Docket:
T-441-13
Citation: 2014 FC 232
Ottawa, Ontario, March 10, 2014
PRESENT: The
Honourable Madam Justice Kane
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BETWEEN:
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HAROLD COOMBS & JOAN COOMBS & PERCY G. MOSSOP
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Applicants
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and
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ATTORNEY GENERAL OF CANADA
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Respondent
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REASONS FOR ORDER AND ORDER
[1]
This is an appeal from the
Order of Prothonotary Aalto, made on July 2, 2013 which struck out the applicants’ Notice of Application without leave to
amend on the basis that the application was bereft of any chance of success. The applicant now seeks to set aside the Order and asks
this Court to conduct a de novo review. The respondent agrees that the
appeal should be considered to have been brought pursuant to Rule 51 of the Federal
Courts Rules.
[2]
As noted in the decision of the Prothonotary,
the issues raised by the applicants, which arise out of the search and seizure
of certain documents at 660 Eglinton Avenue East by the Canada Revenue Agency
(“CRA”), have been the subject of five previous proceedings, all of which were
dismissed.
[3]
The respondent noted that Harold Coombs,
together with others, has to date commenced a total of 14 applications and two
actions against various entities and agencies of the Federal Government.
[4]
On March 12, 2013, the applicants filed T-441-13
seeking declaratory relief from an illegal search and seizure in violation of sections
8 and 15 of the Canadian Charter of Rights and Freedoms.
[5]
On October 21, 2013, Harold Coombs and Joan
Coombs brought an application in this Court (T-1744-13), seeking relief for, among
other things, an alleged breach of sections 8 and 15 of the Charter and
section 231 of the Income Tax Act. In T-1744-13, the applicants are also
seeking to have documents seized by the CRA returned. By order of Justice
Hughes dated November 27, 2013, the application in T-1744-13 was consolidated
with T-441-13. The respondent is moving to strike T-1744-13.
[6]
Although the actions have been consolidated, a
separate Order has been issued with respect to T-1744-13 and other related
recent applications heard together on February 24, 2013.
[7]
In T-1725-13, filed on October 18, 2013, Harold
Coombs and Joan Coombs seek to quash a decision of the CRA Appeals Division,
which confirmed the reassessment for taxation years between 2001 and 2007 of
Select Travel Inc, a company in which Harold Coombs and Joan Coombs are
majority shareholders.
[8]
In T-1834-13, filed on November 7, 2013, Oleg
Volochkov, Anne Volochkov, John F Coombs and Harold Coombs seek to quash a
decision of the CRA Appeals Division, which confirmed the reassessment for
certain taxation years between 1997 and 2008 of these individuals and Sun Air
Travel Inc., a company in which Harold Coombs is president, sole director and a
shareholder.
[9]
By Direction of Prothonotary Aalto, dated
February 13, 2014, the applications in T-1725-13 and T-1834-13 were
consolidated and directed to be heard at the same time as T-441-13. The
applicants argue that T-1725-13 and T-1834-13 are not simply applications to
quash the decisions of the CRA Appeals Division but are applications for a Charter
remedy. The respondent is also moving to strike these applications.
[10]
All of these applications arise from a common
set of facts, the details of which have been described in several other Orders
of this Court and the Tax Court of Canada [“TCC”].
[11]
The following background will provide a summary
for the purpose of the applicants’ present appeal of the decision of
Prothonotary Aalto.
Background
[12]
The CRA sent a team to conduct a search at 660 Eglinton Avenue East in Toronto on September 20, 2006 pursuant to a search warrant
issued under the Criminal Code by the Ontario Court of Justice on
September 14, 2006 (the “Search Warrant”). The applicants allege and the
respondent has acknowledged and the TCC has previously found that one of the
members of the team that executed the Search Warrant, John Legros, was not
named on the Search Warrant. John Legros assisted in the search and seizure by
physically moving boxes. The applicants allege that Mr Legros seized documents
that have been unaccounted for in the inventory of documents provided by the
CRA. The CRA has provided a full inventory to the applicants. The applicants
allege that documents they assert are now missing from their offices are not
accounted for in the CRA’s inventory, these documents must have been taken by
John Legros and that this constitutes an illegal seizure. The CRA’s affiant,
Lynn Watson, who is the lead investigator and was responsible for the search of
the applicants’ premises, has attested that all of the documents seized were transported
to the offices of the CRA and all were accounted for in the inventory.
