Provincial sales tax on legal services following the Christie decision

December 21, 1005

On December 20, 2005, the British Columbia Court of Appeal issued reasons for judgment in the matter of the appeal and cross-appeal of Christie v. British Columbia, a decision of Madam Justice Koenigsberg of the Supreme Court of British Columbia.Although it has been reported by the media that the Court of Appeal has found the imposition of Social Services Tax (PST) on legal services unconstitutional in all circumstances, in fact it is not clear that is the result of the decision. For the majority of the Court, Madam Justice Newbury stated the following:

In the result, I conclude that the appeal should be dismissed and the cross-appeal allowed. I would set aside the order made below and grant Mr. Christie a declaration that to the extent that the Act purports to tax legal services related to the determination of rights and obligations by courts of law or independent administrative tribunals, it is unconstitutional as offending the principle of access to justice, one of the elements of the rule of law.

The cross-appeal to which Justice Newbury refers was seeking a declaration that the tax was unconstitutional for all purposes. The second sentence of the above paragraph may suggest a result which differs from the consequences of allowing the cross appeal.In the circumstances, lawyers are cautioned that:

  • The court order has yet to be finalized and entered. As a result, the exact terms of the order are not yet known;
  • There is the strong likelihood that the Court of Appeal decision will be appealed to the Supreme Court of Canada, with the possibility that the decision could be overturned.

The Law Society is currently following up with the government with respect to the implications of the Court of Appeal’s decision for the collection of the tax. We will provide more information to the profession as we receive it. In the interim, it may be prudent for a lawyer to continue to bill for and hold the tax in trust.The Court of Appeal decision in Christie v. British Columbia is available at

Please check the Law Society website at for updates. Lawyers requesting further information are advised to call Dave Bilinsky, Practice Management Advisor, at 604-605-5331 or email him at