On October 8, 2009, the Supreme Court of Canada rendered a judgment in Breslaw v. Montreal (City) 2009 SCC44 as well as Marcotte v. Longueuil (City) and Usinages Pouliot Inc. v. Longueuil (City) 2009 SCC43.

In Breslaw, the Supreme Court unanimously dismissed the appeal and upheld the Superior Court and Court of Appeal judgments.

In Marcotte and Usinage Pouliot, the Supreme Court also upheld the Superior Court and Court of Appeal judgments in a 5-4 ruling.

Both cases originate from a Québec government decision to promote taxation fairness on the island of Montréal and the south shore by amalgamating the municipalities.

The problems began when measures were taken to mitigate the fiscal shock.

In Breslaw, the appellant was seeking authorization to institute a class action on behalf of taxpayers in the former cities that had amalgamated with the City of Montréal. He was asking that the municipal taxation by-laws be declared “not in conformity” and sought a restitution for alleged overpayments.

In Marcotte and Usinage Pouliot, the appellants were asking that the municipal tax by-laws be declared null. It is this nuance between “declaration of non conformity” and “declaration of nullity” that explains why a unanimous judgment was handed down in the matter involving the City of Montréal, while a split 5-4 judgment was handed down in the one involving the City of Longueuil. The Supreme Court upheld the City of Montréal’s argument that a declaration of a municipal by-law’s lack of conformity with a piece of legislation is not a conclusion that exists in law.

That said, the court did examine the specific problems that could arise should a taxation law be declared null. The majority ruled that such conclusions are unacceptable, that it would be inappropriate to allow a request for a declaration of nullity that, in reality, looks very much like a proceeding to annul the by-laws that includes a request for mandamus (order commanding a public administration to perform an action that is imposed by law) forcing Montréal and Longueuil to recalculate their taxes in accordance with the law. The majority of the court accepted the fact that taxpayers received municipal services between 2003 and 2005. It explained that:

“In the cases at bar, the appellants received municipal services throughout 2003, 2004 and 2005. Moreover, the dispute over the calculation of their taxes concerns only a portion of what they paid. Under the rules applicable to the restitution of prestations, it is unlikely that the amount of their claim would correspond to the amount they are seeking. Given this legal framework and this context, the conclusion being sought does not meet the prima facie case requirement of art. 1003(b) C.C.P.” (paragraph [36] of the judgment in Marcotte and Usinage Pouliot.)

The court majority did not deal with the issue that the principle of proportionality provided for in article 4.2 of the Code of Civil Procedure corresponds to the criterion used in common law provinces to determine whether a class action is the best procedural vehicle to settle a dispute. The minority did, however, look into this issue and found that the criterion is part of the conditions of article 1003 C.C.P.