Aboriginal Federated Alliance Inc. v. Canada Customs and Revenue Agency et al.,

• Judge: Conrad,Fraser,Hunt
• Neutral Citation: 2002 ABCA 104
• Subject Matter: UNEMPLOYMENT INSURANCE,GOVERNMENT PROGRAMS,COURTS,PRACTICE,EMPLOYMENT LAW
• Citation: (2002), 303 A.R. 304 (CA),2002 ABCA 104,303 AR 304,(2002), 303 AR 304 (CA),303 A.R. 304
• Date: 28 January 2002
• Court: Court of Appeal (Alberta)

Aboriginal Federated Alliance v. CCRA (2002), 303 A.R. 304 (CA);

    273 W.A.C. 304

MLB headnote and full text

Temp. Cite: [2002] A.R. TBEd. MY.027

Canada Customs and Revenue Agency and Director of Employment Standards (appellants/respondents) v. Aboriginal Federated Alliance Inc. (respondent/applicant)

(0003-0559-AC; 2002 ABCA 104)

Indexed As: Aboriginal Federated Alliance Inc. v. Canada Customs and Revenue Agency et al.

Alberta Court of Appeal

Conrad and Hunt, JJ.A. and Fraser, J.(ad hoc)

May 7, 2002 and September 4, 2002.

Summary:

Aboriginal Federated Alliance Inc. (AFAI) sued the Minister of Environment (Environment) for the balance owed under a contract. Environment conceded that $73,173.03 remained outstanding, but stated that it had received payment demands from the Workers' Compensation Board (WCB), the Director of Employment Standards and Canada Customs and Revenue Agency (CCRA), which totalled more than the unpaid amount acknowledged by Environment. CCRA's demand for $55,446.14 was for assessments under the Income Tax Act, the Canada Pension Plan Act and the Employment Insurance Act. AFAI had challenged the CCRA's assessments under the objection and appeal provisions of those Acts and those challenges were before the Tax Court of Canada. The demand of the Director of Employment Standards for $24,500 reflected the amounts which an employment standards officer thought were likely owed to as many as 14 AFAI employees. Environment paid the $73,173.03 into court by way of interpleader. AFAI applied for a determination of entitlement to the funds.

The Alberta Court of Queen's Bench, in a decision reported at 276 A.R. 286, held that with respect to the $73,173.03 paid into court, Employment Standards would receive $11,120.33 (being that portion of an Order of Officer issued by an employment standards officer based on the amounts owed to the five specific employees), CCRA would receive $2,629.51, and the remaining funds would be paid out to AFAI. The Director of Employment Standards and CCRA appealed.

The Alberta Court of Appeal allowed the appeal in part. The court held that the chambers judge did not have the jurisdiction to determine what amounts were owing pursuant to CCRA claims made under federal tax and related statutes. However, the court held that the chambers judge did have jurisdiction to interpret the provincial Employment Standards Code and thereby determine the validity of demands made under it. The chambers judge also did not err in determining that the Director's demands were limited to amounts relating to specific employees. The chambers judge should not have ordered the payment out of any of the funds until the resolution of the appeals pursuant to the federal statutes in the Tax Court of Canada.

Courts - Topic 4502

Tax Court of Canada - Jurisdiction - [See Courts - Topic 5695.2 ].

Courts - Topic 5695.2

Provincial courts - General - Jurisdiction or powers - Respecting income tax matters - The Minister of Environment (Environment) owed $73,173.03 to the Aboriginal Federated Alliance Inc. (AFAI) - Canada Customs and Revenue Agency (CCRA) issued a requirement to pay to Environment for $55,446.14 based on assessments against AFAI under the Income Tax Act (ITA), the Canada Pension Plan Act (CPPA) and the Employment Insurance Act (EIA) - Environment paid the $73,173.03 into court by way of interpleader - AFAI applied for a determination of entitlement to the funds - A chambers judge concluded that only $2,629.51 was owed to CCRA - The Alberta Court of Appeal held that the Tax Court of Canada had exclusive jurisdiction to determine the validity of an assessment under the ITA, the CPPA and the EIA, and that while provincial superior courts could determine matters that were ancillary to an assessment, there was no matter ancillary to the assessment that could provide a basis for the exercise of the chambers judge's jurisdiction - The chambers judge erred in concluding that he had jurisdiction to determine what amounts were payable to CCRA simply because he was considering a motion seeking the summary determination of entitlement to funds paid into court on interpleader - See paragraphs 15 to 19.

