055455 N. B. INC. v. 047438 N. B. INC., 2014 NBQB 15

COURT OF QUEEN’S BENCH OF NEW BRUNSWICK TRIAL DIVISION JUDICIAL DISTRICT OF MONCTON Citation: 2014 NBQB 015 MC/720/04 Date: January 16 th , 2014 BETWEEN: 055455 N. B. INC. and 047438 N. B. INC. , Plaintiffs , - and - ATLANTIC LOTTERY CORPORATION INC. , and LOTTERIES COMMISSION OF NEW BRUNSWICK and PROVINCE OF NEW BRUNSWICK Defendants . DECISION BEFORE: The Honourable Justice George S. Rideout AT: Moncton, New Brunswick DATE OF HEARING: January 6 th , 2014 DATE OF DECISION: January 16 th , 2014 APPEARANCES: Gregory E. Murphy, Q. C., Solicitor for Plaintiffs Richard Scott, Q.

C., Solicitor for the Defendant, Atlantic Lottery Corporation Inc. Krista L. Colford, Solicitor for the Defendants, Lotteries Commission of New Brunswick, Province of New Brunswick RIDEOUT, J. FACTS [ 1 ] The general facts of this matter are not in dispute. In 1990, the Defendant, Province of New Brunswick (Province) established a video lottery (VL) program. The Defendant, Lotteries Commission of New Brunswick (Commission) was established to conduct and manage the VL program on behalf of the Province. It is a Crown Corporation.

The Defendant, Atlantic Lottery Corporation Inc. (ALC) is an interprovincial corporation which manages lotteries in the four Atlantic provinces. The Plaintiffs, 055455 N. B. Inc. and 047438 N. B. Inc. are the owners of video lottery terminals (VLT) whose role was to purchase, install and maintain VLT’s in approved locations. [ 2 ] In the Brief filed by the Province are a number of paragraphs which outline what I believe to be the undisputed facts: 3. The VL Program authorized the placement of video lottery terminals ("VLT's") in certain approved premises.

"Approved premises" was defined under the VL Program as including both licensed and non- licensed venues.

4. The Plaintiffs in this action were VLT owners, also as defined under the VL Program. The role of an owner was to Purchase, install and maintain the VLT's in approved premises or locations. 5. Owners were required under the VL Program to be a member of the New Brunswick Coin Machine Operators Association, ("NBCMOA"). The Association was a not for profit organization incorporated under the Companies Act , R.S.N.B. 1973, c. C-13. Its membership was comprised of business men and women involved in the coin machine industry. 6.

On August 16, 1995 the NBCMOA entered into a 7 year term agreement effective April 1, 1995, with the Province that addressed one issue, namely the division of the revenue generated by the VL Program as between the Province, the owners and the site holders, ("the NBCMOA Agreement"). […] 9. Contemporaneously with the execution of the NBCMOA Agreement the Plaintiffs in 1995 entered into licensing agreements with the Atlantic Lottery Corporation ("ALC").

The licensing agreements, authorized under the VL Program, permitted owners to participate in the program for the 7 year term set out in the NBCMOA Agreement. [ 3 ] The Province and Commission brought a Motion which was subsequently amended. The amended Motion and grounds read as follows: (

a) Pursuant to Rule 23.01 (1)(

a) determining that the causes of action plead in paragraph 68 of the Amended Statement of Claim do not properly fall within the parameters of

section 4 of the Proceedings Against the Crown Act R.S.N.B. 1973, c. P- 18, and therefore do not disclose a reasonable cause of action as against, the Defendants Province of New Brunswick and Lotteries Commission of New Brunswick; (

b) Pursuant to Rule 23.01(1)(

b) and/or Rule 27.09 of the New Brunswick Rules of Court striking out the pleadings contained in paragraphs 68, 27 and 28 of the Plaintiff's Amended Statement of Claim; (

c) Costs; and (

d) for such further and other relief as this Honourable Court deems just and expedient. The grounds upon which this Motion is based are: 1. Liability of the Crown in tort is limited to the torts contained in

section 4 of the Proceedings Against the Crown Act , R.S.N.B. 1973, c. P - 18; 2. The tortuous allegations or pleadings contained in paragraph 68 of the Amended Statement of Claim do not fall within

section 4 of the Proceedings Against the Crown Act , R.S,N.B. 1973, c. P-18 and accordingly fail to disclose a reasonable cause of action as against the Defendants Province of New Brunswick and Lotteries Commission of New Brunswick, which is a crown corporation as defined in

section 1 of the Proceedings Against the Crown Act, R.S.N.B. 1973, c. P-18 ; 3. To proceed to trial on these allegations will unnecessarily delay the fair trial of this action and is an abuse of the process of the Court;

4. A determination that the allegations contained in paragraph 68 of the Amended Statement of Claim do not properly fall within

section 4 of the Proceedings Against the Crown Act R. S. N. B. 1973, c. P-18, may shorten the trial of the action and occasion a substantial savings of costs. 5. The allegations set forth in paragraphs 27 and 28 of the Amended Statement of Claim are improper, contain evidence and are contrary to the rules of pleading, specifically Rule 27.06(1) and 27.06(8) of the Rules of Court . The defendants Province of New Brunswick and Lotteries Commission of New Brunswick, will rely on: (

a) The Proceedings Against the Crown Act R.S.N.B.. 1973, c. P-18 , and (

b) New Brunswick Rules of Court, Rule 1.03 , 23.01 (

a) and (b), Rules 27.06(1) , 27.06(8) , 27.09 (

a) and (c). [ 4 ] Patricia Steeves swore to an Affidavit on July 10, 2013 which I set out in full: I, Patricia Steeves, of the City of Fredericton, County of York and Province of New Brunswick, MAKE OATH AND SAY THAT: 1. I have, save as expressly stated otherwise, personal knowledge of the facts herein sworn to. 2.

I am the Chief Operating Officer of the New Brunswick Lotteries and Gaming Corporation, a division of the New Brunswick Department of Finance, formerly known and operated as the Lotteries Commission of New Brunswick and as such, I am authorized to make thiS-affidAvit7.66behalf of the Defendants Lotteries Commission of New Brunswick and Province of New Brunswick ("the Defendants"). 3. Attached as follows are the pleadings in this action: (

a) Exhibit "A" – Notice of Action with Statement of Claim Attached dated august 13, 2004; (

b) Exhibit "B" – Demand for Particulars of Atlantic Lottery Corporation Inc. dated November 4, 2004; (

c) Exhibit "C" – Statement of Particulars of the Plaintiff dated December 7, 2004; (

d) Exhibit “D” – Statement of Defence on behalf of the Lotteries Commission of New Brunswick and the Province of New Brunswick: (

e) Exhibit "E" – Statement of Defence of Atlantic Lottery Corporation Inc. dated April 5, 2005; (

f) Exhibit "F" – Amended Notice of Action with Statement of Claim attached dated February 20; 2013. 4. On May 15, 2013 the Province advised the Plaintiff that the allegations contained in paragraph 68 of the Amended Statement of Claim did not properly fall within the ambit of section 4(1) of the Proceedings Against the Crown Act and as a result were not

sustainable as against the Crown, (attached hereto as Exhibit "G" is a true copy of correspondence dated May 15, 2012 from our solicitor Krista Colford of the Office of the Attorney General to Plaintiffs' counsel Greg Murphy of Murphy, Murphy Mollins. 5. In response, by letter dated June 13, 2013 from Mr. Greg Murphy, a true copy of which is attached hereto as Exhibit "H", the Plaintiffs advised it was their position the allegations contained in paragraph 68 of the Amended Statement of Claim related to personal property and therefore did in fact come within the parameters of section 4(1) (

a) of the Proceedings Against the Crown Act . 6. Notice of Trial was filed with the Clerk's office the next day on June 14, 2013 and the matter was placed on the July Motions Day docket, a true copy of correspondence from Mr. Murphy to the Clerk's Office _ dated June 14, 2013 with Notice of Trial and Certificate of Readiness attached is annexed hereto as Exhibit "I". 7.

