Date: 19990211
Docket: A-416-98
CORAM: LINDEN J.A.
LÉTOURNEAU J.A.
SEXTON J.A.
BETWEEN:
MARY ANN YACYSHYN
Appellant
- and -
HER MAJESTY THE QUEEN
Respondent
Heard at Toronto, Ontario, Thursday, February 11, 1999
Judgment delivered from the Bench
at Toronto, Ontario on Thursday, February 11, 1999
REASONS FOR JUDGMENT OF THE COURT BY: LÉTOURNEAU J.A.
Date: 19990211
Docket: A-416-98
CORAM: LINDEN J.A.
LÉTOURNEAU J.A.
SEXTON J.A.
BETWEEN:
MARY ANN YACYSHYN
Appellant
- and -
HER MAJESTY THE QUEEN
Respondent
REASONS FOR JUDGMENT OF THE COURT
(Delivered from the Bench at Toronto, Ontario on
Thursday, February 11, 1999)
LÉTOURNEAU J.A.
[1] We are of the view that this appeal against an order of Bowman J. of the Tax Court of Canada striking out a paragraph of the appellant's Notice of Appeal before the Tax Court ought to be dismissed for the following reasons.
[2] The appellant's assessments by the Minister of National Revenue ("Minister") arose from assessments against her husband who was the subject of criminal charges and civil assessments under the Income Tax Act ("Act"). He eventually filed for bankruptcy. The Minister imposed liability upon the appellant pursuant to s. 160 of the Act in relation to a payment made to her through her husband as well as in relation to the transfer of two properties.
[3] The appellant disputes the Minister's assessment on various grounds, one of which being that her husband did not have a tax liability for the taxation years in issue. Such ground was alleged in paragraph 5 of her Notice of Appeal to the Tax Court and this is the paragraph that the Tax Court Judge struck out. The sequence of events leading to the Judge's order to strike out the said paragraph is as follows.
[4] On October 10, 1997, Rowe J. of the Tax Court ordered that all examinations for discovery be completed not later than November 30, 1997 and that any undertaking arising out of such examinations be completed not later than January 30, 1998.
[5] The Respondent attempted to hold an examination for discovery of the appellant on November 27, 1997 but she failed to attend it. Eventually she attended on December 16, 1997 and the examination was adjourned to January 16, 1998 in order to give the appellant an opportunity to inform herself as to some of the allegations contained in her Notice of Appeal and in the Reply to that Notice.
[6] In the course of the examination on January 16, the appellant undertook to inform the respondent as to whether she intended to dispute her husband's tax liability and how. On January 29, 1998 the respondent received incomplete and unsatisfactory written answers to the undertakings.
[7] Between March and May 1998, the respondent attempted in vain to get a satisfactory and complete answer to the undertakings, especially the one relating to the husband's tax liability. Four attempts were made at serving the appellant with a Notice to Attend an examination for discovery on June 3, 1998. The last one succeeded but the examination was rescheduled from 10:00 a.m. to 1:00 p.m. in order to accommodate the appellant. Yet, she failed for a second time to attend it.
[8] The day after her failure to attend the examination, the appellant retained new counsel to represent her. Notwithstanding four attempts by the respondent to have her new counsel confirm a date for the examination for discovery, no such confirmation was given by her new counsel.
[9] On June 12, 1998, the respondent served the new counsel with a Notice to Attend requiring the appellant to attend an examination for discovery on June 23,1998. Once again she failed to attend. It is at this juncture that, in the following days, the respondent filed a motion to dismiss the appellant's appeal with costs.
[10] It is against this factual background that Bowman J. decided to strike out of the pleadings the allegation relating to the husband's tax liability rather than acceeding to the Minister's initial request to dismiss the whole appeal.
[11] The appellant now complains before us that the Tax Court Judge did not have the power to strike out the allegation since such relief was not requested by the Minister in the Notice of Motion to dismiss the appeal. She also submits that the Tax Court Judge had no jurisdiction under Rule 64, 96 and 110 of the Tax Court of Canada Rules to strike out only part of the Notice of Appeal. In addition, she seeks the quashing of the order of the Tax Court Judge with solicitor-client costs against the respondent both in this Court and in the Tax Court.
