Nova Ban-Corp Ltd. et al. v. Tottrup et al., (1989) 32 F.T.R. 34 (TD)

• Judge: Strayer, J.
• Court: Federal Court (Canada)
• Case Date: September 14, 1989
• Jurisdiction: Canada (Federal)
• Citations: (1989), 32 F.T.R. 34 (TD)

Nova Ban-Corp Ltd. v. Tottrup (1989), 32 F.T.R. 34 (TD)

MLB headnote and full text

Nova Ban-Corp Limited and Container Port of Alberta Research Corporation (plaintiffs) v. F. Tottrup, Container Port of Alberta Research Corporation, and Her Majesty The Queen in Right of Canada represented by the Minister of National Revenue (defendants)

(T-610-89)

Indexed As: Nova Ban-Corp Ltd. et al. v. Tottrup et al.

Federal Court of Canada

Trial Division

Strayer, J.

September 21, 1989.

Summary:

Nova Ban claimed to be a creditor of Container Port and had proceedings pending in the Alberta Court of Queen's Bench. The Minister of National Revenue issued two notices of assessment respecting the tax liability of Container Port. No notice of objection or notice of appeal was filed by Container Port respecting either assessment. Nova Ban alleged that the president of Container Port (Tottrup) acceded to an excessive assessment of income tax which should have been payable by Tottrup personally, thereby benefiting himself and prejudicing the creditors of Container Port. The Alberta Court of Queen's Bench granted leave to Nova Ban under the Canada Business Corporations Act to commence an action on behalf of Container Port in the Federal Court of Canada to determine the appropriate tax payable by Container Port. Nova Ban on its own behalf and in accordance with the Queen's Bench order, on behalf of Container Port, commenced an action against Tottrup, Container Port and the Minister of National Revenue seeking relief respecting the assessments of Container Port. The Minister of National Revenue applied for leave to file a conditional appearance to object to the jurisdiction of the court and an order striking out Nova Ban's statement of claim.

The Federal Court of Canada, Trial Division, allowed the Minister of National Revenue's application.

Courts - Topic 4049

Federal Court of Canada - Jurisdiction - Trial Division - Income tax matters - Nova Ban was a creditor of Container Port - Nova Ban alleged that Container Port's president caused Container Port to pay more income tax than necessary, thus prejudicing Nova Ban's ability to collect its debt - Pursuant to leave granted by the Alberta Court of Queen's Bench, Nova Ban commenced an action in the Federal Court of Canada to have Container Port's tax liability determined - The Federal Court of Canada, Trial Division, held that it lacked jurisdiction because the action was intrinsically defective (i.e., "There is no court which will entertain a challenge to a federal income tax assessment other than one brought by the taxpayer; nor entertain such a challenge except in the form of an appeal; nor entertain an appeal except within the prescribed time limits").

Income Tax - Topic 8004

Returns, assessments and appeals - Appeal to courts - Federal court - Jurisdiction - [See Practice - Topic 225].

Income Tax - Topic 8004

Returns, assessments and appeals - Appeal to courts - Federal court - Jurisdiction - [See Courts - Topic 4049].

Practice - Topic 225

Persons who can sue and be sued - Individuals and corporations - Status or standing - Non-party to tax assessment - The Federal Court of Canada, Trial Division, agreed that a creditor of a taxpayer has no standing to challenge an assessment and enforcement action taken against the taxpayer by the Minister of National Revenue - See paragraph 9.

Words and Phrases

Court - The Federal Court of Canada, Trial Division, discussed the meaning of this word as it appeared in s. 232(1) of the Canada Business Corporations Act, S.C. 1974-75-76, c. 33 - See paragraph 8.

Cases Noticed:

Hart and Gunther's Building Centre Ltd. v. Minister of National Revenue (1986), 4 F.T.R. 176, agreed with [para. 9, footnote 2].

Inland Revenue Commission v. National Federation of Self-Employed and Small Business Limited, [1981] 2 All E.R. 93, refd to. [para. 9, footnote 3].

Parsons v. Minister of National Revenue, [1984] C.T.C. 352; 54 N.R. 227 (F.C.A.), refd to. [para. 10, footnote 4].

Bechthold Resources Limited v. Minister of National Revenue (1986), 1 F.T.R. 123; 86 D.T.C. 6065 (F.C.T.D.), refd to. [para. 10, footnote 4].

Block (G.R.) Research and Development (1981) Corporation v. Minister of National Revenue (1987), 9 F.T.R. 229 (F.C.T.D.), refd to. [para. 10, footnote 4].

Statutes Noticed:

Canada Business Corporations Act, S.C. 1974-75-76, c. 33, sect. 2(1), sect. 232, sect. 232(1), sect. 232(2), sect. 234, sect. 234(2) [para. 8].

Income Tax Act, S.C. 1970-71-72, c. 63, sect. 165 [paras. 9, 10]; sect. 167(5) [para. 10]; sect. 169, sect. 172, sect. 241(2) [para. 9].

Counsel:

G.J. Steward-Palmer, for the plaintiffs;

S. MacDonald, for the defendants, Aage Tottrup and Container Port of Alberta;

P. Hodgkinson and C. Coughlan, for the defendant, Her Majesty The Queen.

Solicitors of Record:

Milner and Steer, Edmonton, Alberta, for the plaintiffs;

MacDonald and Freund, Edmonton, Alberta, for the defendants, Aage Tottrup and Container Port of Alberta;

John C. Tait, Q.C., Deputy Attorney General of Canada, Ottawa, Ontario, for the defendant, Her Majesty The Queen.

This application was heard in Edmonton, Alberta, on September 14, 1989, before Strayer, J., of the Federal Court of Canada, Trial Division, who delivered the following decision on September 21, 1989: