Date: 20080709
Docket: T-555-08
Citation: 2008
FC 850
Ottawa, Ontario, July 9, 2008
PRESENT: The Honourable Mr. Justice Phelan
BETWEEN:
JORGE
BARREIRO et al
Applicants
and
MINISTER
OF NATIONAL REVENUE
Respondent
REASONS FOR ORDER AND ORDER
(Re Motion for Extension of Time to file
Affidavits and
Motion for Directions re Confidentiality
of
Exhibits 6 to 19 of the Fjoser Affidavit)
I. BACKGROUND
[1]
This is a
motion by the Respondent which arises in the context of a case-managed judicial
review. That judicial review attacks the actions of the Minister (in
particular, his officials at the Canada
Revenue Agency (CRA)) and the Requirements for Information (RFIs), their
purpose and the legislative framework supporting the RFIs and actions of CRA.
[2]
The
affidavit in question by a principal witness for the Respondent contains
various information over which there is a dispute as to confidentiality of
certain exhibits. Pending resolution of that dispute, the Respondent has asked
for an extension of time to file the affidavit until seven (7) days after the
ruling on this confidentiality motion. The Applicants consent to this extension
of time and the Court pronounced orally that the extension of time is granted.
[3]
The
evidence at issue in Mr. Fjoser’s affidavit is of two distinct types. The first
is a series of printouts which contain income tax return information and some
compilation of income tax information (income information). The second is
information from a credit agency, PPSA search results, land titles search results
and the like (asset information).
[4]
The
importance of all of these documents is said to be that they are the documents
used by the Respondent in deciding to issue the RFIs. In that regard, they form
part of the “record”.
[5]
The
Respondent states that some of the documents are in the public domain while concurring
that others are not. The Applicants contend that even if some of the documents are
in the public domain, e.g. motor vehicle details, they can only be obtained by use
of some confidential information such as a social insurance number.
II. ANALYSIS
[6]
The issue
in dispute engages both s. 241 of the Income Tax Act and Rule 151 of the
Federal Courts Rules.
[7]
The
confidentiality regime of the Income Tax Act (Act) admits of an
exception related to the administration and enforcement of the Act. In
particular, s. 241(3)(b) reads:
|
241. (3) Subsections 241(1) and 241(2) do not apply in respect
of
…
(b) any legal proceedings relating to the
administration or enforcement of this Act, the Canada Pension Plan, the Unemployment
Insurance Act or the Employment Insurance Act or any other Act of Parliament
or law of a province that provides for the imposition or collection of a tax
or duty.
|
241. (3) Les paragraphes (1) et (2) ne s’appliquent :
…
b) ni aux
procédures judiciaires ayant trait à l’application ou à l’exécution de la
présente loi, du Régime de pensions du Canada, de la Loi sur
l’assurance-chômage ou de la Loi sur l’assurance-emploi ou de toute autre loi
fédérale ou provinciale qui prévoit l’imposition ou la perception d’un impôt,
d’une taxe ou d’un droit.
|
[8]
The
Supreme Court has addressed in detail the structure of s. 241(3) in Slattery
(Trustee of) v. Slattery, [1993] 3 S.C.R. 430. A critical aspect of the
voluntary tax reporting scheme of the Act is the confidentiality of what a
taxpayer discloses to the tax authorities. The Court noted that s. 241 involves
a balancing of competing interests – the privacy interests of the taxpayer with
the interest of the Minister in being allowed to disclose taxpayer information to
the extent necessary for the administration and enforcement of the Act.
[9]
There can
be no issue that the information at issue is taxpayer information in the hands
of the Minister. Nor is there any doubt that such information can be disclosed
in legal proceedings related to the administration and enforcement of the Act.
As such, the Minister may disclose such information (to the extent that it is
relevant) at the hearing of this matter.
[10]
The real
issue is when is such disclosure authorized or should it be permitted.
Therefore, Rule 151 becomes relevant.
|
151. (1) On motion, the Court may order
that material to be filed shall be treated as confidential.
(2) Before making an order under subsection (1), the Court must be
satisfied that the material should be treated as confidential,
notwithstanding the public interest in open and accessible court proceedings.
|
151. (1) La Cour peut, sur requête, ordonner que des
documents ou éléments matériels qui seront déposés soient considérés comme
confidentiels.