I have been advised by our solicitor and do verily believe that counsel for all parties appeared on Motion's Day at which time the Court ordered the Defendant Province of New Brunswick may file and serve its motion to strike any portion of the Amended Statement of Claim, provided it occurred prior to the August Motions Day. Attached hereto as Exhibit "J" is a true copy of the Order of Mr. Justice McNally dated July 3, 2013. [Exhibits not reproduced] [ 5 ] Mr. William C. West, an officer of both Plaintiffs also filed an Affidavit sworn to December 12, 2013 which reads as follows: I, WILLIAM C.

WEST of Lower Coverdale in the County of Albert and the Province of New Brunswick, MAKE OATH AND SAY AS FOLLOWS: 1. I am an officer of each of the plaintiff corporations. 2. I was a representative of each of the plaintiff corporations at discovery. 3. I have read the Notice of Motion of the Province of New Brunswick and Lotteries Commission of New Brunswick which will be heard by the Court in Moncton on December 20, 2013 at 9:30 a.m. 4. I instructed the plaintiffs' solicitors of record to set this case down for trial.

Attached and marked as Exhibit "A" is letter of my solicitors, Murphy, Murphy & Mollins, April 4, 2013, in which my solicitor estimates 10 days for the trial of this action. 5. The solicitors for the defendants requested 15 days for the trial of this action as indicated in the Certificate of Readiness attached and marked as Exhibit "B". 6. I attended at the Motions Day on July 2, 2013 where Mr. Justice McNally ordered that the case be set down for trial for a three week period after August 30, 2014. 7.

Attached and marked as Exhibit "C" is correspondence from the Court of Queen's Bench of New Brunswick dated August 1, 2013 which confirms the trial will take place September 15, 2014 to October 3, 2014. 8. I am aware of the Order of the Court on July 2, 2013 permitting, notwithstanding this case was set down for trial, the Province to bring a motion prior to the August 2013 Motions Day to strike out any portion of the Statement of Claim prior to August 2013 motions day. This Order was made orally at Motions Day on July 2, 2013 and subsequently prepared by the Court.

9. The only Motion then contemplated by the Province was the Motion it filed with the Court on or about July 31, 2013, within the strict time frame allowed by Mr. Justice McNally, solely in relation to paragraph 68 of the Amended Statement of Claim. 10. This is confirmed in the correspondence attached to the affidavit in support of Patricia Steeves, Exhibit "G", letter of solicitor for the Province, to which she attaches in the original form a copy of the Court of Appeal Decision in Levesque v. Levesque.

I note on the second page of her correspondence she refers only to striking out paragraph 68 of the Amended Statement of Claim. 11. Four months after the permitted Motion was filed and served within the time frame imposed by Mr. Justice McNally, the Province served on December 2, 2013 what purports to be an amendment to its Motion in which additional paragraphs of the amended Statement of Claim are now challenged, presumably 27 and 28, on different grounds. 12. The plaintiffs object to the filing of the purported amended Notice of Motion which does not comply within the time frame imposed by Mr.

Justice McNally and is not within the spirit of the 'exception granted to the Province to bring its Motion in relation to paragraph 68 after the case was set down for trial. 13. There was never a request by the Province to strike out or otherwise challenge paragraphs 27 and 28 until the filing of the purported Amended Notice of Motion on December 2, 2013. The plaintiffs' position is this is not an amendment, but a standalone Motion in which additional paragraphs on different grounds are challenged by the Province. 14.

The Province, in its Statement of Defence dated February 23, 2005 specifically refers to paragraph 68 of the Statement of Claim in relation to the Proceeding Against The Crown Act at paragraphs 4 (

t) and 15. 15. In regard to paragraph 27, the Province pleads in paragraph 3 of its defence it has no knowledge of the allegations in paragraph 27. 16. In regard to paragraph 28, the Province pleads a bare denial in paragraph 2 of its defence. [Exhibits not reproduced] [ 6 ] I will now set out the paragraphs of the Statement of Claim which are in issue namely; paragraphs 27, 28 and 68. As well, I believe it is advisable to set out the amended paragraphs 70 and 71 of the Statement of Claim: 27.

On April 17, 1993 the Minister of Finance, Allan E, Maher, at a meeting of the members of Association in Fredericton, stated: 1) "You have invested more than 22$M in video lottery machines alone and your Association estimates it has created approximately 600 jobs". 2) "Our decision to involve non-liquor licensed locations was made only after careful and objective analysis. It was made with the realization that we had to be very responsible in how we deliver the program, particularly concerning underage play, use of credit, and sensitivity to public perceptions.

I see no need to re-visit that decision and it is our intention to maintain our current policy in this area". 3) "As I had mentioned, the partnership between your Association and the government has proven to be a win/win situation for all video lottery revenues help to provide environmental programs throughout the Province and help support such programs as health care and education, to name but a few, from which all New Brunswickers benefit". 28.

In response to a request from the Association for a written assurance of the Province with respect to the involvement of non- licensed premises, the Minister of Finance, in correspondence to the Association dated April 27, 1993, made the following commitment:

"Our decision to involve non-liquor licensed locations was made only after careful and objective analysis and with the realization that we had to be very responsible in how we deliver the program. I see no need to revisit that decision and it is our intention to maintain our current policy in this area". 68. The plaintiffs claim in tort against the Commission and the Province as follows: 1. For making negligent misrepresentations there would be no changes to the video lottery scheme in respect of non-licensed locations which representations were reasonably relied on by the plaintiffs to their detriment; 2.

For making misrepresentations in respect of non-licensed locations which were either untrue, inaccurate, or misleading and which were reasonably relied on by the plaintiffs to their detriment; 3. For breaching a duty owed to the plaintiffs to bargain in good faith having regard to the special relationship of the parties and the reasonable expectations of the parties; 4. For intentionally and unlawfully interfering with the plaintiffs' legitimate economic interests and business relationships including the plaintiffs' contractual relationship with ALC and with its non-licensed locations; 5.

For unlawfully interfering with the plaintiffs’ vested rights. 70.

As a result of the acts of the defendants, the plaintiffs have suffered damages, which include: 1) Loss of revenue from non-licensed locations front the time their VLTs were disabled to March 31, 2002 ; 1.1) Lost of profit on account of the said disablement of the plaintiff's VLT machines in the amount of $1,750,000,00, particulars are set out in a Lost of Income report prepared by Grant Thornton LLP which report was delivered to the defendants in January 2009 . {The remaining portions of paragraph 70 have been struck in the Amended Statement of Claim} 71.

The plaintiffs claim against the defendants, and each of them, in contract and in tort, for: 1) Damages in the amount of $1,750,000.00 ; 2) Interest; 3) Costs; 4) Such other relief as the evidence may disclose arid this Honorable, Court may permit. [ 7 ] The Statement of Claim also contains paragraphs dealing with the contractual aspect of the claim. Paragraph 68 is the tortious portion and one of the matters in issue in this Motion.

