T-2350-86
Dara M. Wilder and Organic Research Inc. and
Vardax Consultants Inc. (Plaintiffs)
v.
The Queen in right of Canada, Minister of the
Department of National Revenue, Taxation,
Henry Rogers, John W. Robertson, Bob Roy,
Rodney Jamieson, William Lucas, Philip George
Seagle, Larry B. Moi, M. K. Ma, Reginald H.
Norberg and Donald J. Sasnett (Defendants)
INDEXED AS: WILDER v. CANADA
Trial Division, Muldoon J.—Vancouver, February
23 and March 10, 1987.
Federal Court jurisdiction — Trial Division — Alleged
breach by M.N.R.'s officials and U.S. Internal Revenue Ser
vice agents of statutory duty under s. 241 Income Tax Act —
Motion for service ex juris — I.R.S. agents exigible to process
in proper forum — Whether Trial Division proper tribunal —
Tests in ITO—International Terminal Operators re Court's
jurisdiction met — S. 241 incidental to Parliament's compe
tence under s. 101 Constitution Act, 1867 — Alleged torts
based on existing body of federal law, i.e. s. 241 — Court
bound by recent decisions to effect tort actions against private
defendants resting upon existing and applicable federal law —
Motion allowed — Federal Court Act, R.S.C. 1970 (2nd
Supp.), c. 10, s. 17(1),(3)(c),(4)(b) — Crown Liability Act,
R.S.C. 1970, c. C-28.
Income tax — S. 241 prohibiting disclosure of information
obtained by or on behalf of Minister of National Revenue —
Alleged breach by M.N.R.'s officials and agents of Internal
Revenue Service of U.S. of s. 241 statutory duty — Negli
gence — I.R.S. agents exigible to process in Trial Division —
Source of plaintiffs' right under s. 241 to be protected from
unauthorized disclosure found in federal law — Motion for
service ex juris allowed — Income Tax Act, S.C. 1970-71-72,
c. 63, s. 241 — Access to Information Act, S.C. 1980-81-82-
83, c. 111, Schedule II, s. 24 — Canadian Charter of Rights
and Freedoms, being Part I of the Constitution Act, 1982,
Schedule B, Canada Act 1982, 1982, c. 11 (U.K.), ss. 1, 7, 8,
24, 26 — Constitution Act, 1867, 30 & 31 Vict., c. 3 (U.K.)
/R.S.C. 1970, Appendix II, No. Sj (as am. by Canada Act
1982, 1982, c. 11 (U.K.), Schedule to the Constitution Act,
1982, Item 1), s. 101 — Canada-United States Tax Conven
tion Act, 1984, S.C. 1984, c. 20.
Crown — Torts — Alleged breach by M.N.R.'s officials and
agents of Internal Revenue Service of U.S. of statutory duty
under s. 241 Income Tax Act — Negligence — I.R.S. agents
exigible to process in Trial Division — Operation of Crown
Liability Act uncertain — Court bound by recent decisions
overruling earlier line of authorities whereby action to proceed
in Trial Division against Crown but not against officers or
servants of the Crown where latter committed actionable tort
— Crown Liability Act, R.S.C. 1970, c. C-28.
Practice — Service — Ex juris — On agents of Internal
Revenue Service of United States — Alleged breach of statu
tory duty under s. 241 Income Tax Act by conspiring to violate
confidentiality of plaintiffs' reports — Civil consequences of
breach of statutory duty to be subsumed in law of negligence:
R. in right of Canada v. Saskatchewan Wheat Pool, [19831 1
S.C.R. 205 — Negligence alleged — American co-defendants
exigible to process in proper forum — Federal Court, Trial
Division proper tribunal — Existence of alleged torts depend
ent upon federal law — Motion allowed — Federal Court
Rules, C.R.C., c. 663, R. 307 — Income Tax Act, S.C.
1970-71-72, c. 63, s. 241.
The plaintiffs seek an order for service ex juris. Their action,
founded in tort, is based on the defendants' alleged breach of
their statutory duty under section 241 of the Income Tax Act.
