Class action seeks partial refunds from major retailers

Rivard is claiming that these items are “insurance products” and should instead be subject to the taxe sur les primes d’assurance (TPA), nine per cent as opposed to the full 15 per cent. He wants the stores to refund customers the difference between the two methods of taxing consumers.

During this early stage of the class action, which has not yet been given the authorization to proceed, the Quebec Revenue Agency and the federal Attorney General, representing the Canada Revenue Agency, are seeking intervenor status in the case to argue that only actual tax courts, including Quebec Court, and not Quebec Superior Court, should be hearing the case, as the stores were collecting government-mandated taxes.

The July 28 Superior Court document notes other similar class action cases are awaiting authorization as well, and that the federal and provincial tax agencies are seeking to intervene in those cases. They include Poirier v. Les produits Avantage Plus et al. Mire v. Apple Canada and Apple inc., regarding a trade-in program; Dalpé-Palerme and Gagné v. Société financière Mercedes-Benz Canada inc. et al., and Bourdeau v. Automobile et Touring Club du Québec.

The tax authorities are arguing that they are “best placed to enlighten the court on the interpretation and application of these complex tax regimes [and that they] therefore have a real, direct, and distinct interest in the debate.”

The affected retailers are not opposing the intervention of the tax agencies, stating “their participation is necessary to preserve the integrity of the tax system and to allow the court to benefit from their expertise.”

The plaintiff argued their intervention would slow down and complicate the process, and that “voluntary interventions at the authorization stage of a class action are extremely rare and exceptional, and are generally not permitted.”

Judge Enrico Forlini ruled July 28 to allow the Quebec and Canada Revenue agencies to intervene, but just to argue that Quebec Superior Court lacks jurisdiction to hear the case.

“The court finds that the tax authorities have demonstrated a plausible interest in the subject matter of the litigation in all five proposed class actions,” the decision says. “The taxes were paid to the authorities through the defendants acting as mandataries (agents). The authorities are the ultimate beneficiaries of the taxes. They have a direct legal link to both the plaintiffs and defendants, and could be financially impacted by the outcome.”

The judge also decided that this situation is sufficiently exceptional to allow intervention at the authorization stage of the process.

“The jurisdiction issue — lack of jurisdiction of the Superior Court — must be decided at the earliest opportunity for reasons of public order and sound administration of justice. Waiting until after authorization would serve no purpose.”

The decision adds that the interventions by the federal and provincial tax bodies would provide “perspective on the complex tax rules, collection obligations, and refund mechanisms” and would be “highly useful and enlightening for the court.

“Their contribution is considered indispensable on these public-law and tax issues. The intervention is limited to filing written arguments and making oral submissions on the jurisdiction issue only.” n