Date:
20060602
Docket:
T-2015-05
Citation:
2006 FC 683
Ottawa, Ontario, June 2, 2006
Present: Mr. Justice Blais
BETWEEN:
THE
MINISTER OF NATIONAL REVENUE
Applicant
and
9093-4134
QUÉBEC INC./OP.
CONSTRUCTION
SPARCO
ATT.:
MR. JOHN VATHIS
ADMINISTRATOR
HAVING
A PLACE OF BUSINESS AT
324
LORRAINE STREET
ROSEMÈRE,
QUEBEC J7A 4K1
Respondent
REASONS FOR ORDER AND ORDER
[1] This is a motion for contempt of
court in view of the failure of Mr. John Vathis to turn over some
documents to the Department of National Revenue, as he had been ordered to do
by Mr. Justice Yvon Pinard by his order dated December 5, 2005.
RELEVANT FACTS
[2] Mr. John Vathis, the
respondent’s administrator, was served with the following order of
Pinard J., dated December 5, 2005:
THIS COURT
ORDERS to the Administrator of the Respondent, Mr. John Vathis, to answer
to the request for information and documents dated September 26th,
2005, issued under paragraph 231.2(2) of the ITA, in providing all the
requested documents and information:
[translation]
·
The record of wages, from January 2002 to
December 2002;
·
The record of wages, from January 2003 to
December 2003;
·
The record of wages, from January 2004 to
December 2004;
·
The record of wages, from January 2005 to the
date of receipt of the letter of requirement;
·
The names, social insurance numbers, addresses
and telephone numbers of all the subcontractors who worked for your company
during the years 2002 to 2005;
·
The bank statements and cancelled cheques
covering the years 2002, 2003, 2004 and 2005 (for the same periods cited in
paragraphs (1) to (4) above);
·
The minutes book of the corporation; and
·
The most recent financial statements as of the
end of the company’s fiscal year;
AND, if the
Respondent is not able to provide some of the requested documents and
information, the Administrator of the Respondent, Mr. Vathis, must provide
a sworn affidavit stating the reasons why the Respondent is not in possession
of the said documents and information;
These documents
and information as well as the sworn affidavit should be sent to
Ms. Mirlène Videau, Collection Section, Canada Customs and Revenue Agency,
305 René-Lévesque West, 1st Floor, Montréal, no later than
Monday, December 12th, 2005.
[3] On February 6, 2006,
Mr. Richard Morneau, a prothonotary, found that Mr. John Vathis, the
respondent’s administrator, had not complied with the order issued by Pinard J.
and that the documents had not been turned over, as ordered by Pinard J.
[4] Prothonotary Morneau issued an
order dated February 6, 2006, whereby Mr. John Vathis was to appear in
Court on February 27, 2006 to hear proof of his alleged failure to comply with
the order of Pinard J. dated December 5, 2005.
[5] The order also stipulated that
Mr. John Vathis, the respondent’s administrator, had to be prepared at
that date to present any defence he might have to the omission with which he
was charged, namely, of having failed to comply with the order of December 5,
2005.
[6] On February 27, 2006, Mr. John
Vathis appeared before me and the Court began to hear the evidence in relation
to this matter.
[7] The hearing of the motion also
continued on May 2, 2006, in Montréal, to hear new witnesses in regard to this
matter.
EVIDENCE
[8] The Court heard three witnesses on
behalf of the Department of National Revenue in support of the motion for
contempt of court and heard one person, that is, the accused Mr. Vathis,
as a witness in answer to the contempt charges.
[9] The first witness heard in February
2006, was Ms. Mirlène Videau. She recently became responsible for the file
and she simply testified that Mr. Vathis had refused to comply with the
order to provide the documents demanded, claiming he had already given them to
the Department, namely, to Ms. Normandin, at a previous date.
[10] The Court heard Ms. Caroline
Normandin, who had been ordered to conduct an audit in Mr. Vathis’s file.
She said she had met with him only once, she filed the content of her agenda
and some notes that appear in the file and she confirmed that she had met him only
on July 17, 2003 and since Mr. Vathis had appeared without the
documents she had simply closed her file being more or less convinced that he
would not supply the documents mentioned although he had vaguely said that he
might find them after some searching. She had noted in her file that
Mr. Vathis was delinquent vis-à-vis the Department of Revenue and that he
had a considerable debt, which increased the likelihood, she thought, that
nothing would be received from Mr. Vathis. She also said she had gone to
Mr. Vathis’s company on July 3, 2003.
[11] The third witness was
Mr. Richard Beli-Binda. He testified that Mr. Vathis had appeared at
the office to reclaim some documents he had supposedly filed with
Ms. Normandin. He replied to Mr. Vathis that he would contact
Ms. Normandin to check. He checked in the file and found that there was
nothing there attesting that any documents had been filed by Mr. Vathis.
He then stated that his review of the register showed that no other documents
had been filed.
