Date: 20090213
Docket: T-77-04
Docket: T-123-04
Citation: 2009 FC 78
Ottawa, Ontario, February 13,
2009
PRESENT: The Honourable Mr. Justice Zinn
T-77-04
BETWEEN:
NEIL MCFADYEN
Applicant
and
THE ATTORNEY GENERAL OF CANADA
Respondent
AND
BETWEEN:
T-123-04
NEIL MCFADYEN
Applicant
and
THE ATTORNEY GENERAL OF CANADA
Respondent
REASONS FOR JUDGMENT AND
JUDGMENT
[1]
Mr.
McFadyen is involved in a lengthy and apparently ongoing dispute with the
Canadian taxation authority regarding its tax treatment of him and others, who
are spouses of Canadian government employees living and working abroad. During
the history of this dispute the name of the Canadian taxation authority has
changed. It is currently the Canada Revenue Agency; its predecessors were
Canada Customs and Revenue Agency and the Department of National Revenue
(Taxation). For ease of reference, regardless of the proper name of the
authority at the relevant point in time, I shall refer to the taxing authority
throughout as CRA.
[2]
These
applications deal with Mr. McFadyen’s two complaints to the Canadian Human
Rights Commission in which he alleges that he and other spouses of Canadian
government employees working abroad have been discriminated against by CRA and
the Department of Finance. On consent, by Order dated March 2, 2004, Mr. McFadyen’s
applications for judicial review of the decisions of the Canadian Human Rights
Commission to dismiss his complaints were ordered to be heard together, one
immediately after the other. These reasons apply to both applications and will
be filed in each of the two Court files T-77-04 and T-123-04.
[3]
The
human rights complaints that underlie these applications share a factual basis
with the taxation dispute referenced above. Accordingly, it is necessary to set
out in some detail the relevant facts of the taxation dispute.
Background
[4]
In
August 1992, Mr. McFadyen and his spouse left Canada for Japan. His spouse was taking a position with the
Canadian government at the Canadian Embassy in Tokyo, Japan. Mr. McFadyen secured work with the Embassy in
1993 and 1994 both as an employee and as an independent contractor. In 1994
and 1995 he was employed by a securities firm with an office in Tokyo.
The Tax Dispute
[5]
CRA
assessed Mr. McFadyen for the taxation years 1993, 1994 and 1995 as a resident
of Canada (the “1996
assessment”). Mr. McFadyen appealed the 1996 assessment. Chief Justice Garon
of the Tax Court of Canada dismissed the appeal, holding that Mr. McFadyen was
a factual resident of Canada during the three years at issue and thus was
ordinarily resident in Canada within the meaning of section 259(3) of the Income
Tax Act, R.S.C. 1985, c. 1 (5th Sup.): McFadyen v. Canada,
[2000]
4 C.T.C. 2573, 2000 DTC 2473. Chief Justice Garon further found that if Mr. McFadyen was
not a factual resident of Canada during these three years, he would be deemed
by virtue of subsection 250(1)(e) of the Income Tax Act to be a resident
of Canada. Subsection 250(1)(e) at the time deemed spouses of diplomats or
other public servants of Canada to have been resident in Canada throughout the taxation
year.
[6]
An
appeal by Mr. McFadyen to the Federal Court of Appeal was allowed but only to
the extent that the Minister, when assessing Mr. McFadyen’s taxes, was required
to give him a foreign tax credit for taxes that he had paid to Japan: McFadyen
v. Canada, [2002] F.C.J. No. 1756, 2002 FCA 496. An application for leave
to appeal to the Supreme Court of Canada was dismissed: McFadyen v. Canada,
[2003] S.C.C.A. No. 54.
[7]
In
2003, Mr. McFadyen’s taxes for 1993 to1995 were reassessed pursuant to the
decision of the Federal Court of Appeal.
[8]
Mr.
