••••
Date: 20040625
Docket: T-2186-03
Citation: 2004 FC 930
Ottawa, Ontario, Friday the 25th day of June 2004
PRESENT: The Honourable Madam Justice Dawson
BETWEEN:
MINISTER OF NATIONAL REVENUE
Applicant
and
TIM WIGEMYR
Respondent
REASONS FOR ORDER AND ORDER
DAWSON J.
[1] This is a proceeding under Rules 466 and 467 of the the Federal Court Rules, 1998 ("Rules") by which the respondent Tim Wigemyr was required by a show cause order to appear before a Judge to hear proof with respect to an alleged contempt of court, and to be prepared to present any defence which he might have.
[2] Mr. Wigemyr did not appear in Court to respond to the allegation of contempt as required by the show cause order.
History of the Proceeding
[3] On June 11, 2003 a notice ("the Requirement") issued to Mr. Wigemyr pursuant to subsection 289(1) of the Excise Tax Act, R.S.C., c. E-13 ("Act"). Section 289 of the Act and other relevant portions of the Act are set out in Appendix A to these reasons. The Requirement required, for purposes related to the administration or enforcement of the Act, that Mr. Wigemyr provide on or before July 24, 2003, the following information:
1) Bank statements and cancelled cheques for the period January 1, 1997 to December 31, 1999 for all accounts that have operated in the name or controlled by, for, or on behalf of Tim Wigemyr and all joint accounts in the names of any of that person and another or others.
2) A current list of accounts receivable.
3) A listing of assets owned in the name or controlled by, for, or on behalf of Tim Wigemyr.
4) Details of all moneys received by you from employment and other sources during the period January 1, 1997 - December 31, 1999, including the name and address of the payer, and the nature of the payments.
5) copies of all invoices for the business for the period January 1, 1997 - December 31, 1999 for all services provided.
[4] The information was said by the Minister to not have been provided as required.
[5] In the result, an application was made by the Minister to this Court for an order under subsection 289.1(1) of the Act. This subsection allows a Judge to order a person to provide any information sought by the Minister under section 289 if, among other things, the Judge is satisfied that the person was required under section 289 of the Act to provide the information, but failed to do so. The Minister's application under subsection 289.1(1) was successful, and on December 11, 2003 Mr. Justice Rouleau ordered that Mr. Wigemyr comply with the Requirement within 15 days of being personally served with Mr. Justice Rouleau's order. The order specified that failure to abide by the order "shall constitute contempt". It is this order that Mr. Wigemyr is said to be in contempt of.
[6] On January 26, 2004 on the ex parte motion of the Minister, Mr. Justice Russell ordered that Mr. Wigemyr was required to attend before a Judge of this Court in order to hear proof of specified acts and omissions alleged to constitute contempt of court and to be prepared to present any defence to the alleged contempt. The show cause order in material part stated that:
The act with which Mr. Tim Wigemyr is charged is that he, by his conduct described below, breached an Order of the Court;
(i) On June 26, 2003 the Minister of National Revenue (hereinafter "the Minister") issued a requirement to the Respondent, Tim Wigemyr, pursuant to subsection 289(1) of the Excise Tax Act, to provide information and documents with respect to Goods and Services Tax ("GST") reporting periods from January 1, 1997 to December 31, 1999. The deadline for compliance with the Requirement was July 24, 2003.
(ii) On December 11, 2003, the Minister made an application to this Court seeking an Order to comply with the Requirement. Although personally served the Respondent was not present in Court for the application.
(iii) At the conclusion of the hearing, Mr. Justice Rouleau made the following Order:
IT IS HEREBY ORDERED THAT:
The Respondent, Mr. Wigemyr, comply with the Requirement to Provide Information and Documents, said Requirement dated June 26, 2003, within fifteen (15) days of personal service of this order. Failure to abide by this order shall constitute contempt.
The Applicant shall have its costs of this application fixed in the sum of $1,000.00.
(iv) To January 26, 2004, the Respondent has not complied with the Requirement.
