Docket: 2008-331(IT)G
BETWEEN:
GEORGE TRIESTE,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
____________________________________________________________________
Appeals called
for hearing on December 8, 2009 at Toronto, Ontario
Before: The Honourable
Justice E.A. Bowie
Appearances:
|
Counsel for the Appellant:
|
John
David Buote
|
|
Counsel for the Respondent:
|
Eleanor H. Thorn
|
____________________________________________________________________
ORDER
THIS MATTER
having come on for trial on December 8, 2009, and it appearing at that time
that the appellant had served and filed a Supplemental List of Documents under
Rule 87 of the Tax Court of Canada Rules (General Procedure) on the
afternoon of December 7, 2009 disclosing for the first time an additional 14
documents or bundles of documents;
AND IT
APPEARING that the List of Documents filed by the Appellant in purported
compliance with Rule 81 and the Status Hearing Order made by The Honourable
Chief Justice Rip on September 10, 2008 disclosed only three documents;
IT IS HEREBY ORDERED
THAT
1. The trial of
the matter is adjourned sine die;
2. The respondent may conduct a further examination
for discovery of the appellant, such examination to be completed not later than
February 10, 2010;
3. The
appellant shall, within 30 days of the date of this Order, pay to the
respondent costs of the day which are hereby fixed at $6,000.
Signed at Toronto, Ontario, this 9th day of December 2009.
“E.A. Bowie”
Citation: 2009 TCC 618
Date: 20091209
Docket: 2008-331(IT)G
BETWEEN:
GEORGE TRIESTE,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR ORDER
Bowie
J.
[1] This matter came
on for trial before me on the morning of December 8, 2009. It is not complex.
The issue is one of the application of section 250 of the Income Tax Act
and the Canada-U.S. Income Tax Convention in the context of a U.S. citizen
who has lived and worked in Canada during the years under appeal.
[2] The Notice of
Appeal was filed in January 2008, and the Reply to the Notice of Appeal in
April 2008. The parties delivered Lists of Documents under Rule 81,
disclosing those documents that might be used in evidence to assist them at
trial. The appellant’s List was delivered on September 10, 2008; it disclosed
only three documents. A few more were disclosed when he was examined for
discovery on December 2, 2008. In the summer of 2009 both counsel signed and
filed a Joint Application for a trial date, certifying that the matter was then
ready for trial. The trial date was fixed by an Order dated September 8, 2009.
[3] At 3:44 p.m. on
December 7, 2009, the appellant’s counsel filed by fax a Supplemental List of
Documents. It is said on the face of the document that it “is served in
compliance with Section 81”, but that is patently not so. Rule 81 provides:
List of Documents (Partial Disclosure)
81(1) A party shall, within thirty days
following the closing of the pleadings, file and serve on every other party a
list of the documents of which the party has knowledge at that time that might
be used in evidence,
(a) to establish or to assist in
establishing any allegation of fact in any pleading filed by that party, or
(b) to rebut or to assist in
rebutting any allegation of fact in any pleading filed by any other party.
81(2) A list of documents to be filed under
this section shall be in Form 81.
81(3) A party who has failed to file and
serve a list of documents within the time fixed by subsection (1) may, without
leave, file and serve it after that time unless,
(a) a notice of motion for a judgment under
section 91 has been filed, or
(b) an application to fix the time
and place of hearing under subsection 123(1) has been filed or a date for
hearing the appeal has been fixed by the Court,
in which case, the party may apply for leave to
file and serve the list.
(4) A party who has
failed to file and serve a list of documents within the period set by a judge
pursuant to subparagraph 125(5)(a)(i) may file and serve it only with
leave of the Court.
(emphasis added)
[4] This
Supplemental List was delivered to counsel for the respondent, along with
copies of the documents listed, on the afternoon of December 7. Of the 15 items
listed, 14 documents, or in some cases bundles of documents, that “might be
used in evidence” by the appellant were then disclosed for the first time.
[5] At the opening
of the hearing counsel for the respondent, having been taken by surprise,
sought an adjournment, and costs thrown away.
[6] Clearly, the
Respondent would suffer prejudice if required to go to trial under these
circumstances. The documents on the Supplemental List bear dates between May
1999 and June 2009. To produce these for the first time on the eve of trial,
and a year after the examination for discovery of the appellant, is no less
than attempted trial by ambush, a tactic that was abolished from our courts
several decades ago.
[7] The General
Procedure Rules of this Court require that parties produce to the other
party, at a minimum,
the documents that they will be relying on at trial, within 30 days following
the close of pleadings. There is a reason that production of documents precedes
examinations for discovery; it is so that the parties may be questioned during
the examination about the documents that they will rely on at trial to prove
their case, and to disprove their opponent’s case. Such disclosure enables the
parties to make a realistic assessment of the relative strength of their case,
and that of the other party, thereby promoting settlement and the fairness of
the trial process.
[8] Rule 87 recognizes that occasionally a document may emerge
at a late point in time, and it provides for a Supplemental List to be filed
when that happens.
List Incomplete
87 Where, after the list of documents has been
served under either section 81 or section 82, it comes to the attention of the
party serving it that the list has for any reason become inaccurate or
incomplete, that party shall serve forthwith a supplementary list
specifying the inaccuracy or describing the document.
(emphasis added)
The
purpose of this Rule is to ensure that parties comply with their
continuing obligation to make complete disclosure; it is not to facilitate last
minute disclosure of documents that should have been, but were not, disclosed long
ago. The inclusion of the word “forthwith” in the text is not accidental.
[9] Rule 91 provides the remedies for failure to comply with
Rules 78 to 91.
Effect of Failure to Disclose or Produce for
Inspection
91 Where a person or party who is required to make
discovery of documents under sections 78 to 91 fails or refuses without
reasonable excuse to make a list or affidavit of documents or to disclose a
document in a list or affidavit of documents or to produce a document for
inspection and copying, or to comply with a judgment of the Court in relation
to the production or inspection of documents, the Court may,
(a) direct or permit the person or
party to make a list or affidavit of documents, or a further list or affidavit
of documents,
(b) direct the person or party to
produce a document for inspection and copying,
(c) except where the failure or
refusal is by a person who is not a party, dismiss the appeal or allow the
appeal as the case may be,
(d) direct any party or any other
person to pay personally and forthwith the costs of the motion, any costs
thrown away and the costs of any continuation of the discovery necessitated by
the failure to disclose or produce, and
(e)
give such other direction as is just.
[10] In the present
case, the appellant has offered no excuse for failing to include the documents
enumerated in the Supplemental List in the original Rule 81 List, or for
failing to make the Supplemental List “forthwith”. The direction that is just
in the circumstances is to adjourn the trial, to order that the respondent may
conduct a further examination for discovery of the appellant, if so advised,
and to require the appellant to pay the costs thrown away as a result,
forthwith and in any event of the cause. Those costs are fixed at $6,000, an
amount that is intended to compensate the respondent for the costs of the day,
including preparation time, and for the expense of bringing a witness from
Ottawa to Toronto, on a scale indicative of the Court’s disapproval of
the appellant’s conduct in withholding these documents from production until
the eve of trial.
Signed at Toronto, Ontario, this 9th day of December, 2009.
“E.A. Bowie”
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