SHELDON YANG PLAINTIFF - v. -, 2023 SKKB 15

KING’S BENCH FOR SASKATCHEWAN Citation: 2023 SKKB 15 Date: 202 3 01 18 Docket: KBG-RG-02275-2022 Judicial Centre : Regina BETWEEN: SHELDON YANG PLAINTIFF - and - SASKATCHEWAN FINANCE DEFENDANT Appearing: Sheldon Yang self-represented Kyle T. McCreary for the defendant FIAT BERGBUSCH J. JANUARY 18, 2023 INTRODUCTION [ 1 ] Saskatchewan Finance, the named defendant, applies to strike the statement of claim on the grounds that it discloses no reasonable claim, is frivolous and an abuse of the court’s process, and fails to provide sufficient particulars.

During the hearing the defendant took the position that the plaintiff should be given an opportunity to cure the alleged pleading deficiencies by filing an amended statement of claim. [ 2 ] For the reasons that follow, the statement of claim is struck. The plaintiff has leave to file an amended statement of claim within 30 days from the date of this decision, failing which the claim is dismissed. BACKGROUND [ 3 ] The plaintiff, Sheldon Yang, is the principal of a business, E & E Food Service Ltd. [E & E].

The nature of E & E’s business is not evident from the statement of claim or the evidence filed, but what is clear is that E & E is a vendor and was required at all material times to collect provincial sales tax [PST] on its sales, file PST tax returns, and remit collected PST to the Ministry of Finance [Ministry]. [ 4 ] In March 2020, the provincial government announced a program allowing Saskatchewan businesses to defer their obligation to pay PST until July 31, 2020. This program responded to cash flow problems experienced by businesses as an impact of the COVID-19 pandemic.

Businesses were still required to file PST tax returns, either monthly or quarterly as applicable. Further, in order to qualify for the automatic deferral and waiver of interest and penalties, businesses needed to make full payment of the PST amounts by July 31, 2020, or put in place a payment arrangement by agreement with the Ministry.

[ 5 ] E & E postponed making PST payments but did not continue to file PST returns or make payment arrangements by July 31, 2020, as required. [ 6 ] E & E was audited by the Ministry for PST for the period January 1, 2018, to August 31, 2021. On November 29, 2021, the Ministry sent a preliminary audit to E & E, and an adjusted audit on December 17, 2021. In the audit, E & E was assessed a penalty of 10% on all tax that had not been remitted and 25% on taxes collected and not remitted. [ 7 ] E & E paid most of the PST and interest owing but refused to pay the assessed penalty.

The Ministry sent a notice of assessment to E & E on January 18, 2022. [ 8 ] The plaintiff issued the statement of claim against Saskatchewan Finance on September 28, 2022. Briefly, the claim alleges that the government violated Mr. Yang’s civil rights by depriving him of his right to communicate with the government, by discriminating against him, and by depriving him of the right to know how the penalty was calculated.

APPLICABLE LEGISLATIVE PROVISIONS [ 9 ] Several provisions of The Revenue and Financial Services Act , SS 1983, c R-22.01 [ RFSA ] and The Provincial Sales Tax Act , RSS 1978, c P-34.1 [ PST Act ], are germane to the plaintiff’s claim and the underlying issues between the parties. The Provincial Sales Tax Act [ 10 ] The definition of “vendor” in s. 3(1)(

o) of the PST Act includes a person who in the course of business “sells or leases tangible personal property to a consumer or user at a retail sale in the province for purposes of consumption or use …” [ 11 ]

Section 5 of the PST Act imposes a tax on retail sales at the rate of 6% of the value of the property to be consumed or the services to be used. All taxes imposed pursuant to the PST Act are to be collected and remitted to the Minister in accordance with

Part III of the RFSA and the regulations: s. 8.1(1) of the PST Act . [ 12 ]

Section 8.11 entitles certain persons, including vendors, who believe they have overpaid tax pursuant to the PST Act to apply for a refund or to bring an action in the Court of King’s Bench: 8.11(1) If a person, vendor, consumer or user believes that he or she has made an overpayment of tax pursuant to this Act, he or she may do one or more of the following: (

a) apply to the minister for a refund ; (

b) whether or not he or she has applied to the minister for a refund, commence an action in the Court of Queen’s Bench .

