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Citation: 2007TCC554
Date: 20070925
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Docket: 2003-3065(IT)G
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BETWEEN:
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DONALD NEIL MACIVER,
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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 JUDGMENT
Campbell J.
[1] The Respondent
brought a motion to have this appeal dismissed pursuant to Rules 85, 91 and 110
of the Tax Court of Canada Rules (General Procedure). The motion was
based on the following:
(1) the Appellant refused to answer proper questions in
the examination for discovery;
(2) the
Appellant refused to give undertakings;
(3) the Appellant refused to bring his documents to the
examination for discovery;
(4) the Appellant refused to identify the Respondent’s
copies of non‑contentious documents.
(5) the Appellant gave inappropriate, evasive and abusive
responses and made scandalous statements impugning the integrity of various
individuals;
(6) the Appellant reasserted the truth of perjurous
statements and the contents of perjurous affidavits;
(7) the Appellant made false or misleading statements
before a Justice of this Court.
[2] The appeal concerns
an assessment that was made after the Appellant was convicted of tax evasion,
including several counts of perjury. He was also charged with two counts of
obstruction of justice in reference to a related lawsuit, referred to as the CASIL
lawsuit, in which he provided false testimony before the Manitoba Superior
Court by swearing false affidavits, giving false testimony on examination under
oath and writing an intentionally misleading letter to a judge of that court.
[3] The Appellant is 75
years old and is an experienced lawyer who has practiced law for decades. The
Respondent alleges that the Appellant’s actions in this appeal mirror his
patterns of contempt committed in other prior proceedings. According to the
Respondent, the Appellant’s actions have not only frustrated the discovery
process but have impugned upon the integrity of this Court’s processes and
procedures.
[4] In General
Motors of Canada Ltd. v. The Queen, [2006] T.C.J. No. 116, I reviewed the primary aims of
discovery proceedings at paragraph 7:
[7] The three principle
objectives of discovery proceedings were stated in Modriski v. Arnold,
[1947] 3 D.L.R. 321 (Ont. C.A.) as follows:
1. To
enable the examining party to know the case he has to meet;
2. To enable him to procure admissions which will dispense with
other formal proof of his own case; or
3. To
procure admissions which will destroy his opponent's case.
More recently, some
decisions have added a fourth objective: (Violette v. Wandlyn Inns Ltd.,
[1995] N.B.J. No. 574:
4. To facilitate settlement.
[5] The Federal Court
of Appeal recognized the critical importance of discovery proceedings in an oft-cited
passage from paragraph 13 of Yacyshyn v. The Queen, [1999] F.C.J.
No. 196:
[13] Indeed,
the days of trial by ambush or surprise are fortunately gone and a party to
proceedings is subject to disclosure of its case and, in return, entitled to
discovery of the other party's case. This sound rule of practice and
procedure aims at ensuring both the fairness and the expeditiousness of the
proceedings.
[6] The Rules
clearly specify the protections afforded to the discovery process in Tax Court
proceedings. The Respondent alleges that the Appellant breached Rule 85(3)(a)
by failing to bring his documents to the discovery and breached Rule 110 by
refusing to answer proper questions and by giving responses that were
inappropriate, scandalous or abusive.
[7] Although the
Respondent did not reference Rule 95(1) in his motion to dismiss, it does offer
some assistance when considering the issue of “proper questions”, in
relation to Rule 110. Rules 85 and 91 work together in that Rule 85
describes the nature of the parties’ obligations related to documents while
Rule 91 describes the potential consequences of a breach of those
obligations. Likewise, Rules 95(1) and 110 work together, in that Rule 95(1)
describes the parties’ obligations related to answering “proper questions”
while Rule 110 describes the potential consequences of a breach of those
obligations.
[8] The four relevant
Rules for the purposes of this motion state:
85. (1)
A party who has delivered a list of
documents to any other party shall allow the other party to inspect and copy
the documents listed, except those which he objects to produce, and when he
delivers the list he shall also deliver a notice stating a place where the
documents may be inspected and copied during normal business hours.
(2)
Where a party is entitled to inspect the documents to which reference is made
in the list of documents, the other party shall, on request and on payment in
advance of the cost of reproduction and delivery, deliver copies of any of the
documents.
(3) All
documents listed in a party's list of documents under section 81 or under
section 82 and that are not privileged, and all documents previously produced
for inspection by the party shall, without notice, subpoena or direction, be
taken to and produced at,
(a) the
examination for discovery of the party or a person on behalf of, in place of,
or in addition to the party, and
(b) the
hearing of the appeal,
unless the parties otherwise
agree.
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.
