Date:
20130425
Docket:
T-1933-11
Citation:
2013 FC 430
Ottawa, Ontario,
April 25, 2013
PRESENT: The
Honourable Mr. Justice Phelan
BETWEEN:
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ALICE FICEK
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Applicant
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and
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THE ATTORNEY GENERAL OF CANADA
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Respondent
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REASONS FOR
ORDER AND ORDER
I. INTRODUCTION
[1]
This
decision is in respect of a written motion by the Respondent to have the
Applicant’s judicial review dismissed on the grounds of mootness.
II. BACKGROUND
[2]
The
Applicant brought a judicial review in the nature of a mandamus
application to compel the Respondent Minister (or his delegates) to examine the
Applicant’s tax return, issue a corresponding tax assessment and to issue a
notice of assessment [assessment] for the 2010 tax year. The application also
included a request for a declaration that there was no authority to delay the
examination of the Applicant’s tax return, the issuance of the assessment and
the sending of the said notice.
[3]
The
judicial review has been fully argued. The Respondent claimed that it needed
time to perform the examination, including time to conduct an audit of a
charitable tax shelter. This tax shelter is a focal point of the judicial
review.
[4]
Despite
this plea for necessary time, suggested to be until June 2013, approximately
one month after the Federal Court judicial review hearing on November 21, 2012,
the Applicant’s 2010 assessment was issued.
[5]
The
Respondent subsequently brought this motion to dismiss on the grounds of
mootness.
[6]
The
Applicant acknowledges that the issue of mandamus for the issuance of
the 2010 tax year assessment is moot. However, the Applicant argues that the
right to a declaration is not and if it is, the Court should exercise its
discretion to decide the matter.
[7]
The
Applicant has also sought to amend its relief of declaration to make it more
specific to current events. The specific amendment reads:
… in the alternative, a declaration that the
Minister has no authority to delay the examination of the applicant’s return,
the issuance of a corresponding tax assessment, and the sending of a notice of
that assessment for any of the following reasons:
a) to deter
or reduce taxpayer participation in a registered tax shelter (namely, in the
Global Learning Gifting Initiative); or
b) to
pursue goals other than those directly related to examining the applicant’s
return and ascertaining her tax, interest, and penalties payable under the Income
Tax Act.
That amendment has been granted and
these reasons reflect the effect of the requested declaratory relief.
[8]
What
lies at the heart of the dispute is that the Winnipeg office of CRA established
its own policy to hold donor tax assessments in abeyance pending the audit of
the relevant tax shelter. This was a reversal of the previous policy to issue
the assessment first – one which was in effect throughout the country. The
legal issue is whether this new policy meets the obligation to assess for taxes
“with all due dispatch”.
[9]
While
the Applicant acknowledges that the relief of mandamus is moot, she
argues that a declaration is sought that the Minister has no authority to delay
the examination of the Applicant’s return, delay the issuance of the
corresponding tax assessment or delay the sending of the notice of assessment.
III. ANALYSIS
[10]
The
governing test for mootness is well set-out in Borowski v Canada (Attorney General), [1989] 1 S.C.R. 342, 57 DLR (4th) 231 [Borowski]:
(i) whether
the required tangible and concrete dispute has disappeared and the issues have
become academic;
(ii) if
the response to the first question is affirmative, it is necessary to decide if
the Court should exercise its discretion to hear the case.
[11]
The
request for mandamus is clearly moot. There is nothing which the Court
could order to be done even if it agreed with the Applicant that the Minister
had failed to meet his statutory obligation to assess “with all due dispatch”.
[12]
The
Applicant suggests that the declaration is not moot since it seeks a different
relief. However, the doctrine of mootness may not be avoided merely by seeking
declaratory relief (see Rahman v Canada (Minister of Citizenship and
Immigration), 2002 FCT 137, 216 FTR 263).
[13]
However,
the situation in which the Applicant finds herself is one which can happen
often and in many different situations. An applicant claims that the government
has breached the law, and the applicant has been affected by such breach. Prior
to the matter being adjudicated or post- adjudication but prior to a court
decision, government rectifies the breach and then claims that the dispute is
moot. Whatever rights an applicant may have had have been trammelled, but no
remedy is available.
[14]
This
situation facing this Applicant is slightly more complicated because there is
the real prospect of future harm as assessments will be due for other years and
there is no indication that the policy at issue has or will be changed. While
the past alleged wrong is over, a future wrong may occur.
[15]
In
my view, these circumstances do not make the controversy less moot or more
alive. The proper place for considerations of this nature are in the second
prong of the Borowski test – the exercise of the Court’s discretion.
A similar view,
expressed in the context of a tax case where at the time of hearing the debt
was paid and the liens lifted, occurred in Danada Enterprises Ltd v Canada
(Attorney General), 2012 FC 403, 407 FTR 268.
