Date: 20071218
Docket: T-1188-06
Citation: 2007
FC 1334
Ottawa, Ontario, December 18, 2007
PRESENT: The Honourable Mr. Justice Phelan
BETWEEN:
BRIAN
AIRTH et al
Applicants
and
THE
MINISTER OF NATIONAL REVENUE
Respondent
REASONS FOR ORDER
(Motion to Amend)
PHELAN J.
[1]
The
Applicants have moved to amend their Notice of Application to include a number
of new remedies and grounds. This is the second amendment to the Notice of
Application. Time is also running under the Income Tax Act for
re-assessment of the tax years in question.
[2]
The
hearing of this judicial review was set peremptorily on July 19, 2007 to
commence February 18, 2008. The Applicants applied to amend the application on
November 16, 2007 after concluding cross-examinations of several of the Respondent’s
witnesses.
[3]
The basic
principles related to amendments was set out in Canderel Ltd. v. Canada
(C.A.), [1994] 1 F.C. 3 at para. 9:
With respect to amendments, it may be stated, …,
that while it is impossible to enumerate all the factors that a judge must take
into consideration in determining whether it is just, in a given case, to
authorize an amendment, the general rule is that an amendment should be allowed
at any stage of an action for the purpose of determining the real questions in
controversy between the parties, provided, notably, that the allowance would
not result in an injustice to the other party not capable of being compensated
by an award of costs and that it would serve the interests of justice.
The principles were even more succinctly put in Canderel
at para. 12 quoting from the Tax Court:
… Ultimately it boils down to a
consideration of simple fairness, common sense and the interest that the courts
have that justice be done.
[4]
The Court has
approached the proposed amendments with these principles in mind; particularly
fairness, common sense and that justice ought to be done.
[5]
I have
made my determination on the basis of the proposed relief since that was the
manner in which the parties addressed the Court.
Re Paragraph 1
[6]
This is
not essentially new relief and is allowed.
Re Paragraph 2
[7]
This is
new relief and is to some extent related to paragraph 5(e). However, this
relief is so open-ended, lacking in specifics as to time, place and
individuals, as to be a declaration in respect to past conduct not related to
the Request for Information (RFIs). As such, it is a form of relief that could
be the basis of a separate matter. It has the potential to involve conduct
going well beyond the period relevant to the RFIs or in any way related to the
purpose of the investigation giving rise to the RFIs.
[8]
The facts
underlying this relief may be relevant to the essential aspect of this matter –
an attack on the RFIs being issued for an improper purpose – but I cannot see
how the relief itself has sufficient nexus to the basic relief being sought.
This is not a case of a challenge to all tax dealings in respect of members of
the Hell’s Angels.
[9]
On the
other hand, the Applicants say that the facts underlying this relief are those
contained in paragraph 20 and say that the evidence in support of paragraph 20
comes from the record in this matter.
[10]
Therefore,
paragraph 2 will be allowed subject to it being based on the allegations in
paragraph 20 of the Grounds and the Applicants providing to the Respondent
particulars of the allegations from the existing record. In this way, there
will be some scope and definition to the relief and the allegations on which it
is based. Since the narrower relief is based on the record, there should be no
need for new evidence. The Applicants will have leave to amend this proposed
paragraph to be consistent with Grounds and the particulars.
[11]
The
Respondent has suggested that this relief must be addressed to specific
officials. However, the specific breaches were pleaded originally and there has
been no need to name the officials. I fail to see why it is necessary now.
Re Paragraph 3
[12]
This is an
entirely new relief and allegation. The facts may be relevant to the bona
fides and legality of the Respondent’s actions but the relief based upon discretion
and bias is so remote from the principal relief and the prejudice to the
Respondent sufficiently serious that this amendment will not be allowed.
Re Paragraph 4
[13]
This
amendment is not really new and will be allowed.
Re Paragraph 5
[14]
Subparagraphs
(a), (c) and (d) are not truly new and are in line with the core relief at
issue.
[15]
The
Respondent says that subparagraph (b) is new and requires further evidence. The
relief is new but the evidence in support comes from the cross-examinations of
the Respondent’s witnesses. To the extent that the Respondent needs to submit
evidence to address this issue, it would necessarily be limited.
[16]
To assist
the Respondent, this subparagraph will be allowed subject to the Applicants
providing particulars upon which this relief is based. Any issues of further
evidence can be addressed by way of case management conference.
[17]
While the
Respondent says that this grounds of relief is new, it is only so by virtue of
being tied directly to s. 241(1). Any infirmities in this pleading will be
rectified by the order in respect to paragraph 2 which will narrow the scope of
the grounds and relief. Therefore, it is allowed on those onditions.
Re Paragraph 6
[18]
It is
unclear what a “writ” means in this context; however, as recognized by the
Respondent, this relief is a matter of argument. Therefore, the amendment will
be allowed.
Re Paragraph 7
[19]
This is
entirely new relief. It is likely to be amended further and clarified in the
revised Constitutional Question.
[20]
The Applicants
argue that this relief is designed to address issues related to the Criminal
Code, s. 462.48, and to a regime for control between the operation of the
relevant provisions of the Criminal Code and the Income Tax Act.
It is claimed to be an alternative to the striking down of the statutory
provision or “reading down”.
[21]
The
Respondent argues that, among other things, the proposed regime cannot succeed,
that there are issues of court’s power to make such an order and that some
evidence will be needed.
[22]
Since the
constitutional issues will not be addressed until April, there is sufficient
time to adduce evidence, if it is needed.
[23]
While the
merits of the regime do not immediately “jump out” and there may be substance
in the Respondent’s arguments on the legality and practicality of the relief,
it is not for the Court, at this stage, to deny the Applicants the opportunity
to advance this position. The relief is largely a matter of legal argument and
will be allowed.
Conclusion
[24]
The
proposed amendments will be allowed in part and subject to conditions
described. Costs shall be in the cause.
[25]
A formal
order will issue in due course.
“Michael
L. Phelan”
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