[12] Ms. Normandin returned to
testify pursuant to the filing of two documents by the Department of National
Revenue in relation to the transactions in Mr. Vathis’s file and she
repeated that, contrary to Mr. Vathis’s statements, she had never received
any documents, including on September 11, 2003, since her agenda, a copy of
which was filed, attests that she was reviewing a file in Longueuil and did not
report to the office on September 11, 2003, the date when Mr. Vathis
claims he gave her the documents.
[13] In his defence, Mr. Vathis
testified by filing a copy of a page from his agenda, to the effect that on
September 11, 2003, he had gone to the Department of National Revenue and that
he had a reference in his agenda that he had filed the documents.
[14] It should be noted as well that, on
the same date, the same day, in his agenda, there was a meeting with an
employee of the Ministère du Revenu of Quebec, the offices of which are in the
same building.
[15] It is obvious, from the evidence
that was heard and from the review of the written evidence submitted, which
comprised various documents, that there appears to be some confusion concerning
the filing of documents by Mr. Vathis.
[16] I have no reason to doubt the
sincerity of the three employees of the Department of National Revenue who
testified to show that Mr. Vathis had not in the past complied with the
requirements of the law and that, notwithstanding repeated requests for
documents, he had not filed anything other than a printed bank statement listing
the transactions made without ever filing the famous cheques that had been
demanded from him for inspection purposes.
[17] During the hearing I voiced my
concerns about the fact that it was curious that Mr. Vathis had gone to
the office of the Department of Revenue to demand the return of documents,
given the testimony of the Department’s representatives that he had not filed
anything at all. Although troubling, this fact does not, however, lead me to
conclude that Mr. Vathis’s allegations are true.
[18] Mr. Vathis also told the Court
in the course of his testimony that he was asked for $42 for each of the
photocopies of cheques at the bank and that he did not have the resources to
provide these photocopies of several hundred cheques, which would amount to
several thousands if not tens of thousands of dollars.
[19] I must say that Mr. Vathis did
not offer any evidence that these sums had been demanded of him and I told both
parties that it no doubt would have been easy to summons a representative of
the bank to appear before the Court with the said photocopies, which would have
put an end to the dispute at least in respect to the production of the
documents demanded.
[20] However, faced with those
conflicting testimonies, I was bound to make findings about the credibility of
the witnesses.
[21] I have no hesitation in finding that
the witnesses representing the Department of National Revenue spoke freely,
without constraint, with great sincerity, and that they have convinced the
Court that, if the documents had been filed by Mr. Vathis, even if there
were the remotest possibility that the documents might have gone astray, these
documents would nevertheless have been mentioned in one or another of the
registers that exist and that are filled out by the employees of the Department
whenever documents are filed. Not only did Ms. Normandin state under oath
that she had never received Mr. Vathis’s cheques, but the registers and
the written notes she produced in support of her testimony confirm her testimony
unequivocally.
[22] As to Mr. Vathis, the only
support I have for his testimony that he filed these documents is a written
notation on one page of his agenda, which, to say the least, is vague and which
is contradicted by the testimony of Ms. Normandin who was not present in
her office at that date, as her own agenda shows.
[23] Moreover, I have serious doubts
about the credibility of Mr. Vathis who, it cannot be denied, has an
obvious interest in not cooperating with the authorities of the Department of
National Revenue, as attested to by the notations that appear in his file,
which were produced by memoranda from employees of the Department.
CONCLUSION
[24] I have no choice but to conclude
that the Department of National Revenue has clearly demonstrated that
Mr. John Vathis did not take the necessary steps to comply with the order
of Pinard J. dated December 5, 2005, and that there is contempt of court, and I
so hold.
ORDER
WHEREAS the record
discloses beyond a reasonable doubt that Mr. John Vathis, the administrator
of the respondent, has disobeyed the order of Mr. Justice Pinard dated
December 5, 2005, by refusing to respond and to provide all of the
information requested in the applicant’s letter of requirement dated September
26, 2005;
CONSIDERING the penalties
provided in rule 472 of the Federal Courts Rules;
AND WHEREAS this is a first
offence for contempt of court in this case and that a fine would be appropriate
and reasonable in the circumstances;
THE COURT ORDERS THAT:
1. Mr. John Vathis, the administrator of the
respondent, be found in contempt of the order of Mr. Justice Pinard, dated
December 5, 2005;
2. Mr. John Vathis, the administrator of the respondent, be
fined $1,000, payable within ten days following the service of this order, said
payment to be made to the order of the Receiver General of Canada;
3. Mr. John Vathis, the administrator of the
respondent, send the documents and information requested in the Minister’s
letter of requirement and which are still missing, namely: the bank statements
and cancelled cheques for the periods from January to December 2002, from
January to December 2003, from January to August 2004 and from July to December
2005, by registered mail, to the attention of Ms. Mirlène Videau, Trust
Account Examiner, Collections Division, Canada Revenue Agency, 305
René-Lévesque Boulevard West, Montréal, Quebec;
4. Mr. John Vathis, the administrator of the
respondent, pay the applicant costs in the amount of $500, payable within ten
days following the service of this order, which payment shall be made to the
order of the Receiver General of Canada.
“Pierre Blais”
Certified true
translation
François Brunet,
LLB, BCL
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