Case Name:

West Windsor Urgent Care Centre Inc. v. Canada




West Windsor Urgent Care Centre Inc., Appellant, and

Her Majesty the Queen, Respondent


[2008] F.C.J. No. 24


[2008] A.C.F. no 24


2008 FCA 11


2008 CAF 11


[2008] G.S.T.C. 6


2008 G.T.C. 1152


371 N.R. 297


168 A.C.W.S. (3d) 658


Docket A-611-05



 Federal Court of Appeal

 Toronto, Ontario


Desjardins, Sexton and Pelletier JJ.A.


Heard: January 8, 2008.

 Oral judgment: January 8, 2008.


(8 paras.)


Statutes, Regulations and Rules Cited:

Excise Tax Act, s. 261


Appeal From:

Appeal from a judgment of the Honourable Mr. Justice Hershfield dated November 16, 2005 in Windsor, Ontario, Tax Court File No. 2002-2851 (GST)G, [2005] T.C.J. No. 564.



Raymond Colautti for the Appellant.

Michael Ezri for the Respondent.





The judgment of the Court was delivered by

1     DESJARDINS J.A. (orally):-- We are all of the view that the Tax Court Judge made no reviewable error in concluding that the appellant had no standing to seek a rebate under section 261 of the Excise Tax Act (the Act) (see West Windsor Urgent Care Inc. v. the Queen, [2005] T.C.J. No. 564, 2005 TCC 405, Hershfield J., at para. 65.)

2     Section 261 of the Act in its relevant parts states:

Rebate of payment made in error


261.      (1) Where a person has paid an amount


(a)          as or on account of, or

(b)          that was taken into account as,


                 tax, net tax, [...] or other obligation under this Part in circumstances where the amount was not payable or remittable by the person, whether the amount was paid by mistake or otherwise, the Minister shall, subject to subsections (2) and (3), pay a rebate of that amount to the person.

* * *


                 Remboursement d'un montant payÈ par erreur


261.      (1) Dans le cas o˘ une personne paie un montant au titre de la taxe, de la taxe nette [...] ou d'une autre obligation selon la prÈsente partie alors qu'elle n'avait pas ‡ le payer ou ‡ le verser, ou paie un tel montant qui est pris en compte ‡ ce titre, le ministre lui rembourse le montant, indÈpendamment du fait qu'il ait ÈtÈ payÈ par erreur ou autrement.

3     The Tax Court Judge made a careful study of the agreements governing the relations between the appellant and the physicians. According to the facts he accepted, the appellant was to bill OHIP for the service rendered to its patients by the physicians and was authorized to receive the monies earned by the physicians. The physicians were to invoice the appellant for medical services rendered by them to the appellant's patients at an amount of 50% of the monies received. That percentage was later fixed at 60%. Of the monies received, the physicians, in turn, paid overhead for facilities such as office and workplace, equipment, support staff and a variety of other necessary and incidental supplies, at a rate of 40% of the monies received. The same percentage applied to the physicians retained under locum arrangements and to those shareholder-physicians working under a group number. They were all independent contractors.

4     We are unsure of the effect to be given to the Tax Court Judge's comment at footnote 5 of his reasons that the unsigned agreement between the appellant and the physicians "accurately sets out the terms of the contract entered into between the physicians and the Centre." In our view, the evidence does not support such a conclusion. The agreement is unsigned and is marked "Draft". There was no evidence that any physician signed such an agreement. On the other hand, there was evidence that physicians hired on a contract basis signed "locum" agreements in which they agreed to pay the appellant 40% of their billings in exchange for the provision of services to them by the appellant. Finally, the application for a rebate itself described the basis on which the GST had been collected, namely that the appellant provided a series of services to the physician, for which the physician allowed the appellant to retain 40% of his or her billings. Counsel for the appellant was invited to draw our attention to the evidence which would support the Tax Court Judge's conclusion on this point and was unable to do so. We therefore conclude that there was no evidence to support the Tax Court Judge's conclusion on this point.

5     The Tax Court Judge summarized his findings at paragraph 17 of his reasons:


                 During the period relevant to this appeal, May 1, 1999 through January 31, 2001, GST (calculated as seven percent of the Centre's net 40 percent entitlement), was deducted from the physicians' 60 percent entitlement and remitted to the Crown by the Appellant. Therefore, for each medical service performed at the Centre, the Appellant would retain 40% of OHIP payments, the physician performing the medical service would receive 57.2 percent of OHIP payments and the Crown would receive 2.8 percent as GST (i.e. seven percent of the Centre's net 40 percent entitlement).

6     The Tax Court Judge was therefore entitled to make the finding that the physicians actually paid the GST. He wrote (at paragraph 49 of his reasons) that "[t]he persons paying the tax, suffering the burden of the tax, were clearly the physicians". This conclusion was supported by the evidence.

7     The appellant, which collected the GST and was obliged to remit it, did not bear the burden of the payment of the tax. It is not the person described in section 261 as authorized to claim the rebate.

8     This appeal will be dismissed with costs.