Docket: 2012-1662(GST)I
BETWEEN:
BRADMAN LEE,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
____________________________________________________________________
Motion
heard on August 28, 2012 at Toronto, Ontario
By: The Honourable
Justice J.M. Woods
Appearances:
|
For the
Appellant:
|
The
Appellant himself
|
|
Counsel for the Respondent:
|
Darren Prevost
|
____________________________________________________________________
AMENDED JUDGMENT
UPON application by the respondent for an order quashing
an appeal instituted by notice of appeal filed on April 30, 2012,
IT
IS ORDERED that the appeal with respect to an assessment made under the Excise
Tax Act for the 1999, 2000, 2001 and 2002 reporting periods is
dismissed. Each party shall bear their own costs.
This
Amended Judgment is issued in substitution of the Judgment dated September 21,
2012.
Signed at Ottawa, Ontario this 25th
day of October 2012.
“J. M. Woods”
Citation: 2012 TCC 335
Date: 20121025
Docket: 2012-1662(GST)I
BETWEEN:
BRADMAN LEE,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
AMENDED REASONS FOR JUDGMENT
Woods J.
[1]
The Crown has brought an application to quash an
appeal which was instituted by Bradman Lee by way of a notice of appeal filed
with the Court on April 30, 2012.
[2]
The appeal relates to a
reassessment issued under the Excise Tax Act pursuant to a judgment of
this Court. The Crown submits that since the cause of action and the issue have
already been litigated, Mr. Lee should be estopped from pursuing a further
appeal.
Summary of
prior proceedings
[3]
The subject matter of this appeal is
net tax payable by Mr. Lee under the Excise Tax Act relating to his
business as a commissioned real estate salesman during 1999, 2000, 2001 and
2002.
[4]
There have been several legal
proceedings pertaining to this business activity for these years.
[5]
The first was a criminal action in
the Ontario Court of Justice against Mr. Lee. The outcome of that
proceeding was that Mr. Lee was convicted of tax offences under s. 239(1)(a)
and (d) of the Income Tax Act and s. 327(1)(c) of the Excise Tax Act:
R. v Lee, [2008] GSTC 65; [2008] 5 CTC 117 (OCJ) (Ex R-2, Tab 14). Oral
reasons relating to the conviction were issued on November 23, 2007. Subsequent
appeals of this decision by Mr. Lee were not successful.
[6]
The second proceeding
was an appeal instituted by Mr. Lee in
this Court (the “GST Appeal”) in respect of an assessment made under the Excise
Tax Act by notice dated February 17, 2005 (the “2005 Assessment”). The
appeal was governed by the informal procedure and was heard by me for four days
over an eight month period. A judgment partially in Mr. Lee’s favour was issued
on July 28, 2010. An appeal taken by Mr. Lee was not successful.
[7]
Mr. Lee also instituted an appeal
of assessments made under the Income Tax Act. The income tax appeal is
in the process of being heard.
Procedural history of this
appeal
[8]
This matter concerns a reassessment
that was ordered by this Court in disposition of the GST Appeal. As Mr. Lee was
partially successful in the GST Appeal, the judgment ordered the Minister to
make a conforming reassessment as follows:
(1)
in calculating net tax, input tax
credits should be allowed to the same extent that they were allowed for purposes
of the criminal conviction, and
(2)
penalties under section 285 of the
Excise Tax Act should be deleted.
[9]
After an appeal of this decision
by Mr. Lee was dismissed, a reassessment was issued which gave effect to the
judgment. The notice of reassessment is dated June 7, 2011 (the “2011 Reassessment”).
[10]
Mr. Lee then instituted this
appeal in respect of the 2011 Reassessment. Prior to filing a reply, the Crown
brought this motion seeking that the appeal be quashed.
