Docket: T-1045-14
Citation:
2015 FC 857
Ottawa, Ontario, July 13, 2015
PRESENT: The
Honourable Mr. Justice Gascon
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BETWEEN:
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JITENDRA KUMAR
SOOD
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Applicant
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and
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THE MINISTER OF
NATIONAL REVENUE
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Respondent
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JUDGMENT AND REASONS
I.
Overview
[1]
In February 2014, the applicant Jitendra Kumar
Sood accepted a proposal made by the Canada Revenue Agency offering to refund
him a portion of a GST/HST new housing rebate that he claimed he had not yet
received. This refund represented part of a provincial new housing rebate
amount that Mr. Sood was seeking to obtain further to a contract concluded in
June 2007 for the purchase of a new residence from a builder.
[2]
Following Mr. Sood’s acceptance, the Agency
attempted to process and implement the settlement agreement but found that it
could not. After further verification, the Agency determined that Mr. Sood had
already received all tax rebates he was entitled to regarding the purchase of
his new residence. Mr. Sood had signed the purchase contract for his new residence
in June 2007, and took possession of the residence in June 2011; the Ontario
new housing rebate he was claiming did not apply to such situations. The Agency
thus reneged on the settlement proposal accepted by Mr. Sood because he was not
eligible to benefit from the provincial new housing rebate.
[3]
Mr. Sood contends that the Minister of National
Revenue cannot resile from settlement agreements reached with taxpayers. He
thus filed this application for judicial review pursuant to sections 18, 18.1
and 18.4 of the Federal Courts Act, RSC 1985 c F-7 to obtain an
equitable remedy of specific performance against the Minister and to enforce
the settlement agreement he accepted in February 2014. Mr. Sood also seeks
other types of relief including a declaratory remedy that the Minister breached
the February 2014 settlement agreement, a writ of mandamus requiring the
Minister to reassess Mr. Sood’s claim for the provincial new housing rebate,
and various other alternative remedies seeking a reconsideration of his new
housing rebate claim or damages from the Minister.
[4]
The Minister responds that Mr. Sood’s
application is a disguised attempt to appeal the tax reassessment made by the
Agency, denying Mr. Sood’s claim for the provincial new housing rebate. The
Minister submits that such a matter is beyond this Court’s jurisdiction: the
Tax Court of Canada has exclusive authority to consider disputes relating to
the correctness of tax reassessments, and this Court cannot review any matter
that can be appealed to the Tax Court. Furthermore, as Mr. Sood was not
entitled to any provincial new housing rebate based on the facts and the law,
the Minister had no choice but to cancel the settlement agreement.
[5]
For the reasons detailed hereafter, Mr. Sood’s
application for judicial review is dismissed as the Court concludes that it
does not have jurisdiction to entertain what is in fact an appeal of a tax
reassessment, that, in any event, the Agency was required to revoke the
settlement agreement as Mr. Sood was not eligible for the provincial new
housing rebate, and that there is no basis to grant any of the other remedial
measures Mr. Sood is seeking.
II.
Background
[6]
On June 16, 2007, Mr. Sood signed a contract for
the purchase of a new residence located in Toronto, Ontario. Four years later,
on June 29, 2011, Mr. Sood took ownership of the residence.
[7]
In his final closing statement of adjustments
made in June 2011, the builder indicated that the total purchase price charged
to Mr. Sood included a GST amount of $22,133.85, calculated at the GST rate of
6%. The builder claimed a GST rebate of $6,131.35, and Mr. Sood received a full
credit for that GST rebate amount as part of the final closing statement.
[8]
In May 2013, Mr. Sood completed a “GST/HST New Housing Rebate Application for Houses Purchased
from a Builder” [the NHR Application] and submitted it to the Agency. In
this application, he claimed a total rebate amount of $16,293.84. This amount
included a provincial new housing rebate calculated by Mr. Sood at $10,505.12.
[9]
In June 2013, Mr. Sood received a second tax
rebate credit of $2,771.00 on the purchase of his new residence, referred to as
a transitional rebate.
