|
Citation: 2004TCC767
|
|
Date: 20041129
|
|
Docket: 2000-1401(IT)I
|
|
BETWEEN:
|
|
MICHAEL WETZEL,
|
|
Appellant,
|
|
and
|
|
|
|
HER MAJESTY THE QUEEN,
|
|
Respondent.
|
REASONS FOR JUDGMENT
MargesonJ.
[1] By Notice of Appeal (Amended)
(Informal Procedure) dated August 30, 2001 and received
at the Tax Court of Canada on September 4, 2001, the
Appellant purported to appeal assessments of the Minister for the
taxation years 1988, 1994 and 1995 and asked for an Order
vacating assessments for those years.
[2] He further sought an Order for the
return of taxes and interest already paid by the Appellant
between 1974 and 1987 should this Honourable Court determine that
a Reserve has existed in Conne River since 1870 (but I presume he
meant 1984) and that the Appellant was a member of that Band
during that period.
[3] The Minister assessed the
Appellant for the 1988 taxation year by including in his income,
inter alia, an amount of $42,941 received as employment
income. At the Appellant's request and pursuant to the
Fairness Legislation, the Minister subsequently reassessed the
Appellant by Notice of Reassessment Number 1508043 dated October
12, 1995 allowing the Appellant's claim for the married
amount exemption. Prior to issuing the aforementioned
reassessment by letter dated September 1, 1995, the Minister
advised the Appellant that no Notice of Objection could be filed
with respect to the 1988 reassessment. The Minister's
position is that that appeal is not properly before the
Court.
[4] With respect to the
Appellant's 1994 taxation year, the Minister originally took
the position that the Appellant had not filed a valid Notice of
Appeal. In so assessing the Appellant for that year, the Minister
included in his income, inter alia, an amount of
$134,576.34 received from the Miawpukek Band as a retiring
allowance.
[5] With respect to the 1995 taxation
year, the Minister assessed the Appellant by Notice of Assessment
dated October 7, 1996. In so assessing the Appellant for the 1995
taxation year, the Minister included in the Appellant's
income, inter alia, an amount of $23,759.15 received
by the Appellant as registered retirement savings plan
("RRSP") income.
Evidence
[6] Mr. Justice Richard LeBlanc
testified that prior to being appointed to the Bench in 1989 he
was a lawyer for the Miawpukek Indian Band. He worked with the
Appellant, Chief Michael Joe and Marilyn John with respect to
various Band issues including the registration of the Conne River
Indians as a Reserve and the transfer by the province to the Band
of certain functions such as health and education.
[7] He worked for the Band between
1981 and 1989. He was involved in the dispute between the Federal
Government and the Band. The matters were not dealt with when
Newfoundland joined Canada in 1949. There was a considerable
amount of angst about this matter. It was a testy period of time.
Once the Band was registered in 1984 things settled down. The
Appellant was the primary individual involved in these matters
but this witness, the Appellant, Chief Michael Joe and
Marilyn John acted as a team to get the matters resolved. He was
instructed by the Appellant who was the Band administrator at the
time and who was regarded as the individual who was "shaking
things up".
[8] Exhibits A-1, A-2 and A-3 were
admitted through this witness subject to weight and relevance.
Justice LeBlanc never saw the Advisory Committee Report but he
saw documents which contained excerpts from the original Report[1]. In it the
Appellant was recommended to be included on the Band list. This
witness said that "as far as he understood" the
Appellant was approved by the Minister to be added to the Band
list. They were told that they could never see a Cabinet paper
but the material that they submitted would be considered in the
Cabinet papers. The process was ongoing[2].
[9] Exhibit A-2, Tab 5 was a letter
that he wrote to David Crombie, the Minister of Indian and
Northern Affairs at the time, with reference to a meeting that
they had held. He also wrote another letter[3]. He was familiar with other documents
that he reviewed[4]. These represented the last involvement he had with
the matter. This letter dealt with the promised amended criteria
for Band membership and the taxation Remission Order from January
1, 1985 to the date of the recognition of the Reserve at Conne
River.
[10] He referred to a memorandum from P.
McDowell to D. Goodwin and said that this was provided to him
from someone in the Department of Indian and Northern Affairs[5]. This supported
his position that at the time everyone had agreed that there
would be an amendment to the Order-in-Council which
had initially set the membership Band requirements. These
requirements would be changed to read "of Indian
ancestry" and not "Canadian Mic Mac Ancestry"[6]. This was not
done. The wording was changed to "Indian Ancestry" but
ultimately that was changed to "Canadian Indian
Ancestry". Because of this failure to make the amendment to
the legislation which was promised, the Appellant was excluded
from the second list of Band members when his name had been
included in the original list approved by the Order-in-Council
earlier made (together with those who had died).
[11] Exhibit A-2, Tab 9 contains excerpts of
a meeting which was held indicating that qualifications for being
a member of the Band would be changed to "Indian
Ancestry". It was his understanding that it was changed to
"Canadian Indian Ancestry" to keep Mr. Wetzel
off of the list.
[12] Subsequently Mr. Wetzel and Chief
Michael Joe lost their positions as the result of a power dispute
within the Band. Originally there was no objection to the
Appellant being included on the Band list.
[13] In cross-examination he said that
between September 1, 1981 and 1989 he did work for the Band.
There were two Orders-in-Council with respect to the Conne River
Band. One Order-in-Council was completed in 1984 and
the other in 1989. He was aware of the fact that the persons with
whom he was dealing did not have the final say.
[14] In the 1984 Order-in-Council, the
decision of the Cabinet was to make the requirement
"Canadian Mic Mac Ancestry". This was changed in 1989
to "Canadian Indian Ancestry". This was the final
Order-in-Council with respect to this matter. He was not aware of
how that change was made. It was his position that no one could
challenge the authority of Cabinet.
[15] He was told by someone in Indian and
Northern Affairs that the change of the wording to
"Canadian Indian Ancestry" was done in an attempt
to keep the Appellant off of the list of members of the Conne
River Reserve. However, no Minister ever admitted this to him. He
was aware of the fact that the Appellant was a person who had
made some enemies in the Department of Indian and Northern
Affairs.
