SUPERIOR COURT OF JUSTICE – ONTARIO
RE: Heather Sinclair-McDonald, Human Being v. Her Majesty the Queen, Canada Revenue Agency, Ms. J. Fraser and Mr. S. Shahabuddeen
BEFORE: Barnes, J
COUNSEL: Heather Sinclair-McDonald, on her own behalf Maria Vujnovic, Counsel, for the Defendants
HEARD: July 19, 2013
ENDORSEMENT
INTRODUCTION
1The Plaintiff asserts that she has waived her rights as a person under the law and therefore the Income Tax Act does not apply to her. She seeks an order requiring the Defendant, Canada Revenue Agency, to pay back all taxes collected from her over the last ten years. The Plaintiff also claims damages with respect to allegations of conspiracy, conversion, economic loss of profit and for breach of fiduciary duty by Canada Revenue Agency employees Ms. J. Fraser and Mr. S. Shahabuddeen.
2The Plaintiff asserts that the Defendants should be noted in default because the Defendants have failed to file a Statement of Defence within the time prescribed by the rules.
3The Defendant seeks an order from the Court striking out the Statement of Claim, in its entirety, without leave to amend and dismissing the Plaintiff’s action.
4In the alternative, the Plaintiff seeks an order extending the time for the Defendants to serve and file a Statement of Defence to 60 days from the date of this Order.
ISSUES
5These are the main issues in this within motion:
Are the Defendants in default?
Does the Statement of Claim establish any reasonable cause of action?
ARE THE DEFENDANTS IN DEFAULT?
6None of the Defendants are in default. These are my reasons: A Defendant who is served with a Statement of Claim in Ontario has 20 days to deliver a Statement of Defence: Rule 18.01 (a). A Defendant, who serves a Notice of Intent to Defend, has an additional 10 days to file a Statement of Defence: Rule 18.02 (2).
7An attempt was made to serve the Canada Revenue employees, on May 6, 2013, by leaving the Statement of Claim with a third party. It was not personal service and did not comply with Rule 16.01(1). It did not constitute proper service, as the Statement of Claim was left with a third party.
8This was rectified by service by mail. The Canada Revenue Agency employees were served by mail and received the Statement of Claim on May 28, 2013. Under the rules, these Defendants had until June 18, 2013, to file a Statement of Defence. On June 14, 2013, counsel for Her Majesty the Queen and Canada Revenue Agency, served the Plaintiff with a Notice of Intent to Defend on behalf of Her Majesty the Queen, Canada Revenue Agency and the Canada Revenue Agency employees.
9On May 9, 2013, Her Majesty the Queen and the Canada Revenue Agency were served with a copy of the Statement of Claim. The Statement of Defence had to be filed by May 29, 2013. On May 24, 2013, Her Majesty the Queen and the Canada Revenue Agency served the Plaintiff with a Notice of Intent to Defend and also informed the Plaintiff that her attempt to serve the Canada Revenue employees, on May 6, 2013, was defective. The service of the Notice of Intent to Defend gave Her Majesty the Queen and the Canada Revenue Agency until June 8, 2013, to file a Statement of Defence.
10Her Majesty the Queen and the Canada Revenue Agency failed to file a Statement of Defence by June 8, 2013; instead, on June 14, 2013 these Defendants served a Notice of Intent to Defend. On June 19, 2013, served the material to commence the motion before this Court.
11As of June 8, 2013, Her Majesty the Queen and the Canada Revenue Agency, were technically in breach of time period set by the rules for filing a Statement of Defence. They were in breach of the rules.
12As of June 19, 2013, the Plaintiff had not noted the Defendant in default. Three conditions must be in place to note the Defendant in default: the Defendant must have failed to comply with the rule; the Plaintiff must seek to have the Defendant noted in default, and if it is a liquidated claim, the Plaintiff may seek to obtain a default judgment from the Register: Rule 19.
13There is an additional wrinkle because the Defendants, Her Majesty the Queen and the Canada Revenue Agency, represent the Crown. Section 25 of the Crown Liabilities and Proceedings Act R.S.C. 1985,c. C-50, as amended, states that a default judgement cannot be obtained without leave of the Court and with at least 14 days’ notice given to the Deputy Attorney General of Canada. The Plaintiff has not complied with any of the requirements set out in paragraphs 12 and 13 above.