McFadyen’s spouse, at the same time, was engaged in a dispute with the Ontario
Ministry of Finance regarding her status for the purposes of Ontario income tax. It finally
agreed with her that she was not a resident of Ontario during the relevant years under appeal and
adjusted her taxes accordingly. At the same time, and for the same reasons,
the Ontario Ministry of Finance acknowledged that her spouse, Mr. McFadyen, was
not a resident of Ontario in taxation years 1993
to 1995. As a result, CRA in 2006 issued a reassessment to Mr. McFadyen reflecting
the change in his Ontario taxes for the years 1993 to1995 (the “2006
reassessment”). Mr. McFadyen filed an appeal from the 2006 reassessment
directed at the federal taxes payable, the thrust of which was that he was not
a resident of Canada during the 1993 to 1995
taxation years. Chief Justice Rip of the Tax Court of Canada held that this
objection was essentially the same as the issue that had been determined by the
Tax Court of Canada and the Federal Court of Appeal in Mr. McFadyen’s appeal of
the 1996 assessment. The Tax Court of Canada, on July 31, 2008, held that the
doctrine of cause of action estoppel applied to prevent Mr. McFadyen from
challenging the federal tax assessments for the years 1993 to 1995, except with
respect to the interest assessed under the 2006 reassessment. Mr. McFadyen
filed an appeal on September 30, 2008, of that decision to the Federal Court of
Appeal (Court File No. A-479-08). That appeal remains outstanding.
The Human Rights
Complaints
[9]
On
February 23, 1999, during the course of his tax dispute with Revenue Canada and prior to the
judgment of Chief Justice Garon, Mr. McFadyen filed complaints of
discrimination against CRA (CHRC File #H49102) and against the Department of
Finance (CHRC File #B48997).
[10]
In each
complaint, Mr. McFadyen states that the respondent:
… discriminates against me and other
spouses of government employees and other persons living and working outside Canada in the provision of services by treating us in an adverse
differential manner because of our marital status, and/or nationality, in
violation of section 5 of the Canadian Human Rights Act.
[11]
An
investigator was appointed by the Commission. In both cases the investigator’s
recommendation was that the complaint be dismissed. By letter dated December
15, 2003, the Commission dismissed these complaints pursuant to subsection
44(3)(b) of the Act. The Commission accepted the investigator’s analysis and
recommendations. The Commission writes:
[With respect to both complaints], the
complaints are dismissed because:
·
the
differentiation is based not on marital status, but on aggregate family income
level and,
·
there is a bona
fide justification within the meaning of section 15 of the Act.
With respect to complaint (B48997)
against Finance Canada, the complaint is dismissed because:
·
paragraph
250(1)(e) of the ITA was not applied in the complainant’s case.
With respect to the complaint (H49102)
against [CRA], the complaint is dismissed because:
·
the evidence does
not support the complainant’s allegation that the respondent reassessed his
income tax returns on the ground of his marital status (spouse of a Canadian
government employee). The evidence indicates that the respondent reassessed
the complainant’s income tax returns as a factual resident of Canada because he had significant ties to Canada which he did not sever while working and
living abroad.
[12]
Mr.
McFadyen seeks to set aside these decisions.
Issues
[13]
The issues
raised by the applicant in these applications are as follows:
(a) Whether the investigator
failed to conduct a thorough and neutral investigation;
(b) Whether there is a
reasonable apprehension of bias;
(c) Whether the Commission
made patently unreasonable findings of fact; and
(d) Whether the Commission
failed to identify the legal test it used.
Motion to Adjourn
[14]
These
applications were originally scheduled to be heard in Ottawa on September 26, 2006, before Justice von
Finckenstein. Mr. McFadyen, prior to that date, had filed his notice of
objection with respect to the 2006 reassessment. There had not then been any
response from CRA with respect to that objection and, as noted previously, when
the negative response was received, Mr. McFadyen filed an appeal to the Tax
Court of Canada and on July 31, 2008, the Tax Court granted a motion striking out
Mr. McFadyen’s appeal insofar as it attempted to re-litigate the issues
previously determined by Chief Justice Garon which were upheld on appeal.