[12] Although the appellant's contentions may give rise to a nice theoretical debate as to the actual or intended scope of these Rules, there is, however, a simple practical answer to these contentions: the Tax Court has the inherent jurisdiction to prevent an abuse of its process.
[13] Indeed, the days of trial by ambush or surprise are fortunately gone and a party to proceedings is subject to disclosure of its case and, in return, entitled to discovery of the other party's case. This sound rule of practice and procedure aims at ensuring both the fairness and the expeditiousness of the proceedings. No court can condone the unjustified failure of a party to submit to discovery which may either prejudice a party or unduly delay the proceedings and the ensuing justice. Justice delayed is justice denied, especially where it is unjustifiably delayed.
[14] In the case at bar, there was ample evidence to support the judge's finding that both delay and prejudice resulted from the appellant's failure to comply in an orderly and timely manner with the order of the Court issued on October 10, 1997.
[15] Indeed, a week before the trial was due to start on July 8, 1998, the appellant had still not complied with her obligation to disclose As a result, the respondent was not in a position at the forthcoming of the hearing to adequately face and answer the appellant's contention with respect to the absence of tax liability of her husband.
[16] In addition, the appellant's failure to comply with the initial order and subsequent requests to submit to an examination for discovery has unjustifiably and unfairly delayed the process. As a matter of fact, her Notice of Appeal is dated April 26, 1995. We are, as of today, almost four years later and the hearing is still to take place with the respondent in no better a position on the issue of the husband's tax liability than she was on April 26, 1995 when the appeal was launched. It is true that all the delay in bringing the case to trial cannot be attributed to the appellant. However, the delay resulting in the abuse of the process is hers only.
[17] In our view, there was ample evidence before the Tax Court judge allowing him to conclude that the appellant was deliberately evading her obligations with respect to discovery and delaying the process.
[18] It is trite law that an abuse of process can, in appropriate circumstances, lead to the dismissal or the stay of proceedings. The Tax Court Judge was obviously aware that the dismissal of an appeal is a drastic and somewhat ultimate remedy reserved for the egregious case or when no other alternative and less drastic remedy would be adequate.
[19] In the present instance, we are satisfied that the Tax Court Judge carved out an appropriate remedy which ensures fairness to both parties and avoids the ultimate sanction against the one party in default. He properly exercised his discretion and we see absolutely no justification for interfering with it. If anything, he was generous with the appellant.
[20] In concluding, we would like to say a word about the appellant's request for costs on a solicitor and client basis.
[21] An award of costs on a solicitor and client basis is exceptional and is generally made on the ground of misconduct connected with the litigation1. For example, this Court has awarded solicitor and client costs against an appellant whose objective in bringing an appeal was to delay the resolution of the litigation and not to obtain justice2. It is ironic in the case at bar that the appellant, who abused the process of the Tax Court and launched this unmeritorious appeal, as the party with dirty hands, would seek this kind of costs against the victim of the abuse who has complied with the Court order and struggled in vain to exercise her right to discovery.
[22] For these reasons, the appeal will be dismissed with costs and the matter will be referred back to the Chief Justice of the Tax Court of Canada with instruction to expedite the hearing of the appeal by the appellant in the Tax Court file No. 95-1747(IT)G.
"Gilles Létourneau"
FEDERAL COURT OF CANADA
Names of Counsel and Solicitors of Record
DOCKET: A-416-98
| STYLE OF CAUSE: MARY ANN YACYSHYN |
DATE OF HEARING: THURSDAY, FEBRUARY 11, 1999
PLACE OF HEARING: TORONTO, ONTARIO
REASONS FOR JUDGMENT
| OF THE COURT BY: LÉTOURNEAU J.A. |
Delivered at Toronto, Ontario
on Thursday, February 11, 1999.
| APPEARANCES: Mr. Derrick M. Fulton |
For the Respondent
| SOLICITORS OF RECORD: Derrick M. Fulton |
Morris Rosenberg
Deputy Attorney General of Canada
For the Respondent
__________________
1 Amway Corp v. The Queen (1986) 2 C.T.C. 339 (F.C.A.); Canada (Procureur Général) v. Canada [1998] 1 F.C. 337 (F.C.T.D.); Puddister Trading Co. v. Canada (1996), 195 N.R. 155 (F.C.A.).
2 Canada v. Meyer [1993] 2 F.C. D-21 (F.C.A.).
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