Citation: 2010 TCC 364
Date: 20100702
Docket: 2002-3842(IT)G
BETWEEN:
JAMES GRENON,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
AMENDED REASONS FOR ORDER
Miller J.
[1]
The Appellant, Mr.
Grenon, brings a motion for an Order:
i) compelling the Crown
to provide answers to objected undertakings;
ii) requiring the
Crown to present a knowledgeable officer for further examinations for
discovery; and
iii) advice and
directions regarding the appropriate scope of discovery in this appeal.
[2]
Mr. Grenon’s appeal concerns the denial by the Minister of
National Revenue (“Minister”) of the deduction for significant legal expenses
incurred by Mr. Grenon in litigation dealing with child support. The Minister’s
position is that such expenses are personal expenses of the Appellant and not
incurred for the purpose of gaining or producing income; consequently, paragraph
18(1)(a) of the Income Tax Act ("Act") applies
to deny the deduction. Mr. Grenon’s primary argument is that if the legal fees
are not deductible under paragraph 18(1)(a) of the Act then
paragraph 18(1)(a) infringes his right to equal protection and equal
treatment under the law, pursuant to subsection 15(1) of the Canadian
Charter of Rights and Freedoms ("Charter").
[3]
In support of his Charter
argument, Mr. Grenon relies heavily on the Federal Child Support Guidelines
(the "Guidelines"). Under the submissions section of Mr.
Grenon’s Third Amended Notice of Appeal, he states:
…
25. The Guidelines are a central
contextual factor in the systemic discrimination against men in the field of
family law. The Guidelines created an inherent inequality between women
as support recipients and men as support paying parents, creating an
unconstitutional discriminatory effect on men. That unconstitutional effect arises
from a violation of the Appellant’s (and all support paying parents, the
vast majority of who are men), rights to equal protection and equal benefit
under the law as required under s.15(1) and s.28 of the Charter. The
particulars of the deficiencies in the Guidelines of the Divorce Act
leading to this unequal treatment and unconstitutional discrimination include:
(a) Failing to implement the principle under s.26.1 of the Divorce
Act that spouses have a joint financial obligation to support their children
by focusing only on a paying parent’s income and not adequately, or at all,
taking into account the financial circumstances of the recipient parent;
(b) An arbitrary focus on the income of the paying parent in
the assessment of child support without an actual or reasonable assessment of
the needs or true costs of children and thereby failing to provide a bona
fide economic foundation for the Guidelines;
(c) Failing to account adequately, or at all, for the costs of
having custody of children at any level less than 40% of the time thereby
failing to require the recipient custodial spouse to share in any of those
costs. Further unequal treatment includes applying onerous factual presumptions
and financial disclosure requirements on paying parents only;
(d) Applying an unfairly simplistic linear formula connected to
the paying parents after-tax income and not recognizing that the actual costs
of raising children does not rise proportionately as income increases;
(e) Causing an unwarranted transfer of wealth between paying
and recipient parent aimed at an equalization of household income as opposed to
the stated and legitimate aims of the joint financial support of children;
(f) Arbitrarily dictating that the non-custodial parent (where
custody is less than 40% of the time) is the paying parent, when financial
circumstances may indicate that the opposite should be ordered;
(g) Such further and other particulars as may be proven at the
hearing of this appeal.
