Citation: 2007TCC455
Date: 20070827
Docket: 2002‑4824(IT)G
BETWEEN:
JEFFREY SACKMAN,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
AMENDED REASONS FOR ORDER
Bowman, C.J.
[1] We have in these
motions a number of types of relief sought by both parties, as follows:
(a) a
motion by the Crown to compel the appellant to reattend and answer questions
that were refused on discovery;
(b) a
motion by the appellant to compel the representative of the Crown to reattend
and answer questions that were refused on discovery;
(c) a
motion by the appellant to permit an amendment to his notice of appeal;
(d) a
motion by the Crown to permit it to examine for discovery a representative of a
third party, Artistic Ideas Inc. (“Artistic”).
[2] The case has been moving
in this court in a sedate and leisurely way. It was commenced in December 2002
by the firm of solicitors Fraser Milner Casgrain. A reply was filed on
March 24, 2003 and an answer was filed by the appellant’s solicitor on March 31, 2003.
[3] On June 17, 2003, a new
firm of solicitors for the appellant, Osler, Hoskin & Harcourt, was
appointed. On April 29, 2004, a status hearing was held by way of
conference call and a timetable for discoveries and filing of documents was set
and the hearing was set for September 13, 2004 for a duration of two
weeks.
[4] Then cracks began to
appear in the rather tight schedule agreed to by the parties. Requests were
made for an extension of time for discoveries and undertakings and for an
adjournment of the trial date sine die.
[5] The requests were
granted. On September 15, 2004, a further change of solicitors was
made and Teplitsky, Colson replaced Osler, Hoskin & Harcourt. On
November 12, 2004, the case was further delayed by the request that it be
held in abeyance pending the disposition of the appeals in Attorney General
of Canada v. Nash, A-572‑04, Attorney
General of Canada v. Tolley, A-569‑04, Attorney General of Canada
v. Quinn, A‑511-04, and the appeal and cross-appeal in Klotz v.
The Queen. 2004 TCC 147. The Crown was successful in the Federal Court of
Appeal in Klotz, on May 2, 2005 and in the Nash, Tolley and
Quinn appeals on November 21, 2005.
[6] In January 2006, the
Court granted a request to hold this appeal in abeyance pending the application
for leave to appeal to the Supreme Court of Canada in Klotz, Tolley, Quinn and
Nash. In April 2006, the Supreme Court of Canada denied leave. In August
2006, the Court was advised that the parties had agreed on a timetable.
[7] Finally, the several motions
came on before me on May 10, 2007. I shall deal first with the appellant’s
motion to amend the notice of appeal. The essential issue in the original
pleadings is the same as in Klotz, Nash, Tolley and Quinn: the
fair market value (“fmv”) of prints donated by the appellant to registered
charities. A subsidiary question is whether the prints were personal use
property. A third issue was the imposition of penalties. The penalty issue has
now been conceded by the respondent. All of these issues were dealt with at
length in the art donation cases referred to above. Counsel for the appellant
now seeks to raise, if not exactly a new issue, at least a somewhat different
approach to an old issue, that is to say the appellant’s reliance on valuation
practices and procedures which he alleges were historically accepted by the
Canada Revenue Agency. The new points that he wishes to raise are set out in
the following new paragraphs 6(a) to 6(h), 12 and 16(a).
6(a). At material
times the Canada Revenue Agency (“CRA”) published administrative policy and
bulletins about the procedure to be followed with respect to donations and
charitable gifts (the “CRA Publications”).
6(b). The appellant
followed precisely and relied upon the CRA Publications.
6(c). The CRA has a
long history of accepting valuations from certified professional appraisers in
allowing such deductions.
6(d). The CRA
Publications contained a complete code for donations and charitable gifts, such
that the appellant had the legitimate and reasonable expectation that the deductions
would be allowed and that he would not be reassessed.
6(e). In 1999 the
CRA warned taxpayers about potential pitfalls in charitable donations in one of
its CRA Publications. The CRA set out a protocol to be followed, to avoid
problems. The appellant fully complied.
6(f). The
appellant had a reasonable expectation that the CRA would administer the Act in
accordance with its own publications. Instead, the CRA reassessed the
appellant, notwithstanding his compliance with their publications and without
any appraisal evidence of its own to suggest that the fair market value was
less than claimed.
6(g). The appellant
alleges that the CRA should have amended the Act (which it ultimately did) if
it wanted to stop charitable art donations. Instead it administered the “Act”
to accomplish this result ignoring its own publications upon which the
appellant had relied.
