The Restitutionary Class Action: Canadian Class Proceedings Legislation as a Vehicle for the Restitution of Unlawfully Demanded Payments, Ultra Vires Taxes, and Other Unjust Enrichments

DAVID CRERAR

ABSTRACT

Recently, an increasing number of plaintiffs has sought the restitution of taxes levied unconstitutionally by various levels of government. The litigants in such suits have tended to be large corporations. However, taxes, by their very nature, fall upon the shoulders of many. Often the size or complexity of these taxes, coupled with the logistics of mass litigation, deters suits for recovery. The author argues that the class action, entrenched and expanded in Quebec, Ontario and British Columbia legislation, offers an ideal vehicle for the mass restitution of ultra vires taxes. The article starts by reviewing common law jurisprudence of suits against tax-levying government bodies, including recent holdings by the high courts of Australia and England in favour of a general right to recovery. These cases stand in contrast to Air Canada v. British Columbia, the leading Canadian case on restitution of taxes unlawfully demanded. The second half of the article examines the reasons for the development of class action legislation. It argues that the relative procedural novelty of class actions and the relative substantive novelty of restitution can mutually inform one another. Class actions would allow regular citizens, and not just corporate litigants, to reclaim incorrectly collected taxes. To this end, the article explores Canadian legislation governing class proceedings, identifying legislative features especially germane to the proposed restitutionary class action. The article concludes by examining the relatively young Canadian jurisprudence on class actions, and reviewing the advantages and pitfalls of a class action suit for ultra vires taxes and other unlawfully demanded payments.

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Citation: (1998) 56(1) U.T. Fac. L. Rev. 47.
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