[10]
The Agency initially disallowed Mr. Sood’s NHR
Application but, following an objection by Mr. Sood to the Agency’s tax reassessment,
the Agency sent to Mr. Sood a proposal letter on February 19, 2014. In that
letter, the Agency offered to refund Mr. Sood an amount of $7,391.00; this
amount represented the difference between Mr. Sood’s claimed amount of
$16,293.84 in his NHR Application and the two previously credited amounts of
$6,131.35 and $2,771.00. The Agency indicated in the letter that it was making
the proposal based on its records and the information provided. On February 26,
2014, Mr. Sood accepted the offer of the Agency.
[11]
The Agency attempted to process the reassessment
of Mr. Sood’s new housing rebate application based on the accepted settlement
proposal, but it was unable to do so. Following internal verifications, an
appeals officer of the Agency determined that Mr. Sood had already been
credited the correct amount of new housing rebates available to him for the
purchase of his new residence and that he was not entitled to any further
reimbursements. According to the Agency’s verifications, Mr. Sood had correctly
received the federal GST new housing rebate of $6,131.35 and the transitional
rebate of $2,771.00 paid to him; however, no legal or factual grounds could
support the provincial new housing rebate he was claiming.
[12]
On March 18, 2014, the Agency informed Mr. Sood
that he had no right to receive the provincial tax rebate since Mr. Sood had
signed the purchase agreement for his new residence prior to June 18, 2009,
before the Ontario new housing rebate became available. The Agency further
indicated that its February 2014 proposal letter was therefore no longer
applicable because it was based upon incomplete information at the time. Mr.
Sood disagreed and filed a notice of objection with the Agency.
[13]
Mr. Sood and the Agency exchanged email
correspondence and telephone calls until, by letter dated March 31, 2014, the
Agency informed Mr. Sood that it had disallowed his objection to the tax
reassessment. The Agency then told Mr. Sood that, if he disagreed with this
decision, he could appeal to the Tax Court.
[14]
Mr. Sood did not file an appeal to the Tax
Court. Instead, he filed this application for judicial review before the
Federal Court.
III.
Analysis
A.
Does the Court have jurisdiction over this
matter?
[15]
The first issue the Court has to determine is
whether it has jurisdiction to hear Mr. Sood’s application for judicial review.
I agree with the Minister that the Court does not have jurisdiction to consider
this matter as it falls within the exclusive powers and appellate jurisdiction
of the Tax Court. Mr. Sood’s application should be dismissed on this basis.
[16]
Section 18.5 of the Federal Courts Act
precludes judicial review by the Federal Court in respect of a decision or
order made by various federal boards to the extent that a statutory right of
appeal to one of the courts or bodies specifically identified in the section
already exists. Among the courts listed is the Tax Court of Canada. Section
18.5 thus prevents the Federal Court from reviewing any matter that can be
resolved by an appeal to the Tax Court (Sifto Canada Corp v Canada (Minister
of National Revenue), 2014 FCA 140 at para 21 [Sifto FCA]).
[17]
Pursuant to subsection 12(1) of the Tax Court
of Canada Act, RSC 1985 c T-2, the Tax Court has exclusive jurisdiction to
consider all issues relating to the correctness of tax reassessments. Only the
Tax Court can declare reassessments invalid if they are found to be incorrect.
In Roitman v Canada, 2006 FCA 266 at para 20 [Roitman], the
Federal Court of Appeal established the principle that the Federal Court has no
jurisdiction to grant any relief sought on the basis of an “invalid reassessment of tax” unless the reassessment
has first been overturned by the Tax Court; to allow the possibility of seeking
a relief before the Federal Court in such a situation would be to permit a “collateral attack on the correctness of an assessment”.
The Roitman decision has been followed by a consistent line of cases,
including Canada (Minister of National Revenue) v JP Morgan
Asset Management (Canada) Inc., 2013 FCA 250 at para 93 [JP Morgan],
where the Federal Court of Appeal recently repeated that the Federal
Court has no authority to vary, set aside or vacate income tax assessments.
