Temple v. Minister of National Revenue, (2001) 214 F.T.R. 305 (TD)

• Court: Federal Court (Canada)
• Case Date: August 23, 2000
• Jurisdiction: Canada (Federal)
• Citations: (2001), 214 F.T.R. 305 (TD)

Temple v. MNR (2001), 214 F.T.R. 305 (TD)

MLB headnote and full text

Temp. Cite: [2001] F.T.R. TBEd. DE.027

Anthony J. Temple (plaintiff) v. Her Majesty the Queen in Right of Canada as represented by the Minister of National Revenue (defendant)

(T-666-99; 2001 FCT 1254)

Indexed As: Temple v. Minister of National Revenue

Federal Court of Canada

Trial Division

Hargrave, Prothonotary

November 15, 2001.

Summary:

Temple owned and controlled three companies. Temple sued the Minister for misfeasance in assessing two of the companies as employer for source deductions for income tax and unemployment insurance premiums. The third company was allegedly run out of business by the Minister's collection proceedings. Temple sued on his own behalf and as a director personally liable for the assessments. The Minister moved to strike the claim for failing to disclose a cause of action. The Minister alleged that the rule in Foss v. Harbottle precluded Temple (rather than the companies) from bringing an action respecting wrongs committed against the companies.

A Prothonotary of the Federal Court of Canada, Trial Division, held that proceedings respecting wrongs to a corporation could only be brought by the corporation or by way of derivative action. The claims based on wrongs to the companies were struck. Temple's claims for direct personal loss (loss of employment, loss of personal funds, trauma, shock, stress and anxiety) were not struck, as these claims did not offend the rule in Foss v. Harbottle and it was not plain and obvious that they could not succeed.

Company Law - Topic 9415

Actions by corporations - Parties - Proper plaintiff - Temple owned and controlled three companies - Temple sued the Minister for misfeasance in assessing two of the companies as employer for source deductions for income tax and unemployment insurance premiums - The third company was allegedly run out of business by the Minister's collection proceedings - Temple sued on his own behalf and as a director personally liable for the assessments - The Minister moved to strike the claim for failing to disclose a cause of action - The Minister alleged that the rule in Foss v. Harbottle precluded Temple (rather than the companies) from bringing an action respecting wrongs committed against the companies - A Prothonotary of the Federal Court of Canada, Trial Division, held that proceedings for wrongs to a corporation could only be brought by the corporation or by way of derivative action - The claims based on wrongs to the companies were struck - Temple's claims for direct personal loss (loss of employment, loss of personal funds, trauma, shock, stress and anxiety) were not struck, as these claims did not offend the rule in Foss v. Harbottle and it was not plain and obvious that they could not succeed - See paragraphs 17 to 31.

Practice - Topic 230

Persons who can sue and be sued - Individuals and corporations - Status or standing - Shareholders - [See Company Law - Topic 9415 ].

Practice - Topic 2230

Pleadings - Striking out pleadings - Grounds - Failure to disclose a cause of action or defence - [See Company Law - Topic 9415 ].

Practice - Topic 2235

Pleadings - Striking out pleadings - Grounds - Evidence - Rule 221(2) prohibited the calling of affidavit evidence on a motion to strike out a pleading for want of a cause of action - The defendant sought to rely on affidavit evidence in its application to strike - The defendant alleged that the prohibition had exceptions - A Prothonotary of the Federal Court of Canada, Trial Division, stated that "affidavit evidence is permissible in support of a motion to strike out for want of jurisdiction, but not when the shortcoming is simply want of a reasonable cause of action" - See paragraphs 6 to 11.

Cases Noticed:

Foss v. Harbottle (1843), 2 Hare 461; 67 E.R. 189, refd to. [para. 2].

Temple v. Minister of National Revenue, [1997] 2 C.T.C. 2678 (Tax Ct. Can.), refd to. [para. 7].

Cameron v. Ciné St-Henri Inc., [1984] 1 F.C. 421 (F.C.T.D.), refd to. [para. 9].

