Citation: 2012TCC210
Date: 20120608
Docket: 2003-3382(GST)G
BETWEEN:
506913 N.B. LTD.,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent;
Docket: 2003-3383(GST)G
AND BETWEEN:
CAMBRIDGE LEASING LTD.
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR ORDER
(Motion heard on April 2, 3 and 5, 2012 and
Reasons for Order delivered orally from the bench
on April 16, 2012, in Fredericton, New Brunswick.)
D'Arcy J.
[1]
The Respondent has
brought a Motion to strike out certain Affidavits that have been filed by the
Appellants in support of their Motion dated January 31, 2012 or, in the
alternative, striking out certain specified paragraphs together with any
associated Exhibits.
[2]
These are my oral Reasons
for the Order with respect to the Respondent’s Motion.
[3]
The Appellant, 506913 N.B.
Ltd., is appealing from a notice of reassessment issued by the Minister for its
GST reporting periods ending between May 1, 1998 and October 31, 2000. The
reassessments increased 506913 N.B. Ltd.’s net tax by $5,627,882. The Minister
also assessed penalties and interest of $1,253,746 and gross negligence
penalties of $1,374,854.
[4]
The Appellant,
Cambridge Leasing Ltd, is appealing from a notice of assessment issued by the
Minister for its GST reporting periods ending between November 1, 2000
and December 31, 2000. The reassessments increased Cambridge Leasing Ltd.’s net
tax by $498,031. The Minister also assessed penalties and interest of $51,934
and gross negligence penalties of $124,508.
[5]
A pre-trial conference
was held before me on January 28, 2011. On February 7, 2011, I issued an Order
providing for the filing by the Appellants of a Motion to challenge the
admissibility of certain documents.
[6]
The Appellants filed a Motion
on February 28, 2011. The Motion did not comply with my February 7, 2011 Order.
[7]
On March 23, 2011, I issued
a second Order directing the Appellants to withdraw the Motion they filed on
February 28, 2011 and to file a new Motion consistent with my Order of February
7, 2011. The Court also provided detailed directions with respect to the
content of the new Motion.
[8]
The Appellants filed
the new Motion with the Court on February 3, 2012 (the “Main Motion”).
[9]
The Respondent then
filed this Motion on March 15, 2012.
[10]
These are not the only
legal proceedings relating to the transactions in respect of which the Appellants
were assessed.
[11]
The Appellants,
together with Mr. Mark Daley, were subjected to criminal proceedings before the
New Brunswick Provincial Court (the “Criminal Proceedings”).
[12]
Further, the Appellants
and their principals have brought a civil action against individual employees
of the Canada Revenue Agency (the “CRA”) and the Attorney-General of Canada in
the Court of Queen’s Bench of New Brunswick (the “Civil Action”).
[13]
There are three issues raised
in the Motion before me:
(i)
The Respondent is
asking the Court for an Order prohibiting the Appellants from using or
attempting to use any documents containing legal advice from the Department of
Justice to the CRA or its employees (the “solicitor-client privilege issue”).
(ii)
The Respondent is
asking the Court for an Order prohibiting the Appellants from using the
transcript of the discovery of Mr. Ron MacIntyre that occurred in the
Civil Action (the “implied undertaking issue”).
(iii)
The Respondent is
asking the Court to strike specific portions of various Affidavits filed in
support of the Main Motion on the ground that the noted portion is offensive
for one or more of the following reasons:
a.
it contains statements
of the deponent’s information and belief where the source of the information
and fact of the belief are not specified in the Affidavit;
b.
it constitutes a paragraph
that contains no facts;
c.
it contains statements
that are irrelevant;
d.
it contains statements
that constitute speculation or argument; and/or,
e.
it contains statements
that constitute conclusions of law. (the “Affidavit content issue”).
I will first address the solicitor–client privilege
issue
[14]
The Respondent is
asking the Court to issue an order prohibiting the Appellants from using or
attempting to use any documents containing legal advice from the Department of
Justice to the CRA or its employees.
[15]
The Respondent filed,
with her Motion, the Affidavit of Ms. Barb Toole, who is currently the
Assistant Director of Audit in the Saint John, New Brunswick office of the CRA.