[16] Marilyn John testified that she lived
in Conne River all of her life. The Conne River Band is also
referred to as the Miawpukek Band. She was chief for two years
between 1988 and 1990. She was a councillor in 1980. She was
involved with the Federation of Newfoundland Indians. She was the
organizer of the Federation which was founded in 1973.
[17] She was involved in negotiations for
funding of the Conne River Band. She was familiar with the Conne
River Registration Advisory committee established in 1966. This
consisted of Chief William Joe, Malvin Jedore, Chief Alex Denny
and Les Smith of the Department of Indian and Northern Affairs.
The Minister was Warren Almand.
[18] She did research for the compilation of
the list of members for the Band. There were some connections
between two families at Conne River and other Bands in Nova
Scotia. However, it was very difficult to connect them. These
persons left Conne River and went to Nova Scotia before 1949.
These included the names Jedore, Benoit and Michael Martin. These
people became registered in Bands in Nova Scotia. They were not
Canadian citizens.
[19] The original criteria for registration
for the Conne River Band were:
1. North American Indian
ancestry;
2. Resident in Conne
River; or
3. The spouse of or an
adopted child of a person of North American Indian ancestry.
[20] Some of the residents were not of Mic
Mac origin. They wanted all of the residents to be included on
the list who were of Indian ancestry. These recommendations were
accepted by the Department.
[21] She referred to the proposed membership
list[7] as a final
report with respect to the Conne River Advisory Committee. The
Appellant's name appeared on this list. They were directed to
prepare a list of people who might be included in the initial
membership list. Many problems developed with respect to the
registration process.
[22] She was involved in 1984. She was the
manager of the Croft Co-op and a Band Councillor as well. She was
appointed by Chief Billy Joe to many committees. They had a
meeting in St. John's around 1983 or 1984 with respect
to the final registration of the Band. A person by the name of
Rem Westland was appointed by the Minister to prepare a
Cabinet document with respect to the finalization of the Band. He
came to St. John's with the Minister. She met with him
and he told them that Mr. Goodwin, the Assistant Deputy
Minister, was reluctant to push forward on the matter because he
did not like the Appellant and he was going to get him. He would
ensure that the Appellant's name never appeared on the Band
list. She was familiar with the list of Band members to be drawn
up based on the criteria set out by the Advisory Committee and
the Appellant's name was on it[8]. This list was sent to the Minister
and was referred to in a letter to the
Governor-in-Council dated December 4, 1980[9] from the Minister.
[23] The Appellant's name was also
included in a list of Band members submitted to Les Smith of the
membership branch, Department of Indian and Northern Affairs, by
its Council of the Conne River Mic Macs dated September 4,
1984[10].
[24] She was in Ottawa when the Declaration
was released for the Conne River Band. The Department of Indian
and Northern Affairs changed the criteria unilaterally to
"of Canadian Mic Mac Ancestry".
[25] This created problems with those who
might otherwise have been on the list. Many would have been
eliminated. The Band felt that it should decide who its members
would be. There was a lot of lobbying about this issue. She went
to Geneva to lobby for changes. Only the Appellant was omitted
from the list. She was not excluded (even though she should have
been using those criteria). There was a second Order-in-Council
changing the requirements to "Canadian Indian
Ancestry". The problem persisted. No investigation was
conducted to see if anyone other than the Appellant should have
been excluded from the list of Band members.
[26] There were many benefits to being a
Band member and there were many problems that developed. A
Remission Order was granted for Band members. They met with every
Minister that was appointed to change the criteria set out in the
Order-in-Council. Minister David Crombie said that he
would order the bureaucrats to have the original Order-in-Council
changed.
[27] She referred to a memorandum from P.
McDowell to D. Goodwin, dated May 27, 1985[11], which was the document relied upon
to indicate that the requirements were to be changed to
"Indian Ancestry". Minister Crombie was to order
it even though this memorandum was from P. McDowell who was
an executive assistant in the Minister's office.
Minister Crombie made that commitment at the meting but it was
never followed through.
[28] Minister Valcourt made the same
commitment. This was not carried out. No one except the Appellant
was excluded from the Band list. If the criteria had been applied
as found in the Order-in-Council, she would have been excluded
from the Band as well.
[29] She set out the Band's position in
a letter to Minister Pierre Cadieux on February 21, 1990[12] and indicated
to him that the Appellant met the criteria for Band membership.
The criteria was only changed so that his name could be struck by
the bureaucracy. This action was directed to the Appellant
personally and was against the Band's position.
[30] She indicated that there are a large
number of people who are living in the United States and yet are
members of the Band in Canada, although such persons could not be
a member of the Conne River Band. It was pointed out to the
Minister that if the criteria were applied to everyone, many
others besides the Appellant would not qualify to be Band
members.
[31] If a person were not registered as a
member of the Conne River Band, they would not be entitled to any
of the rights of members. They could not own property or receive
services from the Band.
[32] In cross-examination she said
that she did not interview any of the Appellant's people. She
was not happy with either of the first or second
Orders-in-Council. The Bands can control their
membership list as far as she was concerned but she did not know
if the Conne River Band has done so. She was not aware of any
persons who were not on the Conne River Band list that wanted to
be on, other than the Appellant.
[33] In redirect she said that the lists
were drawn up by the Committee. These lists then went to the
Chief and the Council and were finally submitted to the Annual
Assembly.
[34] Michael G. Wetzel testified that he
lived in Conne River, Newfoundland and was a solicitor. He was
originally of Shawnee Ancestry. In 1970 he came to Newfoundland
and did post-graduate work at Memorial University. In 1972
he was employed by the Native Council of Canada and his duty was
to organize all of the Native committees in Newfoundland and
Labrador. Conne River was one of these committees.
[35] He established an office in
Newfoundland. In 1974 he went to work exclusively on the Conne
River project. He is married and still resides at
Conne River. There were no Bands in Newfoundland at that
time and no services because the Federal government decided not
to apply the Indian Act to Newfoundland. He and
others went to Warren Allmand who was the Minister of Indian and
Northern Affairs and he set up the Conne River Advisory
Committee.
[36] In 1979 the report was finalized. Mr.
