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Citation: 2010 TCC 324
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Date:
20100615
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Docket: 2009-3722(GST)G
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BETWEEN:
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PINE VALLEY ENTERPRISES INC.,
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Appellant,
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and
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HER MAJESTY THE QUEEN,
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Respondent.
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REASONS FOR ORDER
Campbell J.
[1] The Appellant filed a Notice of Appeal, in respect to the 2005
taxation year, on December 4, 2009, in which it states at paragraph 1 that,
“[t]he assessment under appeal is the assessment from the notice of
confirmation, dated September 8th, 2009”. Prior to the hearing of
the within Motion on April 28, 2010, and subsequent to consultations between
counsel, Appellant counsel, on April 15, 2010, submitted an Amended Notice of
Appeal which eliminated any reference to section 7 of the Canadian Charter
of Rights and Freedoms (the “Charter”). As this did not satisfy all
of the concerns of Respondent counsel, a Motion, dated April 21, 2010, was
brought to strike certain portions of the Notice of Appeal. This Notice of
Motion was amended on April 23, 2010 and further amended on April 26,
2010.
[2] The Further Amended Notice of Motion requests that the following
portions be struck from the Notice of Appeal and/or the Amended Notice of
Appeal pursuant to Rule 53 of the Tax Court of Canada Rules (General
Procedure) (the “Rules”):
(a) paragraphs
4-12 of the Notice of Appeal. These paragraphs read as follows:
4. Both the
Appellant and its related company duly registered for Goods and Services Tax
(“GST”) since its introduction and have, without fail and incident, filed and
paid upon their returns. The first reporting period of Pine Valley Enterprises
Inc. was July 1, 1998 to September 30, 1998. The first reporting period of Pine
Valley Landscaping Ltd. was January 1, 1991 to March 31, 1991.
5. In the years
2002 to 2005, the Appellant and its related company, unknown to their directing
mind, became the victims of a fraud perpetrated by bookkeepers. While this
fraud was unknown to the Appellant and its director/officer/shareholder, Mr.
Bova, it was known to the Respondent’s officials, who at no time advised the
Appellant nor its director/officer/shareholder of the fraud being perpetrated,
namely: false and/or non-returns, on behalf of the Appellant were being filed,
without any payments being made to the Minister of National Revenue but which
monies were being directed to those perpetrating the fraud.
6. In early 2006
the Respondent’s officials indicated to Mr. Bova that the Appellant’s GST was
not in compliance and planned to conduct an audit into the Appellant’s books
and records. In January, 2006, Mr. Bova requested a meeting with Revenue
Canada, in Ottawa, to discuss the reasons
for the audit and why it was being conducted, and what was amiss with GST.
Revenue Canada refused to meet. In
February, 2006, the Respondent’s officials commenced their audit. In or about
March, 2006, further concerned about the audit, the Appellant’s Director/President,
Mr. Rocco (“Rocky”) Bova specifically instructed that the Respondent’s official
no longer deal with “M & R Accounting”, but deal with him directly as
Director/President of the Appellant companies and apprise him of the reasons
and results of the audit. The Respondent’s officials further ignored this request/demand.
The audit conducted was for the periods July, 2002 to July 31st,
2005.
7. On or about
July 19th, 2006, without any prior warning, “Requirements to Pay”,
pursuant to s. 317(3) of the Excise Tax Act, were issued to the
City of Vaughan, a client of the Appellant company, on account of monies up to
$414,000.00 payable, on account of the Appellant’s services, on alleged default
of unpaid GST and penalties and interest thereon, by the Appellant and its
related company. “Requirements to Pay” were also issued to the City of Brampton and the City of Richmond Hill.
8. On July 26th,
2006, the Appellant’s Director/President, Mr. Rocco (“Rocky”) Bova, upon
learning of this alleged unpaid GST, contacted the Respondent’s officials, in
writing, setting out previous contact and inquiring as to why his
request/demand had been ignored. He further set out that, in the circumstances,
the issuance of the requirement to pay, to the City of Vaughan, and other municipalities, had
caused considerable damage to the reputation and economic viability of the
Appellant company and that any such further action would irreparably jeopardize
the Appellant and its related company.