[15]
Justice
von Finckenstein ordered that these applications be adjourned sine die,
provided that Mr. McFadyen could bring them back on two weeks notice on the
later of “(i) a decision to his notice of objection dated May 24, 2006, which
is not appealed, and (ii) a decision from the Tax Court of Canada on appeal
from a negative decision to his notice of objection dated May 24, 2006.”
[16]
Mr.
McFadyen, after the Order of Justice von Finckenstein, filed a notice of his
intention to act in person. After the decision of the Tax Court on July 31, 2008, Mr. McFadyen wrote to
the Court on August
13, 2008
as follows:
As the Tax Court has now ruled that the
Appellant has no right of appeal available in the Tax Court the Appellant
wishes to set a hearing date for 1 day as soon as possible for these
applications as per the Order of Justice von Finckenstein dated September 26,
2006.
In accordance with the wishes of Mr. McFadyen an
Order issued August 25, 2008, at the direction of the Chief Justice, setting
these applications down for hearing in Ottawa, on December 16, 2008.
[17]
Mr.
McFadyen took a series of steps prior to the scheduled hearing date. On November 7, 2008, the Court granted his
motion, in part, permitting him to file a proposed Further Supplementary
Affidavit. On December 2, 2008, the Court granted his further motion to file a
proposed Third Further Supplementary Affidavit. On December 10, 2008, I issued
a Direction in response to his request, directing that his new memoranda be
accepted for filing.
[18]
In
short, the parties, and most particularly the applicant, were proceeding
towards the hearing set for December 16, 2008, when, late in the morning on
December 15, 2008, on the eve of hearing, the Court received a letter from Alan
Riddell, Mr. McFadyen’s former counsel in these matters, advising that his firm
had just been retained by the applicant to seek an order adjourning the
hearings “on the basis that there is currently pending an appeal to the Federal
Court of Appeal, involving the same parties, which ought to be disposed before
these Judicial Review Applications are disposed of by a Judge of the Trial
Division [sic].” The adjournment request was opposed by the respondent.
[19]
The
motion for an adjournment was heard at the commencement of the hearing on
December 16, 2008, and I indicated orally that the request for an adjournment
was being dismissed with reasons to follow. These are my reasons for that
decision.
[20]
The
applicant submitted that there were three reasons why the adjournment ought to
be granted. First, he submitted that a Judge of this Court, Justice von
Finckenstein, had already determined that there ought to be no hearing of these
applications until the tax issue raised in the applicant’s notice of objection
has been definitively resolved. He accepted that while the principle issue in
the notice of objection had been resolved by the Tax Court, it was currently
under appeal to the Federal Court of Appeal and was expected to be heard in May
2009. Thus, he argued, the situation facing the Court on December 16, 2008,
was precisely that which it faced on September 26, 2006.
[21]
Second,
the applicant submitted that he had erred in making his request that the matter
be rescheduled for hearing. He claims to have misinterpreted the Order of
Justice von Finckenstein believing that if he failed to request that these
matters be rescheduled for hearing within two weeks of the decision of the Tax
Court, he would be unable to ever have these matters heard.
[22]
Lastly,
it was submitted that if these applications are heard prior to the
determination of the Federal Court of Appeal, it may result in contradictory
findings. In this respect counsel submitted that the issue of whether Mr.
McFadyen is estopped from arguing that subsection 250(3) of the Income Tax
Act is discriminatory and contrary to section 5 of the Canadian Human
Rights Act is an issue that is in dispute both before this Court and before
the Federal Court of Appeal.
[23]
I
find that none of these submissions, in the circumstances at hand, are
sufficient to warrant an exercise of my discretion under Rule 36 of the Federal
Courts Rules to grant an adjournment. The relevant factors when considering
whether to grant an adjournment include the prejudice that would be caused to
one or more of the parties, the prejudice to the Court in losing a hearing
date, and the public interest in a timely conclusion to litigation.
