783783 Alberta Ltd. v. Canada (Attorney General) et al., (2009) 466 A.R. 1 (QB)

• Judge: Moen, J.
• Court: Court of Queen's Bench of Alberta (Canada)
• Case Date: October 16, 2007
• Citations: (2009), 466 A.R. 1 (QB);2009 ABQB 149

783783 Alta. v. Can. (A.G.) (2009), 466 A.R. 1 (QB)

MLB headnote and full text

Temp. Cite: [2009] A.R. TBEd. MR.116

783783 Alberta Ltd. carrying on business as Vue Weekly (appellant) v. The Attorney General of Canada, SEE Magazine, Great West Newspaper Group Ltd., Jamieson Newspaper Inc., Hollinger Canadian Publishing Holdings Co., Hollinger Inc., Hollinger International Inc., also known as Sun-Times Media Inc., Conrad M. Black and the Ravelston Corporation Limited (respondents)

(0503-18023; 2009 ABQB 149)

Indexed As: 783783 Alberta Ltd. v. Canada (Attorney General) et al.

Alberta Court of Queen's Bench

Judicial District of Edmonton

Moen, J.

March 12, 2009.

Summary:

Vue Weekly, a free weekly news magazine, brought an action, alleging, inter alia, that the Minister of National Revenue had improperly allowed advertisers to deduct expenses from advertising in SEE Magazine, Vue's main competitor, under s. 19 of the Income Tax Act, when SEE was not a Canadian company as required by s. 19, that Vue had suffered damages due to lost advertising revenue and that the Crown was liable for the Minister's negligence. The Crown applied to strike the statement of claim as against it.

A Master of the Alberta Court of Queen's Bench, in a decision reported at (2007), 430 A.R. 361; 2007 ABQB 348, allowed the application. Vue appealed.

The Alberta Court of Queen's Bench allowed the appeal in part. The duty of care alleged by Vue was negated for policy reasons. However, Vue could seek a remedy in tort in the Court of Queen's Bench or the Federal Court if it was established that SEE was a non-Canadian newspaper and that the Canada Revenue Agency auditors had failed to correctly tax the SEE advertisers. To found a tort action, Vue had a right to seek a declaration, under s. 173(1) of the Income Tax Act, from the Tax Court of Canada (TCC) that the CRA auditors had failed to correctly tax the SEE advertisers. The Master erred when he struck the claim for failure to disclose a cause of action. The appeal was allowed to the extent that, if Vue was unable to have the TCC determine SEE's status, then Vue could amend its statement of claim to seek that remedy from the Court of Queen's Bench. It was plain and obvious that Vue had to obtain the necessary declaration before a tort action began to run. Therefore, Vue's claim as to damages arising from the past actions of the CRA auditors had to fail and those portions of the statement of claim were struck.

Actions - Topic 1502

Cause of action - General principles - When cause of action arises - Tort - [See third and sixth Crown - Topic 1563 ].

Administrative Law - Topic 3205.2

Judicial review - General - Governmental action - [See third and sixth Crown - Topic 1563 ].

Conflict of Laws - Topic 9284

Practice - Stay of proceedings - Where court lacks or declines jurisdiction - The Alberta Court of Queen's Bench discussed the appropriate procedure for the parties and courts where the jurisdiction to determine necessary questions of fact, law, and fact and law were divided between two courts, such as the Court of Queen's Bench and the Tax Court of Canada - When a party initiated an action that required determination of a question of law, or fact and law, and that determination was one that a given court cannot decide, that was analogous to where a plaintiff had failed to allege a fact that was required to prove a claim - Where no party provided the findings of law or mixed fact and law that were outside a court's jurisdiction, that court, itself, could not and should not test and evaluate those allegations of law or mixed fact and law - Until those extra jurisdictional issues were answered, a court could not proceed - That, functionally, was the same as where the court was asked to decide a matter on the basis of inadequate and incomplete facts - A court confronting such a split jurisdiction matter would seem to have two possible options: (1) stay the proceeding until the extra jurisdictional question was determined, or (2) dismiss the proceeding as fatally flawed - Given the operation of limitations legislation, the former seemed the appropriate choice and would allow the court to preserve, where possible, the rights of an allegedly injured party - That stay would only operate as long as the extra jurisdictional question remained live - If the other court found against the plaintiff, then clearly the stayed proceeding would be hopelessly flawed and doomed to fail, and ought to be dismissed, following Rule 129 - Obviously, the same outcome would result where the second court no longer had jurisdiction to make the necessary findings, for example, due to expiry of a limitation period - Alternatively, a court might dismiss an action upon concluding that the alleged duty of care cannot exist - That too was an appropriate alternative for a court that confronted a matter for which two courts had a divided jurisdiction - Where a court identified a matter as hopelessly flawed, dismissing that proceeding was an efficient use of judicial resources - See paragraphs 239 to 262.