(2) Avant de rendre une ordonnance en application du
paragraphe (1), la Cour doit être convaincue de la nécessité de considérer
les documents ou éléments matériels comme confidentiels, étant donné
l’intérêt du public à la publicité des débats judiciaires.
|
[11]
In the
course of normal litigation involving an action, the documents in question
would be produced at discovery but generally subject to the express (or
implied) undertaking of confidentiality. The result is that such information in
the litigation would only be publicly available at the trial.
[12]
The
Federal Court changed its procedures for the relief of declaration (which is
the principal relief sought) from the use of an action to the current procedure
of a judicial review. As a consequence, affidavit evidence (usually the type of
evidence heard in an action at trial) is available when filed with the
Registry. To some extent, the pre-trial disclosure protections are lost by the
form of the proceeding.
[13]
As to
whether this is an appropriate instance under Rule 151 to impose a
confidentiality order, the Court is guided by Sierra Club of Canada v. Canada (Minister of Finance), 2002 SCC 41.
[14]
In Sierra
Club of Canada, the Supreme Court set out the appropriate test for a R. 151
order to be issued when:
·
an order is
necessary to prevent risk to an important interest. This involves a
consideration of real and substantial risk; a finding that the interest in
issue is a public interest in confidentiality; and an obligation to restrict
the remedy as much as is reasonable while preserving the interest.
·
the
salutary effects of the confidentiality order outweigh its deleterious effects.
[15]
The first
category of information at issue (income information) is largely the
information the Applicants supply on their tax filing. There is a recognized
public interest in the Act in maintaining confidentiality over such voluntary
disclosure. Disclosure at this stage harms a privacy interest and a public
interest in the Act.
[16]
Furthermore,
since any confidentiality order would operate only up to the commencement of
the hearing, any adverse effects on the open court principle is largely
ameliorated.
[17]
Litigation,
particularly at this stage, does not justify the Minister in disclosing
taxpayer information simply because there is litigation (nor is a taxpayer
entitled to be treated as if in a cocoon). The Court therefore concludes that
the income tax information and compilations are to remain confidential until
the hearing of this matter, at which time the parties may address the need to
continue to maintain such information and compilations confidential.
[18]
With
respect to the “asset information”, particularly the information which is in
the public domain, the Applicants point out that it was the method of obtaining
the information which made it confidential. The Applicants rely on Scott
Slipp Nissan Ltd. v. Canada (Attorney General), 2005 FC 1479. In that case,
there was evidence of harm by the disclosure of information which should not
continue even if the harm was minimal. However, in the present case, the
Applicants have not produced evidence of potential harm by the disclosure of
information in the public domain.
[19]
In
addition, there is no evidence that in order to obtain information such as PPSA
or land titles search results, one needed to have access to confidential
information. The Applicants have not established some derivative use of
confidential information.
[20]
Finally, there
is no suggestion here (as there was in Airth v. Canada (Minister of National Revenue
– M.N.R.),
2007 FC 370) that the Respondent has stepped outside the bounds of adducing material
that is relevant and necessary to the case in affidavit evidence.
[21]
Information
such as PPSA searches and the like are clearly in the public domain available
in public government registries. The evidence from credit agencies does not
have the same characteristic of being publicly available; however, it appears
to be information which is proprietary to the agencies – not to the subject of
the reports. Therefore, that information has not been shown to be confidential
to the Applicants or between the Applicants and the Respondent. This
information will not be covered by this confidentiality order.
ORDER
FOR THE REASONS
GIVEN, THE COURT ORDERS as follows:
1.
The time
for filing the original affidavits of Wayne Fjoser and Jacqueline Gomez is
extended to seven (7) days following the date of this Order.
2.
The
original affidavit #2 of Wayne Fjoser containing the confidential information
shall be sealed in the Registry and shall remain confidential except for
purposes of this litigation until otherwise ordered by the Court.
3.
The
Respondent is, within the same seven (7) days, to serve and file a “public”
version of Wayne Fjoser’s affidavit, with all information herein ruled confidential
removed.
4.
Costs
shall be in the cause.
“Michael
L. Phelan”
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