Tennant v. Canada (National Revenue), 2012 ABQB 108

Court of Queen ’ s Bench of Alberta Citation: Tennant v. Canada (National Revenue), 2012 ABQB 108 Date: 20120222 Docket: 1003 18671 Registry: Edmonton Between: Robert Ivan Tennant Plaintiff/Respondent - and - Her Majesty the Queen as Represented by the Minister of National Revenue Defendant/Applicant _______________________________________________________ Memorandum of Decision of the Honourable Mr. Justice Sterling Sanderman _______________________________________________________ [ 1 ] Mr. Tennant initiated a lawsuit seeking relief from this Court.

He seeks a finding that the Minister of National Revenue discriminated against him contrary to s. 15 of the Canadian Charter of Rights and Freedoms and asks for an order preventing the Minister from enforcing Notices of Assessment issued in July of 1991. This is the essence of Mr. Tennant ’ s action. [ 2 ] The Defendant asks the Court to strike the Statement of Claim as it reveals no reasonable cause of action. For the purposes of this application, the Defendant accepts the accuracy of the facts set out in the Plaintiff ’ s Statement of Claim.

The relevant facts accepted by the parties for the purposes of the application to strike are:

a) Through a series of transactions that took place in 1987 and 1988, corporations controlled by the plaintiff and known as Hezoor Enterprises Ltd. ( “ HEL ” ) and Lyrient Enterprises Ltd. ( “ LEL ” ) advanced funds to or on behalf of Teirtu Enterprises Ltd. ( “ TEL ” ) totaling $1,032.286.00.

b) At the same time, under identical circumstances, funds totaling $915,608.00 were advanced to TEL from corporations controlled by Bruce Allan Ramage known as Oleru Enterprises Ltd. ( “ OEL ” ) and Simmard Enterprises Ltd. ( “ SEL ” ).

c) In accordance with a common strategy agreed to by the plaintiff, Bruce Allan Ramage and Neil W. Nicols, $1,850,000.00 of the funds advanced to TEL were advanced by TEL to HKPRC International Inc., a wholly owned subsidiary of TEL, to purchase shares in the capital stock of three different corporations.

d) By Notices of Assessment issued July 4, 1991, the defendant included the sum of $593,398.00 in the income of the plaintiff for the 1987 taxation year. For the 1988 taxation year, the defendant included the sum of $490,598.00 in the income of the plaintiff. Both of these amounts are equivalent to the amounts of the loans made collectively by HEL and LEL in 1987 and 1988. The amounts were included as part of the plaintiff ’ s income on the basis that the plaintiff received a personal benefit equal to the amount of loans, even though the loans were legitimate corporate advances.

e) Despite the fact that the loans made by OEL and SEL were made in identical circumstances and pursuant to identical documents as the loans made by HEL and LEL, the amounts loaned by OEL and SEL were not added to the personal income of Bruce Allan Ramage for his 1987 and 1988 taxation years.

f) The plaintiff appealed the Notices of Assessment issued on July 4, 1991, but the plaintiff abandoned those appeals before the matter was heard by the Tax Court of Canada and the assessments were therefore confirmed.

g) Despite repeated requests from the plaintiff, the Minister of National Revenue would not reassess the plaintiff in the same manner as Bruce Allan Ramage and the plaintiff therefore claims that the Minister of National Revenue has discriminated against the plaintiff contrary to s.15(1) of the Charter .

h) On August 15, 2006, the plaintiff applied for a Remission Order from the Minister of National Revenue with respect to the assessments issued on July 4, 1991 for the 1987 and 1988 taxation years, on the grounds that the defendant had discriminated against the plaintiff. On November 4, 2008 the plaintiff ’ s application for a Remission Order was denied.

i) The Plaintiff claims that the Minister of National Revenue has engaged in a concerted and deliberate effort to discriminate against the plaintiff contrary to the terms of the Charter . [ 3 ] The Defendant sought to strike the Statement of Claim in front of Master Breitkreuz on July 18, 2011 and was unsuccessful. An appeal of that decision has been brought to this court. [ 4 ] Three issues arise from this application. They are: 1. What is the appropriate standard of review on an appeal from a Master ’ s decision? 2. Does the Plaintiff ’ s Statement of Claim disclose a reasonable cause of action?

A) Is there a tort of discrimination?

