File No.: CT-2005-006 COMPETITION TRIBUNAL IN THE MATTER OF the Competition Act, R.S.C. 1985, c. C-34, as amended; IN THE MATTER OF an application by B-Filer Inc., B-Filer Inc. doing business as GPAY GuaranteedPayment and Npay Inc. for an order pursuant to section 103.1 granting leave to make application under sections 75 and 77 of the Competition Act;
AND IN THE MATTER OF an application by B-Filer Inc., B-Filer Inc. doing business as GPAY GuaranteedPayment and Npay Inc. for an interim order pursuant to section 104 of the Competition Act.
BETWEEN: B-FILER INC., B-FILER INC. doing business as GPAY GUARANTEEDPAYMENT and NPAY INC.
– and –
THE BANK OF NOVA SCOTIA
B-Filer’s Reply Memorandum of Fact and Law Motion to Amend Pleadings April 27, 2006
April 6, 2006 Affleck Greene Orr LLP Barristers & Solicitors One First Canadian Place Suite 840, P.O. Box 489 Toronto, Ontario M5X 1E5
Michael Osborne T 416-360-5919 F 416-360-5960 E mosborne@agolaw.com Jennifer Cantwell T 416-360-1485 F 416-360-5960 E jcantwell@agolaw.com Edy, Dalton 800-1015 4 St. S.W. Calgary, AB, T2R 1J4
Sharon J. Dalton T 403-263-3200 Ext:105 F 403-263-3202 E sjdalton@edydalton.com
Solicitors for the applicants
PUBLIC
Applicants
Respondent
B-FILER’S REPLY MEMORANDUM OF FACT AND LAW – MOTION TO AMEND PLEADINGS ii TO: McCarthy Tétrault LLP Box 48, Suite 4700 Toronto Dominion Tower Toronto, ON M5K 1E6
F. Paul Morrison T 416-601-7887 F 416-868-0673
E pmorriso@mccarthy.ca Lisa M. Constantine T 416-601-7652 F -416-868-0673
E lconstan@mccarthy.ca Solicitors for the Respondents
PUBLIC
Table of Contents I REPLY ARGUMENT ..............................................................................................................................................1 A. THE PROPOSED AMENDMENTS ARE WITHIN THE SCOPE OF THE LEAVE GRANTED BY THE TRIBUNAL.....................1 B. B-FILER CAN AMEND ITS PLEADING AS OF RIGHT ..................................................................................................1 C. B-FILER’S RIGHT TO AMEND HAS NOT EXPIRED DUE TO SCOTIABANK’S APPEAL...................................................2
PUBLIC
I Reply Argument A. The proposed amendments are within the scope of the leave granted by the Tribunal 1. The cases cited by Scotiabank establish that amendments that change the very nature of a proceeding for which leave was previously granted by, in particular, adding new causes of action or new responding parties, will not be permitted. However, amendments that merely particularize or refine pleadings are acceptable. B-Filer agrees with these propositions.
2. In particular, in Maxwell v. MLG Ventures Ltd., the court did not allow amendments adding a cause of action for breach of fiduciary duty to a class action that pleaded misrepresentation, after it had been certified as a class action. However, the court allowed amendments containing further examples of misrepresentation, as they did not fundamentally change the nature of the action. Maxwell v. MLG Ventures Ltd., (1995), 40 C.P.C. (3d) 304 (Ont. Gen. Div.) 3. B-Filer’s proposed amendments do not fundamentally change the nature of the proceeding for which leave was granted. They do not add another cause of action, product, party, or remedy. As set out in B-Filer’s initial submissions, they make express what is implicit in the current pleading, the evidence filed on the leave application and the Tribunal’s reasons in granting leave. The proposed amendments thus particularize and refine B-Filer’s pleading and should therefore be permitted.
B. B-Filer can amend its pleading as of right 4. Scotiabank asserts that B-Filer cannot amend as of right under Rule 200 because: a) B-Filer did not serve its Notice of Application a second time on Scotiabank in accordance with s. 112 of the Tribunal’s Practice Direction; and
b) B-Filer’s counsel accorded Scotiabank’s counsel the courtesy of advising that he intended to amend B-Filer’s pleading, and, accordingly would not require Scotiabank’s response.
PUBLIC
B-FILER’S REPLY MEMORANDUM OF FACT AND LAW – MOTION TO AMEND PLEADINGS 2 5. B-Filer’s failure to serve the Notice of Application a second time was a mere technical oversight that Scotiabank has not complained about until now. B-Filer’s Notice of Application under ss. 75 & 77 and Statement of Grounds and Material Facts was attached to B-Filer’s Notice of Application for leave under s. 103.1, and Scotiabank was properly served with all of these materials. Scotiabank thus has full notice of the contents of B-Filer’s Notice of Application and Statement of Grounds and Material Facts.
6. Scotiabank has not pointed to any prejudice, policy or precedent to support its contention that this inconsequential breach should deprive B-Filer of the right to amend provided by Rule 200.