[16]
Ms. Toole identified
and attached to her Affidavit the following six documents, in respect of which
the Respondent specifically claims privilege notwithstanding their disclosure
to the Appellants:
i)
a September 12, 2001
memo from Department of Justice lawyer John Ashley to CRA official
Francois LePalme;
ii)
a May 10, 2004 letter
from Department of Justice lawyer Peter Leslie to Francois LePalme;
iii)
an April 11, 200 1etter
from Mr. Leslie to CRA official Brian McGiven;
iv) a series of email correspondence between Ms.
Toole and CRA official Gilles Meloche. The emails were sent in March and
April 2001;
v)
a facsimile
transmission cover page dated November 15, 2000. The fax was sent by Mr. Leslie
to CRA official, Yvon Boudreau; and,
vi) an April 14, 1999 letter from Mr. Leslie to
CRA officials Leonard Doncaster and Tim MacLean.
[17]
During the hearing, the
Respondent’s counsel identified two other documents that are part of the
Appellants’ filings in the Main Motion (Exhibits U and V of Volume 4A of 4):
i)
a June 24, 2004 letter
from Mr. Leslie to CRA official Ron MacIntyre; and,
ii)
a July 2, 2003 letter
from Mr. Ashley to CRA official Steven Lunney.
[18]
It is the Respondent’s
position that the documents listed in Ms. Toole’s Affidavit, the two letters
identified during the hearing and any other similar documents disclosed to the Appellants
are protected by solicitor-client privilege and were inadvertently provided to
the Appellants during the disclosure process in the Criminal Proceedings.
[19]
It is the Respondent’s
position that there was no implied waiver of the privilege despite the
inadvertent disclosure.
[20]
The Appellants argue,
in the first instance, that the documents are not protected by solicitor-client
privilege. If the documents are covered by that privilege the Appellants argue
that the Respondent waived the privilege.
[21]
I will first consider
the issue of whether the documents are protected by solicitor-client privilege.
[22]
As the Supreme Court of
Canada noted in R. v. Couture, 2007 SCC 28, [2007] S.C.J No. 28, at para.
62; privilege excludes evidence on the basis of broad social interests, rather
than facilitating the truth-finding function of a court.
[23]
The rational for the
rule is explained in the Law of Evidence in Canada
as follows:
Society has an interest in preserving and encouraging particular relationships
in the community, the viability of which rely on confidentiality between the
parties. These confidential communications are not typically disclosed to
someone outside the relationship. The solicitor-client relationship has long
been considered one of these special relationships.
[24]
Justice Dickson
explained the operation of solicitor-client privilege in Solosky v. R.,
[1980] 1 S.C.R. 821 (“Solosky”) at para 28:
…privilege can be claimed only document by document, with each
document being required to meet the criteria for the privilege: (i) a
communication between solicitor and client; (ii) which entails the seeking or
giving of legal advice; and (iii) which is intended to be confidential by the
parties. To make the decision as to whether the privilege attaches, the letters
must be read by the judge, which requires, at a minimum, that the documents be
under the jurisdiction of a court. Finally, the privilege is aimed at improper
use or disclosure, and not at merely opening.
[25]
The Law of Evidence
text notes the following with respect to the scope of the privilege:
i)
The communication must
not only be made within the “usual and ordinary scope of professional
employment”
between solicitor and client, but also must be made confidentially.
ii) As long as the circumstances indicate the
parties intend to keep the communication secret, the communication will be
privileged.
iii) Communications must be made in the course
of seeking legal advice
and made in order to elicit professional advice from the lawyer based on the
lawyer’s expertise in the law.
[26]
The Supreme Court of
Canada noted in R. v. Campbell, [1999] 1 S.C.R. 565 at para. 50 that the
fact a lawyer works for an “in-house” government legal service does not affect
the creation or character of the privilege.
[27]
The Court noted that
not every action of a government lawyer attracts the solicitor-client
privilege. For example no solicitor-client privilege attaches to advice on
purely business matters even when it is provided by a lawyer.
[28]
The Court stated that
the determination of whether solicitor-client privilege attaches in situations
involving salaried employees such as government lawyers or corporate counsel
depends on the nature of the relationship, the subject matter of the advice and
the circumstances in which it is sought and rendered.
[29]
This Court has held
that legal advice given in confidence by a lawyer working for the Department of
Justice to a CRA official is privileged (see Global Cash Access (Canada)
Inc. v. The Queen, 2010 TCC 493, [2010] G.S.T.C. 145) (“Global Cash
Access (Canada) Inc.”).
