Citation:
2008TCC72
Date:
20080205
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Docket: 2006-3892(IT)G
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BETWEEN:
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NORMAN A. MINTZER,
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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 ORDER
Bowman, C.J.
[1] Three motions in this case were heard on
January 28, 2008.
[2] The first is a motion by the respondent for
an order extending the time for the respondent to respond to the appellant’s
request to admit. Inadvertently, counsel for the respondent miscounted the time
in which to respond and filed the response late. Mr. Mintzer informed me
that he was not satisfied with some of the answers given. I informed him that
that in my view was not an appropriate basis for opposing the motion. He agreed
and did not oppose the motion further.
[3] The second motion is by Mr. Mintzer
and it seeks the following relief:
1. An order staying this appeal
until the final determination of Federal Court action No.T‑827‑83,
between the parties hereto.
2. An order staying the enforcement
of any claim for taxes arising from the reassessments or this appeal until the
final determination of Federal Court action Nos. T‑827‑03 and
T‑1604‑06.
2. Striking out paragraphs 6(b),
12(a) to (d), (f) to (i), and (k) and (l) of the respondent’s reply.
3. An order for full disclosure
under rule 82.
4. An order striking out the
Notices of Reassessment and Confirmation thereof under appeal herein, and
granting the appeal.
5. Such further and other relief as
this Honourable Court deems just.
[4] Before I deal with
these requests some background might be helpful. Mr. Mintzer is a former
lawyer. He was charged under the Criminal Code with fraud. The
allegation in the reply to his notice of appeal is that he perpetrated a scheme
against Human Resources Development Canada by obtaining benefits under the Canada
Pension Plan, Old Age Security Act and Guaranteed Income Supplement
and against the Ontario Ministry of Finance in respect of the Guaranteed Annual
Income System. He did so in the names of three deceased individuals, his former
spouse’s deceased brother, sister and mother.
[5] He pleaded guilty
and was sentenced to a conditional sentence of two years less a day and was
ordered to pay the amounts fraudulently obtained back to the governments that
he had defrauded.
[6] The total amount in
respect of which he was charged was about $258,000. I am not entirely sure what
his argument against the assessment of the $258,000 might be if the matter goes
to a hearing. In the course of argument, I mentioned three cases of which I was
aware. Svidal (K.L.) v. Canada, [1995] 1 C.T.C. 2692; Neeb v. The Queen, 97 DTC 895
and The Queen v. Poynton, 72 DTC 6329 (Ont. C.A.).
[7] Mr. Mintzer has
also instituted two actions in the Federal Court, T‑827‑03 and T‑1604‑06
against Her Majesty the Queen in Right of Canada. The Crown moved to dismiss T‑827‑03.
Mr. Justice Russell of the Federal Court granted the Crown’s motion
in part but left intact the claim for a declaration that the Crown was
responsible for Mr. Mintzer’s by-pass surgery and also for an unlawful
search and seizure of his income tax records. The Federal Court of Appeal
dismissed an appeal from this order.
[8] A second action
against Her Majesty the Queen in Right of Canada, file no. T‑1604‑06
was commenced by Mr. Mintzer in the Federal Court. He claimed damages on a
number of grounds. Mr. Justice Hughes of the Federal Court ordered
that it be stayed pending the final determination of the tax appeal.
[9] I should mention
for completeness sake that a similar action was started against Her Majesty the
Queen in Right of Canada by Mr. Mintzer. It was dismissed on motion by
Justice Carnwath of the Ontario Superior Court of Justice and an appeal to
the Ontario Court of Appeal was dismissed with costs.
[10] With respect to the
first two heads of relief sought, I can see no basis for staying the appeal in
this court pending the disposition of the Federal Court action T‑827‑83.
The disposition of that action will not affect the Tax Court appeal.
[11] With respect to item
2, this court does not have the power to stay the enforcement of a claim for
taxes pending the determination of a Federal Court action. That power belongs
to the Federal Court.
[12] The motion to strike
out paragraphs 6(b), 12(a) to (d), (f) to (i) and (k) and (l) of the respondent’s
reply to the notice of appeal is based on the view that since it has been found
in the Provincial Court that the moneys were obtained by fraudulent means it is
inappropriate for the respondent to set out any details (as has been done in
the impugned paragraphs) of the manner in which the fraud was perpetrated.
