Case information

Civil procedure — Abuse of process — Estoppel — Taxation — Goods and services tax — Motion to allow appeal, on basis that substance of supply had been determined for earlier reporting periods, dismissed — Appeal from reassessments that denied claims for rebates of GST and HST paid, dismissed — Whether abuse of process by re-litigation is no broader than issue estoppel — Whether issue estoppel bars re-litigation of material findings of fact, or mixed fact and law, following a legislative clarification or other amendment.

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For several years the Canadian Imperial Bank of Commerce (“CIBC”), under the name “President’s Choice Financial”, has been providing credit and banking facilities to customers of Loblaw Companies Limited (“Loblaw”). As part of the arrangement, certain amounts were paid by CIBC to President’s Choice Bank (“PC Bank”), an indirectly wholly-owned subsidiary of Loblaw.

In a 2009 decision of the Tax Court of Canada (President’s Choice Bank v. The Queen, 2009 TCC 170) (“2009 Decision”), the Tax Court found that, for the purposes of the Excise Tax Act, R.S.C. 1985, c. E-15 (“ETA”), the amounts paid by CIBC to PC Bank for the reporting periods from December 31, 2000 to December 30, 2002 were paid for financial services supplied by PC Bank to CIBC and, therefore, no GST was payable.

In 2010, the definition of financial service was amended retroactive to 1990. In 2016 and 2017, PC Bank was reassessed by the Minister of National Revenue for failing to collect and remit GST on the payments made by CIBC. The reassessments were for the reporting periods commencing after December 30, 2002. In the Minister’s view, the supplies made by PC Bank to CIBC were not financial services. PC Bank appealed the reassessment and began to collect GST from CIBC.

CIBC paid the GST and applied for rebates on the basis that the GST was paid in error as PC Bank was supplying financial services to CIBC. The rebate applications covered GST paid during the reporting periods from January 2003 to February 2016. The Minister issued notices of assessment denying CIBC’s requests for rebates.

CIBC filed notices of objection and later appealed to the Tax Court.

At the outset of the Tax Court hearing, CIBC brought a motion to allow its appeal on the basis that the substance of the supply made by PC Bank to CIBC had been determined for earlier reporting periods (December 31, 2000 to December 30, 2002) by the 2009 Decision. CIBC also sought an order precluding the Crown from introducing any evidence inconsistent with the 2009 Decision. The Tax Court dismissed this motion (“Motion Order”).

The Tax Court (“Rebate Judgment”) also dismissed CIBC’s appeal from the assessments made under the ETA that denied CIBC’s claims for rebates of the GST and the federal portion of HST paid in relation to the relevant reporting periods.

While both PC Bank and CIBC filed appeals with the Tax Court, the only appeals that were heard by the Court of Appeal were two appeals filed by CIBC — the appeal from the Motion Order and the appeal from the Rebate Judgment.

The Court of Appeal dismissed the appeals.