Docket: 2007-3810(IT)G
BETWEEN:
WHITE STAR COPPER MINES LIMITED,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
____________________________________________________________________
Motion for an Order granting leave to the
Appellant
to be represented by an Officer of the
Appellant
heard on October 25, 2007 at Toronto, Ontario
Before: The Honourable
Justice E.P. Rossiter
Appearances:
|
Agent for the Appellant:
|
John
Patrick Sheridan
|
|
|
|
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Counsel for the Respondent:
|
Samantha Hurst
|
____________________________________________________________________
ORDER
Upon hearing a Motion by the Appellant
to permit John Patrick Sheridan, P. Eng., a Director and President of the
Appellant, to represent it in the conduct of its appeal;
And having
heard the submissions of the parties and reading the materials filed by the
parties;
IT
IS ORDERED THAT:
1. The motion is
dismissed with no Order as to costs, in accordance with the attached Reasons
for Order.
2. The Respondent shall have 60
days from the date of this Order in which to file a Reply to the Notice of
Appeal.
Signed at Ottawa, Canada, this 7th day of November, 2007.
"E. P. Rossiter"
Citation: 2007TCC669
Date: 20071107
Docket: 2007-3810(IT)G
BETWEEN:
WHITE STAR COPPER MINES LIMITED,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR ORDER
Rossiter, J.
Issue
[1] The Appellant seeks
leave of the Court, to allow the Appellant to be represented by John Patrick
Sheridan P. Eng., a Director and President of the Appellant, in the conduct of
its appeal.
Analysis
[2] Rule 30.(2) of
the Tax Court of Canada Rules (General Procedure) states:
(2)
Where a party to a proceeding is not an individual, that party shall be
represented by counsel except with leave of the Court and on any conditions
that it may determine.
[3] There have been
a variety of cases, which are helpful in determining the motion. I make
particular reference to Pratts Wholesale Ltd. v. Canada, [1998]
T.C.J. No. 171, a decision of Mr. Justice Beaubier wherein he quoted Mr.
Justice Muldoon in Kobetek Systems Ltd. v. Canada, [1998] F.C.J. No. 16
as follows:
6 From these cases the following factors
appear to be relevant to the determination of whether special circumstances
exist: whether the corporation can pay for a lawyer; whether the proposed
representative will be required to appear as advocate and as witness; the
complexity of the legal issues to be determined (and therefore whether it
appears that the representative will be able to handle the legal issues) and whether
the action can proceed in an expeditious manner.
Mr. Justice Beaubier stated in paragraph
7 as follows:
7 There
is an overriding factor which this Court considers to be most important. It is
this: a corporation is a creature of law which is formed for the technical
advantage of its shareholders, directors and officers. That advantage may be
historic, such as limited liability, or it may be more current, such as
for income tax or other tax purposes. For example, the issue in this appeal
relates to a claim respecting Scientific Research and Experimental Development
expenditures. Thus the corporation offers certain advantages which may not be
available to an individual. The offset is that there are consequent duties
which may include technical requirements, such as resolutions or having a
lawyer represent this entity which was created by legislation. Because it is a
technical creation of the law, by its very nature a corporation should be
represented by a lawyer in court in all but very exceptional circumstances.
[4] There are really
four factors relevant to the determination of whether special circumstances
exist:
1.
whether the Corporation can pay
for a lawyer;
2.
whether the proposed
representative will be required to appear as advocate and as witness;
3.
the complexity of the legal issues
to be determined (and therefore whether it appears that the representative will
be able to handle the legal issues); and
4.
whether the action can proceed in
an expeditious manner.
[5] Justice Beaubier
added, as an overriding factor, the special nature of a Corporation and, by its
special nature, it should be represented by a lawyer in Court in all but the
very exceptional circumstances. Mr. Justice Bowie in RFA Natural Gas Inc. v.
Canada, [2000] T.C.J. No. 327 added a fifth factor - whether there was an
election to have the matter removed from Informal Procedure to General Procedure.
[6] These factors have
been referred to and relied upon by Associate Chief Justice Bowman, as he then
was, in Chase Bryant Inc. v. Canada, [2002] T.C.J. No. 663 and Mr.
Justice Little in Thomson Motors Co. v. Canada, [2002] T.C.J. No. 366.
In the latter case, Mr. Justice Little added a sixth factor and that is whether
an Officer is also the Director and sole shareholder of the Corporation.
[7] Is there evidence
of special circumstances which justifies the Court in exercising its discretion
to commit a non-lawyer to represent the company?
[8] The Court is not
unmindful of the costs of litigation to the litigants. The reality is that we have
rules which are in existence for the proper administration of litigation before
this Court and factors have been developed in applying the applicable rules in
this matter.
[9] One of the
factors is whether or not the Corporation can pay a lawyer. The evidence as to
the ability of the Corporation to pay a lawyer is as follows:
1.
The Corporation owns property;
2.
The property, according to the
Corporation’s President, Mr. Sheridan is very valuable;
3.
The Corporation has sufficient
funds to pay its taxes;
4.
The Corporation does not want to
encumber its assets in order to fund its appeal.
[10] There was no
evidence provided with respect to the efforts of the Corporation to raise money
to hire legal counsel, nor any evidence with respect to the finances or financial
statements of the company other than the peripheral statement that the
Corporation has sufficient funds to pay its taxes. The company was publicly
traded but de-listed in approximately 1998. The company has 500 to 600
shareholders. Mr. Sheridan is the President and one of three Directors of the
company and has no shareholder’s interest in the company. According to the
President, the company does not want to encumber its assets to fight the
appeal. There is evidence that the Appellant has the financial ability to
retain legal counsel because of the significant value, according to the
President, of the company’s land assets in and around Timmins, Ontario.
[11] Here we have no
information as to whether or not the Agent, Mr. Sheridan, will be advocate and
witness but I strongly suspect that he will certainly be both. The auditor/accountant
of the Appellant is now deceased. The President, Mr. Sheridan, gave the
appearance as a witness, as the person, very much in control of the affairs of
the Appellant. The complexity of the case is not an issue, according to
the Respondent, but then again complexity to counsel for the Respondent may be
something looked at from a different point of view by the Appellant. There is
no evidence that the matter can really be dealt with in a more expeditious
fashion, with or without counsel, although I suspect, that it will be dealt
with in a more expeditious manner with counsel. The fifth factor is not an
issue; the Agent of this case is the President and one of three Directors and
is not a shareholder.
[12] The Appellant has
not adduced evidence sufficient to convince me that special circumstances have
been established, necessary to justify the Court in exercising its discretion,
to permit to Mr. Sheridan to represent the Appellant.
[13] The motion is
dismissed with no Order as to costs. I grant to the Respondent 60 days from the
date of this Order in which to file a Reply to the Notice of Appeal.
Signed at Ottawa, Canada, this 7th day of November, 2007.
"E. P. Rossiter"
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