[7] On March 22, 2004 on the ex parte motion of the Minister, Mr. Justice Gibson issued an order of substitutional service in respect of the show cause order. The order provided that service of the show cause order and related documents might be effected by posting the documents to the front door of Mr. Wigemyr's premises at Southwest 27-34 - 15 W 4th, Alberta.
Applicable Legal Principles
[8] Rule 466(b) provides that a person is guilty of contempt of court who "disobeys a process or order of the Court".
[9] Relevant and applicable principles are:
(1) The party alleging contempt has the burden of proving such contempt, and the alleged contemnor need not present evidence to the Court.
(2) The constituent elements of contempt must be proved beyond a reasonable doubt.
(3) In the case of disobedience of an order of the Court, the elements which must be established are the existence of the court order, knowledge of the order by the alleged contemnor and knowing disobedience of the order.
(4) Mens rea and the presence of good faith are relevant only as mitigating factors relative to the penalties that are to be imposed.
See: Rules 469 and 470, and Tele-Direct (Publications) Inc. v. Canadian
Business Online Inc. (1998), 151 F.T.R. 271 (T.D.).
[10] Two important procedural points must be observed. First, Rule 467(3) requires that unless otherwise ordered, a show cause order is to be personally served. Second, Rule 470(1) mandates that, unless otherwise directed by the Court, evidence on a motion for a contempt order shall be oral.
Findings of Fact
[11] I will deal first with the three constituent elements of contempt of a court order, and then with the issue of service of the show cause order.
a) Existence of the Order of Mr. Justice Rouleau
[12] The existence of Mr. Justice Rouleau's order of December 11, 2003 was proven by filing a certified copy of the order as an exhibit in the contempt proceeding.
b) Mr. Wigemyr's Knowledge of the Existence of the Order of Mr. Justice Rouleau
[13] Counsel for the Minister attempted to prove that Mr. Wigemyr had been personally served with Mr. Justice Rouleau's order by filing an affidavit of service sworn by a process server, Mr. Houghton. As noted above Rule 470(1) provides that evidence is to be oral at a contempt hearing, unless the Court otherwise directs. No reasons were given by counsel for the Minister as to why Rule 470 should not be followed other than convenience and the fact that the Court generally accepts proof of service by affidavit. I declined to direct that service of Mr. Justice Rouleau's order upon Mr. Wigemyr could be proven by affidavit evidence for the following reasons.
[14] First, the authority to accept proof of service by affidavit is Rule 146(1) which provides:
| 146(1) Service of a document may be proven
(a) by an affidavit of service in Form 146A or, where the service is effected in the Province of Quebec, by a certificate of service of a sheriff, bailiff or other authorized person in accordance with the Code of Civil Procedure of the Province of Quebec;
(b) in respect of a document not required to be personally served, by a certificate by a solicitor in Form 146B;
(c) where a document was served under paragraph 140(1)(a) by leaving it at the office of a solicitor, by an acknowledgement of service signed and dated by the solicitor or by someone employed by the solicitor; or
(d) where a document was served under rule 134, by an acceptance of service signed and dated by the solicitor.
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146(1) La preuve de la signification d'un document peut être établie :
a) par un affidavit de signification établi selon la formule 146A ou, lorsque la signification est faite au Québec, par un procès-verbal de signification d'un shérif, d'un huissier ou autre personne autorisée par le Code de procédure civile du Québec;
b) lorsqu'il s'agit d'un document dont la signification à personne n'est pas obligatoire, par une attestation écrite de l'avocat qui a fait signifier le document, laquelle est sous forme de document distinct ou d'annotation sur le document déposé et qui porte les renseignements prévus dans la formule 146B;
c) lorsque le document a été signifié aux termes de l'alinéa 140(1)a) par livraison du document au bureau de l'avocat, par un accusé de signification daté et signé par l'avocat ou un employé de celui-ci;
d) lorsque le document a été signifié aux termes de la règle 134, par une acceptation de signification datée et signée par l'avocat.
