Contributing Lawyers


Cyndee Todgham Cherniak

United States

Susan Kohn Ross


Andrew Hudson

A Vendor for ORST Purposes May Judicially Review Collections Action of Minister

A client came to me after the Ontario Minister of Revenue issued a writ of seizure and sale pursuant to paragraph 37(1)(b) of the Retail Sales Tax Act (Ontario). The writ of seizure and sale instructed the sheriff to seize my client's assets and sell them to satisfy an alleged retail sales tax debt. The alleged debt allegedly arose thirteen years prior to the issuance of the writ. I am using the word "alleged" because there is a disagreement over whether an assessment was ever issued against the person against whom the writ was issued.

On May 13, 2010, the Divisional Court of the Ontario Superior Court quashed the writ. We had filed judicial review of the Minister of Revenue's decision to issue the writ of seizure and sale. In other words, after the decision, there was no writ permitting the sheriff to seize and sell assets.

In Carter v. The Minister of Revenue, the Divisional Court held that pursuant to Rules 67.07(2) and 67.07.1(1) of the Rules of Civil Procedure, "the Minister was required to obtain leave to issue the warrant in question, some thirteen years after the alleged assessment became final and binding." On August 30, 2010, the Ontario Court of Appeal agreed when deciding a motion by the Minister for an extension of time to seek leave to appeal the Divisional Court decision. The Court of Appeal stated:

I believe the Minister overstates its case by arguing that the Divisional Court is placing a de facto limitation period on tax collection. The court' decision simply holds that the Minister requires leave to use one of its remedies - the warrant - where it waits six years to do so.

This is an important decision because the economy and the shifting of Ministry personnel to the Canada Revenue Agency (due to HST implementation) has caused the Ministry to look at old assessments that have not yet been collected. The morale of the story is that if the Minister of Revenue issues a writ of seizure and sale (also called a warrant) and the alleged debt is more than six years old (based on the date on the assessment), the Minister must seek leave from the Superior Court of Justice before issuing the writ. The Minister would have to notify the alleged tax debtor and the alleged tax debtor would have the opportunity to dispute the facts and law raised by the Minister. This means that it is possible that the writ would not be issued and the alleged tax debtor would not have to face the potential of having assets seized and sold and then fighting the government to receive damages (if the actions were in error).

I should add a reality check for persons who are at the receiving end of the Minister of Revenue's collection actions - the cost of pursuing a judicial review is expensive. While I cannot give exact details, I can say that a judicial review to the Divisional Court can result in legal fees in the range of $50,000 - $100,000. I can tell you that the lawyers who act for the Minister of Revenue may take legal steps that will cause the legal fees of the applicant in a judicial review to increase. I can tell you that the costs awarded by the court may be a small fraction of the legal fees incurred by a successful applicant. However, I can also tell you that if enough money is at stake and the case has merit (e.g., the Minister did not seek leave to issue a writ or the writ is issued against the wrong person or for an incorrect amount), a judicial review might be worthwhile.

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