused because ... there is no
jurisdiction in this Court to entertain the statement of claim.
Also on May 10, 1977 I made the following
pronouncement:
The application for judgment against the defendant in default
of defence is denied.
A letter dated January 22, 1978 addressed "In
the Federal Court of Canada, Attention: The Hon
ourable Mr. Justice Cattanach" was received from
the defendant in the Registry at 8:16 a.m. on
February 1, 1978.
The body of that letter pertinent to this matter
reads as follows:
Last May 10th 1977 you denied application for judgment
against me by the Canadian Wheat Board for advance
payment.
Now they are still trying to get judgment but I do not feel that
I owe them.
They state that I did not deliver wheat but that is not so for I
have proof of this.
Also the Prairie farm ass. Board still owes me 550.00 plus %
which comes to 1037.00 at 6% and I know that they are just
different departments of Agriculture therefore I still maintain I
do not owe them.
There were other contents in appendices to this
letter not germane to this matter.
Naturally I did not engage in correspondence
with the defendant but requested the Clerk of
Process to respond thereto which he did by letter
dated February 2, 1978 and a copy of his response
was also sent to the solicitor for the Canadian
Wheat Board.
The solicitor for the Board acknowledged the
letter from the Clerk of Process stating that no
steps had been taken to enforce payment following
my decision of May 10, 1977, other than to launch
an appeal from that decision.
No doubt notice of this appeal was served on the
defendant which he interpreted as a further effort
to collect payment from him (and not without
some justification) and prompted him to send his
letter dated January 22, 1978, the relevant portion
of which is quoted above.
The appeal launched by the plaintiff herein was
heard by the Federal Court of Appeal at Toronto,
Ontario on Tuesday, January 9, 1979 and judg
ment [(1979) 26 N.R. 526] was rendered at
Ottawa, Ontario on March 8, 1979.
The pronouncement given by the Federal
Court—Appeal Division reads:
The appeal is allowed, the judgment of the Trial Division is set
aside and the matter is referred back to the Trial Division for
reconsideration on the basis that the Trial Division has
jurisdiction.
This decision by the Federal Court's Appeal
Division is binding upon me until reversed by a
higher court. That the matter will be appealed
further by the defendant herein or others in the
same predicament as he finds himself is remote. It
is obvious from his correspondence that he has
suffered the "slings and arrows of outrageous for
tune" and has accepted his lot with resignation
and has sought solace in the law of God.
His resignation is qualified by his expressed
belief that the books of Heaven record with ter
rible exactness every wrong inflicted by one person
upon another for which he cites biblical authority
and he remains adamant in his conviction that he
owes the plaintiff nothing, that he has delivered
wheat to the Board in discharge of advance pay
ments received by him contrary to the allegations
in the plaintiffs statement of claim and that he
can prove his allegations. I have no doubt that he
is anxious that the earthly accounts, especially the
account between him and the Canadian Wheat
Board, should coincide with those kept in Heaven.
The Court of Appeal has directed that I should
reconsider this matter on the assumption that I
have jurisdiction to do so.
I accept and shall implement these directions.
The matter which is to be considered is an
application by the plaintiff for judgment against
the defendant in default of a defence.
It is abundantly clear that the defendant did not
file a statement of defence in accordance with the
mechanical rules of pleading outlined in Rule 407
but he has consistently alleged a fact or facts
which, if substantiated, would constitute a defence
to the statement of claim.
The defendant alleges that he owes the plaintiff
nothing and that he can prove this. Alternatively it
is possible that he has alleged that he does not owe
the full amount which the plaintiff alleges he owes.
If the defendant were successful in establishing
this allegation it would constitute a defence to a
part of the claim against him. Still further in the
alternative the defendant alleges that the plaintiff
owes him an amount in excess of what he owes the
Board and in effect he claims a set off which might
conceivably be the basis for the defendant's allega
tion that he owes the Board nothing or perhaps a
counter claim.
As I have said, no statement of defence, in the
form which a competent lawyer would draft, has
been filed and certainly no semblance of a defence
was filed by the defendant within 30 days of the
service of the statement of claim upon him in
accordance with Rule 402(2).
No statement of defence of any sort, nor any
document susceptible of being construed as a
statement of defence was filed by the defendant
until application was made by notice of motion
dated December 12, 1974 which the plaintiff
abandoned.
However in opposition to that motion for default
judgment made by the plaintiff the defendant
made written representations reproduced above.
In substance he alleges that the Board
"welched" on its agreement and withheld $550. In
effect he alleges a set off but at the same time he
expresses a willingness to pay $417 in monthly
instalments that he can afford.
Time passed until a second ° application was
made by the plaintiff for default judgment against
the defendant by notice of motion dated February
4, 1977. Then followed the events recited above.
The defendant made no representations until his
letter dated January 22, 1978 part of which has
been reproduced above.
The matter now before me based on the direc
tions of the Court of Appeal is that I should now
reconsider the application for default judgment
dated February 4, 1977 this time for the total
amount of $732.84 inclusive of principal, $417,
interest to February 5, 1977, $139.22 and costs of
$176.62 on the basis that jurisdiction exists in the
Trial Division.
The application for judgment in default of
defence against the defendant by the plaintiff is
for $732.84 and no more. Therefore it is a liquidat
ed demand only in accordance with Rule 432.
The grant of judgment in default of defence is
discretionary.
In view of the repeated allegations by the
defendant that he owes the Board nothing, the
circumstances are not appropriate that default
judgment should be given.
The defendant has admitted no allegations in
the plaintiff's statement of claim except that he
would be willing to pay $417 in monthly instal
ments but I do not read that as foregoing what he
alleges the Board owes him. He will pay if the
Board pays. Otherwise he cannot pay.
That being the case the plaintiff is obliged to
prove the allegations in her statement of claim as a
condition precedent to the grant of the relief
sought therein. The defendant is entitled to dispute
those allegations and adduce proof of those replies
he makes as he says he is in a position to do.
Accordingly the only way that this can be
accomplished would be to set the matter down for
trial. While the defendant has not filed a defence
in the usual form he has advanced a general
defence which is simply that he does not owe the
plaintiff any sum.
That appears to be the solution to the impasse
between the parties unless some more expeditious
and less expensive solution is forthcoming.
The matter may be set down for trial in this
Court or the plaintiff may find it more expeditious
and less expensive to sue the matter in the local
courts which do have jurisdiction.
What further steps to be taken are at the discre
tion of the plaintiff.
Meanwhile, for the reasons expressed, the plain
tiffs application for judgment against the defend
ant in default of defence is denied.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.