6(h). The appellant
alleges that the fair market value has always been accepted by the CRA as the
retail value, where a retail market exists for the art donated. The appellant
alleges that there was a retail market for the art he donated and the value in
such market was at least equal to, and often greater than, the value in the
receipts provided by the charities.
. . . . .
12. Although the reassessment
denied the donations claimed, it included in the appellant’s income the amount
of $180,631.19 in respect of taxable capital gains on the works of art donated
by the appellant. Having accepted the amount of $180,631.19 in respect of
taxable capital gains on the works of art donated by the appellant, the
Minister is now estopped from challenging the fair market value of the
donations.
. . . . .
16(a). The appellant
acted reasonably in relying upon the CRA Publications and had the reasonable
and legitimate expectation that the deductions would be allowed and that he
would not be reassessed.
[8] In addition to the above
proposed amendments, the appellant proposes to delete a claim for a donation
carry‑forward of $25,272.35. The Crown consents to this deletion as well
as the substitution in paragraph 13(c) of the amended notice of appeal of
2000 for 2002. Also, in paragraph 5, the appellant wishes to substitute
$771,262.60 for $731,262.60.
[9] The respondent argues
that the appellant is not entitled, as of right, to file an amended notice of appeal
just because the respondent has filed an amended reply to the notice of appeal.
The proposition is probably right, as far as it goes. The appropriate way to
deal with a reply or an amended reply is in an Answer. However, any party has a
right to seek the Court’s permission to amend its pleadings and it is on this
basis that I am approaching the appellant’s motion. The principle which I
believe is applicable is found in The Queen v. Canderel Limited, 93 DTC
5357 at 5361 (F.C.A.):
As regards
interests of justice, it may be said that the courts and the parties have a
legitimate expectation in the litigation coming to an end and delays and
consequent strain and anxiety imposed on all concerned by a late amendment
raising a new issue may well be seen as frustrating the course of justice
[FOOTNOTE 16: See Johnston v. Law Society of Prince Edward Island (1988), 69 Nfld. &
P.E.I.R. 168 (P.E.I.C.A.); Glisic v. Canada, supra note 10.].
The principles were in our view best summarized by Lord Griffiths, speaking for
the majority, in Ketteman v. Hansel Properties Ltd: [FOOTNOTE 17: Supra
note 12 at 62.]
...
This
was not a case in which an application had been made to amend during the final
speeches and the court was not considering the special nature of a limitation
defence. Furthermore, whatever may have been the rule of conduct a hundred
years ago, today it is not the practice invariably to allow a defence which is
wholly different from that pleaded to be raised by amendment at the end of the
trial even on terms that an adjournment is granted and that the defendant pays
all the costs thrown away. There is a clear difference between allowing
amendments to clarify the issues in dispute and those that permit a distinct
defence to be raised for the first time.
Whether
an amendment should be granted is a matter for the discretion of the trial
judge and he should be guided in the exercise of the discretion by his
assessment of where justice lies. Many and diverse factors will bear on the
exercise of this discretion. I do not think it possible to enumerate them all
or wise to attempt to do so. But justice cannot always be measured in terms of
money and in my view a judge is entitled to weigh in the balance the strain the
litigation imposes on litigants, particularly if they are personal litigants
rather than business corporations, the anxieties occasioned by facing new
issues, the raising of false hopes, and the legitimate expectation that the
trial will determine the issues one way or the other. Furthermore, to allow an
amendment before a trial begins is quite different from allowing it at the end
of the trial to give an apparently unsuccessful defendant an opportunity to
renew the fight on an entirely different defence.
Another
factor that a judge must weigh in the balance is the pressure on the courts
caused by the great increase in litigation and the consequent necessity that,
in the interests of the whole community, legal business should be conducted
efficiently. We can no longer afford to show the same indulgence towards the
negligent conduct of litigation as was perhaps possible in a more leisured age.
There will be cases in which justice will be better served by allowing the
consequences of the negligence of the lawyers to fall on their own heads rather
than by allowing an amendment at a very late stage of the proceedings.