9. In order to
mitigate any such further damage, and under protest and without prejudice, the
Appellant’s Director/President took immediate steps to redress the problem,
including:
(a) obtaining legal counsel;
(b) arranging for
full payment, under protest, of the amounts demanded, including penalty and
interest, in full, pending the taking of objection and/or appeal to the Tax
Court from any disputed amounts.
10. On August 4th,
2006, the Appellant and its related company paid:
(a) $417,999.83;
and
(b) $102,151.12;
Respectively, under
protest.
11. The
Respondent’s officials, during the course of communication and negotiation(s)
with the Appellant’s legal counsel, had undertaken to forward a copy of the
notice(s) of assessment, which purportedly grounded the basis for their
collection and search and seizure of these amounts, by way of the requirements
to pay under the Excise Tax Act. However, no such notices were
ever forwarded either to the Appellant or to the Appellant’s counsel.
12. Despite
repeated requests and demands to be furnished with a copy of such notice(s) of
assessment, so that notices of objection and/or appeal may be taken under the Excise
Tax Act, if advisable, the Respondent’s officials have not only refused
to furnish such notice(s) of assessment, they have refused to altogether even
respond to legal counsel with respect to the initial purported assessment(s).
(b) the
phrase, “Following all of this”, in paragraph 13. This paragraph reads as
follows:
13. Following all
of this, on or about May 22nd, 2008, out of the blue, the Appellant
received Notice(s) of (Re)assessment, which were difficult to decipher for the
period covering 2005-12-01 to 2005-12-31.
(c) paragraph 17. This paragraph reads as follows:
17. To date, no
satisfactory accounting nor explanation as to the initial “assessments”, which
were never sent by the Respondent upon which monies were seized and paid under
protest, nor for the “(re)assessment(s)” issued in May, June, and July, 2008,
has been furnished by the Respondent.
(d) subparagraphs
18(e) to (i) inclusive. These subparagraphs read as follows:
18… e) Whether the
Respondent has engaged in an abuse of process at common law and/or s. 7 of the Charter,
which warrants relief pursuant to s. 24(1) of the Charter?
f) Whether
the Respondent has engaged in unreasonable search and seizure, contrary to the Act,
and s. 8 of the Charter, in seizing and taking monies without an
underlying assessment? As well as conduct contrary to the Preamble
to the Constitution Act, 1867?
g) Whether
the Minister’s assessment is void ab initio by way of issue estoppel
and estoppel by action and/or officially induced error?
h) Whether
the penalities, and interest thereon, imposed, and collected and sought,
knowing that the Appellant was a victim of fraud, are contrary to the common
law, the statute, and s. 8 of the Charter?
i) Whether
s. 299(1) and 296(1) of the Excise Tax Act are of no force and
effect or should be suspended in the circumstances for abuse of process and s.
8 Charter violations?
(e) subparagraphs
19(a) and (b). These subparagraphs read as follows:
19. The Appellant relies on
the following statutory and legal provisions:
a) the Common Law;
b) s. 7 of the Charter;
…
(f) subparagraph 21(c). This subparagraph reads as follows:
21. The Appellant therefore
requests […] the following relief:
[…]
(c) that the
monies paid, as set out in paragraph 10, be ordered paid back, with interest,
to the Appellant;
[3] This Court may strike pleadings pursuant to Rule 53 of the Rules.
Rule 53 states:
53. The Court may strike out or
expunge all or part of a pleading or other document, with or without leave to
amend, on the ground that the pleading or other document,
(a) may prejudice or delay
the fair hearing of the action,
(b) is scandalous, frivolous
or vexatious, or
(c) is an abuse of the
process of the Court.
