Docket: 2002-4824(IT)G
BETWEEN:
JEFFREY SACKMAN,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
____________________________________________________________________
Motion
heard on October 14, 2011 at Toronto, Ontario
Before: The Honourable
Justice Valerie Miller
Appearances:
|
Counsel for the Appellant:
|
Matthew
Sokolsky
|
|
Counsel for the Respondent:
|
Martin Beaudry
Jenna Clark
|
____________________________________________________________________
ORDER
UPON motion by the Respondent seeking
Directions for leave to examine Paul Sloan in California, USA, before the hearing, on oath or
affirmation for the purpose of having his testimony to be tendered as evidence
at the hearing of the appeal;
AND UPON hearing the submissions of counsel
for both parties;
AND the Respondent having requested the
issuance of a Commission and Letter of Request with respect to the witness
referred to above;
THE COURT DIRECTS AS FOLLOWS:
1.
The evidence of the
witness Paul Sloan, 6041
Fenwood Avenue, Woodland
Hills, CA 91367-3117, shall be taken on oath or
affirmation in California, USA, before the hearing and shall be
recorded in California at a time and place to be determined.
2.
The Respondent is
required to pay witness fees in the amount fixed by the Tax Court of Canada in
addition to reasonable expenses incurred by Paul Sloan to be examined by the
commission.
3.
The Registrar shall
prepare and issue a commission naming a judge of the Tax Court of Canada as
Commissioner to take the evidence of the witness for use in the hearing.
4.
The Registrar shall
prepare a Letter of Request addressed to the judicial authorities of the State
of California, USA, requesting the
issuing of such process as is necessary to compel the witness to attend and be
examined before the Commissioner.
THE COURT FURTHER ORDERS THAT:
5.
All issues relating to
costs with respect to this motion shall be left to the discretion of the trial
judge.
6.
All expenses incurred
by the Commissioner and the Court Registrar with respect to the commission
evidence of Paul Sloan shall be paid in advance by way of security referred to
in paragraph 10 hereof by the Respondent.
7.
Reasonable travel
expenses incurred by the Appellant with respect to the commission evidence of
Paul Sloan, with the exception of professional fees, shall be reimbursed by the
Respondent.
8.
The reimbursement of
travel expenses incurred by the Appellant shall be limited to economy class
travel for two people, hotel costs up to $200 per night per room, and meals and
incidentals at the rates prescribed by the Treasury Board Secretariat for
government travelers.
9.
With respect to paragraphs
6, 7 and 8 of this Order, the ultimate reimbursement of costs shall be left to
the discretion of the trial judge.
10.
The Respondent shall
deposit with the Tax Court of Canada, on or before November 18, 2011 the
initial sum of Cdn $25,000.00 as security for the Court’s expenses which shall
include the expenses of the Commissioner and Court Registrar.
Signed at Ottawa,
Canada, this 21st
day of October 2011.
“V.A. Miller”
Citation: 2011TCC492
Date: 20111021
Docket: 2002-4824(IT)G
BETWEEN:
JEFFREY SACKMAN,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR ORDER
V.A. Miller J.
[1]
The Respondent has
brought a motion in which she seeks Directions authorizing the issue of a
commission to examine Paul Sloan, a resident of California, before the hearing of this appeal for the purpose of having his
testimony tendered as evidence at the hearing of this appeal. The motion is
brought pursuant to sections 112, 119, 120, 121 and 122 of the Tax Court of
Canada Rules (General Procedure) (the “Rules”).
[2]
The main issue in the
appeal is the fair market value of prints which were donated by the Appellant
to various charities in the 1999 and 2000 taxation years. The Appellant
obtained the prints from Artistic Ideas Inc. (“Artistic”) who acted as agent[1] for Coleman Fine
Arts (“Coleman”) and Silver Fine Arts (“Silver”), both of which were owned by
Paul Sloan.
[3]
Counsel for the
Respondent submitted that Paul Sloan’s evidence is material to the Respondent’s
theory of the case. The Respondent has pled “Further Facts” in its Reply
concerning the nature of the donation program as well as the source and cost of
the prints to Coleman and Silver. These “Further Facts” were not included in
the assumptions made by the Minister of National Revenue (the “Minister”) and
the Respondent bears the burden of proving them. It is the Respondent’s
position that only Paul Sloan can give this evidence.
[4]
The affidavit filed by
the Respondent established the following facts:
a)
The Appellant appointed
Artistic as its agent to donate the prints to charities in return for
charitable donation receipts.
b)
The Appellant
understood that he purchased art from Coleman and Silver but he had no
information how Coleman and Silver obtained the prints.
c)
The Appellant has no
knowledge of the cost of the prints to Artistic or Coleman or Silver.
d)
Paul Sloan gave
commission evidence in the appeal of Artistic Ideas Inc. v Canada, 2008 TCC 452. This evidence would assist the
Respondent with its theory of this appeal. The Respondent served the Appellant
with a Request to Admit certain facts which were based on the commission
evidence given by Paul Sloan and the Appellant has refused to admit any of the
facts and documents in the Request to Admit on the basis that he had no
knowledge of them.
e)
The Respondent wrote to
Paul Sloan to discuss and request his voluntary attendance as a witness at the
hearing. During a telephone conversation with counsel for the Respondent, Paul
Sloan stated that he would not voluntarily attend at the hearing in Canada.
