Docket: 2003-106(IT)G,
2003-107(IT)G
2003-110(IT)G, 2003-111(IT)G
2003-112(IT)G
BETWEEN:
BATHURST MACHINE SHOP LTD.,
MANDATE ERECTORS & WELDING LTD.,
KENNETH PITRE, LEOPOLD THERIAULT
and GERALD PITRE,
Appellants,
and
HER MAJESTY THE QUEEN,
Respondent.
____________________________________________________________________
Motions
heard on June 20, 2006 at Fredericton, New Brunswick,
By: The Honourable
Justice E.A. Bowie
Appearances:
|
Counsel for the Appellants:
|
David
R. Oley
|
|
Counsel for the Respondent:
|
Cecil Woon and Ted R. Sawa
|
____________________________________________________________________
ORDER
Upon motions by counsel for the Appellants,
pursuant to Rule 93(3) of the Tax Court of Canada Rules (General
Procedure) for Orders that:
1. Mr. John Landry be
produced by the Respondent for examination for discovery; and
2. That the Respondent
provide answers to undertakings 55, 56, 57 and 58 given at the discovery of Ms.
Claudette Miller on January 17-20, 2005.
And upon reading the material filed herein;
And upon hearing counsel for the parties;
It is ordered that:
1. The
motions to require the Respondent to produce Mr. John Landry for discovery are
dismissed.
2. The
Respondent shall provide the answers to undertaking 55, 56, 57 and 58 given at
the discovery of Ms. Claudette
Miller on January 17-20, 2005.
3. The
Respondent will be entitled to one set of costs of the motions, in the cause.
Signed at Ottawa, Canada,
this 30th day of June 2006.
"E.A. Bowie"
Citation: 2006TCC378
Date: 20060630
Docket: 2003-106(IT)G, 2003-107(IT)G
2003-110(IT)G, 2003-111(IT)G
and 2003-112(IT)G
BETWEEN:
BATHURST MACHINE SHOP LTD.,
MANDATE ERECTORS & WELDING LTD.,
KENNETH PITRE, LEOPOLD THERIAULT
and GERALD PITRE,
Appellants,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR ORDER
Bowie J.
[1] The Appellants bring these motions for Orders
requiring that
… Mr. John
Landry … be produced by the Respondent, Her Majesty the Queen, for examination
at Discovery [sic] in the within Tax Appeals.
and
for Orders requiring the Respondent to provide answers to four questions in
accordance with undertakings given upon the examination for discovery of
Claudette Miller as the Respondent’s nominee that took place from January 17 to
20, 2006. After the examination of Ms. Miller, counsel for the Respondent had
second thoughts about four of the many questions that had given rise to
undertakings; instead of providing answers, he took the position that the
questions were not relevant to the issues before the Court, and he declined to
fulfill the undertakings that had been given. At the hearing before me, counsel
for the Respondent conceded this second issue, and renewed the undertakings to provide answers to
these four questions. He was clearly correct to do so; once an unqualified
undertaking has been given, it is too late to refuse to provide an answer on
grounds of relevance: see Towne v. Miller. The Appellants are entitled
to have answers to those four questions, and an Order to that effect will go. For
the reasons that follow, I am of the view that the remainder of the Appellants’
motions must fail. My reasons will be brief, because much of the argument that
I heard will necessarily be repeated when the Appellants dispute the
admissibility of certain evidence at the trial.
[2] The income tax
reassessments that are under appeal in these cases go back as far as the 1989
taxation year. They result from inquiries made by officials of Revenue Canada —
Taxation,
beginning almost 15 years ago. These inquiries began as the result of a
telephone call received by Mr. John Landry, an official of Revenue Canada. In
addition to Mr. Landry, several other Revenue Canada personnel, including Ms. Miller,
took part in these inquiries. The Appellants’ contention before me was that the
inquiries were conducted in a way that was contrary to section 8 of the Canadian
Charter of Rights and Freedoms, and their position at trial will certainly
be that much of the evidence that they expect to see tendered by the Respondent
should be excluded for that reason. While all this was argued by Mr. Oley with
his usual vigour, there has not yet been any judicial determination at all
under section 8 in respect of any of the evidence.
