Docket: 2004-122(IT)G
BETWEEN:
CLAUDETTE TREMBLAY,
EXECUTRIX OF THE ESTATE OF MARCEL TREMBLAY,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
____________________________________________________________________
Motion held
by way of conference call on August 28, 2008
at Ottawa, Canada
Before: The Honourable
Justice L.M. Little
Appearances:
|
Counsel
for the Appellant:
|
James
Shea
|
|
Counsel for the Respondent:
|
Carla Lamash
|
____________________________________________________________________
ORDER
Upon Motion by counsel for the Respondent for an Order
compelling the Appellant to provide answers to 12 additional questions;
And upon hearing what was alleged by the
parties;
The Motion filed by the
Respondent is granted in accordance with the Reasons for Order attached.
Signed at Vancouver, British Columbia, this 10th day of September 2008.
“L.M. Little”
Citation: 2008 TCC 500
Date: 20080910
Docket: 2004-122(IT)G
BETWEEN:
CLAUDETTE TREMBLAY,
EXECUTRIX OF THE ESTATE OF MARCEL TREMBLAY,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR ORDER
Little J.
[1]
This is an application
under subsection 116(2) of the Tax Court of Canada Rules (General Procedure)
to compel the Applicant to disclose further documents in a written examination
for discovery.
[2]
Counsel for the
Respondent filed a Notice of Motion dated the 31st day of July 2008
for an Order compelling the Applicant to provide answers to 12 additional
questions.
[3]
By letter to the Court
dated August 27, 2008 Counsel for the Respondent indicated that the Respondent
is satisfied with the answers provided by the Appellant for 10 of the
unanswered questions.
[4]
In the letter dated
August 27, 2008 Counsel for the Respondent indicated that the only questions
which the Appellant has refused to answer were question 20(a) and question 29.
[5]
Re: Question #20(a):
Provide a copy of the Agreement referred to.
(Note: the Agreement in question is the
Non-Competition Agreement referred to in paragraph 9 of the Appellant’s Notice
of Appeal)
In the written discovery the Respondent replied “The
document is subject to confidentiality terms”.
[6]
Re: Question #29:
Provide copies of all settlement agreements and documents relating
to those agreements with respect to the law suit or threatened law suit.
In the written discovery the Respondent
said:
The potentially relevant documents are subject to a confidentiality.
[7]
A conference call was
held with Counsel for the parties on August 28, 2008.
[8]
Re: Question #20(a):
During the conference call Counsel for the
Respondent maintains that there is no proper ground upon which to refuse
production of the documents requested.
[9]
During the conference
call Counsel for the Appellant said:
… our position is that it is a confidential agreement.
It may, to be fair, it may shed light on the circumstances, but the
circumstances will be defined by the witnesses in this particular use and we
were not arguing stronger than the fact is that there is a confidential
agreement between the parties.
[10]
In support of her position
Counsel for the Respondent referred to the decision of the Tax Court of Canada
in Fink v. The Queen, [2005] 3 C.T.C. 2474. Ms. Lamash noted that
in the Fink decision Justice Bonner held that privilege does not attach
to situations where the settlement document is relevant in determining the
ultimate issue in the tax appeal.
[11]
In the Fink
decision Justice Bonner said at paragraphs 27 and 28:
27 I turn next to settlement
privilege. It is invoked by the appellants to justify both the refusal to
produce documents and the refusal to answer questions which clearly do bear or
might bear on discussions such as those pleaded in paragraph 22 of the Amended
Notice of Appeal. Those and other discussions pleaded by the appellant led to
the settlement of the proceedings in court and in the OSC. It was that
settlement which generated the payment now in issue. Essentially the appellants
wish to produce nothing more than the settlement agreement which is already a
matter of public record.
28 Counsel for the appellant asserts
that a party to settlement negotiations is neither required nor permitted to
disclose the contents of such negotiations in proceedings by or against the
third party. He relies on a number of authorities none of which deal with
disclosure in the context of tax litigation in which the true substance and
nature of the payment and of the injury which the payment is intended to
compensate are central to the issue. The settlement privilege is one which is
intended to encourage the resolution of a dispute without litigation by
permitting the parties to the dispute to discuss their differences frankly and
without fear that admissions made by them for the purpose of arriving at a
settlement will be used against them later. It does not prevent disclosure in
later litigation between persons neither of whom was a party to the litigation
in which the offer of settlement was made. Furthermore, in my view, when the
ambit of the privilege is properly understood, it is evident that the privilege
does not attach to cases where the discussion or settlement document is
relevant to establish not the liability of a party to the settlement for the
conduct which gave rise to the dispute but rather to arrive at a proper
interpretation of the agreement itself. The appellant's reliance on this
privilege is in my view wholly unwarranted both as to the production of
documents and as to discussions and events.
[12]
I paraphrase the words
of Justice Bonner and say that the Appellant’s reliance on privilege, with
respect to the Non-Competition Agreement, is in my view wholly unwarranted both
as to the production of the document and as to discussion and events.
[13]
In my opinion the
Appellant should produce the Non-Competition Agreement because that agreement
may contain the information that is necessary to arrive at a proper interpretation
of the issue.
[14]
Re: Question #29:
I have concluded that the Appellant should
produce all settlement agreements and documents relating to those agreements
with respect to the threatened law suit for the same reasons as outlined in
paragraph [13] above.
[15]
The Motion is granted.
Signed at Vancouver, British Columbia, this 10th day of September 2008.
“L.M. Little”
CITATION: 2008 TCC 500
COURT FILE NO.: 2004-122(IT)G
STYLE OF CAUSE: Claudette Tremblay, Executrix of the Estate of Marcel Tremblay
and
Her Majesty The Queen
PLACE OF HEARING: Ottawa, Canada
DATE OF HEARING: August 28, 2008
REASONS FOR ORDER
BY: The Honourable Justice L.M. Little
DATE OF ORDER: September 10, 2008
APPEARANCES:
|
Counsel for the
Appellant:
|
James Shea
|
|
Counsel for the
Respondent:
|
Carla Lamash
|
COUNSEL OF RECORD:
For the Appellant:
Name: James Shea
Firm: Shea
Nerland Calnan
Calgary, Alberta
For the
Respondent: John H. Sims, Q.C.
Deputy
Attorney General of Canada
Ottawa,
Canada
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