Olympia Interiors Ltd. v. Minister of National Revenue, (1993) 66 F.T.R. 81 (TD)

• Judge: Gibson, J.
• Court: Federal Court (Canada)
• Case Date: June 14, 1993
• Jurisdiction: Canada (Federal)
• Citations: (1993), 66 F.T.R. 81 (TD)

Olympia Interiors Ltd. v. MNR (1993), 66 F.T.R. 81 (TD)

MLB headnote and full text

Olympia Interiors Ltd. and Mary David (plaintiffs/respondents) v. Her Majesty the Queen (defendant/applicant)

(T-1436-92)

Indexed As: Olympia Interiors Ltd. v. Minister of National Revenue

Federal Court of Canada

Trial Division

Gibson, J.

July 22, 1993.

Summary:

The plaintiffs Olympia and David disputed the Minister's calculation of the appropriate "installation deduction rate" to be used to calculate the sales price of its product for sales tax purposes. In 1985, Olympia was convicted for failing to submit monthly federal sales tax returns. A 1986 audit fixed the amount of sales tax payable at over $100,000 in taxes and penalties. In 1987 Olympia was charged with 73 counts under ss. 56(2), 57(9)(a) and 62 of the Excise Tax Act, but all charges were either stayed or withdrawn. In 1992, the plaintiffs sued the federal Crown for damages for breach of its duty under the Excise Tax Act. The plain­tiffs also commenced actions in Ontario. The federal Crown applied for summary judgment dismissing the action or, alternatively, an order striking certain paragraphs in the statement of claim and a stay pending an appeal of the Ontario actions to the Ontario Divisional Court.

The Federal Court of Canada, Trial Divi­sion, dismissed the Crown's application.

Limitation of Actions - Topic 7504

Actions against the Crown - Whether federal or provincial legislation applies - The plaintiff sued the federal Crown for malicious prosecution - The action was commenced outside the limitation periods in the Ontario Public Authorities Protec­tion Act and the federal Excise Tax Act - The Federal Court of Canada, Trial Divi­sion, held that s. 32 of the Crown Liability and Proceedings Act did not restrict the application of provincial limitation statutes at the federal level only to actions between persons and individuals - The provincial limitation period applied to the federal Crown - However, where the plaintiff claimed malicious prosecution by the Crown (mala fides), neither the federal nor provincial limitation would bar the action which was otherwise out of time - See paragraphs 73 to 76.

Limitation of Actions - Topic 7583

Actions against the Crown - Applicability of limitation periods - Mala fides - [See Limitation of Actions - Topic 7504 ].

Limitation of Actions - Topic 7584

Actions against the Crown - Applicability of limitation period - Exercise of statutory or other public duty - [See Limitation of Actions - Topic 7504 ].

Practice - Topic 2230

Pleadings - Striking out pleadings - Grounds - Failure to disclose cause of action - The plaintiff taxpayer sued the federal Crown for damages for malicious prosecution under the Excise Tax Act - The plaintiff commenced parallel actions in Ontario against personal defendants - An application by those defendants for summary judgment dismissing the actions was dismissed - The Crown applied for summary judgment dismissing the federal action, claiming the pleadings did not disclose a cause of action - The Federal Court of Canada, Trial Division, dismissed the application, where the pleadings and other documents disclosed a serious issue to be tried - See paragraphs 26 to 32.

Practice - Topic 5276

Trials - Stay of proceedings - Stay of trial - Parallel actions in other jurisdiction - The plaintiffs sued the federal Crown for malicious prosecution under the Excise Tax Act - Parallel proceedings were un­derway in the Ontario courts against per­sonal defendants - The federal Crown applied to stay the federal action pending completion of the Ontario actions - The Federal Court of Canada, Trial Division, dismissed the application - The court stated that prejudice to the Crown, which was not a party to the parallel actions, would be less than prejudice to the plain­tiffs if the action were not stayed - See paragraphs 73 to 76.

Words and Phrases

Subject - Section 32 of the Crown Liabil­ity and Proceedings Act, S.C. 1980, c. 8, provided that provincial limitation periods between "subject and subject" apply to any proceedings by or against the Crown in respect of any cause of action arising in that province - The Federal Court of Canada, Trial Division, stated that "sub­ject" did not only include persons and individuals to the exclusion of the Crown - The Crown was included in the word "subject" for the purposes of s. 32 - See paragraphs 35 to 47.

Cases Noticed:

David v. Woolcott and Kluger (1992), 63 O.A.C. 161 (Div. Ct.), refd to. [para. 24].

Pizza Pizza Ltd. v. Gillespie (1991), 75 O.R.(2d) 225 (Gen. Div.), refd to. [para. 27].

Canada v. Gary Bowl Ltd., [1974] 2 F.C. 146; 4 N.R. 172 (F.C.A.), refd to. [para. 29].

Cyrus J. Moulton Ltd. v. Canada, [1976] 1 F.C. 437 (F.C.A.), refd to. [para. 29].

Flexi-Coil Ltd. v. Bourgault (F.P.) Indus­tries (1990), 36 F.T.R. 149 (T.D.), refd to. [para. 29].

Nelles v. Ontario et al. (1989), 98 N.R. 321; 35 O.A.C. 161; 60 D.L.R.(4th) 609 (S.C.C.), refd to. [para. 30].

Sjouwerman v. Canada Post Corp. and Valance (1990), 37 O.A.C. 294 (C.A.), disagreed with [para. 42].

Berardinelli v. Ontario Housing Corp. et al. (1978), 23 N.R. 298; 90 D.L.R.(3d) 481 (S.C.C.), refd to. [para. 42].

Cascone v. Rodney et al. (1981), 34 O.R.(2d) 618 (H.C.), refd to. [para. 59].

Clark, Drummie & Co. v. Allen (1992), 130 N.B.R.(2d) 97; 328 A.P.R. 97 (C.A.), refd to. [para. 61].

Inuit Tapirisat of Canada and National Anti-Poverty Organization v. Canada (Attorney General), [1980] 2 S.C.R. 735; 33 N.R. 304; 115 D.L.R.(3d) 1, refd to. [para. 68].

Statutes Noticed:

Crown Liability and Proceedings Act, S.C. 1990, c. 8, sect. 3 [para. 56]; sect. 32 [para. 35].

Erection and Installation Costs Regulations - see Excise Tax Act Regulations (Can.).

Excise Tax Act, R.S.C. 1970, c. E-13, sect. 26(6)(c)(ii)(A) [para. 4]; sect. 56(2), sect. 57(9)(a), sect. 62 [para. 18].

Excise Tax Act, R.S.C. 1985, c. E-15, sect. 46(c)(ii)(A) [para. 4]; sect. 111, sect. 112 [para. 34].

Excise Tax Act Regulations (Can.), Erec­tion and Installation Costs Regulations, SOR/83-136, generally [para. 5].

Federal Court Rules, rule 341 [para. 28]; rule 419(1)(f) [para. 67].

Public Authorities Protection Act, R.S.O. 1990, c. P-38, sect. 77 [para. 33].

Authors and Works Noticed:

Sopinka, Lederman and Bryant, The Law of Evidence in Canada (1992), p. 990 [para. 69].

Counsel:

Ronald S. Petersen, for the plaintiffs;

Bonnie Boucher, for the defendant.

Solicitors of Record:

Rock, Talarico, Wong, Ottawa, Ontario, for the plaintiffs;

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

This application was heard at Ottawa, Ontario, on June 14, 1993, before Gibson, J., of the Federal Court of Canada, Trial Divi­sion, who delivered the following judgment for the court on July 22, 1993.