Sorbara et al. v. The Attorney General of Canada [Indexed as: Sorbara v. Canada (Attorney General)]
98 O.R. (3d) 673
Court of Appeal for Ontario,
Doherty, Blair and Lang JJ.A.
June 23, 2009*
- This judgment was recently brought to the attention of the editors.
Courts -- Jurisdiction -- Provincial superior courts -- Plaintiffs not challenging constitutionality of Part IX of Excise Tax Act but rather claiming that they were exempt from payment of GST in respect of certain financial services which they provided -- Plaintiffs' claim not [page674] constitutional in nature -- Superior Court not having jurisdiction over plaintiffs' claim on basis of its authority to adjudicate constitutional claims -- Superior Court not having concurrent jurisdiction with Tax Court to deal with claims arising out of GST assessments and claims for GST rebates -- Section 12 of Tax Court of Canada Act read in combination with ss. 261 and 296 to 312 of Excise Tax Act giving Tax Court exclusive jurisdiction over such claims -- Excise Tax Act, R.S.C. 1985, c. E-15, ss. 261, 296-312 -- Tax Court of Canada Act, R.S.C. 1985, c. T-2, s. 12.
The plaintiffs brought an action in the Superior Court claiming that, on a proper interpretation of Part IX of the Excise Tax Act, they were exempt from payment of the GST in respect of certain financial services which they provided. The defendant moved successfully for summary judgment on the basis that the Superior Court had no jurisdiction over the claim. The plaintiffs appealed.
Held, the appeal should be dismissed.
The plaintiffs did not challenge the constitutionality of Part IX of the Excise Tax Act. The fact that they were claiming a right to recover tax assessed under a misinterpretation of a taxing statute did not make their claim constitutional in nature. The Superior Court did not have jurisdiction on the basis of its authority to adjudicate constitutional claims. Section 12 of the Tax Court of Canada Act, read in combination with ss. 261 and 296-312 of the Excise Tax Act, clearly and unambiguously gives the Tax Court exclusive jurisdiction to deal with claims arising out of GST assessments and taxpayers' claims for GST rebates. Accordingly, the Superior Court did not have concurrent jurisdiction to adjudicate the plaintiffs' claim.
APPEAL from the order of Perell J. (2008), 2008 CanLII 61246 (ON SC), 93 O.R. (3d) 241, [2008] O.J. No. 4739 (S.C.J.) for summary judgment.
Cases referred to Kingstreet Investments Ltd. v. New Brunswick (Finance), [2007] 1 S.C.R. 3, [2007] S.C.J. No. 1, 2007 SCC 1, 276 D.L.R. (4th) 342, 355 N.R. 336, J.E. 2007-115, 309 N.B.R. (2d) 255, 51 Admin. L.R. (4th) 184, 25 B.L.R. (4th) 1, 2007 D.T.C. 5029, 2007 D.T.C. 5041, 2007 G.T.C. 1399, 152 A.C.W.S. (3d) 1151, EYB 2006-112095 Statutes referred to Constitution Act, 1867 (U.K.), 30 & 31 Vict., c. 3, s. 53 Excise Tax Act, R.S.C, 1985, c. E-15, ss. 261 [as am.], 296-312 [as am.], Part IX [as am.] Tax Court of Canada Act, R.S.C. 1985, c. T-2, s. 12 [as am.]
M. Philip Tunley and Paul Jonathan Saguil, for appellants. Josée Tremblay and Suzanie Chua, for respondent.
[1] Endorsement BY THE COURT: -- The respondent moved for summary judgment on the basis that the Superior Court had no jurisdiction over the allegations in the claim. The motion judge agreed, holding that the Tax Court of Canada had exclusive jurisdiction over the subject matter of the claim. The appellants appeal, raising two issues.
