Citation: 2011 TCC 337
Date: 20110706
Docket: 2009-177(IT)G
BETWEEN:
BRADMAN LEE,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR ORDER
(Delivered from the Bench on June 29, 2011
at Toronto,
Ontario)
Hershfield J.
[1] The matter called for
hearing today is being adjourned sine die, however two preliminary
matters raised were heard.
[2] The first matter
dealt with whether a subpoena served by the Appellant on a Ms. Shakela Mohamed should
be quashed on the basis that it was not served on her personally, it did not
include conduct money and it was not served in a timely manner.
[3] Questions were also
raised as to whether Ms. Mohamed, as a witness, could provide any evidence
relevant to the proceedings before this Court. Further still, there was a
question as to her health which may be such as to effectively prevent her from
testifying.
[4] Ms. Mohamed was not
in Court at the time the hearing was called.
[5] In order to permit
me to decide whether or not the subpoena ought to be quashed, evidence was
presented. Mr. Ferouz Mohamed, Ms. Mohamed’s husband, spoke to the issues
concerning the subpoena purportedly served on his wife.
[6] He testified that
on Saturday, June 25th at approximately 12:15 p.m. the Appellant
personally served him with two subpoenas, one that subpoenaed him to attend at
Court as a witness today and the other that subpoenaed his wife to attend at this
hearing. He testified that neither subpoena included conduct money, that is,
witness fees and expenses calculated in accordance with a tariff set out under
the Tax Court of Canada Rules (General Procedure). As to conduct money the
requirement that same be paid or tendered is provided in subsection 141(4) of
such Rules. It is subsection 141(1.1) that provides that service on the
person whose attendance is required be at least five days before the day on
which that person is required to appear. That subsection together with
subsection 141(4) make it clear that the service must be personal. The
Respondent’s counsel has contended that service on such day, June 25th,
does not meet the five day requirement under the said Rules. As well, it
is submitted that since it was not served personally and with conduct money there
is ample ground to quash the subpoena. Perhaps most importantly, however, is
the submission that this person has no material or relevant evidence to give.
[7] The Appellant
testified that he had tried to effect personal service much earlier and felt
that both Mr. Mohamed and his wife could have been served earlier if they were
not avoiding service. He said he had attended at Mr. Mohamed’s office on
several occasions and it was always closed and, as well, he had attended at the
residence of Mr. and Mrs. Mohamed and that persons there refused to open the
door to him. Mr. Mohamed testified, on the other hand, that the address that
the Appellant stated was the address that he had essentially staked out for
service purposes was not their address at all. He acknowledged that his office
had been frequently closed but he explained that it was after tax season and, as
a tax preparer, which was his profession, there was less need to keep the
office open.
[8] The Appellant also
testified that there was a cheque for $75 appended to each of the subpoenas. Mr.
Mohamed denied that there was any cheque attached.
[9] As to the medical
circumstances relating to Ms. Mohamed’s ability to appear as a witness, I note
that there were exhibits tendered confirming that she had suffered two strokes
as a result of an aneurism and notations in those medical reports that there
were memory issues. However, in his testimony, Mr. Mohamed indicated that if
she was required to appear as a witness in the future, she would be able to
attend. He suggested that her problem was not memory loss but rather nausea and
the like, which I take it was to suggest that there may be issues such as the
length of time which she could testify.
[10] On the question of the
relevance of his wife’s testimony, Mr. Mohamed testified that he, not his wife,
was the person who had prepared tax returns for the Appellant for the subject
years and that his wife was not trained at all in respect of the preparation of
such returns. She was his receptionist at the time that the Appellant came to
the office in February of 2003 to have his returns prepared. Mr. Mohamed
testified that he alone prepared those returns and that they were completed in
June, 2003. He said she did see the returns, or at least the first page of
them, that were given to the Appellant after they were completed, as Mr. Lee
had insisted that the front page be changed to more properly reflect his full
name. He acknowledged that it would have been his wife that made that change to
the front page and handed Mr. Lee the returns. The Appellant testified that the
returns were done in February, not June, and that he believes that she knew
much more about the returns and had relevant information concerning matters
that were important to his appeal.