…
[4]
Mr. Grenon goes on to
suggest systemic discrimination in the Government of Canada as follows:
26. The Appellant submits that the
discrimination described herein arising from the Act results from and
reinforces other unequal, discriminatory treatment of men and fathers in the
field of divorce law, including that:
a. the federal government has expressly
adopted a policy of promoting the legal, social, economic and political
interests of women, including informal and formal consultations between the
federal Department of Justice and the federal Status of Women Canada agency,
but has not adopted a similar policy with respect to men;
b. the federal government funds and
participates in private ex parte briefings to judges, including judges
in matters of divorce, that promote the legal, social, economic and political
interest of women, but do not address in an equal manner the interests of men;
c. the federal government includes a
Secretary of State cabinet position, together with a concomitant budget and
bureaucracy with the mandate to promote the legal, social, economic and
political interests of women, yet there is no cabinet member with the same
mandate for men;
c.1 the federal government funds
non-governmental organizations promoting the legal, social, economic and
political interests of women, yet does not fund, or does not fund at an equal
level, groups promoting those same interests of men;
d. according to a federal Department of
Justice publication, women are awarded sole custody of children in divorce
proceedings in 78.5% of cases. Fathers had sole custody in only 8.8% of cases
and shared custody (where a child spends at least 40% of the time with each
parent) was only in 6.7% of cases;
e. according to a federal Department of
Justice publication, men are the payers of child support in 92.8% of cases
before the court;
e.1 The Minister has also interpreted that
spousal support recipients are entitled to deduct legal fees incurred in
relation to such support, but that the payers of such support are not entitled
to deductibility. According to a federal Department of Justice publication, men
are the payers of spousal support in 98.7% of cases where such support is
ordered for couples that had children, and men are the payers in the vast
majority of cases where spousal support is paid where the couple had no
children;
h. Numerous laws and enforcement programs
have been participated in by the federal government for the enforcement of
child support payments, but none for the enforcement of court ordered child
access by a non-custodial parent.
[5]
The Respondent states
in the Reply to the Third Amended Notice of Appeal:
13. He further submits that ss. 3, 6, 9, 18 and 248(1) do not draw a
formal distinction between the Appellant and others on the basis of one or more
personal characteristics and do not fail to take into account the Appellant’s
alleged disadvantaged position within Canadian society resulting in a
substantively differential treatment between the Appellant and others on the
basis of one or more personal characteristics. In the alternative, it is further
submitted that there is no differential treatment of the Appellant for the
purposes of s. 15(1) of the Charter.
[6]
The Respondent
presented an Appeals Officer, Mr. Peturson, for examination for discovery. The Appeals
Officer who reviewed Mr. Grenon’s objection and her team leader are both no longer
employed with the Canada Revenue Agency ("CRA"). Mr. Peturson
reviewed the pleadings, CRA’s files and the production of documents of each
Party. In an affidavit in support of the Respondent’s response to the Appellant’s
Motion, Mr. Peturson stated that the Minister did not rely upon the Guidelines
in denying Mr. Grenon the deduction of legal expenses.
[7]
At the examination for
discovery, Mr. Peturson was asked several questions in connection with the Guidelines.
These are the questions Mr. Grenon seeks to compel the Respondent to answer.
They are attached as Appendix A hereto.
[8]
Mr. Grenon, in his
affidavit in support of the motion, identified Ms. Giliberti and Ms.
Brazeau as the principal authors of the 1995 Federal/Provincial/Territorial
Family Law Committee’s Report and Recommendation on Child Support, which Mr.
Grenon suggests forms the basis for the Guidelines. Mr. Grenon also
identified Ms. McRae as a co-chair of the Federal Family Law Committee in
2001. All three individuals are employed by the Government of Canada. Mr.
Grenon desires to have any one of them appear for examinations for discovery to
answer the questions with respect to the Guidelines.
Motion to Compel
[9]
From a review of the
Undertakings, it is clear that they all relate to the development,
comprehensiveness and adequacy of the Guidelines. Are such questions
proper in accordance with Rule 95 of the Tax Court of Canada Rules
(General Procedure), which stipulates that a person "shall answer to
the best of that person’s knowledge, information and belief, any proper
question relevant to any matter in issue in the proceeding"? The Appellant
takes a broad and liberal interpretation to the scope of examination and
answers this question affirmatively. The Respondent focuses on the requirement
that the question must be relevant to a matter in issue based upon the
pleadings and argues such questions do not so relate.
[10]
The Respondent draws a
distinction between material facts relied upon in the pleadings versus argument
or submissions in the pleadings, concluding that the Appellant cannot allege
facts in its own argument and then turn around to discover the Respondent on
such facts. In this regard, the Appellant referred to the case of Xu v. The
Queen
where Justice Mogan stated:
13. I will strike out paragraph 17 of the Reply
because, under the heading "Statutory Provisions and Grounds relied
On", the Respondent should not allege a new fact or make a new argument
based on a fact not previously alleged.
