McEachern, CJSC:—The petitioners invoke sections 11(h) and 24 of the Canadian Charter of Rights and Freedoms in a challenge against penalties assessed under the Income Tax Act, incuding the return of such penalties which have been paid, on the ground that such penalties are further punishment for tax evasion offences for which the petitioners have already been charged, convicted and sentenced in criminal proceedings.
Such penalties, amounting to 100 per cent or more of the tax evaded, include penalties assessed by Canada as agent for the Province of British Columbia. Hence the appearance of counsel for the Minister of Finance and the Attorney General of British Columbia on this petition.
Counsel for the Minister of National Revenue and the Attorney General of Canada takes the position that section 18 of the Federal Court Act gives exclusive jurisdiction in this matter to the Trial Division of the Federal Court of Canada. Counsel for British Columbia takes a stoic position. He doesn't care if the federal portion of this question is tried in the Trial Division of the Federal Court but he thinks this Court clearly has jurisdiction qua the provincial portion of the assessment.
Uncertain dual jurisdiction in different courts is a developing misfortune in this country as more and more cases fall easily within one jurisdiction or the other, and our citizens are never sure that great time and expense will not be wasted litigating in the wrong court. This is especially so now that increasing numbers of cases of a local or private nature seem to be heard in the Federal Court. In this connection one notices motor vehicle accident cases, corporate takeovers, construction contract claims and many other diverse kinds of cases which also fall clearly within the jurisdiction of the provincial superior courts.
The language of section 18, supra, should be reconciled with the recent jurisprudence which seems to recognize the right of litigants to bring their cases in the courts of general jurisdiction even where Her Majesty in the Right of Canada is involved. Dual jurisdiction which exists in many countries without noticeable success seems to be increasing in Canada. I must leave it to Parliament to decide if dual jurisdiction is in the public interest. With great deference I suggest it is not, except perhaps in particular matters, if any, which are thought to require judicial specialization not available in the provincial superior courts.
On this application I was treated to excellent technical arguments on the question of jurisdiction. In fact, counsel agreed that there is no point in proceeding to the merits of this case until the jurisdictional question has been resolved. This has required extensive argument and the reading of many authorities. As a result, I I only have the question of jurisdiction to consider at this time. The necessity of dividing cases on technical grounds is obviously a good reason to have the broad question of dual jurisdiction reviewed.
I have concluded, after considering the numerous authorities cited by counsel, that this Court has at least coordinate jurisdiction in Charter matters with the Trial Division of the Federal Court. Such I think may fairly be extracted from a number of pre- and post-Charter cases including AG of Canada et al v Law Society of BC (1982), 137 DLR (3d) 1 (SCC) (the Jabour case); Re R L Crain Inc et al and Couture et al (1983), 9 CRR 287 at 300-304 (Sask QB); Re Krakowski and The Queen (1983), 4 CCC (3d) 188 at 191-2 (Ont CA); Canadian Labour Relations Board et al v Paul L'Anglais Inc (1983), 146 DLR (3d) 202 (SCC) at 207, 209, 211-12; R v Ritter et al, [1984] 2 WWR 623 at 643-44 (BCCA); Hunter et al v Southam Inc (1984), 11 DLR (4th) 641 (SCC).
Of the foregoing, and there are undoubtedly many others, I regard Jabour, L'Anglais and Hunter to be particularly appropriate.
Without conceding that there would be jurisdiction in this case if the petitioners sought only a declaration, Mr Purdy says that the claim of the petitioners for the return of the paid penalties removes this case from the jurisdiction of this Court. I cannot accept that submission for it means that this Court might have jurisdicion if the taxpayer refused to pay but does not have jurisdiction if he has paid under protest and is seeking firstly to establish his rights and secondly to recover what he was forced to pay. Such a result is so technical and artificial that it must be rejected.
Next, Mr Purdy argues with his usual agility that even if this Court has jurisdiction it should nevertheless defer to the Trial Division of the Federal Court as income tax matters are said generally to belong to that Court. As there is so much litigation about jurisdiction, the safe course might be to decline jurisdiction but that has not been the practice and my view is that judges who have jurisdiction should not lightly avoid difficult questions, particularly where the petitioners, with full knowledge of the risk, have elected to proceed in this Court. In any event, I regard this case as much a Charter case as an income tax case and I respectfully do not agree that this Court should defer to the Federal Court in Charter matters.
I regard fragmented hearings as one of the unfortunate results of dual jurisdiction, and I do not wish to be understood to be pronouncing an order on the question of jurisdiction which someone may wish to appeal. I have only made a ruling in favour of this Court's jurisdiction, and the order on this and all other questions will only be made after the completion of the hearing of the entire petition. For this reason, of course, it is not necessary to make any order regarding costs. Counsel may reset the balance of the petition for hearing as they may be advised but they may consider waiting for the decision of the Supreme Court of Canada in R v Wigglesworth (1983), 150 DLR (3d) 748 (Sask QB); affirmed (1984), 7 DLR (4th) 361 (CA); leave to appeal granted May 3, 1984, where useful jurisprudence on a similar question may be forthcoming.
Rule accordingly.
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