Date: 20111123
Docket:
A-152-11
Citation: 2011 FCA 327
CORAM: NOËL
J.A.
TRUDEL J.A.
MAINVILLE
J.A.
BETWEEN:
506913 N.B. LTD. and
CAMBRIDGE LEASING LTD.
Appellants
and
HER MAJESTY
THE QUEEN
Respondent
REASONS FOR
JUDGMENT
NOËL J.A.
[1]
This
is an appeal by 506913 N.B. Ltd. and Cambridge Leasing Ltd. (the appellants)
from an interlocutory order of the Tax Court of Canada wherein D’Arcy J., in
dealing with pre-trial issues, ordered that a motion filed by the appellants be
withdrawn and issued a number of directions.
[2]
The
appellants seek to vacate the order and ask that D’Arcy J. be disqualified from
participating in any further proceedings on the ground that he has demonstrated
bias against them.
[3]
For
the reasons which follow, I am of the view that the appeal should be dismissed.
BACKGROUND
[4]
Before
turning to the issues raised on appeal, it is useful to set out the procedural
steps which have led to the disputed order. They arise in the broader context
of an appeal from GST/HST reassessments issued pursuant to the Excise Tax
Act, R.S.C. 1985, c. E-15 (the Act).
[5]
In
November 2009, the appellants brought a motion to amend their notices of appeal,
seeking to add reference to sections 7, 8 and 11 of the Canadian Charter of
Rights and Freedoms, Schedule
B to the Canada Act 1982, (U.K.) 1982, c. 11 (the Charter) (transcripts of
proceedings of the motion, appeal book, pp. 146-149). These amendments were
opposed by the respondent who sought to strike certain paragraphs of the notices
of appeal (appeal book, tab 5). The respondent’s opposition stemmed in part
from the fact that the appellants, being corporations, could not rely on the
Charter as though they were individuals.
[6]
Upon
hearing the submissions of the parties, Associate Chief Justice Rossiter of the
Tax Court of Canada (Rossiter A.C.J.) issued an initial order on November 9,
2009 (appeal book, tab 7). He dismissed the appellants’ motion to amend,
ordered that the examinations for discovery be completed by February 15, 2010
and that the undertakings be completed by March 31, 2010. Finally, he adjourned
the respondent’s motion to strike sine die and awarded costs in the
amount of $1,500 in favour of the respondent. No appeal was taken from this
order.
[7]
Subsequently,
D’Arcy J., as the judge charged with the conduct of the appeal, assumed the
task of settling the outstanding pre-trial issues. A pre-trial conference call
was held before him on January 28, 2011 (appeal book, tab 11). On February 7,
2011, he issued an order (the First Order), setting out the procedure and
relevant time table for the appellants’ proposed motion to challenge the
admissibility of certain documents (appeal book, tab 12). The transcript of the
pre-trial conference makes it clear that the issue of the admissibility of
evidence was going to be addressed as the first preliminary matter.
[8]
On
February 28, 2011, the appellants filed their notice of motion on the
admissibility of evidence. This motion also contained a notice of
constitutional question in which the appellants challenged the constitutional
validity of paragraph 296(1)(b) of the Act (appeal book, tab 13).
Notably, the notice of motion listed as grounds sections 7, 11 and 15 of the
Charter.
[9]
The
respondent took issue with the appellants’ notice of motion and requested that another
teleconference be held (appeal book, tab 14). It argued that the notice of motion
failed to provide specifications as to the evidence which was sought excluded
as directed by the First Order, but rather sought blanket exclusion, in
contravention of it.
[10]
The
appellants responded to the issues raised by the respondent by letter dated
March 8, 2011 (appeal book, tab 15). A further teleconference was held on March
21, 2011 (transcripts, appeal book, tab 16).
[11]
Following
the second teleconference, D’Arcy J. issued another order on March 23, 2011
(the Second Order) (appeal book, tab 2). He ordered that the appellants’ motion
be withdrawn, and that a fresh motion be filed in compliance with his earlier
order. It is this Second Order that is the subject matter of the appeal.
DECISION OF THE TAX COURT
[12]
The
order was rendered without reasons. However, the transcript of the second
teleconference reveals that D’Arcy J. was mainly concerned with the process
(appeal book, tab 16, p. 360). He recalled that during the first pre-trial
conference, the appellants indicated that they would bring a motion challenging
the admissibility of certain documents and that he ordered that this motion be
filed by February 28, 2011.
[13]
However,
D’Arcy J. found that the motion filed by the appellants addressed matters beyond
the admissibility of evidence. He expressed the view that: “the discussion
during the pre-trial conference and my subsequent order were clear: the motion
was only to deal with the admissibility of evidence” (appeal book, tab 16, p.
362). D’Arcy J. also noted that earlier on, Rossiter A.C.J. dismissed a motion
by the appellants premised on the same Charter grounds (sections 7 and 11) and
that no appeal was taken from that decision. D’Arcy J. found that the
appellants were continuing to use the scattered approach that Rossiter A.C.J.
initially denounced (appeal book, pp. 370, 371).
[14]
Following
the teleconference, D’Arcy J. ordered that the appellants’ February 28, 2011
motion be withdrawn and that a fresh motion consistent with his First Order be
filed by April 20, 2011. D’Arcy J. also directed that the new motion be accompanied
by submissions identifying the evidence being challenged, the particulars of
the purported breach of the appellants’ rights, the time when such rights are
said to have been breached, the facts and the law being relied upon. He further
ordered the production of a list containing the specific evidence that the
appellants seek to exclude with a cross-reference to the respondent’s list of
documents.
