2007-1155(IT)G
Michael
Wetzell v. Her Majesty the Queen
MADAM
JUSTICE:
Q. Let the record show that I
am delivering my reasons in respect to the Respondent's motion to quash a Notice
of Appeal.
The Respondent brought
a motion requesting that the Notice of Appeal filed by the Appellant on
February 28, 2007 be quashed. While the Notice of Appeal referenced tax issues
for taxation years prior to 1994, both the Appellant and Respondent agreed that
it is only the 1994 and 1995 taxation years that are being appealed. The
Respondent bases the request to quash the Notice of Appeal for these two taxation
years on the doctrine of res judicata in that the Appellant seeks
to raise, in his Notice of Appeal, matters already decided by a judgment of the
Federal Court of Appeal. In addition, the Respondent argued that the
Appellant's appeal is an abuse of process and that the Appellant does not seek
a remedy which this Court can grant pursuant to sub-section 171(1) of the Income
Tax Act.
The Appellant, in
responding to this motion, raises several issues including the following:
(1) that the Respondent
did not file a Reply to the Notice of Appeal within the 60 day period prescribed
by Rule 44 of the Tax Court of Canada Rules;
(2) that the Respondent's
reliance upon res judicata is inappropriate because in the absence
of a Notice of Constitutional Challenge, neither this Court nor the Federal
Court had jurisdiction to resolve the Charter issues;
(3) that it would be
unfair and result in an injustice if this Court applied the doctrine of res
judicata or an abuse of process argument; and
(4) that the Respondent
has not paid the Appellant his costs as ordered by a 2006 Federal Court
decision which has consequently prejudiced the Appellant and his ability to be
represented by legal counsel in the present motion, resulting in an abuse of
process by the Respondent.
A history of the
treatment of the 1994 and 1995 taxation years and the sequence of events
leading up to this motion are important to a discussion and analysis of these
issues. The Appellant, according to his Notice of Appeal, is an aboriginal person
of North American Ancestry. Throughout the 1970s and early 1980s, the
Appellant worked with the community members of Conne
River and the Federal and Provincial governments to have the community be
recognized as a “Native Community” with registration of its founding members.
Eventually, government approved the establishment of the Conne River Band. In
the 1980s, the criteria for membership to this Band was changed from North
American Indian Ancestry, for which the Appellant qualified, to Canadian Indian
Ancestry, for which he did not qualify. The Appellant claims that this change
was designed and implemented with the specific intention of denying to him,
membership as a founding member of this Band. This rendered him liable to pay
income taxes where individuals in similar circumstances were afforded
registration in the Band and consequently, exemption from taxes. This is the
basis of the Appellant's claim of the Charter breach.
The current Notice of
Appeal is the third step in a series that began with a Tax Court decision in
August 2004, in which the Appellant successfully sought and received Charter
relief with respect to the 1994 and 1995 taxation years. Justice Margeson
determined that the Appellant did not need to submit a Notice of Constitutional
Challenge since he was not attacking the validity of any provisions of the Income
Tax Act, the Indian Act or the Orders‑in‑Council.
He then acknowledged the Section 15 Charter breach and applied subsection 24(1)
in an attempt to remedy the situation. Consequently, the assessments for these
taxation years were vacated. The Minister of National Revenue (the “Minister”)
appealed this decision to the Federal Court and in February 2006, the
Federal Court set aside the initial judgment of this Court in favour of the
Minister.
The Federal Court
determined that the omission of a Notice of Constitutional Challenge was a
fatal blow to Mr. Wetzel's claim and further determined that the differential
treatment received by Mr. Wetzel was "not based on personal
characteristics … analogous to listed grounds”, so as to violate subsection
15(1). The Federal Court determined that the Tax Court decision found that Mr. Wetzel
had been improperly treated, but attributed the fault, at paragraph 23 of the
decision, to "… administrative law wrongs … bad‑faith conduct by Department
bureaucrats … executive action taken for an improper purpose".
The Federal Court
decision concluded that the Tax Court erred in finding a violation of the
Appellant's subsection 15(1) rights because the Order‑in‑Council
did not result in the Respondent being treated differently from all other Conne
River residents of Indian Ancestry. The criterion of Canadian Indian Ancestry
had the same effect on Mr. Wetzel as it did on all those residents of Conne River
of non-Canadian Indian Ancestry.
The Appellant, Mr. Wetzel,
sought leave to appeal this decision to the Supreme Court, which was denied. Consequently,
the Minister re-assessed and reclaimed approximately $62,000.00 in respect to
these taxation years from which the Appellant filed the current Notice of
Appeal. The Respondent's position therefore is that the Appellant seeks again to
raise issues which were conclusively decided by a Federal Court judgment with
leave to appeal to the Supreme Court also denied.
