Date: 20000502
Docket: A-106-00
BETWEEN:
HERBERT NOBLE
Appellant
THE MINISTER OF NATIONAL REVENUE and
JOHN EDWARD THOMPSON
Respondents
REASONS FOR ORDER
(Delivered from the Bench at Toronto, Ontario
on Tuesday, May 2, 2000)
STONE J.A.
[1] The attached copy of the reasons for order in Court file number A-823-99 shall constitute the reasons for order in this matter.
"A. J. Stone"
J.A.
Date: 20000502
Docket: A-823-99
BETWEEN:
ANGELO DEL ZOTTO
Appellant
THE MINISTER OF NATIONAL REVENUE and
JOHN EDWARD THOMPSON
Respondents
REASONS FOR ORDER
(Delivered from the Bench at Toronto, Ontario
on Tuesday, May 2, 2000)
STONE J.A.
[1] This is a motion by the appellant to expedite the hearing of the appeal in this matter from an order of Lemieux J. in the Trial Division of December 3, 1999. An identical motion by the appellant in Court file number A-106-00 to expedite the appeal therein from the same order, was heard at the same time as the motion in this matter.
[2] In September 1999, a Hearing Officer acting under section 231.4 of the Income Tax Act, rendered a decision on various aspects of the procedure to be followed by him in conducting the Inquiry under that section into the financial affairs of the appellant for the taxation years 1979 to 1985. One aspect of the Hearing Officer"s decision pertained to the appellant"s assertion that in the interest of fairness the respondents be required to disclose documents and information that they intend to make use of in examining witnesses at the Inquiry some time prior to the witnesses beginning to testify. The appellant in Court file A-106-00, who is considered a "major witness", has been subpoenaed to testify at the Inquiry beginning on May 29, 2000. A second such witness is scheduled to testify beginning in early June, 2000.
[3] The appellant in both appeals launched applications for judicial review of the Hearing Officer"s decision, which applications were, on October 28, 1999, ordered to be heard together. In November of the same year, an attempt by both appellants to have the Inquiry stayed until the application for judicial review could be heard and disposed of, was dismissed by Campbell J. Shortly afterwards, after appeals from that disposition were instituted, a Justice of the Court of Appeal rejected motions by both appellants to stay the Inquiry.
[4] In the meantime, Lemieux J. heard the applications for judicial review and dismissed them on December 3, 1999. The appeals by both appellants were soon afterwards commenced and are the ones that are sought to be expedited. Both appellants then brought motions pursuant to Rule 399 with a view to setting aside the order of December 3, 1999. The basis for those motions is set forth in paragraph 5 of the Rule 399 notice of motion in this appeal, which reads in part:
| A matter was discovered subsequent to the making of the Order that, in all the circumstances, leads to the conclusion that the Order amounts to a breach of the rules of natural justice and procedural fairness. In particular, it has been discovered that: |
| (a) he [sic] learned judge was, at the time of his appointment to the Federal Court of Canada, a partner of the firm of Osler, Hoskin, Harcourt ("Oslers"). Oslers were solicitors of record for the Applicant in action number T-2022-1933 in the Federal Court Trial Division, which was commenced on August 3, 1993, and reported at [1997] 2 F.C. 428. Oslers also acted for the Applicant in his appeal to this Honourable Court from the Judgment of Rothstein J. (as he then was), as reported at [1997] 3 F.C. 40 and before the Supreme Court of Canada in the appeal from the Judgement of this Honourable Court, heard on January 20, 1999. These proceedings concerned the constitutionality of the Inquiry and of the Applicant"s role in it. Oslers continues to act on the Applicant"s behalf on other matters; |
| (b) the learned judge was appointed to the Federal Court Trial Division on January 22, 1999; |
| (c) on April 27, 1993, while a partner at Oslers, the learned judge provided advice and was otherwise actively involved in this matter; |
| (d) the learned judge"s connection with Oslers and active involvement on the file was not disclosed at the hearing and the parties were not aware of these facts until after the hearing; |
| (e) by failing to recuse himself from hearing the Application or, in the alternative, by failing to advise counsel his prior involvement on the file and invite submissions as to whether he should hear the case, the learned judge acted contrary to the rules of natural justice and procedural fairness. |
Both motions were dismissed by Hugessen J. on March 22, 2000 on the basis that the points in controversy were pending in both appeals and that they should be adjudicated upon at that level.
[5] The dismissal of the Rule 399 motions has given new life to the appeals, which both appellants were prepared to abandon had they been successful on their Rule 399 motions. They contend that they will suffer prejudice if the Inquiry hears the testimony of the appellant in Court file number A-106-00 and the other major witness prior to the disposition of the appeals from the order of Lemieux J. of December 3, 1999.
[6] The respondents say, on the other hand, that the issue of possible prejudice was considered and rejected in the Trial Division and in this Court when the motions to stay the Inquiry were dismissed and that no new evidence of possible prejudice has been put forward by either of the appellants. The respondents maintain, moreover, that the Supreme Court of Canada has already decided that an investigation of this sort is purely administrative and could neither decide nor adjudicate on anything. See e.g. [1965] S.C.R. 12">Guay v. Lafleur, [1965] S.C.R. 12. See also Irvine v. Canada (Restrictive Trade Practices Commission), [1987] 1 S.C.R. 181. The respondents further contend that I should consider the prejudice that they have had to incur and which they continue to incur by reason of the delay in proceeding with the Inquiry and not bringing it to a conclusion. They fear that the passage of time may well impair the memories of witnesses and that this can only become more acute as the delay continues. The respondents accepted, however, that most of the delay to date is accounted for by the various court proceedings including the challenge to the constitutional validity of section 234.1 which was disposed of by the Supreme Court of Canada on January 21, 1999.