95. (1) A person examined for discovery shall answer, to
the best of that person's knowledge, information and belief, any proper
question relating to any matter in issue in the proceeding or to any matter
made discoverable by subsection (3) and no question may be objected to on
the ground that,
(a) the
information sought is evidence or hearsay,
(b) the
question constitutes cross-examination, unless the question is directed solely
to the credibility of the witness, or
(c) the
question constitutes cross-examination on the affidavit of documents of the
party being examined.
110. Where a person fails to attend at the time and place
fixed for an examination in the notice to attend or subpoena, or at the time
and place agreed on by the parties, or refuses to take an oath or make an
affirmation, to answer any proper question, to produce a document or thing that
that person is required to produce or to comply with a direction under section
108, the Court may,
(a) where an
objection to a question is held to be improper, direct or permit the person
being examined to reattend at that person's own expense and answer the
question, in which case the person shall also answer any proper questions
arising from the answer,
(b) where the
person is a party or, on an examination for discovery, a person examined on
behalf of or in place of a party, dismiss the appeal or allow the appeal as the
case may be,
(c) strike
out all or part of the person's evidence, including any affidavit made by the
person, and
(d) direct
any party or any other person to pay personally and forthwith costs of the
motion, any costs thrown away and the costs of any continuation of the
examination.
[9] The majority of
cases heard pursuant to Rule 91 deal with an Appellant’s failure to disclose
documents or to provide a list of documents to the other party. This motion however
concerns the Appellant’s failure to bring his documents to the examination,
after he had already disclosed all of his documents to the Respondent.
Generally, this Court leans toward first ordering an appellant to produce the
withheld documents or restricting an appellant’s right to adduce evidence,
rather than dismissing an appeal. It will impose the strongest sanction of
dismissing an appeal only where there are repeated breaches, or where the
refusal respecting documents is in combination with breaches of other Rules, or
where there is an apparent intent to delay and abuse the process (Rusnak v. The
Queen, [2000] T.C.J. No. 247, and Lichman v. The Queen, [2004]
T.C.J. No. 166).
[10] The Federal Court of
Appeal recognized the Court’s ability to protect its processes in Yacyshyn at
paragraphs 12 and 18:
[12] …the Tax Court has the inherent jurisdiction
to prevent an abuse of its process.
…
[18] It is
trite law that an abuse of process can, in appropriate circumstances, lead to
the dismissal or the stay of proceedings.
[11] It is clear that
this Court has the discretion to choose the appropriate consequence for the
breach. However, when the ultimate and most drastic sanction of dismissal is
imposed, that discretion must be exercised reasonably, by giving sufficient
weight to all the relevant circumstances involved in the appeal. It would not
be reasonable to dismiss the Appellant’s appeal solely on the basis that he did
not bring his documents with him to the examination for discovery. He had, in
fact, fully disclosed all of his documents and accordingly the Respondent’s
disclosure rights were not compromised. Further, it was the Appellant’s argument
that he believed the Respondent’s correspondence to him concerning this
examination contained an agreement by the Respondent waiving the document
production requirement. In fact Rule 85 allows that the parties may "otherwise
agree". The Appellant also argued that his copies of the
documents were too numerous for him to easily transport to the examination.
From a review of this correspondence, it is arguable that the Appellant may
have interpreted the wording to mean he did not have to show up at the
examination with his documents. However, he was requested by the Respondent on
successive days of the examination to bring those documents. If I give him the
benefit of the doubt on his interpretation of the Respondent’s correspondence,
he provided no reasonable explanation as to why he did not cooperate with the
Respondent’s continuing requests after the examination began. He also refused
to admit to or answer questions relating to the copies of the documents he
provided to the Respondent and included in his own List of Documents. In fact
he refers to some documents, upon which he relies to make his claim, as mere “pieces
of paper”. However, if the motion had been based on this ground alone, I would
never apply the ultimate sanction of dismissal but when I look to the other
grounds in this motion and review the various documentation filed and the
submissions of the parties, I believe that it is reasonable in these
circumstances to dismiss the
appeal. I do not believe this is a case where the Appellant should have a “last
chance” to comply with the rules and processes of this Court, nor do I believe
that if I were to order strict and clear instructions to the Appellant with
tight deadlines that it would force this Appellant to comply. In fact, all that
an order of that nature would accomplish is to force the Respondent to file
another similar motion in the future because I am convinced that this Appellant
will continue with a blatant and flagrant contempt for court orders as well as
a calculated repeat of the obstructive conduct exhibited to date in these
proceedings. An admonishment by myself and an order that he complies, would be
meaningless here. Even if the Appellant were not an experienced lawyer, I
believe I would have reached the same conclusion. The fact that he is a lawyer,
who knows full well the consequences of repeated breaches of the rules, simply
reinforces my decision to impose the harshest of sanctions.