That section prohibits any official from knowingly com
municating any information obtained by or on behalf of the
Minister of National Revenue except as authorized by the
section. The plaintiffs invoke section 241 as setting a standard
of care and allege negligence on the part of Her Majesty's
servants in disclosing information to agents of the Internal
Revenue Service of the United States. As against the I.R.S.
agents impleaded as co-defendants, they allege breach of the
duty of care by means of conspiracy to infringe the plaintiffs'
right under section 241. The issues are whether the I.R.S.
agents are exigible to the process of this Court and whether this
Court is the proper tribunal.
Held, the motion should be allowed.
There is no nominate tort of statutory breach in Canada as
held by Dickson J., as he then was, in R. in right of Canada v.
Saskatchewan Wheat Pool, [1983] 1 S.C.R. 205. Civil conse
quences of breach of statute, as stated therein, should be
subsumed in the law of negligence. In that case, since negli
gence was neither pleaded nor proven, the action failed.
In the present case, negligence is alleged. Moreover, despite
the penal consequences provided for, section 241 is more indica
tive of an intention to protect taxpayers from unauthorized
disclosure than to discipline officials. The allegations of breach
of duty of care against the I.R.S. agents renders them, at this
stage of the proceedings, exigible to process in a proper forum
to the extent of calling upon them to respond to the plaintiffs'
allegations.
The next question is whether this Court is the proper tri
bunal. The legal criteria for establishing the jurisdiction of this
Court has been set out by the Supreme Court of Canada in
ITO—International Terminal Operators case, [1986] 1 S.C.R.
752: (1) there must be a statutory grant of jurisdiction by the
federal Parliament; (2) there must be an existing body of
federal law essential to the disposition of the case and which
nourishes the grant of jurisdiction; (3) the law on which the
case is based must be "a law of Canada" as that expression is
used in section 101 of the Constitution Act, 1867.
Although those criteria are not new, there appears to be a
nouvelle vague of jurisprudence in their interpretation. Earlier
judgments of the Trial Division have indicated that where,
under the Crown Liability Act, officers or servants of the
Crown committed an actionable tort for which they might be
held personally liable, the action proceeded in the Trial Divi
sion, against the Crown but not against such officers or
servants.
This Court appears to have moved away from those authori
ties as demonstrated by such recent decisions as Marshall,
Blackfoot Indian Band and Roberts—the latter affirmed by
the Court of Appeal—where it was found that existing and
applicable federal law formed the basis of tort actions againt
private defendants. In Oag v. Canada, the Court of Appeal held
that the Trial Division had jurisdiction to entertain claims
made in an action for false arrest and imprisonment against
individual members of the National Parole Board. In speaking
for the Court, Stone J. referred to an earlier decision of the
Court of Appeal, Stephens v. R., where it was held that despite
the application of the Income Tax Act, the right to damages
sought by the plaintiffs was not provided by federal law. The
Stephens case presented more similarities with the case at bar
than the Roberts or Oag cases, and the failure of the Court of
Appeal in the Oag case to either ratify or repudiate what was
said in Stephens has introduced an element of uncertainty into
the operation of the Crown Liability Act.
In the present case, section 241 of the Income Tax Act
constitutes a body of federal law essential to the disposition of
the case and which nourishes the statutory grant of jurisdiction.
The provision is quintessentially federal law for it is emplaced
in and incidental to Parliament's specific exertion of its legisla
tive competence under subsection 91(3) of the Constitution
Act, 1867: Raising of Money by any Mode or System of
Taxation. The plaintiffs' right to be protected against unau
thorized disclosure is therefore found in federal law. To para
phrase Stone J. in Oag, the alleged torts depend for their
existence upon federal law; and any provable damages resulting
from their commission are recoverable in the Trial Division.
Clearly, those conclusions go against the findings of the Appeal
Division in Stephens. However, unless and until the Supreme
Court of Canada decrees otherwise this Court must abide by
the reasons expressed in the Roberts and Oag cases.
CASES JUDICIALLY CONSIDERED
APPLIED:
R. in right of Canada v. Saskatchewan Wheat Pool,
[1983] 1 S.C.R. 205; ITO—International Terminal
Operators Ltd. v. Miida Electronics et al., [1986] I
S.C.R. 752; Roberts v. Canada, [1987] 4 F.C. 535
(C.A.); aff g Roberts v. Canada, [1987] 1 F.C. 155
(T.D.); Oag v. Canada, [1987] 4 F.C. 511 (C.A.).