[11] As near as I could
tell from the Appellant’s testimony, the concern that he had was that a
compliance officer with the Canada Revenue Agency (“CRA”) (to whom he referred
to as a non-filing officer and who had requested that he file returns for the
subject years) had, unknown to him (the Appellant), received completely
different returns than the returns that he believed were the returns that were originally
prepared for him based on the proper and accurate information provided by him to
Mr. Mohamed. At the very least, it seemed that the Appellant was convinced that
Ms. Mohamed could shed some light on the returns prepared and given to him at
the offices of Mr. Mohamed and/or on the returns that ultimately landed on the
desk of the compliance officer. The suggestion was ultimately made, or so it
seemed to me, that the Appellant believed that Ms. Mohamed was some sort of
informer that fed false information to the CRA or at least that she knew of
facts related to his theory that false information was fed to the CRA. I take
it, as well, that it was these alleged false returns that he believes ultimately
led to the criminal charges and a conviction for what I assume was tax evasion.
That is, he contends that it was the returns that landed on the desk of the
compliance officer in June (which he asserts were not the proper ones prepared
in February) that started all his problems and that he needs to question her to
get that information out there for the Court to hear in the context of these
civil law tax appeals.
Submissions
[12] The Crown referred
the Court to Justice Webb’s 2009 decision in Obonsawin v. Canada. Justice Webb, in my view, wrote
very instructive reasons on the subject of quashing subpoenas on the basis of the
relevance of the testimony sought. Respondent’s counsel had two volumes of
additional authorities to which I need not refer. Mr. Lee argued his need for
Ms. Mohamed’s testimony to find the source of, and shed light on, wrong
information relied on by the CRA.
Analysis
[13] Given Mr. Mohamed’s
appearance, and willingness to testify, at the hearing, I make no comment on
the validity of the subpoena served on him although Respondent’s counsel did
suggest that subpoenas such as this may, if not quashed, survive until the
hearing of the appeals. Since the hearing date is not yet set and there will
likely be a further hearing required to set a new trial date, it is my view
that the status of the effectiveness of the existing subpoena served on Mr.
Mohamed can be resolved at a future time.
[14] Accordingly, I will
deal only with the subpoena concerning Ms. Mohamed.
[15] As to the timing of
the service of the subpoena, the Appellant did not deny that actual service, in
spite of numerous prior attempts, took place as asserted by Mr. Mohamed.
[16] As to the conduct
money, I have two different versions as to whether or not it was provided as
required under the Rules. In this regard, I note that the testimony of
both parties who gave evidence on this question is not disinterested. It is
fairly clear to me that the Appellant accuses Mr. Mohamed and/or his wife as
being a source of his tax problems and they would both likely be hostile
witnesses in respect of the Appellant’s case. I also take it, given remarks
that Respondent’s counsel made at the hearing of this preliminary matter, that
Mr. Mohamed gave evidence at the criminal trial. Those remarks inferred that
such evidence was harmful, or at least not helpful, to the Appellant’s case. That
leaves me with an issue as to whose evidence to prefer in respect of conduct
money. However, I do not find it necessary, in any event, to make a finding as
to whether or not conduct money was paid.
[17] The Appellant
admitted that there was no personal service of the subpoena on Ms. Mohamed as
required under subsection 141(1.1) of the Rules and as underlined in
subsection 141(4) of that Rule.
[18] To be more specific,
subsection 141(1.1) provides that a subpoena “must be served on a person whose
attendance is required at the hearing”. Subsection 141(4) provides that “no
person is required to attend at a hearing unless the subpoena has been served
on that person personally in accordance with subsection (1.1)”.
[19] Notwithstanding the
Appellant’s difficulty in serving the subpoena, I find that this, in itself, is
reason to quash the subpoena although I am more inclined to come to that
resolve on the basis of the materiality of her evidence or rather the lack of
it. Quashing the subpoena for this latter reason relieves me of considering my
discretion under section 7 of the Rules which confirms that failure to
comply with a rule is an irregularity and does not render a step in a
proceeding a nullity and that ultimately the interests of justice must prevail.
Considering that rule, I might have refused to quash the subpoena based on
technical deficiencies alone. Same might easily be rectified or simply not
applied in a case like this.
[20] The real question is
whether or not the subpoena in question was issued to a proper person for the
proper reasons. The Court has inherent jurisdiction to protect and administer
its own processes including refusing to compel a witness to testify where there
is no likelihood that the witness has relevant information or where compelling
the witness is a vexatious action or done for a purpose that appears to be
nothing other than a delay tactic or a tactic to frustrate the prosecution of
the appeal. Further, the compelling of a witness for the purposes of fishing for
information on speculation that it may have some ultimate bearing on an
argument is not sufficient reason to compel the calling of a witness. These considerations
are dealt with in Justice Webb’s decision referred to above and other authorities
cited by Respondent’s counsel.