[13]
With respect to the Search Warrant, it is noted
that on April 16, 2007, Harold Coombs launched an application (T-742-07) in
this Court seeking to quash the Search Warrant and to regain possession of all
the documents and property seized at 660 Eglinton Avenue East. On June 18,
2007, Prothonotary Aalto struck T-742-07 on the basis that the Court has no
jurisdiction to set aside the Search Warrant or to order the return of any materials
seized pursuant to it.
[14]
On or about March 30, 2009, Mr Justice Gans of
the Superior Court of Justice issued an Order instructing the CRA to retain the
seized documents until such time as “the appeal period for any civil tax court
proceedings” expired. On October 10, 2013, the CRA sent a letter to Harold
Coombs advising him that it would, in the near future, make an application to
the Superior Court of Justice for an Order to return the seized documents. This
letter includes an inventory of the seized documents and the name of the person
who seized each individual item.
[15]
At the hearing on February 24, 2014 of T-
441-13, T-1744-13, T-1725-13 and T-1834-13, Mr Coombs acknowledged that the CRA
had made efforts to have the documents returned to him through the appropriate
Court proceedings. However, he indicated that this would only result in the
return of documents noted on the CRA inventory and not the documents he alleges
are missing and, therefore, he was not interested in having the inventoried documents
returned.
[16]
On March 12, 2013, the applicants commenced the
application in T-441-13, now the subject of the current appeal, seeking relief
from the “illegal search and seizure” conducted on September 20, 2006 on the
grounds that “John Gargos”, who was not named on the Search Warrant, had seized
documents on that day. The applicants allege that the search violated their
section 8 and 15 rights under the Canadian Charter and that a remedy
should be provided under section 24 of the Charter. The applicants also
sought a declaration from this Court to have appeals heard on common evidence.
[17]
On June 18, 2013, the respondent moved to strike
T-441-13. On July 2, 2013, Prothonotary Aalto struck T-441-13 on the basis that
the application is bereft of success and that the application amounts to an
abuse of process, being frivolous and vexatious.
The decision –
Prothonotary Aalto’s Order
[18]
The Prothonotary summarized the relief requested
as follows:
This application
seeks declaratory relief arising from an alleged illegal search and seizure
that was conducted by officials of the Canada Revenue Agency (CRA) which it is
alleged by the Applicants amounted to a denial of fundamental justice at a Tax
Court of Canada (TCC) hearing in 2008. Specifically, the relief sought is that
the appeals heard in the TCC being Nos. 2005-3602 (IT), 2005-3623 (IT) and
2005-4191 (IT) were a violation of the Charter of Rights and Freedoms (the
Charter).
[19]
The Prothonotary summarised the applicant’s
argument, which is the same argument and theory advanced at the hearing on
February 24, 2014.That argument is that: the search was executed illegally
because an unnamed person participated in the search and that documents now
missing are not accounted for on the inventory provided by the CRA; as such,
the only possible conclusion is that the unaccounted for documents were taken
by the unnamed person, “John Gagros”. The Prothonotary noted that the
applicants had pursued complaints to the CRA.
[20]
The Prothonotary cited the TCC’s judgment in Coombs
v The Queen, 2008 TCC 289 at para 104, 2008 DTC 4004 [Coombs TCC]:
[104] During that
hearing, the judge indicated that there are court procedures available for the
production of documents that would be available for the appellants who had
appeals then under the general procedure. It was also mentioned by counsel for
the Crown that procedures are in place under the Criminal Code to obtain the
documents. The appellants had ample time to deal with this issue prior to the
trial and they chose not to.
[21]
The Prothonotary also noted that the TCC’s
decision was appealed and that the Court of Appeal cited approvingly the above
passage, before dismissing the appeal for delay (Coombs v Canada (Attorney
General), 2009 FCA 74 at para 10, 387 NR 361, [Coombs FCA]).