[18]
The Minister contends that Mr. Sood’s
application for judicial review is a disguised attempt to challenge and appeal
the tax reassessment made by the Minister following his application for the
provincial new housing rebate; by doing so, Mr. Sood is trying to obtain a
result otherwise unreachable in this Court. Mr. Sood, for his part, contends
that he is not challenging the correctness of the reassessment and that the
Federal Court can, on judicial review, consider matters alleging that the
Agency illegally breached an agreement. Mr. Sood claims that his case differs
from a challenge of the validity and correctness of a tax assessment.
[19]
In support of his position, Mr. Sood relies on
the recent decision issued in Sifto Canada Corp. v Canada (Minister
of National Revenue), 2013 FC 986 at para 17 [Sifto], aff’d 2014 FCA
140, where the Federal Court acknowledged that there is a narrow opening for
judicial review of decisions made by the Minister in the context of tax
assessments. However, I conclude that this Sifto decision can be
distinguished from the current case and that Mr. Sood’s application does not
fit in the limited window carved by the Court in Sifto.
[20]
The Sifto case related to an appeal of a
decision rendered by a prothonotary dismissing the Minister’s motion to strike
two judicial review applications filed by Sifto. In the applications, Sifto was
claiming that the Minister had abused his discretion in issuing a tax
reassessment in breach of a binding settlement agreement and in imposing
penalties on Sifto. In the motion to strike, the Minister was arguing that
Sifto’s requests in fact amounted to a challenge of the correctness of a tax
reassessment as opposed to a review of an abuse of discretion by the Minister;
as such, the requests were thus matters falling within the exclusive
jurisdiction of the Tax Court. At this preliminary stage of the proceedings,
and in light of the stringent test to meet in order to strike judicial review
applications, Justice Rennie concluded that there was sufficient doubt about
the Minister’s position to dismiss the motion to strike. The Federal Court of
Appeal upheld the Federal Court’s finding in Sifto FCA, as it agreed
that a challenge of the Minister’s exercise of discretion in imposing penalties
could only be achieved by way of an application for judicial review. I pause to
note that the Federal Court of Appeal did not consider the portion of the
applications regarding the alleged breach of an agreement as it had been
discontinued by Sifto and Sifto had appealed the reassessments to the Tax
Court.
[21]
I have three observations to make on this
precedent. First, the Sifto decision was issued in a particular
procedural context, namely a motion to strike where, to successfully dismiss
it, it was sufficient to demonstrate that the judicial review applications were
not bereft of any chances of success. In its decision, the Federal Court indeed
left open the possibility for the Minister to advance the jurisdictional
argument again at the hearing on the merits. Second, the Sifto case
dealt with the exercise of a ministerial discretion in imposing penalties, an
issue distinct and separate from a question of tax liability within the
exclusive jurisdiction of the Tax Court. Third, as the Federal Court indicated
at para 21, in circumstances where determining the jurisdiction of the Court
depends on the characterization of the allegations, the Court must review carefully
the pleadings and materials before it in order “to
determine the essential nature of the claim”. The Court of Appeal echoed
this by stating that the Court must read the application holistically to
understand its essential character (Sifto FCA at para 25). In Sifto,
Justice Rennie concluded that the claims could not be reduced to an indirect
appeal of a tax reassessment.
[22]
In the current case, the Court notes that two of
the conclusions in the notice of application and in Mr. Sood’s memorandum
mention forms of relief requiring the Minister to reassess and reconsider the
new housing rebate he claims. In terms of remedies, Mr. Sood is asking the
Court not only to declare the Minister bound by the settlement agreement but
also to send the matter back to the Agency for reassessment of the new housing
rebate claimed by Mr. Sood, or damages in an amount equal to the new housing
rebate claim denied in the Minister’s tax reassessment. In light of the
evidence on the record and the oral representations of the parties, I conclude
that the essential nature and character of Mr. Sood’s claim in this judicial
review application is a collateral attack on the validity of the tax
reassessment made by the Minister.