[3] It is in this
context that Mr. Mockler, senior counsel for the Appellants, made a specific
request to counsel for the Respondent, by a letter dated December 10,
2004, that Mr. Landry be nominated by the Deputy Attorney General of Canada under Rule
93(3) to be examined on behalf of the Crown. The Respondent declined to produce
Mr. Landry, and instead produced Ms. Miller. Counsel for the Appellants
examined Ms. Miller for four days in January 2005, and again on March 13, 2006.
According to counsel for the Respondent, she was asked 2,410 questions, and 112
undertakings were given in the course of her examination. These numbers are not
disputed by the Appellants. What the Appellants do dispute is that Ms. Miller
was satisfactorily prepared to be examined, and that she effectively answered
the questions asked of her. Indeed, Mr. Oley takes the position that Ms. Miller
was, as he put it, inserted “to draw a veil” between Mr. Landry and counsel
for the Appellants.
[4] All that said,
an examination of the record before me does not reveal that the Appellants have
been denied an effective discovery of the Respondent. Many of the answers that
are now objected to as being incomplete and unhelpful could have been, but were
not, made the subject of additional undertakings. Counsel who accepts an answer
without asking follow-up questions or requesting an undertaking to provide a
more complete reply cannot later complain that the reply given was inadequate.
[5] In my view, the
applicable principle was correctly stated by Swinton J. in Baylis Estate v.
Attorney General of Canada,
at paragraphs 9 and 10, where she said:
[9] For
an examination of an additional representative of a corporation to be ordered,
the moving party must demonstrate that it cannot otherwise obtain the discovery
to which it is entitled. One of the purposes of a discovery is to obtain
information about the case to be met. A second is to obtain admissions from the
opposing party. The fact that the person whom the moving party seeks to examine
may be an important witness at trial is not sufficient grounds for ordering an
additional examination. It is only where the representative can not or will not
satisfactorily inform himself that an additional representative will be ordered
to be produced. [authorities omitted]
[10] Therefore,
the fact that Mr. Wilson had to give undertakings in order to answer questions
related to the Glen Report does not lead to the conclusion that an additional
representative should be produced for discovery, as it is inevitable that a
representative of the Crown or a corporation will not be able to answer all
questions posed on discovery. The usual process followed is to give an
undertaking to obtain the information from the appropriate sources, as was done
in this case.
With
the exception of the four undertakings that are the subject of these motions, I was
not referred to a single unsatisfied undertaking. There are, however, a number
of answers given that might usefully have been, but were not, followed up. My
review of the record satisfies me, however, that the Appellants have had an
effective discovery of the Respondent. What the Appellants really want to
achieve by these motions is the right to take a deposition from Mr. Landry, who
will certainly be an important witness at a later stage in these cases. Such
depositions are not any part of the procedure in this Court. As Strayer J. said
in Champion Truck Bodies Ltd. v. The Queen,
The purpose of
the examination [for discovery] is not to obtain disclosure of the intended
evidence of the particular examinee but rather of facts relevant to the
pleadings which are within the knowledge of the other party.
There
is no need for further discovery in this case; what is needed is to move the
matter forward towards a resolution of the issues on the merits without any
further delay.
[6] There is a
further reason to dismiss the motions to have Mr. Landry produced as a
representative of the Crown under Rule 93(3). That provision reads:
93(3) The Crown, when it is the party to be examined, shall select
a knowledgeable officer, servant or employee, nominated by the Deputy Attorney
General of Canada, to be examined on behalf of that party, but if the examining
party is not satisfied with that person, the examining party may apply to the
Court to name some other person.
Mr.
Landry retired on April 1, 2006, and is therefore no longer an “officer servant
or employee” of the Crown. I should perhaps point out that the news of Mr. Landry’s
retirement apparently came as a surprise to counsel on both sides. He had been
transferred to Hamilton, Ontario some
time ago, and apparently had been on leave of some sort from the fall of 2005
until his retirement in April. Counsel for the Appellants had made no enquiry
concerning the possible retirement of Mr. Landry; if they had they would
perhaps have brought the motions sooner. Nor did Mr. Oley attempt to cast any
blame on counsel for the Respondent for the fact that they too had made no such
inquiries; as he put it, “things happen”.