Essentially the paragraphs in the reply which Mr. Mintzer wants to have struck
describe the way in which the identities of the appellant’s former spouse’s
sister, brother and mother were in effect stolen so that Mr. Mintzer could
apply for and obtain the various social benefit cheques. The appellant is
alleging that the amounts are not income. He says in paragraph 80 of his notice
of appeal that the money is a debt as determined by the Ontario Court of
Justice, and is not subject to income tax and was not obtained by fraud or any
other criminal activity. In paragraph 90 he says there are no grounds for
imposing penalties. In light of these contentions it is highly relevant just
how he perpetrated the fraud. The pleading of assumptions requires that the
appellant and the court be given something more than the stark and arid
assertion of conclusions. Pleaded assumptions are expected to be complete,
accurate and informative. While judges may not be entirely ad idem on
what constitute “material facts” as opposed to evidence, I would prefer to see a reply err on
the side of completeness rather than on the side of sparseness provided of
course that it does not cross the line into a rambling recitation of evidence
and conclusions of law.
[13] The impugned
paragraphs are in my view well within the limits of permissible pleading, quite
apart from the fact that several fresh steps were taken by the appellant before
moving against the reply. (Rule 8(b))
[14] Next, I shall deal
with the request for an order for full disclosure of documents under Rule 82 of
the Tax Court of Canada Rules (General Procedure) as opposed to partial
disclosure under Rule 81. The partial disclosure rule in Rule 81 is
somewhat unique. Most, possibly all, other courts in Canada require full disclosure. In this
court making an order for full disclosure under Rule 82 is not unusual if the
party seeking the order can demonstrate reasonable grounds for such an order.
There should however be some basis for putting the other party to the expense
and trouble of assembling a large number of documents. Given the nature of this
appeal and the issues raised I think that the additional material obtained
under a Rule 82 order will in all probability be of no assistance.
[15] In Ikea Ltd. v. Idea
Design Ltd., [1987] 3 F.C. 317, Mr. Justice McNair of the Federal
Court reviewed at length the circumstances in which the court may order full
disclosure under Rule 448 of the Federal Court Rules (as it then read)
which corresponds to Rule 82 of the Tax Court of Canada Rules (General
Procedure). He said at page 325:
20. It becomes
necessary to look at the wording of Rule 448 to determine the scope of its
application and intendment. Rule 448 reads as follows:
Rule
448. (1) The Court may order any party to an action to make and file and serve
on any other party a list of the documents that are or have been in his
possession, custody or power relating to any matter in question in the cause or
matter (Form 20), and may at the same time or subsequently order him to make
and file an affidavit verifying such a list (Form 21) and to serve a copy
thereof on the other party.
(2)
An order under this Rule may be limited to such documents or classes of
document, or to such of the matters in question in the cause or matter as may
be specified in the order.
21. W.R. Jackett,
former President of the Exchequer Court and Chief Justice of
the Federal Court of Canada, wrote an excellent treatise on the practice under
the new Federal Court Rules, entitled A Manual of Practice. In contrasting the
old Exchequer Court Rules and the new Rules in respect of the discovery of
documents, the learned author makes this statement at page 68 of the Manual:
Under
the new Rules the right to discovery of documents in the possession or control
of the opponent that might conceivably be of help to the party demanding
discovery has disappeared. Such right has disappeared even though it would
obviously serve the ends of justice that there be discovery of such documents.
The reason for thus curtailing the ambit of discovery as of right is the purely
practical one that while, on the one hand, it is felt that there are relatively
few cases where a party can be [page326] building his case on documents that he
hopes to get from his opponent, on the other hand it is a very onerous, tedious
and difficult task, involving considerable expense and delay, to prepare a list
of documents that would, conceivably, be of aid to one's opponent. This is
particularly so when a party has widespread operations the details of which he
prefers to keep from his opponent who is also his business competitor. On
balance, it seems probable that the costs and delays of making such discovery
outweigh, in most cases, the theoretical advantages obtained from it.