Courts - Topic 2004

Jurisdiction - General principles - Inherent jurisdiction - Vue Weekly was a free weekly news magazine - Its main competitor was SEE Magazine - Vue's and SEE's advertisers were able to deduct their advertising expenses under s. 19 of the Income Tax Act (ITA), which allowed such deductions for advertising in a Canadian newspaper - Vue brought an action, alleging, inter alia, that the Minister of National Revenue had improperly allowed advertisers to deduct expenses from advertising in SEE when it was not a Canadian company, that Vue had suffered damages due to lost advertising revenue and that the Crown was liable for the Minister's negligence - The Crown applied to strike the statement of claim as disclosing no cause of action against it - A Master allowed the application - Vue appealed - The Alberta Court of Queen's Bench allowed the appeal in part - Vue's proper remedy was by way of judicial review in the Tax Court of Canada (TCC), beginning with a question under the reference mechanism in s. 173(1) of the ITA - While the court rejected the Crown's argument that the TCC had no jurisdiction to hear a reference question from Vue as to SEE's Canadian status, if the Crown was correct, there remained a second and necessary jurisdictional alternative in the Court of Queen's Bench's inherent jurisdiction - The Crown's interpretation of s. 173(1) left a jurisdictional gap: the TCC could consider appeals or reference questions by a taxpayer of matters that related to a taxpayer and required application or interpretation of the ITA, while the Federal Court could conduct judicial reviews initiated by any party of the administrative aspects of the Minister's actions - That left no forum where a third party could obtain a finding of law, or of fact and law, that required interpretation of the ITA - This was the situation in which the Court of Queen's Bench could exercise its intrinsic jurisdiction - Vue alleged a wrong and, if the Crown was correct, had no other forum within which to obtain a remedy - If the TCC accepted that it had authority under s. 173(1) to hear third party enquiries such as Vue's, then Vue had to pursue the matter there - If not, Vue was to be permitted to amend its statement of claim in order to seek a declaration from the Court of Queen's Bench - The court outlined a possible progression for the matter - See paragraphs 216 to 238.

Courts - Topic 4049

Federal Court of Canada - Jurisdiction - Federal Court - Income tax matters - [See Courts - Topic 2004 ].

Courts - Topic 4502

Tax Court of Canada - General - Jurisdiction - [See Courts - Topic 2004 and second Crown - Topic 1571.4 ].

Courts - Topic 4502

Tax Court of Canada - General - Jurisdiction - Vue Weekly was a free weekly news magazine - Its main competitor was SEE Magazine - Vue's and SEE's advertisers were able to deduct their advertising expenses under s. 19 of the Income Tax Act (ITA), which allowed such deductions for advertising in a Canadian newspaper - Vue brought an action, alleging, inter alia, that the Minister of National Revenue had improperly allowed advertisers to deduct expenses from advertising in SEE when it was not a Canadian company, that Vue had suffered damages due to lost advertising revenue and that the Crown was liable for the Minister's negligence - The Crown applied to strike the statement of claim as disclosing no cause of action against it - A Master allowed the application - Vue appealed - The Alberta Court of Queen's Bench allowed the appeal in part - Vue's proper remedy was by way of judicial review in the Tax Court of Canada (TCC) - While ss. 152(8) and 169(1) of the ITA precluded Vue from appealing the taxes paid by SEE's advertisers, appeals were not the only proceedings that might be heard by the TCC - The s. 173(1) reference mechanism allowed a taxpayer to refer a question to the TCC - This provided a court review mechanism to determine the legal correctness of taxes assessed against a taxpayer - This was the kind of determination of fact and/or law that would be required by a party, such as Vue, that sought a declaration that the Canada Revenue Agency (CRA) auditors were acting contrary to legislation - Having obtained a determination of the status of SEE as a Canadian or non-Canadian publication, Vue could then seek judicial review to ensure the proper enforcement of the ITA by CRA auditors - While any s. 173(1) enquiry required the consent of the Minister, the Minister's refusal to consent would, itself, be subject to judicial review - However, in light of the Crown's arguments on this appeal, the court could not conclude that it was plain and obvious that Vue had to seek the declaration from the TCC that would provide the precursor to an action in tort - It was also arguable that the TCC would not have legislative jurisdiction to hear a judicial review of SEE's status - These were questions that should receive the benefit of full argument - See paragraphs 196 to 215.

Courts - Topic 4502

Tax Court of Canada - General - Jurisdiction - The Alberta Court of Queen's Bench stated that the Income Tax Act "recognizes that there are at least two kinds of court evaluations of the correctness of the taxes due from a taxpayer: (1) an appeal of a tax assessment by that taxpayer, that then may change the obligation of that taxpayer to pay taxes; and (2) a reference question initiated by any taxpayer [under s. 173(1)] of any tax assessment that will indicate the legal correctness of that tax assessment, but which does not itself alter the obligations to pay taxes that flow from a given tax assessment" - See paragraph 205.

Courts - Topic 5693

Provincial courts - General - Jurisdiction or powers - Respecting torts against Federal Crown - [See Courts - Topic 2004 ].

Courts - Topic 5695.2

Provincial courts - General - Jurisdiction or powers - Respecting income tax matters - [See Courts - Topic 2004 ].

Courts - Topic 8345

Provincial courts - Alberta - Court of Queen's Bench - Jurisdiction - [See Courts - Topic 2004 ].

Crown - Topic 1563

Torts by and against Crown - Negligence by Crown - Breach of statutory duty - Vue Weekly was a free weekly news magazine - Its main competitor was SEE Magazine - Vue's and SEE's advertisers were able to deduct their advertising expenses under s. 19 of the Income Tax Act, which allowed such deductions for advertising in a Canadian newspaper - Vue brought an action, alleging, inter alia, that the Minister of National Revenue had improperly allowed advertisers to deduct expenses from advertising in SEE when it was not a Canadian company, that Vue had suffered damages due to lost advertising revenue and that the Crown was liable for the Minister's negligence - The Crown applied to strike the statement of claim as disclosing no cause of action against it - A Master allowed the application - Vue appealed - At issue was whether the Minister owed a duty of care to Vue to tax other taxpayers correctly - The Alberta Court of Queen's Bench indicated that, because there was no such previously recognized duty of care, it was necessary to conduct an "Anns" (1978 U.K.H.L.) analysis - The first question was foreseeability - To find a duty of care, the court would have to find that the Canada Revenue Agency (CRA) auditors could have reasonably foreseen that their tax assessment of a company advertising in a newspaper might cause an economic loss to a third party newspaper - A CRA auditor who considered the implications of incorrectly allowing such a tax deduction might foresee that the incorrect deduction could have a financial impact on third parties - Therefore, it was not plain and obvious that such harm was not reasonably foreseeable on the part of CRA auditors - Vue was entitled to have this aspect of the Anns test explored at a trial - See paragraphs 54 to 58.

