COURT FILE NO.: CV-20-00001239-00

DATE: 2021 05 03

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Hilda Larbi v. Canada Revenue Agency

BEFORE: Dennison J.

COUNSEL: Hilda Larbi, Self-Represented, for the Plaintiff (Not Present – Did Not Appear on either date)

Surksha Nayar and Sarah Mackenzie, for the Defendant

HEARD: February 18, 2021 and April 28, 2021

DECISION ON MOTION TO STRIKE STATEMENT OF CLAIM

Overview

1. The Defendant, the Canada Revenue Agency (“CRA”), brought two Motions before the Court. The first Motion is for an order for substituted service. The Defendant was unable to effect service by email of the confirmation of the hearing (Form 37B pursuant to r. 37.10.1(1)(b) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 (“the Rules”). The Plaintiff, Ms. Hilda Larbi, refused to respond to the Defendant and provide her email address. The Plaintiff was properly served with the Motion material and the Defendant seeks to proceed in her absence.

2. The Defendant’s second Motion is to strike the Plaintiff’s Statement of Claim and dismiss the action pursuant to r. 21.01(1)(b) of the Rules. The Defendant submits that the Statement of Claim does not disclose any reasonable causes of action.

3. The Plaintiff filed a Statement of Claim seeking three million dollars in damages against the CRA. The Plaintiff claims that the Defendant improperly permitted her ex-husband to use her identity to obtain an EFILE number. An EFILE number permits tax preparers to file tax returns through a web portal. She states that her ex-husband used this EFILE number to file tax returns for his business and improperly earned money using her identity.

4. The Plaintiff claims that she suffered pain and suffering because of CRA’s negligence, breach of fiduciary and malfeasance. The Defendant never contacted her to confirm that she gave her ex-husband permission to use her identity to obtain an EFILE number.

5. The Plaintiff also claims that the CRA’s actions enabled her ex-husband to forcibly confine her and contributed to the assault and battery by her ex-husband. Although not directly pleaded, the Plaintiff also claims that the Defendant conspired with her ex-husband to undermine her life and that the CRA’s actions adversely impacted her professional life.

6. There are several issues to determined in these Motions,

7. Should the Court grant the Motion for substituted service and hear the Motion in the absence of the Plaintiff?

8. If the Motion proceeds, should the Motion to strike be granted?

9. If the Statement of Claim is struck, should the Plaintiff be granted leave to amend the Statement of Claim?

10. Should the Court order the CRA to cancel the Plaintiff’s EFILE number?

11. If the Motion is granted, what if any costs should be ordered?

Issue #1: Should the Court grant the Motion for substituted service and proceed with the Motion in the Plaintiff’s absence?

Relevant Facts

i) Serving the Plaintiff with the Motion materials

7. On January 8, 2021, a process server attended at the Plaintiff’s residence at 73 Louana Crescent, Woodbridge, Ontario. The Plaintiff was not home, so the process server left a copy of the Notice of Motion to strike the pleadings, the Motion Record, Book of Authorities, and the Confirmation of Motion form with the Plaintiff’s adult son, David Larbi. The process server attempted to go back to the house to retrieve the documents from Mr. Larbi when the process server saw the Plaintiff pull into the driveway. The process server tried to personally serve the Plaintiff, but she entered the home and refused to open the door to permit the process server to personally serve her. The process server also mailed a copy of the documents to the Plaintiff’s address on this date.

8. The process server attended the Plaintiff’s residence again on January 11, 2021, to attempt to personally serve the Plaintiff. When the process server attended, the Plaintiff refused to open the door and yelled from inside the house that the process server should leave and that she would not take the documents. The Plaintiff took photographs of the process server at the door.

9. On January 20, 2021, a letter from the Defendant, dated January 21, 2021, was couriered to the Plaintiff’s residence. That letter indicated that, further to the voice message left on January 14, 2021, the Defendant vacated the original Motion date of January 19, 2021 because they were unable to personally serve the Plaintiff. The letter advised that the Motion was rescheduled for February 18, 2021 and requested that the Plaintiff provide her email address. The letter also made it clear that the Defendant would seek directions from the Court to proceed with the Motion in the Plaintiff’s absence if she did not attend Court.

10. On February 8, 2021, the Defendant couriered a copy of the Confirmation of Motion to the Plaintiff.

11. On February 12, 2021, the Defendant couriered an Amended copy of the Confirmation of Motion and a letter to the Court dated February 12, 2021. That letter advised the Court that the Defendant attempted to contact the Plaintiff via phone on January 6, 8, 14, and February 8, 2021. The letter also stated that the Defendant contacted the Plaintiff via courier or process server on January 8 and 11, 2021. The letter stated that the Defendant would seek direction from the Court and, should the Plaintiff fail to provide her email information, the Defendant would ask the Court to hear the Motion in her absence.

ii) Further service on the Plaintiff

12. On February 18, 2021, I agreed to hear the Defendant’s Motion to strike the Plaintiff’s claim in the Plaintiff’s absence.

13. On March 24, 2021, I released an endorsement in which I stated that upon further reflection the Plaintiff should be given one final opportunity to participate in these proceedings given the significant consequence that could flow from my decision. Also, the Plaintiff could not have been provided the Zoom link to attend the Motion because she refused to provide her email. My endorsement required the Defendant to confirm the Plaintiff’s address. The endorsement also indicated that I was scheduling a further Teleconference call before me on April 28, 2021. The endorsement stated that the Court would commence sharply at 9:00 a.m. The contact details for the call were provided. My endorsement was clear that if the Plaintiff wished to participate in the Motion, she was to contact the number listed in the endorsement and that if she did not call, I would decide the Motion in her absence.

iii) Teleconference call on April 28, 2021

14. The Plaintiff did not participate in the teleconference call on April 28, 2021. The call commenced at 9:00 a.m. Counsel for the Defendant were present confirming that the contact information in my endorsement was correct.

