Docket: 2007-1964(IT)I
BETWEEN:
HEATHER M. WOOD,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
____________________________________________________________________
Appeal
heard on February 15, 2008, at Ottawa, Canada
Before: The Honourable
Justice J.E. Hershfield
Appearances:
|
Agent for the Appellant:
|
Ronald
J. Wood
|
|
Counsel for the Respondent:
|
Tanis Halpapi
(Student-At-Law)
Marie-Eve
Aubry
|
____________________________________________________________________
JUDGMENT
The appeal from the reassessment made under the Income Tax Act for
the 2004 taxation year is allowed, without costs, and the reassessment is
referred back to the Minister of National Revenue for reconsideration and
reassessment in accordance with and for the reasons set out in the attached
Reasons for Judgment.
Signed at Ottawa, Canada,
this 22nd day of February, 2008.
"J.E.
Hershfield"
Citation: 2008TCC105
Date: 20080222
Docket: 2007-1964(IT)I
BETWEEN:
HEATHER M. WOOD,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
Hershfield J.
[1] As indicated from the Bench on the day of
the hearing, the appeal is allowed on the basis that the Respondent brought no
evidence in respect of matters that the Crown had a burden to prove. It is
noted at the outset of these Reasons that the Appellant was represented by an
agent; namely, her husband.
[2] These Reasons for the allowance reflect the
rulings and findings made from the Bench without any evidence having been
presented.
[3] The appeal concerns an RRSP withdrawal in
2004 that was asserted by the Appellant to be an excluded withdrawal pursuant
to the requirements of section 146.02. The withdrawal by the Appellant was used
to finance an educational program for her husband. The Reply to the Notice of
Appeal expressly stated that the reason for the reassessment and confirmation
denying the Appellant’s claim was that the College that offered the particular
program taken by the Appellant’s husband was not a designated educational
institution. This was stated as an assumption.
[4] At the hearing, the Respondent sought to
have the Reply amended. Since the amendment was not consented to, leave of the Court
was required. Leave to amend was denied. The proposed amendment (notice of
which was first given to the Appellant just weeks before the hearing) purported
to change the assumptions made by the Minister to ones that related to other
requirements of the subject provision, namely that the program was not a full-time
program and the Appellant’s husband was not a full-time student. It was now
admitted that the College was a designated educational institution.
[5] The Respondent had no witness to attest to the
assumptions actually made and to the reasons for the reassessment and
confirmation. A letter from the auditor was said to be available. I ruled
against its admission on the basis that it was hardly the best evidence and it
would afford no opportunity for cross-examination. The circumstances of this
case do not warrant a relaxation of the rules of evidence on this point. A
complete reversal of the basis for an assessment made at the 11th hour in a
matter where the Appellant has no legal representation requires the presence of
the Minister’s agent to address obvious questions and concerns.
[6] Having denied the
request to amend the Reply, the
burden of proof in respect of the new issues in the appeal is on the Crown.
[7] The Respondent did
not ask for an adjournment. Still, the Court considered allowing an
adjournment. None was granted. An
adjournment would be highly prejudicial to the Appellant in that it would allow
the Crown to be better prepared for a case that it was to be fully prepared for
that day.
[8] The Appellant was told by the Court that
given that the burden of proof was on the Respondent, the Appellant had no
burden to prove anything and the Respondent was asked how it would proceed. Having
lost the opportunity to cross-examine any witness called by the Appellant, and
having no witnesses of its own, but having documents that needed to be
admitted, the Respondent sought to call the Appellant (and presumably her
husband).
[9] This presents an issue that frequently confronts
the Court. To what extent does the trial Judge assist an Appellant who is not
represented by legal counsel? In my view, the agent was not compellable. He had
not been served with a subpoena or notice of intention to be called as a
witness. He was free to leave. His attendance had not been secured. Legal
counsel could simply have suggested he leave if his presence had not been
secured. The Tax Court of Canada Rules (General Procedure), at section
146, provide that the attendance of a person may be secured only if the person
is an adverse party (which he is not) or is a person who has been served with a
subpoena or with a notice of intention to be called. On that basis his
attendance had not been secured and he could not be compelled to testify. He is
under no obligation to assist the Respondent. If his testimony was to be relied
on, notice should been given. As a general principle, witnesses should be
afforded time to prepare and to assemble records or documents in order to give
reliable testimony and, where required, they should, prior to the trial, be
paid a witness fee and expenses.