7. The courtesy accorded by B-Filer’s counsel to Scotiabank’s counsel does not estop B-Filer from relying on Rule 200.
8. A promissory estoppel cannot be established without an express or implied promise not to rely on a rule, in Maracle, a limitation period. B-Filer’s counsel never promised expressly or impliedly not to rely on Rule 200, or even discussed Rule 200. Rather, in advising Scotiabank’s counsel of B-Filer’s intention to amend, and relieving Scotiabank of the requirement to file a response in the meantime, B-Filer’s counsel accorded Scotiabank’s counsel a courtesy that should not now be turned against B-Filer. Maracle v. Travellers Indemnity Co. of Canada, [1991] 2 SCR 50. C. B-Filer’s right to amend has not expired due to Scotiabank’s appeal 9. B-Filer’s right to amend its Notice of Application and Statement of Grounds and Material Facts in the s. 75 proceeding without leave did not expire upon delivery of Scotiabank’s Notice of Appeal of the Tribunal’s decision in the s. 103.1 proceeding. In both cases cited by Scotiabank, the plaintiff was attempting to amend the pleading whose sufficiency was itself at issue in the appeal. These cases stand for the proposition that it is the Court of Appeal, not the trial court, that should determine whether a pleading that is at issue in an appeal can be amended. Operation Dismantle v. The Queen, [1985] 1 S.C.R. 441. Milliken & Co. v. Interface Flooring Systems (Canada) Inc. (1993), 53 C.P.R. (3d) 71 (Fed. T.D.) PUBLIC
B-FILER’S REPLY MEMORANDUM OF FACT AND LAW – MOTION TO AMEND PLEADINGS 3 10. In Milliken & Co. v. Interface Flooring Systems, relied on by Scotiabank, the Federal Court of Appeal clarified that a party can amend pleadings that are not under consideration in an appeal: The defendant’s position is one of “all or nothing”. In other words, if I were to accept the defendant’s reasoning, the plaintiffs could not, during the pendency of the appeal, make any amendments whatsoever. For example, the plaintiffs could not amend their statement of claim to correct the quantum of their damages even though such an amendment would have no bearing on, or relevance to, the issue under appeal.
I cannot accept the defendant’s argument on this point. In my view, the purpose of Rule 1104 is to give the Court of Appeal control over those aspects of pleadings which it will likely consider. If the Court of Appeal is to effectively deal with issues on appeal, parties should not be able to amend the aspects of their pleadings dealing with these issues without leave of the Court of Appeal. Where the amendments in question will not be considered by the Court of Appeal, there is no reason to defer from the general principles of Rules 420-430 of which Rule 421 permits the plaintiffs to amend their statement of claim without leave until the defendants have pleaded thereto. [Emphasis added]
Milliken & Co. v. Interface Flooring Systems (Canada) Inc. (1993), 53 C.P.R. (3d) 71 (Fed. T.D.) at p. 75.
11. Here, Scotiabank is appealing the Tribunal’s leave decision, which applied the statutory test set out in s. 103.1 of the Competition Act to the facts. The appeal does not involve the sufficiency of B-Filer’s pleading in the s. 75 proceeding. B-Filer’s proposed amendments thus have no bearing on or relevance to, the issue under appeal.
12. Moreover, these amendments are sought in the s. 75 proceeding, which is a separate proceeding that is not before the Court of Appeal. The Court of Appeal would thus lack jurisdiction to consider them.
PUBLIC
B-FILER’S REPLY MEMORANDUM OF FACT AND LAW – MOTION TO AMEND PLEADINGS 4 13. Finally, the cases relied on by Scotiabank flow from Rule 1104 of the old Federal Court Rules. This rule does not exist in the new Rules.
ALL OF WHICH IS RESPECTFULLY SUBMITTED April 6, 2006 “Michael Osborne” Michael Osborne “Sharon Dalton” Sharon Dalton
“Jennifer Cantwell” Jennifer Cantwell
Counsel to the applicants
PUBLIC
BETWEEN: B-FILER INC., B-FILER INC. doing business as GPAY GUARANTEEDPAYMENT and NPAY
THE BANK OF NOVA SCOTIA Respondent
B-Filer’s Reply Memorandum of Fact and Law
Motion to Amend Pleadings
AFFLECK GREENE ORR LLP Barristers & Solicitors One First Canadian Place Suite 840, P.O. Box 489 Toronto, Ontario M5X 1E5
Michael Osborne T 416-360-5919 F 416-360-5960 E mosborne@agolaw.com
Jennifer Cantwell T 416-360-F 416-360-5960 E jcantwell@agolaw.com
EDY, DALTON 800-1015 4 ST. S.W. CALGARY, AB, T2R 1J4
Sharon J. Dalton T 403-263-3200 EXT:105 F 403-263-3202 E jdalton@edydalton.com
Solicitors for the Applicants
PUBLIC
Court File No. CT-2005-006 COMPETITION TRIBUNAL INC. Applicants -and-