Law Times

Law Times • June 29/JuLy 6, 2009 FOCUS PAGE 15 Can a class action force a city to shred tax bills? BY GLENN KAUTH Law Times roperty tax bills are one of the last things homeown- ers want to see, but can they launch a class action suit to force a city to shred it up? That's the question before P the Supreme Court of Canada in Michel Marcotte c. Ville de Longueuil. Marcotte, a ratepayer there, is seeking to overturn a Quebec Court of Appeal deci- sion that ruled class actions are an inappropriate way of challeng- ing a municipal tax bylaw. The Ontario Ministry of the Attorney General is intervening in the case, arguing that the principle behind the Quebec ruling should stand. The case has roots in the 2002 amalgamation of nine municipal- ities into the City of Longueuil, which lies just east of Montreal. In joining the communities, the province included provisions in the city's charter giving it 20 years to adopt a uniform property tax rate for the entire area, according to a Supreme Court summary of the case. That allowed it to have differing rates for the for- mer municipalities but in doing so limited annual increases to five per cent or less. Marcotte, however, argues that tax increases exceed that amount and therefore attempted to launch a class action in order to overturn the tax bylaws and then have the amounts paid refunded. But the courts ruled Marcotte should instead launch his case as an individual through other statutory procedures, includ- ing Quebec's Cities and Towns Act and the Municipal Code of Quebec. Both include provisions for quashing a municipal bylaw. Harvey Strosberg, a promi- nent class action lawyer from Windsor, notes that the courts have dealt with such questions before, including through a case in his city in which a group of exotic dancers sought to overturn a municipal tax on their profes- sion. The issue in class litigation, he says, is that not only do poten- tial plaintiffs have to prove they have a cause of action as well as a definable class, they also have to show class proceedings are the best way of addressing the case. "The class action has to be a preferable procedure," he says, noting the courts will look at whether a better alternative exists. In Ontario, for example, people wanting to challenge a bylaw can seek redress under the Municipal Act. "The contrary argument is that if you want to get every- body in front of the court, the easiest way to do it is through a class action," Strosberg, a senior partner with Sutts Strosberg LLP, adds. In the Windsor case, the complainants against the municipal tax first sought to overturn the municipal bylaw through the Municipal Act. Then, after winning that battle, they launched a class action to get refunds for those affected. As a result, the process took two steps, which Strosberg suspects might not be necessary. "You have to ask the question is if you can do it in two stages, why can't you do it in one," he says. But in its arguments as an intervenor in Marcotte, the Ontario government argues that using standard procedures to challenge a bylaw is both faster and cheaper. "The statutory pro- cess for a challenge to municipal bylaws is less expensive and more expeditious than a class proceeding," its factum states. "In the end, it will achieve the same result. If successful, it will result in 100 per cent return of taxes illegally paid, rather than mere 70 per cent return that class members typically receive in a class pro- ceeding after payment of their lawyers' contingency fees." The factum further goes on to argue that allowing Marcotte's action would go against the original rationale for class proceedings. "The class proceeding process was initially enacted to enhance consumer protection . . . Though it may be used in tort actions properly brought against government, it was never intended to supple- ment or replace the estab- lished processes available to challenge the validity of the exercise of statutory powers." But among the arguments for allowing a class action against 'Any time the Supreme Court of Canada makes a ruling that deals with class actions, it's important,' says Harvey Strosberg. the City of Longueuil, Marcotte's factum refers to concerns that litigation filed individually under statutory procedures might not result in tax refunds for everyone affected. As well, such a process wouldn't freeze statute of limi- tation periods for other taxpay- ers who also might seek redress whereas a class action would, according to arguments filed to the Supreme Court. But for Strosberg, whether a class action is the best route depends on the facts. In a suit that deals with property assessments, for example, it might not be the way to go since the specific circumstanc- es will vary with each taxpayer. But in a case like Marcotte's that