NOT FOLLOWED:
Stephens v. R. (1982), 26 C.P.C. 1; (1982), 40 N.R. 620
(F.C.A.) (sub nom. Stephens' Estate v. Minister of Na
tional Revenue); Pacific Western Airlines Ltd. v. R.,
[1980] I F.C. 86; 105 D.L.R. (3d) 44 (T.D.); afflg
[1979] 2 F.C. 476; 105 D.L.R. (3d) 60 (C.A.).
REFERRED TO:
Marshall v. The Queen, [1986] 1 F.C. 437 (T.D.);
Blackfoot Indian Band, No. /46 (Members) v. Canada
and Blackfoot Indian Band, No. 146 (Chief and Council
lors) (1986), 5 F.T.R. 23 (F.C.T.D.).
COUNSEL:
J. S. Nossal for plaintiffs.
No one appearing for defendants.
SOLICITORS:
Davis & Company, Vancouver, for Clark,
Dymond, Crump, Calgary, for plaintiffs.
No one appearing for defendants.
The following are the reasons for order ren
dered in English by
MULDOON J.: The plaintiffs seek an order for
service of their amended statement of claim, pur
suant to Rule 307 [Federal Court Rules, C.R.C.,
c. 663], on the defendants Reginald H. Norberg
and Donald J. Sasnett in the State of Washington
or elsewhere in the United States of America.
Rule 307 requires such an application to be
supported by affidavit or other evidence showing
that, in the deponent's belief, the plaintiff has a
good cause of action. Not all superior courts in
Canada require such an application to be made,
nor any order to be given, for service ex juris.
Accordingly, it is apparent that the applicants
must not only demonstrate the deponent's belief
that the plaintiffs have a good cause of action; but
they must also persuade the Court that the plain
tiffs really do have a good cause of action. It is
equally apparent that such cause of action must be
within this Court's jurisdiction. Such must be the
fundamental purpose of the Rule.
The plaintiffs' action sounds in tort founded on
the defendants' alleged breach of their statutory
duty, pursuant to section 241 of the Income Tax
Act, S.C. 1970-71-72, c. 63 as amended (the
"Act"). The defendants Norberg and Sasnett are
alleged to be agents of the Internal Revenue Ser
vice of the United States of America (I.R.S. and
U.S.A.) who, the plaintiffs allege, were not persons
legally entitled to receive information obtained by
or on behalf of the Minister of National Revenue
(the "Minister") for the purposes of the Act or the
Petroleum and Gas Revenue Tax Act [S.C. 1980-
81-82-83, c. 68, Part IV]. The two said defendants
are alleged to have obtained such information
relating to the plaintiffs from the defendants Ma,
Moi and Seagle, in Canada, commencing in Janu-
ary 1986, and continuing since that time. The two
defendant I.R.S. agents are alleged to be parties to
the breach of duty, negligence and wilfulness
alleged against Ma, Moi and Seagle, or to have
unlawfully conspired with them and each other, in
Canada, to infringe the plaintiffs' rights defined in
and by section 241 of the Act.
The plaintiffs invoke not only section 241 of the
Act, but also section 24 and Schedule II of the
Access to Information Act, S.C. 1980-81-82-83, c.
111. They claim that the plaintiffs' rights pursuant
to sections 1, 7, 8, 24 and 26 of the Canadian
Charter of Rights and Freedoms [being Part I of
the Constitution Act, 1982, Schedule B, Canada
Act 1982, 1982, c. 11 (U.K.)], were violated by the
Canadian defendants. The plaintiffs also specifi
cally allege that Article XXVII (exchange of
information) of the Convention between Canada
and the U.S.A. approved and given the force of
law by the Canada-United States Tax Convention
Act, 1984, S.C. 1984, c. 20, does not authorize the
disclosure or exchange of information which is
alleged to have occurred in this matter.
The plaintiffs sue for various declarations of
lack of force and effect and invalidity of the
statutory exceptions to the general rule propound
ed in section 241 of the Act regarding communica
tion and disclosure of information, books, records,
writings, returns or other documents. They ask the
Court to declare that any such communicating and
disclosing is unlawful, and that the defendants'
actions in that regard violate the Charter. They
also seek a declaration to the effect that Article
XXVII of the above mentioned Convention is
inconsistent with sections 1, 7, 8, 24 and 26 of the
Charter. Further, the plaintiffs seek interim or
interlocutory injunctions restraining those defend
ants who are servants and agents of Her Majesty
from communicating, or authorizing the communi
cation of or access to, the aforesaid information or
documents.
