Law360 Canada ( June 22, 2022, 5:43 AM EDT) -- Appeal by Jayco, Inc. (Jayco) from dismissal of its action for recovery of expenses it incurred in contesting the GST/HST assessment. Jayco manufactured recreational vehicles in the United States and sold them to Canadian dealers. The Canada Revenue Agency (CRA) claimed delivery occurred in Canada and Jayco was obliged to and failed to collect and remit GST/HST from the dealers. It assessed Jayco for almost $14 million in taxes. Jayco was successful in the Tax Court of Canada and the assessment was set aside. Jayco sued Her Majesty the Queen in right of Canada and the CRA for recovery of legal costs incurred in contesting the assessment and interest charges on the security posted for the taxes claimed pending the hearing of the appeal. The motion judge accepted the argument that CRA had no duty to indemnify Jayco for costs incurred in dealing with a GST/HST audit and no private law duty of care which could found a claim for recovery of expenses incurred. Jayco submitted the motion judge erred in striking its claims as to whether the respondents, as principals, owed a duty to indemnify their agent, Jayco, for damages caused as a result of the agent following the principal's instructions, and whether respondents owed a duty of care to GST/HST registrants who were appointed under the Excise Tax Act to be agents of Her Majesty the Queen in right of Canada, thus permitting an action in negligence to proceed....