Strayer,
J.:
—
Relief
Sought
The
notices
of
motion
filed
respectively
by
Her
Majesty
the
Queen
and
the
other
defendants
seek
identical
remedies:
namely
the
grant
of
leave
to
file
a
conditional
appearance
in
order
to
object
to
the
jurisdiction
of
the
Court,
a
finding
that
the
Court
has
no
jurisdiction
to
entertain
this
action,
and
in
the
alternative
the
striking
out
of
all
or
part
of
the
statement
of
claim
on
other
grounds.
It
was
agreed
at
the
outset
that
argument
would
only
be
presented
with
respect
to
conditional
leave
and
the
jurisdictional
question,
the
remainder
of
the
application
being
adjourned
indefinitely
and
depending
on
the
determination
of
these
issues.
Facts
The
plaintiff
Nova
Ban-Corp
Limited
claims
to
be
a
creditor
of
Container
Port
of
Alberta
Research
Corporation
and
has
proceedings
pending
in
the
Alberta
Court
of
Queen's
Bench
in
that
respect.
On
October
16,
1984
the
Minister
of
National
Revenue
issued
a
notice
of
assessment
against
Container
Port.
On
August
28,
1985
a
certificate
of
tax
indebtedness
in
respect
of
that
assessment
was
filed
in
the
Federal
Court
and
a
writ
of
fieri
facias
was
issued.
On
April
8,
1987
a
new
notice
of
assessment
was
issued,
apparently
with
respect
to
the
same
tax
liability.
It
is
common
ground
that
no
notice
of
objection
or
notice
of
appeal
was
filed
by
Container
Port
in
respect
of
either
of
these
assessments.
Briefly
put,
Nova
Ban-Corp
Limited
as
creditor
of
Container
Port
apparently
takes
the
position
that
the
individual
defendant
Aage
F.
Tottrup,
president
of
Container
Port,
acceded
to
an
excessive
assessment
of
income
tax
which
should
have
been
payable
by
Tottrup
himself,
thereby
benefiting
himself
and
prejudicing
the
creditors
of
Container
Port.
Nova
Ban-Corp
sought
to
amend
its
pleadings
in
the
Court
of
Queen's
Bench
of
Alberta
in
order
inter
alia
to
seek
to
vary
the
assessment
of
income
tax
on
Container
Port.
Mr.
Justice
Cooke
of
that
court
issued
an
order
on
October
3,
1988,
which
provided
in
part
as
follows:
2.
Nova
Ban
is
granted
leave
pursuant
to
secs.
232
and
234
of
the
Canada
Business
Corporations
Act
to
commence
a
single
separate
action
(“the
action”
or
"the
Derivative
and
Oppression
Action")
in
the
name
and
on
behalf
of
CPARC
in
The
Federal
Court
of
Canada
to
determine
the
proper
and
appropriate
tax
payable
by
CPARC
arising
out
of
any
tax
assessments
against
CPARC
since
its
incorporation
and
all
related
questions
touching
thereon
including
any
and
all
defenses
which
would
otherwise
be
open
to
Revenue.
Nova
Ban-Corp
then
acting
on
behalf
of
itself
and
(pursuant
to
the
order
of
Mr.