15. Court waited until 9:13 a.m. to see if the Plaintiff would call. She did not. Counsel for the Defendant confirmed that they had still not heard from the Plaintiff.

16. The Defendant provided an Affidavit stating that they confirmed the Plaintiff’s address was correct. In addition, an Affidavit of Service was provided confirming that the Plaintiff was served with my endorsement. In the circumstances, I am satisfied that the Plaintiff was properly served and aware of the requirement to attend the conference call but failed to do so.

Analysis

i) Should the Court grant an order for substituted serve of the Confirmation Notice?

17. Rule 37.10.1(1)(c) of the Rules requires that a party who brings a Motion to send a copy of the Motion Confirmation to the other party via fax or email.

18. The Defendant was unable to email the Motion Confirmation to the Plaintiff because she refused to provide her email address to the CRA. Given the repeated efforts of the Defendant to contact the Plaintiff, I am satisfied that it is appropriate to grant the order for substituted service of the Confirmation Notice to the date it was mailed to the Plaintiff’s address.

ii) Should the Court proceed with the Motion in the Plaintiff’s absence?

19. I am also satisfied that it is appropriate to proceed with the Motion to Strike the Plaintiff’s Statement of Claim in the Plaintiff’s absence for several reasons.

20. First, there is no issue that the Plaintiff received a copy of the Motion material. She arrived at home on January 8, 2021, shortly after the material had been served on her son. After she arrived at home, the process server tried to personally serve her, but she refused to open the door to permit the process server to do so.

21. Second, the Plaintiff was well aware that the Defendant intended to bring the Motion to Strike and that the Motion would be heard on February 18, 2021. This is demonstrated by the further attempt to serve her on January 11, 2021, the letter dated January 21, 2021, and the Notices of Confirmation dated February 8 and February 12, 2021.

22. Third, the Plaintiff’s behavior demonstrates that she does not want to participate in the Motion or the litigation. Aside from serving the Statement of Claim in March 2020, the Plaintiff has made no efforts to move the litigation forward. She refused to respond to the CRA’s request for her email address. She deliberately tried to avoid accepting service of the Motion material from the Defendant. She also did not attend the Motion on February 18, 2021 or on April 28, 2021.

23. Fourth, The Plaintiff is aware that the Defendant would seek to proceed with the Motion in her absence if she did not provide her email and did not attend Court. The letter from the Defendant dated January 21, 2021 makes it clear that if the Plaintiff did not provide her email address, the Defendant would ask for the Motion to proceed in her absence. Similarly, in the letter dated February 12, 2021, the Defendant indicated that they would ask the Court to proceed ex parte if the Plaintiff did not provide her email information by the hearing date. Despite being put on notice the that the Defendant would seek to proceed in her absence, the Plaintiff did not respond to the Defendant or attend virtual Court on the date of the Motion.

24. Finally, the Court gave the Plaintiff a final opportunity to participate in the Motion. The Plaintiff was served with an endorsement that required her to participate in a teleconference call on April 28, 2021. She was made aware that if she did not attend, the Motion would be decided in her absence. She did not attend.

25. In all of the circumstances, I am satisfied that it is appropriate to proceed with the motion to strike in the Plaintiff’s absence.

Issue #2: If the Motion proceeds, should the Motion to Strike be granted?

Relevant facts

i) The Statement of Claim

26. On March 19, 2020, The Plaintiff issued a Statement of Claim against the CRA. She seeks three million dollars for damages. The Plaintiff is a professional accountant as is her ex-husband.

27. Given the nature of the allegations, it is necessary to review the Statement of Claim in some detail.

28. The Plaintiff claims that she learned through her divorce proceedings that her ex-husband used her identity to obtain an EFILE number from the CRA in 2007. An EFILE number allows tax preparers to file tax returns electronically on behalf of clients. The Plaintiff states that her ex-husband used her identity, under Larbi Accounting Services, to operate a tax practise for years without her knowledge and permission.

29. According to the Statement of Claim, Larbi Accounting Services is a sole proprietorship that the Plaintiff registered in 2007. Her employer, Lupis and Associates, asked her to create a business. Her employer told her that he only paid his employees through a registered business name so that the employer did not have to pay source deductions. The Plaintiff believes that her ex-husband convinced her then boss to force her to register the sole proprietorship so her ex-husband could use and profit from the business.

30. The Plaintiff claims that she never used Larbi Accounting Services to obtain an EFILE number and did not use it to file income tax returns for any clients. She states that her ex-husband used the EFILE number to file tax returns on a commercial basis without her knowledge or permission.

31. The Plaintiff confronted her ex-husband. She told him she was going to impute value to him for the economic gain he received using her identity under Larbi Accounting Services without her knowledge.

32. The Plaintiff claims damages for pain and suffering that she suffered because of the CRA’s negligence, malfeasance, and breach of its fiduciary duty. She claims that the CRA never contacted her to find out if she gave her ex-husband permission to use her identity. The CRA failed to exercise due diligence in allowing her ex-husband to use her identity for his benefit. She claims that the CRA’s lack of due diligence encouraged her ex-husband to engage in identity theft and may have enabled her ex-husband to engage in other identity theft, but she does not specify what that might be.

33. The Plaintiff claims that the CRA’s actions constitutes a breach of its fiduciary duty towards her. The CRA enabled her ex-husband to hack into her email account or set up an email account using her identity to renew the EFILE number under Larbi Accounting Services for years.

34. She claims that her ex-husband reported almost no income on his personal income tax returns and continued to use her identity for his own profit. The Plaintiff claims that her ex-husband contributed almost nothing to the household expenses and their four children even though he was making hundreds of thousands of dollars as she recently discovered.

35. The Plaintiff claims that her ex-husband forced her to open a professional corporation and asked her to obtain an EFILE number for her own corporation after she qualified as a professional accountant. This occurred after he formed his own professional corporation. He lured her to join his tax practise.

