A recent decision of the Federal Court deals with the Court’s jurisdiction relating to abuse of process.

Federal Court Jurisdiction

The Federal Court is different from provincial Superior Courts. For provincial Superior Courts, it is assumed that they have jurisdiction but the Federal Court is without any inherent jurisdiction. As a result, the Federal Court’s jurisdiction is strictly limited to claims which are assigned to it by Federal legislation. However, the Federal Court has territorial jurisdiction for all of Canada and its judgements are effective throughout the entire country. The judgements of provincial courts are only effective in their particular jurisdiction.

Under the Federal Court Act and the Trade-marks Act, the Federal Court has concurrent jurisdiction in all cases in which a claim is made under the authority of any act of Parliament or at law or in equity respecting trade marks.

The Facts

In a recent case, the corporate defendant was formerly related to the plaintiff and had been using trade marks without objection by the plaintiff for some time. The plaintiff attempted to negotiate the purchase of the defendant’s business in Canada but without success.

Subsequently, the plaintiff brought an action alleging infringement of its trade marks. The defendant pleaded in its counterclaim that the action was an abuse of process because it alleged the plaintiff’s predominant purpose was to reduce the value of the defendant’s business in the context of a takeover bid.

The plaintiff brought a motion to strike out the counterclaim on the basis that abuse of process was not within the jurisdiction of the Federal Court.

Abuse of Process

A claim for abuse of process arises when the process of law is used for an ulterior or collateral purpose. It is the misuse of the process of the courts to coerce someone in some way entirely outside the ambit of the legal claim upon which the court is asked to decide. To succeed, the party raising the issue must establish that the process of the court is used for an improper purpose and there is a definite act or threat in furtherance of such purpose.

Abuse of process can be raised as a procedural defence which can result in a stay of proceedings or as a basis to refuse to grant a remedy. In addition, the abuse can constitute an independent tort for which damages and other relief may be granted.

The Federal Court refused to strike the claim for abuse of process on the basis, among others, that the Court has jurisdiction to deal with the tort as a part of a claim for infringement. As a result, the action was allowed to proceed.

Comment

The test for striking out pleadings is that it must be plain and obvious that the party raising the issue cannot succeed. The defendant overcame this hurdle but this decision may not be the last word on these issues.