[24]
But
for Mr. McFadyen’s request that these matters be rescheduled, the hearing on
December 16, 2008, would not have been set. There are many boxes of documents
that have been filed by the parties in these matters, occupying at least twelve
feet of shelf space. Counsel for the respondent prepared for the hearing and had
largely done so when she received verbal advice from Mr. Riddell on Sunday,
December 14, 2008, that he would be writing the Court the next day seeking an
adjournment. As is obvious, this is the second time counsel has had to prepare
for the hearing of these matters. Further, as this date was set some four
months ago, the Court has reviewed the materials filed in order to properly
prepare for the hearing. Again, this is the second time such preparation has
been undertaken – by two different Judges of this Court.
[25]
It
is no answer to the loss of time and resources by respondent’s counsel and the
Court to say, as the applicant did, that the matter can quickly be rescheduled,
again, after the decision of the Federal Court of Appeal.
[26]
It
is to be noted that applicant’s counsel, when asked if these applications would
be discontinued if the Federal Court of Appeal rejected his client’s appeal,
was unable to provide the Court with that assurance. Thus, it could not be said
that the adjournment sought might result in a future saving of judicial
resources.
[27]
It
is also no answer to the lost time and resources to plead that the request to
reschedule was made by a self-represented party who may have misinterpreted the
Court’s Order. First, he was represented at the time the Order in question was
made and had every opportunity then to be advised as to its meaning and
application. Further, the applicant, if in doubt, could have retained counsel
and sought advice, which he admits to having done only a few days prior to the
hearing to assist in his preparation of oral submissions. Every litigant has a
right to present his own case. There are risks associated with that manner of
proceeding and the prejudice, if an imprudent decision is made, must rest upon
the litigant and not upon the opposing party or the Court.
[28]
Generally,
the interest in avoiding conflicting judicial decisions from two Courts
outweighs the public interest in bringing litigation to an end in a timely
manner. However, counsel conceded that it was possible that a decision in the
present applications might be made without making any determination on the
issues before the Federal Court of Appeal. In fact, as will be seen in the
reasons that follow I have made no decision on any issue that is now before the
Court of Appeal as, in my view, it was unnecessary to do so to dispose of these
applications.
[29]
For
these reasons I refused to grant the adjournment and the hearing continued.
Prior to excusing himself, Mr. Riddell spoke to a matter that had been
outstanding since September 21, 2006, a motion to strike portions of the
respondent’s memoranda. The original motion was brought just prior to the
first scheduled hearing date and thus the applicant requested that it be dealt
with by Justice von Finckenstein at the hearing. The motion to strike alleges that
the impugned statements are not supported by the evidence in the record, relate
to a disputed or controversial issue in the proceeding, or are prejudicial to
the applicant. Needless to say, counsel for the respondent assured the Court that
during the course of her submissions she would be pointing to the evidence in
the record supporting the statements made in her memoranda.
[30]
It
became quite evident that a formal ruling on each and every one of the passages
disputed by the applicant would require the better part of the day and that it
would be unlikely to serve any real purpose at this point in the litigation.
Any statement made by counsel, whether in a memoranda or in oral submission,
must have the support of evidence in the record. Accordingly, the matter was
dealt with during the hearing by my undertaking to counsel and the parties that
no submission from either party that relied on facts not in the record would be
accorded any weight.
Analysis
Whether The Investigator
Failed To Conduct A Thorough And Neutral Investigation
[31]
Mr.
McFadyen submits that the Commission breached procedural fairness in that it
relied on the reports of the investigator which were neither thorough nor
neutral. He raises under this heading five allegations which he says show that
the investigator was not thorough as well as an allegation of impartiality that
will be dealt with later.
[32]
First,
the applicant alleges that the investigation was not thorough as the
investigator failed to investigate facts concerning his Ontario residency status. The investigator’s
reports are dated May 8, 2003. In paragraph 34 of his Amended New Memoranda of
Argument the applicant submits that as a result of CRA, on March 6, 2006,
allowing his objection and confirming that he was not a resident of Ontario at the relevant times,
CRA “implicitly conceded” the inaccuracy of a number of paragraphs of the
investigator’s reports. While, as the applicant notes, he had advised the
investigator that he had filed an objection to his 2003 Ontario residency
reassessment, there had been no determination made on that objection until
almost three years after the investigator concluded her reports and more than
two years after the decisions under review.