Faulkner was the Minister of Indian and Northern Affairs at that
time. He said that he would act. Then the government changed and
Jake Epp became the Minister of Indian and Northern Affairs. He
said that he would act on the committee's recommendations and
proceed with the registration of the Band.
[37] The Minister of Indian and Northern
Affairs committed himself to setting up a Membership Committee at
Conne River to establish the membership criteria[13]. His name, his wife's name
and his son's name were on the list. Membership criteria was
approved[14].
[38] A consultant was employed to trace the
ancestry of the residents. The Appellant was asked for proof of
his ancestry and his father produced an Affidavit which was given
to the Committee. It was subsequently lost although he asked his
father to draw up a new affidavit and he did[15].
[39] The Committee's recommendations
went forward. There was tremendous resistance among senior
officials in the Department against having the Band
registered.
[40] In 1980 the committee made
recommendations on the registration of Conne River using
the criteria agreed upon and listing the proposed members of the
Band. It was never acted upon in 1980[16].
[41] He was told that Mr. Goodman was going
to get even with him. Certain cabinet documents[17] indicated that when the Conne
River Band was created, one of the criteria required a member to
be of "Canadian Mic Mac Ancestry". This meant that he
was not qualified. Many other people were upset as well as they
would not be qualified. He referred to page 9 of the cabinet
document and said that the policy reasons that they were talking
about were "him".
[42] He was not challenging the Income
Tax Act or the Indian Act but was only relying upon
sections 15 and 7 of the Canadian Charter of Rights and
Freedoms ("Charter"). He did not pay his
taxes in 1988. In all of the objections that he filed since 1986
a letter was sent with respect to the return for each year
similar to his 1994 taxation year[18]. This was sent in before the
assessment but he still considered it to be his objection.
[43] With respect to the year 1987, he
received no confirmation and therefore no Notice of Appeal was
necessary. He said that he did file a Notice of Appeal for 1994[19] (although there
is no such Notice of Appeal in the records). There was also a
valid Notice of Appeal in 1995. In 1993 he relied on the
Minister's word that he would be reinstated as a Band member
and he would not have to file an Appeal. There was no point in
filing an Appeal.
[44] He recalled being at a discovery of one
Joe Leask who was the Director General of Reserves and Trusts who
said under oath that the term "Canadian Mic Mac
Ancestry" could not be applied.
[45] Mr. Valcourt was to look into why he
was not added on to the Band member's list[20]. The briefing notes of the
Minister of State indicated that Mr. Crombie undertook to
amend the Order-in-Council to read
"Indian Ancestry"[21] and this was referred to
subsequently in a letter from Tom Sidden on May 11, 1990[22].
[46] In cross-examination he admitted
that he was not of Canadian Indian ancestry. He said that his
father passed away this spring. There is a registration system in
the United States.
[47] Mr. LeBlanc filed an objection in 1985
for all of the Band members including himself. (But it was
pointed out that the document that he relied on for that position
did not refer to an assessment but only to a Remission Order for
1985 and 1986.) A Notice of Appeal (Informal) was filed for 1984,
1985 and 1986 but it did not mention 1994[23]. He said that the years 1985 to
1995 are under appeal.
[48] The Respondent called the Appeals
Officer, Ford Hayden, only for the purpose of allowing the
Appellant to cross-examine him. He said that he had been
with Canada Customs and Revenue Agency ("CCRA") for 24
years and 11 of those years were in Appeals. He was familiar
with the records kept by CCRA. He did not know how long they keep
the records. He did not have the Appellant's 1985 and 1986
returns. He said that no objections were filed for 1985 and 1986.
He did not check in the Conne River Band file. No other
information was available to him. No one asked him to look for
the Conne River file. Between 1986 and 1993 there were
adjustments made under the Fairness Package. In order for a
Notice of Appeal to be valid it must refer to a given Notice of
Assessment.
[49] In answer to a question posed by
counsel for the Respondent he said that if there is a group file,
it would also be listed under the name of the individual member
of the group.
Argument on Behalf of the Appellant
[50] The Appellant said that the sole
question before the Court is whether or not there is an issue
under the Charter of Rights and Freedom
("Charter"). He was not challenging the
legislation but only the effect of the Order-in-Council. In March
2000 when he paid the $100 filing fee, he told the Court that he
was looking for disclosure and wished to raise a section 15
argument with respect to the 1988, 1994 and 1995 assessments and
the years 1985 and 1986.
[51] With respect to the documentary
evidence produced by him, he said that these were records made in
the ordinary course of business and should be received in
evidence without calling the maker.
[52] The government owes a fiduciary duty to
him. He had assurances from several ministers that certain
criteria were going to go forward to Cabinet. Certain officials
changed this to exclude only him from the Band list. He was
excluded and no others were excluded. This was unequal
treatment.
[53] Information was given to the Governor
in Council that caused an Order to be made to exclude him from
the Band list. He referred to the case of
Wewaykum Indian Band Canada, [2003] l C.N.L.R.
341 at p. 363 and argued that the solution to his problem does
not lie in rectifying the order in council but in the law
concerning the fiduciary duty owed to the Band by the government.
He took the position that his exclusion from the Band list was a
breach of fiduciary duty to him and to others although it was
only applied to him. He was the only one left off of the list. As
a result of this breach he had to pay taxes.
[54] What has happened to him was a breach
of his section 15 rights under the Charter. His right to
equal treatment was breached when the
Governor in Council received improper information to
exclude him from the list. He was prevented from enjoying the
benefit of the tax exemption.
[55] He referred to Brant v. Minister of
National Revenue, 92 DTC 2274 and Mercier v. Minister
of National Revenue, 92 DTC 1681. He took the
position that the Tax Court has jurisdiction to deal with the
breach of Charter issue. He referred to Operation
Dismantle Inc. v. Canada, [1985] 1 S.C.R. 441. That case
holds that the Governor-in-Council cannot take action that
offends a group or an individual and deprive him of his
Charter rights. This is what happened here. The Tax Court
of Canada has jurisdiction to strike down the assessment on that
basis.
[56] He also argued "estoppel" and
said that there was a commitment made to him that he would be a
member of the Band and that the Order-in-Council
would be changed to accomplish this. If this had been done he
would not have had to pay taxes. He has been detrimentally
affected by the actions of the Minister in the passing of the
Order-in-Council which prevented his name from being
on the list of Band members.