Crown - Topic 1563

Torts by and against Crown - Negligence by Crown - Breach of statutory duty - Vue Weekly was a free weekly news magazine - Its main competitor was SEE Magazine - Vue's and SEE's advertisers were able to deduct their advertising expenses under s. 19 of the Income Tax Act (ITA), which allowed such deductions for advertising in a Canadian newspaper - Vue brought an action, alleging, inter alia, that the Minister of National Revenue had improperly allowed advertisers to deduct expenses from advertising in SEE when it was not a Canadian company, that Vue had suffered damages due to lost advertising revenue and that the Crown was liable for the Minister's negligence - The Crown applied to strike the statement of claim as disclosing no cause of action against it - A Master allowed the application - Vue appealed - At issue was whether the Minister owed a duty of care to Vue to tax other taxpayers correctly - The Alberta Court of Queen's Bench indicated that, because there was no such previously recognized duty of care, it was necessary to conduct an "Anns" (1978 U.K.H.L.) analysis - Having determined that the harm to Vue might be reasonably foreseeable by Canada Revenue Agency (CRA) auditors, the court considered whether there was sufficient proximity between Vue and the auditors to establish a duty of care - Vue had to establish a duty to assess taxes properly arising from the ITA and a proximal relationship between the statutory duty and the damages caused to Vue - While there was no question that a duty could be made out that the CRA auditors must correctly assess taxes of the taxpayer, which duty was owed to the government (the auditor's employer) and to the actual taxpayer being assessed, there was no provision of the ITA that suggested a broader duty to third parties such as Vue - A court had to find a close enough relationship between Vue and the CRA auditors assessing the SEE advertisers that a duty could be imposed - Arguably, that relationship arose from the particular facts and specific circumstances of Vue and SEE as competitors for the same market, in the same area - Thus, the possibility that the relationship of Vue with the CRA auditors might be proximate could not be excluded - Vue should be allowed to attempt to establish proximity at a trial - See paragraphs 59 to 78.

Crown - Topic 1563

Torts by and against Crown - Negligence by Crown - Breach of statutory duty - Vue Weekly was a free weekly news magazine - Its main competitor was SEE Magazine - Vue's and SEE's advertisers were able to deduct their advertising expenses under s. 19 of the Income Tax Act, which allowed such deductions for advertising in a Canadian newspaper - Vue brought an action, alleging, inter alia, that the Minister of National Revenue had improperly allowed advertisers to deduct expenses from advertising in SEE when it was not a Canadian company, that Vue had suffered damages due to lost advertising revenue and that the Crown was liable for the Minister's negligence - The Crown applied to strike the statement of claim as disclosing no cause of action against it - A Master allowed the application - Vue appealed - At issue was whether the Minister owed a duty of care to Vue to tax other taxpayers correctly - The Alberta Court of Queen's Bench indicated that, because there was no such previously recognized duty of care, it was necessary to conduct an "Anns" (1978 U.K.H.L.) analysis - Having determined that the harm alleged by Vue might have been reasonably foreseeable by Canada Revenue Agency (CRA) auditors and that the possibility that the relationship of Vue with the CRA auditors might be sufficiently proximate to establish a duty of care could not be excluded, the court addressed policy considerations - Canadian tort law included as a policy principle that a plaintiff had no right to pursue an action in tort until all other administrative and judicial remedies had been exhausted - Proximity did not arise between an alleged tortfeasor and the injured party until the injured party had exhausted all available non-tort remedies - Here, Vue had not exhausted its remedies via judicial review under the Income Tax Act - Such judicial review would determine two questions: whether SEE was a Canadian newspaper and whether CRA auditors improperly permitted tax deductions for advertising in SEE - On the proximity analysis, no cause of action arose for Vue until the appropriate court had determined that SEE was not a Canadian newspaper and that CRA auditors had improperly allowed the deductions - On this basis, it was plain and obvious that Vue could not succeed at trial and the court would have upheld the Master's decision - See paragraphs 79 to 97.

Crown - Topic 1563

Torts by and against Crown - Negligence by Crown - Breach of statutory duty - Vue Weekly was a free weekly news magazine - Its main competitor was SEE Magazine - Vue's and SEE's advertisers were able to deduct their advertising expenses under s. 19 of the Income Tax Act, which allowed such deductions for advertising in a Canadian newspaper - Vue brought an action, alleging, inter alia, that the Minister of National Revenue had improperly allowed advertisers to deduct expenses from advertising in SEE when it was not a Canadian company, that Vue had suffered damages due to lost advertising revenue and that the Crown was liable for the Minister's negligence - The Crown applied to strike the statement of claim as disclosing no cause of action against it - A Master allowed the application - Vue appealed - At issue was whether the Minister owed a duty of care to Vue to tax other taxpayers correctly - The Alberta Court of Queen's Bench indicated that, because there was no such previously recognized duty of care, it was necessary to conduct an "Anns" (1978 U.K.H.L.) analysis - Having determined that the harm alleged by Vue might have been reasonably foreseeable by Canada Revenue Agency (CRA) auditors and that the possibility that the relationship of Vue with the CRA auditors might be sufficiently proximate to establish a duty of care could not be excluded, the court addressed policy considerations - The court found that proximity was negated by Vue's failure to exhaust its remedies via judicial review under the Income Tax Act - However, notwithstanding this conclusion, the court found residual policy considerations, including that the proposed duty of care ought to be excluded on the basis that it would create indeterminate liability to an unlimited class of potential claimants - See paragraphs 98 to 116.