(2) The person, vendor, consumer or user applying for a refund pursuant to clause (1)(

a) shall apply in a form acceptable to the minister and include: (

a) all the documents or information the minister requires to be satisfied of the person’s, vendor’s, consumer’s or user’s claim to a refund; and (

b) evidence satisfactory to the minister that any returns required to be filed pursuant to this Act were filed.

(3) The minister shall respond to the application mentioned in subsection (2) within 120 days after receiving the application.

(4) The minister may, with respect to the application mentioned in subsection (2): (

a) allow the claim, in part or in whole; or (

b) deny the claim.

(5) If the minister allows the claim, in part or in whole, pursuant to clause (4) (a), the minister may pay interest in accordance with clause 56(1) (

b) of The Revenue and Financial Services Act .

(6) If a person, vendor, consumer or user is dissatisfied with the decision of the minister made pursuant to subsection (4), he or she may commence an action in the Court of Queen’s Bench . … (Emphasis added) [ 13 ] Finally, the PST Act contains a statutory immunity clause: 43.4 No action or proceeding lies or shall be commenced against the Crown, the minister, the ministry over which the minister presides or any officer or employee or administrator or agent of the minister, if that person is acting pursuant to the authority of this Act or the regulations, for anything in good faith done, caused or permitted or authorized to be done, attempted to be done or omitted to be done by that person or by any of those persons pursuant to or in the exercise or supposed exercise of any power conferred by this Act or the regulations or in the carrying out or supposed carrying out of any duty imposed by this Act or the regulations.

The Revenue and Financial Services Act [ 14 ]

Part III of the RFSA , entitled “Revenue Collection,” sets out the requirements for collection and remittance of taxes to the Minister.

[ 15 ] Section 47(1) (a)(

i) of the RFSA defines “collector” to include a vendor as defined in the PST Act .

Section 49 obligates collectors to levy and collect taxes imposed by a “revenue Act” (such as the PST Act ). In the case of taxable goods and services, such taxes must be levied and collected by the collector at the time of sale: 49(1) Subject to subsection (1.1), every collector shall levy and collect, and every taxpayer shall pay, any tax imposed by a revenue Act on a taxpayer.

(1.1) In the case of taxable goods or taxable services, any tax imposed by a revenue Act must be levied and collected by the collector and paid by the taxpayer at the time of the sale of the taxable goods or taxable services.

(2) Any tax imposed by a revenue Act is deemed to have been collected by a collector at the time of sale by the collector of the taxable goods or services as required pursuant to a revenue Act. … [ 16 ] Collectors are required to pay to the Minister the amount of tax collected or deemed to be collected at the times and in the manner prescribed by the regulations and to furnish a return to the Minister at the times and in the manner prescribed: RFSA at ss. 53 and 54 . [ 17 ]

Section 56 of the RFSA requires the Minister to refund overpayments of taxes and imposes a limitation period on actions to recover overpayments from the Minister: 56(1) Subject to subsections (2) and (3), where a collector or taxpayer has made an overpayment of tax, the minister: (

a) shall refund the amount of the overpayment to the collector or taxpayer; and (

b) may pay interest at the rate and in the manner prescribed in the regulations. …

(4) Notwithstanding The Limitations Act , no action may be brought to recover an overpayment after the expiration of: (a) … (

b) in the case of tax payable pursuant to any other Act, four years from the date on which the overpayment occurred. [ 18 ]

Section 57 imposes penalties and interest on collectors for unpaid PST and for failure to file a PST return within the time required. However, if a collector is assessed for tax collected or deemed to be collected or payable following an audit , as appears to have happened here, the collector is liable to pay to the Crown penalties and interest, including a penalty equal to 10% of the tax assessed or 25% on tax collected but not remitted, and interest: 58(1) Notwithstanding

section 57, a collector or taxpayer shall pay the penalty and interest set out in subsection (1.1) if : (

a) an audit is performed on the collector or taxpayer pursuant to this Part or a revenue Act; and (

b) as a result of that audit, the collector or taxpayer is assessed for tax collected, deemed to be collected or payable pursuant to this Part or any revenue Act .