[57] He referred to Taylor v. Canada,
[1995] T.C.J. No. 414 at paragraph 19 on the issue of promissory
estoppel and said that these requirements have been satisfied. He
also referred to Ross River Dena Council Band v. Canada,
[2002] 2 S.C.R. 816 in support of his position that the
officials from the Department of Indian and Northern Affairs that
he was dealing with had sufficient authority to bind the Crown
and they did so when they promised to amend the
Order-in-Council changing the requirement to
"Indian ancestry". The
Governor in Council was bound by the undertakings of
Ministers Munroe and Faulkner and others.
[58] With respect to the assessments
themselves there were credits to which he was entitled on his
account which are more than enough to make up for what the
Minister alleges that he owes.
[59] The appeal should be allowed with costs
and the assessments should be vacated for the years 1988, 1994
and 1995.
[60] As a result of the breach of fiduciary
duty his equality rights were breached. He is entitled to the
appropriate remedy. This was a breach of his section 15
rights.
Argument on Behalf of the Respondent
[61] Counsel said that this is an appeal of
an income tax assessment. Only the years 1994 and 1995 are
validly under appeal. The remainder of the years are not under
appeal and the Affidavit filed covers that issue.
[62] The appropriate provision of the
Income Tax Act is paragraph 81(1)(a) which allows
exemption for those who qualify under the Indian Act.
Section 87 of the Indian Act exempts Indians from
taxation. The simple question is whether or not the Appellant was
an Indian under the Indian Act during those years.
Paragraph 6 of the Indian Act entitles certain persons to
be registered. The Appellant must become a member of the Band
under the Orders-in-Council in order for him to
qualify for the exemption. He does not qualify under the Order.
He is not an Indian and therefore is not entitled to
exemption.
[63] With respect to the argument of
fiduciary duty, there was no such duty owed to the Appellant
because he was not an Indian. The Tax Court of Canada is not a
Court of equity. A fiduciary duty is an equitable duty and any
relief is an equitable relief. Any such relief cannot be granted
by this Court.
[64] With respect to the estoppel argument,
this also is an equitable claim and any relief sought is an
equitable relief. That relief is not available here.
The Equality Argument under Section 15
[65] Notice must be given under section 57
of the Federal Court Act before this Court is entitled to
strike down any statute or any part thereof. Despite the fact
that the Appellant says he is not seeking to have any part of the
Act struck down, this is in effect what he is doing. The
Order-in-Council has to be overlooked in order for the Appellant
to be granted the relief he seeks.
[66] In Mercier, supra, the Appellant
was seeking to challenge a section of the Income Tax
Act.
[67] In order to give effect to any claim
under section 15, the Court must ignore the Order-in-Council. If
it does there would be no Order-in-Council. The Appellant still
would not be a member of the Band. He still would not be exempt.
This Court is not entitled to "write in" such a remedy.
This Court cannot make a change in the legislation. Any remedy,
if available, is not for this Court.
[68] The Appellant relied upon
RossRiver, supra, to say that a
Minister of the Crown can bind the Governor in Council.
This case does not say that. In that case, promises had been made
to set the lands aside and the issue was whether the lands had
reserve status. The officials that the Appellant dealt with here
did not have the authority to bind the Crown. That specific
authority had not been given. That final authority rested with
the Governor in Council. The Governor in Council could
not be bound by these promises. If the Court struck down the
Order-in-Council there would be a vacuum and there would be no
assistance to the Appellant. The Order-in-Council represents the
law of the land. Those arguments are not for this Court. This is
an Income Tax case. Even if the Charter arguments were
validly before the Court, which they are not, the Court could
only ignore the law, that is, the Order-in-Council
and still that would not assist the Appellant.
[69] With respect to the accuracy of the
statement of account, it is the Court's right to order an
accounting to show what amount was paid and what amount is
alleged to be owing. The Crown is prepared to do that. Otherwise
the appeal should be dismissed. There should only be costs as a
self-represented litigant if the appellant is successful.
[70] In rebuttal the Appellant said that he
was not seeking equitable relief. He was not asking to have any
section of the Income Tax Act struck down. He was only
asking for a section 15 remedy. There is a remedy under
subsection 24(1) as can be seen in Schachterv.
Canada, [1992] 2 S.C.R. 679 at paragraph 7. It is important
to the Court to fashion the remedy. His equality rights were
breached.
[71] He referred to the book Native Law[24]
where it was indicated that an American member of the
St. Regis Band, also known as the Mohawks of Akwasasne,
a Band that straddles the borders of Canada and the United
States, was still an Indian within the meaning of the Indian
Act[25].
Analysis and Decision
[72] The first issue in these appeals is the
question of what years are properly before the Court. At the end
of the day, the Appellant argued that all of the years between
1985 and 1995 were under appeal and to that end he relied upon
various letters that he had written to the Minister throughout
that period in which he said that he took issue with all of the
assessments since 1985. However, the Court is satisfied that the
Appellant cannot be successful in that regard because these
letters did not amount to valid Notices of Appeal even though the
Appellant may have indicated to the Respondent that he was taking
issue with the assessments and with the general idea of paying
taxes when he believed that he was exempt. The Court is satisfied
that these various letters and the Appellant's affirmation
that he was taking issue with paying taxes did not amount to
valid Notices of Appeal.
[73] Initially counsel for the Respondent
took the position that only the year 1995 was validly under
appeal. However, by the time of argument he was prepared to agree
that the years 1994 and 1995 are validly under appeal. He
appeared to have been convinced during the trial after viewing
certain documentation, that the year 1994 was also validly before
the Court.
[74] The Court is satisfied that the years
1994 and 1995 are validly before the Court by way of appeal.
However, the Court is satisfied that the year 1988 is not validly
before the Court nor are the other years referred to above. It
was made clear to the Appellant when he was reassessed, at his
request, pursuant to the Fairness legislation, that when he was
allowed the exemption for the married amount, prior to issuing
the reassessment on September 1, 1995, that no Notice of
Objection could be filed with respect to the 1988 reassessment.
The Minister took the position that that appeal is not properly
before the Court and the Court is satisfied that this position is
correct.