Crown - Topic 1563

Torts by and against Crown - Negligence by Crown - Breach of statutory duty - Vue Weekly was a free weekly news magazine - Its main competitor was SEE Magazine - Vue's and SEE's advertisers were able to deduct their advertising expenses under s. 19 of the Income Tax Act (ITA), which allowed such deductions for advertising in a Canadian newspaper - Vue brought an action, alleging, inter alia, that the Minister of National Revenue had improperly allowed advertisers to deduct expenses from advertising in SEE when it was not a Canadian company, that Vue had suffered damages due to lost advertising revenue and that the Crown was liable for the Minister's negligence - The Crown applied to strike the statement of claim as disclosing no cause of action against it - A Master allowed the application - Vue appealed - At issue was whether the Minister owed a duty of care to third party taxpayers to inform them that a newspaper/magazine was Canadian or non-Canadian - The Alberta Court of Queen's Bench rejected this ground of appeal - As no such free-standing duty to inform had been previously recognized, the court conducted an "Anns" (1978 U.K.H.L.) analysis - Nothing in the ITA established such a duty - For Vue to be successful, the court would have to find that the Minister had a positive duty outside of the statutory scheme to inform potential advertisers of their possible erroneous tax deduction - However, s. 241(1) of the ITA prohibited such a disclosure - This negated proximity - See paragraphs 117 to 126.

Crown - Topic 1563

Torts by and against Crown - Negligence by Crown - Breach of statutory duty - Vue Weekly was a free weekly news magazine - Its main competitor was SEE Magazine - Vue's and SEE's advertisers were able to deduct their advertising expenses under s. 19 of the Income Tax Act, which allowed such deductions for advertising in a Canadian newspaper - Vue brought an action, alleging, inter alia, that the Minister of National Revenue had improperly allowed advertisers to deduct expenses from advertising in SEE when it was not a Canadian company, that Vue had suffered damages due to lost advertising revenue and that the Crown was liable for the Minister's negligence - The Crown applied to strike the statement of claim as disclosing no cause of action against it - A Master allowed the application - Vue appealed - The Alberta Court of Queen's Bench allowed the appeal in part - According to Holland v. Saskatchewan et al. (2008 S.C.C.), the "proper remedy for breach of a statutory duty by a public authority ... [was] judicial review for invalidity" - Therefore, Vue had to (1) conduct a judicial review of the alleged unlawful actions of the Canada Revenue Agency (CRA) auditors and, if that review was successful, but the CRA auditors continued to improperly declare SEE a Canadian magazine and allow the SEE advertisers a tax benefit, (2) make a claim for damages in tort regarding the failure to implement a judicial decree - Judicial review was the necessary precursor to any tort liability - If the CRA auditors followed the court's instructions, then Vue had its remedy and could not seek further damages in tort - See paragraphs 156 to 160.

Crown - Topic 1571.4

Torts by and against Crown - Negligence by Crown - Failure to implement judicial decision - [See sixth Crown - Topic 1563 ].

Crown - Topic 1571.4

Torts by and against Crown - Negligence by Crown - Failure to implement judicial decision - Vue Weekly was a free weekly news magazine - Its main competitor was SEE Magazine - Vue's and SEE's advertisers were able to deduct their advertising expenses under s. 19 of the Income Tax Act (ITA), which allowed such deductions for advertising in a Canadian newspaper - Vue brought an action, alleging, inter alia, that the Minister of National Revenue had improperly allowed advertisers to deduct expenses from advertising in SEE when it was not a Canadian company, that Vue had suffered damages due to lost advertising revenue and that the Crown was liable for the Minister's negligence - The Crown applied to strike the statement of claim as disclosing no cause of action against it - A Master allowed the application - Vue appealed - The Alberta Court of Queen's Bench allowed the appeal in part - According to Holland v. Saskatchewan et al. (2008 S.C.C.), the "proper remedy for breach of a statutory duty by a public authority ... [was] judicial review for invalidity" - Therefore, Vue had to (1) conduct a judicial review of the alleged unlawful actions of the Canada Revenue Agency (CRA) auditors and, if that review was successful, but the CRA auditors continued to improperly declare SEE a Canadian magazine and allow the SEE advertisers a tax benefit, (2) make a claim for damages in tort regarding the failure to implement a judicial decree - In order to obtain a declaration that CRA auditors had acted contrary to the ITA, Vue had to prove that SEE was not a Canadian magazine and that the auditors improperly applied the ITA when they assessed taxes due from SEE's advertisers - Answering these questions required the interpretation and application of the ITA - The Tax Court of Canada was the only court that was provided by legislation with jurisdiction to interpret and apply the ITA - That was where Vue would seek a judicial review that determined SEE's status as a Canadian or non-Canadian publication and whether the SEE advertisers had been taxed incorrectly - See paragraphs 161 to 195.