[30]
I have reviewed the six
documents attached to Ms. Toole’s Affidavit and the two letters identified
during the hearing. I will first address the memorandum from Department of
Justice lawyer John Ashley to the CRA official, the four letters from
Department of Justice Lawyer Peter Leslie to various CRA officials, the fax
transmission cover page and the letter from Mr. Ashley to a CRA official.
[31]
After reading each of
the documents, I have concluded that Mr. Ashley’s memorandum and letter, each
of Mr. Leslie’s letters and the fax transmission cover page were, at the time
they were issued, protected by the solicitor-client privilege. Each of the
documents evidence communication between a solicitor and his client, entail the
provision of legal advice and were intended to be confidential.
[32]
The emails attached as
Exhibit 4 to Ms. Toole’s Affidavit do not constitute communication between a
solicitor and his or her client. However, the email that was sent at 7:32 am on
April 17, 2001, by Ms. Toole to another CRA employee, Mr. Gilles Meloche, and
the email that was sent at 4:55 pm on April 18, 2001 by Gilles Meloche to Ms.
Toole discuss legal advice provided by Department of Justice lawyers to the
CRA. It is clear that such legal advice was given in confidence and thus was
subject to solicitor-client privilege when provided by the Department of
Justice lawyer to the CRA official.
[33]
This privilege is not
lost when the advice is shared with other CRA officials. As Justice Bowie
stated in Global Cash Access (Canada) Inc., supra, at paragraph 5:
[…] The advice was given to the Agency under the protective cloak of
solicitor client privilege, and it does not lose that protection when it is
passed from one officer of the Agency to another. If support for that
proposition, other than common sense, is required, it may be found in the
judgment of Halvorson J. in International Minerals & Chemical Corp.
(Canada) v. Commonwealth Insurance Co., [1990] S.J. 615; 89 Sask R.1 (Sask.
Q.B.).
[34]
The Respondent has
requested that I grant an Order prohibiting the Appellants from placing before
the Court other documents containing legal advice from the Department of
Justice to the CRA or its employees. I cannot grant such an Order without first
having the document in question identified.
[35]
The decision with
respect to whether privilege exists must be made on a document-by-document
basis. Further, as Justice Dickson noted in Solosky, supra, the
judge must read the relevant documents to make that decision. I must read the
correspondence in question before I can make a decision with respect to
privilege.
[36]
In summary I find that
Mr. Ashley’s memorandum and letter, each of Mr. Leslie’s letters, the fax
transmission cover page and the two noted emails were, at the time they were
issued, protected by the solicitor-client privilege.
[37]
I will now address the
issue of whether this privilege was lost when the Respondent disclosed the
documents to the Appellants in the course of the Criminal Proceedings.
[38]
The Law of Evidence
text makes a number of comments with respect to the duration of privilege. It
notes that privilege is “jealously guarded”: it is only set aside in unusual
circumstances. The duration of the solicitor-client privilege is permanent: it
continues even with respect to other litigation arising in the future. Nevertheless, the
privilege may be lost or “waived” on a communication.
[39]
Further, the law is
clear. The privilege belongs to the client: a solicitor may not waive the
privilege. Only a client may waive the privilege.
[40]
In the current Motion,
the Respondent admits that it made inadvertent disclosure of the privileged
documents.
[41]
Originally, at common
law, inadvertent disclosure of privileged information constituted a complete
waiver of privilege. The rule was established in Calcraft v. Guest, [1898] 1 Q.B. 759 (C.A.). However, modern cases are not as rigid.
Inadvertent or negligent disclosure no longer automatically waives privilege.
[42]
One of the leading
cases on inadvertent disclosure is the decision of the New Brunswick Court
of Appeal in Chapelstone Developments Inc. v. R., 2004 NBCA 96,
[2004] G.S.T.C. 162 (“Chapelstone”).