[22]
The Prothonotary considered the applicants’
argument that this application is different because subsection 24(1) of the Charter
is invoked, but concluded that this argument is futile because the
propriety of the Search Warrant and its execution have been determined in prior
Court proceedings, whereas subsection 24(1) of the Charter is a remedial
provision in play only if there is a breach of Charter rights.
[23]
The Prothonotary remarked that, in effect, the
applicants’ claim amounts to a collateral attack on the 2008 decision of the
TTC, which falls outside the jurisdiction of this Court. The Prothonotary
concluded that this application is bereft of any chance of success, is
vexatious and frivolous, and amounts to an abuse of process:
Mr. Coombs says
that this matter is different because section 24(1) of the Charter is invoked
and the other two Applicants were not party to the prior applications. Section
24(1) of the Charter does not help the Applicants. That section deals with
remedies for a breach of Charter rights. The issue of the propriety of the
search warrants and their execution has been determined in prior Court
proceedings. This application is simply a variation on a well-worn theme.
In effect, part of
the relief sought in the notice of application is a collateral attack on the
decision of the TCC from 2008. That decision was appealed to the Federal Court
of Appeal and dismissed. There is no jurisdiction in this Court to review the
TCC decision in question. The issues relating to the search warrants have
previously been dealt with and this notice of application amounts to an abuse
of process and is a frivolous and vexatious application. The application must
be dismissed. In coming to this conclusion, I have reviewed carefully the
Applicants’ motion record and the Applicants’ written submissions. However,
they are not persuasive. There is ample authority as outlined in the written
representations of the Respondent as to why this application is bereft of any
chance of success and must be dismissed. [Emphasis
added]
The Applicants’ Position
[24]
The applicants submit that the Order which
struck out their application for judicial review should be set aside because it
concerned questions that are vital to the case and was based upon a wrong
principle or a misapprehension of the facts (Canada v Aqua-Gem Investments
Ltd, [1993] 2 FC 425, [1993] FCJ No 103 (FCA) [Aqua-Gem]).
[25]
The applicants argue that the Prothonotary erred
in law and failed to consider that the language of subsection 24(1) of the Charter
is broad enough to include the remedy of damages for breach of their rights (Vancouver (City) v Ward, 2010 SCC 27, [2010] 2 S.C.R. 28 [Ward]). As
such, the applicants submit that the Prothonotary erred by finding that
subsection 24(1) of the Charter has no application. The applicant also
submits that the TCC does not have jurisdiction to grant the remedy sought in
this application and therefore the Federal Court should assume this
jurisdiction.
[26]
The applicants further submit that the
Prothonotary exceeded his jurisdiction pursuant to Rule 50(1)(f) of the Federal
Courts Rules by deciding issues that concern section 7 of the Charter, involving
their life, liberty, and security of the person. The applicants submit that
their allegations and evidence clearly establish that their life, liberty, and
security were at risk. Although the applicants acknowledge that their liberty
may no longer be at risk, because no criminal proceedings have been instituted,
they argue that their liberty has been put at risk by the uncertainty in the
status of the possible criminal proceedings and the delay in receiving
information about who participated in the search.
[27]
The applicants also submit that the Prothonotary
erred in law by relying on the Affidavit of Maria Vojnovic, because no evidence
should be led on a motion to strike a notice of application (Jodhan v Canada (Attorney General), 2008
FC 781 at para 16, 330 FTR 226).
[28]
The applicants argue that motions to strike an
application for judicial review should be resorted to only in the most exceptional
circumstances, since justice is better served by allowing the application judge
to deal with all the issues that are raised, given that a judicial review
application proceeds in much the same way a motion to strike a notice of
application would proceed, i.e. on affidavit evidence and arguments before a
judge (Eidsvik v Canada (Minister of Fisheries and Oceans), 2011 FC 940
at paras 24-25, [2011] FCJ No 1165 citing David Bull Laboratories (Canada)
Inc v Pharmacia Inc, [1995] 1 FC 588, [1994] FCJ No 1629 (FCA) [David
Bull]; Amnesty International Canada v Canada (Canadian Forces), 2007
FC 1147, 320 FTR 236 [Amnesty]. The applicants argue that no
exceptional circumstances exist in the present circumstances to warrant
striking out their application at this stage.