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[15] This is a general provision and it is a principle of statutory interpretation that a general provision yields in the face of a specific provision. See, for example, the comments of the Federal Court of Appeal in Canada (Attorney General) v. Canada (Information Commissioner) (2001), 200 F.T.R. 160 at paragraph 16 and the analysis of Mr. Justice Rothstein, then sitting as a judge of this Court, in Frankowski v. Canada (Minister of Citizenship and Immigration) (2000), 192 D.L.R. (4th) 187. Thus, the specific requirements of Rule 470 should generally prevail over Rule 146(1).
[16] Second, because of the significance of a finding of contempt, the constituent elements of contempt are to be proven beyond a reasonable doubt. Generally, proof of service to that standard should, in my view, require oral testimony.
[17] In the result, the contempt proceedings were adjourned to permit the process server to be called to testify.
[18] Mr. Houghton subsequently testified. His evidence was that he is familiar with Tim Wigemyr as a result of having been required to serve documents upon him in this proceeding on numerous occasions. Mr. Houghton testified that he has served documents upon Mr. Wigemyr at his home address, that on the first occasion Mr. Wigemyr verbally identified himself to be Tim Wigemyr, and that Mr. Wigemyr's home is located on land legally described as Southwest 27-34 - 15 W 4th, Alberta which is the address referred to in the order of substitutional service.
[19] Specifically, Mr. Houghton swore that on December 30, 2003 he personally served Mr. Wigemyr with a true copy of Mr. Justice Rouleau's order and that at that time Mr. Wigemyr verbally acknowledged himself to be Tim Wigemyr.
[20] I found Mr. Houghton's evidence to be credible. His evidence was given in a straightforward manner, with no hesitation, contradiction or implausibility. Having found Mr. Houghton's evidence to be credible I am satisfied and find, beyond any reasonable doubt, that Mr. Wigemyr received the order of Mr. Justice Rouleau on December 30, 2003 and according had knowledge of that order from that date.
c) Whether the Order was Complied with
[21] The Court heard the evidence of Ms. D. Sanderson, a Non Filer/Non Registrant Enforcement Officer. Ms. Sanderson swore to the existence of a number of national databases maintained by the Minister. She testified that she searched all three of those databases as of April 15, 2004 and that her search revealed that none of the information specified in the Requirement had been provided by Mr. Wigemyr as of that date. She confirmed that she had not personally received the required information and that, had any other representative of the Minister received the information, it would have been noted in one of the appropriate databases.
[22] I found Ms. Sanderson's evidence to be credible. She testified in a straightforward manner. There were no contradictions within her testimony nor was it inherently implausible. Ms. Sanderson answered questions from the Court without hesitation.
[23] On the basis of such testimony I am satisfied beyond a reasonable doubt that Mr. Wigemyr failed to provide the information enumerated in the Requirement, and in consequence failed to comply with the order of Mr. Justice Rouleau.
d) Service of the Show Cause Order
[24] The usual requirement of personal service of the show cause order was dispensed with by Mr. Justice Gibson on the basis of evidence which established that the order and supporting material could not practically be personally served upon Mr. Wigemyr.
[25] Mr. Houghton testified that on March 25, 2004 he served the following documents on Mr. Wigemyr by leaving them posted to Mr. Wigemyr's front door at Southwest 27-34 - 15 W 4th, in the County of Stettler, in the Province of Alberta:
a) correspondence from the Department of Justice Canada dated March 24, 2004;
b) Order of Mr. Justice Gibson dated March 22, 2004;
c) Order of Mr. Justice Russell dated January 26, 2004;
d) Motion Record of the Applicant; and
e) Applicant's Witness List
[26] As noted above, I found Mr. Houghton's testimony to be credible. I accept his evidence and find as a fact that he served the show cause order as required by the terms of the order of Mr. Justice Gibson.
The Appropriate Disposition
[27] Counsel for the Minister sought an order that Mr. Wigemyr be found in contempt, that he be fined, ordered to pay costs, and be ordered to comply with the order of Mr. Justice Rouleau.
[28] Rule 472 deals with the penalty which may be ordered on a finding of contempt. It provides that:
| Where a person is found to be in contempt, a judge may order that
(a) the person be imprisoned for a period of less than five years or until the person complies with the order;
(b) the person be imprisoned for a period of less than five years if the person fails to comply with the order;
(c) the person pay a fine;
(d) the person do or refrain from doing any act;
(e) in respect of a person referred to in rule 429, the person's property be sequestered; and
(f) the person pay costs.