[ 8 ] The Province and the Commission filed a defence to the action. I am reproducing paragraphs 4 (t), 4 (u), 12 (

c) and 15: 4. As to the whole of the Statement of Claim the Defendants state: […] (

t) The Defendants plead and rely on the provisions of subsection 4(1) of the Proceedings Against the Crown Act , C. P-18, R. S. N. B. 1973 and sate that the claims of the Plaintiff as set out in paragraph 68 of the Statement of Claim are not permitted claims under subsection 4(1). (

u) The Defendants further plead and rely on the provisions of subsection 4(8) of the Proceedings Against the Crown Act , supra and state that no claim can lie as against ALC as agent of the Crown in respect of anything done or omitted to be done by ALC as agent in the course of the performance or purported performance of its duties. 12. As to the allegations contained in paragraphs 48, 49, 51 and 52 of the Statement of Claim, the Defendants state: […] (

c) That ALC is accordingly immune from suit pursuant to the provisions of paragraph 4(8) of the Proceedings Against the Crown Act . 15. The Defendants deny the allegations contained in paragraph 68 of the Statement of Claim and state that these are claims not permitted pursuant to the provisions of the Proceedings Against the Crown Act , supra, in particular

section 4 . [ 9 ] Simply put, the Province and Commission submit that no cause of action arises against them for alleged torts due to the Proceedings Against the Crown Act . The Plaintiffs argue that the Court should wait until it hears all the evidence before it makes a decision on the issues raised in the Motion. ISSUES [ 10 ] While the Plaintiffs did not set out issues in their Brief, the Province and Commission have set the issues in their Brief as follows: 25. What is the applicable legal test for an order pursuant to Rule 23.01(1) (

a) and (

b) of the Rules of Court ? 26. Are the tort allegations contained in paragraphs 68(

a) through (

e) of the Amended Statement of Claim sustainable as against the Province? 27. Are paragraphs 27 and 28 of the Amended Statement of Claim contrary to the rules of pleading and should be struck? [ 11 ] In addition to opposing the Motion, the Plaintiffs believe the Court should exercise its discretion and wait until all the evidence is presented at trial before deciding the issues set out in the Brief of the Province and Commission.

ANALYSIS LAW [ 12 ] I will set out the Rules of Court which have been referenced by the parties, namely; Rules 23 , 27.06 and 27.09 : 23.01 Where Available

(1) The plaintiff or a defendant may, at any time before the action is set down for trial, apply to the court (

a) for the determination prior to trial, of any question of law raised by a pleading in the action where the determination of that question may dispose of the action, shorten the trial, or result in a substantial saving of costs, (

b) to strike out a pleading which does not disclose a reasonable cause of action or defence, or (

c) for judgment on an admission of fact in the pleadings, in the examination of an adverse party, or in answer to a Request to Admit Facts;

(2) A defendant may, at any time before the action is set down for trial, apply to the court to have the action stayed or dismissed on the ground that (

a) the court does not have jurisdiction to try the action, (

b) the plaintiff does not have legal capacity to commence or continue the action, or (

c) another action is pending in the same or another jurisdiction between the same parties and in respect of the same claim. (

d) New Brunswick is not a convenient forum for the trial or hearing of the proceeding. 23.02 Evidence Except with leave of the court, on applications under Rule 23.01(1) , evidence shall not be admitted except (

a) a transcript of a relevant examination, and (

b) affidavits which are necessary to identify a document or prove its execution. 23.03 Effect of Judgment Under This Rule Where a plaintiff obtains judgment under this rule, such judgment shall not prejudice his right to proceed against the same defendant for other relief, or against any other defendant for the same or other relief, unless the court orders otherwise.

27.06 Rules of Pleading - Applicable to All Pleadings Material Facts

(1) Every pleading shall contain a concise statement of the material facts on which the party pleading relies for his claim or defence, but not the evidence by which those facts are to be proved. Pleading Law

(2) A party may raise any point of law in his pleading. Conclusions of law may be pleaded provided that the material facts supporting such conclusions are pleaded. Facts Presumed unless Denied

(3) A party need not plead any fact which is presumed by law to be true or where the burden of disproving it lies on the opposite party. Condition Precedent

(4) Unless the opposite party has specifically denied it in his pleading, a party need not plead the performance or occurrence of a condition precedent to the assertion of his claim or defence. (

a) a loss that a person does not suffer in a business capacity; or (

b) a loss that a person suffers in a business capacity to the extent that it consists of liability that he or another person incurs for a loss that is not suffered in a business capacity; Inconsistent Pleading

(5) A party may plead inconsistent allegations if the pleading makes it clear that such allegations are being pleaded in the alternative, and an allegation in a Reply must not be inconsistent with an allegation made in the Statement of Claim or raise a new claim; such an inconsistent allegation may be pleaded only by way of amendment to the Statement of Claim. Notice

(6) Where notice to any person is alleged, it is sufficient to allege such notice as a fact unless the form or precise terms of the notice is or are material. Agreement

(7) Where it is material to allege that an agreement is to be implied from a series of letters or conversations or from any other circumstances, it is sufficient to allege the agreement as a fact.

Documents or Conversations

(8) The effect of a document or the purport of a conversation, if material, shall be pleaded as briefly as possible, but the precise words of the document or conversation shall not be pleaded unless those words are themselves material . [Underlining added] Nature of Act or Condition of Mind

(9) Where fraud, misrepresentation or breach of trust is alleged, the pleading shall contain full particulars thereof; but malice, intent or knowledge may be alleged as a fact without pleading the circumstances from which it is to be inferred. Claim for Relief

(10) Where a pleading contains a claim for relief, the nature of the relief claimed shall be specified. Particulars of damages need only be pleaded to the extent that they are known at the date of the pleading, but further particulars shall be filed and served forthwith after they become available and, in any event, not later than the date of entry for trial.

(11) No objection to a pleading shall be taken on the ground that only a declaratory judgment or order is sought, and the court may make binding declarations of right whether or not consequential relief is or could be claimed. General Damages or Exemplary or Punitive Damages

(12) When general damages or exemplary or punitive damages are claimed, no amount shall be stated. Subsequent Facts

(13) A party may plead a fact which occurred after commencement of the action and, where it occurred after filing and serving his pleading, he may, with leave, file and serve an amended pleading. Leave may be granted on terms as may be just even though the fact gives rise to a new claim or defence.

(14) Where a party's cause of action or defence is founded on

an Act, he shall plead the specific sections on which he relies. 27.09 Striking Out a Pleading or Other Document The court may strike out any pleading, or other document, or any part thereof, at any time, with or without leave to amend, upon such terms as may be just, on the ground that it (

a) may prejudice, embarrass or delay the fair trial of the action, (

b) is scandalous, frivolous Or vexatious, or

(

c) is an abuse of the process of the court. [ 13 ] Turning next to the Proceedings Against the Crown Act , I will reproduce sections 1 , 3, 4 and 21: 1 In this Act “agent”, when used in relation to the Crown, includes an independent contractor employed by the Crown; “Crown” means the Crown in right of the Province and includes a Crown corporation; “Crown corporation” includes, but is not limited to, the New Brunswick Power Corporation, the New Brunswick Energy Marketing Corporation, the New Brunswick Liquor Corporation, New Brunswick Lotteries and Gaming Corporation, the Financial and Consumer Services Commission, the New Brunswick Credit Union Deposit Insurance Corporation, the Workplace Health, Safety and Compensation Commission, the New Brunswick Community College (NBCC), the Collège communautaire du Nouveau-Brunswick (CCNB), the New Brunswick Housing Corporation, Service New Brunswick, New Brunswick Internal Services Agency, Energy Efficiency and Conservation Agency of New Brunswick, Invest New Brunswick, the New Brunswick Highway Corporation, the Agricultural Development Board and the New Brunswick Economic and Social Inclusion Corporation; “officer”, in relation to the Crown, includes a Minister of the Crown and a servant of the Crown; “order” includes a judgment, decree, rule, award, and declaration; “person” does not include the Crown; “proceedings against the Crown” includes a claim by way of set-off or counterclaim raised in proceedings by the Crown, and interpleader proceedings to which the Crown is party; “ Rules of Court ” means Rules of Court made under the Judicature Act. 3 Subject to this Act, a person who has a claim against the Crown may enforce it as of right by proceedings against the Crown in accordance with this Act in all cases in which (

a) the land, goods or money of a person are in the possession of the Crown, (

b) the claim arises out of a contract entered into by or on behalf of the Crown, or (

c) the claim is based upon liability of the Crown in tort to which it is subject by this Act. 4(1) Subject to this Act, the Crown is subject to all liabilities in tort to which, if it were a person of full age and capacity, it would be subject,