(1.1) In the circumstances mentioned in subsection (1), the collector or taxpayer is liable to pay to the Crown, in addition to any other penalty : (

a) one of the following: (

i) a penalty equal to 10% of the amount of tax assessed ; (ii) if a collector has collected, but not remitted, any tax as required by this Part or a revenue Act, a penalty equal to 25% of the amount of tax assessed ; (iii) if the minister is satisfied that a collector who has collected tax has wilfully failed to remit the tax as required by this Part or a revenue Act, a penalty equal to the amount of tax assessed; and (

b) interest, at the rate and applied in the manner prescribed in the regulations, on the amount of tax assessed, from the day on which the tax was required to be forwarded or paid . … (Emphasis added) [ 19 ] The Minister may waive or cancel interest or penalties imposed under the RFSA : s. 58.1 of the RFSA . [ 20 ] The Minister may make an estimate of the amount of tax collected by a collector which has not been accounted for or paid, including any penalty and interest payable.

A notice of the estimate is served on the collector, directing the collector to account for the unpaid amount or pay it: s. 60 of the RFSA (In its materials, the Ministry refers to this document as a notice of assessment). A collector served with a notice of estimate pursuant to s. 60 has a right of appeal to the Board of Revenue Commissioners: s. 61 of the RFSA . Law Governing applications to strike pleadings [ 21 ] The Ministry relies upon Rule 7-9 of The Queen’s Bench Rules in applying to strike the statement of claim:

Striking out a pleading or other document, etc. in certain circumstances 7-9(1) If the circumstances warrant and one or more conditions pursuant to subrule (2) apply, the Court may order one or more of thefollowing: (

a) that all or any part of a pleading or other document be struck out; (

b) that a pleading or other document be amended or set aside; (

c) that a judgment or an order be entered; (

d) that the proceeding be stayed or dismissed.

(2) The conditions for an order pursuant to subrule (1) are that the pleading or other document: (

a) discloses no reasonable claim or defence, as the case may be; (

b) is scandalous, frivolous or vexatious; (

c) is immaterial, redundant or unnecessarily lengthy; (

d) may prejudice or delay the fair trial or hearing of the proceeding; or (

e) is otherwise an abuse of process of the Court.

(3) No evidence is admissible on an application pursuant to clause (2)(a). [22] The governing principles that apply to an application to strike a pleading for failing to disclose a reasonablecause of action are well established. An oft-cited

summary is found in Saskatchewan Power Corporation v Swift Current (City), 2007SKCA 27 at para 18, [2007] 5 WWR 387: [18] These general principles were summarized by Gunn J. in the case of Collins v. McMahon [2002 SKQB 201]: [11] The principles which apply to an application to strike a plaintiff’s claim under Rule 173(

a) are the following: (

i) The claim should be struck where, assuming the plaintiff proves everything alleged in the claim there is no reasonable chance ofsuccess. (Sagon v. Royal Bank of Canada et al. (1992, (SK CA), 105 Sask. R. 133 at 140 (C.A.)); (ii) The jurisdiction to strike a claim should only be exercised in plain and obvious cases where the matter is beyond doubt. (Sagon, at140; Milgaard v. Kujawa et al. (1994), (SK CA), 123 Sask. R. 164 (Sask.

C.A.)); (iii) The court may consider only the claim, particulars furnished pursuant to a demand and any document referred to in the claim uponwhich the plaintiff must rely to establish its case (Sagon, at p. 140); (iv) The court can strike all, or a portion of the claim (Rule 173); (

v) The plaintiff must state sufficient facts to establish the requisite legal elements for a cause of action.(Sandy Ridge Sawing Ltd. v. Norrish and Carson (1996), (SK KB), 140 Sask.

R. 146 (Q.B.)). [23] In reviewing the statement of claim to determine whether it discloses a reasonable cause of action, the courtassumes all of the facts as pleaded are true, unless they are manifestly incapable of being proven: R v Imperial Tobacco Canada Ltd.,2011 SCC 42 at para 22, [2011] 3 SCR 45 [Imperial Tobacco]. [24] In Harpold v Saskatchewan (Corrections and Policing), 2020 SKCA 98 [Harpold], the Court of Appealinstructed that a chambers judge must take into consideration the whole of the statement of claim, including the combined effect of anytechnical pleading together with other facts, to determine whether the essential elements of a cause of action are present: [26] When called upon to review a claim in response to an application under Rule 7-9(2)(a), the reviewing judge is required todetermine whether sufficient facts have been pleaded to establish the legal elements of a cause of action by considering the whole of thestatement of claim.

