



COURT OF APPEAL FOR ONTARIO

CITATION: 861808 Ontario Inc. v. Canada
    (Revenue Agency), 2013 ONCA 604

DATE: 20131003

DOCKET: C56450

Feldman, MacPherson and Epstein JJ.A.

BETWEEN

861808 Ontario Inc.

Appellant

and

Canada (Revenue Agency)

Respondent

Jeffrey Radnoff, David Fenig and Kris Gurprasad, for the
    appellant

Shahana Kar and Angela Shen, for the respondent

Heard: September 30, 2013

On appeal from the order of Justice Robert F. Goldstein
    of the Superior Court of Justice, dated January 7, 2013.

By the Court:


[1]

The appellant 861808 Ontario Inc. appeals from the order of Goldstein
    J.  of the Superior Court of Justice dated January 7, 2013, striking paragraph
    2  of the appellants statement of claim that sought an injunction against the
    respondent Canada Revenue Agency (CRA) preventing it from collecting the
    appellants unpaid taxes, interest and penalties. The appellants primary claim
    in the action is that an agent of the CRA made an agreement with the appellant
    to accept $79,000 in full satisfaction of its tax debt, and that the CRA is in
    breach of that agreement.

[2]

CRA brought a motion seeking the striking of the relevant portion of the
    appellants statement of claim based on s. 18(1) of the
Federal Courts Act
,
    R.S.C. 1985, c. F-7 (
FCA
):

18(1) Subject to section 28, the Federal Court has
    exclusive original jurisdiction

(a) to issue an injunction, writ of
certiorari
,
    writ of prohibition, writ of
mandamus
or writ of
quo warranto
,
    or grant declaratory relief, against any federal board, commission or other
    tribunal;

[3]

The motion judge held that when exercising powers of tax collection the
    CRA is indisputably a federal board, commission, or other tribunal.  He also
    held that both the wording of s. 18(1) of the
FCA
and the relevant
    case authorities pointed to an obvious conclusion: the superior court has no
    jurisdiction to issue an injunction enjoining the CRA from collecting taxes,
    interest and penalties from the appellant.

[4]

In supplementary reasons dated May 23, 2013, the motion judge awarded
    CRA costs fixed at $40,150.25.  This award included substantial indemnity costs
    after July 21, 2010.

[5]

The appellant appeals these orders on four grounds.

[6]

First, and principally, the appellant contends that the motion judge
    erred by concluding that s. 18 of the
FCA
applies to interim orders,
    such as the interim injunction sought by the appellant. The appellant wants the
    superior court to enjoin the CRA, pending the determination of the appellants
    breach of contract claim against it, from continuing to garnish customer
    accounts of the appellant to collect taxes the CRA alleges are still owing,.

[7]

We do not accept this submission.  Section 18(1) of the
FCA
explicitly grants the Federal Court exclusive original jurisdiction to issue
    an injunction.  There is nothing ambiguous in this language; it applies to all
    injunctions, including interim, interlocutory and permanent.  Moreover, all of
    the relevant case authorities support the motion judges analysis and
    conclusion: see
Canada (Attorney General) v. TeleZone Inc.
, 2010 SCC
    62, at para. 52;
Puttkemery v. Air Canada
, [2003] O.J, No. 2686 (Div.
    Ct.), at paras. 5-6; and
Burkes v. Canada (Revenue Agency)
, 2010 ONSC
    3485, at paras. 9-15.

[8]

In
TeleZone
, Binnie J. dealt with this issue explicitly, at
    para. 52:

All of the remedies listed in s. 18(1)(a) are traditional
    administrative law remedies, including the four prerogative writs 
certiorari
,
    prohibition,
mandamus
and
quo warranto
 and declaratory and
    injunctive relief in the administrative law context.  Section 18 does not
    include an award of damages.  If a claimant seeks compensation, he or she
    cannot get it on judicial review.  By the same token,
the plaintiff in a
    damages action is not entitled to add a supplementary claim for a declaration
    or injunction to prevent the government from acting on a decision said to be
    tainted by illegality.  That is the domain of the Federal Court
. 
    [Emphasis added.]

[9]

This passage is conclusive against the appellants argument.

[10]

Second,
    the appellant submits that the motion judge erred by concluding that the CRA is
    a federal board, commission or other tribunal within the meaning of s. 18(1)(a)
    of the FCA.  The appellants action against the CRA is framed in contract and
    tort law, not administrative law and judicial review.

[11]

We
    disagree. As Belobaba J. stated in
Burkes
, at para. 11:

The respondent Canada Revenue Agency clearly exercises powers
    of tax collection as conferred by an Act of Parliament and is therefore a
    federal board, commission or tribunal for the purposes of s. 18.

[12]

Third,
    the appellant contends that the motion judge erred by permitting the return of
    the motion to strike in the face of Allen J.s order that CRA could request
    that the motion be brought back if circumstances warrant.

[13]

We
    disagree.  The circumstance that warranted bringing back the motion was the
    Divisional Courts refusal to grant leave to appeal in
Burkes v. Canada
    (Revenue Agency)
, 2010 ONSC 6059 (Div. Ct.).  With this decision of a
    higher court in play, the motion judge was justified in permitting the return
    of CRAs motion in this case.

[14]

Fourth,
    the appellant seeks leave to appeal the motion judges costs award.  The
    appellant contends that the substantial indemnity component of the award was
    made in error.

[15]

We
    would not grant leave to appeal.  CRA sought costs of just under $60,000. 
    After careful review of the progress of the litigation, lawyers involved for
    CRA, hourly rates, dockets, and offers to settle, the motion judge fixed costs
    at just over $40,000.  Accordingly, even if the appellant were successful on
    its legal argument, we would not interfere with the costs award he made,

[16]

The
    appeal from the motion judges order dated January 7, 2013 is dismissed.  Leave
    to appeal the motion judges order dated May 23, 2013 is denied.

[17]

The
    respondent is entitled to its costs of the appeal fixed at $24,000, inclusive
    of disbursements and HST.

Released: October 3, 2013 (K.F.)

K. Feldman J.A.

J.C. MacPherson J.A.

G.J. Epstein J.A.