[43]
At paragraph 54 of his
decision in Chapelstone, Justice Robertson quotes the second edition of the
Law of Evidence as follows:
Where the disclosure of privileged information is found to have been
inadvertent, recent Canadian cases have chosen not to adhere to the principle
in Calcraft v. Guest, holding that mere physical loss of custody of a
privileged document, does not automatically end the privilege. With rules of
court now providing for liberal production of documents, the exchange of large
quantities of documents between counsel is routine and accidental disclosure of
privileged documents is bound to occur. A judge should have a discretion to
determine whether in the circumstances the privilege has been waived. Factors
to be taken into account should include whether the error is excusable, whether
an immediate attempt has been made to retrieve the information, and whether
preservation of the privilege in the circumstances will cause unfairness to the
opponent.
[Footnote omitted]
[44]
Justice Robertson
continued and summarized the law as follows:
In summary, the general rule is that the right to
claim privilege may be waived, either expressly or by implication. However,
inadvertent disclosure of privileged information does not automatically result
in a loss of privilege. More is required before the privileged communication
will be admissible on the ground of an implied waiver. For example, knowledge
and silence on the part of the person claiming the privilege and reliance on
the part of the person in receipt of the privileged information that was
inadvertently disclosed may lead to the legal conclusion that there was an
implied waiver. In the end, it is a matter of case-by-case judgment whether the
claim of privilege was lost through inadvertent disclosure.
[45]
It appears that the
privileged documents attached as Exhibits 1 to 5 of Ms. Toole’s Affidavit
and the two privileged letters identified during the hearing, were disclosed in
June 2005 during the Criminal Proceedings.
[46]
It is not clear to me
how the Appellants acquired a copy of the privileged letter attached as Exhibit
6 to Ms. Toole’s Affidavit. The letter does not appear to relate to either of
the Appellants or their employees or shareholders. It was written by Mr. Leslie
to CRA officials in Sydney and Halifax, Nova Scotia.
[47]
With respect to
Exhibits 1 to 5 of Ms. Toole’s Affidavit and the two letters identified during
the hearing, I accept Ms. Toole’s testimony that the disclosure was
inadvertent.
[48]
The CRA disclosed
approximately 70,000 documents to the Appellants. It is not surprising that
there was inadvertent disclosure of at least 7 documents.
[49]
With respect to Exhibit
6 to Ms. Toole’s Affidavit, I am troubled that the Court was not made aware of
how the document came into the Appellants’ possession. However, it was clearly
provided to the Appellants by the CRA at some point in time.
[50]
I note that a portion
of this document is redacted. Such redaction supports the Appellants’ argument
that the disclosure of this document was not inadvertent.
[51]
Ms. Toole testified
that the CRA would not, in the normal course of its business, disclose
documents that contained communication between Department of Justice lawyers
and the CRA.
[52]
After considering all
of the evidence before me, I have decided to accept the evidence of Ms. Toole.
The disclosure of Exhibit 6 to her Affidavit was inadvertent.
[53]
As I just noted, the
disclosure of seven of the documents occurred in June 2005.
[54]
The Crown was aware of
the inadvertent disclosure as early as September 2006.
[55]
On September 1, 2006,
an Affidavit sworn by Mr. David Daley was filed in the Criminal Proceedings.
Attached to the Affidavit were the privileged documents marked as Exhibits 1, 3
and 6 of Ms. Toole’s Affidavit.
[56]
On September 11, 2006,
Mr. Daley swore another Affidavit that was also filed in the Criminal
Proceedings. The privileged document attached as Exhibits 2 of Ms. Toole’s Affidavit
and the two privileged letters identified during the hearing were attached to
Mr. Daley’s Affidavit.
[57]
Each of the remaining
two Exhibits to Ms. Toole’s Affidavit, Exhibits 4 and 5, were marked as
Defendants Exhibits during the Criminal Proceedings.
[58]
The Crown did not raise
any objection before the New Brunswick Provincial Court to the privileged
documents being filed during the proceedings before the Court.
[59]
In fact, the document
attached as Exhibit 3 of Ms. Toole’s Affidavit is referred to at paragraph 14
of the July 30, 2008 decision of Judge Arseneault in the Criminal Proceedings.
[60]
Further, the emails
attached as Exhibit 4 to Ms. Toole’s Affidavit that were sent at 7:32 am on
April 17, 2001 by Ms. Toole to Mr. Meloche and at 4:55 pm on April 18, 2001 by
Mr. Meloche to Ms. Toole were put to a CRA official in 2009 during discovery in
these proceedings.
[61]
Once again the
Respondent did not object on the ground that the documents were privileged
documents that had been inadvertently disclosed.