[4] The test for striking pleadings was set out at paragraph 3 of Main Rehabilitation
Co. Ltd. v. The Queen, 2004 D.T.C. 6762, where the Federal Court of Appeal
stated the following:
The test to be applied for striking
out pleadings is whether it is plain and obvious that Main’s Notice of Appeal
to the Tax Court discloses no reasonable claim. Only if its appeal is certain
to fail should the relevant portions of the Notice of Appeal be struck out. As
stated, the facts alleged in the Notice of Appeal are assumed to be true. See Hunt
v. Carey Canada Inc., [1990] 2 S.C.R. 959
An Order to strike portions of a pleading should not be made “…unless it
be obvious that the plaintiff’s action is so clearly futile that it has not the
slightest chance of succeeding…” (Pfizer Canada Inc. v. Apotex Inc.,
[1999] F.C.J. No. 959 (Fed. T.D.) at paragraph 30).
[5] It must be remembered that the purpose of pleadings is to assist
in clearly and concisely defining the issues before the Court. At paragraph 5
of Zelinski v. The Queen, 2002 D.T.C. 1204, which was affirmed by the
Federal Court of Appeal (2002 FCA 330), Justice Bowie stated that:
[5] The applicable principle is
stated in Holmsted and Watson:
This is the rule of
pleading: all of the other pleading rules are essentially corollaries or
qualifications to this basic rule that the pleader must state the material
facts relied upon for his or her claim or defence. The rule involves four
separate elements: (1) every pleading must state facts, not mere conclusions of
law; (2) it must state material facts and not include facts which are
immaterial; (3) it must state facts and not the evidence by which they are to
be proved; (4) it must state facts concisely in a summary form.
Applying these
principles, I approach both motions on the basis that the test to be applied is
whether the paragraphs in dispute, and those that the Appellant proposes to
add, are proper pleadings of material facts. The Appellant's motion seeks to
add two issues to those now pleaded. She should be permitted to do so, unless
it is plain and obvious that they are so ill-founded in law that they could not
succeed at trial, even if the facts upon which they depend were established to
be true.
However, matters of weight and relevancy and the significance of the evidence
are best left to the discretion of the presiding Judge.
[6] Section
309 of the Act provides that:
309. (1) The Tax Court
may dispose of an appeal from an assessment by
(a) dismissing
it; or
(b) allowing
it and
(i) vacating
the assessment, or
(ii) referring
the assessment back to the Minister for reconsideration and reassessment.
This
provision is almost identical to subsection 171(1) of the Income Tax Act
and both clearly establish that it is the validity of the assessment, and not
the process which establishes that assessment, that this Court has been given
the statutory authority to deal with in an appeal before it. As Justice Woods
stated in her Reasons at paragraph 21 of Main Rehabilitation Co. Ltd. v. The
Queen, 2004 D.T.C. 2099:
[21] …If the assessments are
incorrect as a matter of law, it will not matter whether the objection process
was flawed. If they are correct, they must stand even if the objection process
was flawed.
This
Court has no authority to determine whether Canada Revenue Agency (“CRA”) has
engaged in a reasonable and fair process in arriving at the assessment but can
only determine if the amounts contained in the assessment are owing in total,
in part, or not at all, under the relevant statute.
[7] With
this background, I will now review the impugned paragraphs of the Notice of
Appeal/Amended Notice of Appeal.
[8] According to paragraphs 4 through 12 of
the Notice of Appeal, the Appellant seeks to introduce evidence concerning both
an alleged fraud perpetrated against the Appellant by its bookkeepers and
subsequent garnishment orders issued by CRA. The Appellant is concerned that
there are overlapping time frames relating to prior audits and that all of
these facts are relevant to the correctness of the assessment under appeal.
[9] The Respondent submits that these facts are irrelevant to the
issues before the Court as they relate to matters outside the audit period, do
not relate to amounts owing pursuant to the assessment and generally are not
within the jurisdiction of this Court to consider.
[10] Paragraphs 4 through 12 of
the Notice of Appeal/Amended Notice of Appeal outline a complex and lengthy
history between the Appellant and CRA. The paragraphs describe a history of
audits of the Appellant, allegations of the issuance of improper assessments
and an overlap in audit periods, with approximately half a million dollars
being paid under protest pursuant to garnishment proceedings. The test to
determine the relevance of these paragraphs is whether they are relevant to the
determination of the issues before this Court and whether they will have
bearing ultimately on the questions which the presiding Judge must address (Faber
v. The Queen, 2007 D.T.C. 640, at paragraph 14).