Finally, the plaintiffs claim damages. They
claim special and general damages for the negli
gence of those defendants who breached the duty
of care allegedly owed to the plaintiffs pursuant to
section 241 of the Act. They also claim special,
general and punitive damages from the defendants
for their alleged conspiracy in Canada with the
defendants Ma, Moi, Seagle, Norberg and Sasnett
to communicate the information and allow the
inspection of the documents all relating to the
plaintiffs in flagrant disregard of the plaintiffs'
lawful right to be protected from such conduct,
communication and inspection.
An earlier ex parte application by the plaintiffs
to permit service ex juris was denied by Mr.
Justice Joyal on December 3, 1986 [T-2350-86,
not yet reported], but without prejudice to the
plaintiffs' applying again "on more substantial
grounds". In his reasons for that disposition, Joyal
J. wrote this [at page 2]:
I am not persuaded that this is a proper case for the order
asked pursuant to Rule 307 of the Rules of this Court. I have
carefully read the statement of claim as well as the affidavit in
support of the motion for the ex juris order. I interpret the
plaintiffs' case as one for redress against the Crown and its
named servants for the allegedly unlawful disclosure of confi
dential tax information. I fail to see any grounds of redress
against the defendants, Norberg and Sasnett, for having
received it.
Furthermore, the several prayers for relief substantially in
the form of declaratory orders are directed to the Crown and its
servants for the allegedly illegal disclosure to United States
authorities of confidential tax information relating to the plain
tiffs. Although damages are claimed against "the Defendants"
generally, I fail at this stage to see where the defendants,
Norberg and Sasnett, could be held accountable for a breach of
a Canadian statute. On the facts disclosed in the statement of
claim and which, for purposes of this application I must
presume to be true, the defendants Norberg and Sasnett would
not be answerable to the provisions of the Income Tax Act on
which the plaintiffs' claim is substantially based.
It was subsequent to the earlier disposition of
their application that the plaintiffs amended their
statement of claim to allege the tort of conspiracy
between Ma, Moi and Seagle on the one hand and
Norberg and Sasnett on the other hand which, the
plaintiffs allege, was perpetrated in Canada at
divers times and places known only to them.
In order to mark compliance with Rule 307, the
plaintiffs' application for service ex juris is sup
ported by the affidavit of Douglas C. Morley, a
barrister and solicitor of Vancouver, British
Columbia. In this affidavit it is alleged, among
other matters:
10. THAT the Plaintiffs allege that in furtherance of the con
spiracy referred to ... herein,
(i) Ma, Moi, Seagle, Norberg and Sasnett met in Canada to
communicate, receive, inspect, and to allow access to infor
mation obtained in the course of their duties relating to the
affairs of the Plaintiffs,
(ii) Ma and Moi attended at the City of Seattle in the
United States of America and were present during the
examination by Norberg and Sasnett of a business associate
of the Plaintiffs,
(iii) Norberg and Sasnett while in Canada were given docu
ments and information relating to the affairs of the Plaintiffs
by Ma, Moi and Seagle, and were allowed by them to take
the documents and information to the United States of
America,
(iv) Ma, Moi and Seagle told Norberg that Wilder had filed
income tax returns in Canada for the taxation years 1982,
1983, and 1984 only after a demand had been made on
Wilder for the filing of the returns,
(v) Ma, Moi and Seagle during January 1986 told Norberg
that Wilder was the subject of an investigation by the
Department of National Revenue, Taxation, in Canada.
11. THAT upon my review of the Amended Statement of Claim
and the facts alleged therein, and of the relevant provisions of
the Income Tax Act, particularly section 241 thereof, I verily
believe that the Plaintiffs have set forth a prima facie case.
12. THAT I verily believe Norberg and Sasnett are necessary
and proper parties to the action herein.