[emphasis
added]
and by Bowman, T.C.C.J. in Continental
Bank Leasing Corporation et al. v. The Queen [FOOTNOTE 18: 93 DTC 298 at
302 (T.C.C.).]:
... I prefer to put the
matter on a broader basis: whether it is more consonant with the interests of
justice that the withdrawal or amendment be permitted or that it be denied. The
tests mentioned in cases in other courts are of course helpful, but other factors
should also be emphasized, including the timeliness of the motion to amend or
withdraw, the extent to which the proposed amendments would delay the
expeditious trial of the matter, the extent to which a position taken
originally by one party has led another party to follow a course of action in
the litigation which it would be difficult or impossible to alter and whether
the amendments sought will facilitate the court's consideration of the true
substance of the dispute on its merits. No single factor predominates nor is
its presence or absence necessarily determinative. All must be assigned their
proper weight in the context of the particular case. Ultimately it boils down
to a consideration of simple fairness, common sense and the interest that the
courts have that justice be done.
[10] In argument, counsel for
the appellant also agreed to delete certain portions of the new paragraphs in
the amended notice of appeal, as follows. In paragraph 6(d) the following
words will be deleted
“...such that the appellant had the
legitimate and reasonable expectation that the deductions would be allowed and
that he would not be reassessed”.
The appellant agrees to delete the
following words from paragraph 6(f):
“The Appellant had a reasonable
expectation that the CRA would administer the Act in accordance with its own
publications. Instead”
The appellant agrees to delete from
paragraph 6(g) the words “upon which the appellant had relied”.
[11] The appellant agrees to
delete from paragraph 16(a) everything following the word “Publications”.
[12] With the exception of
paragraph 12, with which I shall deal below, what remains is relatively
innocuous. I can see nothing wrong with pleading that the appellant in
determining the fmv relied upon practices and procedures published by the Canada
Revenue Agency (“CRA”). I personally would give departmental bulletins and
practices very little weight but it is material that a trial judge may consider
informative in the context of all of the evidence. It is not the place of a motions
judge to usurp the functions of the trial judge with respect to matters of
relevancy or with respect to what arguments may be advanced. If the matters
raised in the proposed amendments (or what is left of them after the
appellant’s deletions) are as irrelevant as counsel for the appellant says,
they can be disposed of in a good deal less time than it has taken to argue and
dispose of these motions.
[13] The one exception that I
will make is with respect to the words which the appellant proposes to add to
paragraph 12.
Having accepted the amount
of $180,631.19 in respect of taxable capital gains on the works of art donated
by the appellant, the Minister is now estopped from challenging the fair market
value of the donations.
The obvious inconsistency in the
Minister’s position requires an explanation and I question how the two
positions can stand together. This is not however a matter of estoppel.
Estoppel can apply against the Crown under some circumstances (Goldstein v.
The Queen, 96 DTC 1029) but this is not such a case. The inconsistency is a
matter for argument and it may well be that the appellant will be able to ask
the trial judge for some adjustment to the assessment. I am therefore denying
the amendment to paragraph 12. Otherwise the appellant is entitled to make
the amendments that he seeks.
[14] I turn now to the motion
to compel the respondent to answer outstanding undertakings, refusals and
questions on discovery and to compel the Crown’s representative, Salvatore Tringali,
to attend for a further examination. In the appellant’s motion record is a
chart setting out the questions that he wants answered. They are the following:
|
Question No.
|
Page No.
|
Specific Question
|
|
18
|
4
|
Under advisement to provide the complete Sackman
file as the proceeding did not move as a “full disclosure case”.
|
|
41
|
12
|
Refusal to answer questions on the Minister’s
policy 20 years ago, and whether there was a change in the policy regarding
art donations.
|
|
118
|
31
|
Refused to answer if the CRA engaged its own
appraisers in other art cases.
|
|
125
|
32
|
Refused to answer if there was any case where the
CRA engaged an appraiser.
|
|
131
|
35
|
Refused to answer if Mr. McCarney, or someone
else at headquarters, have input on whether the Crown should engage its own
art appraisers.
|
|
156
|
40
|
Refused to answer if anyone had seen invoices that
Mr. Teplitsky sent to Mr. Derskin’s office.
|
|
163
|
43
|
Refused to answer questions based upon a document
dated January 26, 1998 by John Oulten (Marked as Exhibit 1)
|
164
|
44
|
Refused to determine what Exhibit 1 purports
to be.
|
|
185
|
51
|
Refused to answer if Mr. Sackman did anything
inconsistent with the advice the CCRA gave about ‘gifts in kind’ appraisals.
|
|
194
|
54
|
Refused to answer if Ms. Yeoman’s is an
appraiser that the CCRA has used in the past.
|
|
195
|
55
|
Refused to indicate if the Crown will determine if
Ms. Yeoman or Mr. Rosoff are accredited appraisers.
|
|
233
|
66
|
Refusal to answer what the CRA policy was, pre the
multiple art donation cases, to allow retail value if there was a retail
market.
|
[15] Counsel for the
respondent has agreed to answer question 18 and to provide the assessor’s
file.