36. It is the Plaintiff’s belief that her ex-husband engaged in a concerted effort with the CRA to undermine her life, career, and profession so that her ex-husband could force her into a relationship to cover up his crimes against her. She claims that when she asked him for a divorce, her ex-husband told her he would frustrate the divorce and that “with money he can get what he wants.” Since the divorce proceedings commenced, her ex-husband has engaged in corrupt acts involving lawyers and Court staff to frustrate the divorce proceedings.

37. It is also the Plaintiff’s position that the CRA’s actions enabled her ex-husband, who is violent and abusive, to forcibly confine her “to his criminal lifestyle by using the money he got and continues to get from using my identity to bribe people to frustrate the divorce.”

38. In addition, the Plaintiff claims that the CRA’s actions contributed to the assault and battery her ex-husband subjected her to as a result of the prolonged and frustrated divorce proceedings. Her ex-husband is also criminally charged with assault and is to have no contact with her.

39. The Plaintiff claims that her ex-husband forced himself into her life so he could use her intelligence for his own benefit while undermining her efforts to make a living so that people would think he was taking care of her.

40. The Statement of Claim states that the Plaintiff suffered shock and trauma as a result of the CRA’s actions. The CRA’s actions encouraged her ex-husband to profit from using her identity, while undermining her effort to make a decent living as a professional accountant.

41. She further states that the purpose of the Statement of Claim is to bring to the attention of the authorities how individuals such as her ex-husband can conspire with government agencies to harm victims such as herself by exploiting a marriage relationship.

42. The Plaintiff also informs the CRA in the Statement of Claim that as a professional accountant she will not tolerate any acts of harassment with respect to the EFILE number that she obtained using her legitimate professional corporation. She will file a further action if she experiences any harassment from the CRA.

43. The Plaintiff states that she has led a good life and has not gotten into any trouble except for what her ex-husband has created for her. She is taking action to address the various parties he used against her since she became aware of his intentions of using the marriage to unjustly enrich himself.

44. It is also the request of the Plaintiff that the Court order the CRA to cancel the EFILE number that her ex-husband obtained under Larbi Accounting Services and to delete it from her profile.

ii) How the EFILE process works

45. To assess the causes of action raised in the Statement of Claim, it is necessary to understand how EFILE works. EFILE is an automated service that allows approved tax preparation service providers to transmit individual tax return information to the CRA directly from EFILE certified tax preparation software.

46. Pursuant to s. 150.1(2.3) of the Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.) (“the Act”), tax preparers must file all eligible prepared returns electronically. A tax preparer is defined as a person or partnership that considers and prepares more than ten tax returns. Section 150.1(2.3) of the Act states that a tax preparer shall file any return by way of electronic filing except that ten of the returns of corporations and ten of the returns of individuals may be filed other than by way of electronic filing.

47. There is nothing in the Act that describes the requirement to use the EFILE system or how the CRA is to determine who may use the EFILE system.

48. The Government of Canada website sets out the eligibility requirements and how to apply for an EFILE number. This number allows tax preparers to use the automated system to electronically file their client’s tax returns. The website states that “any firm, organization, or individual providing tax preparation services” who meets the eligibility and suitability requirements will be given full access to EFILE online. The applicant must be a:

a. proprietor of a sole proprietorship;

b. member of a partnership (for large or national partnerships, the managing tax partners would be the applicants);

c. the directors, officers, and controlling shareholders of a corporation;

d. the managers of the branch offices;

e. the proprietor, the members of a partnership, or the directors, officers, or controlling shareholders of a corporation who hold a franchise (for large or national partnerships, the managing tax partners would be the applicants);

f. any person having management and control of any of the applicants listed above;

g. any person (not including employees of a sole proprietorship, partnership, or corporation unless they also fall under one of the applicant types above) who prepares T1 individual and benefit returns on behalf of others, such as a sub-contractor.

49. A business may have more than one person who meets the definition of an applicant. All applicants must be on the EFILE registration and renewal form. Applicants must be 18 years of age, Canadian citizens, and have a Social Insurance Number.

50. Registration for EFILE numbers are completed online. Tax preparation service providers who register with EFILE are issued an EIFLE number to use when processing client tax returns. Multiple tax preparation service providers can use the same EFILE number provided that each person is included on the EFILE registration or renewal form. The EFILE number is renewable annually using the online automated system.

51. The CRA website states that it is the responsibility of the applicant to fill in the EFILE registration information and to verify its accuracy. In addition, applicants are informed that the CRA claims no responsibility for damages caused by using the EFILE website.

52. The website[^1] states that agents of the CRA conduct suitability screenings to ensure suitability requirements are met. The screening criteria essentially looks to ensure that the applicant has not been convicted under the Act or the Excise Tax Act R.S.C., 1985 c. E-15 or been assessed for a penalty under these Acts. The screening also looks to see if there are “any misrepresentations on their application or renewal form” and that the applicant has “not engaged in fraud, dishonesty, breach of trust, or other conduct of a disreputable nature.”

53. The purpose of the screening by the CRA is to maintain public confidence in the EFILE system. The website states that the CRA evaluates applications to safeguard the system, maintain a high level of public confidence in electronic filing, ensure all participants in the program adhere to high standards of conduct and integrity, and evaluate the applicant’s risk as an electronic filer.

Analysis

i) Test for Motion to Strike Pleadings

54. A pleading may be struck if “it discloses no reasonable cause of action”: Rules, r. 21.01(1)(b).

55. A claim will only be struck “if it is plain and obvious, assuming the facts pleaded to be true, that the pleading discloses no reasonable cause of action.” It is only if the action is certain to fail that it should be struck. This a high threshold for the Defendant to satisfy: R. v. Imperial Tobacco Canada Ltd., 2011 SCC 42, [2011] 3 S.C.R. 45, at para. 17; see also Hunt v. Carey, 1990 CanLII 90 (SCC), [1990] 2 S.C.R. 959, 74 D.L.R. (4th) 321, at p. 980.

