Date:
20130523
Docket: T-1668-12
T-1879-12
Citation:
2013 FC 544
Vancouver, British Columbia,
May 23, 2013
PRESENT: The
Honourable Madam Justice Simpson
BETWEEN:
|
|
PAUL MATTHEW JOHNSON
|
|
|
|
Applicant
|
|
and
|
|
|
HER MAJESTY THE QUEEN
IN RIGHT OF CANADA
(THE MINISTER OF NATIONAL
REVENUE)
|
|
|
|
Respondent
|
|
|
|
|
REASONS FOR
ORDER AND ORDER
[1]
In
these consolidated applications (the First Applications), Paul Matthew Johnson
(the Applicant) seeks judicial review of actions of the Minister of
National Review undertaken in the course of assessing liability for and
collecting tax pursuant to the Excise
Tax Act, RSC
1985, c E-15. In the motion presently at issue, the Respondent seeks leave
to file a further affidavit (the Motion). This Motion was heard on the day
previously scheduled for the hearing of the First Applications on their merits.
I. Background
[2]
In April
2012, a partnership involving the Applicant (the Partnership), and the
Applicant were notionally assessed for their GST/HST tax liability for reporting
periods between July 1, 2011 and December 31, 2012 (the Old Assessments). In
the First Applications, the Applicant seeks, inter alia: (i) declaratory
relief dealing with the Minister’s actions, (ii) an order quashing or setting
aside the Old Assessments, and (iii) a stay of collection activities pursuant
to the Old Assessments.
[3]
The
Respondent filed an affidavit of Terence Finlay, sworn on November 9, 2012 (the
First Finlay Affidavit). Mr. Finlay is the Canada Revenue Agency auditor who
was assigned to audit both the Partnership and the Applicant and he was
directly involved in the actions which gave rise to the First Applications. Mr.
Finlay was cross-examined by Applicant’s counsel on December 6, 2012. During that
examination Mr. Finlay indicated that the audits of the Partnership and the
Applicant were ongoing and that, following receipt of further disclosure from
the Royal Canadian Mounted Police (RCMP), the Old Assessments would be subject
to a reassessments process.
[4]
The
Respondent moved on May 10, 2013 for leave pursuant to Rule 312(a) of the Federal
Court Rules to file a further affidavit from Mr. Finlay, sworn on May 9,
2013 (the Second Finlay Affidavit).
[5]
The Second Finlay
Affidavit reveals that on January 23, 2013, Mr. Finlay received documentation
from the RCMP related to the alleged drug-trafficking activities of the
Partnership between October 1, 2011 and March 31, 2012 (the Disclosure Package).
This information was incorporated into Mr. Finlay’s ongoing audits. On February
22, 2013, he sent a letter to the Partnership, with a copy to the Applicant,
setting out proposed adjustments to the liability set out in the Old
Assessments and offering an opportunity to respond (the Proposal Letter). No
response was received and on April 17, 2013, Mr. Finlay concluded the audits
for the period between October 1, 2011 and March 31, 2012. He also vacated the
assessment of the Partnership’s reporting period ending September 30, 2011 on
the basis that no taxes were owed. The Minister reassessed the Partnership by
Notice of (Re)assessment dated April 23, 2013, and the Applicant was reassessed
in respect of his joint and several liability on May 3, 2013 (the New
Assessments).
II. Submissions
[6]
In
oral argument on the Motion, counsel for the Respondent agreed that he would
consent to the Applicant filing a single amended application for judicial
review (the New Application) to replace the First Applications. He agreed
that the New Application will incorporate facts and prayers for relief
concerning the New Assessments, and that the Applicant will be entitled to
seek orders quashing the New Assessments and staying related collection
activities. In the New Application, the Applicant will also be entitled to
continue to request declaratory relief in respect of the Minister’s
actions associated with the Old Assessments.
[7]
Once
this position was clear, counsel for the Applicant consented to an order
granting leave to file the Second Finlay Affidavit.
[8]
Counsel
also agreed that:
a. an
order would be made scheduling the steps to be taken prior to the hearing of
the New Application
b. this
case should be specially-managed
c. they
were both available for a one-day hearing of the New Application in Vancouver in the week of September 23, 2013
d. the
Respondent would immediately produce a copy of the Disclosure Package
e. the
Respondent would produce Mr. Finlay for cross-examination starting at
1:00 p.m. on May 22, 2013 and at other times to be agreed between counsel
[9]
There
was no consent on the issue of costs. The Applicant sought solicitor-and-client
costs and the Respondent asked for costs in the cause. In my view, the
Respondent made no effort to respect the date for the hearing of the First
Applications in the sense that it did not file the Second Finlay Affidavit
until approximately ten days before the hearing. This late filing was not
justified because the Respondent knew the results of the audits in February
when the Proposal Letter was prepared. Accordingly, the Applicant will have its
costs of this Motion.
[10]
The
parties have consented to having this matter be specially-managed under Rule
384. However, since a schedule for preparation and a hearing date for the
Application have been set on consent, it is my conclusion that an order is
unnecessary. The parties are expected to meet the deadlines they set for
themselves.
ORDER
FOR
THESE REASONS, THIS COURT ORDERS THAT:
1. The Motion is granted
and the Second Finlay Affidavit is to be filed.
2. The
First Applications, which were scheduled for hearing on May 22, 2013, are
adjourned sine die and need not be rescheduled because they will be
replaced with the New Application.
3. The
New Application will be heard on Wednesday, September 25, 2013 at 9:30 a.m.
for one day.
4. The
schedule for the pre-hearing preparation of the New Application is as follows:
By
June 3, 2013: Applicant to file the New Application
By
June 7, 2013: Respondent to file a record pursuant to Rule 317
By
June 21, 2013: Applicant’s further affidavits, if any, to be filed
By
July 24, 2013: Respondent to file any further affidavits
By
Aug 2, 2013: All cross-examinations to be completed
By
Aug 23, 2013: Applicant’s supplementary application record is to be filed
By
Sept 13, 2013: Respondent’s supplementary application record is to be filed
5. Costs
of this motion are payable by the Respondent to the Applicant. Using items 5
and 6 of Federal Court Tariff B, Column IV as a guide and assigning 11
units, the costs are hereby fixed at $1,544.84 and are payable by the end of
June 2013.
“Sandra J. Simpson”
Email this Content