Justice
Cooke)
on
behalf
of
Container
Port,
brought
this
action
seeking
the
following
relief:
(a)
a
Declaration
against
the
Minister
that
the
assessment
of
Container
Port
in
respect
of
the
SRTC
and
the
related
Certificate,
Requirement
to
Pay
and
writ
of
fieri
facias
are
nullities;
(b)
a
Declaration
that
the
Minister
is
estopped
from
proceeding
with
the
collection
of
the
tax
purportedly
levied
or
imposed
by
the
assessment,
and
from
continuing
any
proceedings
under
the
Certificate,
Requirement
to
Pay
and
writ
of
fieri
facias;
(c)
Certiorari
quashing
the
assessment
of
Container
Port
and
the
related
Certificate,
Requirement
to
Pay
and
writ
of
fieri
facias;
(d)
an
Order
requiring
the
Defendant
Tottrup
to
cause
Container
Port
to
produce
to
this
Honourable
Court
and
the
Plaintiffs
financial
statements
for
Container
Port
in
the
form
required
by
Section
155
of
the
Canada
Business
Corporations
Act
for
the
period
1984
to
1988,
inclusive
or,
for
an
accounting
in
such
other
form
as
this
Honourable
Court
may
deem
appropriate;
(e)
in
the
alternative,
a
Declaration
as
to
the
proper
amount
of
tax
owed
by
Container
Port
in
respect
of
the
SRTC;
(f)
judgment
against
Tottrup
compensating
the
Plaintiffs
as
"aggrieved
persons"
in
respect
of
excess
taxes
which
Tottrup
has
caused
Container
Port
to
pay
or
agree
to
pay,
(g)
such
further
and
other
relief
as
this
Honourable
Court
may
deem
just;
(h)
costs.
Conclusions
At
the
outset
counsel
for
the
various
defendants
satisfied
me
that
they
had
raised
a
prima
facie
doubt
as
to
the
jurisdiction
of
the
Court.
Counsel
for
the
plaintiffs
indicated
that
she
had
no
instructions
to
oppose
the
grant
of
leave
to
the
defendants
to
enter
a
conditional
appearance.
I
therefore
granted
such
leave.
With
respect
to
the
substantive
question
of
whether
this
Court
has
jurisdiction
to
entertain
such
an
action,
I
am
satisfied
that
it
does
not.
Firstly,
it
is
clear
that
this
Court
has
no
jurisdiction
over
the
individual
defendant
Tottrup
or
the
corporate
defendant
Container
Port
with
respect
to
the
subject-matter
of
this
action.
The
essential
claim
against
Tottrup
is
that
he
unlawfully
arranged
for
Container
Port
to
pay
more
income
tax
than
it
should
have
done,
thus
prejudicing
Nova
Ban's
ability
as
a
creditor
of
Container
Port
to
recover
moneys
owing
to
it.
These
are
matters
of
corporate
law
or
of
creditor
and
debtor.
To
the
extent
that
federal
laws
are
involved,
I
can
find
no
statutory
assignment
of
jurisdiction
to
this
Court
to
administer
those
laws.
To
the
extent
that
provincial
laws
are
involved
there
is
an
equal
lack
of
jurisdiction
in
the
Court
to
entertain
such
claims.
While
the
order
of
Mr.
Justice
Cooke
could
not,
of
course,
confer
any
jurisdiction
on
this
Court
which
it
did
not
otherwise
have,
it
should
be
noted
that
he
only
gave
leave
to
bring
such
an
action
"to
determine
the
proper
and
appropriate
tax
payable
by
CPARC
.
.
.
."
He
did
not
authorize
any
such
action
for
the
purpose
of
claiming
compensation
from
Tottrup,
as
requested
in
the
prayer
for
relief
in
the
present
action.
Secondly,
the
remainder
of
the
claims
in
the
statement
of
claim
all
essentially
involve
a
challenge
to
the
assessment
of
October
16,
1984
and
to
the
enforcement
measures
which
followed
it.
I
take
it
that
the
request
for
an
order
requiring
Tottrup
to
produce
financial
statements
or
for
an
accounting
is
intended
to
assist
the
plaintiffs
and
the
Court
in
determining
whether
the
assessment
was
correct.
While
the
subject-matter
of
federal
income
tax
is
within
federal
jurisdiction
and
is
governed
by
existing
federal
statute
law,
the
question
remains
as
to
whether
there
has
been
any
statutory
assignment
by
Parliament
of
jurisdiction
to
the
Federal
Court
to
hear
proceedings
such
as
the
present
one.
I
am
satisfied
that
there
has
not.
The
plaintiffs
strongly
rely
on
the
order
of
Mr.
Justice
Cooke
of
the
Court
of
Queen's
Bench
of
Alberta
purportedly
made
under
sections
232
and
234
of
the
Canada
Business
Corporations
Act.