[16] As will be seen below,
counsel for the appellant refused to permit his client to answer numerous
questions on the grounds of relevancy. Both counsel seem to take a very
expansive view of relevancy when it comes to questions that they want answered
and a very narrow and technical view of relevancy when it comes to questions
they do not want to answer.
[17] The questions that the
Crown wants answered are set out in Schedule E to the affidavit of
Salvatore Tringali, an employee of the Canada Revenue Agency, sworn on
March 15, 2007. The questions are as follows. (The schedule also contains
the relevant portions of the transcript of the examination for discovery of the
appellant). I have not reproduced the portions of the transcript or any of the questions
which counsel informed me are no longer in issue:
|
Page No.
|
Question No.
|
Description
|
|
|
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Refusals relating to 1998
|
|
10 & 11
|
35
|
To answer questions with respect to the documents
at Exhibit 1, Tab 1, promotional material provided by Artistic
Ideas and dated 1998.
|
|
11
|
36
|
To answer any questions with respect to the 1998
taxation year.
|
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11 to12
|
37
|
To answer questions about the Appellant’s understanding
of how the program worked when he first became involved with Artistic Ideas.
|
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12 to 13
|
38
|
To answer questions with respect to Appellant’s
involvement in the purchase and donation of art through Artistic Ideas in the
1998 taxation year.
|
|
36
|
115 & 118
|
Whether the documents at Exhibit 1,
Tab 2A concerned the catalogue of prints that were available in 1998?
|
|
43
|
156
|
Whether there was a schedule attached at the time
the Appellant executed agreement at Exhibit 1, Tab 66, in 1998?
|
|
45 & 46
|
169
|
To make inquiries of Mr. Richmond to
determine what his knowledge was with respect to the location of the prints
[at the time the Appellant entered into his purchase agreements].
|
|
51
|
183
|
To answer questions relating to an order form in
1998 and the deeds of gift executed in 1998.
|
|
52
|
184
|
To answer questions with respect to correspondence
sent by Artistic Ideas to one of the charities on the Appellant’s behalf in
1998.
|
|
52
|
185
|
To confirm the details of the specific prints that
the Appellant acquired and donated in 1998.
|
|
52
|
186
|
To answer questions with respect to the donation
receipts and purchase cost in 1998.
|
|
74
|
260
|
Re Tab 3, Exhibit 2, to confirm whether
these are the specific titles that Appellant donated to the League for Human
Rights B’nai B’rith in 1998.
|
|
|
|
Refusals relating to 1999
|
|
52
|
187
|
Whether the Appellant recalls, in 1999, donating
ten prints acquired in 1998 to one of the charities?
|
|
62
|
212
|
Whether the Appellant ever took possession of the
ten prints from 1998 and which the Crown says were donated in 1999?
|
|
63
|
214
|
How did the donation of the ten prints that you
acquired in 1998, how did the donation of those prints in 1999 come about?
Did someone approach the Appellant about it?
|
|
64
|
215
|
How did you go about selecting which charities you
would donate the prints to in 1999?
|
|
75
|
261
|
Re Exhibit 2, Tab 3, to confirm whether
these are the ten eleventh prints that Appellant acquired in 1998, and
donated in 1999, to Ballet Creole.
|
|
91
|
298 & 299
|
To answer a series of questions with respect to
the 1999 taxation year.
|
|
|
|
Refusals relating to 2000
|
|
94 & 95
|
306 to 308
|
What the Appellant’s expectations were of the
effect of clause 7 of the document appearing at Tab 68, Exhibit 1,
and whether they were that each group of ten prints would have an appraised
value of $10,000.
|
|
118
|
370
|
To confirm that it was the Appellant’s expectation
that the prints that he acquired as part of this purchase agreement in 2000
would have appraisals accompanying them in an amount not less than $21,000
per group.
|
|
|
|
Refusals relating to Donation Tax Credit Claims in
1998 & 1999:
|
|
125 & 126
|
395 to 399
|
To answer questions with respect to Appellant’s
donation tax credit claims, with reference to his income tax returns for 1998
and 1999.
|
|
|
|
Refusals relating to Appraisals:
|
|
129 & 130
|
409
|
To answer question with respect to the appraisals
that Appellant relied on and that were obtained for the donations in 1998 and
1999.