Government Programs - Topic 1203

Canada Pension Plan - Jurisdiction - [See Courts - Topic 5695.2 ].

Master and Servant - Topic 8322

Employment and labour standards - Enforcement - Jurisdiction - The Minister of Environment (Environment) owed $73,173.03 to the Aboriginal Federated Alliance Inc. (AFAI) - The Director of Employment Standards issued a demand to pay to Environment for $24,500, reflecting the amounts which an employment standards officer thought were likely owed to as many as 14 AFAI employees - Environment paid the $73,173.03 into court by way of interpleader - AFAI applied for a determination of entitlement to the funds - A chambers judge held that Employment Standards would receive $11,120.33, being that portion of an Order of Officer issued by an employment standards officer based on the amounts owed to five specific employees - The Alberta Court of Appeal held that despite the internal appeal mechanism in the Employment Standards Code, the chambers judge had jurisdiction to interpret the statute and determine whether the Director's demands were limited to amounts set out in the Order of Officer, because the interpleader process interrupted the normal progress of a Director's demand under the Code - Further, AFAI's position as to the chambers judge's jurisdiction was not a collateral attack on the Director's demand - See paragraphs 27 to 42.

Master and Servant - Topic 8330

Employment and labour standards - Enforcement - Payment demand to third party - The Minister of Environment (Environment) owed $73,173.03 to the Aboriginal Federated Alliance Inc. (AFAI) - The Director of Employment Standards issued a demand to pay to Environment for $24,500, reflecting the amounts which an employment standards officer thought were likely owed to as many as 14 AFAI employees - Environment paid the $73,173.03 into court by way of interpleader - AFAI applied for a determination of entitlement to the funds - A chambers judge held that Employment Standards would receive $11,120.33, being that portion of an Order of Officer issued by an employment standards officer based on the amounts owed to five specific employees - The chambers judge apparently interpreted s. 115 of the Employment Standards Code to mean that the Director could demand payment from a third party only as to amounts owing to particular employees, and not to unknown employees - The Alberta Court of Appeal agreed - Although s. 115 entitled the Director to issue a demand without knowing the exact amount owing, reference throughout the section to "an employee" suggested that the legislature contemplated payments owing to a specific employee rather than to an indeterminate group of employees - See paragraph 43.

Master and Servant - Topic 8330

Employment and labour standards - Enforcement - Payment demand to third party - The Minister of Environment (Environment) owed $73,173.03 to the Aboriginal Federated Alliance Inc. (AFAI) - The Director of Employment Standards issued a demand to pay to Environment for $24,500, reflecting the amounts which an employment standards officer thought were likely owed to as many as 14 AFAI employees - Environment paid the $73,173.03 into court by way of interpleader - AFAI applied for a determination of entitlement to the funds - A chambers judge held that Employment Standards would receive $11,120.33, being that portion of an Order of Officer issued by an employment standards officer based on the amounts owed to five specific employees, but not including an administrative levy payable to the Crown - The Alberta Court of Appeal held that the chambers judge did not err in omitting the administrative levy from the amount ordered to be paid to the Director - The administrative levy could not be collected from third party funds paid into court on an interpleader - See paragraph 46 to 48.