56. In considering if there is no reasonable cause of action, the Court must read the pleading generously because “actions that yesterday were deemed hopeless may tomorrow succeed”: Imperial Tobacco, at para. 21; see also Grand River Enterprises Six Nations Ltd. v. Attorney General (Canada), 2017 ONCA 526, at para. 16.

57. In considering whether to strike these pleadings, I am mindful of the fact that the Plaintiff is self-represented and likely drafted the pleadings herself.

58. Rule 25.06(1) of the Rules provides that a pleading shall contain a precise statement of the material facts upon which a party relies but not the evidence by which those facts are to be proved. Bald allegations in support of the pleadings are not sufficient: Deluca v. Canada, 2016 ONSC 3865, at para. 5.

59. The power to strike out a claim is important to the effective and fair operation of the Courts. “It unclutters the proceedings, weeding out the hopeless claims and ensuring that those that have some chance of success go on to trial”: Imperial Tobacco, at para. 17.

60. In Aristocrat Restaurant Ltd. v. Ontario, [2003] O.J. No. 5331 (S.C.), at paras. 18 and 19, Epstein J. stated that a failure to properly establish a cause of action can occur in two ways,

A claim will be found to be legally insufficient when either the allegations it contains do not give rise to a recognized cause of action or it fails to plead the necessary legal elements of an otherwise recognized cause of action.

In order to survive the second type of rule 21.01(1)(b) motion, a plaintiff must, at minimum, plead the basic elements of a recognized cause of action pursuant to which an entitlement to damages is claimed. Vague allegations that make it impossible for an opposing party to reply should be struck.

61. In this case, the Defendant submits that the Plaintiff failed to plead the basic elements of each cause of action raised in the Statement of Claim. The Defendant further submits that the Plaintiff’s Statement of Claim contains bald statements and vague allegations that do not provide a basis to find that the basic elements of the causes of action have been established. It is the Defendant’s position, that the only appropriate remedy is to strike the Plaintiff’s Statement of Claim entirely.

62. The Plaintiff’s Statement of Claim explicitly raises the cause of actions of negligence, breach of a fiduciary duty and malfeasance. The Statement of Claim also appears to raise causes of action of conspiracy, defamation, assault, and battery.

63. The Plaintiff’s repeated failure to attend Court and defend her Statement of Claim provides a strong basis for the Court to find that the Motion to Strike should be granted. However, given the significant consequences to the Plaintiff in striking a Statement of Claim, I will address each cause of action that the Plaintiff appears to raise to explain why I find that it is plain and obvious that the Plaintiff’s Statement of Claim could not succeed and should be struck.

ii) Negligence Claim

64. To establish negligence, the Plaintiff must first establish that the Defendant owed her a duty of care: Mustapha v. Culligan of Canada Ltd., 2008 SCC 27, [2008] 2 S.C.R. 114, at para. 4. The Plaintiff pleaded that the Defendant owed her a duty of care to ensure that her identity was not improperly used to obtain EFILE number by her ex-husband.

65. The claimed duty of care does not fall into a recognized duty of care, nor is the duty of care claimed analogous to a recognized duty of care.

66. The Court of Appeal for Ontario found that the CRA owed a duty of care to a taxpayer that the CRA is investigating in McCreight v. Canada (Attorney General), 2013 ONCA 483, 116 O.R. (3d) 429. In that case, the Plaintiff sought to sue the CRA and its investigators for negligent investigation which led to the Plaintiff being charged with fraud and conspiracy. Writing for the Court, Pepall J. held that the duty of care was analogous to a duty of care that police officers owed their suspects and, therefore, it was not plain and obvious that the pleadings should be struck. See also Leroux v. Canada Revenue Agency, 2012 BCCA 63, 347 D.L.R. (4th) 122.

67. In this case, the CRA did not audit or investigate the Plaintiff. It is the Plaintiff’s position that the Defendant was negligent because the Defendant provided an EFILE number in her name without confirming that she was the actual person applying.

68. Where the claimed duty of care falls outside a previously recognized duty of care a two-part test is applied. As explained by the Supreme Court of Canada in Imperial Tobacco, the Court must first consider “whether the facts disclose a relationship of proximity in which failure to take reasonable care might foreseeably cause loss or harm to the plaintiff”: at para. 39. Second, notwithstanding proximity, are there policy considerations such that a duty of care ought not to be recognized.

69. I do not think it is reasonably foreseeable the CRA’s actions of granting an EFILE number that permits access to a web portal (a virtual mailbox), would result in harm to a third party who had no documents sent through the portal.

70. Even if the foreseeability requirement was satisfied, “there must be … a close and direct relationship of proximity”: Cooper v. Hobart, 2001 SCC 79, [2001] 2 S.C.R. 537, at para. 22. To establish proximity, the duty of care must arise from either the statutory scheme or from a series of specific interactions between the government and the claimant. Cooper, at para. 43; Imperial Tobacco, at paras. 22, 43-45.

71. In cases involving public authority defendants, the proximity analysis is often rooted in the context of the governing statute because this is the primary source of the defendant’s obligations: Cooper, at para. 43.

72. The purpose of the Act is to collect funds for the public. The Act gives the Minister of National Revenue and his delegates broad powers to do so. These powers include assessing tax returns and imposing penalties.

73. There is nothing in the Plaintiff’s Statement of Claim that points to anything in the Act that creates an intention to recreate a private law duty of care between the CRA and third parties to ensure the accuracy of the information that is filed by another party to obtain an EFILE number to use the CRA’s web portal.

74. There is also nothing in the Act or the application process set out online that states or infers that the purpose of screening applicants is to ensure that third parties are not defrauded by the tax preparers. EFILE is simply an electronic portal or mailbox through which tax preparers can provide tax documents to the CRA. In fact, the government website states that the CRA is “not responsible in any manner for direct, indirect, special, or consequential damages, caused in any way, that result from using this Website.”[^2]

75. There is also nothing in the interactions between the Defendant and the Plaintiff that would establish a duty of care. Where it is alleged that there are interactions between a government regulator and a plaintiff, the relationship and connection between the regulator and the individual must be “distinct from and more direct than the relationship between the regulator and that part of the public affected by the regulator’s work”: Taylor v. Canada (Attorney General), 2012 ONCA 479, at paras. 80, 104.

