Date: 20020228
Dockets: 1999-4149-IT-G, 1999-4309-IT-G,
2000-3987-GST-G and 2000-4302-IT-G
BETWEEN:
JAMES T. GRENON,
GRENCORP MANAGEMENT INC.,
COLBORNE CAPITAL CORPORATION, and
COLBORNE CAPITAL CORPORATION,
Appellants,
and
HER MAJESTY THE QUEEN,
Respondent.
____________________________________________________________________
Counsel for the Appellants: Carman R. McNary
Counsel for the Respondent: J.E. Fulcher
____________________________________________________________________
Reasonsfor
Order
(Delivered orally from the Bench at Edmonton,
Alberta, on January 9, 2002)
McArthur J.
[1]
This is a motion by the Respondent for an order that all four
appeals be heard one immediately after the other on common
evidence pursuant to subsection 4(2) and section 26 of the
Tax Court of Canada Rules (General Procedure), and for an
order for costs of the motion. They are presently separated in
two pairs. The predominant issue in the Grenon/Grencorp appeals
is whether the taxpayer was a trader in securities. The
predominant issue in the Colborne appeals is the deductibility of
expenses and the goods and services tax thereon but there is a
trading in securities issue similar to that in the
Grenon/Grencorp appeals.
[2]
The Respondent submits that the requested order will avoid
multiplicity of trials and the possibility of inconsistent
decisions as well as promote the most expeditious and inexpensive
determination of the common questions of fact and law arising out
of these appeals. The Appellant opposes such an order on the
grounds that the Westar expense in the Colborne actions is an
issue that has nothing to do with those in the Grenon/Grencorp
actions and by including this very time-consuming expense hearing
would further complicate an already very complex set of issues in
the Grenon/Grencorp appeals.
[3]
The Appellant adds that it is too late to join the actions.
Grenon and Grencorp are almost advanced to the point of setting a
trial date, while Colborne has yet to have discoveries. James
Grenon sets out his position in his affidavit dated December 28,
2001 particularly in paragraphs (dd), (ee), (ff), (gg), (hh),
(ii), (jj) and (kk) which read as follows:
(dd) At no
time prior to completion of the oral examinations already
conducted did the Crown or its counsel raise the possibility that
the two Colborne Income Tax and GST Appeals could or should also
be joined to the conduct of the Grenon Appeals.
(ee) No
examinations have been commenced with respect to the issues
present in the Colborne Income Tax and GST Appeals, nor were
those issues considered in preparing the Lists of Documents that
have already been completed.
(ff)
My solicitor informs me that if the Grenon Appeals are heard in
conjunction with the Colborne Income Tax and GST Appeals there
will be a substantial delay in bringing the Grenon Appeals to
Court in that we will have to review the Lists of Documents filed
in order to include documents relevant to the unique issues
present in the Colborne Income Tax and GST Appeals, and then we
will have to commence oral examinations for discovery on those
issues.
(gg) My
solicitor further informs me that the issues presented in the
Colborne Income Tax and GST Appeals, if joined to the Grenon
Appeals, would add substantial greater complexity to an already
complex set of issues present in the Grenon Appeals. Further, my
solicitor informs me and I believe that if the Colborne Income
Tax and GST Appeals were to be heard in conjunction with the
Grenon Appeals, the trial of the issues would take considerably
more time to prepare for, and to present at, trial.
(hh)
Specifically, the Colborne Income Tax and GST Appeals require a
focus on the issue of deductibility of legal costs with respect
to specific litigation in the past (the "Deductibility
Issue"). This issue has no direct parallel to any issue
present in the Grenon Appeal, and relates to a further complex
and detailed array of facts. I am concurrently swearing
Affidavits in each of those appeals with respect to those
particular facts and issues and how they impact on this
application, and will not restate what I depose in those
Affidavits.
(ii)
In order for the Court to determine the deductibility of the
legal expenses incurred by Colborne in the Westar case, as
described in my Affidavits, it will be necessary to present
extensive evidence originating in the past litigation, evidence
which is not necessary to the Grenon Appeals.
(jj)
As the Deductibility Issue only relates to the Colborne Income
Tax and GST Appeals, which relate to a different party (Colborne
Capital Corporation) (although I am a director of that company),
and at later period of time, evidence as to the business plan of
Colborne is not directly relevant to the Grenon Appeals.
(kk) My
solicitor informs me that none of the issues identified by the
Respondent in its Notice of Motion and supporting Affidavit are
identical between the different parties to the Grenon Appeals and
the Colborne Income Tax and GST Appeals, although certain issues
are similar."
[4]
Sections 4 and 26 of the Tax Court of Canada Rules (General
Procedure) read as follows:
4(1) These
rules shall be liberally construed to secure the just, most
expeditious and least expensive determination of every proceeding
on its merits.
4(2) Where
matters are not provided for in these rules, the practice shall
be determined by the Court, either on a motion for directions or
after the event if no such motion has been made.
26
Where two or more proceedings are pending in the Court and
(a)
they have in common a question of law or fact or mixed law and
fact arising out of one and the same transaction or occurrence or
series of transactions or occurrences, or
(b)
for any other reason, a direction ought to be made under this
section,
the Court may direct that,
(c)
the proceedings be consolidated or heard at the same time or one
immediately after the other, or
(d)
any of the proceedings be stayed until the determination of any
other of them.
[5]
Primarily for the reasons set forth by Respondent's
counsel, the motion is granted, without costs. No costs are
ordered because I agree with the Appellant that this motion could
have been brought much earlier. The advantages of having the
appeals heard together far outweigh the Appellants'
submissions to the contrary. Included in my reasons is the fact
that with the goodwill and excellent reputations of both counsel
who are highly experienced before this Court, I have no doubt
that they can have the desired discoveries in Colborne in the
near future and bring all procedures in all actions in a parallel
or up-to-date position. The advantage of avoiding a multiplicity
of proceedings, hearing the same witnesses twice and the
possibility of inconsistent judgments, outweighs the
negatives.
[6] I
accept the Respondent's statement that Westar evidence
would be called in the Grenon and Grencorp appeals, joined or
not. I believe there is no reason to prevent the Appellant to
deal with the issues transaction by transaction while joined. All
four appeals have common issues and require many of the same
witnesses. Mr. Grenon's intention in every one of the
trading issues may be very important in all appeals. In general,
I accept the submissions of the Respondent. It does not serve a
purpose to repeat them. The motion is allowed and no order is
made as to costs.
Signed at Ottawa, Canada, this 28th day of February, 2002.
"C.H. McArthur"
J.T.C.C.
COURT FILE
NO.:
1999-4149(IT)G, 1999-4309(IT)G
1999-3987(GST)G, 1999-4302(IT)G
STYLE OF
CAUSE:
JAMES T. GRENON, GRENCORP
MANAGEMENT INC., COLBORNE
CAPITAL CORPORATION and
COLBORNE CAPITAL CORPORATION
PLACE OF
HEARING:
Edmonton, Alberta
DATE OF
HEARING:
January 9, 2002
REASONS FOR ORDER
BY:
The Honourable Judge C.H. McArthur
DATE OF
ORDER:
January 15, 2002
APPEARANCES:
Counsel for the
Appellant:
Carman R. McNary
Counsel for the
Respondent:
J.E. Fulcher
COUNSEL OF RECORD:
For the
Appellant:
Name:
Carman R. McNary
Firm:
Fraser Milner Casgrain
For the
Respondent:
Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, Canada
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