It was an incredible story, a real life David vs Goliath. I’m talking about the meal tax lawsuit that a handful of Canadian carriers won against Canada Revenue Agency, resulting in millions of dollars in excise taxes being returned to trucking companies and their owner/operators.

Truck News has been all over this story since the beginning when the lawsuit was first filed, right through to the decision and subsequent issuing of cheques to carriers who filed the claim. It was estimated that as much as $15 million was being returned to owner/operators, who between the years of 1991 and 2002 ran into the US and were leased to carriers that participated in the claim. In short, the court decision found that trucking companies and owner/operators who purchased fuel in Canada and then consumed it in the US were eligible for excise tax rebates, since the fuel was essentially an exported item, and as such, exempt from federal excise taxes.

That loophole was slammed shut immediately after the initial claim was made, but the court ordered CRA to issue rebates to those carriers and their owner/operators who were involved in the initial lawsuit, which was the brilliant brainchild of fuel tax accountant Larry Babins and then steered through the courts by Winnipeg super-lawyer Israel Ludwig, who got rich off the deal and deservedly so, having taken the case on spec’.

It’s a great story, no? Not so fast. While some of the carriers involved, including test cases Nolan Transport and Bison Transport, have already issued refunds to eligible owner/operators (and set aside the remaining funds in a trust account until they can find the appropriate individuals), I’ve been hearing more and more from owner/operators whose carriers at the time are refusing to release the funds.

Some are reluctantly agreeing to pay out their owner/operators, after deducting “administration fees” and even “lawyer’s fees” (even though Ludwig already took his commission off the top). Then you have the unique case of Highland Transport, which was acquired by TransForce after the claim was made but before the funds were released by CRA.

Its owner/operators have dug in their heels in an increasingly hostile dispute over the money, which by some accounts (according to the O/Os) TransForce feels entitled to because Highland capped fuel prices and by other accounts TransForce has yet to release simply because it doesn’t have the necessary paperwork to figure out who should get what. TransForce itself has not responded to my request for an interview. Neither has Babins, the accountant who initiated the entire claim and is the caretaker of an invaluable, guarded list of carriers involved (right down to the truck number and all the other pertinent information), a list that even CRA would not release to me despite a formal Access to Information request.

(It should be said, Babins has courteously agreed to confirm to any owner/operator whether or not they are eligible for a refund).

Ludwig, the lawyer who represented carriers when they filed the claim against CRA, has been more forthcoming with information, however there’s only so much he can divulge, since he is still representing carriers who have had their claims refused as they file their appeals.

So what you have here is what could have been an incredible story, an improbable win for the little guy against the big bad taxman, which has instead deteriorated into one gigantic mess. Let’s hope the refunds get passed on to the O/Os they were intended for. We all know the cash means a lot more to them than the conglomerates that to date have withheld it.