[21] In Obonsawin,
Justice Webb considered the question of quashing a subpoena. He referred to
the case of Zündel (Re), which set out
grounds for quashing a subpoena. Questions to be asked must concern whether the
evidence from the witness subpoenaed is relevant and significant in regard to
the issues the Court must decide. It is said that Courts should not allow
subpoenaing of witnesses that are merely reflective of fishing expeditions.
Further, it is not sufficient for the party calling the witness to simply state
that the witness might have material evidence. Rather, the party has to
establish that it is likely that the witness would give material evidence.
[22] Justice Webb also refers to the difference between
questions of law and questions of fact. In this regard, it would be necessary
to determine whether there would be any basis to suggest that Ms. Mohamed could
provide any testimony that bears to the calculations made by the Minister of
National Revenue in determining the correctness of the assessments. The basis
of those actual assessments would be in the knowledge of the CRA, and even if
they were based on false returns prepared by someone other than the Appellant or
without his input, I am not satisfied that Ms. Mohamed would have anything relevant
to say about those returns. The hearing of appeals before this Court pursuant
to section 169 of the Income Tax Act, relate to determining the
correctness of the assessment and not, generally, the process by which it came
to be. How the CRA got the information in order to make the calculation it made
in making the assessment is not a subject over which this Court would generally
have jurisdiction.
[23] Lastly, I note that Justice Webb, referring to R. v.
Harris
stated that the burden was on the parties seeking to impose a subpoena to
establish that it was likely or would probably give rise to evidence material
to the issues raised. I would add to that, that the burden is on the Appellant
in this case to establish that the evidence would relate to matters within the
jurisdiction of this Court. I am not satisfied that the Appellant has satisfied
either of these requirements. It strikes me as more likely than not that
requiring Ms. Mohamed to appear would constitute an abuse of process.
[24] At the risk of being
somewhat repetitive, I still ask myself: “What information is it that the
Appellant wants to obtain from Ms. Mohamed that is relevant to the appeal
before this Court?” The reassessment referred to in the Reply to the Notice of
Appeal asserted unreported real estate commissions and disallowed expenses. The Appellant has the task of showing
the asserted amounts earned were not earned by him and that the expenses were
incurred to earn income. Who the CRA relied on for information relating to the
assessment might be gotten from a CRA officer and even then the relevance of
that information is likely none at all. What is relevant to this Court is
information directly related to amounts properly reportable as income, not
where asserted wrong information came from. The Appellant just has to bring
evidence of the amount he actually earned. That is his task. It is not his task
to uncover an informer who may have provided false information. That is the
fishing trip that the Appellant is on. He has a burden to discharge in this
preliminary matter and that is to satisfy me that Ms. Mohamed likely has
evidence material to his appeals. The Appellant has failed to satisfy this
burden in this case. The subject subpoena is therefore quashed.
[25] The question now
arises as to whether I should include in my Order a direction that no further subpoenas
be issued by the Court at Mr. Lee’s request that would seek to compel Ms.
Mohamed to appear at any hearing of these appeals without prior Court approval.
The matter is res judicata as far as I am concerned and I fear, as well,
that Mr. Lee’s determination to bring her forward stems from an attitude and
mindset that smacks of being vexatious. Still, I cannot purport to tie the hands
of another judge by finding a proceeding that is yet to happen, as being res
judicata. Accordingly, direction will be given to the Court either not to
issue blank subpoenas or to ensure in some other manner or by some other means
that a subpoena against Ms. Mohamed shall not be effectively served without a
prior Court order.
[26] With respect to the conduct of the hearing itself, as I
said, it is adjourned sine die.
[27] Respondent’s counsel has acknowledged that the criminal
prosecution of the Appellant in respect of matters relating to subject years for
the tax owing in those years is still before the Courts. He was convicted at
the criminal trial and the conviction was upheld by the Court of Appeal but an
application for leave to appeal to the Supreme Court of Canada has been filed.
Accordingly, it is not in accordance with the longstanding practices of the CRA
and this Court to proceed with the civil matter until the criminal matters have
been finally disposed of. Accordingly, I will direct that the Respondent advise
this Court as to the status of this matter once the Supreme Court of Canada has
ruled on the leave application.
Signed
at Ottawa, Canada this 6th day of July 2011.
"J.E. Hershfield"
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