[12] There are numerous aggravating factors upon
which I have relied in reaching this decision. My conclusions are based upon
the submissions of the parties, the documentation and in particular the
following:
(1) Appendix
“A” to the Respondent’s submissions which reference the Appellant’s refusals to
provide answers or where he gives inappropriate or scandalous responses;
(2) Appendix
“B” to the Respondent’s submissions which references false statements made
before this Court;
(3) Appendix
“C” to the Respondent’s submissions which references the Appellant’s
declarations of truth of his perjurous affidavits.
[13] Rule 95(1) states that the individual being
examined must answer “any proper question relating to any matter in issue in
the proceeding”. In Baxter v. The Queen, 2004 TCC 636, at
paragraph 10, the Court stated that “relevancy is defined by the pleadings” and,
at paragraph 12, that “The threshold level of relevancy is quite low” in
respect to discoveries. Courts have consistently applied the principles
articulated in the case of Baxter and have deemed questions to be proper
where there was some connection to the matter in issue. Where a party refuses
to answer such questions, they are in breach of Rule 95(1). As with breaches
relating to document production, this Court favours first ordering the
Appellant to re-attend the examination to answer the questions or restricting
the Appellant’s right to produce evidence rather than dismissing the appeal.
[14] The Respondent argues that this Appellant
is even more deserving of a harsh sanction because he is “an experienced
practicing lawyer, and his conduct was not born out of misplaced ignorance, but
out of knowing contempt;” [Respondent’s Written Submissions, paragraph 57(a)].
He argued that refusing to answer any questions related to his criminal
conviction, reasserting the truth of proven perjurous statements and misleading
a Justice of this Court were all part of the Appellant’s “deliberate pattern to
thwart the legitimate discovery processes of this Court, and part of a wider
pattern of contempt for the administration of justice” [Respondents Written
Submissions, paragraph 56]. He submits that ordering the Appellant to re-attend
an examination would not change this behaviour but would merely delay the
matter until another judge faces the same circumstances at some future date.
[15] The Appellant’s response is that:
It is unfortunate
that the Crown has not provided the Court with full transcripts and copies of
the documents relied on in the Motion. This could have prevented taking
statements from the Examination for Discovery and other documents out of
context.
[Appellant’s
Submissions, page 1]
[16] The Appellant also states that:
The Crown
consistently asked irrelevant questions and repeatedly asked questions which
were intended solely to bring into issue my credibility. As I read rule 95(1)(b),
these questions were improper.
[Appellant’s
Submissions, page 4]
[17] After prolonged argument by both parties on
the lack of proper, or any, notice by the Appellant for his read-ins, I
obtained a copy of the full transcript and permitted the Appellant to proceed
despite argument by the Respondent that the Appellant was continuing his
abusive pattern of breaching the rule that required notice of read-ins in a
motion that deals with abuse of the rules. In the end, much of the material,
which the Appellant referenced, dealt with the substantive issues rather than
the points which the Respondent raised in this motion.
[18] In response to many of the questions asked
in the examination for discovery, the Appellant simply stated “my assertions
stand and cannot be questioned”. Although he attempted to explain this away in
his submissions, the response was clearly intended to avoid responding to what
I consider pertinent and relevant questions. The questions were not being asked
solely to attack the Appellant’s credibility. They were all clearly relevant to
the matters in issue, regardless of whether they are read in isolation or in
the context of the entire examination for discovery. The Appellant declared
entire subject areas irrelevant simply because he believed that his position
was beyond scrutiny. The documents were replete with numerous refusals by the
Appellant to answer direct references to the pleadings, including inappropriate
responses such as “you’re asking silly questions again” (p. 186, Tab 11 of
Appendix “A”). In a previous application, the Appellant attempted
unsuccessfully to have portions of the Reply to the Notice of Appeal struck.
The assumptions in the Reply are therefore validly before this Court. However,
the Appellant continued to declare many of them invalid and refused to answer
proper questions put to him in this regard. Many of his refusals were based on
incredulous assertions for which he could not, or would not, provide any
plausible explanation. For example, after positively declaring that banking
documents in the Appellant’s name were not authentic, his responses were as
follows:
1377 Q. What’s
the basis of you disputing their authenticity?
A. It’s
because I don’t believe they’re authentic.
1378 Q. Aside from your
belief, is there any experience, any facts to back up that belief, sir?
A. I object to that
question and I’m not going to answer that.
1379 Q. So you are refusing to provide the
basis of your belief as to why these documents are inauthentic?