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Lorsqu'une personne est reconnue coupable d'outrage au tribunal, le juge peut ordonner :
a) qu'elle soit incarcérée pour une période de moins de cinq ans ou jusqu'à ce qu'elle se conforme à l'ordonnance;
b) qu'elle soit incarcérée pour une période de moins de cinq ans si elle ne se conforme pas à l'ordonnance;
c) qu'elle paie une amende;
d) qu'elle accomplisse un acte ou s'abstienne de l'accomplir;
e) que les biens de la personne soient mis sous séquestre, dans le cas visé à la règle 429;
f) qu'elle soit condamnée aux dépens.
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[29] Mr. Justice Lemieux considered the principles applicable to the assessment of a penalty for contempt in Lyons Partnership, L.P. v. MacGregor (2000), 5 C.P.R. (4th) 157 (T.D.) and wrote at paragraphs 21, 22 and 23 as follows:
21. In Cutter (Canada) Ltd., supra, Urie J.A. said in assessing the amount of the fine what was relevant was "the gravity of the contempt in the context of the particular circumstances of the case as they pertain to the administration of justice" (page 562). The Federal Court of Appeal endorsed the reasons of the trial judge that the amount of the fine should reflect "the severity of the law and yet sufficiently moderate to show the temperance of justice" (page 563). The level of the fine, Urie J.A. indicated, could not be a token fine because this would "be inconsistent with the gravity of the contraventions and might serve to encourage others to flout the law if it is to their financial advantage to do so" (pp. 567-68).
22. This last statement by Urie J.A. echoes the words of Justice Rouleau of this Court in Montres Rolex S.A. v. Herson (1987), 15 C.P.R. (3d) 368 (F.C.T.D.), "that the primary purpose of imposing sanctions is to ensure compliance with orders of the court" (page 371). Pinard J. of this Court in Louis Vuitton S.A. v. Tokyo-Do Enterprises Inc. (1991), 37 C.P.R. (3d) 8 (F.C.T.D.), also stressed the importance of deterrence as the principal factor in ensuring that those orders will not be breached again because "if those who get caught were to get away unscathed that would encourage such activities and consequently destroy the intended effect of the laws that have been passed" (page 13, line b). Pinard J., in assessing a fine, took into account the value of the counterfeit goods sold. He also ordered solicitor-client costs capped to a maximum.
23. To close off on the issue of first principles, other relevant factors to be taken into account are whether the contempt offence is a first offence (R. v. de L'Isle (1994), 56 C.P.R. (3d) 371 (F.C.A.)), and the presence of any mitigating factors such as good faith or apology (Baxter Travenol Laboratories, supra).
[30] In support of his submission on penalty, counsel for the Minister referred to the unreported decision of Mr. Justice Rouleau dated May 6, 2004 in Minister of National Revenue v. Diane Fischer (T-2028-03) where in similar circumstances a fine of $2,000.00 was imposed together with costs of $2,500.00. In the event of a failure to pay both the fine and costs within 30 days, Justice Rouleau ordered that Ms. Fischer was to be incarcerated for a period of 30 days.
[31] My only concern with respect to the appropriateness of this disposition in the circumstances of the present case is that there is jurisprudence of this Court to the effect that a person can not be incarcerated for civil contempt in their absence. See: Society of Composers, Authors and Music Publishers of Canada v. Trillion Investment Corp. (c.o.b. Copper John's Tavern), [1999] F.C.J. No. 319. In the result, I would order that in the event of further default in compliance with the order of Mr. Justice Rouleau and default in compliance with this order, Mr. Wigemyr is to be brought before the Court to show cause why he should not be incarcerated for a period of 30 days as a result of that default.
ORDER
[32] IT IS HEREBY ORDERED THAT:
1. The respondent Tim Wigemyr is found to be in contempt of the order of this Court dated December 11, 2003.
2. The respondent Tim Wigemyr shall pay a fine in the amount of $2,000.00 within 30 days of personal service of this order upon him.