[33]
In
my view, it cannot be maintained that the investigator was less than thorough
by pointing to facts that were not known or in existence at the time of the
investigation. Mr. McFadyen submits that the investigator erred in failing to
investigate the CRA with respect to his objection and accepted the position of
CRA at face value. There are two difficulties with this position. First,
there is no evidence that the investigation he suggests ought to have been
undertaken would have resulted in any different conclusion. The issue of Ontario
residency, as Mr. McFadyen acknowledges, is a matter for the Ontario authorities and not the
CRA. Second, there had been a finding of the Tax Court, upheld by the Federal
Court of Appeal, that Mr. McFadyen was assessed on the basis that he was a factual
resident of Canada, not a deemed resident under subsection 250(1)(e) of the Income
Tax Act. While Mr. McFadyen has challenged that conclusion in his
objection to the 2006 reassessment, and that matter is currently before the
Federal Court of Appeal, it cannot retroactively change the evidence that was
before the investigator in 2003. She made her reports on the facts before her
at that time. She cannot be faulted for so doing.
[34]
Second,
the applicant alleges that the investigation was not thorough as the
investigator failed to disclose and report crucial evidence. Specifically, he
submits that the investigator had evidence that his marital status was
considered in rendering the 1996 assessment but this was not reflected in her
reports. The particulars of the alleged omitted evidence are recited at
paragraphs 41 through 45 of his Amended New Memoranda of Argument.
[35]
The
respondent submits that the investigator’s report on the CRA complaint shows
that evidence of a consideration of marital status was reflected in the report,
and points to paragraphs 42 to 45 of the report on the CRA complaint and the
summary of the evidence of Eliza Erskine, Senior Rulings Officer. In
particular, the respondent points to the following from paragraph 42: “... the
issue is the nexus to Canada. For example, where
your house is, spouse, dependants, family, social connections, provincial ties
(e.g. driver’s licence) and health coverage etc. is indicative of where you are
based for taxation purposes.” Counsel submits that contrary to the submissions
of Mr. McFadyen, CRA did not deny that one’s marital status or the location of
one’s spouse could be relevant factors in determining residency. Further, the
respondent submits that the report on the CRA complaint makes it clear that
marital status was a factor considered by CRA but that the mere fact that it
was considered does not entail that there has been a breach of the Act. The
passage at paragraphs 71 to 74 of the report on the CRA complaint supports the
respondent’s submissions, and, in my view, is a full and complete answer to the
submissions of Mr. McFadyen:
71. The
issue is whether the complainant’s income tax returns were reassessed and he
was deemed “ordinarily resident” in Canada and a “factual resident” of Ontario because he was married, specifically, to
a government employee posted abroad.
72. The
evidence shows that the complainant was reassessed because of numerous factors
which indicated that he had significant social, personal, economic, and
financial ties in Canada; thereby , making him a factual resident of Canada,
and liable to pay income tax to Canada not Japan. The evidence also indicates
that the respondent used the complainant’s marital status, i.e., spouse of a
public servant, as one such tie to Canada in determining that the complainant was a Canadian
resident for tax purposes.
73. The
Supreme Court of Canada stated in Thomson v. M.N.R. and Beament v. M.N.R. that
marital status is one of the factors in determining whether a tax payer is a
resident for the purposes of the income tax. This is due to the fact that
marital status is one of the indicia of social ties to Canada for a determination
of residence for tax purposes. According to the common law, had the
complainant severed all his ties to Canada, he would have been assessed as a
non resident despite his marital status; or had the complainant retained all of
his ties to Canada, and had been unmarried, he would still have been assessed as a factual
resident of Canada.
74. Although
the respondent did not provide comparative data on how it treated non married
individuals, or individuals not married to public servants, the evidence
provided does not indicate that the complainant was treated in an adverse
differential manner, simply because his marital status, as a spouse of a public
servant, is considered by common law to be one of the factors; albeit not the
only one, in determining his residency status. As indicated in paragraph 66
above, the Tribunal stated in Menghani and Naqvi that citing a
number of factors, including grounds proscribed by the CHRA (such as
marital status) in the proper case and when adequately assessed, may be a
relevant consideration, and may not amount to discrimination under the CHRA.