While the present application is not one to strike
out the statement of claim, upon which no evi
dence is receivable, nevertheless the question must
be asked whether the defendants Norberg and
Sasnett are exigible to the process of this Court in
an action or proceeding within this Court's proper
cognizance. The plaintiffs invoke section 241 of
the Act, a law of Canada within the meaning of
section 101 of the Constitution Act, 1867 [30 &
31 Vict., c. 3 (U.K.) [R.S.C. 1970, Appendix II,
No. 5] (as am. by Canada Act 1982, 1982, c. 11
(U.K.), Schedule to the Constitution Act, 1982,
Item 1)1, as setting a standard of care, and they
allege negligence on the part of Her Majesty's
servants in breaching that duty. They allege con
spiracy involving the defendants Norberg and Sas -
nett, with the other defendants, for the purpose of
breaching that duty of care "thereby causing
injury to .the economic interests of the Plaintiffs
and damages to the Plaintiffs herein". The plain
tiffs do not allege how the alleged breach of duty
factually caused those alleged damages or injury,
or in what manner they occurred. Presumably
however breach of the plaintiffs' "right to be
secure against unreasonable search and seizure"
under the Charter, if such breach there were,
could be compensable without proof of damages.
In the case of R. in right of Canada v. Sas-
katchewan Wheat Pool, [1983] 1 S.C.R. 205, the
present Chief Justice of Canada, Mr. Justice Dick-
son, in delivering the judgment of the Court, held
that in Canada there is no nominate tort of statu
tory breach. The judgment is useful for the very
thorough review of the law undertaken there by
Dickson J. He summarized the principles, which
are of broader application than the limits of that
particular litigation, at pages 227 and 228, thus:
1. Civil consequences of breach of statute should be subsumed
in the law of negligence.
2. The notion of a nominate tort of statutory breach giving a
right to recovery merely on proof of breach and damages
should be rejected, as should the view that unexcused breach
constitutes negligence per se giving rise to absolute liability.
3. Proof of statutory breach, causative of damages, may be
evidence of negligence.
4. The statutory formulation of the duty may afford a specific,
and useful, standard of reasonable conduct.
5. In the case at bar negligence is neither pleaded nor proven.
The action must fail.
In the case at bar negligence is alleged. Moreover,
despite the provision of penal consequences for
officials and authorized persons who commit the
offence created by subsection 241(9) of the Act,
Parliament appears clearly to have intended to
provide protection against unauthorized disclosure
for a class of persons in which the plaintiffs are
included. Section 241, taken as a whole is much
more indicative of that intention to protect the
confidentiality of the plaintiffs' records, than of a
limited intention merely to discipline wayward
officials or persons, who could in any event be
dealt with in terms of their employment status.
In terms of the articulation of a cause of action
against the two American defendants, the allega
tions of breach of the duty of care by means of
conspiracy in Canada to violate the confidentiality
of the plaintiffs' records, renders those defendants
at this stage of the proceedings exigible to process
in a proper forum to the extent of calling upon
them to respond to the plaintiffs' allegations.
The next question is whether this Court is the
proper tribunal. A recent decision of the Supreme
Court of Canada on this matter is ITO—Interna-
tional Terminal Operators Ltd. v. Miida Elec
tronics et al., [1986] 1 S.C.R. 752. Mr. Justice
McIntyre, writing for the majority set out, at page
766, the legal criteria for establishing this Court's
jurisdiction over any matter, thus:
The general extent of the jurisdiction of the Federal Court has
been the subject of much judicial consideration in recent years.
In Quebec North Shore Paper Co. v. Canadian Pacific Ltd.,
[1977] 2 S.C.R. 1054, and in McNamara Construction (West-
ern) Ltd. v. The Queen, [1977] 2 S.C.R. 654, the essential
requirements to support a finding of jurisdiction in the Federal
Court were established. They are:
1. There must be a statutory grant of jurisdiction by the
federal Parliament.
2. There must be an existing body of federal law which is
essential to the disposition of the case and which nourishes the
statutory grant of jurisdiction.
3. The law on which the case is based must be "a law of
Canada" as the phrase is used in s. 101 of the Constitution Act,
1867.
Although these criteria are not new, there
appears to be a nouvelle vague of jurisprudence in
their interpretation. Madam Justice Reed in Mar-
shall v. The Queen, [1986] 1 F.C. 437 (T.D.), and
in Blackfoot Indian Band, No. 146 (Members) v.