Crown - Topic 1649

Torts by and against Crown - Actions against Crown - Defences, bars or exclusions - Existence of alternative remedy - [See third and sixth Crown - Topic 1563 ].

Damages - Topic 528

Limits of compensatory damages - Remoteness - Torts - Foreseeability - [See first Crown - Topic 1563 ].

Income Tax - Topic 7604

Returns, assessments, payment and appeals - General principles - Who may challenge assessments etc. - [See first, second, third, fourth and fifth Crown - Topic 1563 ].

Income Tax - Topic 7843

Returns, assessments, payment and appeals - Assessments and reassessments - Presumption of validity - Vue Weekly was a free weekly news magazine - Its main competitor was SEE Magazine - Vue's and SEE's advertisers were able to deduct their advertising expenses under s. 19 of the Income Tax Act (ITA), which allowed such deductions for advertising in a Canadian newspaper - Vue brought an action, alleging, inter alia, that the Minister of National Revenue had improperly allowed advertisers to deduct expenses from advertising in SEE when it was not a Canadian company, that Vue had suffered damages due to lost advertising revenue and that the Crown was liable for the Minister's negligence - The Crown applied to strike the statement of claim as disclosing no cause of action against it - A Master allowed the application - Vue appealed - At issue was the effect of s. 152(8) of the ITA, the "deemed accuracy of tax assessments" provision - The Master found that Vue's action was barred by s. 152(8) - The Alberta Court of Queen's Bench disagreed - Section 152(8) bound the taxpayer and the Minister - Third parties could challenge the correctness of a tax assessment if they were required to pay part of that assessment, though that challenge did not affect the quantum actually due from the taxpayer - An assessment that bound a taxpayer under s. 152(8) was not a legally binding precedent on other parties - Vue sought to extend that principle - While this was novel, novelty alone was not a sufficient ground on which to strike pleadings - See paragraphs 127 to 148.

Income Tax - Topic 7926

Returns, assessments, payment and appeals - Appeals (incl. objections) - General - [See third Courts - Topic 4502 ].

Income Tax - Topic 7951

Returns, assessments, payment and appeals - Appeals to tax review board or Tax Court - General - [See third Courts - Topic 4502 ].

Income Tax - Topic 8001

Returns, assessments, payment and appeals - Appeals to courts - General - [See third Courts - Topic 4502 ].

Income Tax - Topic 8004

Returns, assessments, payment and appeals - Appeals to courts - General - Federal court - Jurisdiction - [See Courts - Topic 2004 ].

Income Tax - Topic 8967

Administration - Communication of information - Prohibition - General - Vue Weekly was a free weekly news magazine - Its main competitor was SEE Magazine - Vue's and SEE's advertisers were able to deduct their advertising expenses under s. 19 of the Income Tax Act (ITA), which allowed such deductions for advertising in a Canadian newspaper - Vue brought an action, alleging, inter alia, that the Minister of National Revenue had improperly allowed advertisers to deduct expenses from advertising in SEE when it was not a Canadian company, that Vue had suffered damages due to lost advertising revenue and that the Crown was liable for the Minister's negligence - The Crown applied to strike the statement of claim as disclosing no cause of action against it - A Master allowed the application - Vue appealed - At issue was the effect of s. 241 of the ITA, which prohibited disclosure of taxpayer information - The Master held that the prohibition was such that Vue could not claim successfully against the Minister in tort - The Alberta Court of Queen's Bench disagreed - Vue's claim related to the administration of the ITA - Therefore, the presumption that the only way Vue could prove its claim was by revealing taxpayer information was incorrect - Further, confidentiality issues could be addressed by the court - See paragraphs 149 to 155.

Practice - Topic 225

Persons who can sue and be sued - Individuals and corporations - Status or standing - Nonparty to tax assessment - [See first, second, third, fourth and fifth Crown - Topic 1563 and Income Tax - Topic 7843 ].

Practice - Topic 2200

Pleadings - Striking out pleadings - General principles - A defendant applied successfully under Rule 129(1) to strike the statement of claim as disclosing no cause of action against it - On the plaintiff's appeal, the Alberta Court of Queen's Bench discussed the test on an application to strike under Rule 129(1), stating "[t]he test is clear; claims that advance an action or defence may only be struck if those claims have no chance of success at trial. Evaluation is based on the presumption that all facts alleged are true. The court should be sensitive to novel or unusual legal questions, and not strike claims when the law is unclear, unsettled, or new. The logical corollary of that principle is that the court may apply Rule 129(1) when the common-law or statute provides a clear legal rule, or where the alleged facts simply fail to provide an adequate foundation for the claimed action or defence." - See paragraphs 25 to 31.

Practice - Topic 2200

Pleadings - Striking out pleadings - General principles - [See Income Tax - Topic 7843 ].