The Respondent’s Position
[29]
In response to the applicant’s argument that the
Prothonotary exceeded his jurisdiction by making an order “relating to the
liberty of a person”, contrary to Rule 50(1)(f) of the Federal Courts Rules,
the respondent submits that the applicants’ motion did not fall within any of
the exceptions enumerated in Rule 50(1). Therefore, Prothonotary Aalto acted
within his jurisdiction in making the Order striking out the application.
[30]
The respondent further submits that there is no
basis to set aside or vary the Prothonotary’s Order under Rule 399, which
provides a party with an opportunity to move to set aside or vary an Order made
ex parte. In this case, the respondent notes that the motion was
determined in writing, with both parties having filed materials.
[31]
The respondent agreed, despite that the
applicants had not referred to the appropriate rule, that Rule 51 should be
relied on to appeal the Prothonotary’s Order.
[32]
The respondent submits that the Prothonotary’s
decision was not based on a wrong principle of law or a misapprehension of
facts. The respondent submits that the Prothonotary correctly determined that
the applicants are, in effect, seeking declaratory relief that they were denied
fundamental justice at the TCC, which amounts to a collateral attack on the
conclusions of the TCC, which were upheld by the Court of Appeal. Furthermore,
the respondent argues that subsection 24(1) of the Charter does not
apply in this case, as the propriety of the Search Warrant and its execution
have been determined in prior Court proceedings.
[33]
The respondent submits that the Prothonotary has
jurisdiction to strike an application for judicial review where such an
application is clearly “bereft of any possibility of success” (David Bull,
supra at para 15).
[34]
The respondent notes that this Court has already
struck five prior applications brought by Harold Coombs for want of
jurisdiction.
The Issues
[35]
The issues are: whether
the decision of Prothonotary Aalto should be set aside because he applied the
wrong legal test in determining whether to strike the applicant’s application
for judicial review; and, if the decision is set aside, whether, on a de
novo review, the Court should dismiss the respondent’s motion to strike and
order that the application be heard on its merits.
The Standard of Review of a Prothonotary’s decision
[36]
In Apotex Inc v Eli Lilly Canada Inc,
2013 FCA 45 at para 4, 444 NR 103, the standard of
review previously established in Canada v Aqua-Gem Investments Ltd,
[1993] 2 FC 425, [1993] FCJ No 103 (FCA) and restated at para 19 of Merck
& Co v Apotex Inc, 2003 FCA 488, [2004] 2 FCR 459, leave
to appeal to SCC refused [2004] SCCA No 80, was
reiterated:
It is trite law that
discretionary orders of Prothonotaries ought not to be disturbed on appeal to a
Judge unless:
(a) they are clearly wrong, in the sense that the exercise of discretion
was based upon a wrong principle or a misapprehension of facts; or
(b) in making them, the prothonotary improperly exercised his or her discretion
on a question vital to the final issue of the case.
(Z.I. Pompey Industrie
v. ECU-Line N.V., 2003 SCC 27 at paragraph 18, endorsing Canada
v. Aqua-Gem Investments Ltd., [1993] 2 F.C. 425 at 462-463 (F.C.A.)).
[37]
The applicants submit that
the questions are vital to the final issue of the case and that the order of
the Prothonotary was wrong.
The Prothonotary did not err
[38]
I have considered whether
the Order of Prothonotary Aalto is clearly wrong, i.e. whether he exercised his
discretion based upon a wrong principle of law or upon a misapprehension of
facts.
[39]
Prothonotary Aalto fully
considered and understood the applicants’ arguments and the premise the
applicants relied on to argue that their Charter rights were breached.
He also applied the correct legal test. The Prothonotary did not err; he did
not base his decision on a wrong principle of law nor did he misapprehend the
facts.
[40]
Although the question at
issue would be vital to the final issue in the case, given that once the
application is struck, the matter is concluded, the test requires the
Prothonotary to have exercised his discretion improperly. This is not the case.