Canada and Blackfoot Indian Band, No. 146
(Chief and Councillors) (1986), 5 F.T.R. 23
(F.C.T.D.) found existing and applicable federal
law to found tort actions against private defend
ants. In Roberts v. Canada, [ 1987] 1 F.C. 155
(T.D.), Mr. Justice Joyal declined to strike out a
statement of claim in which one Indian Band sued
another Indian Band over possession of land
occupied by the latter Band. The action was prop
erly taken against the Crown for alleged breach of
fiduciary duty, but Joyal J. held that, in terms of
subsection 17(1) of the Federal Court Act, R.S.C.
1970 (2nd Supp.), c. 10 the defendant Band's legal
position was thoroughly intertwined with that of
the Crown in a.case where relief was also claimed
against the Crown. He followed the judgments of
Reed J. in that regard.
An appeal against the decision of Joyal J. was
unanimously dismissed by the Appeal Division of
this Court on March 2, 1987 [[1987] 4 F.C. 535].
However, the majority of the Court, Messrs. Jus
tices Urie and Hugessen, found that in the particu
lar circumstances of that case it was paragraph
17(3)(c) of the Federal Court Act which grants
exclusive jurisdiction over proceedings to deter
mine disputes where the Crown is or may be under
an obligation, in respect of which there are or may
be conflicting claims. Mr. Justice MacGuigan con
curred in that finding, but also agreed with Joyal
J. and, in turn, Reed J. in resting the requisite
statutory grant of jurisdiction upon subsection
17(1), as well as upon paragraph 17(3)(c). Despite
the urging of counsel for the applicant in the
matter at bar, the Roberts case bears little
similarity to the present matter, apart from the
impleading of a private party as a co-defendant of
the Crown.
Closer in similarity is the recent decision of the
Appeal Division of this Court in Oag v. Canada,
[ 1987] 4 F.C. 511. There the plaintiff, who had
been "gated" upon release from prison on manda
tory supervision, sued the Crown, the National
Parole Board, the Chairman and another member
of that Board, and three public servants. The
action sounds in false arrest, false imprisonment,
assault and battery, and deprivation of Charter
rights. As against the Parole Board and the public
servants the statement of claim was struck out and
the action dismissed in regard to them. The issue
on appeal was whether the Trial Division has
jurisdiction to hear and determine the claims made
in the action against those two individual defend
ants, the Chairman and his colleague. They held
office not as public servants, but by virtue of
appointment by the Governor in Council.
The Appeal Division's reasons for judgment in
the Oag case were expressed by Mr. Justice Stone,
with Chief Justice Thurlow and Mr. Justice Heald
concurring. The decision is finely reasoned and
ought to be appreciated in full, but its critical path
runs thus [at page 519]:
The source of the freedom being enjoyed by the [plaintiff] at
the time of his alleged false arrest and imprisonment is found in
federal law. The relevant statutory provisions are subsection
24(l) of the Penitentiary Act [R.S.C. 1970, c. P-6 (as am. by
S.C. 1976-77, c. 53, s. 41)], and subsection 10(1), section 12,
and subsections 15(1) and (2) of the Parole Act [R.S.C. 1970,
c. P-2 (as am. by S.C. 1976-77, c. 53, s. 28)]:
It is apparent that so long as the [plaintiff] fulfilled the
terms of the mandatory supervision he was entitled to enjoy a
degree of freedom.
That [position] was approved by the Supreme Court of
Canada, when, in effect, it ruled the so-called "gating" practice
upon which this action is based to be illegal (R. v. Moore; Oag
v. The Queen et al., [ 1983] 1 S.C.R. 658, at page 659).
There thus appears, to use the phrase of Laskin C.J.C. in the
Rhine and Prytula case, "a detailed statutory framework" of
federal law under which the appellant not only acquired the
right to be free but also the right to remain so. It must be
emphasized that, as he remained under sentence, the quality of
freedom he enjoyed was not the same as that possessed by a
person not under sentence. Its limits were demarcated by
federal statutes. If the torts of false arrest and imprisonment
were committed as alleged, they were committed because his
right to remain free thus delineated was interfered with. I do
not think that law need expressly provide a remedy for such
interference for the claims to be governed by it. These torts, in
my view, depend for their existence upon federal law; any
provable damages resulting from their commission are recover
able in the Trial Division. I have concluded that the claims are
provided for in the "laws of Canada" or "federal law".