Practice - Topic 2230

Pleadings - Striking out pleadings - Grounds - Failure to disclose a cause of action - Vue Weekly was a free weekly news magazine - Its main competitor was SEE Magazine - Vue's and SEE's advertisers were able to deduct their advertising expenses under s. 19 of the Income Tax Act, which allowed such deductions for advertising in a Canadian newspaper - Vue brought an action, alleging, inter alia, that the Minister of National Revenue had improperly allowed advertisers to deduct expenses from advertising in SEE when it was not a Canadian company, that Vue had suffered damages due to lost advertising revenue and that the Crown was liable for the Minister's negligence - The Crown applied to strike the statement of claim as disclosing no cause of action against it - The Alberta Court of Queen's Bench stated that, on an application such as this, the plaintiff only had an onus to prove a prima facie duty of care (stage one of the "Anns" (1978 U.K.H.L.) analysis - As the onus then shifted to the applicant, the plaintiff had no requirement to plead the social and economic facts necessary to resist an argument by the applicant in the second stage policy analysis - Therefore, in an application to strike, the court generally ought not to engage in the second stage of the Anns analysis - If the plaintiff established that a novel prima facie duty of care was not certain to be rejected, the court's enquiry ought to end unless (1) the parties agreed fully as to the evidence that could be relied on, (2) there was a sufficient foundation in the facts pled and the relevant legislation for the court to conclude that no cause of action existed, or (3) the court had already found all of the relevant factual evidence for the Anns second step - See paragraphs 99 to 101.

Torts - Topic 60

Negligence - Causation - Foreseeability - [See first Crown - Topic 1563 ].

Torts - Topic 77

Negligence - Duty of care - Relationship required to raise duty of care - [See first, second, third, fourth and fifth Crown - Topic 1563 ].

Torts - Topic 78

Negligence - Duty of care - Effect of statutory or policy precautions or safeguards on the scope of the duty of care - [See third, fourth and fifth Crown - Topic 1563 ].

Torts - Topic 81

Negligence - Duty of care - Requirement that duty be owed to plaintiff - [See first, second, third, fourth and fifth Crown - Topic 1563 ].

Cases Noticed:

Dickey et al. v. Pep Homes Ltd. et al. (2006), 401 A.R. 149; 391 W.A.C. 149; 2006 ABCA 402, refd to. [para. 8].

Taylor v. Workers' Compensation Board (Alta.), [2005] A.J. No. 968 (Q.B.), refd to. [para. 8].

Hovsepian et al. v. Westfair Foods Ltd. et al. (2001), 296 A.R. 283; 2001 ABQB 700, refd to. [para. 16].

Tottrup v. Lund et al. (2000), 255 A.R. 204; 220 W.A.C. 204; 2000 ABCA 121, refd to. [para. 19].

Tottrup v. Alberta (Minister of Environmental Protection) - see Tottrup v. Lund et al.

Dyson v. Attorney General, [1911] 1 K.B. 410 (C.A.), refd to. [para. 28].

Hunt v. T & N plc et al., [1990] 2 S.C.R. 959; 117 N.R. 321, refd to. [para. 28].

Hunt v. Carey Canada Inc. - see Hunt v. T & N plc et al.

Decock et al. v. Alberta et al. (2000), 255 A.R. 234; 220 W.A.C. 234; 2000 ABCA 122, refd to. [para. 28].

Adrian et al. v. Canada (Attorney General) et al. (2004), 348 A.R. 91; 321 W.A.C. 91; 2004 ABCA 149, refd to. [para. 28].

Arcand et al. v. Imperial Oil Ltd. et al., [2006] A.R. Uned. 1; 2006 ABCA 13, refd to. [para. 28].

McElheran v. Canada et al., [2006] A.R. Uned. 869; 2006 ABCA 161, refd to. [para. 28].

Fullowka v. Whitford (1996), 147 D.L.R.(4th) 531 (N.W.T.C.A.), refd to. [para. 28].

Pearson v. Canadian Radio-Television and Telecommunications Commission (1997), 200 A.R. 380; 146 W.A.C. 380; 152 D.L.R.(4th) 83 (C.A.), leave to appeal granted (1998), 227 N.R. 89; 219 A.R. 165; 179 W.A.C. 165 (S.C.C.), refd to. [para. 28].

Horseman v. Horse Lake First Nation (2005), 361 A.R. 287; 339 W.A.C. 287; 2005 ABCA 15, refd to. [para. 28].

Holland v. Saskatchewan et al. (2008), 376 N.R. 316; 311 Sask.R. 197; 428 W.A.C. 197; 294 D.L.R.(4th) 193; 2008 SCC 42, appld. [para. 35].

Odhavji Estate et al. v. Woodhouse et al., [2003] 3 S.C.R. 263; 312 N.R. 305; 180 O.A.C. 201; 2003 SCC 69, consd. [para. 45].

Donoghue v. Stevenson, [1932] A.C. 562 (H.L.), refd to. [para. 45].

Nielsen v. Kamloops (City) and Hughes, [1984] 2 S.C.R. 2; 54 N.R. 1, refd to. [para. 45].

Cooper v. Registrar of Mortgage Brokers (B.C.) et al., [2001] 3 S.C.R. 537; 277 N.R. 113; 160 B.C.A.C. 268; 261 W.A.C. 268; 2001 SCC 79, refd to. [para. 45].

Cooper v. Hobart - see Cooper v. Registrar of Mortgage Brokers (B.C.) et al.

Edwards et al. v. Law Society of Upper Canada et al., [2001] 3 S.C.R. 562; 277 N.R. 145; 153 O.A.C. 388; 2001 SCC 80, refd to. [para. 45].

Anns v. Merton London Borough Council, [1978] A.C. 728 (H.L.), appld. [para. 49].

Ludco Enterprises Ltd. et al. v. Ministre du Revenu national, [1995] 2 F.C. 3; 182 N.R. 125 (F.C.A.), leave to appeal refused (1995), 197 N.R. 318 (S.C.C.), refd to. [para. 71].

Ludmer v. Canada - see Ludco Enterprises Ltd. et al. v. Ministre du Revenu national.