[36]
Third,
the applicant alleges that the investigation was not thorough as the
investigator failed to obtain comparative data from CRA. On February 17, 2001,
the investigator wrote to CRA with the following request: “Please provide
comparative analysis btn the C and other LES not married to Can government
employees (remove names just provide data) [sic].” Presumably this would
provide evidence as to whether the applicant’s tax status differed from other
locally engaged staff who were not married to Canadian government employees.
CRA responded to this request by email dated March 3, 2003, as follows:
After looking into the matter, and
discussing the matter with others, she [Ms. McKenny] has confirmed that the
CCRA does not consider it feasible at this time to verify the manner in which
other embassy staff were assessed. From DFAIT, it would be possible to obtain
a list of Canadians employed at various embassies abroad, and then review their
past files for one or more years. However, she indicates that this could take several
weeks of full-time research. As well, it is likely that due to the passage of
time the original records may be unavailable, although relevant details are
likely retained and available in electronic or other format.
Given the resources that would be
necessary to explore the treatment of other taxpayers, the CCRA considers that
not producing this limited amount of information is most compatible with your
desire to complete the investigation of this file within a short time frame. I
trust you are able to proceed to complete your consideration of the complaints.
The investigator summarizes this response at
paragraph 26 of her report on the CRA complaint and then writes: “Because the
respondent did not provide the comparative data, further investigation had to
be undertaken.”
[37]
The
respondent submits that this situation is distinguishable from that in Charlebois
v. Canada (Canadian Human Rights
Commission),
unreported, September 17, 1998, Court File T-2314-96, relied on by the
applicant. In Charlebois, the complainant said that he believed that there
was an underlying, unexpressed reason for his dismissal. The investigator
initially asked the employer what the Court found to be relevant questions on
this issue but rather than waiting for a response, proceeded to conclude the
investigation and finalize the report. Mr. Justice Campbell found that because
of this the investigation was not thorough.
[38]
I
agree with the submission of the respondent that Charlebois is
distinguishable. Here the investigator did receive a response to the request
for comparative data from CRA, stating that it was not considered feasible to
provide the data at that time. More importantly in my view, the data asked for
in this case were not pivotal to the determination the investigator was
required to make; whereas in Charlebois, the information requested
appears to be the gravamen of the complaint. Accordingly, I find no error on
the part of the investigator in how she proceeded.
[39]
Fourth,
the applicant alleges that the investigation was not thorough as the
investigator failed to investigate and thus decide on aspects of his
complaints, namely, the allegation that he was discriminated against based on
nationality and sex, and as the investigator failed to investigate and
question CRA as to the purpose of the Canada-Japan Income Tax Convention Act
and the Vienna Convention on Diplomatic Relations.
[40]
In
her report on the CRA complaint, the investigator writes:
68. The complainant
includes several grounds in his complaint; namely, nationality, sex and sexual
orientation.
69. A review of the
particulars of his complaint indicates that only the ground of marital status
is related to this human rights complaint. Accordingly, the other grounds were
not investigated.
70. The complaint
also includes the grounds of “citizenship “previously living in Canada” and “social status”. These are not prohibited grounds
under the Canadian Human Rights Act (CHRA). Therefore, they were also
not investigated as the Commission has no jurisdiction to deal with these grounds.
A similar conclusion was reached in the report
on the Finance Department complaint.
[41]
The
respondent submits that, on a fair reading of the human rights complaints filed
by the applicant, the investigator’s conclusion that only the ground of marital
status is related to his complaints was reasonable.
[42]
Mr.
McFadyen in his oral submissions argued that the complaint of discrimination on
the basis of sex went to his allegation that CRA was engaged in systemic
discrimination against women as most spouses who find themselves in the
situation he himself was in, are women. Mr. McFadyen is not a member of the
group which he asserts are subject to systemic discrimination. In my view, it
is not unreasonable for the investigator or the Commission to refuse to investigate
an allegation of systemic discrimination against a class of persons by someone
who is not personally a member of that class unless there is evidence that
members within that class are unable to make their own complaint.
