Date: 20080221
Docket: T-1930-07
Citation: 2008
FC 237
Vancouver, British
Columbia,
February 21, 2008
PRESENT: The Honourable Mr. Justice Blanchard
BETWEEN:
THE
MINISTER OF NATIONAL REVENUE
Applicant
and
JAY CURRIE also known as
JAY FERGUSON ELLIOTT CURRIE
and JAY F.E. CURRIE
Respondent
REASONS FOR ORDER AND ORDER
[1]
This is a motion
on behalf of the Applicant, the Minister of National Revenue (the Minister),
for an Order against the Respondent under section 231.7 of the Income Tax
Act (the Act) to provide information or documents sought by the Minister
under subsection 231.2(1) of the Act.
[2]
The
Respondent was required to provide the information and documents sought by the
Minister and failed to do so. The information and documents sought by the Minister
are not protected from disclosure by solicitor-client privilege.
[3]
The
Order sought will require that the Respondent provide the following
information:
a) Complete details of, including
but not limited to, the name, complete address and types of transactions with
all financial institutions Jay Currie, (sometime known as Jay Ferguson Elliott
Currie) including any partnerships, trade names or operating names, has had
dealings with for the periods 01 January 2007 to 30 June 2007;
b) Complete details of, including
but not limited to, the names, addresses and moneys received from all
parties for all contracts, written or verbal, entered into by Jay Currie
(sometime known as Jay Ferguson Elliott Currie) including any partnerships,
trade names or operating names, for the period 1 January 2007 to 30 June
2007;
c) Complete details of, including
but not limited to, names, addresses, amounts receivable and projected amounts
receivable, of all work-in-progress at 30 June 2007 for Jay Currie (sometime
known as Jay Ferguson Elliott Currie) including any partnerships, trade names
or operating names;
d) A complete list of money,
shares, securities, interest, dividends and any other asset held directly,
indirectly or beneficially for Jay Currie (sometime known as Jay Ferguson
Elliott Currie) including any partnerships, trade names or operating names, for
the period 01 January 2007 to 30 June 2007;
e) A complete list of all
nominees, including complete names and addresses, who operated trading and/or
investment accounts on behalf of Jay Currie, (sometime known as Jay Ferguson
Elliott Currie) including any partnerships, trade names or operating names, for
the period 01 January 2007 to 30 June 2007;
f) A complete list, including
source names, addresses and amounts, of all income for Jay Currie,
(sometime known as Jay Ferguson Elliott Currie) including any partnerships,
trade names or operating names, for the period 01 January 2007 to 30 June
2007;
(the Information and Documents);
[4]
The
motion was set for hearing on December 17, 2007. The hearing was adjourned to
enable the Respondent to prepare further submissions and to file a Notice
of Constitutional Question. The matter was rescheduled for general
sittings at Vancouver on February
18, 2008.
[5]
The
Court has before it the Applicant's record which includes the Notice of
Application, the Affidavit of Linda Brown sworn November 7, 2007, the
Applicant's memorandum of Fact and Law and Book of Authorities.
[6]
The
Respondent's amended record consists of the Respondent's amended Memorandum of
Fact and Law and Book of Authorities. The Respondent did not file a Notice of
Constitutional Question, nor did he file affidavit evidence.
Analysis
[7]
Section
231.2 of the Act states that the Minister may "for any purpose related to
the administration or enforcement of this Act, including the collection of any
amount payable under this Act by any person" require a person to provide
information and/or documents.
[8]
The
evidence relied on by the Minister to establish the required facts under
section 231.7 is set out in the Affidavit of Linda Brown, a Collections Officer
in the Vancouver Island Tax Services Office of the Canada Revenue Agency (the
CRA). These facts are not disputed by the Respondent. I am satisfied that
these facts establish that the Respondent was required to provide the
Information and Documents, and that the Information and Documents requested are
not protected from disclosure by solicitor-client privilege. I am therefore satisfied
that the pre-requisites set out in paragraphs 231.7(1)(a) and (b) for the
issuance of a compliance order under the Act have been established.
[9]
In
his amended record, the Respondent no longer challenges the constitutional
validity of the pertinent provisions of the Act. He does state, however, that
the process which underlies the Application is not consistent with the Federal
Courts Rules, fails to set out a discernible process leaving a respondent
unaware of what rules are applicable to the proceeding and, consequently,
making it impossible for a respondent to properly respond to the application.
[10]
The
Respondent further contends that, as a consequence of this procedural
deficiency, the net effect of the compliance order is to render the
"seizure" of the Information and Documents unreasonable, thereby
infringing his s. 8 Charter rights.
[11]
The
Respondent also contends that failure to provide a clear process or follow the Federal
Courts Rules is contrary to fundamental justice and violated his s. 7
Charter rights.
[12]
The
only remedy available, in the Respondent's submission, is that the application
be dismissed.
[13]
For
the reasons that follow, all the Respondent's arguments must fail.
[14]
Shortly
after the coming into force of the impugned provision the Minister sought,
pursuant to Rule 72, the Court's direction with respect to proceedings under
subsection 231.7 of the Act. Prothonotary Lafrenière issued directions on April
22, 2002, in Court file T-643-02, Minister of National Revenue v. Neil T.
