Dockets: 2005-2906(GST)G
2005-2908(GST)G
BETWEEN:
DUNDURN STREET LOFFTS INC.,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent;
AND BETWEEN:
ALEXANDER STREET LOFTS
DEVELOPMENT CORPORATION INC.,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
____________________________________________________________________
Motion
heard on February 11, 2009 at Hamilton, Ontario
By: The Honourable
Justice Judith Woods
Appearances:
|
Agent for the Appellants:
|
Adam
Stelmaszynski
|
|
Counsel for the Respondent:
|
Gatien Fournier
|
____________________________________________________________________
ORDER
Upon application by the appellants for the following:
(a)
An Order interpreting the relevant provisions of Sections 285, 285(1),
285(16), 327(1)(d), 327(2)(a), 327(2)(b), 327(3), 327(4), 330, and 331 of the
Excise Tax Act, Part IX, in a Prosecution by Indictment;
(b)
An Order directing Correction Services Canada to issue travel passes to
permit the appellant’s officer and director, Stelmaszynski, to travel to
Brantford, Welland, St. Catharines and Toronto to interview witnesses, to
obtain written materials and to properly prepare the defense of the appellants
as per the Order of Justice Valerie Miller dated October, 2008;
(c)
A determination of alleged palpable and over-riding errors, if any,
encountered throughout the course of this action; and
(d)
An order vacating the entire amount of the Notices of Re-assessment or
in the alternative, an order sending the Notices of Re-assessment to CRA for re‑calculation
of the correct amounts;
It is ordered:
1) the
application is dismissed;
2) any examinations for discovery shall be completed no later than
June 1, 2009;
3) undertakings given at examinations for
discovery shall be satisfied no later than July 31, 2009;
4) the parties shall communicate with the
Hearings Coordinator, in writing, on or before August 31, 2009 to advise the
Court whether or not the case will settle, whether a pre-hearing conference
would be beneficial or whether a hearing date should be set. In the latter
event, the parties may file a joint application to fix a time and place for the
hearing in accordance with section 123 of the Tax Court of Canada Rules
(General Procedure); and
5) all parties shall
bear their own costs in respect of this application.
Signed at Toronto, Ontario this 25th
day of February 2009.
“J. Woods”
Citation: 2009 TCC 122
Date: 20090225
Dockets: 2005-2906(GST)G
2005-2908(GST)G
BETWEEN:
DUNDURN STREET LOFFTS INC.,
Appellant,
and
HER MAJESTY THE Q/UEEN,
Respondent;
AND BETWEEN:
ALEXANDER STREET LOFTS
DEVELOPMENT CORPORATION INC.,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR ORDER
Woods J.
[1] Dundurn Street
Loffts Inc. and Alexander Street Lofts Development Inc. have applied to the
Court for the following relief:
(a)
An Order interpreting the relevant provisions of Sections 285, 285(1),
285(16), 327(1)(d), 327(2)(a), 327(2)(b), 327(3), 327(4), 330, and 331 of the
Excise Tax Act, Part IX, in a Prosecution by Indictment;
(b)
An Order directing Correction Services Canada to issue travel passes to
permit the appellant’s officer and director, Stelmaszynski, to travel to
Brantford, Welland, St. Catharines and Toronto to interview witnesses, to
obtain written materials and to properly prepare the defence of the appellants
as per the Order of Justice Valerie Miller dated October , 2008;
(c)
A determination of alleged palpable and over-riding errors, if any,
encountered throughout the course of this action; and,
(d)
An order vacating the entire amount of the Notices of Re-assessment or
in the alternative, an order sending the Notices of Re-assessment to CRA for re‑calculation
of the correct amounts.
[2] In 2005, the appellants instituted appeals in this
Court in respect of assessments made under the Excise Tax Act. The
assessments, which were issued on December 7, 2000, essentially related to GST
refund claims that the Minister alleges were improper.
[3] One week after the assessments were issued, criminal
proceedings against the appellants and their shareholder, Adam Stelmaszynski,
were instituted in respect of the same refund claims.