DOES THE STATEMENT OF CLAIM ESTABLISH ANY REASONABLE CAUSE OF ACTION?
14The Defendants argue that the Plaintiff’s Statement of Claim should be struck because it discloses no reasonable cause of action. The Defendant relies on Rule 21.01(1) (b) of the Rules.
15To succeed, the Defendants must show that it is plain, obvious and beyond doubt that the Plaintiff could not succeed in her claim. The focus here is on the legal adequacy of the claim and for this assessment, the facts pleaded in the Statement of Claim are accepted as fact. See Hunt v. Carey Canada Inc. 1990 90 (SCC), [1990] S.C.J. No. 93.
16The Plaintiff’s claim against Her Majesty the Queen and the Canada Revenue Agency is based on her position that she has waived her right to be recognised as person before the law. She asserts that she is a human being and not a person as recognized under the law and therefore the Income Tax Act of Canada does not apply to her.
17This position has been extensively considered and rejected by Canadian Courts. Canadian Courts have consistently held that natural persons “whether described as acting in their own private capacity for their own private benefit or not, are directly included in the definition of “person” contained in the Income Tax Act”. See Bloom v Canada, [2010] F.C.J. No. 753 (FC) at paragraphs 19 to 21.
18MacFarland J.A. observed in R v. Klundert 2008 ONCA 767, [2008] O.J. No. 4522 at paragraph 19 “Unfortunately for the respondent, the Act [Income Tax Act] does not distinguish between person and natural persons. The definition of “person” in the Act includes human beings of which specie the respondent belongs”. See also Meads v. Meads, 2012 ABQB 571 where ACJ Rooke conducts an extensive analysis of the jurisprudence in this area and arrives at the same conclusion.
19Therefore the Plaintiff’s Statement of Claim, against Her Majesty the Queen and the Canada Revenue Agency, discloses no reasonable cause of action. It has no prospect of success.
20The Statement of Claim against the Canada Revenue Agency employees suffers the same fate. The main basis of the action against these Defendants is that they continued to enforce the provisions of the Income Tax Act and take action with respect to tax debt collection, even after the Plaintiff had informed them that she was no longer a person as recognised by the law but rather a human being and therefore, she asserted, the Income Tax Act did not apply to her.
21The Statement of Claim does not disclose the material facts upon which the pleadings are based. In effect, the basis of the claim is that the Canada Revenue Agency employees were carrying out the terms of their employment pursuant to a lawful authority.
22It is trite law that the Parliament of Canada has authority to legislate in the area of taxation. See R. v. Klundert, 2008 ONCA 767; s. 224(1) of the Income Tax Act authorizes the Canada Revenue Agency to garnish a tax debtor’s income; Pursuant to s. 8 of the Crown Liability and Proceedings Act Crown, employees cannot be held liable for doing that which they are authorised by statute to do.
23For all these reasons, the Statement of Claim discloses no reasonable cause of action; cannot succeed; it is frivolous, vexatious and an abuse of the process of the Court. The Statement of Claim is dismissed in entirety without leave to amend. The Plaintiff’s action is dismissed.
24The court has taken note of the financial hardship currently facing the Plaintiff, who is self-represented in this matter. I leave it to the discretion of Her Majesty the Queen and the Canada Revenue Agency to decide if they wish to submit a cost outline for an assessment of costs.
Barnes, J
DATE: July 22, 2013
CITATION: Sinclair-McDonald v. Her Majesty the Queen, 2013 ONSC 4900
COURT FILE NO.: CV-13-1859-00
DATE: 2013-07-22
SUPERIOR COURT OF JUSTICE – ONTARIO
RE: Heather Sinclair-McDonald, Human Being v. Her Majesty the Queen, Canada Revenue Agency, Ms. J. Fraser and Mr. S. Shahabuddeen
BEFORE: Barnes, J
COUNSEL: Heather Sinclair-McDonald, on her own behalf Maria Vujnovic, Counsel, for the Defendants
ENDORSEMENT
Barnes, J
DATE: July 22, 2013