Paragraph 4:
[11] This paragraph describes the Appellant’s
general conduct with respect to paying taxes. Paragraph 4 has no relevance to
the issues that will be before this Court and following the decision in Eramo
et al v. The Queen, 2007 D.T.C. 1330, at paragraph 6, where a
similar paragraph was struck, paragraph 4 of the Appellant’s Notice of
Appeal/Amended Notice of Appeal should be struck.
Paragraph 5:
[12] This paragraph contains
allegations that the Appellant was a victim of fraud by its bookkeepers and
that false returns were filed on the Appellant’s behalf, without its knowledge,
in earlier years. This paragraph also contains allegations that CRA was privy
to this alleged fraud. The Respondent argued that these facts are irrelevant to
the present assessment. However, I believe that these allegations of fraud may
be very relevant to the correctness of the assessment and particularly to the
imposition of penalties. In Gould v. The Queen, 2005 D.T.C. 1311,
Chief Justice Bowman (as he was then), in considering whether to strike
portions of a Reply dealing with a purported scheme in which the taxpayer may
have participated, stated at paragraph 11:
[11] I can see nothing wrong with
the Overview. It describes generally the "scheme" in which the
Minister alleges the appellant participated. I think it is arguably relevant
that the appellant's charitable donations are not an isolated phenomenon but
form part of a larger pattern. What weight if any should be given to this fact
will be a matter for the judge who hears the case. It would be premature and indeed
inappropriate for me, sitting as a motions judge, without the benefit of having
heard any evidence to decide whether so broad a description of an alleged
"scheme" is relevant. To do so would be to usurp the function of the
trial judge.
[13] I agree with the Appellant’s submissions that, if these
allegations are founded, they may impact upon the assessment and most certainly
the penalty issue. The details of the fraud and its relevance are best left to
the presiding Judge. If they are shown to be irrelevant to the issues, the
presiding Judge can ignore them. This paragraph should remain.
Paragraph 6:
[14] This paragraph
contains details of an earlier audit conducted in 2006 for the periods covering
July, 2002 to July 31, 2005. This paragraph also contains allegations of abuse
by the CRA during the audit process.
[15] Most of this paragraph
contains facts concerning the actions of CRA during the audit that are not
relevant to the correctness of the assessment. Since it is well established
that this Court cannot address alleged abuses by CRA occurring in the assessment
process, these references within paragraph 6 must be struck. However, the
first, fourth and last sentence of this paragraph should remain. If, as the
Appellant alleges, an audit was conducted in periods that overlap with the
present assessment under appeal and no independent assessment was issued, the
details of this audit may have some bearing on the correctness of the present
assessment. Again, this is best left to be determined by the presiding Judge.
Paragraphs 8 and 9:
[16] These paragraphs describe
dealings between the Appellant and CRA in an objection process and are
irrelevant to the correctness of the assessment. They should be struck.
Paragraphs 7, 10, 11 and 12:
[17] These paragraphs contain
details concerning the garnishment proceedings in 2006. The Respondent argued
that the garnishment resulted from an earlier assessment under the Act
and that, if the Appellant had objections to that assessment, it could have
challenged the validity of that assessment at the time. The Appellant’s
argument is that this garnishment was never valid and that there was no
opportunity to legitimately dispute the amounts that CRA claimed were owed. If
the Appellant can adduce evidence to show that there was some duplication of
amounts which the Appellant paid under protest pursuant to this garnishment,
then there may be an argument that the present assessment is incorrect. This is
particularly true if, as the Appellant alleges, the garnishment was not issued pursuant
to an independent assessment. The relevance and weight, if any, is best left to
the presiding Judge to assess within the parameters of all the adduced
evidence. It is not clear and obvious to me that these impugned paragraphs
should be struck because they are scandalous, frivolous or vexatious, or an
abuse of the process of the Court. It would be premature for me on a motion to
deprive the Appellant of its right to present this argument to the presiding
Judge. These paragraphs will remain in the pleadings.