A. I don’t have to.
(p. 303, Tab
29 of Appendix “A”)
[19] In addition, after
positively asserting that a Swiss bank account may have forwarded funds to pay
the Appellant’s credit card without his knowledge, the Appellant’s response
followed the same pattern:
1710 Q. Well,
the reason I’m asking that, sir, is that seems to be quite a spectacular
allegation, that a bank would, without instructions from you, transfer specific
sums to your credit cards.
A. I
don’t know anything about Swiss banking any more than you do.
1711 Q. Okay,
do you have any specific facts that give you reason to believe that the Swiss
banks did that?
…
1716 Q. Do
you have any facts to support that suggestion?
A. I
haven’t stopped beating my wife because I never started beating her.
(p. 378 and p.
379, Tab 42 of Appendix “A”)
[20] These are just two
examples of the Appellant’s deliberate obstructive behaviour. Such responses
are simply attempts to wilfully evade answering proper questions that I
consider well above the threshold level referred to in Baxter.
[21] It is also evident
from the Appellant’s responses that he refused to provide undertakings or to
make enquiries into matters relating to his own affairs. In his submissions he
stated that he understood the usual practice on examinations was to take an
undertaking under advisement and to report back at a future date. However, his
actual responses do not support this spin which he attempted to place on the
matter of undertakings. In addition, the Appellant in a case management
conference specifically denied his refusal to provide undertakings at the
examination just a few days earlier. His confirmation to a Justice of this
Court that he provided undertakings was the direct opposite of what actually occurred
just a few days earlier at the examination.
[22] The Appellant
actually asserted at this case management conference that he had provided two
undertakings and specifically referenced the Berger Report as one of them.
However, at the conclusion of the examination, the Appellant actually states
that he did not provide any undertakings and that he reserved the right not to
provide the Berger Report because it was not subject to an undertaking. The
Appellant’s statements to the case management judge just a few days after the
examination are a blatant example of the Appellant’s deliberate and calculated
attempt to adjust his assertions and his behaviour to suit the circumstances
while disregarding and ignoring the rules and procedures of this Court. His
bold assertions fly in the face of what actually occurred and resulted in
misleading a Justice of this Court. He is not an inexperienced Appellant. As an
experienced lawyer, he knows better than to engage in such wilful, obstructive,
and dishonest behaviour meant only to hinder and impede the administration of
justice.
[23] The Appellant’s
responses to appropriate questions range from uncooperative to openly
antagonistic and abusive. Even when asked to review his own records, he simply
states that he is not reviewing anything. (p. 394, Tab 44 of Appendix “A”). In
fact some of his responses imply that he was fully aware of the prejudicial
effect of refusing to answer because it would result in the Respondent being
taken by surprise at trial.
[24] The Respondent also
referred me to the Appellant’s allegations of impropriety in respect to
participants in related proceedings, including the Manitoba Court of Appeal,
opposing counsel in the CASIL lawsuit, and Canada Revenue Agency
representatives, as further examples of inappropriate, scandalous and abusive
responses and behaviour.
[25] During the
examination for discovery, the Appellant relied on the same arguments which
were determined to be untrue in prior proceedings. In the CASIL lawsuit the
Court found that the Appellant committed perjury in several affidavits
respecting his control over Swiss funds. As a result, the Appellant was
incarcerated for a period of time (Tab 49 of Appendix “A”). In swearing the
truth of these affidavits during the examination, he was essentially
recommitting the same acts for which he was previously convicted and
incarcerated. He made no attempt to qualify his statements contained in these
affidavits but instead continued to assert the veracity of those statements by
declaring as irrelevant the fact that he was found guilty of committing perjury
in respect to these very same affidavits. (Tab 1, Appendix “C”)
[26] In summary, this is
not a case of the relevance of several questions put to an Appellant during an
examination for discovery. In reviewing the transcript of the examination and
other documentation, it is apparent that the Appellant made absolutely no
effort to respond to proper questions put to him but instead has engaged in a
deliberate pattern intended to frustrate the discovery processes of this Court.
He has been intentionally uncooperative, obstructive, evasive and dishonest
throughout his participation in the proceedings to date and unfortunately I do
not see this behaviour changing in the future. What I find most remarkable is
that he continues to ignore and deny his convictions for perjurous statements
and affidavits by reasserting them. I do not intend to give him another
platform to continue with such conduct. There is simply no point in providing
this Appellant with another opportunity as I am convinced that he will only
continue in a similar pattern of bad behaviour. In circumstances such as this,
a strong message must be sent that this Court will not condone such
unacceptable behaviour.
[27] Although an order
for costs may have no financial impact upon the Appellant as he has no
attachable funds within Canada, the Respondent’s motion to dismiss the appeal is granted
with costs.
Signed at Ottawa, Canada, this 25th day of September 2007.
Campbell J.
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