The only remaining question is whether there is here a
"statutory grant of jurisdiction by the federal Parliament" to
satisfy the first requirement. In my view such a grant of
jurisdiction is found in paragraph 17(4)(b) of the Federal
Court Act, R.S.C. 1970 (2nd Supp.), c. 10:
17....
(4) The Trial Division has concurrent original jurisdiction
(b) in proceedings in which relief is sought against any
person for anything done or omitted to be done in the
performance of his duties as an officer or servant of the
Crown.
While the word "officer" is not defined by that Act, the
definition of "public officer" in section 2 of the Interpretation
Act, R.S.C. 1970, c. 1-23 is relied upon:
2. (1) ...
"public officer" includes any person in the public service of
Canada
(a) who is authorized by or under an enactment to do or
enforce the doing of an act or thing or to exercise a power,
or
(b) upon whom a duty is imposed by or under an
enactment;
I do not think it necessary to deal in any definitive way with the
point, there being no evidence before us that establishes the
duties and responsibilities of the two individual respondents. In
view of this lack of evidence the parties are content that each of
the respondents be considered an `officer" of the National
Parole Board for purposes of this appeal. On that basis, I am
satisfied that paragraph 17(4)(b) of the Federal Court Act does
confer jurisdiction on the Trial Division to hear and determine
the claims made against the individual respondents in the
action. I see no reason for giving the language of that para
graph a narrower construction.
There is an enigma in that decision of the Dag
case. It resides in the quotation of a passage of an
earlier judgment of the Appeal Division: Stephens
v. R. (1982), 26 C.P.C. 1, also reported as Ste-
phens' Estate v. Minister of National Revenue
(1982), 40 N.R. 620. That passage (at pages 9-10
C.P.C.; 629-630 N.R.) is:
In the present case it is contended that the income tax
assessments were invalid and the defendants other than the
Crown acted without legal authority in seeking to recover the
unpaid arrears. The contention that they acted without legal
justification would appear to be a necessary basis of their
liability in tort, if any. Thus the claims against the defendants
other than the Crown would necessarily involve the construc
tion and application of provisions of the Income Tax Act. Is
this sufficient to give the Court jurisdiction to entertain the
claims against them, having regard to the implications of the
Supreme Court's decision in Rhine and Prytula? Having given
these implications the best consideration I can, I have come to
the conclusion that it is not sufficient for jurisdiction. What I
infer from Rhine and Prytula is that a cause of action in
contract (or tort) may be held to be one sufficiently supported
by federal law to give the Federal Court jurisdiction if the
contractual or tortious liability can be said to be one that is
provided for by federal law. The Supreme Court appears to
have concluded in Rhine and Prytula that the rights asserted
there found their source essentially or substantially in federal
law because of the extent to which they were provided for and
governed by the applicable federal statutes. In the present case,
despite the necessary application of the provisions of the
Income Tax Act to the question of validity or legal justification,
the right to damages cannot be said to be provided for by
federal law. If it exists at all, it is created by provincial law.
The applicable federal law does not purport to create or provide
for this right. [Emphasis not in original text]
The Appeal Division recited the above passage of
Mr. Justice Le Dain in reporting the respondents'
arguments before it. The Appeal Division did not
ratify what Le Dain J. said, nor did it repudiate
what he said. The Stephens case, in which
Le Dain J. made the above recited statement,
evinced many more similarities with the case at
bar than either the Roberts case or the Oag case,
both so recently decided by the Appeal Division
and earlier mentioned herein. In such a manner
does this nouvelle vague introduce an element of
abhorrent uncertainty into the law.
In the Dag case where there was, no doubt, a
choice of who should answer for the alleged
wrong-doing of the National Parole Board, the
Attorney General, or the implicated Board mem
bers individually, the Appeal Division chose the
individual Board members. Its judgment seems to
attach personal liability to them. The earlier judg
ments of this Court have indicated that where,
under the Crown Liability Act [R.S.C. 1970, c.
C-38], officers or servants of the Crown commit
ted an actionable tort for which they might be held
personally liable, the action proceeded against the
Crown, but not against such officers and servants
in this Court.
In the case at bar it would seem to be easy to
hold that the grant of jurisdiction resides in sub
section 17(1) and paragraph 17(4)(b) of the
Federal Court Act:
17. (1) The Trial Division has original jurisdiction in all
cases where relief is claimed against the Crown and, except
where otherwise provided, the Trial Division has exclusive
original jurisdiction in all such cases.