Hill et al. v. Hamilton-Wentworth Regional Police Services Board et al. (2007), 368 N.R. 1; 230 O.A.C. 260; 50 C.R.(6th) 279; 2007 SCC 41, refd to. [para. 80].

Childs v. Desormeaux et al., [2006] 1 S.C.R. 643; 347 N.R. 328; 210 O.A.C. 315; 2006 SCC 18, refd to. [para. 99].

755165 Ontario Inc. v. Parsons et al. (2006), 259 Nfld. & P.E.I.R. 82; 781 A.P.R. 82; 273 D.L.R.(4th) 11; 2006 NLTD 123, leave to appeal denied (2006), 260 Nfld. & P.E.I.R. 222; 786 A.P.R. 222; 273 D.L.R.(4th) 1; 2006 NLCA 60, refd to. [para. 100].

Myles-Leger Ltd. v. 755165 Ontario Inc. - see 755165 Ontario Inc. v. Parsons et al.

Ring et al. v. Canada (Attorney General) et al. (2007), 268 Nfld. & P.E.I.R. 204; 813 A.P.R. 204; 2007 NLTD 146, refd to. [para. 101].

Hercules Management Ltd. et al. v. Ernst & Young et al., [1997] 2 S.C.R. 165; 211 N.R. 352; 115 Man.R.(2d) 241; 139 W.A.C. 241; 146 D.L.R.(4th) 577, refd to. [para. 105].

Martel Building Ltd. v. Canada, [2000] 2 S.C.R. 860; 262 N.R. 285; 2000 SCC 60, refd to. [para. 105].

Design Services Ltd. et al. v. Canada (2008), 374 N.R. 77; 2008 SCC 22, refd to. [para. 112].

Slattery (Bankrupt) v. Slattery, [1993] 3 S.C.R. 430; 158 N.R. 341; 139 N.B.R.(2d) 246; 357 A.P.R. 246; 106 D.L.R.(4th) 212, refd to. [para. 123].

Minister of National Revenue v. Wesbrook Management Ltd. (1996), 206 N.R. 23; 96 D.T.C. 6590 (F.C.A.), leave to appeal refused (1997), 218 N.R. 400 (S.C.C.), refd to. [para. 132].

Aboriginal Federated Alliance Inc. v. Canada Customs and Revenue Agency et al. (2002), 303 A.R. 304; 273 W.A.C. 304; 214 D.L.R.(4th) 707; 2002 ABCA 104, refd to. [para. 132].

R. v. Greenwood (A.), [2003] B.C.T.C. 1045; 2003 BCSC 1045, refd to. [para. 132].

Nova Ban-Corp Ltd. et al. v. Tottrup et al., [1990] 1 F.C. 288; 32 F.T.R. 34; 89 D.T.C. 5489 (T.D.), refd to. [para. 132].

Thorsteinson v. Minister of National Revenue (1980), 80 D.T.C. 1369 (T.C.C.), refd to. [para. 134].

Ramey v. Minister of National Revenue, [1993] 2 C.T.C. 2119; 93 D.T.C. 791 (T.C.C.), refd to. [para. 134].

Sarraf v. Minister of National Revenue, [1994] 1 C.T.C. 2519; 94 D.T.C. 1506 (T.C.C.), refd to. [para. 134].

Acton v. Minister of National Revenue (1994), 95 D.T.C. 107 (T.C.C.), refd to. [para. 134].

Route Canada Real Estate v. Minister of National Revenue, [1995] 2 C.T.C. 2421; 95 D.T.C. 502 (T.C.C.), refd to. [para. 134].

Kraychy v. Minister of National Revenue (1996), 96 D.T.C. 1479; 64 A.C.W.S.(3d) 495 (T.C.C.), refd to. [para. 134].

Schafer v. Minister of National Revenue, [1998] G.S.T.C. 7; 98 G.T.C. 2045 (T.C.C.), refd to. [para. 134].

Papa v. Minister of National Revenue, [2000] G.S.T.C. 74, refd to. [para. 134].

Schuster v. Canada, [2001] G.S.T.C. 91, refd to. [para. 134].

Gaucher v. Minister of National Revenue, [2001] 1 C.T.C. 125; 264 N.R. 369 (F.C.A.), refd to. [para. 135].

Bâtiment Fafard International Inc. v. Canada, [1999] 4 C.T.C. 2723; 99 D.T.C. 504 (T.C.C.), refd to. [para. 136].

Bourque v. Canada, 2004 D.T.C. 2944; 2004 TCC 404, refd to. [para. 137].

Harris et al. v. Minister of National Revenue (2000), 256 N.R. 221; 187 D.L.R.(4th) 419 (F.C.A.), leave to appeal denied (2000), 264 N.R. 391 (S.C.C.), refd to. [para. 154].

Harris et al. v. Minister of National Revenue (2001), 268 N.R. 384; 2001 FCA 74, refd to. [para. 154].

Airth et al. v. Minister of National Revenue, [2007] F.T.R. Uned. 218; 2007 D.T.C. 5333; 2007 FC 370, refd to. [para. 154].

Addison & Leyen Ltd. et al. v. Canada Customs and Revenue Agency (2007), 365 N.R. 62; 2007 SCC 33, refd to. [para. 167].

Roitman v. Canada (2006), 353 N.R. 75; 2006 FCA 266, leave to appeal refused (2006), 362 N.R. 400 (S.C.C.), refd to. [para. 179].

Smith et al. v. Canada et al. (2006), 226 B.C.A.C. 187; 373 W.A.C. 187; 141 C.R.R.(2d) 368; 2006 BCCA 237, refd to. [para. 181].