Analysis
[11]
The Crown submits that the
doctrine known as res judicata should be applied to quash the appeal in
respect of the 2011 Reassessment. The principle was described by the Judicial
Committee of the Privy Council in Thomas v Trinidad and Tobago, (1990)
115 NR 313, at 316.
[…] It is in the public interest
that there should be finality to litigation and that no person should be
subjected to action at the instance of the same individual more than once in
relation to the same issue. […]
[12]
Res judicata is a form of estoppel recognized by the courts, which
has two forms, issue estoppel and cause of action estoppel. In Angle v MNR,
[1975] 2 S.C.R. 248 (SCC), Laskin J. described the reason for the rule:
The basis of issue estoppel as
well as a cause of action estoppel has been variously explained; for example,
that it is “founded on considerations of justice and good sense” (see New
Brunswick Railway Co. v. British and French Trust Corp. Ltd., at p. 19);
that it is “founded upon the twin principles so frequently expressed in Latin
that there should be an end to litigation and justice demands that the same
party shall not be harassed twice for the same cause” (Carl Zeiss case,
per Lord Upjohm at p. 946, per Lord Guest at
p. 933); that is founded on “the general interest of the community in the
termination of disputes, and in the finality and conclusiveness of judicial
decisions; and … the right of the individual to be protected from vexatious
multiplication of suits and prosecutions … ” (Spencer-Bower and Turner, Res
Judicata, (2nd ed. 1969), p.10). […]
[13]
There is precedent for application
of the principle to appeals under the Income Tax Act in circumstances
similar to this: The Queen v Chevron Canada Resources Limited, 98 DTC
6570 (FCA), at para 36 to 41; Armstrong v The Queen, 2006 DTC 6310
(FCA), para 28; and McFadyen v The Queen, 2008 TCC 441, 2008 DTC 4513.
[14]
I was not referred to any judicial
precedent of its application to appeals under the Excise Tax Act but
there is no reason that it should not apply. Absent special circumstances, a
taxpayer should not be permitted to relitigate the same matters that were
already decided by this Court.
[15]
In my view, the res judicata
principle should be applied in respect of the appeal of the 2011 Reassessment.
The issues which have been raised in the notice of appeal are issues that were
already decided by the Court, or are issues that Mr. Lee should have raised
at the earlier proceeding. There are no overriding reasons that would justify
allowing this litigation to proceed.
Was there lack of notice
of the motion?
[16]
In response to the Crown’s
argument, Mr. Lee stated that he was not aware of this motion or that it was
scheduled. He was present in Court because the motion was scheduled to be heard
on the same day that his income tax appeal was scheduled to be continued.
[17]
Mr. Lee stated that he never
received a copy of the notice of motion. He also stated that although he
received a book containing the Crown’s judicial authorities, without a covering
letter or tabs, he was unaware that the book contained written submissions
concerning the motion. He implied that he assumed the judicial authorities
related to the income tax appeal.
[18]
I am not persuaded by Mr. Lee’s
submissions. In particular, I do not accept that he did not receive a copy of
the notice of motion or that he was unaware that the book of judicial authorities
included the Crown’s written submissions.
[19]
For Mr. Lee’s submissions to be
believed, I would have to find that there there were several problems with the
material sent to Mr. Lee by the Crown: (1) the courier delivery of the
notice of motion was not effected even though the Crown filed an affidavit
relating to service, and (2) the book containing judicial authorities and
written submissions received by Mr. Lee was deficient in that it did not
contain the covering letter that Mr. Prevost read at the hearing, nor a cover
page or tabs even though these are standard procedures and were contained in
the book provided to the Court. Taken together, these circumstances are too
improbable to be believed.
[20]
I would also comment that I had asked
both parties at the beginning of the sitting whether they objected to
proceeding with this motion first before the continuation of the income tax
appeal. Mr. Lee asked for clarification about the motion and I indicated that
it related to his GST appeal. Mr. Lee then indicated that he had no problem in
proceeding with the motion. It was not until after the Crown had presented its
argument that Mr. Lee stated that he had not been aware of the motion.
[21]
I am satisfied that Mr. Lee was
aware of the motion and that there was no unfairness in proceeding with the
hearing.
Conclusion
[22]
It is appropriate to
apply the doctrine of res judicata in these circumstances. The appeal
in respect of the 2011 Reassessment will be dismissed.
[23]
The Crown sought costs in respect
of the motion on grounds that the appeal was an abuse of process. I do not
propose to order costs since Mr. Lee was not represented by counsel and the
doctrine of res judicata is not something that lay litigants are likely
to be familiar with. Each party shall bear their own costs.
Signed at Ottawa, Ontario this 25th
day of October 2012.
“J. M. Woods”
Email this Content