[23]
In essence, Mr. Sood is in fact seeking
to obtain the refund of a tax rebate for which the Agency has determined he is
not eligible; his judicial review application amounts to an indirect means to
vary the tax reassessment on the provincial new housing rebate he claimed,
without appealing to the Tax Court. This is not an application this Court can
entertain. Even though Mr. Sood, through artful pleading, tried to frame his
case as an application for judicial review, and despite the able efforts by Mr.
Sood to portray it differently, I find that the application nonetheless boils
down to a disguised appeal of the reassessment made by the Minister. This is precisely the sort of mischief that the Federal Court of
Appeal cautioned against in JP Morgan, at para 49:
Armed with sophisticated
wordsmithing tools and cunning minds, skilful pleaders can make Tax Court
matters sound like administrative law matters when they are nothing of the
sort. When those pleaders illegitimately succeed, they frustrate Parliament's
intention to have the Tax Court exclusively decide Tax Court matters.
[24]
This lack of jurisdiction would be sufficient to
dismiss Mr. Sood’s judicial review application. In any event, I would also
dismiss it on the basis that the Minister was entitled to resile from the
February 2014 settlement proposal as there is no basis in the law and on the
facts to support Mr. Sood’s claim to the provincial new housing rebate.
B.
Was Mr. Sood entitled to the provincial new
housing rebate and could the Agency revoke the settlement agreement?
(1)
Legal background
[25]
It is true that tax disputes are settled every
day by the Agency in Canada. However, going back to Galway v Canada
(Minister of National Revenue), [1974] 1 FC 600 (CA) [Galway], the
case law has consistently established that the Agency cannot make “deals” with taxpayers if there is no factual or legal
basis to do so. As recently confirmed by the Federal Court of Appeal in CIBC
World Markets Inc. v Canada, 2012 FCA 3 [CIBC] and JP Morgan,
the Agency cannot conclude settlement agreements or implement a compromise with
taxpayers, even if it was negotiated in good faith, if it is not defensible on
the facts or on the law.
[26]
There is no support for the general proposition
that settlement agreements with the Minister should be upheld no matter whether
they are actually based on facts or soundly anchored in law. On the contrary,
the Minister has no choice but to issue an assessment when the facts and the
law demonstrate a liability for tax (JP Morgan at paras 77-79; CIBC
at paras 22, 24; Harris v Canada, [2000] 4 FC 37 (CA) at para 37; Cohen
v The Queen, [1980] CTC 318 (FCA) [Cohen]). The Minister has no
discretion to compromise a tax liability by issuing, pursuant to a settlement
agreement, an assessment that is not supported by the facts and the law. The
Minister’s power to agree to a compromise based on the facts is limited by
these principles established by Galway and the long line of
jurisprudence following it.
[27]
In his written and oral submissions, Mr. Sood
referred to the Tax Court decision in 1390758 Ontario Corporation v The
Queen, 2010 TCC 572 (CanLII) at paras 35-37 [1390758 Ontario].
However, I find that it is distinguishable from the present matter and cannot
be applied to the current situation. In 1390758 Ontario, the Court had
no reason to believe that the reassessments made by the Minister were not “justifiable on the facts and the law” (at para 40).
The Court had rather found that the compromise agreed to by the Minister was a
result that could be arrived at following a trial on the merits. The 1390758
Ontario decision materially differed from the Galway or Cohen
cases where, in each of them, the reassessments were found to be “not justifiable on the facts and the law”. In both of
these cases, either the full amount would have been included in the taxable
income at issue or no amount would have form part of it; there was no middle
ground to justify a compromise settlement. In other words, the case law
distinguishes between situations where it is an all or nothing proposition and
one where the factual situation lends itself to some interpretation and room
for negotiation. Only in the latter cases can the Crown or the Minister be
considered to be bound by a compromise agreement regarding a tax reassessment.
