Harris v. Canada
T-2407-96
Giles A.S.P.
31/12/97
23 pp.
Statement of claim, on grounds, inter alia of lack of standing; by virtue of Federal Court Act, ss. 18(3), 18.1(1), Federal Court Rules, R. 1602(1), declaratory relief against M.N.R. may be sought only on application for judicial review made by way of originating motion-Class action on behalf of all individuals required to file returns pursuant to Income Tax Act, s. 150 except certain persons who between January 1, 1985 and October 1, 1996 were assessed by Minister of National Revenue on basis that as matter of law, "taxable Canadian property" under Act could be held or disposed of by residents of Canada-Plaintiff member of organization dealing with public issues, including proper enforcement of existing taxation statutes-In 1996 Auditor General tabling Report expressing concerns about administration of Income Tax Act in respect of movement out of Canada of at least $2 billion of assets held in unidentified family trusts-Because of Minister's 1985, 1991 Rulings, transactions may have circumvented law regarding taxation of capital gains-1985 Ruling declaring public company shares held by trust resident in Canada "taxable Canadian property" and that change in residence not causing deemed realization-Allowing emigration of shares ownership without realization of capital gains-Ruling not published-In 1985 Minister issuing opinion contrary to Ruling-Opinion made public-In 1991, in circumstances similar to 1985 Ruling, Minister issuing Ruling in favour of trusts, but taxpayer undertaking to provide waiver-1991 ruling not published until 1996 when released in severed form without reference to waiver, undertaking-Standing Committee on Finance adopting Minister's view "taxable Canadian property" could be held by residents of Canada", Rulings correct-Plaintiff alleging reasonable apprehension of bad faith in administration, ulterior motive on Crown's part-Plaintiff unable to provide particulars until examination for discovery-In 1995 in response to taxpayer's request, Minister issuing opinion based on interpretation Canadian resident can hold, dispose of taxable Canadian property-Not made public until 1996-Plaintiff seeking determination, pursuant to common law doctrine of public interest standing, entitled to sue for substantive declaratory relief with respect to meaning, interpretation of Act; or if common law not allowing grant of such standing, declaration common law rule unconstitutional or constitutionally inapplicable-Motion allowed-Although parties agreed originating motion should be converted into action, not open to parties to make such agreement-Only Court can, by application of Federal Court Act, s. 18.4(2) direct application for judicial review be treated as action-Sufficient ground to strike statement of claim-Plaintiff's challenge constituting third party challenge to Advance Tax Ruling and assessment made relying thereon-Third party challenge to assessment never permitted in our tax system: Nova Ban-Corp. Ltd. v. Tottrup, [1990] 1 F.C. 288 (T.D.)-In as much as Advance Tax Ruling given to single taxpayer to enable that taxpayer to determine tax consequences of his proposed action, logical to apply same rules to Advance Tax Ruling as are applied to assessments-Any part of claim seeking to alter ruling or assessment of particular taxpayer would be struck out-If bad faith, ulterior motive, question whether in any action based on such facts reassessment of any taxpayer could be ordered-In addition apprehension of bad faith going to be particularized only after filing of affidavits as to documents in conduct of examinations for discovery, thus implying facts to support allegations not known to plaintiff, and cannot found cause of action: Caterpillar Tractor Co. v. Babcock Allatt Limited, [1983] 1 F.C. 487 (T.D. )-At common law, person could only have standing if had special interest-Plaintiff not having special interest-Plaintiff seeking to reverse not only Minister's opinion, Ruling, but also Report of Finance Committee, tabled in House of Commons-If individual plaintiff not having standing in own right, cannot represent class purporting to represent-If plaintiff's claim struck for want of standing, so too claim of class must fail-Wish to see subject trusts taxed not special interest required by common law to give him standing-Plaintiff raising constitutional issue in sense of Bill of Rights-Not giving plaintiff standing to seek from Court interference with finding of committee of House of Commons-Public's interests in taxation expressed at legislative level-No right to bring action to collect taxes-Within Crown's jurisdiction to decide in what manner taxes will be collected-For judicial review proceedings to be converted to action, must originally have been properly brought-To bring review proceedings, must be person directly affected-As not directly affected, plaintiff having no standing in judicial review-Federal Court Act, R.S.C., 1985, c. F-7, ss. 18(3) (as am. by S.C. 1990, c. 8, s. 4), 18.1(1) (as am. idem, s. 5), 18.4(2) (as am. idem)-Federal Court Rules, C.R.C., c. 663, R. 1602 (as enacted by SOR/92-43, s. 19; 94-41, s. 14)-Income Tax Act, S.C. 1970-71-72, c. 63, s. 150 (as am. by S.C. 1985, c. 45, s. 85; 1986, c. 44, s. 2; 1988, c. 55, s. 135; 1991, c. 49, s. 124).