3. The respondent Tim Wigemyr shall pay to the Minister of National Revenue costs, which are fixed in the amount of $2,500.00 within 30 days of personal service of this order upon him.
4. The respondent Tim Wigemyr is to comply with the order of Mr. Justice Rouleau issued on December 11, 2003 within 30 days of personal service of this order upon him.
5. In the event Mr. Wigemyr fails to pay the fine and costs and to comply with the Court's order of December 11, 2003, all within 30 days of the date of personal service of this order upon him, he is to be brought before any Judge of this Court to show cause why Mr. Wigemyr should not be incarcerated for a period of up to 30 days.
6. This order may be varied upon application by any Judge of this Court.
7. This order is to be personally served upon Mr. Wigemyr forthwith upon its issuance.
"Eleanor R. Dawson"
__________________________________
Judge
| 289(1) Despite any other provision of this Part, the Minister may, subject to subsection (2), for any purpose related to the administration or enforcement of this Part, including the collection of any amount payable or remittable under this Part by any person, by notice served personally or by registered or certified mail, require that any person provide the Minister, within such reasonable time as is stipulated in the notice, with
(a) any information or additional information, including a return under this Part; or
(b) any document.
289(2) The Minister shall not impose on any person (in this section referred to as a "third party") a requirement under subsection (1) to provide information or any document relating to one or more unnamed persons unless the Minister first obtains the authorization of a judge under subsection (3).
289(3) On ex parte application by the Minister, a judge may, subject to such conditions as the judge considers appropriate, authorize the Minister to impose on a third party a requirement under subsection (1) relating to an unnamed person or more than one unnamed person (in this section referred to as the "group") where the judge is satisfied by information on oath that
(a) the person or group is ascertainable; and
(b) the requirement is made to verify compliance by the person or persons in the group with any duty or obligation under this Part.
289(4) Where an authorization is granted under subsection (3), the authorization shall be served together with the notice referred to in subsection (1).
289(5) Where an authorization is granted under subsection (3), a third party on whom a notice is served under subsection (1) may, within fifteen days after the service of the notice, apply to the judge who granted the authorization or, where that judge is unable to act, to another judge of the same court for a review of the authorization.
289(6) On hearing an application under subsection (5), a judge may
(a) cancel the authorization previously granted if the judge is not then satisfied that the conditions in paragraphs (3)(a) and (b) have been met; or
(b) confirm or vary the authorization if the judge is satisfied that those conditions have been met.
1990, c. 45, s. 12; 2000, c. 30, s. 85.289.1(1) On summary application by the Minister, a judge may, despite subsection 326(2), order a person to provide any access, assistance, information or document sought by the Minister under section 288 or 289 if the judge is satisfied that
(a) the person was required under section 288 or 289 to provide the access, assistance, information or document and did not do so; and
(b) in the case of information or a document, the information or document is not protected from disclosure by solicitor-client privilege (within the meaning of subsection 293(1)).
289.1(2) An application under subsection (1) must not be heard before the end of five clear days from the day the notice of application is served on the person against whom the order is sought.
289.1(3) The judge making an order under subsection (1) may impose any conditions in respect of the order that the judge considers appropriate.
289.1(4) If a person fails or refuses to comply with an order, a judge may find the person in contempt of court and the person is subject to the processes and the punishments of the court to which the judge is appointed.
289.1(5) An order by a judge under subsection (1) may be appealed to a court having appellate jurisdiction over decisions of the court to which the judge is appointed. An appeal does not suspend the execution of the order unless it is so ordered by a judge of the court to which the appeal is made.
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289(1) Malgré les autres dispositions de la présente partie, le ministre peut, sous réserve du paragraphe (2) et, pour l'application ou l'exécution de la présente partie, notamment pour la perception d'un montant à payer ou à verser par une personne en vertu de la présente partie, par avis signifié à personne ou envoyé par courrier recommandé ou certifié, exiger d'une personne, dans le délai raisonnable que précise l'avis_:
a) qu'elle lui livre tout renseignement ou tout renseignement supplémentaire, y compris une déclaration selon la présente partie;
b) qu'elle lui livre des documents.
