Date: 20130426
Docket: A-355-12
Citation: 2013 FCA 111
CORAM: SHARLOW
J.A.
DAWSON J.A.
WEBB
J.A.
BETWEEN:
EVERTON BROWN
Appellant
and
HER MAJESTY THE QUEEN
Respondent
REASONS FOR JUDGMENT
DAWSON J.A.
[1]
This
is an appeal from a judgment of the Tax Court of Canada. For reasons cited as
2012 TCC 251, 2012 DTC 1211, the Tax Court dismissed the appellant’s appeal
from reassessments made under the Income Tax Act, R.S.C. 1985, c. 1 (5th
Supp.) (Act) for the 2004, 2005, 2006 and 2007 taxation years. The
reassessments added undeclared income in respect of each taxation year
(calculated using a modified deposit method) and also assessed gross negligence
penalties for each taxation year.
[2]
In
reaching his decision to dismiss the appeal, the Judge made three key findings.
First, he found the appellant not to be credible so that his evidence could not
be accepted “without reliable corroborating evidence, of which there is none in
the trial record” (reasons, paragraphs 45 and 56). Second, the appellant
produced five witnesses to support his explanation with respect to both the
sources and ownership of cash and the nature of certain transactions. The Judge
found the appellant’s witnesses all to be unreliable (reasons, paragraph 48).
Third, he found no basis at law to exclude documents provided to the Canada
Revenue Agency by the police in London, Ontario (reasons, paragraph 44).
[3]
As
a result of these findings, the Judge upheld the Minister’s assessments.
[4]
On
this appeal the appellant raises a number of issues. Some are issues this Court
does not have jurisdiction to consider. For example, the appellant seeks an
order requiring that certain monies and a vehicle be returned to him and an
order requiring that a lien placed against his home be removed. However, as was
explained to the appellant during the hearing, on this appeal this Court can
only dismiss the appeal from the decision of the Tax Court, give the decision
that should have been given by the Tax Court or refer the matter back to the
Tax Court (section 52, Federal Courts Act, R.S.C. 1985, c. F-7 (Act)).
In turn, the jurisdiction of the Tax Court was confined to dismissing the
appellant’s appeal from the assessments or allowing the appeal by vacating the
assessments, varying the assessments or referring the assessments back to the
responsible Minister for reconsideration and reassessment (section 171 of the Act).
[5]
The
issues raised by the appellant that this Court has jurisdiction to deal with
relate to the Judge’s assessment of credibility and the evidence, and to the
Judge’s decision to accept into evidence documents provided to the Canada
Revenue Agency by the police.
[6]
To
turn first to the issues raised by the appellant relating to the Judge’s
assessment of credibility and the evidence, the appellant argues that the
Judge’s assessment of his credibility was tainted by the suggestion that he had
trafficked cocaine. The appellant also argues that the Judge erred by
attributing transactions to him when he had provided documents (such as
invoices) to show that property was purchased by someone else. The appellant
also argues that the Judge erred by attributing transactions to him when the
transactions involved joint bank accounts. Finally, the appellant argues that
he was self-represented and did not know that he should give certain evidence
to the Tax Court.
[7]
As
explained below in more detail, the appellant was charged with, but never
convicted of, drug trafficking. In my view, this did not taint the Judge’s
assessment of credibility. The Judge knew that the Crown lacked sufficient
evidence to support the charges against the appellant (reasons, paragraph 58).
It is not reasonable to infer that the Judge’s credibility finding was
improperly tainted when the Judge knew there was insufficient evidence to
proceed against the appellant. As well, a review of the transcript demonstrates
that there was ample evidence to support the Judge’s credibility finding.
[8]
With
respect to the attribution of transactions to the appellant, as explained
during the hearing, the fact an individual is named in an invoice does not
prove conclusively that the individual paid for any item referred to in the
invoice. The Judge must look at the whole of the evidence to determine who paid
for the item or items in question. Similarly, with respect to deposits into
joint bank accounts, the issue the Judge was required to decide was whether it
was the appellant’s money that was deposited into the account or accounts. This
was a separate issue from whose name was on the account. The Judge had the
opportunity to see and hear each witness and was obliged to make findings about
whether it was the appellant’s money that was used to make the purchases and
deposits in issue. No palpable and overriding error has been shown in the
Judge’s findings of fact.
[9]
As
to the fact the appellant was self-represented at trial, I understand well the
difficulty a non-lawyer faces when deciding what evidence is necessary to
counter an assessment made by the Minister of National Revenue. However, again
as explained at the appeal hearing, it is too late on an appeal from a trial
decision to bring evidence that was available and could have been put into
evidence at trial.
