Date: 19990518
Docket: T-1283-98
BETWEEN:
ROGER OBONSAWIN, CARRYING ON BUSINESS
AS NATIVE LEASING SERVICES
Plaintiff
- and -
HER MAJESTY THE QUEEN IN RIGHT OF CANADA AS REPRESENTED
BY THE MINISTER OF NATIONAL REVENUE
Defendant
REASONS FOR ORDER AND ORDER
GILES, A.S.P.:
[1] The plaintiff, an Indian living on an Indian reserve, operated on the reserve the business of hiring Indians and making their services available to off-reserve organizations which benefited Indians. At one time the income earned by performing services off-reserves by those Indians was exempt from income tax. New Guidelines were issued which, in effect, only allowed the employees exemption from tax if the employer was one of a number of entities which did not include organizations such as the plaintiff's.
[2] The guidelines, which were interpretations given in public as to the taxability of the income of Indians, were neither made by statute or by regulation. They were, however, apparently followed when assessing the income of certain of the employees.
[3] A number of cases were brought by Indian employees which the employees understood were to be test cases, and an attempt was made to agree the facts and expedite the cases. When the plaintiffs felt they were making no progress with the test cases, this case was brought by statement of claim by the plaintiff. It sought declarations: 1 - that the Guidelines were null and of no effect; and 2 - that the administration of section 87 through the Guidelines is a breach of the defendant's fiduciary obligations to the plaintiff.
[4] The Crown sought to strike out the statement of claim on the grounds inter alia: a) that the plaintiff lacked standing; and b) that the statement of claim discloses no reasonable cause of action.
[5] It was argued that the plaintiff could not qualify for standing as the claim is clearly a public interest claim and the law did not authorize a challenge to an income tax assessment by anyone other than the taxpayer concerned.
[6] In my view the plaintiff was not challenging an income tax assessment, but the validity of the Guidelines themselves, and as those Guidelines would presumably bring an end to his business, he had a personal interest and would have had standing had anyone been able to obtain a declaration with respect to the Guidelines. It was my view that the Guidelines had no legally binding effect and at the hearing I indicated that the claim to a declaration with respect to the Guidelines would be struck.
[7] I reserved my decision with respect to the claim for a declaration that the administration of section 87 of the Indian Act through the Guidelines is a breach of the defendant's fiduciary obligations to the plaintiff.
[8] Other than the fact that the relationship between the Crown and Indians is a fiduciary one I have been unable to isolate the breach of any particular fiduciary duty owed to the plaintiff in any of the cases cited by the parties. None are outlined in the pleadings. No doubt, under section 87, as in all Crown relationships with Indians, the duty is fiduciary. That is to say the Crown as trustee cannot benefit from its position. If the Guidelines were followed and as a result the plaintiff's employees moved their allegiance to one of the favoured institutional employers the plaintiff would suffer but would the Crown gain? If the employees were slow in transferring their allegiance the Crown would gain from them but not from the plaintiff. The existence of the Guidelines might well be the cause of loss to the plaintiff but I do not see them as possibly in breach of fiduciary obligations to the plaintiff.
[9] I conclude, therefore, that there is no cause of action for the relief claimed and the statement of claim will be struck in its entirety.
ORDER
The statement of claim is struck out.
"Peter A.K. Giles"
A.S.P.
TORONTO, ONTARIO
May 18, 1999
FEDERAL COURT OF CANADA
Names of Counsel and Solicitors of Record
COURT NO: T-1283-98
| STYLE OF CAUSE: ROGER OBONSAWIN, CARRYING ON BUSINESS AS NATIVE LEASING SERVICES |
- and -
| HER MAJESTY THE QUEEN IN RIGHT OF CANADA AS REPRESENTED BY THE MINISTER OF NATIONAL REVENUE |
CONSIDERED AT TORONTO, ONTARIO PURSUANT TO RULE 369.
REASONS FOR ORDER
| AND ORDER BY: GILES A.S.P. |
DATED: TUESDAY, MAY 18, 1999
SOLICITORS OF RECORD: Mandell Pinder
Barristers & Solicitors
500 - 1080 Mainland Street
Vancouver, BC
V6B 2T4
For the Plaintiff
Morris Ronsenberg
Deputy Attorney General
of Canada
For the Defendant
FEDERAL COURT OF CANADA
Date: 19990518
Docket: T-1283-98
Between:
| ROGER OBONSAWIN, CARRYING ON BUSINESS AS |
NATIVE LEASING SERVICES
Plaintiff
- and -
| HER MAJESTY THE QUEEN IN RIGHT OF CANADA AS REPRESENTED BY THE MINISTER OF NATIONAL REVENUE |
Defendant
REASONS FOR ORDER
| AND ORDER |