|
|
140 to 145
|
445 & 446
|
To produce working papers for the pre-litigation
appraisals provided by Leslie Fink, Edith Yeomans, and Charles Rosoff
for 1998, 1999, and 2000, including the letter or terms of engagement,
retainers of the expert appraiser, all notes, working papers, and related
documents, invoices or any other information received with respect to what
were viewed as comparable sales, and copies of any draft reports that were
issued by the appraisers or prepared by the appraisers, and copies of
invoices and confirmation of the number of hours with respect to their
billing of Artistic Ideas.
|
|
|
|
Refusal relating to 2001:
|
|
181
|
558 to 661
|
Whether the Appellant participated in Artistic’s
art donation program in 2001.
|
[18] Counsel for both parties have repeatedly stated that
the sole issue is the fmv of the prints that were donated. Whether the art
donation program constituted a tax avoidance scheme, what the appellant might
have expected or understood in engaging in the art donation arrangements, or
whether his motivation might have been charitable or tax-driven strikes me as
entirely irrelevant to that issue. Moreover, the fact that the appellant might
have engaged in similar art donation arrangements in previous years might be
relevant to his intent and expectations in the year 2000 but that in itself is
not relevant. It is not like a real estate trading case where the fact that a
taxpayer engaged in similar transactions in other years is relevant to the
question of intent. Here, intent is not a pertinent consideration. As was said
in Klotz v. The Queen, 2004 DTC 2236, affd FCA 2005 DTC 5279:
[22] One thing is clear, albeit probably irrelevant
to what has to be decided here, and it is that Mr. Klotz's motivation in
participating in this program was purely the anticipated tax benefit. The
broadening of the cultural or intellectual horizons of the students at FSU was
not a factor. He never asked what FSU was going to do with the prints. In 1999,
FSU received 1,450 prints from various donors and presumably issued receipts
for at least $1,450,000.
[23] He received substantial promotional
materials from the AFE program. They contain a page or two of idealistic and
somewhat hifalutin verbiage about the social benefit of giving art to
educational institutions but the bulk of the material has to do with the tax
advantages. Two opinions from well-known law firms were received. The opinions
are carefully drafted but like most legal opinions that I have seen in respect
of transactions in which the reduction of tax is a significant factor, they are
more in the nature of a dissertation on the various provisions of the Act
in the government's arsenal that might be used to attack the intended tax
result. Such opinions are stated to be subject to so many qualifications,
provisos and assumptions that it is difficult to see how a client could derive
much comfort from them.
[24] Mr. Klotz did not receive Ms. Laverty's
appraisal until after he had donated the art works.
[25] It is unnecessary for me to deal at any
greater length with the donor. Mr. Klotz made a mass donation of limited
edition prints to FSU. He did not see them or have them in his possession. He
was indifferent as to what they were or who they went to or what the donor did
with them. His sole concern was that he receive a charitable receipt. None of
this is relevant to the issue. A charitable frame of mind is not a prerequisite
to getting a charitable gift tax credit. People make charitable gifts for many
reasons: tax, business, vanity, religion, social pressure. No motive vitiates
the tax consequences of a charitable gift.
[19] Similarly, the questions
asked by counsel for the appellant to which the respondent objected strike me
as equally irrelevant. The policies of the CRA, its past and current practices
do not advance the appellant’s case. The question might be asked “Suppose the
deponent answered all of the questions on the CRA’s policies in the manner most
favourable to the appellant, could those answers, if read into evidence help
the appellant one iota?” The answer I think would be no. It was said by
Viscount Simon in Gold Coast Selection Trust Limited v. Humphrey
(Inspector of Taxes), [1948] A.C. 459, that valuation is an art, not an
exact science. Nonetheless, the fmv of an object is a matter of objective fact,
not of policies formulated by the CRA. The identity, experience and
qualifications of appraisers used by the CRA in making the assessment are of no
significance in the determination of value in this Court.
[20] I have, with some
hesitation, allowed the appellant to amend his notice of appeal to plead in
effect that he relied upon published policies of the CRA with respect to donations
of art. I think in fairness to the appellant he should be entitled to make such
an argument even though I personally have serious doubts about how it advances
his case. Since the appellant argues that he relied upon policies of the CRA I
do not think it helps him to find out about policies and practices that he did
not rely upon or know about. I think however that both parties in their
examinations for discovery are, at least in respect of the questions that are
refused, engaging in fruitless and time-wasting fishing expeditions.