It is for the reviewing judge “to determine whether the combined effect of any technical pleading, together with otherfacts, properly plead the essential elements of the cause of action” (Reisinger v J.C. Architect Ltd., 2017 SKCA 11 at para 20, 411 DLR(4th) 687 [Reisinger]). [25] In the present application, the defendant has also referred to Rule 13-8 of The Queen’s Bench Rules, which setsout the general requirements for pleadings. This Rule reflects the fourfold function of pleadings, which is: 1. To define with clarity and precision the question in controversy between litigants. 2.

To give fair notice of the case which has to be met so that the opposing party may direct his evidence to the issues disclosed by them.A defendant is entitled to know what it is that the plaintiff asserts against him; the plaintiff is entitled to know the nature of the defenceraised in answer to his claim. 3. To assist the court in its investigation of the truth of the allegations made by the litigants. 4. To constitute a record of the issues involved in the action so as to prevent future litigation upon the matter adjudicated between the

parties. (See W.B. Williston & R.J. Rolls, The Law of Civil Procedure, vol 2, (Toronto: Butterworths, 1970) at 636, cited in Ducharme andHolben v Davies and Rogoschewsky (1984), (SK CA), 29 Sask R 54 (CA) and Harpold at para 29.) [26] Pleadings that do not achieve technical compliance with The Queen’s Bench Rules should not necessarily bestruck provided they adequately serve their purpose, which is to define the issues in dispute and give notice to the other side of what isclaimed.

The court’s focus in assessing an application to strike all or part of a claim as disclosing no reasonable cause of action is on thesubstance of the pleading rather than its form: Thirsk v Public Guardian and Trustee of Saskatchewan, 2017 SKQB 66 at paras 21 and23 [Thirsk]; Harpold at para 32. [27] Pleadings drafted by self-represented litigants can give rise to competing challenges related to access to justice.On the one hand, screening out claims that have no chance of success enhances efficiency, promotes fairness, and avoids unnecessarycosts: Harpold at para 33; Imperial Tobacco at paras 19-20.

On the other, requiring strict compliance with the technical rules ofpleadings may deprive plaintiffs, especially self-represented litigants, of access to the court: Harpold at para 34. [28] In Harpold at para 37, the Court of Appeal noted the challenge with identifying a recognized cause of action in astatement of claim that is verbose, poorly drafted and fails to use technical language.

Despite the presence of such defects, the court maybe able to identify a reasonable claim from the narrative facts pleaded, even if standard legal terms are missing. [29] As an alternate ground for striking the claim, the defendant relies upon Rule 7-9(2)(

b) of The Queen’s BenchRules, contending that the statement of claim is frivolous. A pleading is frivolous if it is “plain and obvious” or “beyond reasonabledoubt” that the claims it advances are “groundless and cannot succeed”: Siemens v Baker, 2019 SKQB 99 at paras 23-25; Yashcheshen vJanssen Inc., 2022 SKCA 140 at para 20 [Janssen]. [30] The defendant further asserts that the statement of claim should be struck pursuant to Rule 7-9(2)(

e) as an abuseof process. The doctrine of abuse of process “is flexible and is unencumbered by specific doctrinal requirements...”: Walker v Mitchell,2020 SKCA 127 at para 24, [2021] 4 WWR 555.

In determining whether a claim is frivolous or an abuse of process, a judge mayconsider the merits of the claim and the motives of the plaintiff in bringing it, and evidence other than the pleadings is admissible: Sagon v Royal Bank of Canada (1992), (SK CA), 105 Sask R 133 (WL)(CA) at para 18. [31] The Court of Appeal recently clarified that the “plain and obvious” test also applies to applications to strike onthe basis that a statement of claim amounts to an abuse of process: GHC Swift Current Realty Inc. v BACZ Engineering

(2004) Ltd.,2022 SKCA 38 at paras 25-26. [32] If a deficient statement of claim can be rehabilitated through amendments, a plaintiff should be given leave todo so before the claim is struck: Yashcheshen v Teva Canada Ltd., 2022 SKCA 49 at para 43, [2022] 8 WWR 60. This is so even if theplaintiff has not expressly applied to amend the pleading: Thirsk at para 11. However, where the allegations in the statement of claimcannot be distilled into coherent and material facts on which a cause of action can be based, they must be struck: Thirsk at para 27. Analysis (

a) The statement of claim does not disclose a reasonable cause of action [33] For the reasons which follow, I conclude that the statement of claim must be struck because it does not disclosea reasonable cause of action. [34] The starting point is for the court to review the statement of claim as a whole, taking into account any technicalpleading and any other pleaded facts. This is challenging in this case as the statement of claim is so seriously flawed. The allegations areset out in six brief paragraphs on one single-spaced typed page.