[11]
The Respondent argues
this is especially so where the questions do not relate to the issue – the
constitutionality of paragraph 18(1)(a) of the Act. Justice Beaubier,
in his decision of June 9, 2006 on a motion by Mr. Grenon stated:
1. Advice and directions respecting the
Court’s jurisdiction of the constitutionality of the Federal Child Support
Guidelines. This is answered by stating that in this Appeal of an
assessment under the Income Tax Act (the "Act"), this Court
may rule as to matters affected by that assessment under the Act. But in
and of themselves, the Federal Child Support Guidelines (the "Guidelines")
are outside of the jurisdiction of this Court as set forth in the Tax Court
of Canada Act.
[12]
The Respondent’s
position is summarized in paragraphs 18 and 19 of her written submission:
18. It is in this context the Appellant’s 3rd
Amended Notice of Appeal must be examined. Paragraphs 16 through 26 of the
"Submissions of the Appellant" portion of the 3rd Amended
Notice of Appeal, do not give rise to discoverable allegations of material
facts. The content of these paragraphs has not been plead as material facts,
and therefore they have not been responded to as facts in the Reply to the 3rd
Amended Notice of Appeal. These paragraphs represent only the arguments the
Applicant intends to make at the hearing of the appeal and they do not have the
character of allegations of fact.
19. As is evident from the decision of the Tax
Court and of the Federal Court of Appeal, the Federal Child Support Guidelines are not an issue before
the Tax Court in this Appeal. The Appellant’s opinion that his arguments
regarding these Guidelines are relevant to an interpretation of paragraph 18(1)(a)
of the Act and section 15 of the Charter, does not transform what
are otherwise only arguments into material facts or issues to be decided by the
Tax Court, not otherwise plead.
[13]
Mr. Grenon’s counsel
places little importance on the placement of facts in the pleadings, suggesting
that if I find he has incurred some technical breach in putting the facts in
paragraph 26 of the Third Amended Notice of Appeal in the wrong section of the
pleadings, he will simply seek leave to amend pleadings. With respect, counsel
is making light of the framing of pleadings. And the Appellant, in his own
submissions, acknowledged that where a party objects to a question on the basis
of relevancy, the questioned party must satisfy the Court that the information
it seeks may be relevant to a fact in issue. The deficiencies in the Guidelines,
that the Appellant refers to in his submissions portion of the Third Amended
Notice of Appeal, are simply not facts in issue. They are the Appellant’s
opinion of the Guidelines raised in argument. The Guidelines
themselves are a fact. The Appellant’s view of them are not, and are not
relevant to whether paragraph 18(1)(a) is discriminatory against
men.
[14]
The Appellant’s counsel
suggested that if I rule against him on this motion, I am effectively
rendering his client’s constitutional challenge impossible. I was disappointed
to hear him take that tact. The issue of deductibility of legal expenses in
support payment litigation is an important one. It is certainly easy to
appreciate why a litigant may find it unequal or unfair that he or she, the
payer of support, may not be allowed to deduct legal fees, while the other
litigant is allowed to deduct legal fees. I have not been convinced, however,
that the extent of examination the Appellant seeks is the kind of full
canvassing contemplated by the Rules, nor frankly, necessary for a fulsome
Charter argument on whether paragraph 18(1)(a) of the Act contravenes
section 15 of the Charter.
[15]
There have been several
cases recently providing some guidance to litigants and to this Court as to the
scope of examinations. Certainly, wide latitude is acceptable. But there are
limits. I recognize that in the context of a Charter argument, the
Courts are to make broad inquiries into the contextual factors: the Appellant
suggests that in this case those factors include pre-existing disadvantage,
stereotyping, prejudice or vulnerability experienced by men as child support
payers. The Appellant attempts to draw a direct line between these factors and
the role the Guidelines play in legal disputes over support, suggesting
the need to delve into the very foundation of the Guidelines. I
disagree. This approach goes beyond providing context in the paragraph 18(1)(a)
dispute, and effectively, puts the constitutionality of the Guidelines
in play, exactly what Justice Beaubier ruled against.