[7] While fully recognizing the respondents sense of frustration with the slow pace of the Inquiry to date, in my view the motions before me should not be dismissed for that reason. To my mind, one of the prime issue raised in the appeal is a serious and important one touching as it does on the alleged breach of natural justice and procedural fairness based on some prior involvement of the Motions Judge on behalf of the appellant and of his former law firm in litigation arising out of the Inquiry process. Surely it is in the interest of justice that this issue be heard and disposed of by the Court of Appeal before the major witnesses referred to above are required to testify at the Inquiry. The remaining issues in the appeal should also be heard.
[8] I therefore conclude that the appeal in this matter and the appeal in Court file number A-106-00 ought to be heard and disposed of before the appellant in Court file number A-106-00 and the other major witness is required to testify. I appreciate that the appeals are not now ready to be heard and that some considerable work must be done in order to perfect them. After hearing the submissions of counsel, I am satisfied that the following directions should govern the conduct of the appeals from this date forward until they are heard on May 26, 2000:
| 1. The appellant in each appeal shall prepare and file the Appeal Book in compliance with Rules 343 - 344 and shall serve the same not later than May 9, 2000. |
| 2. Any party wishing to have added to the Appeal Book fresh evidence by way of affidavit with respect to the issue of alleged conflict of interest in the Motions Judge whose order is the subject of each appeal shall move the Court of Appeal for that purpose not later than May 9, 2000. |
| 3. Any cross-examination on affidavit evidence filed pursuant to a motion under paragraph 2 hereof shall be completed not later than May 17, 2000, and the transcript thereof shall forthwith be added to the Appeal Book. |
| 4. All questions as to relevance and admissibility of fresh evidence added to the Appeal Book pursuant to paragraphs 2 and 3 hereof is reserved to the panel hearing the appeals. |
| 5. Any party wishing to have added to the Appeal Book in each appeal the whole or any part of the transcript of the Inquiry shall move the Court of Appeal for that purpose not later than May 9, 2000; any issue as to the relevance and admissibility of the transcript or any part thereof so added to the Appeal Book shall be reserved to the panel hearing the appeal. |
| 6. The appellant in each appeal shall file and serve his Memorandum of Fact and Law not later than 2:00 p.m. Friday, May 19, 2000. |
| 7. The respondents in each appeal shall file their Memorandum of Fact and Law or, as they may elect, a joint Memorandum of Fact and Law, not later than May 24, 2000. |
| 8. The appeal in this matter and in Court file number A-106-00 shall be heard together at Ottawa, on Friday, May 26, 2000, commencing at 10:00 a.m. |
[9] These reasons shall apply equally to the motion in Court file number A-106-00 and upon the filing of a copy of the same in that Court file shall become the reasons for order therein.
[10] The costs of this motion shall be in the cause.
"A. J. Stone"
J.A.
FEDERAL COURT OF CANADA
Names of Counsel and Solicitors of Record
| STYLE OF CAUSE: HERBERT NOBLE |
Appellant
REVENUE and JOHN EDWARD THOMPSON
Respondents
DATE OF HEARING: TUESDAY, MAY 2, 2000
PLACE OF HEARING: TORONTO, ONTARIO
REASONS FOR ORDER
| OF THE COURT BY: STONE J.A. |
Delivered at Toronto, Ontario on Tuesday, May 2, 2000
APPEARANCES: Mr. Alan D. Gold, and
Ms. Maureen McGuire
Mr. Steven Albin
| SOLICITORS OF RECORD: Gold & Fuerst |
Barristers & Solicitors
20 Adelaide Street East
Suite 210
Toronto, Ontario
M5C 2T6
| Deputy Attorney General of Canada |
FEDERAL COURT OF APPEAL
Date: 20000502
Docket: A-106-00
BETWEEN:
Appellant
| THE MINISTER OF NATIONAL REVENUE and JOHN EDWARD THOMPSON |
Respondents
FEDERAL COURT OF CANADA
Names of Counsel and Solicitors of Record
| STYLE OF CAUSE: ANGELO DEL ZOTTO |
Appellant
REVENUE and JOHN EDWARD THOMPSON
Respondents
DATE OF HEARING: TUESDAY, MAY 2, 2000
PLACE OF HEARING: TORONTO, ONTARIO
REASONS FOR ORDER
| OF THE COURT BY: STONE J.A. |
Delivered at Toronto, Ontario on Tuesday, May 2, 2000
APPEARANCES: Mr. William C. McDowell
Mr. Ivan S. Bloom
| SOLICITORS OF RECORD: McCarthy Tétrault |
Barristers & Solicitors
Suite 4700
Toronto Dominion Bank Tower
Toronto, Ontario
M5K 1E6
| Deputy Attorney General of Canada |
FEDERAL COURT OF APPEAL
Date: 20000502
Docket: A-823-99
BETWEEN:
Appellant
| THE MINISTER OF NATIONAL REVENUE and JOHN EDWARD THOMPSON |
Respondents
REASONS FOR ORDER
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