[10]
It
follows that the appellant has failed to show any error in the Judge’s
assessment of credibility or the evidence.
[11]
The
only remaining issue is: did the Judge err by finding that there was no basis
in law to exclude documents the Canada Revenue Agency received from the London
Police Service?
[12]
The
facts that give rise to this issue are as follows. On October 17, 2007,
officers from the London Police Service executed a search warrant at the
appellant’s residence. The warrant was issued pursuant to the Controlled
Drugs and Substances Act, S.C. 1996, c. 19 and was based on allegations
that the appellant was trafficking cocaine. The warrant authorized the seizure
of alleged proceeds of crime, illegal drugs, financial documents and other
relevant information. Pursuant to this warrant certain evidence and documents
were seized by the London Police Service. The appellant was charged with
trafficking, but the charges did not proceed to trial due to the insufficiency
of the evidence.
[13]
The
seized documents were given by the London Police Service to officials of the
Canada Revenue Agency. An officer from the London Police Service testified
before the Tax Court that the Canada Revenue Agency was not advised about the
warrant, the search or the seizure.
[14]
The
documents passed from the police to the Canada Revenue Agency formed part of
the record used by the Canada Revenue Agency to prepare the analysis of the
appellant’s income. At least some of the seized documents were tendered in
evidence before the Tax Court.
[15]
As
noted above, the appellant says the documents should not have been accepted
into evidence by the Judge. The appellant says that accepting the documents
violated his rights that are guaranteed under the Canadian Charter of Rights
and Freedoms, Part I of the Constitution Act, 1982, being Schedule B
to the Canada Act 1982 (U.K.), 1982, c. 11 (Charter).
[16]
The
Judge correctly concluded that the relevant Charter right was the section 8
guarantee against unreasonable search and seizure. The Judge then relied upon
the decision of the Supreme Court of Canada in R. v. Jarvis, 2002 SCC
73, [2002] 3 S.C.R. 757 to find the documents received from the London Police
Service to be admissible. The essence of the Judge’s reasoning is found at paragraphs
37 to 39 of his reasons. The Judge reasoned that in Jarvis the Supreme
Court of Canada ruled that it was permissible for an officer of the Canada
Revenue Agency to pass on documents properly obtained in the course of an audit
to officials later carrying on a criminal investigation. In the Judge’s view,
if this was permissible under the Charter it would be equally permissible for
police to share information with Canada Revenue Agency auditors. The Judge also
considered that in Jarvis the Supreme Court noted that taxpayers have
very little privacy interest in documents they are obliged to keep and produce
during an audit.
[17]
For
the reasons that follow, I have concluded that the Judge was correct when he
found that documents received from the Canada Revenue Agency were admissible. I
reach this conclusion, however, for somewhat different reasons than those given
by the Judge.
[18]
Section
8 of the Charter guarantees everyone “the right to be secure against
unreasonable search or seizure”. The Supreme Court of Canada has defined this
right as one which protects a reasonable expectation of privacy (R. v.
Cole, 2012 SCC 53, [2012] S.C.J. No. 53).
[19]
The
search and seizure conducted by the London Police Service was authorized by
warrant. At no time has the appellant challenged the validity of the search
warrant. It follows that the search and the seizure were lawful. The question
then becomes whether the appellant had a reasonable expectation that the London
Police Service would maintain the confidentiality of the documents it seized.
The existence of any such expectation depends upon “the totality of the
circumstances” (Cole at paragraph 39).
[20]
The
appellant did not point to any evidence or judicial authority which supports
the conclusion that he had a reasonable expectation of privacy over the
documents lawfully seized by the London Police Service.
[21]
As
to the evidence, the appellant’s evidence before the Tax Court was inconsistent
with any subjective expectation of privacy. In direct examination he stated
that the documents seized by the police should have been returned to him, so
that the Canada Revenue Agency could then ask him to deliver the documents to
it (transcript of evidence given on February 28, 2012, at page 173).
[22]
As
to judicial authority, the jurisprudence does not support on an objective basis
any significant expectation of privacy. As the Judge noted, in Jarvis
(at paragraph 95) the Supreme Court observed that “taxpayers have very little
privacy interest in the materials and records that they are obliged to keep
under the [Act], and that they are obliged to produce during an audit.”
[23]
Because
the appellant failed to demonstrate that he had a reasonable expectation of
privacy over the seized documents, it follows that the appellant’s right to be
free of any unreasonable search or seizure was not violated. It further follows
that the Judge was correct to receive the documents into evidence.
[24]
For
these reasons, I would dismiss the appeal with costs.
“Eleanor R. Dawson”
“I
agree.
K.
Sharlow J.A.”
“I
agree.
Wyman
W. Webb J.A.”
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