Practice - Topic 3411

Interim proceedings - Interpleader - General - The Minister of Environment (Environment) owed $73,173.03 to the Aboriginal Federated Alliance Inc. (AFAI) - Canada Customs and Revenue Agency (CCRA) issued a requirement to pay to Environment for $55,446.14 based on assessments against AFAI under the Income Tax Act (ITA), the Canada Pension Plan Act (CPPA) and the Employment Insurance Act (EIA) - Environment paid the $73,173.03 into court by way of interpleader - AFAI applied for a determination of entitlement to the funds - AFAI had challenged the CCRA's assessments under the objection and appeal provisions of the ITA, the CPPA and the EIA and those challenges were before the Tax Court of Canada - The Alberta Court of Appeal stated that until the Tax Court proceedings came to an end, it was impossible to ascertain the amount of CCRA's claims - Accordingly, given AFAI's attack on the CCRA assessment through other procedures, AFAI's motion for summary determination of CCRA's claim was premature and ought to have been adjourned until completion of the Tax Court proceedings - See paragraphs 23 to 26.

Practice - Topic 6270

Judgments and orders - Administrative orders - Collateral attack - [See Master and Servant - Topic 8322 ].

Unemployment Insurance - Topic 6002

Enforcement - Jurisdiction - [See Courts - Topic 5695.2 ].

Cases Noticed:

Norris (Bankrupt), Re (1989), 34 O.A.C. 304; 69 O.R.(2d) 285 (C.A.), refd to. [para. 17].

Fleming Estate v. Minister of National Revenue, [1984] 2 F.C. 331; 61 N.R. 113 (F.C.A.), refd to. [para. 17].

Minister of National Revenue v. Parsons - see Fleming Estate v. Minister of National Revenue.

Nova Ban-Corp Ltd. et al. v. Tottrup et al., [1990] 1 F.C. 288; 32 F.T.R. 34 (T.D.), refd to. [para. 17].

Prefontaine v. Minister of National Revenue, [1999] A.R. Uned. 15 (Q.B.), refd to. [para. 17].

Grossman (Bankrupt), Re (1998), 222 A.R. 139 (Q.B.), refd to. [para. 17].

Montreal Trust Co. v. Tottrup (1990), 82 Alta. L.R.(2d) 340 (Q.B.), refd to. [para. 18].

Petromines Acquisitions Ltd., Re (2001), 295 A.R. 377; 94 Alta. L.R.(3d) 309 (Q.B.), refd to. [para. 18].

Susan Shoe Industries Ltd. v. Ontario (Minister of Labour) et al. (1994), 70 O.A.C. 347; 18 O.R.(3d) 660 (C.A.), refd to. [para. 34].

Ontario Hydro v. Kelly et al. (1998), 61 O.T.C. 123; 39 O.R.(3d) 107 (Gen. Div.), refd to. [para. 34].

R. v. Consolidated Maybrun Mines Ltd. et al., [1998] 1 S.C.R. 706; 225 N.R. 41; 158 D.L.R.(4th) 193, refd to. [para. 38].

R. v. Klippert (Al) Ltd., [1998] 1 S.C.R. 737; 225 N.R. 107; 158 D.L.R.(4th) 219, refd to. [para. 38].

Rizzo and Rizzo Shoes Ltd. (Bankrupt), Re, [1998] 1 S.C.R. 27; 221 N.R. 241; 106 O.A.C. 1; 154 D.L.R.(4th) 193; 50 C.B.R.(3d) 163; 33 C.C.E.L.(2d) 173; 98 C.L.L.C. 210-006, refd to. [para. 44].

Statutes Noticed:

Employment Standards Code, S.A. 1996, c. E-10.3, sect. 115(1) [para. 12].

Counsel:

M.J. Lema, for the appellant Canada Customs and Revenue Agency;

S.P. McDonough, for the appellant Director of Employment Standards;

P.E. Kennedy, for the respondent.

This appeal was heard on January 28, 2002, before Conrad and Hunt, JJ.A., and Fraser, J.(ad hoc), of the Alberta Court of Appeal. The following judgment of the Court of Appeal was delivered by Hunt, J.A., and was filed on May 7, 2002. Supplementary reasons were filed on September 4, 2002.