(

a) in respect of a tort to real or personal property, or causing bodily injury, committed by an officer or agent; (

b) in respect of a breach of a duty that a person owes to his servant or agent by reason of being his employer; (

c) in respect of a breach of a duty attaching to ownership, occupation, possession or control of property; (

d) under any enactment, or under any regulation made under authority of any enactment. 4(2) No proceedings lie against the Crown under paragraph (1)(

a) in respect of

an act or omission of an officer or agent unless the act or omission would, apart from this Act, have given rise to a cause of action in tort against that officer or agent or his personal representative. 4(3) Where a function is conferred or imposed upon an officer of the Crown as such by common law or by statute, and that officer commits a tort in the course of performing or purporting to perform that function, the liability of the Crown in respect of the tort is the same as if that function had been conferred or imposed solely by virtue of instructions lawfully given by the Crown. 4(4) An enactment that negatives or limits the amount of the liability of an officer of the Crown in respect of any tort committed by that officer, in the case of proceedings against the Crown under this Act in respect of a tort committed by that officer, applies in relation to the Crown as it would have applied in relation to that officer if the proceedings against the Crown had been proceedings against that officer. 4(5) Where property vests in the Crown by virtue of any rule of law that operates independently of the acts or the intentions of the Crown, the Crown is not, by virtue of this Act, subject to liability in tort by reason only of the property being so vested; but this subsection is without prejudice to the liability of the Crown under this Act in respect of any period after the Crown, or any person acting for the Crown, has in fact taken possession or control of the property, or entered into occupation thereof. 4(6) No proceedings lie against the Crown under this Act in respect of anything done or omitted to be done by any person while discharging or purporting to discharge responsibilities of a judicial nature vested in him, or responsibilities that he has in connection with the execution of judicial process. 4(7) No proceedings lie against the Crown under this Act in respect of any act, neglect or default of any officer of the Crown, unless that officer has been directly or indirectly appointed by the Crown and at the material time paid in respect of his duties as such officer wholly by the Crown. 4(8) Notwithstanding any provision of this or any other Act, no proceedings lie directly against an officer or agent of the Crown, in the name of the officer or agent or in the name of his or her office, in respect of anything done or omitted to be done by the officer or agent in the course of the performance or purported performance of his or her duties. 4(9) Notwithstanding subsection (8), where anything done or omitted to be done by an officer or agent of the Crown would give rise to a cause of action in respect of which the Crown would, but for subsection (8), be subject to liability and to proceedings under this Act, proceedings may be instituted, in accordance with this Act, directly against the Crown in respect of that cause of action. 21 No proceedings may be brought against the Crown except as provided by this Act.

[14] The Province and Commission reference a number of regulations under the Lotteries Act which may serve to explain whatprecipitated this action. However, I do not believe it is necessary to set out those provisions for purposes of this decision. RULE 23.01 [15] The New Brunswick Court of Appeal considered Rule 23.01 in numerous decisions. In Boisvert v. LeBlanc 2005 CarswellNB762 Drapeau, C.

J. reviews the approach to applying, as well as limitations with respect to Rule 23.01, commenting at paragraphs 16,23, 28, 31 – 35: 16 The traditional approach to adjudication is one that favors the settlement of all issues at one time: Miawpukek Band v. Ind-Rec Highway Services Ltd. (1999), (NL CA), 172 Nfld. & P.E.I.R. 245 (C.A.; Greene J.A., as he then was).That approach reflects the time-tested conviction that a piecemeal approach to adjudication often proves counterproductive inachieving worthwhile economies of time and money, and a just result.

That said, several Rules of Court, including Rules 22.04(3),23.01(1)(

a) and 24, allow for a derogation from the traditional approach through pre-trial determinations of questions of law.Given the right circumstances, those Rules may prove helpful in securing the just, least expensive and most expeditiousdetermination of proceedings on their merits. […] The explicit conditions precedent to the application of Rule 23.01(1)(a) 23 The text of Rule 23.01(1)(

a) makes plain that it has application only in connection with a question of law raised by a pleadingand where the determination of that question may dispose of the action, shorten the trial, or result in a substantial saving ofcosts. The possibility that the determination of a question of law raised by a pleading might achieve one of those three objectivesis a condition precedent to the exercise of judicial discretion that is implicit in Rule 23.01(1)(a): Lloyd's of London v. Norris(1998), (NB CA), 205 N.B.R. (2d) 29 (C.A.), Berlin Developments Ltd. v.

Royal Oaks Estates Inc. (2001), (NB KB), 237 N.B.R. (2d) 253 (Q.B.; P.S. Creaghan J.) and CDP CDP Accès Capital Inc. c. Engrais Chaleur Ltée,[2003] A.N.-B. no 482 (C.A.; Richard J.A.) (QL). What is contemplated here is a real and substantial possibility that judicialintervention will be of significant assistance in achieving at least one of the Rule's stated objectives. […] 28 It goes without saying that the hypothetical question of law at issue here is of general importance and that its judicialdetermination will have significant precedential value.

Moreover, it is the parties' common position that the question is unsettled,complex and difficult (at least in some respects). Those features of the question and the significance of its determination makeplain that a mere enhancement of the chances of settling the underlying litigation cannot suffice to meet the Rule's explicitconditions precedent and, thus, open the door to its application (see Peake v. Canadian Surety Co. (1993), (ONSC), 13 O.R. (3d) 344 (Gen. Div.) and PDC 3 Limited Partnership v.

Bregman + Hamann Architects (2001), (ON CA), 52 O.R. (3d) 533 (C.A.)). […] 31 […] A question's hypothetical nature may not preclude resort to Rule 23.01(1)(a), but it certainly weighs in the balance, alongwith other factors, against the court exercising its discretion in favor of an immediate determination. 32 The parties agree that, in undertaking the determination requested of him, the motion judge ventured into unchartedjurisprudential waters. Indeed, it would appear that the relatively recent legislation that concerns us here has yet to be judiciallyconsidered.

That appears to be the case, as well, for similar legislation in Prince Edward Island, Nova Scotia and Alberta. 33 In addition, the parties acknowledge, as did the motion judge, that the question raised in Ms. Boisvert's Notice of Motion is, atleast in some respects, both complex and difficult.

34 Finally, the substantive question of law at issue here is unarguably one whose importance transcends the parties and theunderlying litigation. It is axiomatic that a large pool of litigants - indeed, the motoring public in general - will feel the rippleeffect of the statutory

interpretation required to determine that question. Moreover, a judicial delimitation of s. 265.21(2)'s rangeof application will set the reach of other equally important provisions of the sub-part entitled "Damages", namely s. 265.2(1)(effect of failure to wear a seat belt on damages recoverable), s. 265.3 and s. 265.4 (calculation of damages for loss of income), s.265.5 (pre-judgment interest not to be awarded on damages for non-pecuniary losses) and s. 265.6 (interim payment of specialdamages). 35 Rule 23.01(1)(

a) is unsuited for the resolution of unsettled, complex and difficult questions of statutory

interpretation whosedetermination would be facilitated by a consideration of evidence, be it only evidence pertaining to the provision's object, and theLegislature's intention in relation thereto, and whose determination would, as well, benefit from the refinement and honing ofarguments that typically takes place over the course of pre-trial preparation and at the trial itself. Examples of that cautiousapproach in action abound in the jurisprudence. See also: Levasseur v. New Brunswick Securities Commission [2012] N. B. J. No. 134 wherein Madam Justice LaVigne said atparagraph 4: 4 In Boisvert v.

Leblanc, 2005 NBCA 115, [2005] N.B.J. No. 561, the Court of Appeal reiterated that the court's function islimited to determining a point of law raised by a pleading where the determination of that question may dispose of the action,shorten the trial or result in a substantial saving of costs. At para. 23, Chief Justice Drapeau stated that "[the possibility that thedetermination of a question of law raised by a pleading might achieve one of those three objectives is a condition precedent to theexercise of judicial discretion that is implicit in Rule 23.01(1)(a). See also, Norris v.