289(2) Le ministre ne peut exiger de quiconque - appelé « tiers » au présent article - la livraison de renseignements ou de documents prévue au paragraphe (1) concernant une ou plusieurs personnes non désignées nommément, sans y être au préalable autorisé par un juge en vertu du paragraphe (3).
289(3) Sur requête ex parte du ministre, un juge peut, aux conditions qu'il estime indiquées, autoriser le ministre à exiger d'un tiers la livraison de renseignements ou de documents prévue au paragraphe (1) concernant une personne non désignée nommément ou plus d'une personne non désignée nommément - appelée « groupe » au présent article -, s'il est convaincu, sur dénonciation sous serment, de ce qui suit_:
a) cette personne ou ce groupe est identifiable;
b) la livraison est exigée pour vérifier si cette personne ou les personnes de ce groupe ont respecté quelque devoir ou obligation prévu par la présente partie.
289(4) L'autorisation accordée en application du paragraphe (3) doit être jointe à l'avis visé au paragraphe (1).
289(5) Le tiers à qui un avis est signifié ou envoyé conformément au paragraphe (1) peut, dans les 15 jours suivant la date de signification ou d'envoi, demander au juge qui a accordé l'autorisation prévue au paragraphe (3), ou, en cas d'incapacité de ce juge, à un autre juge du même tribunal de réviser l'autorisation.
289(6) À l'audition de la requête prévue au paragraphe (5), le juge peut annuler l'autorisation accordée antérieurement s'il n'est pas convaincu de l'existence des conditions prévues aux alinéas (3)a) et b). Il peut la confirmer ou la modifier s'il est convaincu de leur existence.
1990, ch. 45, art. 12; 2000, ch. 30, art. 85.
289.1(1) Sur demande sommaire du ministre, un juge peut, malgré le paragraphe 326(2), ordonner à une personne de fournir l'accès, l'aide, les renseignements ou les documents que le ministre cherche à obtenir en vertu des articles 288 ou 289 s'il est convaincu de ce qui suit_:
a) la personne n'a pas fourni l'accès, l'aide, les renseignements ou les documents bien qu'elle en soit tenue par les articles 288 ou 289;
b) s'agissant de renseignements ou de documents, le privilège des communications entre client et avocat, au sens du paragraphe 293(1), ne peut être invoqué à leur égard.
289.1(2) La demande n'est entendue qu'une fois écoulés cinq jours francs après signification d'un avis de la demande à la personne à l'égard de laquelle l'ordonnance est demandée.
289.1(3) Le juge peut imposer, à l'égard de l'ordonnance, les conditions qu'il estime indiquées.
289.1(4) Quiconque refuse ou fait défaut de se conformer à l'ordonnance peut être reconnu coupable d'outrage au tribunal; il est alors sujet aux procédures et sanctions du tribunal l'ayant ainsi reconnu coupable.
289.1(5) L'ordonnance visée au paragraphe (1) est susceptible d'appel devant le tribunal ayant compétence pour entendre les appels des décisions du tribunal ayant rendu l'ordonnance. Toutefois, l'appel n'a pas pour effet de suspendre l'exécution de l'ordonnance, sauf ordonnance contraire d'un juge du tribunal saisi de l'appel.
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FEDERAL COURT
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: T-2186-03
STYLE OF CAUSE: The Minister of National Revenue v. Tim Wigemyr
PLACE OF HEARING: Calgary, Alberta and Ottawa, Ontario
DATE OF HEARING: April 19, 2004 (Calgary, Alberta)
May 12, 2004 (Ottawa via video conference)
REASONS FOR ORDER AND ORDER: DAWSON J.
DATED: June 25, 2004
APPEARANCES:
Mr. Dan Misutka FOR THE APPLICANT
Department of Justice - Edmonton
No appearance FOR THE RESPONDENT
SOLICITORS OF RECORD:
Mr. Morris Rosenberg FOR THE APPLICANT
Deputy Attorney General of Canada
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