claims the entire bylaw was beyond the scope of a municipality's powers, group- ing plaintiffs together under a common cause could be better, he says. The case, which is awaiting judgment following arguments in January, is a significant one that could affect municipal law, he adds. "Any time the Supreme Court of Canada makes a rul- ing that deals with class actions, it's important." LT Raise your municipal law awareness Municipal & Planning Law An easy to use electronic service that keeps you up-to-date with the latest decisions in municipal and planning law. Each month subscribers receive an e-mail bulletin summarizing recent court decisions in the municipal and planning law area. These summaries are arranged in various sub-topics to provide a quick overview of what's happening in the courts today, and are linked to the case digest and the full text decision in pdf format. Visit canadalawbook.ca and click on "Access online products" to sign up for our no-obligation free trial services. Annual subscription price $210 • P/C 0537700999 $18 for each additional recipient Land Compensation Reports Available online and in print, it includes leading precedent- setting cases on the land compensation process, at the local, regional, provincial and federal levels. Full Service Subscription • Parts and Bound Volumes • $194/vol. P/C 0345090999 • Back volumes • $148/vol. ISSN 0380-4208 Municipal Lands: Acquisition, Management and Disposition Not only does this indispensable resource deal with transactions involving real property, but it has an extensive chapter about municipal tax sales, as well as municipal procurement and environmental issues relating to real property. Looseleaf & binder • $188 • Releases invoiced separately (1-2/yr.) P/C 0116030000 • ISBN 0-88804-428-3 Visit our web site in July for a 20% discount O'Brien's Encyclopedia of Forms, Eleventh Edition, Municipal Corporations, Division IX Internet version included with your print subscription This invaluable service delivers concise commentaries that help you to quickly and easily adjust the related municipal forms to your goals and evolving legal requirements. Looseleaf & binders (3) & Internet access • $435 Releases invoiced separately (1/yr) • P/C 0897030000 Vol. 1/2/3 - ISBN 0-88804-187-X/-356-2/-425-9 The Ontario Municipal Act: A Comprehensive Guide Offers a unique and comprehensive description and analysis of the entire Ontario . This service incorporates amendments to the Act and new or amended regulations, notice of repealed regulations, and court decisions applying, interpreting or otherwise directly related to the Act. Looseleaf & binder • $212 • Releases invoiced separately (1/2 yr) P/C 0480030000 • ISBN 0-88804-412-7 Ontario Municipal Board Reports This renowned resource, available online and in print, includes leading precedent-setting municipal cases from Ontario. It reports leading Board decisions as well as Divisional Court appeals and decisions of the Ontario Assessment Review Board. Includes eReports — e-mailed monthly to your desktop, with topically indexed case summaries linked to the full text judgments. Full service subscription • Parts and bound volume $194/volume P/C 0350090999 (3 vols/yr) • Back volumes • $148 each P/C 0350100000 • ISSN 0318-7527 Ontario Planning Practice: Annotated Statutes and Regulations A practical, user-friendly resource, it provides: the full text of the amended statutes; a and more. Looseleaf & binders (2) • $234 Releases invoiced separately (2/yr) P/C 0433030000 • Vol. 1/2 ISBN 0-88804-081-4/-185-3 Visit our web site in July for a 20% discount Ontario Property Tax Assessment Handbook, Second Edition A must-have resource that provides a comprehensive guide to the principles of assessment of real property, the relationship between assessment and property tax, property tax itself as well as administrative law that clarify this complex area of law. Looseleaf & binder • $148 • Releases invoiced separately (1/2 yr) P/C 0418030000 • ISBN 0-88804-245-0 and relevant regulations and concordance and legislative history For a 30-day, no-risk evaluation call: 1.800.263.2037 CA060 Canada Law Book is a Division of The Cartwright Group Ltd. Prices subject to change without notice, to applicable taxes and shipping & handling. www.lawtimesnews.com CA060 (LT 1-2x4).indd 1 6/24/09 2:43:03 PM LT0629 M. Virginia MacLean, Q.C. and Kelly G. Y Original author: John G. Chipman erxa Municipal Act, 2001 Editors: Roger T. Beaman, Al Burton, John G. Chipman, Paul Chronis and Ian James Lord Editor: Arnold S. Weinrib Associate Editors: Eric R. Finn and John G. Chipman Quinto M. Annibale Editor: Irvin M. Shachter W eirFoulds LLP Planning Act Planning Act Jack A. W alker, Q.C., and Jerry Grad

• Cover
• LSUC Honours
• Bits & Bytes
• Focus On Municipal & Planning Law