[75] Therefore, the appeals with respect to
the years 1988 and the other years other than 1994 and 1995 are
dismissed and the Minister's assessments with respect thereto
are confirmed.
[76] The secondary issue which arose was the
Appellant's contention that irrespective of the result in
this decision he does not owe the Minister any money because he
has remitted sufficient funds to cover any deficit which might
arise even if this decision goes against him. At the end of
argument counsel for the Respondent was not adverse to this Court
ordering an accounting of the Appellant and this Court thinks
that that would be a proper course of action.
[77] The Court orders that the Respondent
make an accounting of the Appellant for the years in issue,
showing the amounts that the Minister has calculated that the
Appellant owes, showing all credits to which the Appellant was
entitled during the period in issue and giving unto the Appellant
sufficient information to allow the taxpayer to reasonably be
able to conclude what amounts were allegedly owing, what amounts
of interest were being charged, what amounts the Appellant paid
to the Minister by way of credit and consequently enable him to
conclude the amount still owing and the basis for it.
[78] That leaves for consideration the
validity of the assessments for the years 1994 and 1995. The
Court cannot grant to the Appellant all of the relief that he
seeks because it does not have the jurisdiction to do so.
However, the Court is satisfied that it has jurisdiction to deal
with the validity of the assessments for the years 1994 and 1995.
The only relief that the Court could give would be to vacate the
assessments for those years and grant costs to the Appellant. In
essence, the Appellant asked the Court to vacate the assessments
for the years 1994 and 1995 on the basis of a violation of his
rights under the Charter.
[79] The Appellant made it clear that he was
not challenging the legislation, i.e. the Income Tax
Act or any other legislation but only the effect of the
Order-in-Council which had the result of excluding
him from being a member of the Conne River Band which in turn
excluded him from enjoying the benefits of being on that list of
Band members. Had he been on that list of Band members, he would
have been exempt from paying taxes on money earned on the Reserve
under the Indian Act[26]. He raises an argument under section 15 of the
Charter. He asks for the appropriate remedy under this
section which would be whatever the Court considers appropriate
and just in the circumstances.
[80] The Appellant admits that he did not
comply with the provisions of section 57 of the Federal
Court Act. He says that he did not have to comply with this
section because he is not asking to have any statute struck down
or any law declared to be invalid. He is merely saying that his
Charter rights have been violated and he is seeking the
appropriate remedy.
[81] Counsel for the Respondent, on the
other hand, takes the position that the Appellant is in the wrong
court. He is seeking a remedy from the Tax Court of Canada which
it does not have the authority to give. In so far as he was
concerned the simple question before the Court was whether or not
the Appellant was an Indian under the Indian Act during
the years in question. Paragraph 6 of the Indian Act
entitles certain persons to be registered but the Appellant was
not a member of the Band on the basis of the
Orders-in-Council in issue and he was not entitled to
the exemption. Simply put, he was not an Indian and therefore he
was not entitled to the exemption.
[82] He referred to the Appellant's
argument of fiduciary duty and said that this did not apply to
the Appellant because he was not an Indian (under the
Indian Act). The Tax Court of Canada is not a court
of equity. A fiduciary duty is an equitable duty and any relief
to be granted is an equitable relief. Any such relief cannot be
granted by this Court.
[83] With respect to the estoppel argument,
this too is an equitable relief and this Court is not entitled to
grant it. The relief is not available here.
[84] The Appellant was required to give
notice under section 57 of the Federal Court Act
before this Court is entitled to strike down any statute or any
part thereof. It was his position that in effect the Appellant
was asking for the statute to be struck down (i.e. the
Order-in-Council). At the very minimum he was asking
that the Order-in-Council be overlooked in order for
him to be granted the relief he seeks. However, even if the Court
ruled to overlook the Order-in-Council it would not
be of benefit to the Appellant because the Appellant still would
not be a member of the Band and he would not be entitled to the
relief he seeks. This would require a change in the legislation
and this Court cannot make the change in the legislation. Any
remedy, if available, is not for this Court.
[85] With these arguments, the Court cannot
agree. The Court is satisfied in accordance with the argument of
the Appellant that he was not bound by the provisions of section
57 of the Federal Court Act. The Court is satisfied that
he is not seeking to have the Income Tax Act or any part
thereof struck down, nor is he seeking to have any part of the
Indian Act struck down, nor is he seeking to have any of
the Orders-in-Council declared to be invalid. Since
he is not seeking to have a statute declared to be invalid, or of
no consequence or to have some other section written in which
would have the effect of varying the statute in question, then he
is not bound by the requirements of section 57 of the Federal
Court Act.
[86] In essence, the Appellant is seeking
relief under the Charter. The sole question before the
Court is whether or not the Appellant has laid out the factual
groundwork to enable the Court to grant the so-called
"Charter relief".
[87] This case proceeded under the Informal
Procedure and the Court must take into account the provisions of
the Tax Court of Canada Act, Revised Statutes of
Canada, 1985, chapter T-2, subsection 18(4). In hearing an
appeal under this provision, the Court is not bound by any legal
or technical rules of evidence in conducting a hearing for the
purposes of the Act, and can deal with it as informally
and expeditiously as the circumstances and the consideration of
fairness permit. This provision was cited by counsel for the
Appellant and was not seriously contested by counsel for the
Respondent who was prepared to allow the various pieces of
evidence, including the exhibit evidence, to be admitted, subject
to weight and relevance. The Court in interpreting the viva
voce evidence and the documentary evidence has borne this in
mind.
[88] It was obvious from the manner in which
counsel for the Respondent replied to this appeal that he was
satisfied that there was probably an injustice done to the
Appellant in this case. If the Court is correct in reading
between the lines of his submissions, the Appellant should be
entitled to some remedy but his position was that such a remedy
cannot be obtained before the Tax Court of Canada.