[62]
In summary, the
inadvertent disclosure occurred nearly seven years ago. On at least three
occasions, beginning five and a half years ago, the inadvertent disclosure was
brought to the attention of the Respondent. However, the Respondent did not
raise any objections in relation to these documents until October 2011.
[63]
In my view, the
knowledge and silence on the part of the Respondent constituted an implied
waiver of the solicitor-client privilege as to the documents attached to Ms. Toole’s
Affidavit and the two privileged letters identified during the hearing of this Motion.
The next issue is the Discovery evidence from the
Civil Action
[64]
CRA official Ron
MacIntyre was discovered during the Civil Action. He is one of the defendants
in the action.
[65]
The Appellants filed an
Affidavit of Mr. Allen Skaling sworn on January 27, 2012 in support
of the Main Motion (“the 2012 Skaling Affidavit”).
[66]
Paragraphs 14, and 15
of the 2012 Skaling Affidavit contain extensive quotes from the transcript of
the discovery of Mr. Skaling in the Civil Action. Paragraph 5(d) and 16
are based upon the discovery transcript.
[67]
The entire transcript
of the discovery of Mr. Skaling in the Civil Action is attached as Exhibit 6 to
the 2012 Skaling Affidavit.
[68]
It is the Respondent’s
position that the use by the Appellants of the transcript from the discovery in
the Civil Action breaches the implied undertaking rule.
[69]
The implied undertaking
rule was discussed at length in the recent decision of the Supreme Court of
Canada, Juman v. Doucette, 2008 SCC 8, [2008] 1 S.C.R. 157 (“Juman”).
Justice Binnie stated the rule as follows at paragraph 27:
For good reason, therefore, the law imposes on the
parties to civil litigation an undertaking to the court not to use the
documents or answers for any purpose other than securing justice in the civil
proceedings in which the answers were compelled (whether or not such documents
or answers were in their origin confidential or incriminatory in nature). […]
[70]
He noted that there are
two good reasons for the rule:
In the first place, pre-trial discovery is an invasion
of a private right to be left alone with your thoughts and papers, however
embarrassing, defamatory or scandalous. At least one side in every lawsuit is a
reluctant participant. Yet a proper pre-trial discovery is essential to prevent
surprise or “litigation by ambush”, to encourage settlement once the facts are
known, and to narrow issues even where settlement proves unachievable. […]
[…] second rationale […]: A litigant who has some
assurance that the documents and answers will not be used for a purpose
collateral or ulterior to the proceedings in which they are demanded will be
encouraged to provide a more complete and candid discovery. This is of
particular interest in an era where documentary production is of a magnitude
(“litigation by avalanche”) as often to preclude careful pre-screening by the
individuals or corporations making production. […]
[71]
The implied undertaking
rule was recognized by the New Brunswick Court of Queen’s Bench in 1989 in Rocca
Enterprises Ltd. v. University Press of New Brunswick Ltd. 103 N.B.R. (2nd)
224 (“Rocca Enterprises Ltd.”) at para 24 where the Court stated the
following:
[…] I do however accept that the law in New Brunswick is set out by
Anderson J. in Reichmann […] as follows:
There is an implied undertaking by a party conducting an oral
examination for discovery that the information so obtained will not be used for
collateral or ulterior purposes. […]
[72]
Appellants’ counsel
accepts that the implied undertaking rule applies in New Brunswick. This
is not surprising since he was counsel for the plaintiff in the Rocca
Enterprises Ltd. hearing.
[73]
Counsel for the Appellants
argues that the implied undertaking rule does not apply in the Main Motion on
the ground that there is no privacy interest to be protected.
[74]
I do not agree. The
implied undertaking arises once discovery occurs.
[75]
A party may raise the
privacy issue when seeking leave to have the undertaking waived; however,
privacy is not a condition for the imposition of the undertaking in the first
instance.
[76]
The Appellants have
clearly breached the implied undertaking by filing the oral discovery of Mr.
MacIntyre without the consent of Mr. MacIntyre or leave of the New Brunswick
Court of Queen’s Bench.
[77]
The Appellants argue
that I should allow the oral discovery to be filed, relying on one of the
exceptions set out by the Supreme Court in Juman. However, the Appellants
have not brought a Motion seeking leave to file the oral discovery of Mr.