Subsection
232(1)
provides
as
follows:
(1)
Subject
to
subsection
(2),
a
complainant
may
apply
to
a
court
for
leave
to
bring
an
action
in
the
name
and
on
behalf
of
a
corporation
or
any
of
its
subsidiaries,
or
intervene
in
an
action
to
which
any
such
body
corporate
is
a
party,
for
the
purpose
of
prosecuting,
defending
or
discontinuing
the
action
on
behalf
of
the
body
corporate.
In
subsection
2(1)
of
the
Act
the
word
"court"
is
defined
to
mean
the
superior
courts
of
the
various
provinces
as
specifically
named
therein.
In
respect
of
Alberta
the
relevant
"court"
at
the
time
this
order
was
made
would
have
been
the
Court
of
Queen's
Bench.
On
its
face
subsection
232(1)
might
suggest
that
if
that
"court"
once
authorized
an
action
whether
in
that
court
or
some
other
court,
then
Parliament
must
be
taken
to
have
so
authorized
the
action.
However
it
is
clear
from
subsections
232(2)
and
234(2)
that
the
action
or
application
when
brought
must
also
be
brought
in
the
"court"
as
defined;
namely,
in
Alberta,
in
the
Court
of
Queen's
Bench.
In
subsection
232(2)
it
is
provided
that
"No
action
may
be
brought
.
.
.
under
subsection
(1)
unless
the
court
is
satisfied
that
.
.
.”.
This
clearly
implies
that
the
action
is
to
be
brought
in
the
same
"court"
as
gives
leave
for
the
action
to
be
brought.
Similarly
in
subsection
234(2)
it
is
the
“court”
which
has
authority
to
give
the
various
forms
of
relief
specified
there,
some
of
which
relief
might
be
involved
in
the
statement
of
claim
filed
in
the
Federal
Court
in
this
action.
Thus
the
Canada
Business
Corporations
Act
does
not
provide
a
basis
for
a
creditor
to
commence
proceedings
in
the
Federal
Court
in
the
name
of
its
debtor
in
respect
of
the
tax
assessment
of
that
debtor.
Nor
does
the
Income
Tax
Act
authorize
anyone
but
the
taxpayer
to
challenge
a
tax
assessment.
The
plain
words
of
the
Act
do
not
so
provide.
By
sections
165,
169,
and
formerly
172
(authorizing
appeals
to
the
Federal
Court)
it
is
the
"taxpayer"
who
is
authorized
to
file
an
objection
to
an
assessment
or
to
bring
an
appeal.
In
the
present
case
it
is
obvious
that
Nova
Ban-Corp
Limited
is
not
the
taxpayer
in
question.
I
can
find
no
authorization
in
the
Income
Tax
Act
for
the
creditor
Nova
Ban
being
able
to
appeal
the
assessment
of
Container
Port
by
suing
in
the
name
of
the
latter.
It
is
obvious
that
the
"plaintiff"
Container
Port
in
the
present
action
is
somehow
distinct
from
the
"defendant"
Container
Port
which
is
the
real
taxpayer.
Apart
from
the
absence
of
any
express
authority
for
such
a
proceeding,
I
agree
respectfully
with
my
colleague
Walsh,
J.
in
Hart
and
Gunther's
Building
Centre
Ltd
v.
M./\/.R.2
where
he
held
that
a
creditor
of
a
taxpayer
had
no
standing
to
challenge
the
assessment
and
the
enforcement
action
taken
pursuant
to
It.
I
believe
that
the
House
of
Lords
decision
in
Inland
Revenue
Commission
v.
National
Federation
of
Self-Employed
and
Small
Businesses
Limited,
quoted
by
him,
provides
a
clear
rationale
for
denying
any
implication
that
a
person
other
than
the
taxpayer
can
challenge
his
assessment.
The
House
of
Lords
there
emphasized
the
confidentiality
of
taxation
information
which
militates
against
third
parties
coming
in
to
attack
an
assessment.
