COURT FILE NOS. 04-CV-266505CM1, 05-CV-292354PD2, 04-CV-278567CM1

DIVISIONAL COURT FILE NOS. 99/06, 100/06, 101/06

DATE: 20060316

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

B E T W E E N:

BELL CANADA

Applicant (Responding Party)

• and -

THE MINISTER OF FINANCE FOR

ONTARIO

Respondent (Moving Party)

B E T W E E N:

PROCTER & GAMBLE INC.

Applicant (Responding Party)

• and -

THE MINISTER OF FINANCE FOR ONTARIO

Responding (Moving Party)

B E T W E E N:

IBM CANADA LTD.

Applicant (Responding Party)

• and -

THE MINISTER OF FINANCE FOR ONTARIO

Respondent (Moving Party)

COURT FILE NO.: 04-CV-266505CM1

Joseph M. Steiner and Chia-yi Chua,for the Applicant

Frank S. Stopar, for the Respondent

COURT FILE NO.: 05-CV-292354PD2

Chia-yi Chua, for the Applicant

Cathy Shanahan, for the Respondent

COURT FILE NO.: 04-CV-278567CM1

Chia-yi Chua, for the Applicant

Lori E.J. Patyk, for the Respondent

HEARD at Toronto: March 16, 2006

JENNINGS J.: (Orally)

1The Minister seeks leave to appeal the Order of C. Campbell J., dismissing the Minister’s motions to strike, or alternatively, stay or quash the notices of application brought by each of I.B.M., Bell, and P&G.

2C. Campbell J. summarized the two-pronged attack by the Minister in paragraphs 15, 16 and 17 of his Reasons:

15“The Minister submits that there are two bases for which this Application should be quashed or at least stayed. The first is that the interpretative issues raised by the Applicants do not involve interpretation at all, since various of the terms raised have already been judicially determined in other cases, including decisions of the Supreme Court of Canada.

16The second ground is that to the extent such terms do fall to be determined on the Application, they involve complicated and difficult issues and disputed fact inappropriate to be dealt with by application.

17As a result of both these issues, it is submitted that a determination by application would usurp the appeal process in the statutes by in effect deciding the issues.”

3The responding parties raise two preliminary matters that I must determine, as follows:

(a) the Order of C. Campbell J. is final, not interlocutory and any appeal from his Order lies to the Court of Appeal;

(b) in the alternative, the motion for leave was out of time, having been brought 111 days after it was pronounced, rather than the 7 days as provided in the Rules.

FINAL OR INTERLOCUTORY?

4In my opinion, C. Campbell J.’s Order pertained to a procedural motion that objected to the manner of the procedure chosen by the applicants. There was no attack on the jurisdiction of the Court to deal with the issues raised between the parties but rather with the method by which those issues would be brought before the Court. There was no termination of the applicant’s substantive rights to challenge the assessments the Minister issued against them, there being no final disposition of a substantive right. In my opinion, the principles laid down by the Ontario Court of Appeal in Ball v. Donais (1933) 13 O.R. (3e) 222, do not apply. Further, although it can be argued that the first prong of the Minister’s attack on the procedure chosen has been determined, C. Campbell J. specifically left open for determination by the Judge hearing the application, the second prong of the attack, that of factual complexity. The issue of the appropriateness of Rule 14 procedure is still very much alive.

5Accordingly, I find the Order under appeal is interlocutory, not final.

TIMELINESS

6The Minister argues that the time for bringing this motion should run from the date when C. Campbell J. settled the terms of his Order (February 6, 2006), rather than the date upon which his reasons were released (October 25, 2005). Counsel for the responding parties agrees that if time does run from the date of settling the Order, the motion was timely brought.

7The Minister argues that the language in paragraphs 25 and 26 of C. Campbell J.’s Reasons, led him to believe that until the Order was settled, there was a right to re-argue the entire motion before the Judge hearing the application. Those paragraphs read in part as follows:

25“The motion to quash or in the alternate (sic) to stay will be dismissed.

26It will, however, be dismissed with leave to be renewed on the return of the Application.”

8When the Motions Judge settled his Order it was clear that the leave to renew was restricted to “… the ground of material factual issues in dispute, …”

9Although, in my opinion, reading paragraphs 25 and 26 in the context of the preceding 24 paragraphs, strongly indicates that what the Minister was to be permitted to re-argue before the Applications Judge was solely the issue of factual complexity, I cannot say that the matter is free from doubt or that the interpretation the Minister made of the Reasons was unreasonable. I find that settlement of a key term of the Order was required and, that accordingly, the time for appeal runs from the date of the settlement. Had I not so found, under the circumstances I would have exercised my discretion to extend the time for the motion seeking leave, there being no indication of any prejudice to the responding parties.

10I now turn to the merits.

11The Minister agrees that in Sunnybrook & Women’s College Health Sciences Centre v. Ontario (Minister of Finance), 2003 14810 (ON CA), [2003] O.J. No. 1168, the Court of Appeal confirmed that it was appropriate to resort to Rule 14 for the determination of taxpayer’s rights that depend on the interpretation of a statute.

12The reasoning in that decision has been applied in subsequent decisions cited in paragraphs 39 and 40 of the responding party’s factum.

13I am unable to accept the Minister’s argument that C. Campbell J. deviated from the law as set out by the Court of Appeal in Sunnybrook by going beyond statutory interpretation and applying statutory interpretation to the particular facts pertaining to the taxpayer in each of the three applications. The Court is not being asked to quantify tax. The parties seek a determination of their rights under the legislation which is permissible, absent complicated facts in dispute, in an application under Rule 14.

14Accordingly, I find that C. Campbell J.’s decision is not in conflict with the authorities to which I have referred.

15Further, and because I have found that C. Campbell J. correctly applied those authorities, I have no reason to doubt the correctness of his decision.

16Accordingly, the applications for leave to appeal in these three matters are dismissed. Counsel are agreed that costs should be payable by the Minister in the sum of $2,000.00 to each of the three respondents.

JENNINGS J.

Date of Reasons for Judgment: March 16, 2006

Date of Release: March 17, 2006

COURT FILE NOS. 04-CV-266505CM1, 05-CV-292354PD2, 04-CV-278567CM1

DIVISIONAL COURT FILE NOS. 99/06, 100/06, 101/06

DATE: 20060316

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

B E T W E E N:

BELL CANADA, Applicant

• and -

THE MINISTER OF FINANCE FOR

ONTARIO (Moving Party)

PROCTER & GAMBLE INC., Applicant

• and - THE MINISTER OF FINANCE FOR ONTARIO

Responding (Moving Party)

IBM CANADA LTD., Applicant

• and -