Paragraph 17:
[18] This paragraph relates to
the detailed information contained in the preceding paragraphs 7, 10, 11 and
12. Similar reasoning applies and therefore this paragraph will remain as well.
Paragraph 13:
[19] The phrase, “Following all
of this”, flows as a consequence of allowing the preceding paragraphs 7, 10, 11
and 12 to remain and, consequently, will be permitted to remain.
Subparagraph 18(e) – Abuse of
Process
[20] The Appellant has
eliminated any reference to section 7 of the Charter in the Amended
Notice of Appeal. Consequently, subparagraph 18(e) now states:
18… e) Whether the
Respondent has engaged in an abuse of process at common law which warrants
relief.
[21] The Appellant’s allegations of
abuse of process focus on CRA’s conduct during the audit and assessment
process, including refusals to respond, to account for monies paid pursuant to
the garnishment and to explain the alleged overlap of assessment periods. The
Appellant’s allegations of abuse are clearly confined to the actions of CRA and
the correctness of its administrative processes during audit and assessment.
Jurisprudence supports that this Court’s jurisdiction does not extend to these
matters. Although the Appellant relied on the decision in U.S.A. v. Cobb,
[2001] 1 S.C.R. 613, to argue that this Court has implicit jurisdiction to
prevent abuse of its own process, even where protections afforded under
section 7 of the Charter do not apply, I do not believe that the
decision by implication extends the jurisdiction of this Court to adjudicate
upon the administrative processes employed by CRA. Therefore, because the claim
of abuse of process against the actions of CRA is beyond the Court’s
jurisdiction, this subparagraph must be struck.
Subparagraph 18(f) – Garnishment
and Section 8 of the Charter:
[22] The Appellant alleged that
the garnishment proceedings in 2006 are an infringement of section 8 of the Charter
and contrary to the preamble to the Constitution Act, 1867. Section 8 of
the Charter reads:
8. Everyone has the
right to be secure against unreasonable search or seizure.
[23] The Respondent submitted
that the current appeal contains no allegations of unreasonable search or
seizure which would engage these provisions. The Respondent argues that such
proceedings are simply methods of collection authorized by statute. In any
event, no monies were seized, as the Appellant voluntarily paid funds pursuant
to these proceedings, although under protest. Even if the garnishment was an
improper seizure of money, it may relate to the present appeal only to the
extent that it affects the correctness of the calculations used in the
assessment. In the decision in Faber, at paragraph 17, it was held that
claims of violations of protections that do not affect the validity of the
assessment should be struck.
[24] The clear purpose of
section 8 of the Charter is aimed at protecting individuals from
unjustified intrusion of an individual’s privacy rights. It does not, however,
extend to protection of economic rights. While a taxpayer may expect
significant privacy protections in some forms of search or seizure, in this
appeal the Appellant paid under protest in response to CRA’s garnishment
proceedings. The basic governing principle is that the right to levy taxes will
include the right to collect them (The Queen v. McKinlay Transport Limited
et al., [1990] 1 S.C.R. 627; Pembina on the Red Development
Corporation Ltd v. Triman Ind. Ltd. et al., 92 D.T.C. 6174). An integral
and essential part of the tax collection scheme includes garnishment
proceedings that CRA may take. As far as the Appellant’s concerns with the
garnishment going to the validity of the assessment as expressed in paragraphs
5, 7, 10, 11 and 12, I have permitted those paragraphs to remain in the pleadings.
However, there is no basis for the allegation that these same garnishment proceedings
affected rights of personal dignity or privacy. Subparagraph 18(f) will
therefore be struck.
Subparagraph 18(g) –
Issue Estoppel:
[25] In reviewing my
notes, the transcript of the proceedings and the submissions, I do not see
where either counsel addressed this issue. Because the party bringing the
Motion bears the burden to prove that this allegation is contrary to Rule 53 of
the Rules, and since this burden has not been met, subparagraph 18(g)
will not be struck.
Subparagraph 18(h) – Penalties and
Interest:
[26] The Appellant challenges
the application of penalties and interest because, due to the alleged fraud by
the Appellant’s bookkeepers, such amounts are contrary to the common law and
section 8 of the Charter.
