Shahana Kar

The defendants brought a motion to strike a paragraph of the plaintiff’s statement of claim seeking an interlocutory injunction restraining the Canada Revenue Agency from collecting outstanding tax liabilities.

The underlying action alleged torts including misrepresentation, breach of contract, misfeasance in public office, and intentional interference with economic relations arising from the handling of a taxpayer relief application.

The court held that s. 18 of the Federal Courts Act grants exclusive jurisdiction to the Federal Court to issue injunctions against federal boards, commissions, or tribunals, including the CRA when exercising tax collection powers.

Although superior courts retain jurisdiction over damages claims against the Crown grounded in tort or contract, they cannot grant injunctive relief against such federal entities.

The impugned paragraph seeking injunctive relief was therefore struck without leave to amend.

The applicants sought a representation order under Rule 10.01 of the Rules of Civil Procedure permitting them to represent 416 claimants who had used payroll processing services and alleged that trust funds were misapplied by a bank.

The underlying dispute concerned funds withdrawn from employers’ accounts for payroll and tax remittances that were deposited into mixed trust accounts and partially applied to reduce the payroll processor’s indebtedness to the bank or transferred to a related entity.

The bank opposed the representation order, arguing that two separate transactions created distinct issues among claimants.

The court held that common issues existed because liability for the alleged breaches of trust would affect all claimants collectively and distribution of any recovery would be shared.

A representation order was granted and a related unopposed motion concerning distribution of funds held by a government agency was also authorized.

The appellant appealed a bankruptcy court judge's refusal to annul his bankruptcy or stay it pending the outcome of his damages action against the Canada Revenue Agency in the Federal Court.

The Court of Appeal dismissed the appeal, finding no error by the bankruptcy judge.

The Court noted that the CRA exercised its statutory right to vote down the appellant's proposal, and the Federal Court action would not affect the legal validity of the bankruptcy.