[21] It occurred to me that,
in terms of sheer irrelevancy of questions asked on discovery, counsel for both
parties were in more or less a dead heat and that if I was going to require the
appellant’s questions to be answered I would have to do the same with respect
to the respondent’s questions. This case, however, has gone on long enough with
endless and pointless procedural skirmishing. I trust that the parties will get
on with this litigation and consider whether the answers that they are hoping
to get to the disputed questions would, in the overall picture, make a jot of
difference to their chances of success. I am aware that the threshold test of
relevancy on discovery is relatively low but there are limits. The traditional
reasons for examinations for discovery — to obtain admissions, to facilitate
proof, to determine what evidence will be used at trial, to facilitate
settlement — have been lost sight of, submerged in a morass of purposeless
interrogation.
[22] With the exception of
the question about the assessor’s file, which I am allowing, the motions by
both parties to compel reattendance to answer the questions that were refused
are dismissed.
[23] Finally I come to the
question of the Crown’s motion to examine a nominee of Artistic (the promoter)
as a third party under section 99 of the Tax Court of Canada Rules
(General Procedure), (the “Rules”) which reads:
Discovery of Non-Parties with Leave
99. (1) The court may grant leave, on such terms
respecting costs and other matters as are just, to examine for discovery any
person who there is reason to believe has information relevant to a material
issue in the appeal, other than an expert engaged by or on behalf of a party in
preparation for contemplated or pending litigation.
(2) Leave under subsection (1) shall not be
granted unless the Court is satisfied that,
(a) the moving party
has been unable to obtain the information from other persons whom the moving
party is entitled to examine for discovery, or from the person sought to be
examine,
(b) it would be unfair
to require the moving party to proceed to hearing without having the
opportunity of examining the person, and
(c) the examination
will not,
(i) unduly delay the
commencement of the hearing of the proceeding,
(ii) entail unreasonable
expense for other parties, or
(iii) result in unfairness
to the person the moving party seeks to examine.
(3) A party who examines a person
orally under this section shall, if requested, serve any party who attended or
was represented on the examination with the transcript free of charge, unless
the Court directs otherwise.
(4) The examining party is not entitled
to recover the costs of the examination from another party unless the Court
expressly directs otherwise.
(5) The evidence of a person examined
under this section may not be read into evidence at the hearing under
subsection 100(1).
Section 99 is quite restrictive and
an order permitting discovery of a third party requires strict compliance with
the provisions of section 99.
[24] On February 3,
2007, counsel for the respondent wrote to the solicitors for the appellant
asking that Artistic provide answers to 86 questions which are attached as
Schedule A to the letter. That schedule is attached as Appendix A. These
are the questions that the Crown wants to put to the representative of Artistic.
That representative (Mark Pearlman) has already been examined and
cross-examined in Artistic’s own appeal to the Tax Court of Canada. The
transcript of a third party’s examination cannot be used at trial in the same
way as the discovery of a party is used. The questions have to do with the
promotional activity of Artistic in selling the program. It may be that the
Crown wants to have the transcript of the representative of Artistic on the off
chance that he is called as a witness. The transcript might be useful as a
means of impeaching him. This is not a proper use of section 99. There is
absolutely nothing in the questions in Appendix A that can assist in
determining fmv. I regard the 86 questions in Schedule A as a case of
overkill.
[25] These motions are a
prime example of the sort of thing that justifies the criticisms that are being
made about the exorbitant cost of litigation. Thorough preparation is one
thing. Oppressive and excessive examination of irrelevant minutiae is quite
another. It is high time that the parties to tax litigation realized that
procedural wrangling and unnecessarily lengthy examinations for discovery are
putting the cost of litigation in the Tax Court of Canada out of the reach of
ordinary people. The material filed on the motions comprised affidavits,
transcripts of the discoveries and cross‑examinations of the deponents,
numerous books of documents and authorities and written argument. This
avalanche of material with which counsel inundated me and which towered upwards
of two feet in the air was of absolutely no assistance in deciding these
motions. All it did, apart from cluttering up the court’s file, was to add to
the length and expense of the proceedings. Cases are won by focussing on the
issue and by an adroit and lethal assault on the jugular, not a proliferation
of diversionary tactics.
[26] The motion to examine a
representative of Artistic is dismissed. Artistic was represented on the motion
by counsel. It is entitled to its costs. Otherwise, I am awarding no costs to
either party.
Signed at Ottawa, Canada, this 27th
day of August 2007.
“D.G.H. Bowman”
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