Lloyd's of London, (NBCA), 8 C.C.L.I. (3d) 216 (N.B.C.A.), at para. 12. [16] The Levasseur decision deals with a situation where the Plaintiffs were caught up in a Ponzi scheme and sued the SecuritiesCommission and four employees for negligent investigation of the companies which caused 54 investors to lose money. Sections 4 and21 of the Proceedings Against the Crown Act were raised by the Securities Commission along with

section 20 of the Securities Act. TheCourt commented at paragraphs 53 – 57 and 94 - 96: 53 This Court has not been provided with firm case law dealing with para. 4(1)(

d) or similar provisions in other provinces. Itwould seem that this is due in part to the fact that in other provinces, the equivalent of para. 4(l)(

a) is not limited to torts "to realor personal property, or causing bodily injury". In other provinces, the Crown is subject to the same liability as a person of fullage and capacity "in respect of a tort committed by any of its officers or agents." Therefore, it may not be necessary in thoseother provinces to argue the equivalent of para. 4(1)(

d) since the equivalent to para. 4(1)(

a) is much more generous. 54 It may be open in the present case for the trial judge to find that para. 4(1)(

d) includes bad faith negligence in carrying outobligations under the Securities Act. 55 If the trial judge was to find that the defendants breached a duty that was owed under the Securities Act, it would not beplain and obvious that the plaintiffs' claim against the Commission and its employees was precluded by the PACA. 56 If the trial judge found under the first question that the personal defendants acted in bad faith and therefore not within thecourse of their duties, then it would not be plain and obvious that the plaintiffs' claim against the defendants personally wasprecluded. 57 I cannot conclude at this time that the within action is precluded by ss. 4 and 21 of the FACA. […] VI.

CONCLUSIONS AND DISPOSITION 94 I am of the view that the present case is not appropriate for a pre-trial determination of the questions of law raised in thepleadings. These questions could be better determined by the trial judge. This matter should go to trial so that evidence can be

heard on the matters of fact and the issues raised in order to provide a factual underpinning for the determination of any possibleliability. 95 It is in the best interest of justice that this matter be determined pursuant to a trial. The matter should be allowed to proceedto trial and the plaintiffs should have their case tried on the merits. 96 The threshold for striking a pleading is high and the burden upon the moving party is a heavy one since it must be shown thatthe case cannot possibly succeed at trial.

I am satisfied that the defendants have failed to discharge theft burden, and thereforethe motion to strike out the Amended Statement of Claim must fail. [17] The New Brunswick Court of Appeal again considered Rule 23.01(1)(

b) and articulated the approach a Motions Judge is to takeon a motion to strike because the pleadings fail to disclose a reasonable cause of action. Chief Justice Drapeau, C. J. says atparagraphs 26 and 28 of Sewell v. ING Insurance of Co. of Canada 2007 NBCA 42 , [2007] N. B. J. No. 219: 26 The principles that inform the determination of a defendant's motion to strike under Rule 23.01(1)(

b) are well settled and canbe summarized as follows: (1) the only question for judicial resolution is whether it is plain and obvious that the Statement ofClaim fails to disclose the essential elements of a cause of action tenable at law. That conclusion should be reached only in theclearest of cases; (2) correlatively, absent exceptional circumstances, the court must accept as proved all facts asserted in theStatement of Claim and abstain from looking beyond the pleading itself and any documents referred to therein (see Hogan v.Doiron et al. (2001), 243 N.B.R. (2d) 263, [2001] N.B.J.

No. 382 (QL), 2001 NBCA 97, para. 38 and Boisvert v. LeBlanc (2005),294 N.B.R. (2d) 325, [2005] N.B.J. No. 561 (QL), 2005 NBCA 115, para. 21). To expand the exercise beyond those limits wouldoperate to morph the motion under Rule 23.01(1)(

b) into an application for

summary judgment under Rule 22, the appropriatevehicle to determine prior to trial whether there is factual merit to a claim; (3) the Statement of Claim is to be read generously toaccommodate drafting deficiencies; and (4) where a generous reading of its provisions fails to breathe life into a pleading, allsuitable amendments should be allowed (see Rule 27.10(1) and LeDrew et al. v. Conception Bay South (Town) (2003), 231 Nfld. &P.E.I.R. 61, [2003] N.J. No. 276 (QL), 2003 NLCA 56).

Those principles reflect the Legislature's injunction that the Rules be"liberally construed to secure the just, least expensive and most expeditious determination of every proceeding on its merits":Rule 1.03. […] 28 Moreover, I am also of the view that the motion judge erred in law in finding that it was plain and obvious that the Statementof Claim fails to disclose a reasonable cause of action. It is apparent from Ms. Sewell's pleading that she is asserting anentitlement to damages under the SEF 44 issued by ING.

A fair reading of the Statement of Claim compels the conclusion that itfeatures the implicit allegation that Ms. Sewell is an "eligible claimant". The contrary view is, in my respectful view, the productof a less than generous approach to the exercise required by Rule 23.01(1)(b). Interestingly, in its Amended Statement of Defence,ING states that Ms. Sewell "is not an insured person and/or a spouse as defined by the provisions of the SEF 44 endorsement andspecifically denies that [she] is eligible for coverage pursuant to the terms and conditions of the SEF 44 endorsement". [18] In Lévesque v.

New Brunswick 2011 NBCA 48 , [2011] N. B. J. No. 163, the Court of Appeal of New Brunswick againconsidered this issue. The Chief Justice confirmed that the New Brunswick legislation, Proceedings Against the Crown Act, is differentfrom legislation in other provinces. As Drapeau, C.

J. said at paragraphs 50 and 52: 50 At any rate, while Nova Scotia, Manitoba and Saskatchewan were importing into their statute books s. 5(1) of the UniformModel Act, New Brunswick was enacting a much more timid reform of its tort-related Crown immunity law. […] […] 52 In framing tort liability in such narrow terms, the Legislature did not fall prey to some drafting "slip". Neither more victim-favouring reforms elsewhere nor arguably victim-unfriendly judicial

interpretations of s. 4(1) of our Proceedings Against theCrown Act have moved the Legislature to modify its terms with a view to expanding the Crown's liability in tort. […]

[19] Then, turning to the issue presently before this Court, Chief Justice Drapeau had this to say in Lévesque at paragraphs 37, 43, 58and 72: 37 In my view, the trial judge rightly found the Proceedings Against the Crown Act precludes an action in tort for negligentmisrepresentation against the Province and a "Crown corporation" within the purview of that statute. In this jurisdiction, unlikethe situation elsewhere, the Crown is only liable for torts falling within the categories recognized by s. 4(1).

While the appellantsare right in suggesting that s. 4(1) stands to receive "a wide and liberal construction [...] calculated to advance the right of thesubject by giving him [or her] an extended remedy" (see Cherubini Metal Works Limited v. Nova Scotia (Attorney General), (NS CA), [1995] N.S.J. No. 12 (C.A.) (QL), at para. 19), they do acknowledge terminological elasticity has asnapping point.

Thus, as noted, the appellants acknowledge the tort of negligent misrepresentation is not captured by s. 4(1).Correlatively, I conclude s. 4(3) does not operate to open the door to a lawsuit for negligent misrepresentation against the Crown. […] 43 That view is tethered to the distinctive wording of this Province's legislation dealing with proceedings against the Crown. Inthat regard, a truism bears repeating: in the Canadian federation, New Brunswick, like all other provinces, is fully entitled toadopt, within constitutional limits, legislation that differs from statutes on the same topic enacted elsewhere.

When ourLegislature adopts its own legislative framework to address a problem that may be common to some or all sister jurisdictions, itssovereign will in fashioning a solution must be respected. In particular, that sovereign will cannot be sacrificed by courts at thealtar of pan-Canadian legislative uniformity. More pointedly, it is beyond dispute that, in adopting the Proceedings Against theCrown Act in the early 1950s, the Legislature parted ways with other reforming jurisdictions.

Indeed, it rejected unqualifiedabolition of Crown immunity for actions in tort in favour of a regime that opens the door to Crown liability for torts that fallwithin specified categories. […] 58 Of course, each jurisdiction was free to adopt a modified version of the Uniform Model Act, which is precisely what NewBrunswick did.