[4] All three were eventually convicted in the Ontario
Superior Court of Justice. Mr. Stelmaszynski was sentenced to 30 months in jail
and fined $702,646, which was equal to the refunds paid to the appellants.
[5] Mr. Stelmaszynski’s conviction and sentence were
upheld by the Ontario Court of Appeal and leave to appeal to the Supreme Court
of Canada was denied.
[6] In the Court of Appeal, Doherty J.A. stated that it
had been accepted at trial that there was no realistic possibility that Mr.
Stelmaszynski could pay the fine (R. v. Alexander Street Lofts
Development Corporation Inc. v. R., 2007 ONCA 309, at para. 32).
[7] Until the Supreme Court’s decision on the leave
application, the appeals instituted in this Court were stayed pursuant to s.
327(4) of the Excise Tax Act. The appeals were activated again early in
2008.
[8] The material filed by the appellants with this
application is over 100 pages long. In it, they request a large number of rulings
from the Court.
[9] Some of the rulings requested have nothing to do with
the appeals in this Court but involve only the criminal proceedings.
[10] This Court does not have the jurisdiction to make
these rulings, and for that reason it is not appropriate for me to comment on
them.
[11] At the hearing, Mr. Stelmaszynski submitted that this
Court had the appropriate jurisdiction because it had the authority to
interpret the Excise Tax Act.
[12] The jurisdiction of the Tax Court of Canada is not as
broad as this. In general, the jurisdiction is limited to making determinations
with respect to assessments.
[13] Some of
the relevant statutory provisions are reproduced below.
Tax Court of Canada Act
12. (1) The Court has exclusive
original jurisdiction to hear and determine references and appeals to the Court
on matters arising under the Air Travellers Security Charge Act, the Canada
Pension Plan, the Cultural Property Export and Import Act, Part V.1
of the Customs Act, the Employment Insurance Act, the Excise
Act, 2001, Part IX of the Excise Tax Act, the Income Tax
Act, the Old Age Security Act, the Petroleum and Gas Revenue Tax
Act and the Softwood Lumber Products Export Charge Act, 2006 when
references or appeals to the Court are provided for in those Acts.
[Emphasis added.]
Excise Tax
Act
309. (1) Disposition of appeal - 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.
[14] In hearing appeals from assessments under the Excise
Tax Act, the Court routinely interprets the statutory provisions of the Act
in order to determine if the assessments are correct. Generally there is no jurisdiction
to interpret the Excise Tax Act outside of that context.
[15] This application as it applies to rulings relating
only to the criminal proceedings must therefore be dismissed.
[16] Certain other rulings requested would appear to relate to the assessments.
Many of these are matters on which this Court could potentially rule prior to
trial pursuant to section 58 of the Rules.
[17] In my view, however, it would not be desirable to
decide any of these matters at this stage of the litigation process. I am very
reluctant to tie the trial judge’s hands by making preliminary determinations
at this early stage of the proceedings. It would be preferable for these to be
considered by the judge who will be hearing the appeals on their merits.
[18] I would comment specifically about one request. The
appellants seek an order that directs Correction Services Canada to issue
travel passes to Mr. Stelmaszynski in order to prepare his case. I
understand that Mr. Stelmaszynski is currently on parole and is subject to
travel restrictions.
[19] The appellants are essentially asking this Court to
interfere in matters of criminal justice in order to make it easier for their
representative to prepare their appeals. It is not appropriate to do so, in my
opinion. Further, even if it were appropriate, there is not a sufficient
evidentiary foundation for me to conclude that travel passes are necessary in
order for Mr. Stelmaszynski to prepare the case.
[20] In light of these conclusions, the application will be
dismissed in its entirety.
[21] Finally, I would comment that these appeals have been
outstanding for a long period of time. It is therefore desirable for all
concerned that this litigation now proceed as efficiently as possible.
[22] To assist
with this process, I will include in the
order accompanying these reasons deadlines for the remaining pre-trial steps.
[23] As for costs in respect of this application, I have
considered the parties’ submissions at the hearing, and have concluded that all
parties should bear their own costs.
Signed at Toronto,
Ontario this 25th day of February 2009.
“J. Woods”
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