[89] Both parties were aware of the fact
that the Appellant was entitled to make a protest to the
Registrar pursuant to section 14.2 of the Indian Act
regarding the omission of his name from the Indian Register or
the omission or deletion of his name from the Band list as
maintained under the Indian Act. However, it would be
trite to say that from the time that the formation of the Band
was contemplated there were many changes on the Reserve itself
with respect to the governing body on the Reserve; many
personalities changed; the Appellant himself may very well have
created some opposition among the Band members in attempting to
have his name added to the list and it may not have been
practical for him to make the protest to the Registrar as
provided in that section. Further, as a power struggle ensued on
the Reserve for a number of years and the leadership changed it
may very well be that many persons who might have otherwise
supported the Appellant's position may have changed their
allegiance and may very well have been satisfied that since their
name was on the list they were not going to "rock the
boat".
[90] The Court has no doubt that it has no
jurisdiction to determine the Appellant's status as an
"Indian" under the Indian Act and it will not
attempt to do so. There is no doubt in the Court's mind that
during the relevant period of time the Appellant was not
registered as a Indian within the meaning of section 2 of
the Indian Act. However, the issue of whether or not he
was entitled to be registered is the subject matter of the
Appellant's argument that his Charter rights were
violated in the end by having his name left off of the list of
members of the Band.
[91] The Court was most impressed with the
evidence of the Appellant himself as well as the other witnesses
who were called to testify by him. They had intimate historical
knowledge of the Band at Conne River, its personalities, the
attempts to have the Reserve created and the various changes
which took place in the criteria for Band membership which were
ultimately described in the Order-in-Council which
was passed on November 2, 1989 and which is at the centre of this
appeal.
[92] Further, the Appellant was in the
forefront of the attempt to organize the Band, have the Band
registered and have the Reserve created and was in close,
sometimes personal contact with several Ministers of the Crown
acting in their capacity as Minister of Indian and Northern
Affairs and with many people in the bureaucracy. It is obvious
from the viva voce evidence, from perusal of the evidence
introduced by way of documentation and from any reasonable
inference that the Court is entitled to draw from both sources of
evidence that the Appellant encountered stiff opposition from the
beginning in his attempt to organize the Bands in Newfoundland
and Labrador, in his attempt to have the Band created at Conne
River and the establishment of the list of persons to be included
in the Band list.
[93] The opposition did not appear to come
from the Ministers but there is an undeniable conclusion to be
drawn that persons high up in the bureaucracy made a conscious
decision to keep the Appellant's name and the names of his
family off of the Band list. The sole reason for this appeared to
be nothing more than their attempt to punish him for his
confrontation with the bureaucracy and from the forceful manner
in which he proceeded when he attempted to have the Band created.
He obviously "tramped on a lot of toes and stirred up a lot
of dust" in the process. It was obvious that several members
of the bureaucracy took offence to this and they made it clear
that they were going to get back at him. No less than three
witnesses testified to this effect.
[94] Marilyn John made a startling
revelation that even though she was on the list, she would be
excluded if the criteria had been applied to her. The Court
concludes from her evidence that if the criteria for Band
membership included either "of Canadian Mic Mac
Ancestry" or "of Canadian Indian Ancestry", many
persons would have been effected and many should not have been on
the list. Yet the Appellant was the only one who was excluded
from the list based upon the latter criteria.
[95] There was no doubt in the mind of
Marilyn John that Minister David Crombie said that he would
order the bureaucrats to have the original
Order-in-Council changed to read "of Indian
Ancestry" She said that Minister David Crombie and
Minister Valcourt made the same commitment in spite of the
opposition from the bureaucracy. This commitment was not carried
out.
[96] Mr. Justice Richard LeBlanc was also a
very knowledgeable witness of the events leading up to the
passing of the Order-in-Council with respect to the Conne River
Band as he was a lawyer for the Miawpukek Indian Band. He worked
with the Appellant, Chief Michael Joe and Marilyn John with
respect to various issues including the registration of the Conne
River Indians as a Reserve. As far as this witness was concerned
the Appellant was recommended to be included on the Band list,
and his name was approved by the Minister to be added to the Band
list. He concluded that the decision to keep the term "of
Canadian Indian Ancestry" was made just to keep the
Appellant off of the list.
[97] In cross-examination he confirmed
that he was told by someone in the Department of Indian and
Northern Affairs that the change of the wording to "Canadian
Indian Ancestry" was done in an attempt to keep the
Appellant off of the list of members of the Conne River Reserve.
He was aware of the fact that the Appellant was a person who had
made some enemies in the Department of Indian and Northern
Affairs.
[98] Michael Wetzel echoed the testimony of
the two previous witnesses. To him it was obvious that after the
Committee's recommendations went forward there was a
tremendous resistance among senior officials in the Department
against having the Band registered. He was told that Mr. Goodman
was going to get even with him and this, according to him, was
accomplished by changing the criteria to read "Canadian Mic
Mac Ancestry".
[99] Counsel for the Respondent did not take
any great issue with the allegations put forward by the
Appellant, Mr. Justice Richard LeBlanc or Marilyn John. All
of this evidence was corroborative of the Appellant's
position with respect to the manner in which he was treated by
the bureaucracy of the Department of Indian and Northern Affairs.
Counsel for the Respondent was prepared to admit that something
appeared to be wrong with the way that the Appellant was treated
but it was his position that the Appellant had come to the wrong
court and that in essence what he was seeking was to have the
legislation struck down. He was asking for equitable relief which
this Court does not have the jurisdiction to give.
[100] In essence the Appellant made three different
arguments in support of his claim to have the assessments
vacated. These arguments were:
1. Fiduciary duty;
2. Estoppel;
3. Violation of his
Charter of Rights under section 15 and his right to have an
appropriate remedy for such a violation under section 24.
[101] With respect to the argument on the fiduciary duty
the Court does not believe that this is applicable to the facts
in this case. The Court is satisfied that the argument of counsel
for the Respondent on this point is valid. In order for that
principle to apply the Appellant would have to be a member of the
Band and he was not. Indeed the essence of his argument is that
because he was not a member of the Band he has suffered losses
which are attributable to breach of his Charter rights.
Therefore it is difficult for the Court to see how fiduciary duty
argument is available to him.
[102] With respect to the argument of
"estoppel", the Court is satisfied that this doctrine
does not apply in the circumstances of the present case. In any
event "estoppel" cannot override the law of the land.
