Court File and Parties

CITATION: Burkes v. Canada (Revenue Agency), 2010 ONSC 6059

COURT FILE NO.: 359/10

DATE: 20101105

SUPERIOR COURT OF JUSTICE – ONTARIO – DIVISIONAL COURT

RE: DAVID BURKES, Plaintiff (Moving Party)

-and-

CANADA (REVENUE AGENCY) and CARLTON SHEPPARD, Defendants (Responding Parties)

BEFORE: MOLLOY J.

COUNSEL: Jeffrey Radnoff and K. Gurprasad, for the Moving Party

P. Tamara Sugunasiri, for the Responding Parties

HEARD: October 5, 2010 at Toronto

Endorsement

Introduction

[1] The plaintiff seeks leave to appeal to the Divisional Court from the Order of Belobaba J. dated July 8, 2010, dismissing his motion for an interlocutory injunction.

Background

[2] David Burkes is a chartered accountant who owes a substantial amount of money to the Canada Revenue Agency (“CRA”) for tax arrears. He has been unable to reach an agreement with the CRA as to the payment of those arrears and the CRA has taken various enforcement steps against him to collect the arrears. Mr. Burkes alleges the CRA has acted maliciously in refusing to go along with his proposed payment plan and continuing its collection efforts. He says the CRA is deliberately trying to ruin and humiliate him.

[3] Mr. Burkes has sued the CRA and its employee Carlton Sheppard for $1 million in general damages and $50,000 in punitive damages, alleging abuse of process, unlawful interference with economic relations, and misfeasance in public office. The plaintiff also seeks a permanent injunction restraining the CRA from taking any steps to collect the tax arrears while he is making the payments he has proposed under his repayment plan.

[4] Mr. Burkes brought a motion in this action seeking an interim injunction restraining any collection steps by the CRA until trial.

The Decision of the Motion Judge

[5] The motion judge held that this court has no jurisdiction to grant an injunction against the Canada Revenue Agency because s. 18 of the Federal Court Act provides that the Federal Court has the exclusive jurisdiction to grant such relief.

[6] The motion judge further held that even if he had jurisdiction to grant the injunction sought, he would still dismiss the motion because the plaintiff had failed to meet his onus of establishing irreparable harm. The motion judge noted that the evidence presented by the plaintiff in support of his contention that he would suffer irreparable harm consisted mainly of bald assertions and speculation. Further, the motion judge held that the balance of convenience did not favour Mr. Burkes, particularly in light of the public interest in ensuring that citizens pay their taxes in full and on time.

Analysis

[7] The plaintiff argues that the test for leave to appeal is met under both alternative branches of Rule 62.02 (4). Specifically, he argues that there are conflicting decisions on the jurisdiction and irrreparable harm issues and that it is desirable that leave be granted (Rule 62.02(4)(a)); and, that there is reason to doubt the correctness of the decision and matters of broad general importance are involved (Rule 62.02(4)(b)).

[8] Each of the two tests for leave has two components. Before leave can be granted, the party seeking leave must meet both aspects of at least one of the tests.

[9] In my view, the plaintiff has failed to satsify the second branch of both tests.

[10] With respect to the irreparable harm issue, I do not find that there are conflicting decisions on a question of principle. Rather, the plaintiff’s argument on this issue is really directed towards showing that other courts have reached a different conclusion when applying the law. This argument properly falls within the “reason to doubt correctness” aspect of the test for leave.

[11] On both the irreparable harm issue and the balance of convenience issue, the plaintiff must establish reason to doubt the correctness of the motion judge’s decision and an issue of “such importance” that leave to appeal should be granted. The plaintiff has failed to satisfy the second component of that test. There is no issue of broad general importance raised in this case. It is clearly a matter that is important to Mr. Burkes, but the broader public interest is not invoked. There are no matters going beyond the interest of the parties to warrant adjudication by a higher court. Accordingly, leave to appeal on those issues is not warranted.

[12] Under the “conflicting decisions” test, I must be satisfied that it is desirable that leave be granted. I accept that the plaintiff’s argument with respect to jurisdiction is appropriately considered under the conflicting decisions branch of the test. However, I do not need to resolve whether the decisions cited are truly conflicting, or whether they are distinguishable, as is argued by the defendants. Regardless of whether there are conflicting decisions, I do not see this as an appropriate case in which to grant leave because the test is conjunctive and the second part of the test is not met. I do not consider it to be desirable to grant leave in this case. The plaintiff has started a parallel proceeding in the Federal Court in which he has sought, inter alia, an order of mandamus against the CRA and injunctive relief. There can be no doubt as to the jurisdiction of the Federal Court to grant such relief and in my view it is more appropriately dealt with in that forum given the nature of the CRA, the nature of the dispute between the parties, and the special expertise of the Federal Court in respect of taxation and federal taxation agencies.

[13] Further, given that the motion judge would not have granted an injunction in any event, and my conclusion that leave to appeal is not appropriate with respect to his findings on the merits of the injunction motion, there is limited utility in proceeding with an appeal solely on the jurisdictional issue.

Conclusion and Order

[14] In the result, this motion for leave to appeal is dismissed. Costs of the leave motion are fixed at $5000, payable by the plaintiff within 60 days.

MOLLOY J.

Date: November 5, 2010