[27] In Jarvis v. The Queen,
[2002] S.C.J. No. 76, at paragraph 69, the Supreme Court of Canada described
the application of section 8 as follows:
[69] … For the application of s. 8,
there must first be a search or seizure. Subsequently, it must be determined
whether the search or seizure was unreasonable. Like the Fourth Amendment of
the U.S. Constitution, s. 8 protects a reasonable expectation of privacy: Hunter v. Southam, supra, at p. 159, per Dickson, J. (as he then was). What is reasonable,
however, is context-specific. In the application of s. 8, "an assessment
must be made as to whether in a particular situation the public's interest in
being left alone by government must give way to the government's interest in
intruding on the individual's privacy in order to advance its goals, notably
those of law enforcement" (id., at pp. 159-60).
[28] The Appellant has not demonstrated how the application of
penalties and interest would fall within the context of section 8 in this
appeal. The burden of proof is upon the Respondent in the application of gross
negligence penalties pursuant to section 285 of the Act. It was unclear
if all of the referenced penalty amount was applied pursuant to section 280 or
if some of it related to section 285. If the Appellant shows that the
garnishment had some bearing on the validity of the assessment, then that may also
have some bearing on this issue. Consequently, the Appellant would have an
opportunity to challenge the imposition of penalties without reliance upon
section 8 of the Charter. Without substantive reasons to support a
section 8 challenge to penalties, it is not plain and obvious that this
subparagraph should remain and, accordingly, it is struck.
Subparagraph 18(i) – Sections
299(1) and 296(1) of the Act:
[29] The Amended Notice of
Appeal changed the wording of subparagraph 18(i) to read:
18… i) Whether s.
299(1) and 296(1) of the Excise Tax Act should be suspended, or
not applied, in the circumstance for abuse of process at common law and s. 8 Charter
violations?
However, the substance of the issue
is essentially unchanged from the wording contained in the Notice of Appeal.
[30] The Appellant challenged
the validity of these two sections of the Act on the grounds that they
constitute abuse of process and violations of section 8 of the Charter.
Section 299(1) addresses the fact that the Minister of National Revenue (the
“Minister”) is not bound by any return while section 296(1) is the general
provision giving the Minister the right to assess taxpayers.
[31] A section 8 Charter
challenge arises in the context of a search or seizure. Although this Court has
jurisdiction to rule on the validity of the provisions of the Act,
neither of these provisions relate to the search or seizure of the Appellant’s
property. Since I have previously discussed the nature of the garnishment
proceedings in the context of a section 8 Charter challenge, it will
suffice to say that it is plain and obvious that this Charter challenge
cannot succeed and should be struck.
[32] I turn next to the abuse of
process argument referenced in this subparagraph. A claim of abuse of process
may have several contexts. Justice C. Miller, in Obonsawin v. The
Queen, [2004] T.C.J. No. 68, at paragraphs 8, 10, 11 and 12, describes the
range of potential abuse of process allegations as follows:
[8]
Clearly the Tax Court of Canada has exclusive jurisdiction to vacate a GST
assessment. Just as clearly, the OSCJ has jurisdiction to award damages in a
tort action of abuse of power or abuse of process. What is not so clear is who
has jurisdiction to give declaratory relief. It is helpful to clarify certain
concepts in considering this issue, before proceeding to address the stay
application. What is abuse of power? What is abuse of process?
…
Abuse of process
[10] This concept
becomes somewhat trickier as it is used in a number of different contexts.
(i) Tort.
Again relying on comments in Remedies In Tort, Mr. Lewis Klar and
Justice Linden summarized this tort as originating in Grainger v. Hill as
follows:
4. ... It is an action for abusing
the process of law, by employing it to extort property to which the Defendants
had no right: that is of itself a sufficient cause of action, without alleging
that there was no reasonable or probable cause for the suit itself" (per
Vaughan J.). "This is not an action for a malicious arrest or prosecution,
or for maliciously doing that which the law allows to be done: the process was
enforced for an ulterior purpose; to obtain property by duress to which the
Defendants had no right. The action is not for maliciously putting process in
force, but for maliciously abusing the process of the Court" (per
Bosanquet J.).
...
Damages for this tort liability also
are not within the purview of the Tax Court of Canada.