(4) The Trial Division has concurrent original jurisdiction
(b) in proceedings in which relief is sought against any
person for anything done or omitted to be done in the
performance of his duties as an officer or servant of the
Crown. [Emphasis not in original text.]
The action before the Court is certainly a case
where relief is claimed against the Crown. It is
certainly a proceeding in which, were it not for the
(now uncertain) operation of the Crown Liability
Act, relief could be sought from any person for
misdeeds in the performance of duties as an officer
or servant of the Crown. Admittedly, these are the
interpretations which Urie J. and Hugessen J.
declined to embrace in the above mentioned
Roberts case.
In the case at bar it would seem to be obvious
that there is a body of federal law which is essen
tial to the disposition of the case and which nou
rishes the statutory grant of jurisdiction. It is a
small body, being section 241 of the Act, passed
for the protection of taxpayers and others from
whom the Minister collects information, returns
and other documents. Its basic purpose may well
be to protect the Revenue, but it aims to achieve
that by protecting taxpayers and others. The plain
tiffs are such taxpayers or other persons. The
Minister's officials' duty not to divulge, and the
plaintiffs' correlative right to have their informa
tion, books, records, returns or other documents
kept from being revealed by the Minister's offi
cials, are conceived and born and reside in section
241 which is their sine qua non. That provision is
quintessentially federal law for it is emplaced in
and incidental to Parliament's specific exertion of
its legislative competence in a class of subject
prescribed in head 3 of section 91 of the Constitu
tion Act, 1867: The raising of Money by any Mode
or System of Taxation.
The other federal legislation pleaded by the
plaintiffs is section 24 and Schedule II of the
Access to Information Act, S.C. 1980-81-82-83, c.
111. This legislation supplements and specifically
supports section 241 of the Income Tax Act. It is
undoubtedly authentic federal law.
Therefore, to paraphrase Stone J. in the unani
mous Oag decision of the Appeal Division, the
source of the right to be enjoyed by the plaintiffs
at all times after their information and documents
had been "obtained by or on behalf of the Minister
for the purposes of this Act" is found in federal
law. To paraphrase further: "These [alleged] torts
depend for their existence upon federal law;
any provable damages resulting from their com
mission are recoverable in the Trial Division."
Admittedly, these conclusions do not square with
the conclusions previously stated by Le Dain J. for
an equally unanimous panel of the Appeal Division
in the Stephens case, which were passively recited
by the more recently convoked panel of that Divi
sion in the Oag case. Nor, admittedly, do these
conclusions square with the decisions in this Court
in Pacific Western Airlines Ltd. v. R., [1980] 1
F.C. 86; 105 D.L.R. (3d) 44 (T.D.), aff g [1979] 2
F.C. 476; 105 D.L.R. (3d) 60 (C.A.).
This declared state of the law seems to pose a
conundrum for the Court. What ought to be the
result, in view of the previous long line of appar
ently authoritative interpretations of section 101 of
the Constitution Act, 1867? No doubt Mr. Justice
McIntyre's three criteria expressed in the ITO—
International Terminal Operators Ltd. case, above
recited, constitute the most authoritative interpre
tation of that constitutional provision. Equally, the
Appeal Division's interpretations of those three
criteria in the Roberts and the Oag cases provide
authoritative statements of jurisdiction which this
Court ought to follow. Unless and until the
Supreme Court of Canada decrees otherwise, this
Court must abide by the reasoning expressed by
one panel of the Appeal Division in the Roberts
case, and particularly this Court must abide by the
reasoning expressed by another panel of the
Appeal Division in the more apposite situation
revealed in the Oag case. This, despite the contrary
opinion of the Appeal Division in the earlier, but
now apparently overruled statement of the law
expressed in the similar Stephens case, as well as
in the Pacific Western Airlines case.
Therefore, the Court will order that a notice of
the amended statement of claim herein may be
served on the defendants Reginald H. Norberg and
Donald J. Sasnett at 915-2nd Avenue, in the City
of Seattle, in the State of Washington, one of the
United States of America, or elsewhere in that
country wherever they may be found. Each of
those defendants shall be accorded 60 days from
and after such service within which to file his
defence. Rule 307(2) provides that the defendant
may, within such time, seek to obtain from the
Court further time to file his defence.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.