Federal Court strikes down ‘vexatious’ tax claims

No fundamental right to opt out of tax obligations: court

Federal Court strikes down ‘vexatious’ tax claims

The Federal Court has struck down a series of claims brought forth by the plaintiff, challenging tax assessments and collection actions.

In Kibalian v. Canada, 2024 FC 141, the court found the claims devoid of merit and vexatious. The court dismissed the plaintiff's statement of claim, which asserted a purported "fundamental right" to opt out of tax obligations. In this connection, the plaintiff sought declaratory relief that sections of the Income Tax Act are of no force and effect against him, that the outstanding assessments against him be declared inoperable, and other relief to reverse collection action. However, the court found that these submissions lacked merit, and it was plain and obvious they were doomed to fail.

The court emphasized the absence of such a “fundamental right” and deemed the claim meritless, labelling it a classic Organized Pseudolegal Commercial Argument (OPCA) claim.

Furthermore, the Federal Court highlighted that the matters raised in the statement of claim, including challenges to tax assessments and collection actions, fall under the exclusive jurisdiction of the Tax Court of Canada. The judge deemed it plain and obvious that the litigation was also destined to fail in this regard.

The court noted the plaintiff's attempt to re-litigate previously determined disputes, indicating a clear dissatisfaction with prior outcomes. The court unequivocally stated that such attempts to revisit resolved matters were improper and doomed to fail.

Additionally, the court addressed the plaintiff's collateral attacks on previous decisions of the Tax Court of Canada, dismissing them as misguided attempts lacking merit. The judge reinforced the view that the plaintiff's actions were vexatious, exemplified by the multitude of baseless lawsuits filed in various courts.

Moreover, the court declared the Plaintiff a vexatious litigant under subsection 40(1) of the Federal Courts Act, noting the repetitive and frivolous nature of the claims.

In concluding the judgment, the court ordered the plaintiff to pay costs amounting to $1,000 to the defendant, emphasizing the appropriateness of such an order in the circumstances of the case.

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