[41]
The Prothonotary correctly determined that the
applicants are, in effect, seeking a declaration they were denied fundamental
justice at the TCC, which amounts to a collateral attack on the conclusions of
the TCC, which were upheld by the Court of Appeal. In fact, even though a Charter
breach was not directly in issue in the TCC, Justice Woods in Coombs TCC,
supra at paras 101-106, nevertheless considered allegations concerning
the propriety of the Search Warrant and its execution:
101 Before
concluding these reasons, I wish to make a comment about a procedural issue
raised by Mr. Coombs in argument.
102 The
procedural issue has to do with a seizure of records in the course of a
criminal investigation against a number of individuals, including Harold
Coombs, in September of 2006. Mr. Coombs argues that the seizure has caused
prejudice to the appellants in reference to these appeals because they have not
had the necessary documents to properly prepare their cases.
103 I do not
think that the appellants can complain of unfairness in this regard. I would
note that this issue was raised in a case management hearing before Justice
Bowie on July 30, 2007.
104 During
that hearing, the judge indicated that there are court procedures available for
the production of documents that would be available for the appellants who had
appeals then under the general procedure. It was also mentioned by counsel for
the Crown that procedures are in place under the Criminal Code to obtain the
documents. The appellants had ample time to deal with this issue prior to the
trial and they chose not to.
105 Mr. Coombs
argued that these steps would not have been fruitful because it appeared that
some of the documents are no longer in the Crown's possession. Mr. Coombs'
theory is that they were likely taken by a CRA official who, according to Mr.
Coombs, illegally participated in the search and seizure. First, I note that
this is an unproven allegation on which there is not a sufficient evidentiary
basis to support it. I reject any notion that an official from the CRA is
hiding documents in this case.
106 I am also
not satisfied that the seizure was illegal even if someone not named in the
warrant was invited to participate by the officer in charge. In this regard, I
note the decision of the Supreme Court of Canada in R. v. Strachan,
[1988] 2 S.C.R. 980 and the decision of the Nova Scotia Court of Appeal in R.
v. B., 52 C.C.C. (3d) 224. [Emphasis added.]
[42]
This very same passage was cited by the Court of
Appeal in dismissing the appeal due to delays (Coombs FCA, supra at
para 10).
[43]
The Prothonotary was therefore justified in
reaching the conclusion that he did, namely, “the issues relating to the search
warrants have previously been dealt with and this notice of application amounts
to an abuse of process and is a frivolous and vexatious application…” and that
“there is ample authority as outlined in the written representations of the
Respondent as to why this application is bereft of any chance of success and
must be dismissed.”
[44]
Although the applicants contend that in the
earlier proceedings they did not seek relief pursuant to section 24 of the Charter
for breaches of their section 8 and 15 rights (the applicant also referred to a
breach of section 7), the circumstances that the applicants rely on in these
allegations are the very same circumstances considered by the TCC. The
allegations of Charter breaches all stem from the allegations regarding
the search and seizure of documents. Justice Woods clearly rejected the bald
allegations that an official of CRA is hiding documents. In addition, Justice
Woods noted that the Supreme Court of Canada had established in R v Strachan,
[1988] 2 S.C.R. 980, 56 DLR (4th) 673 [Strachan] that the
participation of a person not named in the search warrant does not invalidate
the warrant or its execution. These are the very same allegations and, whether
characterized as a Charter breach or otherwise, the issues have been
previously determined.
[45]
The applicants’ argument that Strachan
should be distinguished because in that case, the officer in charge of the
search attempted to seek judicial authorization by advising the judge that two
other officers would participate, does not change the fact that the Supreme
Court of Canada clearly indicated at para 29:
This
requirement is met when the officer or officers named in the warrant execute it
personally and are responsible for the control and conduct of the search. The
use of unnamed assistants in the search does not violate the requirement of s.
10(2) so long as they are closely supervised by the named officer or officers.
It is the named officers who must set out the general course of the search and
direct the conduct of any assistants. If the named officers are truly in
control, participate in the search, and are present throughout, then the use of
assistants does not invalidate the search or the warrant.