[16]
The Guidelines
are indeed a factor. Their creation and development are not. Put another way,
it is important context in this case involving a challenge to paragraph 18(1)(a)
of the Act to understand whether the effect of the Guidelines has
been discriminatory in the application of that income tax provision. So, for
example, undertaking number 16 which asks if the Crown accepts that in 92.8% of
cases men are the payers of child support, is a proper question in this regard.
Undertaking number 16 was taken under advisement by the Crown and is not in
dispute.
[17]
The Appellant appears
to want to explore whether the Guidelines were created with an objective
to be discriminatory against men or at the very least, that they were
inadequately developed. That, however, is not the matter in issue. The
Appellant, in providing context, may need to show a pre-existing disadvantage
to men as a result of the application of the Guidelines, not as a result
of any inadequacy in their development.
[18]
The Appellant, in
paragraph 26 of his submissions in his Third Amended Notice of Appeal, argues
that the discrimination in paragraph 18(1)(a) of the Act results
from discriminatory treatment of men in the field of the divorce law generally
and goes on to cite factors such as government policies promoting women and not
men, judges’ training promoting women’s interest and not men’s, and government
funding women’s organization. Given the Appellant’s approach to examinations
regarding paragraph 25 of his Third Amended Notice of Appeal, I have grave
concerns as to where he might go with respect to paragraph 26. It is an
exercise to prove systemic discrimination against men by the Government of
Canada. From a common-sense point of view alone, I fail to see how opening the
door so wide, even at the examination stage, will provide the necessary context
for a Charter challenge to paragraph 18(1)(a) of the Act,
as it pertains to the deduction of legal fees.
[19]
It is important to bear
in mind that paragraph 18(1)(a) of the Act is not a provision
specific to legal fees, let alone legal fees in a family law dispute. It is an
overriding restriction on the deduction of payments that are not incurred for
the purpose of earning or producing income business or property. It is also
important to note that it is the Court’s interpretation of this provision (see
the Federal Court of Appeal decision Nadeau v. Canada) that has denied
the deduction to a man in circumstances similar to the Appellant’s.
[20]
I interpret the
Appellant’s theory to be along the lines that the Court’s interpretation of
paragraph 18(1)(a) of the Act to date, to deny a deduction of
legal fees to a male payer of support, is reinforcement of a government policy
to discriminate against men. It is, therefore, according to the Appellant,
necessary in this Charter challenge to provide the context of that
overriding discriminatory policy to show the pre-existing disadvantage. I do
not buy it. To be relevant to a challenge to paragraph 18(1)(a) of the Act,
there must be some link between that alleged policy and that provision of the Act.
This should be a matter of law, not politics, and should be about context
surrounding the application of that particular law. An overall attack on
government policy in the domain of family law is far beyond the scope of this
challenge and, I find it would be an unnecessary fishing expedition to permit
questioning regarding government policies with respect to funding, judicial
training, etc. I trust these comments will serve as guidance to the parties for
the completion of discoveries.
Motion to require knowledgeable officer
[21]
I agree with the
Respondent’s submission that the parties’ disagreement as to the
discoverability of the Guidelines was really the dispute at the heart of
this motion, not necessarily Mr. Peturson’s competence as an appropriate
officer from the Crown. Given my conclusion that the detailed discovery on the Guidelines
sought by the Appellant is not proper, it follows that the Appellant’s request
to have officers of the Crown knowledgeable about the development of the Guidelines
is to be denied. It is unnecessary for me, given that finding, to explore the
reasons in the case of Simser v. Canada
for ordering the attendance of a different officer of the Crown.
[22]
The motion is denied.
Costs will be in the cause.
Signed at Ottawa, Canada, this 2nd
day of July, 2010.
"Campbell J. Miller"
APPENDIX A
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