76. There is nothing plead that suggests a distinct or different relationship between the Defendant and the Plaintiff. According to the pleadings, the Plaintiff had no interaction with the CRA. Rather, the CRA relied on information provided by a third party that allegedly used the Plaintiff’s identity to obtain an EFILE number and subsequently confirmed its renewal annually. Accepting the pleadings, her ex-husband had a fraudulent relationship with the CRA in setting up the account. Even assuming that there was a relationship between the CRA and the Plaintiff, it was not distinct or more direct than the type of conduct the regulator engages in with other individuals in setting up an EFILE number and, therefore, does not create a duty of care.

77. In other cases, even where there is a direct connection between the government agency and the plaintiff, the Courts have not found a duty of care.

78. For example, In Deluca, Dunphy J. held that the CRA did not owe a duty of care to taxpayers from the consequences of dealing with charities that were later found to have been improperly registered: at paras. 48, 52.

79. Based on the pleadings, it is plain and obvious that the Defendant does not owe the Plaintiff a duty of care and therefore the claim of negligence cannot succeed.

iii) Breach of Fiduciary Duty Claim

80. The Plaintiff also alleges that the Defendant beached its fiduciary duty to her by permitting her ex-husband to obtain an EFILE number using her identify without her permission.

81. Relationships where a fiduciary obligation have been found possess three general characteristics:

I. The fiduciary has scope for the exercise of some discretion or power;

II. The fiduciary can unilaterally exercise that power or discretion so as to affect the beneficiary’s legal or practical interests; and

III. The beneficiary is peculiarly vulnerable to or at the mercy of the fiduciary holding the discretion or power.

See Elder Advocates Society v. Alberta, 2011 SCC 24, [2011] 2 S.C.R. 261, at para. 27.

82. The evidence must show that the alleged fiduciary gave an undertaking of responsibility to act in the best interest of a beneficiary: Elder Advocates Society, at para. 30, citing Galambos at paras. 66, 71, 77-78. The existence and character of the undertaking is informed by the norms relating to the particular relationship. “The party asserting the duty must be able to point to a forsaking by the alleged fiduciary of the interests of all others in favour of those of the beneficiary”: Elder Advocates Society, at para. 31.

83. The undertaking may be found in the relationship between the parties, an agreement to act as a trustee or be an imposition of responsibility set out in a statute. In addition, the duty must be owed to a defined person or class of persons who must be vulnerable to the fiduciary in the sense that the fiduciary has a discretionary power over them. For example, executor-beneficiary, solicitor-client, agent-principle, or parent-child may create fiduciary duties, but other relationships may also create a fiduciary duty: Elder Advocates Society, at para. 33.

84. Where a party seeks an ad hoc duty, such as in this case, the party must be able to point to an identifiable legal or vital practical interest that is at stake.

85. The Plaintiff failed to plead a reasonable cause of action that the Defendant had a fiduciary duty towards her for the following reasons.

86. First, The Plaintiff did not plead any direct interactions or agreements that could establish a fiduciary relationship between herself and the CRA.

87. Second, the Plaintiff has not pointed to anything in the legislation that supports an undertaking by the Defendant to act with undivided loyalty towards her or to a class of persons such as tax preparers. The undertaking must be supported by the language of the legislation. The mere fact that the CRA has discretionary powers to affect a person’s interest is not sufficient. As explained in Elders Advocate Society, the fiduciary’s duty to is not to mediate between interests, it is to protect the beneficiary’s interest. “The Crown’s broad responsibility to act in the public interest means that situations where it is shown to owe a duty of loyalty to a particular person or group will be rare”: at paras. 33, 43-45, 48.

88. Third, the Plaintiff has not plead that she is part of a defined class that is vulnerable to the exercise of the CRA’s discretionary power. The CRA must act in the interests of all citizens. The Plaintiff did not plead that the CRA forsook the interest of all others in favour of herself or in a class of persons, presumably tax preparers. In any event, vulnerability alone is not sufficient to establish a fiduciary.

89. An example of the limits of a fiduciary duty in the government regulatory context was considered by the Nova Scotia Court of Appeal in Walsh v. Atlantic Lottery Corp., 2015 NSCA 16, 355 N.S.R. (2d) 384. In that case, the Plaintiff argued that the Government was at least partially responsible for his gambling addiction because the Government, knew or ought to have known that the use of video lottery terminals was inherently dangerous and would produce victims like him. The Court of Appeal upheld the motion judge’s decision to summarily dismiss the Plaintiff’s claim and found that the Government did not breach its fiduciary duty to the plaintiff. As the motion judge explained, at para 100:

The Gaming Control Act imposes a duty on the Province and its agents to act in the best interests of the public. There is nothing in the statute which could be construed as imposing any degree of responsibility on the Province to protect Mr. Walsh’s interests. Such a burden would be inherently at odds with the Province’s duty to act in the best interests of the public at large. The Plaintiff’s claim for breach of fiduciary duty therefore fails at the first requirement, and I need not consider the remaining two requirements.

90. The same analysis applies in this case. The Plaintiff has not pointed to anything in the Act that could be construed as imposing any degree of responsibility on the CRA to protect the Plaintiff’s interests.

91. It is plain and obvious that this cause of action cannot succeed and must be struck.

iv) Malfeasance in Public Office Claim

92. The Plaintiff also claims that the Defendant owes her damages because of its malfeasance.

93. The tort of malfeasance in public office has two essential elements i) the public officer must have engaged in deliberate and unlawful conduct in his or her capacity as a public officer and ii) the public officer must have been aware that his or her conduct was unlawful and that it was likely to harm the Plaintiff: Odhavji Estate v. Woodhouse, 2003 SCC 69, [2003] 3 S.C.R. 263, at para. 23.