[28]
Similarly, the Sifto case dealt with an
exercise of discretion by the Minister regarding the penalties assessed by the
Agency. Conversely, when there is no discretion at play, the Minister and his
employees have no choice but to apply the Canadian tax laws and are required to
follow them; in such cases, the question is not whether they exercised their
powers or discretion properly, but whether they “acted
as the law governing them required them to act” (Ludmer v Canada,
[1994] FCJ No 2007, (1994) 182 NR 125 (FCA) at para 43).
[29]
Mr. Sood’s claim for the provincial new housing
rebate is not based in law or on the facts of this case. As the proposal
agreement accepted in February 2014 was not defensible on the law or on the
facts of this case, the Minister was not only entitled but had no choice but to
resile from this agreement with Mr. Sood.
(2)
The claim for a provincial new housing rebate is
not based in law
[30]
As far as the law is concerned, I agree with the
Minister that Mr. Sood was simply not entitled to a provincial new housing
rebate under section 256.21 of the Excise Tax Act, RSC 1985 c E-15 [the ETA].
[31]
Mr. Sood claims that the Minister has not
identified what would be contrary to law in providing access to the provincial
rebate. I do not agree. The Agency has rather demonstrated that there is no
legal basis to support Mr. Sood’s claim for a provincial new housing rebate and
Mr. Sood has not identified any legal basis showing how he could be entitled to
the rebate he is claiming.
[32]
Under the ETA, taxes are imposed on sales
of new homes. Section 254 of the ETA provides a rebate with respect to the
tax paid on the purchase of a new home. Subsection 256.21(1) allows for a
rebate on the provincial portion of the HST paid; this rebate applies only to
homes that were subject to the HST and for which a purchaser has indeed paid a
provincial portion of the HST.
[33]
The Court notes that the Government of Ontario
introduced a HST as of July 1, 2010 in the province. When it came into effect
on July 1, 2010, the HST rate in Ontario was 13%, 5% representing the federal
part and 8% the provincial part. New homes located in Ontario were therefore
taxed at the HST rate of 13% starting on July 1, 2010; prior to that, they were
simply taxed at the GST rate of 6%. Sections 123 and 256.21 of the ETA
refer to the “harmonization date” for Ontario,
set at July 1, 2010 as this is the date on which the HST was implemented in the
province.
[34]
Similarly, section 256.21 of the ETA
containing the specific provisions referring to the provincial new housing
rebate for Ontario came into force on July 1, 2010. All of this was explained
to Mr. Sood in the Agency’s letter of March 31, 2014.
[35]
Furthermore, as explained in more detail in the
Agency’s information sheets referring to the provincial new housing rebate, the
purchase date of a new residence affects the eligibility for the new housing
rebate. This is not a situation where an exercise of a discretion by the
Agency is at play; it is rather a situation where the Agency simply has to
determine if the law applies, and to apply it if it has to, as was the case in JP
Morgan (at paras 22-23).
[36]
The Agency’s GI-077 information sheet entitled “Harmonized Sales Tax: Purchasers of New Housing in Ontario”
describes when the provincial new housing rebate can be available. It shows
that, considering the June 2007 date of purchase of his new residence by Mr.
Sood and the June 2011 date on which he took possession of his home, he was not
entitled to receive a provincial new housing rebate. The summary table in
Appendix C of the GI-077 information sheet indicates that, for new houses
purchased and sold after May 2, 2006 and before October 31, 2007, with
ownership and possession transferred after July 1, 2010 – as is the case for
Mr. Sood –, a GST new housing rebate and a 2008 transitional rebate are
available, but no Ontario new housing rebate is.
[37]
The GI-077 information sheet reflects the
proposed tax changes announced in the 2009 Ontario Budget, in Information
Notice No. 2, Helping Homebuyers and the Housing Industry with an Enhanced
New Housing Rebate, A New Rental Housing Rebate and Transitional Rules released
by the Government of Ontario on June 18, 2009, and in Information Notice No. 4,
Additional Information for Homebuyers and the Housing Industry under Ontario
HST released by the Government of Ontario on November 19, 2009.
[38]
I therefore conclude that there is no legal
basis to support Mr. Sood’s claim to a provincial new housing rebate and a
settlement compromise that could be legally accepted by the Minister in that
respect.