422252 Alberta Ltd. v. Canada (Attorney General), [2003] B.C.T.C. 1362; [2004] 1 C.T.C. 73; 2003 BCSC 1362, refd to. [para. 181].

R. v. Wilson, [1983] 2 S.C.R. 594; 51 N.R. 321; 26 Man.R.(2d) 194; 4 D.L.R.(4th) 577, refd to. [para. 182].

Quebec (Procureur général) v. Laroche et al., [2002] 3 S.C.R. 708; 295 N.R. 291; 2002 SCC 72, refd to. [para. 182].

Samos Investments Inc. v. Pattison et al. (2000), 140 B.C.A.C. 46; 229 W.A.C. 46; 190 D.L.R.(4th) 448; 2000 BCCA 412, refd to. [para. 182].

Walker v. Canada Customs and Revenue Agency (2005), 344 N.R. 169; 2005 FCA 393, refd to. [para. 188].

Markevich v. Minister of National Revenue, [2003] 1 S.C.R. 94; 300 N.R. 321; 2003 SCC 9, refd to. [para. 188].

Webster v. Canada (Attorney General) (2003), 312 N.R. 235; 2003 FCA 388, refd to. [para. 188].

Montreal Trust Co. v. Tottrup (1990), 82 Alta. L.R.(2d) 340 (Q.B.), refd to. [para. 190].

Longley v. Minister of National Revenue, [1992] 4 W.W.R. 213; 14 B.C.A.C. 22; 26 W.A.C. 22 (C.A.), refd to. [para. 192].

Minister of National Revenue v. Jay Kay Publications Ltd., [1972] C.T.C. 481; 30 D.L.R.(3d) 65 (F.C.T.D.), revd. [1972] C.T.C. 539; 31 D.L.R.(3d) 629 (F.C.A.), refd to. [para. 206].

Minister of National Revenue v. Nova Scotia Power Inc., [2002] 2 C.T.C. 2276; 2002 D.T.C. 1432 (F.C.T.D.), revd. (2003), 299 N.R. 374; 2003 FCA 33, affd. [2004] 3 S.C.R. 53; 323 N.R. 394; 2004 SCC 51, refd to. [para. 206].

Saipem Luxembourg S.A. v. Canada Customs and Revenue Agency, [2004] F.T.R. Uned. 52; [2004] 2 C.T.C. 242; 2004 FC 113, affd. (2005), 337 N.R. 213; 2005 FCA 218, leave to appeal refused (2005), 349 N.R. 200 (S.C.C.), refd to. [para. 206].

Imperial Oil Ltd. v. Minister of National Revenue, [2004] 2 C.T.C. 3030; 2004 TCC 207, revd. (2004), 327 N.R. 329; 2004 FCA 361, revd. [2006] 2 S.C.R. 447; 353 N.R. 201; 2006 SCC 46, refd to. [para. 206].

Minister of National Revenue v. 236130 British Columbia Ltd., [2006] 1 C.T.C. 2501; 2005 TCC 770, affd. (2006), 354 N.R. 388; 2006 FCA 352, refd to. [para. 206].

Canadian Human Rights Commission v. Canadian Liberty Net et al., [1998] 1 S.C.R. 626; 224 N.R. 241, refd to. [para. 218].

R. v. Cooper (A.R.) (2002), 303 A.R. 399; 273 W.A.C. 399; 2002 ABCA 156, leave to appeal refused (2003), 317 N.R. 400; 363 A.R. 191; 343 W.A.C. 191 (S.C.C.), refd to. [para. 219].

Brotherhood of Maintenance of Way Employees v. Canadian Pacific Ltd., [1996] 2 S.C.R. 495; 198 N.R. 161; 78 B.C.A.C. 162; 128 W.A.C. 162; 136 D.L.R.(4th) 289, refd to. [para. 222].

Obonsawin v. Minister of National Revenue, [2004] G.S.T.C. 16; 2004 TCC 3, refd to. [para. 246].

Chrysler Canada Inc. v. Minister of National Revenue et al., [2008] 5 C.T.C. 174; 329 F.T.R. 260; 2008 FC 727, refd to. [para. 247].

Main Rehabilitation Co. v. Minister of National Revenue (2004), 329 N.R. 248; 247 D.L.R.(4th) 597; 2004 FCA 403, refd to. [para. 247].

Obonsawin v. Canada et al., [2006] O.T.C. 815; [2006] G.S.T.C. 127; 2006 G.T.C. 1274 (Sup. Ct.), refd to. [para. 257].

Obonsawin v. Canada et al., [2007] O.A.C. Uned. 447; 2007 ONCA 701, refd to. [para. 257].

Statutes Noticed:

Income Tax Act, R.S.C. 1985 (5th Supp.), c. 1, sect. 152(8) [para. 128]; sect. 241 [para. 149].

Counsel:

Joseph J. Arvay, Q.C. (Arvay Finlay), for the appellant;

Kerry E.S. Boyd and Darcie Charlton (Department of Justice Canada), for the respondent, Attorney General of Canada;

Mendy Chernos (McCarthy Tétrault LLP), for the respondents, SEE Magazine, Great West Newspaper Group Ltd., Jamison Newspapers Inc., Hollinger Canadian Publishing Co. and Hollinger International Inc.

This appeal was heard on October 16, 2007, by Moen, J., of the Alberta Court of Queen's Bench, Judicial District of Edmonton, who delivered the following reasons for judgment on March 12, 2009.