Rather than equating the liability of the Crown to that of a person of full age and capacity in respect of all tortscommitted by one of its officers or agents, as the Conference of Commissioners on Uniformity of Legislation in Canadarecommended, and as Nova Scotia, Saskatchewan and Alberta did in the early 1950s, our Legislature endorsed equivalency onlyfor a "tort to real or personal property, or causing bodily injury". The plain and ordinary meaning of the quoted phrase, whichis lifted from s. 4(1)(a), excludes, as the appellants concede, the tort of negligent misrepresentation.

Indeed, to hold otherwisewould require ascribing to the phrase "tort [...] to personal property" a meaning that its constituent words cannot reasonablybear. […] 72 It follows that the trial judge did not err in accepting as correct the

summary of the law on point found in Daigle andRideout v. Province of New Brunswick: [...] In many jurisdictions the Crown's immunity has been removed and the Crown subjected to liability with respect to all formsof tort. In this Province, however, subsection 4(1) of the Act subjects the Crown to liability only in respect of the classes of torttherein enumerated, viz: (

a) in respect of a tort to real or personal property, or causing bodily injury, committed by an officer or agent; (

b) in respect of a breach of a duty that a person owes to his servant or agent by reason of being his employer; (

c) in respect of a breach of a duty attaching to ownership, occupation, possession or control of property; (

d) under any enactment, or under any regulation made under authority of any enactment.

With respect to a tort that does not fall within those enumerated classes the common law immunity of the Crown remains. Forinstance, in Long v. Province of New Brunswick (1959), (NB CA), 44 M.P.R. 12; 19 D.L.R. (2d) 437, it was heldthat claims based on false arrest, malicious prosecution and forcible seizure did not fall within the provisions of subsection 4(1) ofthe Act. The plaintiffs' claim in the present action is a claim for alleged economic loss. A claim for such loss occasioned by negligentmisstatement or misrepresentation clearly does not fall within the language of any of the paragraphs in subsection 4(1).Paragraphs (

b) and (

d) are clearly inapplicable. The alleged tort is not a tort or wrong to real or personal property and it is notsuggested that it caused bodily injury to anyone -- paragraph (

a) therefore does not apply. While the transaction related to ahighway matter, the alleged tort cannot be said to have constituted a breach of any duty owed by the defendant arising out of orattaching to its ownership, occupation, possession or control of the highway -- paragraph (

c) therefore does not apply. [paras. 3-4] [Emphasis added.] [20] As I read the authorities, I believe the New Brunswick Court of Appeal has established that negligent misstatement ormisrepresentation is not a tort which applied to the Province or to any Crown Corporations. As noted, the Act must specifically providefor the tort before it is applicable against the Crown.

BREACH OF DUTY TO BARGAIN IN GOOD FAITH [21] The Plaintiffs’ in paragraph 68(3) claim as follows: The Plaintiffs claim in tort against the Commission and the Province is as follows: 3) For breaching a duty owed to the Plaintiffs to bargain in good faith having regard to the special relationship of the parties andthe reasonable expectations of the parties. [22] Counsel for the Province and Commission have referenced these authorities; Algo Enterprises Ltd. v. Repap New Brunswick Inc.[2013] N. B. J. No. 206; Doucet et al. v. Spielo Manufacturing Inc. 2011 NBCA 44 , [2011] N. B. J. No. 153 and Oz Optics Ltd.v.

Timbercon, Inc. 2011 ONCA 714 , [2011] O. J. No. 5029. [23] I am somewhat familiar with the Doucet matter and believe the law is clear that the concept of good faith bargaining of a contractis not recognized as a stand-alone duty or tort in Doucet supra, Robertson, J. A., summarized the law at paragraph 37: 37 In

summary, the law does not recognize a generalized pre-contractual duty to bargain in good faith. If such a duty were to berecognized, it would have to be under tort law principles and, accordingly, damages would be calculated in accordance with tortand not contract principles. It follows that a claim for damages based on the difference between the agreed sale price and the fairmarket value of the on-line division would not be allowed. Since there is no completed bargain, the remedy should be measuredby reliance and not by expectation interests.

All of this was explained to the plaintiffs by the defendants and yet the formerpersisted with the dream of claiming damages based on contractual principles for breach of a non-existent duty to bargain ingood faith. [24] It is interesting to note Mr. Justice Robertson’s comments at paragraph 39 as they relate to the position of the Plaintiffssuggesting we should wait until the full trial of the matter rather than dealing with them at this stage: D. Final Note --

Summary Judgment

39 The legal foundation on which the negligent misrepresentation claim rested was as materially defective as the claim resting ona perceived pre-contractual duty to negotiate in good faith. Both issues should have been disposed of in a motion for

summaryjudgment. In point of fact, the respondents brought a motion asking, inter alia, that the two claims be struck as disclosing nocause of action. Regrettably, the motion was denied without the benefit of fully-motivated reasons (see 2006 NBQB 268, [2006]N.B.J. No. 322 (QL)). The void is indefensible and would have generated further appellate comment had the matter beenappealed to this Court. Of course, there was no obligation on the respondents to seek leave of this Court to appeal theinterlocutory ruling. At the same time, the precedential significance of this Court's decision in Lange v.

Cannon (1998), (NB CA), 203 N.B.R. (2d) 121, [1998] N.B.J. No. 313 (C.A.) (QL), encouraging the early resolution of lawsuitsthrough the application of the Rules of Court relating to

summary judgment and preliminary rulings on questions of law, shouldnot be lost on those who know the true cost of litigation, especially judges who are entrusted as keepers of the gateway tolitigation.

It is simply too expensive for parties to persist with litigation erected on foundations of straw, anchored in sand. [Emphasis added] [25] In Oz Optics supra, the Ontario Court of Appeal commented at paragraphs 61 – 63 and 65: 61 The obligation to act in good faith has been the subject of considerable discussion both by the judiciary and the legal academy.As things currently stand, it is difficult to ascertain in what circumstances it will be applied. 62 The common law has not recognized a free standing duty of good faith based in tort. 63 Likewise, the law has not recognized a general duty to bargain in good faith in contract.

However, in specific circumstances, aduty to enforce or perform a contract in good faith has been recognized. [...] [...] 65 The existence of a pre-contractual duty of good faith is less certain. According to the Supreme Court of Canada in Martel, atpara. 73, "a duty to bargain in good faith has not been recognized to date in Canadian law." In Martel, the cause of action atissue concerned negligence by a party during contract negotiations; the court rejected the recognition of duty of care in thatcontext.

Significantly, the duty of good faith was not raised as an issue on appeal, and thus, the court emphasized, the analysis inthat case did not directly address the question of whether such a duty exists: at para. 73. However, the policy considerationsraised by the court in dismissing the existence of a duty of care in negligence between parties to contractual negotiations are,nonetheless, instructive on the question of whether a duty to bargain in good faith should be recognized.

Among the variouspolicy considerations the court relied upon in this regard, it observed that other causes of action already provide appropriateremedies.

Among these, the court noted, that the doctrines of undue influence, economic duress and unconscionability "provideredress against bargains obtained as a result of improper negotiation." In addition, negligent misrepresentation, fraud and thetort of deceit cover much of the wrongful conduct committed during negotiations where an agreement is ultimately notconcluded: at para. 70. [26] Finally, we have the comments of Walsh, J. in Algo Enterprises supra at paragraph 16: 16 Phrased differently, the distinction at issue in this Motion to amend is between the relevance of the concept good faith inrenewing (or negotiating) a contract (which the Plaintiffs say they are not pursuing) and the relevance of the concept of goodfaith in the performance and enforcement of an existing contract (which the Plaintiffs say they are pursuing).

The difference isexplained in Transamerica Life Canada Inc. v. ING Canada Inc.: I agree ... that Canadian courts have not recognized a stand-alone duty of good faith that is independent from the termsexpressed in a contract or from the objectives that emerge from those provisions. The implication of a duty of good faith has notgone so far as to create new, unbargained-for, rights and obligations. Nor has it been used to alter the express terms of thecontract reached by the parties.