[10] As the adverse party,
the Appellant could have been
compelled to testify. However, clearly she could not attest to the Respondent’s
documents. She could not give the best evidence as to any of the points in
issue. Documents as to the nature of the program would have to be admitted
through a witness that could attest to them. The Canada Revenue Agency auditor
who, at some point, apparently relied on them should have been there to speak
to their admission or someone from the College should have been available to
give the best evidence of the nature of the program that was at issue. The
Appellant who did not attend at the College should not be compelled to give
evidence where better evidence was available to the Crown.
[11] To compel the Appellant to take the witness
stand in these circumstances without counsel would be to invite an abuse of the
evidentiary requirements of the entire proceeding. There must, in my view, be
an element of discretion in the application of the Rule to secure the
attendance of a person to testify, particularly in an Informal Procedure case
where procedural fairness and the interests of justice are not advanced by
applying it.
It is incumbent on the party with the onus of proof to consider and meet reasonable
evidentiary requirements, particularly where that party is the Crown, acting
with counsel, and the other party is not so represented.
[12] As stated above, it is the Respondent, who
now at the 11th hour asserts a new factual issue, that must call evidence. Documentation
of the program curriculum, hours and the like, that were presumably relied on
by the Respondent at some point prior to the hearing, were for the Respondent
to identify at the trial through its witnesses - the persons who examined and
relied on such evidence in the first place - not the evidence of a student’s
spouse even if she is the adverse party. The relevant testimony would be that
of the person, presumably the auditor, who knows the source of the documents and why
they should be taken as reliable and given weight. Indeed, as already suggested, someone from the College
might have been brought to testify – someone with actual first hand knowledge of
the new facts in issue. Allowing the Respondent to examine the Appellant would
have the effect of allowing an ill-fated last gasp attempt to avoid the
inevitable consequence of being less than fully prepared for a ruling that
reversed the burden of proof. Allowing the Respondent to examine the Appellant,
who lacked legal sophistication and acumen and was without counsel, would, in
my view, have inevitably required the intervention of the Court. Acquiescing to
the application of a Rule that would have allowed an attempt to have the
Appellant attest to the Respondent’s evidence is not something this Court should
encourage. For these reasons, I did not allow the Respondent to call the
Appellant.
[13] The Respondent’s failure to have its own
witness available to speak to the assumption issue and to speak to issues that
the Crown should have knowledge of (such as the nature of the programs offered
by the College) is fatal, in this case, in my view. In this case the interests
of justice are better served by disallowing the calling of evidence that in my
view could not meet the best evidence standards that are set to help ensure
reliable findings. The Crown failed in this case to meet these standards and no
relaxation of those standards was allowed.
[14] Accordingly, the hearing ended without
evidence being brought by the Respondent, the party with the burden to bring evidence
to support its new assertions. The parties were advised that the appeal would thereby
be allowed.
[15] The Appeal is
allowed without costs. The subject educational program shall be treated by the
Minister as meeting the requirements of section 146.02 of the Income Tax Act.
Signed at Ottawa, Canada, this
22nd day of February, 2008.
"J.E. Hershfield"
CITATION: 2008TCC105
COURT FILE NO.: 2007-1964(IT)I
STYLE OF CAUSE: HEATHER M. WOOD AND HER MAJESTY THE QUEEN
PLACE OF HEARING: Ottawa, Canada
DATE OF HEARING: February 15, 2008
REASONS FOR JUDGMENT BY: The
Honourable Justice J.E. Hershfield
DATE OF JUDGMENT: February 22, 2008
APPEARANCES:
|
Agent for the
Appellant:
|
Ronald J. Wood
|
|
Counsel for the
Respondent:
|
Tanis Halpapi (Student-At-Law)
Marie-Eve
Aubry
|
COUNSEL OF RECORD:
For the Appellant:
Name:
Firm:
For the
Respondent: John H. Sims, Q.C.
Deputy
Attorney General of Canada
Ottawa,
Canada
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