B) Was the Plaintiff discriminated against by the Defendant contrary to s. 15 of the Charter? 3. Does the Alberta Court of Queen’s Bench have jurisdiction to hear this matter? [5] In Janvier v. 834474 Alberta Ltd., 2010 ABQB 800 at para. 18, Justice Macklin set out the standard of review on appealsfrom a decision of the Master. The standard of review would be one of correctness. As Justice Macklin said at para. 18: In

summary, the standard of review on a decision from the Master on a question of law is correctness. The standard of review for factsaccepted by the Master or factual inferences drawn by the Master from the evidence is reasonableness. The finding must amount to apalpable and overriding error. The imputed error must be plainly identified and must be shown to have affected the result. On a questionof mixed fact and law, if the principle of law cannot be extricated from the question, then the standard of review is again one ofreasonableness only to be interfered with if a palpable and overriding error can be shown.

If the principle of law can be extricated fromthe question, then the standard of review on the principle of law is correctness. [6] Even though Rule 6.14(3) has been modified since Justice Macklin’s decision by allowing additional evidence to be called aslong as it is in the opinion of the judge hearing the appeal relevant and material, the standard of review remains the same. In Dagher v.Thompson, 2011 ABQB 499 at paras. 33 to 36, Justice Park interpreted the amended Rule and applied Janvier. [7] The Appellant characterizes the Plaintiff’s lawsuit as a challenge to his tax assessments.

The Appellant suggests that anyattack on assessments under the Income Tax Act must be made in the Tax Court of Canada, with further appeals being heard by theFederal Court of Appeal. The Tax Court of Canada is given exclusive original jurisdiction to hear and determine matters of this sortarising under the Act. Consequently, the Appellant suggests that this Court lacks jurisdiction to review the correctness of anyassessments made under the Income Tax Act.

The Appellant argues that the Court of Queen’s Bench of Alberta does not have jurisdictionto grant the Plaintiff the relief he seeks. [8] The Appellant suggests a second reason why this Court does not have the jurisdiction to grant the relief requested by thePlaintiff. The Plaintiff asks for a declaration that the Minister has discriminated against the Plaintiff. The Appellant points out that theFederal Courts Act grants the Federal Court exclusive jurisdiction to grant declaratory relief against the Minister.

For these reasons, theAppellant argues that this claim must be dismissed because the action has been begun in the wrong forum and is doomed to fail. [9] After this matter was argued, the British Columbia Court of Appeal released the decision of Leroux v. Canada (RevenueAgency) 2012 BCCA 63 that is supportive of the Appellant’s position. [10] Nevertheless, there is some Appellate authority that stands contrary to this submission. In Pearson v.

The Canadian Radio-Television and Communications Commission, (1997), 1997 ABCA 276 , 200 AR 380 (CA), the majority held, in the context ofan application to strike an originating Notion of Motion under the old Rule 129 of the Alberta Rules of Court that it was not plain andobvious that the Federal Court had exclusive jurisdiction to hear a Charter challenge to The Canadian Radio- Television andCommunications Commission’s religious broadcast policy.

At para. 8, Foisy, J.A., writing for the majority, held that the Court ofQueen’s Bench has inherent jurisdiction to make such constitutional declarations with regard to the actions of government. In Pearson,Charter relief was sought and the Court of Appeal decided that the application could be advanced in the Court of Queen’s Bench ofAlberta in addition to the Federal Court. [11] It is not plain and obvious that the Plaintiff’s request for Charter relief cannot be heard in the Superior Court, a court ofinherent jurisdiction.

A person should not be deprived of their right to advance their cause of action unless it is certain to fail. Failure mayresult from a court not having jurisdiction to hear the action or no cause of action is revealed by the pleadings. This Statement of Claimshould not be struck for jurisdictional difficulties. [12] The Appellant argues that there is not a tort of discrimination and that the claim must fail. The Plaintiff’s claim is not basedon this allegation. The Plaintiff argues that the Minister of National Revenue discriminated against him and breached s.15 of the Charter.

If the Plaintiff can establish such a breach, s.24 of the Charter could provide him with a remedy. His action is not premised on theexistence of a tort of discrimination. [13] Having decided that the motion to strike the claim for no reasonable cause of action must fail in relation to the jurisdictionalargument and the nonexistence of a tort of discrimination, I will turn to the last argument put forward by the Appellant. Has the Plaintiffbeen able to show that he was discriminated against by the Defendant contrary to s. 15 of the Charter. [14] In Law v.