[7] Mr. Oley does
take the position, however, that his retirement does not preclude Mr. Landry
from being named by the Court as “some other person” to be examined as a
representative of the Crown. He argues that those concluding words of Rule
93(3) are not limited by what goes before them, and that if I am persuaded that
it is appropriate to name a second person to be discovered, then I need not
name an officer, servant or employee — I can name any other suitable person who
is knowledgeable about the subject matter.
[8] Mr. Woon argues
that the matter has been settled by the Supreme Court of Canada’s decision in The
Queen v. CAE Industries Ltd.
The Supreme Court there reversed a decision of the Federal Court of Appeal that
had required the Crown to produce the Honourable James Richardson, a former
Minister of the Crown, to be examined for discovery, holding that the words
“departmental or other officer of the Crown” did not include Mr. Richardson,
even though he had been a Minister at the time the Court of Appeal’s Order was
made, because:
… those words
can only refer to a person who is such an officer at the time that the
discovery is to take place. We say this having regard to the fact that
admissions would ordinarily be elicited to bind the Crown on issues arising in
the litigation.
The
text of Federal Court Rule 465, as it stood at the relevant time, was
significantly different from that of Rule 93(3), however. The relevant
part of it read:
465(1) For the purposes of this Rule, a party may be examined for
discovery, as hereinafter in this Rule provided,
…
(c) if the party is the Crown, by questioning any
departmental or other officer of the Crown nominated by the Attorney-General of
Canada or Deputy Attorney-General of Canada or by order of the Court, …
The
words on which Mr. Oley relies — “… some other person …” — are conspicuously
absent.
[9] Does that lead
to a different result? I think not.
[10] It is trite that
at common law the Crown was, by prerogative, immune from discovery. It follows that the limit
of the right to examine the Crown for discovery is fixed by the statute that
abolishes that prerogative. In the present case the prerogative is abolished by
section 20 of the Tax Court of Canada Act, the relevant part of
which reads:
20(1) Subject to the approval of the Governor
in Council, rules for regulating the pleadings, practice and procedure in the
Court shall be made by the rules committee.
(1.1) Without limiting the
generality of the foregoing, the rules committee may make rules
(a) for oral
examinations for discovery of officers of Her Majesty in right of Canada;
(b) for discovery
and production, and supplying of copies, of documents by Her Majesty in right
of Canada;
20(1) Sous réserve de leur approbation par le
gouverneur en conseil, les règles concernant la pratique et la procédure devant
la Cour sont établies par le comité des règles.
(1.1) Sans qu’il soit porté
atteinte à l’application générale de ce qui précède, le comité des règles peut
prendre des règles sur les objets suivants :
a) les interrogatoires préalables oraux
des agents de Sa Majesté du chef du Canada;
b) la production de documents, la
communication de leur teneur ainsi que la fourniture de copies de documents,
par Sa Majesté du chef du Canada;
It is evident that the intent
of Parliament was that Her Majesty should be subject to examination for
discovery in this Court, but that such examinations should be “of officers of
Her Majesty” (“des agents de Sa Majesté”). The words “some other person”
standing alone indeed might bear the interpretation that Mr. Oley would have me
put on them. Read in the context of the authorizing statute, however, they can
only mean some other officer of Her Majesty. The rationale for this is implicit
in the passage from the Reasons of Laskin C.J. in CAE that I have
reproduced above. One would hardly expect that the Crown, in surrendering its
immunity to discovery, would agree to be bound at trial by admissions of fact
made by persons who were not “officers of Her Majesty”.
[11] I must read Rule
93(3) in a way that is intra vires the powers given by Parliament to the
Rules Committee: see McKay v. The Queen.
That can only be done by reading the words “some other person” as being
limited by the expression that precedes it — “… a knowledgeable officer,
servant or employee …”. Section 20 does not confer on the Committee the power
to make a rule that would cause the Crown to be bound by answers given on an
examination of someone who is not, at least in a broad sense, an officer of Her
Majesty in right of Canada.
[12] The applications to require
that Mr. John Landry be produced to be examined for discovery as a nominee of
the Respondent are dismissed. An Order will go requiring the Respondent to
furnish to the Appellants answers to undertakings numbered 55, 56, 57 and 58 on
the examination of Ms. Miller. One set of costs of the motions will be to the
Respondent, in the cause.
Signed at Ottawa, Canada, this 30th day of June 2006.
"E.A. Bowie"
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