MacIntyre.
[78]
Regardless, this Court
does not, in my view, have jurisdiction to grant leave to file the oral
discovery.
[79]
It is clear from the
Supreme Court of Canada decision that the implied undertaking is owed to the
Court where the proceeding took place: in this instance, the New Brunswick
Court of Queen’s Bench.
[80]
As a result, it is the
New Brunswick Court of Queen’s Bench that has jurisdiction to grant leave, not
the Tax Court of Canada.
[81]
As my colleague Justice
Angers stated in Welford v. the Queen, 2006 TCC 31, 2006 D.T.C. 2353, at
para. 19:
It seems to me that if the proceeding giving rise to
the application of the implied undertaking rule was before the Ontario Superior
Court of Justice and one of the parties to that proceeding wants to use in the
Tax Court an examination for discovery from that proceeding, it is the Ontario
Superior Court of Justice that would have the power to permit the production of
the document protected by the implied undertaking rule and to release the party
from that undertaking.
[82]
For the foregoing
reasons, the Respondent’s Motion with respect to the oral discovery of Mr.
Macintyre in the New Brunswick Court of Queen Bench is granted. Paragraphs
5(d), 14, 15 and 16 of the Affidavit of Allen Skaling sworn on January 27, 2012
shall be struck together with Exhibit 6 to the Affidiavit.
The last issue I will address is the Affidavit content
issue
[83]
The Respondent is
asking the Court to strike specific portions of various Affidavits filed in
support of the Main Motion on the ground that the noted portion is offensive
for one or more of the following reasons:
(i)
it contains statements
of the deponent’s information and belief where the source of the information
and fact of the belief are not specified in the Affidavit;
(ii)
it constitutes a paragraph
that contains no facts;
(iii) it contains statements that are irrelevant;
(iv)
it contains statements
that constitute speculation or argument; and/or,
(v)
it contains statements
that constitute conclusions of law.
[84]
Rule 72 of the Tax
Court of Canada Rules (General Procedure) provides that:
An affidavit for use on a motion may contain
statements of the deponent’s information and belief, if the source of the
information and the fact of the belief are specified in the affidavit.
[85]
Rule 72 is an exception
to General Procedure subrule 19(2) which states:
An affidavit shall be confined to a statement of facts
within the personal knowledge of the deponent or to other evidence that the
deponent could give if testifying as a witness in Court, except where these
rules provide otherwise.
[86]
As Justice Trudel
stated in Canada (Attorney General) v. Quadrini, 2010 FCA 47 at
paragraph 18:
[…] the purpose of an affidavit is to adduce facts relevant to
the dispute without gloss or explanation. The Court may strike affidavits,
or portions of them, where they are abusive or clearly irrelevant, where they
contain opinion, argument or legal conclusions, or where the Court is convinced
that admissibility would be better resolved at an early stage so as to allow
the hearing to proceed in a timely and orderly fashion […].
[87]
I agree with the Respondent
that the Affidavits in question are filled with speculation, opinions,
arguments and legal conclusions.
[88]
I also agree with the Respondent
that the Affidavits contain hearsay where the source of the information and
fact of the belief are not specified.
[89]
Further, it is not
clear to me, at this stage, the relevance of certain portions of the Affidavits.
[90]
The first issue that I
must address is how to deal with those deficiencies in the Affidavits.
[91]
I will first address
the statements of the deponent’s information and belief where the source of the
information and fact of the belief are not specified in the Affidavits.
[92]
I believe that any such
deficiencies in the Affidavits go to the weight I should give the statements,
with such determination being made after I have heard from the Appellants on
the Main Motion. It is only after I have heard from the Appellants that I can
determine whether the hearsay evidence in question should be admitted under the
principled approach set out by the Supreme Court of Canada in R v. Khelawon,
2006 SCC 57 or one of the exceptions to the hearsay rule.
[93]
I will next address the
relevancy issue.
[94]
The Respondent’s
counsel is asking me to strike out numerous paragraphs and sentences which he
argues are irrelevant.
[95]
Counsel for the Appellants
argues that I should not make a determination with respect to relevancy until
after he has presented his case to me and attempted to show me the connection
between the items noted in the Affidavits and his argument.
[96]
I agree with counsel
for the Appellants. It is only after I have heard from the Appellants that I
can made a determination with respect to relevancy.