The statement of claim omits a prayer for relief listing the remediessought by the plaintiff. It does not identify, even by label, any particular cause of action, such as breach of contract or negligentmisrepresentation. [35] Since it is brief, the statement of claim is reproduced here in its entirety (except for the paragraphs naming theparties): 3.

The defendant has violated the plaintiff civil rights in a few points: • The defendant deprives the plaintiff rights to have direct contact with the defendant • The defendant discriminates against the plaintiff in the way of communication • The defendant deprives the plaintiff rights to know how the penalty is calculated [Errors in original] 4.

The plaintiff had direct contacts with the defendant seeking information and advice about the postponed PST payment in thepandemic period because the defendant had a special notice, however the defendant did not recognize the direct contacts but forced theplaintiff to take their direct phone call and made a penalty decision on the postponed PST payment. Plaintiff tried to discuss and questionthe penalty decision with the defendant, especially the constantly changing calculations, however the defendant deprived the plaintiffright to know how the penalty was calculated. 5.

The plaintiff believes the defendant violated his civil rights, deprived his rights to directly contact the defendant, anddiscriminated against the plaintiff in the way to get information. The plaintiff has tried to talk with the defendant about the unreasonable

practice on the penalty decision. Especially, when the plaintiff started to make penalty payments according to the agreement, the defendant increased the penalty amount from $4885.51 to $8920.22 plus already paid $815.00, the plaintiff tried to discuss with the defendant about the changed decision, asked the defendant to provide detailed regulations and methods how the calculated is applied on each month penalty. However the defendant did not provided the information just had the bully decision, this definitely deprive the plaintiff rights to know how.

I have the right to verify the penalty calculation and should be able to get the same amount if the regulation/act is clear to the public. 6. The plaintiff has tried to contact the defendant to solve the violation, however no result. Therefore, makes the claim against the defendant’s violations of his civil rights. Detailed evidence and information will be available upon request. [Errors in original] [ 36 ] Assuming the alleged facts to be true, Mr. Yang contacted the Ministry to seek information and advice about the postponement of his obligation to remit PST during the COVID-19 pandemic.

The plaintiff received a telephone call from someone representing the Ministry. The Ministry then imposed a penalty, presumably for alleged noncompliance with the PST Act and the RFSA . The claim alleges the penalty was constantly changing, and the Ministry increased the amount from $4,885.51 to $8,920.22 in addition to a penalty of $815.00 that the plaintiff had already paid. According to the claim, the Ministry did not explain how the amount was calculated, direct Mr. Yang to the applicable legislation or regulations, or contact him using his preferred mode of communication.

The statement of claim also asserts various conclusions, such as that the Ministry’s practice in imposing a penalty was “unreasonable” and this was a “bully decision.” [ 37 ] The statement of claim alleges that the Ministry “violated” Mr. Yang’s “civil rights.” Breach of “civil rights” is not a recognized cause of action.

However, I will examine the three alleged instances of such violations to see whether the elements of a recognized cause of action can be unearthed. [ 38 ] First, the plaintiff alleges deprivation of his right to have direct contact with the defendant, although the statement of claim does acknowledge a telephone call he received from the Ministry. Members of the public do not have a legally enforceable right to direct contact with government ministries or agencies.

It is plain and obvious that this complaint does not identify a reasonable cause of action. [ 39 ] Second, the plaintiff also alleges that he has been subjected to discrimination by the defendant “in the way to get communication.” It is not clear what this means. Members of the public do not have the right to specify how government ministries or agencies communicate with them or provide them with information or notices. If that is the gist of the plaintiff’s complaint, the claim is bound to fail. Alternately, this allegation may allude to discrimination in a more traditional sense.