Canada (Minister of Employment and Immigration), (SCC), [1999] 1 SCR 497, the SupremeCourt of Canada established the framework of analysis to be used by courts when determining whether there has been a breach of s. 15 ofthe Charter. In Gosselin v. Quebec (Attorney General), 2002 SCC 84 , [2002] 4 SCR 429, the Supreme Court of Canadasummarized the three broad inquiries mandated by Law.

At para. 17, the Court states: To establish a violation of s. 15(1), the claimant must establish on a civil standard of proof that: (1) the law imposes differential treatmentbetween the claimant and others, in purpose of effect; (2) one or more enumerated or analogous grounds are the basis for the differentialtreatment; and (3) the law in question has a purpose or effect that is discriminatory in the sense that it denies human dignity or treatspeople as less worthy on one of the enumerated or analogous grounds. [15]

Section 15 of the Charter states: 15(1) Equality before and under law and equal protection and benefit of law - Every individual is equal before and under the law andhas the right to the equal protection and equal benefit of the law without discrimination and, in particular, without discrimination basedon race, national or ethnic origin, colour, religion, sex, age or mental or physical disability. [16] In the fourth edition of Canadian Charter of Rights and Freedoms, Lexis Nexis Canada Inc. 2005, edited by Gérald - A.Beaudoin and Errol Mendes, in

Chapter 14 authored by William Black and Lynn Smith, the following passage dealing with the equalityrights is found at Page 939. (

b) Enumerated or analogous grounds A crucial element of the current analytical framework, present since Andrews, is that

section 15 covers only differential treatment basedon grounds relating to personal characteristics that are either listed in

section 15 (race, national or ethnic origin, colour, religion, sex, ageor mental or physical disability) or are analogous to those listed grounds. Thus, there is no generic guarantee of equality: the allegedinequality must be based on an enumerated or analogous ground. The analogous grounds, like the enumerated ones, are “permanent” in the sense that a determination that a ground is analogous is not afinding of fact but more like a conclusion of law. Indeed, Bastarache JJ. has suggested that the factual underpinnings for a decision that aground is analogous, once made, become a question of settled law.

The determination as to what grounds are analogous to the listed grounds is to be made in light of the purposes of

section 15. There is nosingle touchstone, but the factors taken into consideration have included whether the personal characteristic is one that cannot bechanged without high personal cost and whether there is a history of discrimination or animosity against persons with that characteristic.There is considerable room for judicial notice to be taken in the process. In Corbiere v. Canada (Minister of Indian and NorthernAffairs), McLachlin and Bastarache JJ.

For the majority observed that “to identify a ground of distinction as analogous, one shouldconsider the characteristics of the enumerated grounds: It seems to us that what these grounds have in common is the fact that they often serve as the basis for stereotypical decisions made noton the basis of merit but on the basis of a personal characteristics that is immutable or changeable only at unacceptable cost to personalidentity.

This suggests that the thrust of identification of analogous grounds at the second stage of the Law analysis is to reveal groundsbased on characteristics that we cannot change or that the government has no legitimate interest in expecting us to change to receiveequal treatment under the law. To put it another way, s. 15 targets the denial of equal treatment on grounds that are actually immutable,like race, or constructively immutable, like religion.

Other factors identified in the cases as associated with the enumerated andanalogous grounds, like the fact that the decision adversely impacts on a discrete and insular minority or a group that has beenhistorically discriminated against, may be seen to flow from the central concept of immutable or constructively immutable personal

characteristics, which too often have served as illegitimate and demeaning proxies for merit-based decision making. The grounds the Supreme Court has found to be analogous are citizenship, marital status, sexual orientation and off-reserve Indian band membership (Aboriginality/residence). [ 17 ] In this case, the Plaintiff has not been able to provide the immutable personal characteristics that he possesses that are the basis for the differential treatment he claims. An inability on his part to do so fails to establish a cause of action against the Crown.

Consequently, as his pleadings do not disclose a reasonable claim, the claim is to be struck pursuant to Rule 3.68(1). [ 18 ] Costs are awarded to the Defendant. Heard on the 18 th day of January, 2012. Dated at the City of Edmonton, Alberta this 22 nd day of February, 2012. Sterling Sanderman J.C.Q.B.A. Appearances: Mr. Murray L. Engelking Engelking Wood for the Plaintiff/Respondent Ms. Wendy Bridges Department of Justice Canada for the Defendant/Applicant