The Court is satisfied that the essential factors giving rise to
an estoppel were not present here. In effect, the Appellant is
asking that the Court estop the Minister from relying upon the
legislation that came about as a result of
Order-in-Council setting out the criteria for a
person being listed as a member of the Band. This, the Court
cannot do.
[103] That leaves for consideration the more substantial
and difficult question of whether or not the Appellant's
Charter rights have been violated and whether or not there
is an appropriate remedy, if such a violation is found.
[104] Respondent's counsel argued that the central
question before the Court is whether or not the Appellant was an
Indian under the Indian Act during the years in question.
The Court does not accept this argument. It is obvious that he
was not a member of the Band because he was not listed on the
final list of the Band members and according to the enumerated
criteria he did not qualify as a member of that Band. However,
that does not end the Court's inquiry because it does not
answer the question as to whether or not there was a violation of
the Appellant's Charter rights and whether or not
there is an appropriate remedy for it.
[105] The Court is satisfied that the Appellant is not
seeking to have any federal statute struck down and he need not
have given notice pursuant to section 57 of the Federal Court
Act before the Court can consider his Charter
argument. Further, the Court is satisfied that if the Appellant
is seeking to have the Court overlook this statute it cannot do
so and the Court agrees with the submission of counsel for the
Respondent that the overlooking of the statute cannot provide any
remedy for the Appellant. However, the Court does not agree that
in order to give any effect to the Appellant's claim under
section 15 of the Charter, the Court must ignore the
Order-in-Council. Section 15 of the Charter does not
require the Court to overlook any statute in order to make that
section applicable. That section states as follows:
15.(1) Every individual is equal before and under
the law and has the right to the equal protection and equal
benefit of the law without discrimination and, in particular,
without discrimination based on race, national or ethnic origin,
colour, religion, sex, age or mental or physical disability.
[106] In seeking to apply the Charter to the
Appellant's factual situation the Court has to read that
section in conjunction with section 24(1) which reads as
follows:
24.(1) Anyone whose rights or freedoms, as
guaranteed by this Charter, have been infringed or denied may
apply to a court of competent jurisdiction to obtain such remedy
as the court considers appropriate and just in the
circumstances.
[107] This does not require the Court to strike down any
legislation. This Court has jurisdiction over the Income Tax
Act and assessments made under the Income Tax
Act. It is trite to say that on the facts of this case, what
the Court is dealing with are assessments against the Appellant
in the years in question under the Income Tax Act. The
whole question is the validity of those assessments. This is
precisely the jurisdiction of the Tax Court of Canada.
[108] This very issue arose in the case of
O'Neill Motors Limited v. Her Majesty the Queen[27]. This case was
brought to the attention of both counsel by the Court and both
were given the opportunity to comment upon its relevance here.
Counsel for the Appellant argued that this case is applicable in
that it provided the remedy that the Court believed was
appropriate under the circumstances. Counsel for the Respondent
argued that this case does not help the Appellant because he has
not specified the various elements required to be proven in order
to establish a successful claim, i.e.: he has not specified the
basis of the alleged breach and the Respondent cannot reply to
the allegations.
[109] In O'Neill Motors Limited, supra, the
taxpayer's counsel stated the following question of law for
determination:
Is it appropriate and just in the circumstances for the
assessments of tax relevant to this reference to be vacated by
virtue of subsection 24(1) of the Canadian Charter of Rights
and Freedoms (the 'Charter')?
That is the same question that is before this Court.
[110] It is true that in that case the question involved
an illegal search and seizure under section 231.3 of the
Act and whether or not this amounted to a violation of the
taxpayer's rights under section 8 of the Charter.
However, the principles remain the same and are applicable in the
case at bar.
[111] In O'Neill, supra, at page 1491 Justice
Bowman referred to the case of The Queen et al. v.
Lagiorgia[28]
where Hugessen J. said:
Subsection 24(1) mandates the Court to grant a remedy for the
breach of any Charter right. While there can be no doubt that
there is a vast discretion in the words.
... such remedy as the court considers appropriate and just in
the circumstances,
we think that it is a discretion to fashion a remedy, not to
deny it altogether.
Bowman J., said,
I have come to the conclusion that the appropriate and just
remedy in the circumstances is that the assessments based upon
the illegally obtained evidence should be vacated. My reasons are
as follows:
(1) Subsection 24(1)
of the Charter gives to a court of competent jurisdiction
a "vast discretion", as stated in The Queen et al.
v. Lagiorgia, (supra). Similarly, in Mills v. The
Queen, [1986] 1 S.C.R. 863 McIntyre, J. said at p. 965:
What remedies are available when an application under s. 24(1)
of the Charter succeeds? Section 24(1) again is silent on
the question. It merely provides that the appellant may obtain
such remedy as the court considers "appropriate and just in
the circumstances". It is difficult to imagine language
which could give the court a wider and less fettered discretion.
It is impossible to reduce this wide discretion to some sort of
binding formula for general application in all cases, and it is
not for appellate court to pre-empt or cut down this wide
discretion.
[112] Further, Bowman J. said:
Here, too, I must fashion a remedy that is appropriate and
just. There is no question that this court is a court of
competent jurisdiction. (Mills v. The Queen,
(supra)).
At the end of the day the Court vacated the assessments
referred to under section 24(1) of the Charter.
[113] The case of Schachterv. Canada[29] is applicable
here. That case indicates that subsection 24(1) provides for an
individual remedy to a person whose rights have been infringed
when the statute or provision in question is not in and of itself
unconstitutional but some action taken under it infringes
Charter rights. This is the situation in the present
case.
[114] Counsel for the Respondent took the position that
Ross River Dena Council Band v. Canada[30], did not assist the Appellant
here because the authorities with whom the Appellant dealt did
not have authority to bind the Crown. However, the Court is
satisfied that that does not answer the question that is posed.
There can be no doubt that authorities could not impose upon the
government the duty to pass legislation in accordance with
undertakings they had given to the Appellant or anyone else but
that is not what the Appellant's argument rests upon. The
Appellant's argument here rests upon the fact that he was
treated differently than other people who lived on the Reserve
and that the same rules that determined that other people were
entitled to be on the list of members of the Reserve did not
apply to him. More stringent requirements were applied by the
Minister in the determination that he and his family were not
entitled to be on the list of Band members. This is where the
discrimination occurred and it is for that Charter breach
that the Appellant seeks the appropriate remedy.