While
discovery as of right has been thus limited in scope, any party may apply for an
order for the old style discovery by his opponent of the documents that are or
have been in his possession, custody or power relating to any matter in
question in the cause or matter (Rule 448). Such an application will only be
granted where the applicant can convince the Court that there is something in
the circumstances of the particular case calling for this more expensive type
of discovery and, if granted, it may be granted on a restricted basis (Rule
448(2)). There is an automatic right of inspection and to make copies of any
documents discovered pursuant to such an order (Rule 453).
22. The leading
case is Compagnie Financiere du Pacifique v. Peruvian Guano Company (1882), 11
Q.B.D. 55 (C.A.), where Brett L.J., stated the principle applicable to the
interpretation of the words of the rule "a document relating to any matter
in question in the action", at page 63 as follows:
It seems to me that
every document relates to the matters in question in the action, which not only
would be evidence upon any issue, but also which, it is reasonable to suppose,
contains information which may -- not which must -- either directly or
indirectly enable the party requiring the affidavit either to advance his own
case or to damage the case of his adversary. I have put in the words
"either directly or indirectly," because, as it seems to me, a
document can properly be said to contain information which may enable the party
requiring the affidavit either to advance his own case or to damage the case of
his adversary, if it is a document which may fairly lead him to a train of
inquiry, which may have either of these two consequences ... .
23. This
general principle has been consistently followed and applied by the courts over
the years, and has been extended to the area of the production of documents.
[16] In Owen Holdings Ltd. v.
Canada, [1997] 3 C.T.C. 2286, Justice Rip analysed the meaning of the
words “relating to” — which have been interpreted as being of the broadest
import — and referred with approval to the judgment of McNair J. in Ikea.
[17] I do not think in the
circumstances of this case an order under Rule 82 is warranted.
Mr. Mintzer already has obtained further documents under the Access to
Information Act. Given the manner in which the issues are framed, any
further production of documents would be time consuming and onerous and would
be unlikely to yield anything that would assist the appellant in his case.
[18] The next head of relief sought
is for an order striking out the notices of confirmation and the reassessments.
I have seen nothing that would warrant so draconian a measure. Vacating
assessments is what the appeal process in this court is ultimately in aid of.
We do not exercise that jurisdiction summarily or arbitrarily.
[19] Mr. Mintzer’s second motion
is for an order striking out the reply and allowing his appeal. The grounds are
as follows:
1. The respondent
filed an affidavit on a motion in this Court divulging that the appellant made
an offer to settle this appeal and accusing him of lying about undertakings he
made at discoveries, and has thereby fatally prejudiced this appeal and
rendered a fair, unbiased and just hearing impossible.
2. The
respondent made exparte representations to the Registrar of the Tax Court of
Canada, without any notice to the appellant, and without the knowledge of the
appellant to gain an advantage in this appeal, and did gain an advantage.
3. The
respondent’s actions are a denial of natural justice, not in accordance with
the principles of fundamental justice, an abuse of the process of the court and
put the administration of justice into disrepute.
[20] With respect to ground 1 there
is nothing in any affidavit filed on behalf of the respondent in this
proceeding that accuses Mr. Mintzer of lying about any undertakings. There
is some discussion of undertakings but nothing that even remotely implies any
dishonesty on the part of the appellant in his conduct of this appeal. So far
as the fact that in a letter to the Registrar from counsel for the respondent
stated that the appellant had made an offer of settlement is concerned, nothing
in her letter discloses the terms of the settlement. In this court it is usual
for offers of settlement to be made. Judges are aware that settlement
negotiations continue up to the morning of trial and sometimes even beyond
that. Neither I nor any other judge is influenced by the knowledge that
settlement offers and counter offers are routinely made. The reference to a
letter of settlement by one of the parties prejudices no one provided the terms
are not disclosed.
[21] A copy of Ms. Nott’s letter
to the Registry was inadvertently not sent to the appellant. She admits it
should have been and has apologized to Mr. Mintzer. He has suffered no
harm whatsoever.
[22] There is no basis for striking
out the reply or for allowing the appeal.
[23] The Crown’s motion to extend
the time to serve a response to the request to admit is granted and the time
for doing so is extended to the day the response was served on the appellant. I
make no order for costs on that motion.
[24] The appellant’s two motions are
dismissed with costs which I fix in the total amount of $350.00.
Signed at Ottawa, Canada, this 5th day of February 2008.
Bowman,
C.J.
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