[2] We are satisfied that the appeal must be dismissed. [page675] The "Kingstreet Investments" Argument
[3] The appellants sought to invoke the constitutional jurisdiction of the Superior Court, claiming that their cause of action alleged unconstitutional conduct by the taxing authorities. The dispute as framed in the amended statement of claim does not challenge the constitutionality of Part IX of the Excise Tax Act, R.S.C. 1985, c. E-15 (the GST provisions), but rather contends that on a proper interpretation of the provisions of Part IX, the appellants are exempt from payment of the GST in respect of certain financial services provided to them. The appellants contend that the services fall within the "financial service" exemption in the Excise Tax Act and that the services are not caught by the "advice" exception to the exemption. In short, the claim as framed raises questions of statutory interpretation. The claim as framed does not raise questions of the vires of the Act or its compliance with s. 53 of the Constitution Act, 1867.
[4] The appellants rely on Kingstreet Investments Ltd. v. New Brunswick (Finance), 2007 SCC 1, [2007] 1 S.C.R. 3, [2007] S.C.J. No. 1 to support their contention that their action raises a constitutional cause of action. Like the motion judge, we think the appellants read Kingstreet too broadly. Kingstreet addressed the right of the taxpayer to recover tax moneys improperly paid to the provincial government under an ultra vires taxing provision. The court held that constitutional principles and not private-law unjust enrichment concepts must control the taxpayer's right to recover tax moneys paid under an unconstitutional taxing provision. The case was not concerned with the proper forum in which to advance a claim. The jurisdiction of the provincial Superior Court was never in issue in Kingstreet.
[5] We do not read Kingstreet as creating a constitutional cause of action available to a taxpayer whenever he or she claims a right to recover tax assessed under a misapplication or misinterpretation of a taxing statute. Like the motion judge, we do not characterize the appellants' claim as constitutional in nature. It follows that the appellants cannot rest their assertion of jurisdiction in the provincial Superior Court on the undoubted and unchallenged authority of the provincial Superior Court to adjudicate constitutional claims. The Concurrent Jurisdiction Argument
[6] The appellants submit that even if Kingstreet does not govern so as to give the provincial Superior Court a constitutional jurisdiction in this matter, the provincial Superior Court has concurrent jurisdiction with the Tax Court to adjudicate on the [page676] claim made by the appellants. Counsel for the appellants submits that s. 12 of the Tax Court of Canada Act, R.S.C. 1985, c. T-2 does not specifically and unequivocally oust the jurisdiction of the provincial court. He further contends that absent a clear ouster of that jurisdiction, the Superior Court retains its jurisdiction which is concurrent with that allocated to the Tax Court.
[7] We accept the principle put forward by the counsel. A Superior Court has jurisdiction to entertain virtually any claim unless that jurisdiction is specifically, unequivocally and constitutionally removed by Parliament. The motion judge also accepted this principle.
[8] In our view, s. 12 of the Tax Court of Canada Act, read in combination with ss. 261 and 296-312 of the Excise Tax Act, does specifically exclude the jurisdiction of the Superior Court in language that is clear and unambiguous.
[9] The Excise Tax Act provides a complete statutory framework with respect to a taxpayer's claim for a rebate of GST paid under Part IX of the Excise Tax Act. This framework also establishes the procedure that must be followed to challenge the validity of the assessment made by the Minister. That challenge must be by way of a Notice of Objection to the Minister and ultimately an appeal to the Tax Court. In particular, s. 312 of the Excise Tax Act provides:
- Except as specifically provided in this Part, . . . no person has a right to recover any money paid to Her Majesty as or on account of, or that has been taken into account by Her Majesty as, tax, net tax, penalty, interest or any other amount under this Part.
[10] As noted above, Part IX of the Excise Tax Act sets out a detailed procedure for the recovery of moneys paid. That procedure ultimately ends in a challenge to the Minister's decision by way of an appeal in the Tax Court. The statutory circle is completed by s. 12 of the Tax Court of Canada Act, which provides that the Tax Court has:
. . . exclusive original jurisdiction to hear and determine references and appeals . . . on matters arising under . . . Part IX [the GST] of the Excise Tax Act.
[11] The statutory provisions considered as a whole along with the explicit language in s. 12 of the Tax Court of Canada Act leave no doubt that Parliament has given the Tax Court exclusive jurisdiction to deal with claims arising out of GST assessments and taxpayers' claims for rebates of GST paid.
[12] The appeal is dismissed. Costs to the respondent in the amount of $10,000, inclusive of disbursements and GST.
Appeal dismissed.