[5]
In a letter dated March
1, 2011, counsel gave the following reasons for not consenting to the motion;
(i)
Mr. Sloan’s evidence is not material. The CRA
knows how much Mr. Sackman paid for the art. Based on prior authorities that is
the least amount that he will receive as a tax credit. Based upon the Crown’s
position that there is a “tax donation market” the price paid by Mr. Sackman is
the price in that market;
(ii)
To the extent that Mr. Sloan was involved with
Artistic Ideas Inc. (“Artistic”) we already went through an extensive exercise
to have a representative of Artistic produced for discovery. The Crown should
have brought this motion at that time with respect to Mr. Sloan. The Crown’s
request will delay matters. My client is anxious, as he has been throughout
these proceedings to have the matter finally resolved;
(iii)
The Crown has already examined Artistic. A
representative of Artistic will be compellable to attend trial as a witness in Ontario. Artistic can give evidence about the
“tax scheme”. Mr. Sloan is redundant.
[6]
In exercising my
discretion under section 119 of the Rules to direct an examination prior
to the hearing of the appeal for the purpose of having the person’s testimony
available to be tendered as evidence at the hearing, I must take into account:
(a) the convenience of the person
whom the party seeks to examine,
(b) the possibility that the
person will be unavailable to testify at the hearing by reason of death,
infirmity or sickness,
(c) the possibility that the
person will be beyond the jurisdiction of the Court at the time of the hearing,
(d) the expense of bringing the
person to the hearing,
(e) whether the witness ought to
give evidence in person at the hearing, and
(f) any other
relevant consideration.
[7]
In addition, I must be satisfied
that the Respondent has met the tests for commission evidence which have been
applied by the courts. Those tests were listed by Addy, J. in M.N.R. v
Javelin Foundries & Machine Works Ltd., [1978] C.T.C. 597 (FCTD) as:
13 There is no
question but that the granting of a commission is a discretionary matter which
must be dealt with according to the particular circumstances of each case. As
to the method of exercising that discretion, I am in general agreement with the
tests enumerated by Osler, JA in the case of Ferguson v Millican
(1905), 11 O.R. 35 at 39, which tests were approved and applied by the late
Steward, J in Niewiadomski v Longdon, [1956] O.W.N. 762.
According to these authorities the court must be satisfied that:
1. the
application is made bona fide;
2. the issue
is one which the court ought to try;
3. the
witnesses to be examined can give evidence material to the issue;
4. there is
some good reason why they cannot be examined here.
[8]
In the present motion, the
application is made bone fide; the issue is one which the court ought to
try; and, there is good reason why the witness cannot be examined here. The
only issue, and indeed the only relevant ground on which the Appellant has opposed this motion, is
whether Paul Sloan’s evidence is material to this appeal.
[9]
The Respondent has made
the following submission:
26. The respondent’s theory of the case is that there was no
identifiable market for the prints before Coleman, Silver and Artistic created
a market through the donation program. Mr. Sloan is able to give evidence
concerning the origins of the donation program and the absence of any
discernible market for the artwork before it was packaged as part of the
Artistic program. His testimony is also necessary to authenticate documents
necessary to challenge the appellant’s anticipated expert evidence.
[10]
There is no doubt that
the evidence sought from Paul Sloan is material to the issue in this appeal and
to the Respondent’s theory of the case. She has been unsuccessful in her
attempts to have the transcript of Paul Sloan’s commission testimony or the
facts that arise from that testimony entered as evidence in this appeal and
Paul Sloan has refused to come to Canada.
[11]
The Respondent is
entitled “to put its best foot forward in this litigation”[2] and she is
entitled to obtain the evidence she needs to accomplish this.
[12]
For these reasons, I
direct a Commission and a Letter of Request under section 112 of the Rules
be issued which authorizes the taking of evidence of Paul Sloan on oath or
affirmation in the jurisdiction of California, USA before the hearing of this appeal. I also direct
pursuant to section 122 of the Rules that the transcript and recording
of Paul Sloan’s testimony may be used by any party at the hearing of this
appeal as the evidence of Paul Sloan. The Commissioner can make the decision
whether the taking of Paul Sloan’s evidence should be videotaped.
[13]
The motion is allowed.
Costs of this motion are left to the discretion of the trial judge.
Signed at Ottawa, Canada, this 21st
day of October 2011.
“V.A. Miller”
CITATION: 2011TCC492
COURT FILE NO.: 2002-4824(IT)G
STYLE OF CAUSE: JEFFREY SACKMAN AND
THE
QUEEN
PLACE OF HEARING: Toronto,
Ontario
DATE OF HEARING: October 14, 2011
REASONS FOR ORDER
BY: The Honourable Justice Valerie Miller
DATE OF ORDER: October 21, 2011
APPEARANCES:
|
Counsel for the
Appellant:
|
Matthew Sokolsky
|
|
Counsel for the
Respondent:
|
Martin Beaudry
Jenna Clark
|
COUNSEL OF RECORD:
For the Appellant:
Name: Matthew Sokolsky
Firm: Teplitsky,
Colson
For the
Respondent: Myles J. Kirvan
Deputy
Attorney General of Canada
Ottawa,
Canada
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