(3)
The claim for a provincial new housing rebate is
not supported by the facts
[39]
If the Minister maintained the proposal
agreement accepted by Mr. Sood, it would not only be contrary to law, but it
would also not be supported by the facts.
[40]
The evidence on the record shows that Mr. Sood
did not pay the HST for which he was claiming a provincial new housing rebate
and which forms the basis of the February 2014 proposal agreement.
[41]
In his NHR Application, Mr. Sood claimed a
provincial new housing rebate amount of $10,505.12. According to the
application form and to the calculations prescribed for the rebate, this amount
was based on a “provincial part of the HST” paid
on the house, which Mr. Sood reported as being the addition of $22,133.85 and
$627.24. These two amounts originated from the builder’s final closing
statement of adjustments attached to Mr. Sood’s NHR Application; however, in
that final closing statement, these two figures were respectively reported as “GST” on the sale price and “GST
calculated at 6.00%” on upgrades ordered. There was no reference to any
HST amount covered by either of those two tax figures.
[42]
Conversely, when the HST applied, the builder’s
final closing statement referred to “HST calculated at
13.00%”; it did for items such as “Electronic
Registration Fee”, “Status Certificate”
or “Water, Gas and Hydro Connections”, for which
the builder indeed credited Mr. Sood in the statement.
[43]
There is therefore no indication on the record
nor evidentiary support showing that there was a total “HST
paid on the house” in the amounts of $22,133.85 and $627.24 as indicated
by Mr. Sood in his NHR Application. The evidence rather points to those two
amounts referring strictly to the GST paid on the house. The claim for the
Ontario new housing rebate amount of $10,505.12 is therefore not supported by
the facts on the record, a fact that the Agency conveyed to Mr. Sood by
telephone in March 2014.
[44]
Since no provincial tax was paid on the new
house, there can be no rebate refunded to Mr. Sood. Stated differently, there
cannot be a tax rebate if there is no tax to be rebated.
[45]
The proposal had been made to Mr. Sood based on
the factual information available to the Agency officer in February 2014. It
was later discovered that the Minister had made an error because the record was
incomplete and the proposed reassessment had not yet been processed in
accordance with the procedure at the Agency. The evidence indicates that the
Agency was not able to give effect to the proposal agreement because no legal
or factual basis existed for the provincial new housing rebate claimed by Mr.
Sood.
[46]
Mr. Sood contends that the Agency did not
properly exercise its discretion and argues that the officer who actually sent
the proposal letter was acting under the dictation of the other officer who
reviewed the claim when the Agency was not able to process it. Mr. Sood also
contends that the officer had all the information he needed when he negotiated
and proposed the settlement and that he was, or should have been, deemed to
have knowledge of the information. I see no basis for these arguments: there
was no exercise of discretion at play in this case and the Agency had a legal
obligation, when it found out that the settlement proposal could not be
supported by the law and on the facts, to revoke the proposed agreement.
[47]
For these reasons, I conclude that Mr. Sood’s claim
for a provincial new housing rebate amount is not supported by the law or by
the facts on the record and that, in those circumstances, the Minister was
required to resile from the accepted proposal agreement.
C.
There is no basis to grant the other remedies
claimed by Mr. Sood
[48]
Mr. Sood describes this judicial review
application as one “to enforce a settlement agreement
made by the Minister of National Revenue”. In addition to seeking
relief in the form of a declaration that the Minister be bound by the February
2014 settlement agreement, Mr. Sood also requests a writ of mandamus forcing
the Minister to reassess the new housing rebate that he claims and, in the
alternative, a writ of certiorari requiring the Minister to reconsider the new
housing rebate, an order for damages in an amount equal to his claim, or a
direction from the Court to treat this application as an action. There is no
basis to grant any of these reliefs.