If so, as noted recently in Yashcheshen v Law School Admission Council Inc ., 2021 SKCA 149 at paras 27-29 , there is no common law tort of discrimination in Canada. Reading the allegation of discrimination as generously as possible, it is also bound to fail. [ 40 ] Third, the plaintiff alleges that he has been deprived of the right to know how the Ministry calculated the penalty. If this is simply a reiteration of the plaintiff’s complaint of inadequate communication by the Ministry, it is plain and obvious that it cannot succeed.

If the plaintiff’s real concern is that he (or, more accurately, his business) has been overcharged PST, interest, or penalties, the statement of claim does not make this allegation directly. This will be addressed in more detail below. [ 41 ] In addition, there is no claim for relief in the statement of claim, let alone any allegation that the plaintiff has suffered a loss or injury as a result of any of the alleged wrongs.

This reinforces the conclusion that the pleading discloses no reasonable cause of action: Shinkaruk v Neufeld Building Movers Ltd ., 2014 SKQB 12 at paras 12-13 , 432 Sask R 255. [ 42 ] Finally, in its notice of application the Ministry also relies upon the statutory immunity clause found at s. 43.4 of the PST Act (cited above).

Section 43.4 is a bar to an action unless bad faith is expressly pleaded and sufficient particulars are also pleaded in support of that allegation: see M.R.L.P. v Canada (Attorney General) , 2020 SKQB 101 at paras 45-49 ; Yashcheshen v College of Physicians and Surgeons of Saskatchewan , 2019 SKQB 43 at paras 38-43 . The statement of claim contains no averment of bad faith nor any material facts that could be interpreted as such.

For this reason, as well, it is plain and obvious that the plaintiff’s claim as presently drafted has no reasonable chance of success. [ 43 ] To conclude, even reading the statement of claim generously, the court has been unable to identify sufficient material facts to support a recognized cause of action and the statement of claim must be struck. (

b) The statement of claim is frivolous [ 44 ] For the reasons which follow, I also conclude that the statement of claim must be struck because it is frivolous. [ 45 ] To reiterate, a pleading can only be struck on the ground that it is frivolous if it is “plain, obvious and beyond reasonable doubt” that the claims advanced are “groundless and cannot succeed” and if they lack substance: Janssen at paras 19-20 ; Solgi v College of Physicians and Surgeons of Saskatchewan , 2022 SKCA 96 at para 47 , 473 DLR (4 th ) 421 [ Solgi ].

An application on this ground engages with the merits of the claim: Solgi at para 43 . [ 46 ] The defendant has filed the affidavit of Michael Litzenberger, an audit supervisor with the Ministry. Mr. Litzenberger deposes that he supervised the auditor responsible for the audit of E & E. E & E was audited for PST for the period January 1, 2018, to August 31, 2021. [ 47 ] On November 29, 2021, the Ministry sent a preliminary audit to E & E, and an adjusted audit on December 17, 2021. According to Mr.

Litzenberger, E & E was assessed a penalty of 10% on PST that the corporation had not forwarded and 25% on taxes collected and not remitted. E & E paid most of the tax owing, but Mr. Yang did not agree to pay the penalty. As a result, says Mr. Litzenberger, the Ministry issued a notice of assessment under s. 61 (this is presumably a reference to a notice of estimate issued pursuant to s. 60) of the RFSA on January 18, 2022. [ 48 ] Mr. Litzenberger and other Ministry officials had contact with Mr. Yang about the preliminary audit, the

adjusted audit, and the notice of assessment sent to E & E. Mr. Litzenberger understands E & E objects to paying the penalty because of the tax deferral policy implemented by the Ministry for spring 2020, intended to mitigate cash flow concerns related to impacts of COVID-19. The policy provided that tax remittances could be deferred to July 31, 2020, without penalty or interest so long as businesses continued to file tax returns each month or quarter as applicable and made full payment by July 31, 2020, or put in place a payment arrangement.

E & E did not file returns, pay the tax, or make payment arrangements by the required deadlines. [ 49 ] In a responding affidavit, Mr. Yang outlines his understanding of the program announced by the Ministry to provide relief to small businesses impacted by the COVID-19 pandemic. He explains that, when the pandemic continued through the summer of 2020, he expected that the Ministry would continue to allow businesses to delay payment of PST to support their cash flow. Mr.