[43]
I
also find that it was not unreasonable for the investigator to conclude that
nationality was not pertinent to the complaint. I see nothing to support the
submission that Mr. McFadyen’s tax treatment turned on his nationality. He was
taxed in Canada because of the finding that he was an ordinary resident of Canada. His nationality had
no role to play in that decision and none was suggested. Those having to pay
Canadian taxes come from many countries and have many nationalities. There is
nothing on the record, or in the complaints, that warrants any consideration
that Mr. McFadyen’s tax treatment was made on the grounds of his nationality.
Simply raising a ground of discrimination does not necessarily mean the
allegation has any merit.
[44]
As
to the submission that the investigator failed to question CRA concerning the
Canada-Japan tax treaty or the Vienna Convention, that is simply not borne out
by the evidence. Pages 491 to 504 of the Applicant’s Further Application
Record, Vol. 2 of 4, is a record of the interview the investigator had with
Eliza Erskine, Senior Rulings Officer, and they show that the investigator did
question her on both topics.
[45]
Fifth,
the applicant alleges that the investigation was not thorough as the
investigator failed to interview “a number of vitally connected decision
makers” at CRA. This cannot be sustained. First, I find that the investigator
did question those at CRA who had been the most critical decision- makers,
namely Ms. McGetchie and Ms. McKenny and, in addition, had an interview with
Ms. Erskine who was a senior Rulings Officer at CRA. Justice Nadon of the
Federal Court – Trial Division, as he then was, in Slattery v. Canada (Human
Rights Commission), [1994] 2 F.C. 574, at para.69, has observed that the
fact that an investigator has not interviewed every witness that an applicant
would have liked to be interviewed is not necessarily fatal to the validity of
the report. The investigator is the master of his or her own process. The
investigators are experienced and knowledgeable in this area and ought to be
accorded wide latitude in how they conduct their investigations. When, as
here, the key witnesses are interviewed, the Court should exercise restraint in
finding that the investigation was flawed because others were not investigated,
unless there is clear and cogent evidence that those not interviewed had critical
evidence to offer. There is no such evidence here, and I find that the
decision of the investigator as to whom she would interview was reasonable.
Whether There Is A Reasonable
Apprehension Of Bias
[46]
The
applicant submits that the Commission’s decision ought to be set aside on the
basis that there is a reasonable apprehension of bias on its part. The
evidence on which he relies is the refusal of the Commission to entertain his
concerns respecting errors and omissions in the investigator’s reports and his
concerns about possible bias on the part of the investigator. He relies, in large
part, on the following passage describing a telephone conversation a
representative of the Commission had with him. It is reproduced at page 516 of
the Applicant’s Further Application Record, Vol. 2 of 4: “I explained to the
complainant that while Ms. Helgason was prepared to meet with him, she wanted
him to know in advance that she was not prepared to change the investigation
report and that the correct procedure at this point was for him to make a
written submission.” The applicant asserts that this is proof of the
closed-mind of the Commission and thus its bias.
[47]
The
respondent submits, correctly, that the test is whether,
as a matter of fact, the standard of open-mindedness has been lost to a point
where it can reasonably be said that the issue before the Commission has been
predetermined: See Zündel v. Canada (Attorney General), [1999] F.C.J. No. 964, 175 D.L.R. (4th) 512. I am
satisfied that the Commission had not predetermined the matter and thus hold
that there is no bias shown. It is clear from the entirety of the written
summary of the telephone conversation that the Commission was prepared to hear
or read what Mr. McFadyen had to say and that it would engage in a further
investigation if it felt that it was warranted. What it was not prepared to do
was to change the reports. If a further investigation had been warranted no
doubt there would have been addenda or further reports for the Commission’s
consideration in addition to the written submissions of both parties on the
reports. The Commission had not determined at that point what its decision on
the reports and the submissions of the parties would be. As such there was no
predetermination.
