Date:
20070813
Docket:
T-2194-06
Citation:
2007 FC 834
Ottawa,
Ontario, August 13, 2007
PRESENT: The Honourable Mr. Justice
Blanchard
BETWEEN:
MINISTER
OF NATIONAL REVENUE
Applicant
and
757746
ALBERTA LTD. and PAUL MOREL
Respondents
REASONS FOR
ORDER AND ORDER
[1]
In these reasons I explain why I have found the Respondents to be in
contempt of the Court’s Order of January 18, 2007.
1. Applicable Legal
Principles
[2]
Rule 466(b) of the Federal Courts Rules, SOR/98-106 (Rules)
states that a person is guilty of contempt of court when they disobey an order
of the Court.
[3]
In considering whether a person is in contempt, the Court must apply the
following principles:
1. The burden of proving contempt falls upon the party alleging
such contempt, and that the person alleged to be in contempt (contemnor) need
not present any evidence to the Court.
2. The constituent elements of contempt must be proven beyond a
reasonable doubt.
3. The disobedience of an order of the Court must be established
by demonstrating the existence of the Court order, knowledge of the order by
the alleged contemnor, and knowledge of disobedience of the order.
4. The evidence to establish contempt shall be provided orally,
unless instructed otherwise by the Court.
5. To establish liability for disobeying an injunctive order it
is sufficient to show that the contemnor has knowledge of the order, as proof
of intent is not a required element for the finding of contempt. See; Rules 469
and 470, and Tele-Direct (Publications) Inc. v. Canadian Business Online
Inc. (1998), 151 F.T.R. 271.
[4]
The underlying rationale justifying the Court’s contempt power is to
ensure the orderly administration justice and respect for judicial process. The
disobedience of a Court order constitutes an attack on its authority and
dignity. Consequently, compliance with Court orders is imperative if the rule
of law is to be maintained.
2. Findings of Fact
[5]
Oral evidence in support of the allegation of contempt of court was
adduced by William John Stevens; a process server and Jana Engelhardtova, an
auditor. Each witness testified in a straight-forward manner with no
inconsistencies or inherent implausibilities in their evidence. Each answered
questions put to them by counsel and by the Court directly and without hesitation.
I find each witness to be credible and accept their evidence.
[6]
Additionally, copies of the Court’s Orders of January 18, 2007 and April
4, 2007, along with proof of their service to the Respondents were tendered and
received as exhibits.
[7]
The Respondents did not attend in Court, nor did they otherwise respond
to the application to find them to be in contempt of court.
[8]
On the basis of the above described evidence, I am satisfied beyond a
reasonable doubt of the following facts:
1.
On November 4, 2005, Ms. Engelhardtova met with Mr. Morel and requested
books and records for the corporation as she was conducting a GST audit ordered
by Canada Revenue Agency. The requested documents were not provided by the
Respondents.
2.
On March 12, 2006, Ms. Engelhardtova accompanied by her team
leader visited Mr. Morel and requested the aforementioned documentation. No
documentation was provided by the Respondents during this visit.
3.
On June 13, 2006, the Respondents were personally served with a
Requirement to Provide Information and Documents (the Requirement) issued
pursuant to paragraphs 289(1)(a) and (b) of the Excise Tax Act,
R.S.C. 1985, c. E-15, and paragraphs 231.2(1)(a) and (b) of the Income
Tax Act, R.S.C. 1985, c. 1 (5th Supp.). The Respondents were
required to answer in respect to the period from August 1, 2002 to January 31,
2004, and requested six (6) different categories of documents pertaining to all
transactions that occurred during the audit period. The requirement specified
that the information and documents were to be provided within 30 days from the
date of receipt of the notice.
4.
On October 11, 2006, Mr. Morel faxed Ms. Engelhardtova a printout of the
corporation’s bank statements but omitted to provide the Applicant documents
from the other five categories listed in the Requirement.
5.
On December 28, 2006, the Respondents were personally served with a copy
of the Applicant’s record filed in this proceeding by the Minister of National
Revenue (the Minister) in which he sought an order requiring the Respondents to
comply with the Requirement.
6.
On January 11, 2007, the Respondents did not appear for the
hearing requesting an order of compliance with the Requirement.
7.
On January 18, 2007, the Court granted the Minister’s application
and ordered that the Respondents comply with the Requirement within 30 days
after being served with the order.
8.
On January 26, 2007, the Respondents were personally served with the
Court’s order of January 18, 2007.
9.
The Respondents failed to comply with January 18, 2007 Order. To date,
neither the required documents nor information has been provided by the
Respondents.
10.
On April 4, 2007, an order was made requiring the Respondents to appear
before the Court on June 7, 2007, and be prepared to answer the allegation of
contempt of the January 18, 2007 Court Order made against them.
11.
On April 12, 2007, the Respondents were personally served with the April
4, 2007 Court Order.
12.
On June 7, 2007, the Respondents did not comply with the April 4, 2007 Court
Order and failed to appear and answer the allegation of contempt made against
them.
[9]
These facts, establish without doubt, the existence of the Court’s Order
of January 18, 2007, the Respondents’ knowledge of that Order, and their
disobedience of that Order.
3. Disposition
[10]
The Respondents are guilty of contempt of court because they have
disobeyed the Court’s Order of January 18, 2007.
[11]
The Applicant seeks an order requiring the Respondents to attend Court
on the next available date to speak to sentence, and costs on a solicitor-client
basis.
[12]
Rule 472 deals with the penalty which may be ordered on a finding of
contempt. The Rule provides that:
|
472. 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.
|
472.
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.
|
[13]
In Winnicki v. Canada (Human Rights Commission), 2007 FCA 52, the
Federal Court of Appeal held that an individual found in contempt of court
should be provided an opportunity to make submissions as to what would be an
appropriate sentence. To that end, I will provide the Respondents the
opportunity to make submissions on sentence and order that: (1) the Respondents
make written submissions and appear at a sentencing hearing; (2) a copy of the
within Order and Reasons for Order be personally served on the Respondents; and
(3) the Applicant file further written submissions on sentencing.
[14]
I will dispose of the issue of costs after the sentencing hearing.
ORDER
THIS COURT
ORDERS that:
1.
The Respondents are guilty of contempt of court because they have
disobeyed the Court’s Order of January 18, 2007.
2.
The Respondents shall serve and file written submissions on sentencing on
or before August 31, 2007.
3.
The Respondents will attend the sentencing hearing at 9:30 a.m. on
September, 21, 2007 at the Federal Court, 3rd Floor, 8th
Avenue S.W., Calgary, Alberta, and will be heard as to the appropriate
sentence.
4.
The Applicant will serve and file further written submissions, on or
before September 7, 2007, wherein the following factors are to be addressed:
(1) Any non-compliance or past violations by the Respondents of
provisions of the Income Tax Act, and/or the Excise Tax Act if
any;
(2) Any further information about the Respondents which may assist
the Court on sentencing.
5.
The Applicant shall serve the Respondents’ personally with a true copy
of the within Order and Reasons for Order no later than August 21, 2007 and
file proof of service with the registry of the Court.
6.
The issue of costs shall be dealt with after the sentencing hearing.
“Edmond P. Blanchard”
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