MIL Davie Inc. v. Société d'exploitation et de développement d'Hibernia ltée (1998), 226 N.R. 369 (F.C.A.), refd to. [para. 11].

Hollington v. Hewthorn (F.) & Co., [1943] K.B. 587 (C.A.), refd to. [para. 13].

Coca-Cola Ltd. et al. v. Pardhan et al. (1999), 240 N.R. 211; 172 D.L.R.(4th) 31 (F.C.A.), refd to. [para. 15].

Martel et al. v. Samson Indian Band et al., [1999] F.T.R. Uned. 166 (T.D.), refd to. [para. 17].

Hunt v. T & N plc et al., [1990] 2 S.C.R. 959; 117 N.R. 321, refd to. [para. 17].

Operation Dismantle Inc. et al. v. Canada et al., [1985] 1 S.C.R. 441; 59 N.R. 1, refd to. [para. 17].

Inuit Tapirisat of Canada and National Anti-Poverty Organization v. Canada (Attorney General), [1980] 2 S.C.R. 735; 33 N.R. 304, refd to. [para. 17].

Salomon v. Salomon (1896), 66 L.J. Ch. 35 (H.L.), refd to. [para. 19].

Hercles Management Ltd. et al. v. Ernst & Young et al. (1997), 211 N.R. 352; 115 Man.R.(2d) 241; 139 W.A.C. 241; 146 D.L.R.(4th) 557 (S.C.C.), refd to. [para. 20].

Rogers v. Bank of Montreal (1985), 64 B.C.L.R. 63 (S.C.), affd. (1987), 9 B.C.L.R.(2d) 190 (C.A.), refd to. [para. 21].

Antrim Yards Ltd. v. Canada (1991), 44 F.T.R. 299 (T.D.), refd to. [para. 22].

Dixon v. Minister of National Revenue (2001), 181 F.T.R. 104 (T.D.), refd to. [para. 22].

Johnson v. Lyttle's Iron Agency (1877), 5 Ch. D. 687 (C.A.), refd to. [para. 26].

Pender v. Lushington (1877), 6 Ch. D. 70, refd to. [para. 26].

Wood v. Odessa Water Works Co. (1889), 42 Ch. D. 636, refd to. [para. 26].

Salmon v. Quin & Associates Ltd., [1909] 1 Ch. 311 (C.A.), affd. [1909] A.C. 442 (H.L.), refd to. [para. 26].

British American Nickel Corp. v. O'Brien, [1927] A.C. 369 (P.C.), refd to. [para. 26].

Edwards v. Halliwell, [1950] 2 All E.R. 1064 (C.A.), refd to. [para. 26].

Hayes v. Bristol Plant Hire Ltd., [1957] 1 W.L.R. 499, refd to. [para. 26].

Kosmopoulos et al. v. Constitution Insurance Co. of Canada et al. (1987), 74 N.R. 360; 21 O.A.C. 4; 34 D.L.R.(4th) 208 (S.C.C.), refd to. [para. 27].

Minister of National Revenue v. Candrel Ltd. (1993), 157 N.R. 380 (F.C.A.), refd to. [para. 33].

Authors and Works Noticed:

Gower, L.B., Principles of Modern Company Law (3rd Ed. 1969), pp. 582, 584 [para. 26].

Sopinka, John, Lederman, Sidney N., and Bryant, Alan W., The Law of Evidence in Canada (2nd Ed. 1999), pp. 1120, 1123 [para. 13].

Counsel:

Michael R. Scherr, for the plaintiff;

Sean Taylor, for the defendant.

Solicitors of Record:

Pearlman & Lindholm, Victoria, British Columbia, for the plaintiff;

Swinton & Co., Vancouver, British Columbia, for the defendant.

This matter was heard on August 23, 2000, at Vancouver, British Columbia, before Hargrave, Prothonotary, of the Federal Court of Canada, Trial Division, who delivered the following judgment on November 15, 2001.