Rather, courts have implied a duty of good faith with a view to securing the performance andenforcement of the contract made by the parties, or as it is sometimes put, to ensure that parties do not act in a way thateviscerates or defeats the objectives of the agreement that they have entered into ...

[Emphasis added] [27] I believe this issue has also been resolved. There is no “free standing duty of good faith” nor does a duty or tort to bargain in goodfaith fall within sections 3 and 4(1) of the Proceedings Against the Crown Act, if such a duty in tort did exist, which it does not. INTERFERENCE WITH ECONOMIC INTERESTS [28] The Plaintiffs also raised the issue of interference with economic and business relationships in their claim: The Plaintiffs claim in tort against the Commission and the Province as follows:

(4) For intentionally and unlawfully interfering with the Plaintiffs' legitimate economic interests and business relationshipsincluding the Plaintiffs' contractual relationship with ALC and with its non-licensed locations. [29] Certain requirements must be met to establish intentional and unlawful interference. This was noted by Robertson, J. A., in A. I.Enterprises Ltd. v. Bram Enterprises Ltd. 2012 NBCA 33 , [2012] N. B. J. No. 116 at paragraphs 46 and 47: 46 It is worth drawing attention to a 1980

article published in the Canadian Bar Review and authored by Professor Peter Burns:"Tort Injury To Economic Interests: Some Facets Of Legal Response", (1980) 58 Can.B.Rev. 103. As of 1980, Professor Burnsdeduced that there were three essential elements to the tort of causing harm by unlawful means: (1) the defendant intended toharm the plaintiff; (2) subsequent injury or economic loss; and (3) the presence of unlawful means in the defendant's conduct (p.141). Professor Burns went on, however, to question whether the law actually recognized a tort of deliberate infliction of harm byunlawful means.

He also observed that Canadian judges had embraced the "unlawful means" doctrine with a "vigueur" equal tothat of their English counterparts. As to the scope of the unlawful means requirement, Professor Burns observed that tortiousconduct, and even a breach of statute, might qualify. But he concluded with the observation: "For the most part, however, thedetermination of what constitutes unlawful means has been made on an ad hoc basis" (p. 141). 47 It is also worth highlighting the influential decision of Lord Denning in Torquay Hotel Co., Ltd. v.

Cousins and Others, [1969]1 All E.R. 522 (C.A.), because his treatment of the unlawful means issue has been a mainstay of the Canadian jurisprudence.Once again, Lord Denning affirmed the distinction between direct and indirect interference and the proposition that theclaimant need only establish unlawful means in cases of indirect interference. As to what is or is not unlawful, this is what theMaster of the Rolls had to say: I must say a word about unlawful means, because that brings in another principle.

I have always understood that if one persondeliberately interferes with the trade or business of another, and does so by unlawful means, that is, by

an act which he is not atliberty to commit, then he is acting unlawfully, even though he does not procure or induce any actual breach of contract. If themeans are unlawful, that is enough. [p. 530] See also: Leavitt v. Hooper [2012] N. B. J. No. 73 where Mr. Justice Glennie carried out a detailed and thoughtful examination of thisarea of the law at paragraphs 35 – 51. [30] As I understand the law, there is a requirement of unlawful conduct affecting economic interests. However, the next question mustbe; does this tort fall within the provisions of the Proceedings Against the Crown Act?

I believe not for the reasons set up subsequently. UNLAWFUL INTERFERENCE WITH VESTED RIGHTS [31] Referencing the Statement of Claim, it provides at paragraph 68(5):

The Plaintiffs claim in tort against the Commission and the Province as follows:

(5) For unlawfully interfering with the Plaintiffs’ vested rights. [ 32 ] The Province and Commission rely upon the same arguments raised in the previous

section on Intentional Interference with Economic Interest. They also rely on the same case authorities which support that the claim must fall within the provisions of the Proceedings Against the Crown Act . IMPROPER PLEADINGS [ 33 ] The Plaintiffs argue that this aspect of the Motion is out of time. It is suggested that Mr. Justice McNally ’s Order to permit the Motion to strike paragraph 68 because it is in conflict with the Proceedings Against the Crown Act was restricted to only this aspect and the striking of paragraphs 27 and 28 were not included in the Order.

There was also a time limit in the Order in relation to paragraph 68. [ 34 ] The Province and Commission make reference to Walsh v. New Brunswick [2008] N. B. J. No. 198 in which Mr. Justice McNally dealt with this specific issue. I reproduce paragraphs 19 – 22: 19 In support of his position that the words should be pleaded, counsel for Mr.

McCarroll relies on Rule 27.06(8) , the rule dealing with the pleading of documents or conversations which provides that "The effect of a document or the purport of a conversation, if material, shall be pleaded as briefly as possible, but the precise words of the document or conversation shall not be pleaded unless those words are themselves material". He submits that the words pleaded are briefly but fully stated and are material themselves. 20 In Cape Bald Packers, Limited v. Niles et al. [2002] N.B.J.

No. 57 (N.B.Q.B.) , Justice Creaghan dealt with a similar issue where portions of a Statement of Claim that pleaded the details and wording of correspondence exchanged between counsel were struck. He stated: [48] My finding on this question does not entirely dispose of the matter before me.

By way of Rule 27.06(8) , our rules provide that the effect of a document or the purport of a conversation should be pleaded as briefly as possible, but the rule provides that the precise words of the document shall not be pleaded unless those words are themselves material. [49] I turn now to the impugned paragraphs in the Statement of Claim. [50] I agree with the observations of my brother Riordon, J. in Quann v. Creighton , [1990] N.B.J. No. 340 that a court should be reluctant to interfere with a plaintiff's statement of his cause of action. However, the rules of pleading must be complied with.

My review of the impugned paragraphs shows that to some considerable extent the Plaintiff in this case has pled the precise words of the solicitor's letters when a brief statement of the effect of the communication could be stated as a proper alternative. [51] These references are unnecessary, contrary to the rules of pleading and go to plead evidence by way of correspondence from the Defendant's solicitor. [52] Therefore, those provisions in the Statement of Claim which incorporate or refer to specific words from letters from the Defendant's solicitor to the Plaintiff's solicitor shall be struck out.

The plaintiff shall have leave to amend its Statement of Claim such that such incorporation and reference to the Defendant's solicitor's letters are deleted to conform with Rule 27.06(8) so that the Plaintiff's claim is pleaded such that only the effect or purport of those letters and discussion is set out as briefly as possible.

21 Although the words pleaded in the proposed paragraph 26 are not extensive and are relatively brief, the principles and rulesof pleading remain the same. In my view, the pleading of the specific words allegedly used by Mr. Walsh in speaking withConstable McEachern constitute the pleading of evidence and offends Rule 27.06(1). 22 The references to the words allegedly used by Mr. Walsh are unnecessary and the purport of the conversation can be pleadedwithout detailing the words used.

Moreover, I have not been persuaded that the specific words themselves as pleaded arematerial and permissible pursuant to Rule 27.06(8), particularly when it appears from the proposed amendment that it is notcertain that those exact words were used in any event by Mr. Walsh as the words immediately following the purported quote ofMr. Walsh say "or words very similar to the foregoing". [35] I believe Mr. Justice McNally’s comments reflect the state of the law in New Brunswick. References to actual words allegedlyused are not normally permitted to be plead.

The sole exception relates to when the words themselves are material. [36] As noted earlier, the Plaintiffs submit that this Court should be reticent to consider the requests in this Motion without hearing allof the evidence. In this regard, the Plaintiffs reference the comments of Chief Justice Drapeau in Boisvert v. LeBlanc supra andMadam Justice LaVigne in Levasseur v. New Brunswick Securities Commission supra. [37] The Plaintiffs also reference Tigger Games Ltd. v. Atlantic Lottery Corporation Inc. 2003 NBQB 426 , [2003] 268 N. B.R. (2d) 85, [2003] N. B. J. No. 433.