[15]
The
order also provided that additional motions could be brought, but only after
questions relating to the admissibility of evidence have been settled. Finally,
D’Arcy J. awarded costs in the amount of $4,500 in favour of the respondent.
POSITION OF THE APPELLANTS
[16]
The
appellants submit that the documentary evidence which they were ordered to
particularize is in the tens of thousands of pages. Dealing with the issue of
admissibility of evidence in the manner requested by D’Arcy J. would be
“extremely onerous and unwieldy” (appellants’ memorandum, para. 12). They
rather wish to proceed with categories or bundles of evidence based on the
manner in which they were seized. On this point, the appellants contend that
they did not have the opportunity to provide submissions on the best method to
present the admissibility of evidence issue.
[17]
The
appellants note that D’Arcy J. proceeded to hold the second teleconference on
his own motion. They submit that the telephonic pre-hearing conference did not
meet the notice requirements which the principles of natural justice dictate.
[18]
The
appellants also disagree with D’Arcy J.’s understanding of the First Order. In
their view, it was open to them to raise issues other than those which relate
to the admissibility of evidence such as, for instance, issues relating to the
burden of proof.
[19]
Finally,
considering the tone of D’Arcy J., his comments during the teleconference
hearing and the punitive aspect of the costs which he awarded, the appellants
ask that all further proceedings in the matter take place before a different
judge.
ANALYSIS AND DECISION
[20]
In Sawridge
Band v. Canada, 2006 FCA 228, this Court spoke to the standard of review
applicable to discretionary decisions in the context of trial management. Evans
J.A. wrote (paras. 21-24):
[21]
First, this Court is very reluctant to interfere with decisions
made by a judge in the course of managing a matter prior to trial, particularly
one as complex, lengthy and difficult as this one. As a result of living with
the matter over time, the case management judge will have acquired an overall
understanding of it which an appellate court, on the basis of hearing an appeal
on a particular issue, cannot possibly match in either depth or breadth.
[22]
When performing essentially case management functions judges are
appropriately given "elbow room" by appellate courts, so that they
can get on with what is often a difficult job, calling for a mix of patience,
flexibility, firmness, ingenuity, and an overall sense of fairness to all parties.
These qualities are very evident in the way in which both Hugessen and Russell
JJ. have performed their tasks in the present matter.
[23] In my opinion,
the Court should bear the above considerations in mind when both determining
and applying the standards of review appropriate to the different aspects of
Russell J.'s decision by virtue of Housen v. Nikolaisen, [2002] 2 S.C.R.
235, 2002 SCC 33.
[24] Thus, to the
extent that the decision involved an exercise of discretion (as when, for
example, the Judge was deciding whether to exclude those who had failed to
comply with a Court order), the appellants have a particularly high hurdle to
cross. They must establish that the discretion was exercised on the basis of an
erroneous view of the law or a misapprehension of the facts, or was otherwise
non-judicial. On the other hand, determining the relevance of evidence is
generally a question of law, subject to appellate review on a standard of
correctness, as is the judge's analysis of the judicial authorities on
subsection 35(1).
[21]
In
my view, a judge performing pre-trial functions is entitled to the same degree
of deference. Applying this standard, I can detect no basis for intervening
with D’Arcy J.’s exercise of discretion in the present case.
[22]
I
first note that the appellants had the opportunity to make submissions prior to
the issuance of the Second Order and did so by their letter of March 8, 2011 as
well as during the pre-trial conference.
[23]
The
transcript of the first teleconference (tab 11) supports the view that issues
were to be addressed in sequence and that the first issue to be addressed was
that relating to the admissibility of evidence obtained in alleged breach of
section 8 of the Charter. The appellants point to two excerpts from the
transcript where D’Arcy J. spoke to other issues (appellants’ memorandum, para.
17). However, this does not detract from the fact that the issue of
admissibility had to be addressed before any other issue could be considered.
[24]
Beyond
this, in apparent disregard for the earlier process and the terms of the Second
Order, the appellants chose to raise issues which had been raised and finally
disposed of by Rossiter A.C.J. Counsel for the appellants was unable to advance
any form of justification for this behaviour.
[25]
Contrary
to the submissions of the appellants, they had the opportunity to be heard,
both during the first and the second teleconference. It is therefore not open
to them to now say that the 70,000 pages of documents make it too onerous and
unwieldy to deal with the issue in the manner provided by the Second Order. In
any event, as counsel for the respondent acknowledged during the course of the
hearing, nothing prevents the appellants from particularizing their objection
by reference to categories of documents if the documents lend themselves to
this treatment.
[26]
Finally,
there is no basis for the request that D’Arcy J. be removed from this case. I
fail to detect any bias in the comments which he made during the second
teleconference. D’Arcy J. does express dissatisfaction and impatience as a
result of the appellants’ disregard for the First Order. However, his Second Order
allows the appellants to file a motion on the admissibility of evidence as had
been requested, and leaves the door open for future motions once that issue is
settled. The result is not unfair for the appellants. With regards to costs,
the amount awarded is certainly indicative of D’Arcy J.’s displeasure, but awarding
costs with the view of discouraging improper behaviour is a normal function of
cost awards. It is not a ground for alleging bias.
[27]
Otherwise,
it has not been shown that D’Arcy J. misapplied his discretion in awarding
costs as he did.
[28]
I
would dismiss the appeal with costs.
“Marc
Noël”
“I
agree.
Johanne Trudel J.A.”
“I
agree.
Robert M.
Mainville J.A.”
Email this Content