[46]
The Court did not put any additional caveats on this
general proposition.
[47]
The Prothonotary did not err in permitting the
respondent to submit the affidavit of Maria Vojnovic. This affidavit merely put
the previous decisions and orders of this Court, the TCC and the Federal Court
of Appeal, all of which are matters of public record, before the Prothonotary.
[48]
The Prothonotary acted within his jurisdiction
as conferred by Rule 50 of the Federal Courts Rules. Rule 50 provides
that a Prothonotary may make any necessary orders relating to a motion, except,
among other circumstances, in a motion relating to the liberty of a person.
While the applicants have alleged a breach of section 7 of the Charter
and an infringement of their life, liberty and security of the person, the
Prothonotary’s decision was not related to the applicants’ liberty, but whether
the applicant’s matter was bereft of success because it has already been dealt
with by the TCC and the Court of Appeal. In this case, the applicants’ bare
allegations that their liberty is at stake, or was previously at stake, in
light of a previous finding of the TCC that the search was not illegal and the
allegations were bald, do not oust the Prothonotary of his jurisdiction
pursuant to Rule 50.
[49]
Although motions to strike an application for
judicial review should not be made except in the most exceptional
circumstances, I disagree with the applicants that no such exceptional
circumstances exist in the present case. The circumstances are indeed
exceptional given the multiplicity of proceedings brought by the applicants all
arising from the same set of facts, all with various nuances in an attempt to
package the applications as new and different. These circumstances clearly
justify the exercise of the Prothonotary’s discretion to strike the
application. The applicant relied on Amnesty in which Justice Mactavish
summarised the principles governing motions to strike. Those principles are not
in dispute and were applied correctly by the Prothonotary. It is true that
different considerations are at play when considering whether to strike out a
Notice of Application for Judicial review than a statement of claim.
[50]
In Amnesty, supra at paras 26-27,
Justice Mactavish noted:
[26] As a
result, the Federal Court of Appeal determined that applications for judicial
review should not be struck out prior to a hearing on the merits of the
application, unless the application is “so clearly improper as to be bereft of
any possibility of success”.
[27] The
Federal Court of Appeal further teaches that “Such cases must be very
exceptional and cannot include cases ... where there is simply a debatable
issue as to the adequacy of the allegations in the notice of motion”: David
Bull, at ¶15.
[51]
The Prothonotary reached the conclusion that the
merits of the application were “so clearly improper as to be bereft of any
possibility of success”.
[52]
With respect to the applicants’ argument that
they are entitled to approach this Court for a remedy pursuant to section 24 of
the Charter, in accordance with the decision of the Supreme Court of
Canada in Ward, I note that the applicants do not appear to appreciate
that a remedy pursuant to section 24 must be based on a breach of a Charter right.
Although the applicants assert that their applications differ from earlier
applications because they now allege breach of Charter rights, as noted
above, the applicants rely on the very same facts to support the alleged Charter
breach that were found by the Tax Court of Canada to not constitute an
illegal search. The Prothonotary addressed this issue and noted:
Mr. Coombs says
that this matter is different because section 24(1) of the Charter is invoked
and the other two Applicants were not party to the prior applications. Section
24(1) of the Charter does not help the Applicants. That section deals with
remedies for a breach of Charter rights. The issue of the propriety of the
search warrants and their execution has been determined in prior Court
proceedings. This application is simply a variation on a well-worn theme.
[53]
The applicants have not established that the
decision of the Prothonotary should be set aside. Moreover, the applicants have
made the same arguments before me as they made before Prothonotary Aalto and,
in so doing, had yet another opportunity to raise the same issues, just as if
they had a de novo review. If I had concluded that the Prothonotary
erred, which I have not, and had conducted a de novo review, I would
arrive at the same conclusion: that the application is an abuse of process and
must be dismissed. Despite the applicants’ commitment to pursuing every
possible option, repackaging or re-characterizing the same application time and
time again with the same allegations that have previously been adjudicated upon
will not open up new avenues of relief or yield a different result.
[54]
The application is dismissed.
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