Yang complains that no one called him to warn him that the postponement period would end on July 31, 2020, and that penalties would be imposed for late filing of returns and late PST remittances. He says that he spoke with an auditor employed by the Ministry, but the auditor did not advise him about penalties on the postponed payment and told him to hold off making the PST remittances until the Ministry had completed its audit. He says if he had been notified about the penalties, he would have taken quick action to make the payments.

He also says that, once he knew the audit results, he resumed making monthly payments, starting in November 2021, and paid all outstanding PST amounts. He believes he owes nothing on account of postponed PST payments. [ 50 ] Mr. Yang expresses frustration with the “department’s practice of communicating with [him] about PST payment.” He acknowledges receiving “a few calls” on February 8, 2022, from the director of the audit branch of the Ministry, but said he was busy with work and uncomfortable talking with the director by telephone so Mr. Yang asked the director to communicate by email. Mr.

Yang attached to his affidavit a subsequent email exchange he had with the director, who referred Mr. Yang to an information notice on the Government of Saskatchewan website that explained the details of the PST deferral program.

In his email, the director also summarized the requirements for businesses during the deferral period, as follows: The requirements during the deferral period as listed in the Information Notice were: • Tax returns must still be filed each month/quarter (with or without payment) if you are able to do so. • Monthly filers may defer payment of amounts due for February, March and April 2020 reporting periods to July 31, 2020. • Full payment or a payment arrangement must be in place by July 31, 2020 in order to qualify for the automatic deferral and waiver of penalty and interest.

Based on a review of the audit and your account, the returns in that period were not filed and no payment was received prior to July 31, 2020. [ 51 ] The director advised Mr. Yang that a waiver of interest and penalties would only be considered in extraordinary circumstances, which did not apply to his situation. He commented that a waiver would not be fair to other businesses that had paid the penalty. [ 52 ] In response to Mr. Yang’s further inquiries, the director pointed him to information on the Ministry’s website and explained how he could sign up to receive automatic email notifications of bulletins.

The director also informed Mr. Yang about a tax information phone line where information officers were available to answer questions. [ 53 ] Mr. Yang also attached to his affidavit numerous email exchanges he had with a business auditor employed by the Ministry. Among other things, this auditor sent Mr. Yang an audit package for E & E and explained the various penalties for failure to remit and pay PST and how they applied to E & E. [ 54 ] In his affidavit, Mr.

Yang contends that the way in which Ministry officials have communicated with him has “deprive[d] [his] rights to have direct contact with the department” and he objects to being directed to the Ministry’s website rather than receiving direct responses to his email inquiries.

He also says that the Ministry has deprived him of the right to know how the penalty has been calculated and says that the penalty amount was “constantly changed and messed up.” He asserts that the Ministry “bullied [him] and just gave [him] a huge increased penalty.” He claims that he has not received a detailed penalty and interest calculation for each month and has not been informed what interest rate was being applied or what legislation or regulation applied to the penalty calculation, despite repeated requests for such information.

He alleges that he was bullied into paying the penalty and appears to claim reimbursement of any overpayment, with penalties and interest. Mr. Yang’s affidavit is not just confined to facts but also includes opinions and argument. [ 55 ] On December 15, 2022, the day on which this application was heard, Mr. Yang filed a letter with the local registrar, reiterating his concerns about “bad customer service” and “messed up communication practice” of the Ministry. He also claimed that he had pointed out an error with the Ministry’s calculation of the penalty and interest owed by his business.

Finally, he included a list of remedies that he seeks in this action, as follows: 3.a Any over paid PST needs to be returned, with penalty and interest. 3.b Over paid penalty and interest needs to be returned. 3.c Cost for the time spend on verify the auditing and communicating the mistakes to the department. and 4. Mental compensation suffered from the department. 5. Costs compensation on this statement of claim.

While the letter is not admissible as evidence, it may point the way towards amendments that could be made to the statement of claim. [ 56 ] To reiterate the conclusions reached above about Mr. Yang’s concerns regarding the quality, adequacy, or mode of communications he had with the Ministry, these complaints are not actionable. The affidavits filed by the Ministry and by Mr. Yang reveal considerable communication by Ministry employees with Mr. Yang to explain the PST deferral program to him and the results of E & E’s audit. It may be that Mr.