94. For the knowledge component, it is not enough that the officer blatantly disregarded his or her official duty. There must be a conscious disregard for the interests of those who will be affected by the misconduct in question. There has to be an awareness of the harm: Odhavji, at para. 29.

95. I will assume without deciding that the Plaintiff did not have to name a particular public officer in her Statement of Claim in support of her claim of malfeasance given the other failings in the pleadings.

96. The Statement of Claim simply states that the Defendant caused the tort of malfeasance. The Statement of Claim does not plead that the CRA engaged in deliberate or unlawful conduct. There are no facts pled that the CRA did not comply with the Act or their own policies in providing the EFILE number.

97. Similarly, there is no facts pled that the CRA agent acted knowingly that his or her actions were unlawful and would likely cause harm to the Plaintiff. The Statement of Claim simply pleads that the CRA’s actions caused the Plaintiff harm.

98. There are no material facts pled to support a finding that agents of the CRA committed the tort of malfeasance. It is simply a bald conclusion contained in the Statement of Claim. The comments from the Federal Court of Appeal in Merchant Law Group v. Canada Revenue Agency, 2010 FCA 184, 321 D.L.R. (4th) 301, at para. 34, are apt in this case:

When pleading bad faith or abuse of power, it is not enough to assert, baldly, conclusory phrases such as “deliberately or negligently,” “callous disregard,” or “by fraud and theft did steal”: Zundel v. Canada, 2005 FC 1612, 144 A.C.W.S. (3d) 635; Vojic v. Canada (M.N.R.), 1987 CanLII 9545 (FCA), [1987] 2 C.T.C. 203, 87 D.T.C. 5384 (F.C.A.). “The bare assertion of a conclusion upon which the court is called upon to pronounce is not an allegation of material fact”: Canadian Olympic Association v. USA Hockey, Inc. (1997), 1997 CanLII 5256 (FC), 74 C.P.R. (3d) 348, 72 A.C.W.S. (3d) 346 (F.C.T.D.). Making bald, conclusory allegations without any evidentiary foundation is an abuse of process: AstraZeneca Canada Inc. v. Novopharm Limited, 2010 FCA 112 at paragraph 5. If the requirement of pleading material facts did not exist in Rule 174 or if courts did not enforce it according to its terms, parties would be able to make the broadest, most sweeping allegations without evidence and embark upon a fishing expedition. As this Court has said, “an action at law is not a fishing expedition and a plaintiff who starts proceedings simply in the hope that something will turn up abuses the court’s process”: Kastner v. Painblanc (1994), 1991 CanLII 14420 (FCA), 58 C.P.R. (3d) 502, 176 N.R. 68 at paragraph 4 (F.C.A.).

99. It is plain and obvious that this cause of action cannot succeed.

v) Conspiracy Claim

100. The Supreme Court of Canada in Canada Cement Larfarge Ltd. v. British Columbia Lightweight Aggregate Ltd., 1983 CanLII 23 (SCC), [1983] 1 S.C.R. 454, 145 D.L.R. (3d) 385 set out the test for tortious conspiracy as follows:

i) There is an agreement between two or more parties to perform specific acts to injure the Plaintiff;

ii) The defendants acted in furtherance of that agreement;

iii) The predominant purpose of the agreement was to injure the Plaintiff;

iv) The Defendants should know that, in the circumstances, injury to the Plaintiff is likely to result; and

v) Their conduct caused injury to the Plaintiff.

See also Agribrands Purina Canada Inc. v. Kasamekas, 2011 ONCA 460, 106 O.R. (3d) 427, at paras. 24-26. See also Hunt, at pp. 985-86.

101. The requisite elements are not plead in the Statement of Claim nor are there sufficient material facts to maintain this claim. The Plaintiff made a bald allegation of conspiracy. The Statement of Claim asserts that the CRA’s conduct “enabled” and “encouraged” the Plaintiff’s ex-husband to fraudulently use her identity and to forcibly confine, assault, and batter her. She further pleads that she “believes her ex-husband is engaging in a concerted effort with the Defendant to undermine her life, care and profession”. There are no material facts pled of any agreement between the Defendant and the Plaintiff’s ex-husband to allow him to use her identity to obtain and EFILE number to cause harm to the Plaintiff. This agreement is a fundamental requirement to a conspiracy. If there is no agreement there cannot be a conspiracy: Lysko v. Braley, 2006 CanLII 11846 (ON CA), [2006] O.J. No. 1137, at para. 144.

102. It is plain and obvious that this cause of action cannot succeed and therefore must be struck from the Statement of Claim.

vi) Forcible Confinement Claim

103. Based on a reading of the Statement of Claim, it is possible that the Plaintiff seeks to plead the criminal offence of forcible confinement. To be guilty of the criminal offence of forcible confinement, the complainant must be coercively restrained or directed contrary to her wishes, such that she could not move about according to her own free will. See R. v. Pritchard, (2008) SCC 59, 2008 SCC 59, [2008] 3 S.C.R. 195, at para. 24.

104. The Statement of Claim states that “the Defendant’s action enabled my ex-husband who is a violent and abusive person to forcibly confine me to his criminal lifestyle by using the money he got and continues to get from using my identity to bribe people to frustrate the divorce.”

105. There are no facts plead that suggest the Defendant or any of its employees coercively restrained or directed the Plaintiff. A bald assertion that the Defendant enabled her unlawful confinement is not sufficient to maintain this cause of action.

106. Although, it does not appear that the Plaintiff is pleading false imprisonment, this cause of action would also fail as there are no material facts that the Plaintiff was deprived of her liberty against her will that was caused by the CRA: Kovacs v. Ontario Jockey Club (1995), 1995 CanLII 7397 (ON SC), 126 D.L.R. (4th) 576 (Ont. Gen. Div.), at para. 45.

vii) Assault and Battery Claim

107. There is no reasonable cause of action for the tort of battery against the Defendant in the Statement of Claim. To establish a cause of action of battery, the Plaintiff must establish that the Defendant intentionally inflicted harmful or offensive physical contact against her: Verigin v. Regnier, [1996] B.C.J. No. 2130, at para 67.