The essence of the
doctrine of res judicata is that there should be finality in the
realm of litigation, with no person being subjected to action by the same
individual more than once in relation to the same issue. It is also clear from
the case law (Chevron Canada Resources Ltd. v. Canada, [1998] F.C.J. No.
1404, which quoted Thomas v. Trinidad and Tobago, (1990) 115 N.R. 313 at
316) that this principle applies not only where the remedy and grounds in both
actions are the same, but also applies to those matters of fact or law,
relating to the subject matter, which could have been raised in the first
action but were not.
Justice Binnie in the
case of Danyluk v. Ainsworth Technology Inc., [2001] S.C.J. No. 46,
explained the principles of this doctrine and at paragraph 25 of that decision
reviewed the three pre-conditions which must be present for it to apply. Those
three pre‑conditions are : (1) that the same question has been decided;
(2) that the judicial decision which is said to create the estoppel was final;
and,
(3) that the parties to
the judicial decision or their privies were the same persons as the parties to
the proceedings in which the estoppel is raised or their privies.
The Respondent submits
that all three pre‑conditions are met here. After hearing the
submissions of both parties to this motion and after reviewing the decisions of
Justice Margeson of this Court and the Federal Court of Appeal decision,
together with the Appellant's current Notice of Appeal, I must conclude that
the issues which the Appellant seeks to put before this Court are the same
issues decided conclusively by the Federal Court decision.
The Federal Court did
not send the matter back to this Court for reconsideration, nor was leave to
appeal to the Supreme Court granted. The Federal Court specifically held that
the Appellant's subsection 15(1) Charter rights were not violated by the Order-in-Council
and his appeal for the 1994 and 1995 taxation years were dismissed. The
Appellant's current Notice of Appeal simply restates the matters previously
dealt with by the Federal Court of Appeal in 2006. The reformulation of the
appeal is simply an attempt to re-litigate issues already dealt with. All
preconditions are therefore met and to permit the appeal to proceed would not
only be inappropriate in light of the doctrine of estoppel but would result in
an abuse of the processes of this Court.
As I understand it, Mr.
Wetzel's argument is that the actual issue is his challenge in respect to the
discrimination of senior Crown officials that prevented him from being registered
as a Band member and that since the Federal Court decided that this Court had
no jurisdiction to hear the argument where there was no Notice of
Constitutional question filed, then essentially there is really no decision.
Therefore, the merits of his Charter argument have not been dealt with within the
arena of a full and fair hearing.
However, contrary to
the Appellant's submissions, the decision of Justice Margeson still exists and
is not a nullity, although it may have little precedential value in light of
the subsequent Federal Court decision. It appears that all of the facts were
presented to Justice Margeson and that the Federal Court had all of the record
before it. Consequently the Federal Court had jurisdiction to dispose of the
Minister's appeal as it did. The Federal Court decision simply referenced and
relied upon the failure to provide the inappropriate Notice. The Appellant's
argument appears to be based not on a breach of his Charter Rights due to
offensive legislation, but more appropriately that the Crown's actions, in
designing and applying an Order‑in‑Council, resulted in the
problem with his membership status and therefore, violated his subsection 15(1)
rights. As a result he seeks to vacate the Respondent's claim for tax arrears
in these years and for repayment of taxes and interest. I am referring to paragraphs
21(a) and 21(b) of his Notice of Appeal. Subsection 171(1) sets out the
parameters which this Court has in granting a remedy in an Income Tax appeal.
Subsection 24(1) of the Charter does not create courts of competent
jurisdiction, but merely vests additional powers in courts independently of the
Charter. It is only where a Court has jurisdiction, conferred by statute, over
the parties, the issues and the authority to make the Order, that it has the
power to grant a remedy pursuant to subsection 24(1) of the Charter. This
Court, however, has no jurisdiction to grant a subsection 24(1) remedy on the
grounds of a breach of section 15 of the Charter in respect to Cabinet's Order‑in‑Council.
Even if there is a breach, this Court has no jurisdiction to remedy it.
Finally, in respect to
the Appellant's argument that the Respondent did not file a Reply to the Notice
of Appeal as required by section 44 of the Rules and should be prevented from
bringing the within motion, even though the Respondent did not file a Reply
within 60 days and instead brought this motion, I conclude that I have
inherent jurisdiction to hear and dispose of this motion on its merits, as I
have done.
In summary, the
Respondent's motion is granted and the Appellant's Notice of Appeal is
quashed. It would appear that on some administrative level, the Appellant
suffered wrongdoing, but he has properly accessed the various levels within the
Court system and I am simply unable to assist him, although I have sympathy for
his position. Neither party addressed the issue of costs during the motion and
I therefore make no order in this respect.
CERTIFIED
CORRECT
Email this Content