Yang followed advice from a Ministry official to hold off paying any PST arrears until the audit was completed. Regardless, the statement of claim, as drafted, does not allege that Mr. Yang (or, more properly, E & E), overpaid PST amounts, interest or penalties to the Ministry or that E & E should not have been penalized because, for example, it followed advice received from a Ministry official. [ 57 ] In short, the court is satisfied that the statement of claim in its current form is frivolous and must be struck. (

c) Abuse of Process [ 58 ] The Ministry also applies to strike the statement of claim on the ground that it “is otherwise an abuse of process of the Court,” relying on Rule 7-9(2)(

e) of The Queen’s Bench Rules . It does not appear that the defendant advances arguments in support of this ground in addition to those that have already been canvassed in these reasons. It is, accordingly, unnecessary for me to decide whether the statement of claim should also be struck on this ground, given my conclusions above. LEAVE TO AMEND [ 59 ] In oral argument, the Ministry submitted that the plaintiff should be given an opportunity to remedy the defects in the statement of claim. The Ministry proposed that the plaintiff should be granted 30 days to “improve” his pleading. [ 60 ] While Mr.

Yang’s complaints about breaches of “civil rights” or inadequate communication with the Ministry cannot be cured and are doomed to fail, the plaintiff (or, rather, E &

E) may be able to allege a reasonable cause of action related to an alleged overpayment of PST, interest, and penalties. The claim alleges “constantly changing calculations,” an increase in the penalty amount from $4,885.51 to $8,920.22, and a desire to “verify the penalty calculation.” The affidavit filed by Mr.

Yang alleges an overpayment and the letter he filed with the court on December 15, 2022, also lists various remedies he requests for an alleged overpayment. [ 61 ] A plaintiff “should ordinarily be given an opportunity to amend defects to his claim if allowing such amendments meant that reasonable causes of action would result”: Filson v Canada (Attorney General) , 2015 SKCA 80 at para 31 , 465 Sask R 6.

Put another way, the court should grant leave to amend the statement of claim if there is some prospect that an amendment could cure the defects identified in these reasons. [ 62 ] The applicable legislation and case law do provide various avenues for a party to challenge a notice of estimate issued by the Ministry and to seek to recover an overpayment. For example, a collector of PST can appeal from a notice in accordance with s. 61 of the RFSA .

In addition, s. 8.11 of the PST Act authorizes a vendor who believes that it has made an overpayment of tax to apply to the Minister for a refund or to commence an action in the Court of King’s Bench. Further, a party that believes it has made an overpayment might be able to assert a claim for restitution based on unjust enrichment or mistake. How the enactment of s. 43.4 of the PST Act (the statutory immunity provision) would affect the availability of these claims is a question for another day. [ 63 ] This is a borderline case for granting leave to amend.

However, I have decided to grant the plaintiff leave to amend the statement of claim, for the following reasons: (

a) The Ministry suggested that the plaintiff should be given this opportunity. (

b) Since a statement of defence has not been filed to date, this proceeding is still at the stage where Rule 3-72(1)(

a) of The Queen’s Bench Rules applies and the plaintiff may amend his pleading, including to correct the name of a party, “any number of times without the Court’s permission.” (

c) As noted above, Mr. Yang’s concerns related to an alleged overpayment of PST, interest, and penalties, could form the basis of a pleading that would survive an application to strike. (See the discussion in 628356 Saskatchewan Ltd. v Water Security Agency , 2018 SKQB 4 at para 22 , 78 CLR (4 th ) 53.) [ 64 ] The Ministry argued, correctly, that neither party to the action has been properly named. If the plaintiff does proceed with an amendment to the statement of claim, the identification of the parties must also be remedied.

The claim was commenced against “Saskatchewan Finance”, when the proper designation of the defendant should be the Government of Saskatchewan: The Proceedings Against the Crown Act, 2019 , SS 2019, c P-27.01, s. 12 . Further, from the evidence filed, it appears that the proper plaintiff in any action to recover an overpayment of PST should be E & E Food Service Ltd., not Mr. Yang himself. CONCLUSION [ 65 ] For the foregoing reasons, the statement of claim is struck.

The plaintiff shall have 30 days from the date of this decision to serve and file an amended statement of claim that corrects the deficiencies identified in this decision. If the plaintiff fails to amend the statement of claim within this timeframe, the statement of claim shall stand dismissed. [ 66 ] As the successful party, the defendant is entitled to costs on column 1.

J. P. T. BERGBUSCH