In
Canada
that
confidentiality
is
required,
in
circumstances
such
as
the
present,
by
subsection
241(2)
of
the
Income
Tax
Act
which
states
that
no
official
shall
be
required
in
connection
with
any
legal
proceedings
to
testify
as
to
informa
tion
obtained
on
behalf
of
the
Minister
for
the
purposes
of
the
Act.
This
would
clearly
provide
a
major
obstacle
to
any
third
party
challenging
an
assessment
in
court
and
it
cannot
be
implied
that
such
a
challenge
is
authorized.
There
are
other
obstacles
to
this
action
proceeding
as
framed.
I
believe
it
is
now
adequately
settled
that
a
challenge
to
an
assessment
or
the
enforcement
action
which
is
based
on
the
assessment
must
be
by
way
of
an
appeal
as
authorized
under
the
Act.
The
present
action
is
not
in
the
form
of
an
appeal:
the
remedies
sought
include
declarations
and
certiorari
as
well
as
a
money
judgment
against
the
defendant
Tottrup.
It
cannot
be
regarded
as
an
appeal
under
the
Act.
Further,
even
if
it
were
an
appeal
it
is
out
of
time.
No
notice
of
objection
was
ever
filed
by
the
taxpayer
with
respect
to
either
assessment.
By
section
165
the
taxpayer
has
90
days
from
the
mailing
of
the
assessment
to
file
such
ar
objection.
Although
it
is
possible
to
obtain
an
extension
of
that
period,
an
application
for
such
extension
must
be
made,
according
to
subsection
167(5),
to
the
Tax
Court
within
one
year
after
the
expiry
of
the
normal
time.
No
such
application
has
been
made.
Therefore
any
appeal,
even
if
otherwise
tenable,
could
not
be
commenced
by
a
statement
of
claim
filed
on
March
23,
1989,
almost
two
years
after
the
last
assessment.
It
should
be
underlined
that
the
plaintiffs'
action
must
fail,
not
because
of
some
arcane
jurisdictional
conflict
between
the
Court
of
Queen's
Bench
of
Alberta
and
the
Federal
Court
of
Canada,
but
because
the
action
is
intrinsically
defective.
That
is,
there
is
no
court
which
will
entertain
a
challenge
to
federal
income
tax
assessment
other
than
one
brought
by
the
taxpayer;
nor
entertain
such
a
challenge
except
in
the
form
of
an
appeal;
nor
entertain
an
appeal
except
within
the
prescribed
time
limits.
I
will
therefore
grant
the
applications
of
the
respective
defendants
and
order
that
the
action
be
struck
out
on
the
basis
that
this
Court
has
no
jurisdiction
to
hear
such
a
claim.
The
plaintiffs
contended
that
even
if
they
should
not
succeed
in
respect
of
this
application,
costs
should
not
be
awarded
against
them
because
they
commenced
their
action
in
the
Federal
Court
with
the
leave
of
the
Court
of
Queen's
Bench
of
Alberta.
As
I
have
noted
above,
the
action
which
they
commenced
went
well
beyond
what
was
expressly
authorized
by
Mr.
Justice
Cooke.
Further,
it
is
clear
that
he
did
not,
and
could
not,
assure
them
of
success
in
the
Federal
Court
and
his
order
expressly
recognized
the
right
of
the
Minister
of
National
Revenue
to
raise
any
defenses
he
might
have.
Given
the
clear
requirements
of
the
Income
Tax
Act
and
the
state
of
the
jurisprudence,
it
must
have
been
evident
that
such
a
proceeding
would
be
highly
uncertain.
For
their
part
the
defendants
have
asked
for
costs
on
a
solicitor-client
basis.
Such
an
award
would
be
justified
only
if
the
manner
of
conduct
of
the
litigation
by
the
plaintiffs
was
patently
negligent,
vexatious,
or
abusive.
I
am
unable
to
characterize
it
as
such
on
the
basis
of
the
information
I
have
before
me.
Therefore
the
defendants
are
entitled
to
their
costs
on
this
application
on
a
party-and-party
basis.
Defendant's
application
to
strike
the
statement
of
claim
granted.
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