Date: 20110308
Docket: A-166-10
Citation: 2011 FCA 85
CORAM: EVANS
J.A.
DAWSON
J.A.
LAYDEN-STEVENSON
J.A.
BETWEEN:
TERRY LONG
Appellant
and
HER MAJESTY THE QUEEN
Respondent
REASONS FOR JUDGMENT
EVANS J.A.
Introduction
[1]
This is an
appeal by Terry Long from an interlocutory decision of the Tax Court of Canada
(2010 TCC 197) in which Justice Campbell (Judge) denied his motion seeking full
disclosure under rule 82(1) of the Tax Court of Canada Rules (General
Procedure) (Rules).
[2]
The Judge
also denied Mr Long’s request that partial disclosure not be ordered against
him because documents relevant to his appeal against reassessment by the
Minister of National Revenue could be used against him in criminal proceedings.
[3]
Instead,
the Judge directed the parties to produce and serve a list of documents
pursuant to rule 81 (partial disclosure), on which they intend to rely in Mr
Long’s appeal against reassessment, together with a timetable for the
completion of the remaining pre-hearing steps.
[4]
The motion
before the Judge arose from Mr Long’s appeal against a reassessment for amounts
owing as unreported business income in the taxation years 1999 to 2003,
allegedly arising from an electrical contracting business and a marijuana
growing operation. Mr Long proposes to pursue his appeal by arguing questions
of constitutional law, including a challenge to the validity of the
post-assessment processes, particularly because they prevent him from
challenging the Minister’s reassessment without incriminating himself. To
challenge the quantum of the reassessment, he says, would force him to produce
documents that could be used to prosecute him for criminal offences.
Partial or full disclosure?
[5]
The Judge
stated that it is normal practice in the Tax Court to order the partial
disclosure of documents under rule 81 of the Rules, in order to avoid
unwarranted expense and delay. However, a party may be granted full disclosure
under rule 82 on satisfying the Court that there is a reasonable basis for
believing that full disclosure will assist in the expeditious resolution of the
issues arising from the reassessment, and in either advancing a party’s case or
damaging that of the opposing party.
[6]
The Judge
regarded the timing of Mr Long’s motion, namely at the close of the pleadings
and before other pre-hearing steps had been taken, as the most compelling
reason for denying full disclosure. In her view, the motion was premature. It
was more appropriate for Mr Long to move for full disclosure, or the disclosure
of particular documents not included in the partial disclosure, at a time when
he could argue that the documents disclosed by the Minister pursuant to the
partial disclosure order, and produced through undertakings given on discovery
or otherwise, were inadequate to ensure a fair and efficient hearing of his
appeal.
[7]
In
reaching this conclusion, the Judge emphasized the importance of considering
requests for full disclosure within a specific factual context, so as to enable
the Court to assess the relevance of documents sought, but not included in the
partial disclosure.
[8]
This Court
may only interfere on appeal with a trial judge’s exercise of discretion if the
appellant demonstrates that it was based on some error of law or a wrong
principle. I am not persuaded that the Judge did so err in refusing in her
discretion to grant Mr Long’s motion for full disclosure.
[9]
Mr Long
argues that partial disclosure is inadequate because the Minister will not rely
on documents that assist him as Appellant. However, the logical conclusion of
this argument is that full disclosure is always required, and that is clearly
not what the Rules contemplate.
[10]
Mr Long
also submits that full disclosure is needed because of the breadth of the
ground of his appeal, namely the fundamental unfairness of the assessment
process, and the Minister’s stated intention of relying only on documents
relevant to the quantum of the reassessment. The Minister may have decided to
so limit himself because he is of the view that the Tax Court’s statutory
jurisdiction is confined for the most part to determining the amount of tax
owing and not the constitutional validity of the post-assessment process
established by Parliament.
Unilateral disclosure
[11]
Mr Long
argues that the Judge erred in not exempting him from having to disclose any
documents on the ground that this would compel him to incriminate himself. In
2002, the RCMP had investigated Mr Long in connection with an illegal marijuana
growing operation, charges were laid against him, but subsequently stayed.
While he maintains his innocence with respect to these offences, he remains
concerned that disclosing the documents relating to his business income that
would enable him to pursue his appeal against the quantum of the reassessment
would provide material that could be used against him in criminal proceedings.
[12]
To put him
to the choice of either incriminating himself by disclosing these documents or
abandoning his appeal against the merits of the reassessment would, he says,
violate his rights under section 7 of the Canadian Charter of Rights and
Freedoms.
[13]
The Judge
held that, despite the absence of authority, there may be circumstances in
which the Tax Court would exercise its discretion to order unilateral
disclosure by the Minister, in order to prevent a breach of a taxpayer’s
Charter rights. However, she was not satisfied that the facts of the present
case warranted such an exceptional order.
[14]
There has
been no finding as of yet that disclosure would lead to an imminent violation
of Mr Long’s Charter rights. Moreover, the implied undertaking that information
disclosed in discovery will not be used for the purposes of other litigation,
and his right to refuse to answer specific questions put to him at his
examination for discovery that may incriminate him, provide additional
protections against the possibility of any Charter infringement.
[15]
Again, I
am not persuaded that the Judge made any error that would warrant the
intervention of this Court when, in the exercise of her discretion, she refused
the relief sought by Mr Long at this early stage of the appeal. His concerns
can be more appropriately dealt with as discovery proceeds and in fact-specific
contexts.
[16]
I would
only add that the Minister’s reassessment includes unreported income alleged to
have arisen from Mr Long’s electrical contracting business. He does not say
that making partial disclosure with respect to this would cause him to
incriminate himself.
Conclusion
[17]
For these
reasons, I would dismiss the appeal with costs.
“John
M. Evans”
“I
agree.
Eleanor
R. Dawson, J.A.”
“I
agree
Carolyn
Layden-Stevenson J.A.”
FEDERAL COURT OF APPEAL
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: A-166-10
(APPEAL FROM
A JUDGMENT OF THE HONOURABLE CAMPBELL MILLER OF THE TAX COURT OF CANADA DATED APRIL 14, 2010, DOCKET NO. 2009-1011(IT)G)
STYLE OF CAUSE: Terry
Long and Her Majesty the Queen
PLACE OF HEARING: Vancouver,
British Columbia
DATE OF HEARING: March 3, 2011
REASONS FOR JUDGMENT BY: EVANS J.A.
CONCURRED IN BY: DAWSON
AND LAYDEN-STEVENSON JJ.A.
DATED: March 8, 2011
APPEARANCES:
|
Terry Long
|
SELF-REPRESENTED
|
|
David
Everett
Elizabeth (Lisa) McDonald
|
FOR THE RESPONDENT
|
SOLICITORS
OF RECORD:
|
Myles J. Kirvan
Deputy Attorney General of Canada
|
FOR THE RESPONDENT
|
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