Date: 20070405
Docket: T-1188-06
Citation: 2007
FC 370
Ottawa, Ontario, April 5, 2007
PRESENT: The Honourable Mr. Justice Phelan
BETWEEN:
BRIAN
AIRTH et al
Applicants
and
THE
MINISTER OF NATIONAL REVENUE
Respondent
REASONS FOR ORDER AND ORDER
RE: CONFIDENTIALITY
[1]
The
Applicants appeal Prothonotary Lafrenière’s decision to deny a claim for
confidential treatment of (a) the Respondent’s affidavits to date and any
future affidavits, (b) any cross-examination on affidavits, (c) further
affidavits of the Applicants, (d) any tribunal records, (e) the Applicants’ and
the Respondent’s Records, and (f) the respective parties’ Written
Representations on Memorandums of Fact and Law.
[2]
The
Applicants argue that the decision on this matter is vital to the case and that
the Learned Prothonatory erred in fact and law.
[3]
It was
agreed that the legal test on this type of appeal to permit a judge to exercise
discretion de novo is that the question raised in the motion is vital to
the final issue in the case, or, the order must be clearly wrong in that the
prothonotary’s discretion was based on a wrong principle or on a
misapprehension of the facts.
Vital to the Final Issue
[4]
There is
no doubt that the Respondent is intending to disclose a considerable amount of
taxpayer information, which it claims is necessary to substantiate its defence
and is consistent with the confidentiality regime in the Income Tax Act.
[5]
It is
difficult to see how the T-1 filings of the individuals are relevant to the
issues in this case although it is possible to see the potential relevancy of
some of the information contained or lifted from the tax filings. The
Respondent has indicated that it does not need the T-1 forms and these could be
removed from the public version of the documents on the grounds of relevancy.
It would be redundant to require a separate motion to deal with this matter
given the Respondent’s position even though this was not strictly a matter on
which the Prothonotary ruled.
[6]
The
parties are cautioned that litigation is not to be a tool to embarrass a party
– that may be a consequence but it cannot be a purpose. Future pleadings should
be prepared with this caution in mind.
[7]
The
decision under appeal cannot be considered vital to the final issues in this
matter as it does not in any way determine or prejudice the determination of
whether the letters of requirement for information (RFIs) are being utilized to
advance an investigation of the Appellants (Applicants) where the predominant
purpose is not related to the administration and enforcement of the Income
Tax Act.
[8]
The
information disclosed in the pleadings to date is not the same information as
that being sought. The failure to obtain a confidentiality order does not
adversely affect the Applicants’ ability to succeed on the main matter.
Confidentiality orders have repeatedly been found not to be vital to the final
issues (Bristol-Myers Squibb Co. v. Apotex Inc., 2002 FCT 278, aff’d
2003 FCA 59).
Incorrect Legal Test
[9]
The
Applicants contend that the Learned Prothonotary erred because he applied the legal
test in R. v. Mentuck, [2001] 3 S.C.R. 442 rather than that contained in
Sierra Club of Canada v. Canada (Minister of Finance), [2002] 2 S.C.R. 522.
[10]
Reading
the decision as a whole, I cannot conclude that the Learned Prothonotary misapplied
the law. He was mindful of the test in Sierra when he dealt with the
specifics of this case.
[11]
Even if
the Applicants were correct that the Learned Prothonotary confused the two
cases, I would have reached the same conclusion he did. It must be remembered
that Sierra was a case of disclosing information covered under
contractual relations – not covered under a statute.
[12]
The
confidential regime under the Income Tax Act gives way when the matter
is “any legal proceeding relating to the administration and enforcement of this
Act” (s. 242(3)(b)). Justice Sharlow in Harris v. Canada, [2001] 2
C.T.C. 148 (FCA) specifically covered the situation of an improper
administration of the Income Tax Act and held the proceeding to be related
to the administration and enforcement of the Act. The term “related to” is to
be given a broad meaning.
[13]
The
Applicants’ attack on the RFIs is in part an attack on the proper use of the Income
Tax Act and its administration. The Applicants rely, in their motion, on
the provisions of the Income Tax Act and not on some free standing right
of confidentiality.
[14]
The
Applicants’ claim for confidentiality is grounded in the Income Tax Act
and the exception to the confidentiality provisions applies to this litigation.
The Learned Prothonotary did not clearly err in law or principle.
Misapprehension of the Facts
[15]
The
Applicants challenge the finding that the Applicants “failed to adduce any
affidavit evidence in support of their motion”. At best this finding is obiter
dicta.
[16]
The Applicants
relied on the previously filed affidavits although these were not part of their
motion record. It is not for the Court to guess which affidavits and what parts
are relied upon on a motion. More importantly, the evidence relied upon in this
regard seems to consist of allegations that officials have breached their
confidentiality obligations in speaking to an author of a book about the Hell’s
Angels. The thrust of the Applicants’ concern in regard to disclosure of
affidavit evidence cannot be based on a confidentiality that ceases to exist
under s. 241(3)(b).
[17]
The
Applicants did not adduce any compelling evidence in support of its motion. The
public exposure of the information in the affidavits does not, however,
represent authority to disclose any more than that which is relevant to the
legal proceeding.
Conclusion
[18]
The
Applicants sought an order which covered all future filings, evidence and
argument. This is a somewhat open-ended request and is premature in regards to
other filings. It is best to deal with claims of confidentiality on a case by
case basis bearing in mind, the Income Tax Act exclusion from
confidentiality, relevance and other issues pertinent to pleadings.
[19]
Since the
cost award is a separate decision and does not seem to address the fact that
the Court raised the issue of any motions for a confidentiality order, the
costs which are payable by the Applicants need not be paid forthwith.
[20]
This
appeal will be dismissed with costs to be paid at the time of settlement of
cost issues.
ORDER
IT IS ORDERED THAT:
1.
The appeal
is dismissed.
2.
The
materials currently under seal may be public except for the inclusion of T-1
forms. The Respondent is to file within seven (7) days revised materials making
the necessary amendments to reflect the removal of the T-1 filings.
3.
The costs are
awarded to the Respondent and shall be paid at the time of settlement of cost
issues.
“Michael
L. Phelan”
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