[97]
The Respondent is also
requesting that I strike numerous paragraphs that contain no facts. The
depondent used each of the noted paragraphs to attach documents.
[98]
There is no reason to
strike the paragraphs. This issue is what weight I should give to the attached
documents. I will make that decision after I hear from both parties during the
Main Motion.
[99]
With respect to the
speculation, opinions, arguments and legal conclusions contained in the Affidavits,
the usual remedy is to strike out the offensive portions of the Affidavit.
However, if the relevant portions are not severable then the entire Affidavit
is struck.
[100]
After reviewing each of
the Affidavits, I have determined that a number of the statements constitute
speculation, opinions, arguments and/or legal conclusions.
[101]
Statements that are
severable will be struck.
[102]
As a result, with
respect to the 2012 Skaling Affidavit:
a)
The first sentence of paragraph
9, which begins with the following words: “Although the CRA maintains that it
exercised its audit powers in a regulatory capacity…” is struck;
b)
The first sentence of
paragraph 11, which begins with the following words: “At that meeting, neither Mr.
Crossman or Mr. MacIntyre had any concrete evidence…” is struck;
c)
The following words
from the fifth sentence of paragraph 13 are struck: “and he was accompanied by
a number of his confreres and they seized numerous documents that had no
relation to the assessment or potential criminal charges”;
d)
The last sentence of
paragraph 13, which begins with the following words: “I found this attitude totally
unacceptable…” is struck;
e)
The first sentence of
paragraph 14, which begins with the following words: “The product of the search
warrants was also...” is struck. This sentence is also struck under my ruling
on the implied undertaking;
f)
The first sentence of
paragraph 15, which begins with the following words: “As additional or further
evidence of the abusive conduct of CRA...” is struck. This sentence is also
struck under my ruling on the implied undertaking; and,
g)
The following words
from the first sentence of paragraph 19 are struck: “and having concluded that
they were now firmly involved in a criminal investigation”.
[103]
With respect to the Affidavit
of David Daley sworn on February 24, 2011:
a)
the following words
from the first sentence of paragraph 12 are struck: “all for the purpose of
using such evidence to support the validity of the assessments herein”;
b)
The second sentence of
paragraph 14, which begins with the following words: “In short, I state that it
appears any alleged...” is struck;
c)
Paragraph 16 is struck;
d)
The following words
from the second sentence of paragraph 18 are struck: “and the evidence shows
that Mr. McIntyre of CRA and RCMP officials and Department of Justice lawyers
were fully aware of the potential breaches of the law in the mixing of audit
and investigative functions”;
e)
The fifth sentence of
paragraph 20, which begins with the following words: “It is not possible for me
to prove...” is struck;
f)
The second sentence of
paragraph 23, which begins with the following words: “A trial involving the
validity of the assessments herein...” is struck.
[104]
With respect to the Affidavit
of David Daley sworn on September 1, 2006, which was reaffirmed by Mr. Daley in
his February 24, 2011 Affidavit:
a)
Paragraph 29 is struck;
b)
The last sentence of
paragraph 33, which begins with the following words: “I ask the Court to
consider...” is struck;
c)
The last sentence of
paragraph 40, which begins with the following words: “The Minister has no proof
for these allegations...” is struck;
d)
The second sentence of
paragraph 42, beginning with the words “The Ministry has no proof that Nautica
Motors Inc.”, and the two sentences that follow are struck;
e)
The first sentence of
paragraph 54, which begins with the following words: “I note that in the
Information to search...” is struck;
f)
Paragraphs 107, 115 and
118 are struck.
[105]
With respect to the Affidavit
of David Daley sworn on February 13, 2007, which was reaffirmed by Mr. Daley in
his February 24, 2011 Affidavit:
a)
Paragraph 20 is
struck.
[106]
Certain statements
contained in the Affidavits, that constitute speculation, opinions, arguments
and/or legal conclusions are not severable. These statements were identified by
counsel for the Respondent and are contained in paragraphs 7 and 8 of the 2012
Skaling Affidavit and paragraph 9 of the 2011 Daley Affidavit. Such statements
will not be struck, however they will be ignored by the Court.
[107]
Since the Motion is
only granted in part, there will be no order with respect to costs.
D'Arcy J.
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