(ii) Court's
inherent jurisdiction over its own process. The Tax Court of Canada is no
different from other Superior Courts in having an inherent power to prevent
abuse of its own process. The Tax Court of Canada rules are full of examples,
the clearest perhaps represented in Rule 53, which allows the Court to strike
out all of a pleading on the grounds that it is an abuse of process of the
Court.
[11] This, however, is
not the abuse of process at issue in this case, as the abuse of process, if
any, was not an abuse of the Court's own procedure, but of the assessment
procedure and the assessment itself.
(iii) Abuse
of process in the administrative or public law context of a breach of
principles of natural justice.
[12] This appears to
be the abuse Mr. Bourgard was referring to when he first suggested the Court
could vacate an assessment if there is something about the Minister's assessing
actions that shocks the conscience of the community. …
[33] While the Appellant has not
clearly established which of the abuse of process claims it is arguing, it is
clear that the first and third abuse of process claims are beyond the
jurisdiction of this Court. The Notice of Appeal/Amended Notice of Appeal do
not contain any grounds to support a claim that these two provisions of the Act
are an abuse of the Tax Court process. As no reasonable cause of action is
disclosed, this subparagraph should be struck.
Subparagraphs 19(a) and (b) –
Relief:
[34] As subparagraph 19(a) on
its face is not offensive within the meaning of Rule 53 of the Rules, it should
remain, subject to my within Reasons. Subparagraph 19(b) will be struck, since
no valid Charter claim is established in the Notice of Appeal/Amended
Notice of Appeal.
Subparagraph 21(c) – Relief:
[35] The Appellant requests that
this Court order that the monies, paid pursuant to the garnishment proceedings,
be returned to the Appellant with interest. This relief is beyond the
jurisdiction of this Court. The Appellant paid this money voluntarily, although
under protest, and if a claim for such relief is possible, it may only be
through an application to the Federal Court. This subparagraph should therefore
be struck.
Extension of Time for Filing a
Reply to the Notice of Appeal/Amended Notice of Appeal:
[36] The Respondent requested 60
days after the “final disposition of this Motion” to file its Reply.
There was some discussion at the end of the hearing as to the appropriateness
of this request. After hearing from both counsel, I advised that I would
provide the Respondent with 60 days to file after the disposition of the within
Motion but not the “final” disposition, should there be an appeal of the within
Reasons. The Appellant submits that this Court does not have jurisdiction to
grant such an extension and, if a party seeks to appeal, then that party must
apply to stay the proceedings.
[37] Pursuant to Rule 12(1) of
the Rules, this Court has discretion to extend or abridge any time
prescribed by these Rules on such terms as are just.
[38] The time for delivery of a
Reply falls under Rule 44(1)(b) which states:
44. (1) A reply shall be filed in
the Registry within 60 days after service of the notice of appeal unless
…
(b) the Court allows, on
application made before or after the expiration of the 60-day period, the
filing of that reply after the 60-day period within a specified time.
On further review of the Respondent’s
request and the Rules, I believe it is both practical and logical that I
permit the Respondent 60 days after the final disposition of this Motion to
file the Reply. This avoids the unnecessary delays and costs that would be
associated with requiring the Respondent to bring another application in this
respect should there be an appeal of the within Reasons.
Summary:
[39] For the reasons set out
above, the following paragraphs of the Notice of Appeal/Amended Notice of Appeal
shall be struck:
Paragraphs 4, 8, 9,
18(e), 18(f), 18(h), 18(i), 19(b) and 21(c)
[40] Several sentences contained
in paragraph 6 shall be struck, leaving the paragraph to read as follows:
In early 2006 the
Respondent’s official indicated to Mr. Bova that the Appellant’s GST was not in
compliance and planned to conduct an audit into the Appellant’s books and
records. In February, 2006, the Respondent’s officials commenced their audit.
The audit conducted was for the periods July, 2002 to July 31, 2005.
Costs:
[41] The Respondent did not
request costs and, although success was divided, I leave this to the ultimate
discretion of the presiding Judge.
Signed at Ottawa, Canada, this 15th day
of June 2010.
Campbell J.
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