[48]
It is also claimed by Mr. McFadyen that he had
a reasonable apprehension of bias on the part of the investigator because she
accepted the statements of CRA at face value, failed to seek support for those
statements, availed herself of a CRA official as an expert and refused to
consider the report by the applicant’s expert, and refused to take any action
as a result of the applicant pointing out deficiencies in her reports.
[49]
I find that none of these claims are supported
by the evidence and thus there can be no finding of bias as described in Zündel,
above. The investigator conducted a detailed and thorough examination of the
fundamentals of the applicant’s complaints. She recites the evidence she
obtained both from the applicant and the respondents. She is permitted wide
latitude as to how she conducts her investigation. There is nothing in the
reports or her actions that suggests that she favoured one party over the
other. She accepted no expert from either party, but indicated that if an
expert was needed the Commission would retain its own and not rely on either
party’s proposed expert. In short, her actions were even-handed and
appropriate.
Whether The Commission Made
Patently Unreasonable Findings Of Fact
[50]
The applicant submits that the Commission, in
accepting the investigator’s reports, made a patently unreasonable finding of
fact. He submits that there is a clear contradiction between the
investigator’s findings that the respondent based its decision on his marital
status and the Commission’s conclusion that it did not. The passages he claims
to be contradictory are as follows:
The evidence also indicates that the
Respondent used the Complainant’s marital status, i.e. spouse of a public
servant, as one such tie to Canada in determining that the complainant was
a Canadian resident for tax purposes.
and
The evidence does not support the
Complainant’s allegation that the Respondent reassessed his income tax returns
on the ground of his marital status (spouse of a Canadian government
employee). The evidence indicates that the Respondent reassessed the
complainant’s income tax returns as a factual resident of Canada because he had significant ties to Canada which he did not sever while working and living abroad.
[51]
The
applicant’s contention that these are directly contradictory is flawed. There
is a substantial difference between saying, as the investigator did, that one
factor looked at in determining the applicant’s ties to Canada was his marital
status, and saying, as the Commission did, that his income tax was not
reassessed on the grounds of his marital status.
Whether The Commission
Failed to Identify The Legal Test It Used
[52]
The
applicant submits that it is not clear from the record what test the Commission
used to conclude that marital status was not used in determining his tax
status. Again, in my view this submission is based on a flawed understanding
of the decision of the Commission. The investigator’s reports indicate, as the
CRA admitted, that marital status is one of the factors that it may consider
when determining whether a taxpayer is ordinarily resident in Canada – that alone does not
necessarily result in a finding that there has been discriminatory conduct.
Here the Commission found that subsection 250(1)(e) of the Income Tax Act
was not applied to Mr. McFadyen, with the result that he was not deemed
resident solely on the grounds of his marriage to a government employee working
abroad. As a consequence, there was no possible finding that there had been a prima
facie case of discrimination, as has been asserted by Mr. McFadyen. I
conclude from my reading of the reports and the decisions of the Commission that
it was satisfied that there was no evidence that Mr. McFadyen was discriminated
against in his tax treatment because of or on the grounds of marital status.
That, in my view, was a reasonable conclusion to have reached based on the
totality of the evidence.
Conclusion
[53]
These
applications must be dismissed. Neither the Commission nor the investigator
breached procedural fairness and the decision of the Commission to dismiss the
applicant’s complaints was reasonable based on the evidence before it.
[54]
The
respondent asks for costs in these matters and I see no reason why it should
not be awarded its costs. However, while the respondent will be entitled to
its disbursements in each application, much of the legal work done was incurred
for both matters, e.g. memoranda were duplicated, etc. Accordingly, the
respondent shall be entitled to its fees in Court File No.T-77-04 but shall
only be entitled to its fees in Court File No.T-123-04 for legal work that was
performed uniquely for that application. In this way, the respondent will not
be unjustly awarded fees in the second application for work in the first
application which was largely reproduced in the second application.
JUDGMENT
THIS COURT ORDERS AND
ADJUDGES that:
- The motion to
adjourn the hearing is dismissed;
- The applications
for judicial review are dismissed; and
- The respondent is
to have its costs in accordance with these Reasons.
“Russel
W. Zinn”
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