108. To establish the tort of assault, the Statement of Claim must assert that the Defendant engaged in conduct intended to arouse the Plaintiff’s apprehension of imminent harmful contact, that the threat of such contact was apparent to a reasonable complainant and that the Plaintiff apprehended imminent harm: Verigin, at para. 67: Silbernagel v. Ritchie (1994), 2 B.C.L.R. (3d) 147, at para. 26, referring to Linden, Canadian Tort Law, 5th ed. (Toronto: Butterworths, 1993), at pp. 42-43.

109. There are no material facts plead that the Defendant had any physical contact that would support a pleading of battery. Similarly, there are no material facts pled that the Defendant contacted or threatened to contact the Plaintiff in any manner. There are no material facts that the Defendant engaged in any conduct that would case the Plaintiff to apprehend imminent harm. There are no material facts that the threat of such contact would be apparent to a reasonable complainant.

110. It is plain and obvious that this cause of action cannot succeed.

viii) Defamation Claim

111. While the Plaintiff did not explicitly plead the tort of defamation, she alleges that the CRA’s actions caused reputational harm.

112. The essential elements of the tort of defamation are that 1) the impugned words were defamatory; 2) the words referred to the Plaintiff and 3) the words were published. See Grant v. Torstar Corp., (2009) SCC 61, 2009 SCC 61, [2009] 3 S.C.R. 640, at para. 28.

113. The Plaintiff has not pled any of the essential elements of the tort of defamation and this cause of action must be struck.

ix) Should the Pleadings be struck as being scandalous, frivolous, or vexatious statement of claim?

114. Given that I have already determined that the Statement of Claim does not contain any reasonable causes of action, it is not necessary that the Court consider whether the pleadings should be struck on the basis that the pleadings are scandalous, frivolous, or vexatious pursuant to either r. 25.11 or r. 21.01(3)(d) of the Rules. Nonetheless, if I had not otherwise struck out the pleadings, I would strike out the pleadings on the basis that they are frivolous and vexatious.

115. Any claim for which there is clearly no merit may qualify as frivolous vexatious or an abuse of process. For example, a pleading that shows a complete absence of material facts is considered frivolous and vexatious. “Bare allegations should be struck as scandalous”, particularly “where allegations of intentional or malicious conduct are made”: Aristocrat Restaurant Ltd., at para. 21.

116. The Court, however, should only exercise this inherent jurisdiction to strike a pleading on the basis that it is frivolous and vexatious in the clearest of cases: Salasel v. Cuthbertson, 2015 ONCA 115, 124 O.R. (3d) 401, at para. 8; Rules, r. 21.01(3)(d); Currie v. Halton Regional Police Service Board, (2003) 2003 CanLII 7815 (ON CA), 233 D.L.R. (4th) 657, at paras. 17-18: Bastien v. Egalite, 2016 ONSC 7652.

117. In this case, the Plaintiff’s Statement of Claim had a complete absence of material facts as explained above. In addition, many of the claims asserted that the CRA acted in an intentional or malicious manner without any facts plead to support these allegations.

118. The pleadings also fail to organize the facts so that the causes of actions are clearly identifiable and are supported by the material facts necessary to establish the causes of actions. The Plaintiff’s pleadings also failed to connect many of the events that the ex-husband allegedly engaged in to the CRA, for example the unlawful confinement, assault, and battery.

119. In the circumstances, I would have struck out the Statement of Claim on the basis that it was frivolous and vexatious, if I had not otherwise determined that the statement of claim should be struck.

Issue #3: Should the Plaintiff be permitted to Amend her Statement of Claim?

120. The Defendant submits that the Plaintiff should not be granted leave to Amend her Statement of Claim.

121. Amending a Statement of Claim can often cure a deficient Statement of Claim. As explained in Andersen Consulting Ltd. v. Canada (Attorney General), 2001 CanLII 8587 (ON CA), [2001] O.J. No. 3576, at para 37,

“…amendments… should be presumptively approved unless they would occasion prejudice that cannot be compensated by costs or an adjournment; they are shown to be scandalous, frivolous, vexatious or an abuse of the court’s process; or they disclose no reasonable cause of action.”

122. Leave to amend will only be denied in the clearest of cases, where the deficiencies in the pleading cannot be cured by an appropriate amendment: South Holly Holdings Ltd. v. The Toronto-Dominion Bank, 2007 ONCA 456, at para. 6.

123. I recognize that the Plaintiff is not a lawyer and, therefore, at a disadvantage in preparing her Statement of Claim.

124. Most of the Plaintiff’s claims are grounded on the assertion that the Defendant had a duty or responsibility to check that the identity of the person applying for the EFILE number was who they claimed to be. For the reasons explained above, I found there is no such duty. Because no such duty exists the claims of negligence, malfeasance, and breach of fiduciary duty cannot succeed.

125. Similarly, the cause of action of conspiracy cannot succeed because it requires more than just proof of negligence but actual knowledge that the Defendant knowingly let the ex-husband use the Plaintiff’s identity to obtain an EFILE number. The Plaintiff’s claim is premised on the basis that the Defendant had to verify that she was not the person applying for the EFILE number. She has not plead any material facts to suggest that the Defendant knowingly allowed the ex-husband to misuse the EFILE system.

126. With respect to the defamation claim, allowing for amendment would not cure the defects as there is no basis to find that the Defendant made any defamatory statements regarding the Plaintiff. Her claim is more about the impact that the CRA’s action had on her life generally which does not amount to defamation.

127. Finally, many of the Plaintiff’s claims relate to matters involving the ex-husband including the unlawful confinement, assault, and battery. If the Plaintiff were to pursue these claims against anyone, they should be against her ex-husband, not the CRA.

128. I am not prepared to grant the Plaintiff leave to amend her statement of claim because they do not disclose a reasonable cause of action and the statement of claim is frivolous and vexatious.