[49]
A mandamus is an extraordinary remedy. The basic
principal factors for the issuance of a writ of mandamus are well settled and
have been outlined in Apotex Inc v Canada (Attorney General), [1994] 1
FC 742 at para 55, aff’d [1994] 3 S.C.R. 110. These conditions are cumulative and
they all need to be satisfied before this Court can consider issuing a writ of
mandamus (Rocky Mountain Ecosystem Coalition v Canada (National Energy
Board) (1999), 174 FTR 17 (FCTD) at para 16). These conditions
include the existence of a public legal duty to act, a clear right of the
applicant to the performance of that duty, and the absence of any other
adequate remedy.
[50]
These conditions are not met by Mr. Sood. There
is no public legal duty on the part of the Agency to accept a settlement
agreement or to pay Mr. Sood a tax rebate amount when it is not mandated by statute
or by the facts. On the contrary, as discussed above, the Minister is obligated
to assess the amount of tax payable on the basis of the facts and in accordance
with the law and cannot implement a compromise settlement divorced from such
facts and law (Galway, 1390758 Ontario, CIBC). In addition, Mr. Sood has
an alternative remedy available, in the form of an appeal to the Tax Court to
challenge the tax reassessment by the Minister. This suffices to dismiss the
request for the issuance of a mandamus in this case.
[51]
Similarly, the request for certiorari amounts to
a request to set aside and reconsider the new housing rebate claim made by Mr.
Sood, and to an indirect appeal of the tax reassessment made by the Minister in
that respect. As they are remedies of last resort, this Court cannot entertain
applications for judicial reviews in the face of adequate, effective recourse
elsewhere (Harelkin v University of Regina, [1979] 2 S.C.R. 561; JP
Morgan at paras 84-85).
[52]
Nor is there any reason to award damages under
section 18.1 of the Federal Courts Act in the current situation. Mr.
Sood is seeking damages equal to the amount he is claiming in his NHR
Application. Once again, the invalidity of the tax reassessment made by the
Minister is at the core of this requested relief and Mr. Sood cannot obtain
damages unless he demonstrates this invalidity. This is something on which the
Tax Court has exclusive jurisdiction and the Federal Court has no jurisdiction
to award damages based on an incorrect tax reassessment until the Tax Court has
overturned and revised such reassessment.
[53]
Finally, subsection 18.4(2) of the Federal
Courts Act gives the Court the authority to turn an application for
judicial review into an action for breach of contract. However, this avenue of
redress is discretionary. In Meggeson v Canada (Attorney General), 2012
FCA 175 at paras 31-38, the Court specified that,
though considerations which may lead to the exercise of this discretion are not
limited, it has been done when, for example, an application does not provide
appropriate procedural safeguards where declaratory relief is sought or when
the facts underlying the application cannot be properly determined through
affidavit evidence. In essence, this discretion is exercised where proceeding
by an action is “necessary to
alleviate the inadequacies of the relief available on judicial review” (at para 33), and “to promote and facilitate access to justice” (at para 37).
[54]
This case is not a situation which calls for the
exercise of this discretion, and Mr. Sood has not referred the Court to
precedents supporting his position on this front or to any basis on which the
Court could be justified to exercise its discretion in that respect.
Furthermore, the established jurisprudence repeatedly states that an applicant
cannot seek a relief before this Court on the basis of an invalid reassessment
of tax unless such reassessment has been overturned by the Tax Court. As Mr.
Sood’s application is an indirect challenge of the Minister’s tax reassessment
and refusal of his new housing rebate claim, the jurisdiction falls under the
Tax Court (Newcombe v Canada, 2013 FC 955). There is no valid cause of
action against the Minister potentially supporting a claim for damages equal to
the amount of the new housing rebate denied by the Minister, and I thus decline
to direct that Mr. Sood’s application be treated as an action.
IV.
Conclusion
[55]
Mr. Sood’s application for judicial review is
dismissed as the Court concludes that it does not have jurisdiction to
entertain what is in fact an appeal of a tax reassessment, that the Agency was
required to revoke the settlement agreement since no legal or factual basis
supports Mr. Sood’s claim to the provincial new housing rebate, and that there
is no basis to grant any of the other remedial measures Mr. Sood is seeking.
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