Canus v. Canada Customs

In Fish Cases, Judicial Review/Crown Liability, Taxation on (Updated )

This case involved an audit by Canada Customs and Revenue Agency of a Canadian Fish Processor that sold fish to its U.S. parent company. As a result of this audit, the company was re-assessed tax in the amount of $1,031345 for improper transfer pricing. As a result of this re-assessment the Fish Processor was limited in the amount of credit that it could obtain and accordingly had to curtail its business activities. Subsequent to the re-assessment, the Fish Processor was successful in having the re-assessment reversed.

The fish process then commenced an action in Nova Scotia Supreme Court alleging both public misfeasance and negligence.

With respect to misfeasance, after referring to Odhavji Estate v. Woodhouse, 2003 SCC 69, [2003] 3 S.C.R., the court refused to find any misfeasance because there was no evidence of an improper purpose, ill will or intent to harm. With respect to negligence, the court distinguished Cooper v. Hobart, 2001 SCC 79, [2001] 3 S.C.R. 537 as a case involving a claim for physical harm. It also said the claim could not be established as relational economic loss because it did not fall into an existing category or any analogous category. It also declined to find a new duty of care under the Ann’s v Merton London Borough Council principal. In doing so it distinguished Keeping v. Canada 2003 Carswell Nfld. 113 (C.A.) and applied Jones v. Department of Employment, [1998] 1 All E.R. 725 (C.A.). In any event, even if there were a duty of care, it would be negated for the policy reason that such a duty would interfere with the Crown’s ability to raise revenue. The court also declined to find negligent misrepresentation.