Hadi Sarraf (Plaintiff) v. Her Majesty the Queen (Defendant)
Published in: (1994), 94 Dominion Tax Cases 6553
Federal Court-Trial Division
July 6, 1994
(Court File No. T-333-94.)
HEADNOTE
The taxpayer's appeal to the Federal Court-Trial Division was based on his allegation that the Income Tax Act is unconstitutional because of the apparent inconsistency between taxing power provisions of subsections 92(2) and 91(3) of the Canada Constitution Act, 1867. The Crown moved for an Order striking the taxpayer's Statement of Claim in its entirety.
Held: The Crown's motion was granted. There is no law which provides that a motion to strike can be heard and determined only by a judge of the Court. In Iscar Limited v. Karl Hertel GmbH, [1989] 3 F.C. 479, it was specifically pointed out that a prothonotary has jurisdiction to hear and decide a motion to strike. The taxpayer's case, moreover, being totally founded on the alleged unconstitutionality of the Income Tax Act, had no possibility whatsoever of succeeding in view of a number of judicial decisions including that of the Privy Council in Caron v. The King, [1924] 4 D.L.R. 105. In this case, the Privy Council concluded that the Dominion government has the power to impose a dominion income tax for dominion purposes, notwithstanding the apparent exclusive delegation to the provinces of the power to levy direct taxation under subsection 92(2) of the Canada Constitution Act, 1867. For these reasons, the taxpayer's Statement of Claim was struck.
Counsel: Not available.
Before: Giles, A.S.P.
DECISION
Giles, A.S.P.: The motion before me by the Crown is for an order pursuant to Rule 419(1)(a) striking the statement of claim in its entirety. The Crown moves in the alternative to strike those portions of the claim which appear to be included for the purposes of alleging a claim against Anton Plas personally. In his responding submissions, the plaintiff has not addressed the submissions of the Crown, but has raised what I consider to be preliminary objections to my jurisdiction and to the disposition of this matter without a trial. The portions of the plaintiff's submissions relevant to the preliminary objections read as follows:
He states that this motion should be dismissed for the following reasons:
(i) The Senior Prothonotary and the Associate Senior Prothonotary have no jurisdiction to give a judgment disposing of an action without the consent of the Plaintiff, and the Plaintiff has not given such a consent.
Rule 336(1)(c) of the Federal Court Rules.
(ii) The Defendant seeks relief that can only follow upon judgment at trial.
The Honourable Mr. Justice J. Jerome, A.C.J. of the Federal Court of Canada (Trial Division), in Order of the Court, (rendered from the Bench at Toronto on Monday the 27th day of April, 1992) in the Motion of Hadi Sarraf in his capacity as a director of 495187 Ontario Limited at the time of its dissolution v. Her Majesty the Queen, ordered as follows: 'This application seeks relief that can only follow judgment at trial. It is clearly beyond the scope of any determination this Court could make upon motion. Accordingly it must be, and is hereby dismissed.'
Order, Federal Court of Canada (Trial Division)
(attached)
Rule 336(1) of the Federal Court Rules
(iii) The Senior Prothonotary and the Associate Senior Prothonotary have no jurisdiction to hear and dispose of this interlocutory motion.
Rule 336(1)(g)(1) of the Federal Court Rules.
Rule 336(1)(g) provides that a prothonotary has the power to dispose of any interlocutory application assigned to him specially or to any prothonotary by special or general direction of the Chief Justice or the Associate Chief Justice. By a general direction on the 31st of October 1985, the Associate Chief Justice empowered the Senior Prothonotary and Associate Senior Prothonotary to hear and dispose of any interlocutory application of the Trial Division, other than five enumerated types of application. The first such type was 'any application which by law may be heard and determined only by a judge of the Court'. I know of no law which provides that a motion to strike can be heard and determined only by a judge of the Court. In the case of Iscar Ltd. v. Karl Hertel GmbH, [1989] 3 F.C. 479, it was specifically pointed out that a prothonotary has jurisdiction to hear and decide a motion to strike.
The order of the Associate Chief Justice was made in response to an interlocutory application for an order for repayment of certain sums before the issue had been tried. That order has no relevance to a motion to strike a statement of claim as revealing no cause of action and particularly a statement of claim filed in a different action. It is my view that these preliminary objections cannot succeed.
The plaintiff's case is based on his allegation that the Income Tax Act is unconstitutional. He indicates that by s. 92 2 of the Constitution Act 1867 denies the Federal government the right to raise the money by income tax which is a form of direct taxation. The apparent inconsistency between s. 92 2 and s. 91 3 has been raised on a number of previous decisions. The decision in Caron v. The King, [1924] 4 D.L.R. 105 is an example of those Court decisions. In Caron v. The King the Judicial Committee of the Privy Council decided that the Dominion government had the power to impose a dominion income tax for dominion purposes, notwithstanding the apparent exclusive delegation of the power to levy direct taxation to the provinces under s. 92 2. The plaintiff's case being totally founded on the alleged unconstitutionality of the Income Tax Act has no possibility whatsoever of succeeding. The statement of claim should therefore be struck out under Rule 419(1)(a) as disclosing no reasonable cause of action. With such a disposition it is not necessary to consider whether the claim against Anton Plas should be struck out.
ORDER:
The statement of claim is struck out in its entirety.