Date:
20070619
Docket:
T-1926-06
Citation:
2007 FC 656
[ENGLISH
TRANSLATION]
Montréal, Quebec, June 19, 2007
PRESENT: Richard Morneau, Esq., Prothonotary
BETWEEN:
THE
MINISTER OF NATIONAL REVENUE
Applicant
and
LA COOPERATIVE DE
SERVICES DES
TRAVAILLEURS AUTONOMES
DE
L’OUTAOUAIS also known
as
COOP
HARMONIE PLUS
Respondent
REASONS
FOR ORDER AND ORDER
[1]
The
Court is faced with two (2) motions. One is by the applicant, and it is aimed
at establishing a timeline for bringing this case into order, which is tending
to drag. This motion is not truly being challenged.
[2]
The
other motion is by the respondent (hereinafter Coop Harmonie Plus) under Rule
371 of the Federal Courts Rules (the Rules) for leave to have two
witnesses heard during the hearing for its application to have the Court’s
decision dated November 6, 2006, reviewed, which gave leave to the Minister of
National Revenue (the applicant) to have a request for information and document
delivery aimed at the designated individuals not mentioned by name served on
Coop Harmonie Plus.
[3]
We
will first deal with the latter motion under Rule 371.
Background
[4]
The
Court’s leave on November 6, 2006, was granted under subsection 231.2(3) of the
Income Tax Act (“ITA”). To obtain this leave, the applicant demonstrated
two elements: that the persons in question could be identified and that the
applicant required their names to audit a duty or obligation set out in the
ITA, namely, to our understanding, that the investments of persons in the Coop
Harmonie Plus met the conditions set out in the ITA to qualify as an RRSP
deduction.
[5]
Afterwards,
Coop Harmonie Plus filed an application challenging the order dated November 6,
2006, and proceed with the examination on affidavit of the two auditors who
signed the affidavits in support of the ex parte application, Ms. Josée
Girard and Mr. Jacques Lacroix. The same steps were taken in docket T-1933-06.
[6]
Coop
Harmonie Plus finally filed the motion under review recently.
Analysis
1 Motion
by Coop Harmonie Plus under Rule 371
[7]
Rule
371 reads as follows:
|
371. On motion, the
Court may, in special circumstances, authorize a witness to testify in
court in relation to an issue of fact raised on a motion.
(Emphasis added)
|
371. Dans des
circonstances particulières, la Cour peut, sur requête, autoriser un
témoin à témoigner à l’audience quant à une question de fait soulevée dans
une requête.
|
[8]
In
Cyanamid Canada Inc. v. The Minister of National Health and Welfare (1992),
52 F.T.R. 22 (F.C. Trial Division), the Associate Chief Justice of this Court,
as he then was, stressed the following statements that apply mutatis
mutandis to the rule under review:
It
is clear that motions are to be conducted on the basis of documentary evidence
and that it is exceptional to depart from this practice. Rule 319 of the Federal
Court Rules provides that allegations of fact upon which a motion is based
shall be by way of affidavit although, by leave of the Court and for special
reason, a witness may be called to testify in open Court in relation to an
issue of fact raised by an application. In Glaxo Canada Inc. v. Canada
(Minister of National Health and Welfare) and Apotex Inc. et al. No. 4)
(1987), 11 F.T.R. 132, Glaxo’s application under rule 319(4) for leave to call
a witness to give viva voce evidence in relation to certain issues of fact
raised in the application was dismissed. Rouleau, J., commented (at
p. 133):
Under
Rule 319 all the facts on which a motion is based must be supported by
affidavit evidence. It is only ‘by leave of the court’ and ‘for special reason’
that a witness can be called to testify in relation to an issue. There were no
cases presented to me by counsel for the plaintiff nor am I aware of any case
law which identifies the test as to what constitutes ‘special reason’. In my
opinion, this is a question to be decided on the facts of a particular case
with the onus being on the applicant to prove the existence of ‘special reason’
to the satisfaction of the court. What is clear from the jurisprudence is that
leave will be granted by the court only in exceptional circumstances.
[9]
The
burden of demonstrating the existence of those circumstances falls to the
respondent, Coop Harmonie Plus.
[10]
In
its notice of motion and written submission — and not in an affidavit, so
therefore not in the evidence — Coop Harmonie Plus argues that the applicant is
pursuing some sort of nationwide investigation through this docket, and not a
simple audit of the people in question at Coop Harmonie Plus.
[11]
During
its written submissions at its motion hearing, counsel for Coop Harmonie Plus
argued that the applicant was reproducing here on merit the situation denounced
by the Supreme Court of Canada in James Richardson & Sons v. M.N.R.,
[1984] 1 S.C.R. 614, i.e. a general investigation (fishing expedition)
into a category of people.
[12]
According
to the allegations by Coop Harmonie Plus, witnesses who come from or worked for
the applicant (Mr. Vita and Mr. Gagnon) would confirm everything. However, the
affidavit provided by Coop Harmonie Plus is very brief, and does not raise at
all the detailed proposition argued by Coop Harmonie Plus in its written and
oral allegations. Furthermore, the applicant acted in 2006 pursuant to the
parameters under subsection 231.2(3) of the ITA, which, as demonstrated by
counsel for the applicant, underwent two legislative changes since Richardson
in 1984.
[13]
Moreover,
Coop Harmonie Plus did not provide as evidence any elements showing that it
took steps to contact the two witnesses sought, Mr. Vita and Mr. Gagnon, and
that these two witnesses refuse to provide affidavits. In Mr. Vita’s case, it
appears that he is no longer employed by the applicant. He is therefore not
under the applicant’s control. As for Mr. Gagnon, the evidence reveals very
little about him.
[14]
As
a result, this motion by the respondent, Coop Harmonie Plus, will be dismissed
with costs, because it is my view that the respondent did not meet its burden
of proof in its motion.
2 Applicant’s
motion for a timeline
[15]
As
for this motion, the parties will govern themselves in accordance with the timeline
in the order below. This motion is therefore allowed, with costs in the cause.
ORDER
1.
The
motion by the respondent, Coop Harmonie Plus, is dismissed, with a set of costs
for both dockets (i.e. this docket and docket T-1933-06).
2.
The
applicant’s motion to establish a timeline is allowed as follows, with costs in
the cause. Thus, the parties must govern themselves according to the following timeline:
a)
By
July 18, 2007, the respondent, Coop Harmonie Plus, shall serve and file an
additional motion record under Rule 364 that contains, if applicable, written
representations in addition to those already filed, and the excerpts from the
transcripts of the testimonies on affidavit that it intends to use;
b)
By
August 3, 2007, the applicant, the Minister of National Revenue, shall serve
and file a motion record in response to the respondent’s motion record and the
additional motion record, if applicable;
c)
After
the later of the dates above, the Court shall set the motion review hearing for
the order at a special session of the Federal Court in Montréal, for a duration
of no longer than one (1) day for dockets T-1926-06 and T-1933-06. Counsel for
the applicant shall send the judicial administrator a letter for that purpose.
d)
This
order applies mutatis mutandis to docket T‑1933‑06.
“Richard
Morneau”
Email this Content