Norris. These directions set out the procedure to be followed in
proceedings under subsection 231.7 of the Act. The process provides as follows:
[6] The Applicant shall
file a Notice of Application in Form 301, to be treated by the Registry as both
an originating document and notice of motion, which shall:
(a) set out the day,
time and place at which the application will be heard, either at a General
Sittings of the Court or such special sitting date as may have been appointed
by the Judicial Administrator upon informal request by the Applicant;
(b) be amended by
deleting any references to Rule 300 et seq.;
(c) contain a notice in
capital and bold characters which reads as follows: "The Respondent who
wishes to oppose the application shall serve a Respondent's Record and file
three copies of it not later than 2:00 p.m. on the last business day before the
hearing of the application."; and
(d) be accompanied by
the appropriate filing fee.
[7] Once the Notice of
Application has been filed, the Applicant shall personally serve the Respondent
with an Application Record containing a table of contents, the notice of
application, each supporting affidavit and documentary exhibit and the
Applicant's memorandum of fact and law. The Applicant shall file three copies
of the Application Record, and proof of service thereof in accordance with ss.
237.1 of the Income Tax Act, forthwith and in any event no later than
two clear days before the return date of the hearing of the application.
[15]
The
above process has essentially been followed in applications under subsection
231.7 of the Act for a number of years and has been recognized as the
appropriate procedure to follow in MNR v. Cornfield, 2007 FC 436 at
paras. 16, 16 and 30.
[16]
While
the Notice of Application makes no specific reference to any particular Rule,
it does refer to the Federal Courts Rules and, more importantly, states
in bold print …"The Respondent who wishes to oppose the application shall
serve a respondent's record and file three copies of it not later than 2:00
p.m. on the last business day before the hearing of the application."
[17]
I
agree with the Applicant's submission that the underlying purpose of the Rules
is to serve the interests of fundamental justice. In the instant case, the
Respondent had clear notice of the proceeding initiated against him, the nature
of and details of the order sought as well as the stated grounds for the
application.
[18]
The
Respondent was also notified that if he wished to oppose the application, he
had to serve and file a "Respondent's record" within the given
delays.
[19]
In
my view, the principles of fundamental justice are not violated because the
Notice of Application fails to spell out what is to be included in the
respondent's record. The Federal Courts Rules with respect to both
applications (Rule 310(2)) and motions (Rule 364(2)) provide for what is to be
included in a respondent's record. Both provisions are essentially the same and
serve to guide parties in the preparation of their responses in such
applications.
[20]
In
the circumstances, the Respondent knew the case he had to meet. Any
deficiencies or lack of clarity in the procedure to be followed could easily be
corrected by seeking the Court's direction. The process outlined in the Notice
of Application is fair and does not violate the principles of fundamental
justice.
[21]
Since
the Respondent's concerns regarding a fair hearing have been met, his
objections on constitutional grounds are misplaced. As stated above, the
Respondent has notice of the case against him and has the opportunity to make
full answer and defence. Confusion, if any, over procedural issues can be
answered through directions from the Court. Such issues are not in the nature
of those contemplated under s. 7 of the Charter, where the focus is on such
concepts as the right to make full answer defence.
[22]
The
Respondent's arguments relating to s. 8 of the Charter are fully answered in R.
v. McKinley Transport, [1990] 1 S.C.R. 627, where the Supreme Court at page
650 of its reasons concluded that seizure contemplated by section 231.(3) of
the Income Tax Act is reasonable and does not violate s. 8 of the Charter.
Further, the Respondent has failed to demonstrate how the impugned process
would have caused him any prejudice. He had in excess of 90 days to prepare his case,
adduced no evidence and elected not to cross-examine the Applicant's only
affiant.
[23]
The
provisions under the Act regarding compliance orders are clear, as are the
facts that must be established by the Minister to obtain such an order. These
provisions are specific to compliance order applications and should be favoured
over the wholesale application of more general rules. That is not to say the Federal
Courts Rules in such applications find no application. In the instant,
the Rules serve to complement the process directed by the Court for such
applications under the Act pursuant to Rule 72.
[24]
The
evidence of the Minister is that the Respondent owes a tax debt and that the
information sought is necessary to the administration and enforcement of the
Act, including collection of amounts owing.
[25]
In
the circumstances, I am satisfied that:
1) The requirements have been met for
granting an order against the Respondent under section 231.7 of the Income
Tax Act to provide Information or Documents sought by the Minister under
subsection 231.2(1) of the Income Tax Act, such requirements being:
a) the Respondent was required under subsection
231.2(1) of the Income Tax Act to provide the Information and Documents
sought by the Minister;
b) the Respondent has failed to provide the
Information and Documents sought by the Minister; and
c) the Information and Documents sought by the
Minister are not protected from disclosure by solicitor-client privilege.
2) The Respondent has not yet provided the Minister
with the Information and Documents; and
3) The Information and Documents are not protected
from disclosure by solicitor-client privilege within the meaning of subsection
232(1) of the Income Tax Act;
4) An order under section 231.7 of the Income Tax
Act be made that the Respondent provide the Information and Documents
(described at paragraph [3] above).
ORDER
THIS
COURT ORDERS that, pursuant to section 231.7 of the Income Tax Act, the Respondent
shall comply with the notice issued by the Minister and shall forthwith and in
any event not later than 30 days after being served with this Order provide the
Information and Documents, set out in paragraph [3] of the above Reasons for
Order, to a Canada Revenue Agency officer acting under the authority conferred
by the Income Tax Act or other person designated.
THIS COURT FURTHER ORDERS that costs are awarded to the Minister in
the amount of $779.24.
"Edmond P. Blanchard"
Email this Content