[16]
The
live controversy about the interpretation and application of the assessment
powers for the 2010 tax year, which is at the heart of the dispute, is
academic, particularly as the declaratory relief was an adjunct to the principal
relief of mandamus.
[17]
The
issue of discretion is to consider again three criteria (Borowski at
paras 29-42):
•
the
presence of an adversarial context;
•
concern
for judicial economy; and
•
the
need of the Court to be sensitive to its role as the adjudicative branch in the
political network.
[18]
The
onus is on the Applicant but the assessment of the criteria is not merely mechanical.
One criterion may outweigh the other two in reaching a final conclusion.
42 In exercising its discretion in an appeal
which is moot, the Court should consider the extent to which each of the three
basic rationalia for enforcement of the mootness doctrine is present. This is
not to suggest that it is a mechanical process. The principles identified above
may not all support the same conclusion. The presence of one or two of the
factors may be overborne by the absence of the third, and vice versa.
(Borowski, above, at para 42)
[19]
On
the first criterion, the parties accept that there was an adversarial
relationship throughout the relevant parts of the application. Importantly, the
evidence establishes that that adversarial relationship is continuing and will
likely continue. The Winnipeg Tax Centre’s policy continues as confirmed in
evidence before this Court.
The Winnipeg Tax Centre has since extended its
approach to 2011; more precisely, to the 2011 T1 tax returns of individual
taxpayers who claimed charitable donation tax credits through the 2011 version
of Global Learning Initiative Gifting [sic] that were unassessed as of March
23, 2012 (Respondent’s Motion Record, Affidavit of Caroll Sukich at para 32) .
[20]
With
regard to the second criterion, that of judicial economy, three factors are
relevant, as discussed in Borowski:
•
is
the issue sensitive and evasive of review?
•
would
the “social cost” of leaving an issue of public or national importance
undecided justify the Court’s intervention?
•
would
a decision have some practical effect on the rights of the parties even though
it would have no effect on the now moot controversy that led to the litigation?
[21]
The
issue is certainly sensitive and has broad impact. It has shown itself to be
evasive of review. As referred to earlier by the Court, review after the
offending conduct has stopped becomes difficult because it allows the “offending”
party to cure and avoid judicial scrutiny.
[22]
In
this case even the timing of the curative action – the issue of the 2010 notice
of assessment - raises concerns. In the judicial review, the CRA stated that:
I expect that all work related to my review of the
Promoter, other entities, charities and individuals who participated in GLGI
2010 as well as the preparation of the position paper will be finalized by June
2013 (Respondent’s Reply Record on Mootness, Affidavit of Anton Plas at para 26).
[23]
That
was the position of the Respondent before this Court. As events unfolded, the
Applicant’s assessment was issued in December 2012.
[24]
In
view of CRA’s control over the timing of notices of assessment and the
continuing nature of the controversy and Winnipeg Tax Centre’s policy, the
issue is not only potentially evasive of review but also and importantly it has
the potential to perpetuate but remain undecided.
[25]
The
new policy will continue to affect more taxpayers and this taxpayer in
subsequent years. The policy is a broad-based one affecting donors to certain
types of registered charitable organizations. Both parties have acknowledged
that this is a test case for the Winnipeg Tax Centre’s new policy to auditing.
[26]
Absent
a resolution in the context of this case, there is risk that this issue of the
legality of the new policy may remain unresolved for some time. As the issue
affects the national taxation system, it is one of public and national
importance.
[27]
Lastly,
the resolution of this issue will affect the Applicant’s 2011 tax year, and
subsequent years, if she continued to donate in the same way. It will also
affect any others caught by the new policy or who may be caught by this or a
similar policy. The resolution of this issue will have practical effect.
[28]
The
judicial economy favours the Court resolving the issue in dispute.
[29]
The
final criterion – the role of the Court – is one to which the Court is
sensitive. The Respondent’s suggestion that it is not for the Court to go about
issuing legal opinions ignores the Court’s role in this case which is to engage
in statutory interpretation on a given set of facts. There is no issue of the
Court straying into areas of executive or legislative policy. However, if the
Applicant is correct, a local office fiat could run counter to the legislated
duty of the Minister to assess “with all due dispatch”.
[30]
The
Applicant has satisfied the test in favour of the Court exercising its
discretion to decide this matter.
IV. CONCLUSION
[31]
The
Respondent’s motion to dismiss the judicial review on the basis of mootness
will be dismissed. The Applicant shall have her costs in any event of the
cause.
ORDER
THIS
COURT ORDERS that the Respondent’s motion to dismiss the
judicial review on the basis of mootness is dismissed. The Applicant is to have
her costs in any event of the cause.
“Michael L. Phelan”
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