[115] The Court does not accept the arguments of Counsel
for the Respondent that the Appellant has not specified the basis
of the alleged breach of his Charter rights and that the
Respondent cannot reply to the allegations in a meaningful
way.
[116] The Appellant from the beginning has argued that
he has received marginal treatment from the Minister vis
a vis other residents of the Conne River Reserve and as a
result of that he has suffered gross disadvantages. The Appellant
testified in Court and was cross-examined by the Respondent
and no questions were put to him in this regard. The Appellant
has produced sufficient evidence before the Court for it to
conclude that he was arguing that this discrimination was based
upon his race, natural or ethnic origin.
[117] In Law v. Canada, [1999] 1 S.C.R. 497 at p.
507, Iacobucci J., said:
Section 15 of the Charter guarantees to every
individual the right to equal treatment by the state without
discrimination.
[118] In reference to Andrews v. Law Society of
British Columbia, [1989] 1 S.C.R. 143 on the issue of the
proper approach to section 15(1) he repeated the statements of
McIntyre J. who indicated that it would be inappropriate to
attempt to confine analysis under section 15(1) to a "fixed
and limited formula". At p. 509 he said,
In accordance with McIntyre J's caution in Andrews,
supra, I think it is sensible to articulate the basic
principles under s. 15(1) as guidelines for analysis, and not as
a rigid test which might risk being mechanically applied:
Equality under the Charter must be purposive and
contextual. The guidelines which I review below are just that -
points of reference which are designed to assist the Court in
identifying the relevant contextual factors in a particular
discrimination claim, and in evaluating the affect of those
factors in light of the purpose of s. 15(1).
[119] Bearing that in mind, the Court is satisfied on
the basis of the evidence presented and any reasonable inferences
that it is entitled to draw from the evidence presented, that the
Appellant's rights under sections 15 and 24 of the
Charter have been violated. It is clear from the evidence
that other persons whose names appear on the list of Band members
do not satisfy the criteria as set out by the
Order-in-Council. Therefore, it is obvious that the
Appellant was treated differently from those members and the
evidence makes it clear that he was treated differently because
he had offended officials who were in positions of authority
within the Ministry. The Court is further satisfied that the
Appellant was given assurance from persons in high authority,
including Ministers, that the criteria for Band membership would
be changed to "of Indian Ancestry" and that the
Appellant would have qualified to be on the final list of Band
members as he was on the initial list.
[120] It is clear that the Appellant in attempting to
organize the various bands in Newfoundland and Labrador and in
dealing with persons who occupied high positions in the
bureaucracy of the Department of Indian and Northern Affairs
fermented their consternation against him and they intended to
get even with him by fashioning some method for keeping his name
off of the Band list. From all that the Court can conclude from
the evidence he was entitled to be on that Band list, he was
initially on the Band list and the final wording of the
Order-in-Council was fashioned so as to prevent him
from being treated as an equal with all the other residents of
Conne River Reserve "of Indian Ancestry". This was a
clear violation of his Charter rights and he is entitled
to an appropriate remedy.
[121] The Court is satisfied that the appropriate remedy
here is to vacate the assessments for the years 1994 and
1995.
[122] The appeals are allowed in that regard and the
matter is remitted to the Minister of National Revenue for
reconsideration and reassessment based upon this finding that
assessments against the Appellant for the years 1994 and 1995 be
vacated. This, of course, is in addition to the Court's order
that the Appellant is entitled to an accounting as earlier
indicated.
[123] It is obvious that this decision will not bring an
end to the unsatisfactory position that the Appellant finds
himself in because this Court cannot order that his name be added
to the list of Band members. There is a provision under the
Indian Act for rectifying that error by having the
Registrar add the Appellant's name to that list but the Court
is satisfied that that may not be a practical action for the
Appellant at this time, as earlier indicated in these Reasons for
Judgment. It would appear obvious that in future years the same
problem will arise where the Appellant could be assessed, he
could file an objection, then an appeal to the assessment and the
assessments against him could be vacated. The Appellant should
not be put through that process each year. To force him into such
a situation would be a further violation of his Charter
rights.
[124] The Court would recommend that the Minister make a
Remission Order in favour of the Appellant for all of the years
that he should have been considered to be a member of the Band
and during which time he should have been given the same rights
as all other members of the Band.
[125] It is interesting to note that the Minister had
initially agreed to make a Remission Order but subsequently
decided against this. It would be safe to assume that the reason
for such action is founded in those facts which have already been
elicited before this Court and which the Court has accepted.
[126] The Court realizes that it does not have the
authority to order the Minister to take this course of action but
under the circumstances it would appear to this Court to be the
only reasonable course of action to follow.
[127] With respect to costs the Court would normally
agree with the argument of counsel for the Respondent but the
pendulum seems to have swung against that position in light of
the decision of the Federal Court of Appeal in David Sherman v
The Minister of National Revenue, docket A-387-02, 2004
FCA 29 where the Court refused the Appellant's claim for
costs based upon his customary hourly rate charges or as being in
excess of the allocation rate contemplated by the tariff and
awarded costs on a "moderate allowance basis".
[128] The Court appeared to endorse the position
enunciated by Registrar Roland of the Supreme Court of Canada in
Metzser v Metzser, [2000] S.C.C.A. No 527, that
the:
reasonably competent solicitor approach [referred to in
Bradshaw Construction Ltd. v. Bank of Nova Scotia (1991), 54
B.C.L.R. (2d) 309 (S.C.)] was unworkable when assessing special
costs awarded to a lay litigant", and that the only
reasonable approach was" to make the award on a quantum
meruit basis.
[129] The Court is of the opinion that the Appellant,
who is a solicitor, expended time and effort on the pursuit of
his claim. He is entitled to some compensation in accordance with
the principles set out in Sherman, supra. It would
not be appropriate to send the matter back for taxation. This is
an appropriate case for the exercise of the Court's
discretion by awarding a lump sum for costs. The Appellant shall
have costs in the amount of $2,000.
Signed
at Ottawa, Canada, this 29th day of November 2004.
Margeson J.
Email this Content