Issue #4: Should the Court order the CRA to cancel the Plaintiff’s EFILE Number?

129. The Plaintiff also seeks an order that the Defendant cancel the EFILE number that her ex-husband has improperly obtained. As pointed out by the Defendant, The Plaintiff can cancel her EFILE number at any time by contacting the Sudbury Tax Center as is indicated on the online EFILE website.

130. At this point, the Court has no jurisdiction to make such an order because the Court has not determined that the EFILE number was improperly obtained.

Conclusion

131. The Statement of Claim is struck out in its entirety. Leave to Amend the Statement of Claim is denied.

Issue #5: What if any Costs should be awarded against the Plaintiff?

132. The Defendant seeks costs in the amount of $12,000.00 for the Motion to strike and $1,000.00 for the Motion for substituted serve. The Defendant’s costs of for the additional Court appearance on April 28, 2021 were $2000.00.

133. The total costs incurred by the Defendant was $49,079.68. Counsel submits that the costs the Defendant seeks are considerably less than the costs that were incurred in bringing the Motions. The Defendant submits that time spent in preparing for the Motions was increased given the number of issues raised in the Statement of Claim and the difficulties of trying to serve the Plaintiff.

134. The starting point in determining costs is s. 131(1) of the Courts of Justice Act, R.S.O. 1990, c. C. 43, as amended. Section 131(1) provides that subject to the provisions of an act or rules of the Court, “costs … are in the discretion of the court, and the court may determine by whom and to what extent the costs shall be paid”.

135. Rule 57 of the Rules sets out the factors for the Court to consider in exercising its discretion with respect to costs in accordance with s. 131(1) of the Courts of Justice Act. Rule 57 lists the following factors for the Court to consider. It reads as follows,

(0.a) the principle of indemnity, including, where applicable, the experience of the lawyer for the party entitled to the costs as well as the rates charged and the hours spent by that lawyer;

(0.b) the amount of costs that an unsuccessful party could reasonably expect to pay in relation to the step in the proceeding for which costs are being fixed;

(a) the amount claimed and the amount recovered in the proceeding;

(b) the apportionment of liability;

(c) the complexity of the proceeding;

(d) the importance of the issues;

(e) the conduct of any party that tended to shorten or to lengthen unnecessarily the duration of the proceeding;

(f) whether any step in the proceeding was,

(i) improper, vexatious or unnecessary, or

(ii) taken through negligence, mistake or excessive caution;

(g) a party’s denial of or refusal to admit anything that should have been admitted;

(h) whether it is appropriate to award any costs or more than one set of costs where a party,

(i) commenced separate proceedings for claims that should have been made in one proceeding, or

(ii) in defending a proceeding separated unnecessarily from another party in the same interest or defended by a different lawyer;

(h.1) whether a party unreasonably objected to proceeding by telephone conference or video conference under rule 1.08; and

(i) any other matter relevant to the question of costs.

136. Ultimately in fixing costs, the overriding principle is reasonableness and fairness: Boucher v. Public Accountants Council for the Province of Ontario (2004), 2004 CanLII 14579 (ON CA), 71 O.R. (3d) 291 (C.A.).

137. I am satisfied that the Defendant should be granted the costs in the amount of $14,500.00 for the following reasons.

138. First, the Defendant was the successful party on both Motions and is therefore presumptively entitled to costs on a partial indemnity basis. The amount the Defendant seeks is less than the partial indemnity.

139. Second, the Motion to Strike was complex given the number of claims the Plaintiff raised and appeared to raise in her Statement of Claim. A significant amount of time researching and writing the factum had to be spent given the number claims raised.

140. Third, the Plaintiff unnecessarily lengthened the duration of the proceedings and increased the cost of the litigation. She refused to accept service of documents. She refused to answer phone calls and refused to provide an email so the Confirmation Notice could be filed in accordance with the Rules. The Plaintiff’s conduct resulted in the first Motion date having to be abandoned and a new date had to be set. In addition, the Court ordered a further appearance to provide the Plaintiff with a final opportunity to participate in the Court proceedings. The Plaintiff’s actions caused the Defendant to incur unnecessary costs.

141. Fourth, the rates and hours spent by Counsel for the Defendant are reasonable. The senior lawyer on this file has 19 years experience. The lawyer who argued the Motion has two years experience. I do note that there appears to be some duplication in the work done and I have taken this into account in determining what would be appropriate costs.

142. Fifth, I have also considered the disbursements incurred by the Defendant and they are reasonable. They relate to filing fees, copying the material and repeated attempts to serve the Plaintiff. The disbursements were over $2,000.00.

143. Sixth, I have considered that the Plaintiff is unrepresented in these proceedings.

144. In all of the circumstances, it is fair and reasonable to order the Plaintiff, Hilda Larbi to pay costs to the Defendant the CRA in the amount of $14,500.00 inclusive of HST and disbursements within sixty days of receipt of this endorsement.

145. This cost order is subject to 3% annum if it is not paid.

Dennison J.

DATE: May 3, 2021

COURT FILE NO.: CV-20-00001239-00

DATE: 2021 05 03

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Hilda Larbi v. Canada Revenue Agency

BEFORE: Dennison J.

COUNSEL: Hilda Larbi, Self-Represented, for the Plaintiff (Not Present – Did Not Appear)

Surksha Nayar and Sarah Mackenzie, for the Defendant

HEARD: May 3, 2021

DECISION ON MOTION TO STRIKE STATEMENT OF CLAIM

Dennison J.

DATE: May 3, 2021

[^1]: Canada Revenue Agency, “Eligibility” (Updated as of 19 February 2021), online: https://www.canada.ca/en/revenue-agency/services/e-services/e-services-businesses/efile-electronic-filers/eligibility.html.

[^2]: Government of Canada, “Legal Obligations” (11 August 2016), online: https://www.canada.ca/en/revenue-agency/services/e-services/e-services-businesses/efile-electronic-filers/legal-obligations.html.