In this matter, ALC applied to convert Tigger’s application into a trial. The Court held that therewere significant factual disputes along with a dispute as to the purport of the regulations. Consequently, the matter was converted into atrial. [38] I must say that the issues in Tigger are different from the ones before the Court. If the Court in Tigger had dismissed the Motion,the matter would have had to be resolved on the basis of an

interpretation of documents. In the matter presently before the Court, theparties will still be proceeding to Court and evidence will be called. APPLYING THE LAW TO THIS MATTER RULE 23.01 [39] As a general comment, the law provides that under 23.01(1)(a), the party applying for a determination prior to trial must showthree things:

a) the determination may dispose of the action,

b) shorten the trial, or

c) result in substantial saving of costs. [40] The Plaintiffs argue that even if the Motion were granted, ALC would still have to deal with the matters alleged in paragraph 68,therefore; there is no benefit to granting the Motion. I reference paragraph 25 of the Plaintiffs’ Brief: 25. In terms of the present motion, two of the defendants can plead statutory immunity; the other cannot. Compartmentalizationof evidence is not possible where there are multi parties with differing legal characterizations.

Only after all of the evidence hasbeen considered can there be a proper judicial determination of what evidence may apply to what party. Yet another reason whythe Court should exercise its discretion, irrespective of the merits on this motion, and subscribe to the dicta of Hoyt, J.A. firstdiscussed above at paragraph two. [41] The Plaintiffs were referring to Hoyt, J. A., as he then was, in Agnew v. Dow Chemical Co. (NB CA), [1991]N. B. J.

No. 427 where he said: It will be seen that the Rule sets up three factors for the Judge to consider when dealing with such an application - will theapplication dispose of the action, will the trial be shortened or will there be a substantial saving of costs? [...]

[...] Even if one or more of the requirements have been met , the Rule, in my opinion, does not compel the Judge to determine the question before trial. He can dismiss the application without ruling on the merits if, as here, he thinks the question could be better determined by the trial Judge . In other words, the Judge has a discretion whether to dismiss or allow the application. [Emphasis added in original] [ 42 ] The Plaintiffs make a strong argument. However, I am also mindful of the admonition made by Mr. Justice Robertson in Doucet supra at paragraph 23 of this decision where he encourages Judges to consider the issues of

Summary Judgment and preliminary rulings on questions of law. As Robertson, J. A. said: “[i]t is simply too expensive for parties to persist with litigation erected on foundations of straw, anchored in sand.” [ 43 ] As I understand the law set out earlier in these reasons, I believe the Province and Commission have established the requirements necessary under Rule 23.01(1) (a). The issues raised in the striking of paragraph 68 arise from points of law only.

While it will not dispose of the action, a striking of the paragraph will shorten this trial because evidences to prove these matters will not be required as against the Province and the Commission. Therefore; they will only have to introduce evidence establishing ATL’s negligent misrepresentation, or lack of good faith or unlawful interference with legitimate economic interests and business relationships or unlawfully interfering with vested rights. There will be no need to call evidence on these issues as against the Province and Commission.

It follows therefore that there will be a substantial saving of costs. [ 44 ] In addition, negligent misrepresentation, bargaining in bad faith, unlawful interfering with legitimate economic interests and unlawful interfering with vested rights are not torts contemplated in the Proceedings Against the Crown Act particularly in paragraph 4 of that legislation.

Consequently, even if I assume that the tortious allegations contained in paragraph 68 of the Statement of Claim to be true, it follows that the allegations do not disclose a reasonable cause of action because they cannot be brought against the Crown or Crown agency. [ 45 ] Acknowledging the words of Hoyt, J. A. , as he then was, that I have discretion and even if I should reach the conclusions I have, I still should not automatically strike the pleading. That being said, I believe that in clear cut situations such as the one here, the Court should follow the admonition of Robertson, J.

A . and strike paragraph 68 of the Plaintiffs’ Statement of Claim because it does not disclose a reasonable cause of action against the Province and Commission. I cannot see any possibility of success on these tortious claims. [ 46 ] It is well accepted that until the Proceedings Against the Crown Act was enacted, no action at all could be maintained against the Crown. All rights of action against the Crown derive from that legislation.

I believe that the law clearly establishes that the some of the claims are not stand-alone causes of action and none of the alleged tortious conduct in paragraph 68 is actionable against the Province and Commission. RULE 27.09 [ 47 ] The Court must first deal with the objection of the Plaintiffs which relates to whether the Motion was not in compliance with the Order of Mr.

Justice McNally . [ 48 ] At the July 2 nd , 2013 Motions Day, the Province and Commission objected to the entry of this matter for trial. [ 49 ] Their point was that they wished to make a Motion to strike paragraph 68 and if the matter was entered for trial, they could not make that Motion. It was concluded that the matter would be entered and a date for trial set but the Province and the Commission could still file the Motion under certain time constraints. The Order of Justice McNally reads as follows: ORDER WHEREAS a hearing was held in this matter at the Motions Day sitting of July 2, 2013;

AND WHEREAS the Court heard submissions from Gregory Murphy appearing for the Plaintiffs; Krista. Colford for Lotteries Commission of New Brunswick and the Province of New Brunswick; and Ann Marie McDonald for Atlantic Lottery Corporation; IT IS HEREBY ORDERED: 1. This matter be entered for trial and the Clerk

schedule dates for trial, in consultation with counsel for the parties, for a period of three weeks to begin after August 30, 2014. 2. The Province of New Brunswick shall file and serve any motion it intends to make to strike any portion of the Statement of Claim prior to the August 2013 Motions Day. 3. The Atlantic Lottery Corporation shall have until the October 2013 Motions Day to serve any expert financial reports upon the other parties to the action. [ 50 ] The Motion was filed on July 31, 2013, subsequently amended and filed on December 3, 2013.

The reason for the amendment was to add the striking of paragraphs 27 and 28 of the Statement of Claim. I would refer to paragraph 12 of the Affidavit of William C. West set out in paragraph 4 of these reasons. [ 51 ] As I review the facts of this aspect of the matter, I believe the Province and Commission complied with the Order of Justice McNally with respect to paragraph 68 which was brought pursuant to Rule 23.01 .

That rule says a Plaintiff and Respondent may apply: “at any time before the action is set down for trial.” The Province and Commission added a request in this Amended Motion to strike two other paragraphs 27 and 28. The Rule provides they can apply: “at any time” if they meet the requirements of the Rule. [ 52 ] As I read Rule 27.01, either party can apply at any time to strike a pleading. In Rule 23.01, the party must apply before the matter is set down for trial.

Consequently, the Rule 23.01 matter was filed in compliance with Justice McNally ’s Order and the Amended Motion adding a further request under Rule 27.01 can be filed any time, therefore; it is in compliance with the Rules of Court . [ 53 ] From my review of the authorities, the issue comes down to whether the words are “material”. Only if the words themselves are material to the matter before the Court can they be plead. As I read the pleadings as well as the Affidavits filed in this matter, I do not see where the words are material.

This is particularly so in relation to the allegations in paragraph 68 although they might have some bearing on other issues in the Statement of Claim. That being said, I believe a concise précis of what was the purport of any statement is more appropriate and in compliance with the Rules of Court . [ 54 ] Therefore, the two paragraphs 27 and 28 should be struck with leave for the Plaintiffs to amend their pleadings to give a purport of the words used, not the exact words themselves.

DISPOSITION [ 55 ] The Motion of the Defendants, Province of New Brunswick and Lotteries Commission of New Brunswick is allowed and paragraphs 27, 28 and 68 of the Amended Statement of Claim are struck. With respect to paragraphs 27 and 28, the Plaintiffs will be permitted ten (10) days from the filing of those reasons to amend their pleadings as provided for in these reasons. [ 56 ] With respect to costs on this Motion, I believe that costs should be in the cause.

SIGNED this 16 th day of January, 2014 at Moncton, New Brunswick. ____________________________________________ George S. Rideout Judge of the Court of Queen’s Bench of New Brunswick Trial Division Judicial District of Moncton