Date: 20081021
Docket: A-487-07
Citation: 2008 FCA
316
CORAM: NOËL J.A.
NADON J.A.
TRUDEL J.A.
BETWEEN:
HER
MAJESTY THE QUEEN
Appellant
and
AVENTIS PHARMA INC.
(FORMERLY: HOECHST MARION
ROUSSEL
CANADA INC.)
Respondent
Hearing held at Montréal, Quebec, on October 21, 2008.
Judgment
delivered from the bench at Montréal, Quebec, on October 21, 2008.
REASONS FOR JUDGMENT OF THE COURT BY:
NOËL J.A.
Date: 20081021
Docket: A-487-07
Citation: 2008 FCA 316
CORAM: NOËL
J.A.
NADON
J.A.
TRUDEL
J.A.
BETWEEN:
HER MAJESTY THE QUEEN
Appellant
and
AVENTIS PHARMA INC.
(FORMERLY: HOECHST MARION
ROUSSEL
CANADA INC.)
Respondent
REASONS FOR JUDGMENT OF THE
COURT
(Delivered from the bench at Montréal,
Quebec, on October 21, 2008)
NOËL J.A.
[1]
This is an
appeal from an interlocutory decision by Justice Lamarre of the Tax Court of
Canada (the TCC judge) who dismissed the Crown’s motion to compel the
representative of Aventis Pharma Inc. (Aventis) to answer certain questions and
to allow the Crown (once again) to amend its pleadings according to the
responses it counted on obtaining. At the same time, the TCC judge terminated the examination for
discovery.
Background
[2]
The motion
sought to compel the witness to reattend for the continuation of his examination
for discovery and answer any questions on the way in which certain moneys were
repatriated to Canada from Portugal and then redirected to
Ireland, and on the facts, circumstances and events surrounding the loans made
by HIFC (Hoechst International Financial Company, in Ireland) to Aventis.
[3]
Both
parties agree that these questions pertain to a series of facts that the
Minister of National Revenue (the Minister) relied on and accepted as proven
when issuing the assessments under appeal but that were nonetheless denied or
ignored by the Crown in its reply to the notice of appeal. Importantly, the
Crown did not advance any alternative position to justify the assessments in
its reply to the notice of appeal.
[4]
The TCC judge characterized this approach as “unusual”.
She agreed with the position of counsel for the respondent that the approach
masks a strategy to establish a new basis of assessment. According to the TCC
judge, nothing at that stage warrants a fishing expedition for facts that could
have been discovered during the audit, before the pleadings defined the issues.
[5]
She
therefore dismissed the Attorney General’s motion and terminated the discovery.
[6]
Counsel
for the Crown contends that in dismissing her motion, the TCC judge confused the roles of the Minister
and the Attorney General. Counsel states that the Minister relied on
information provided by Aventis to make his assessments, and that in its notice
of appeal Aventis merely repeated the facts it had submitted to the Minister
(Memorandum of the Crown, paragraph 51).
[7]
According
to counsel for the Crown, the Attorney General is not bound by the assumptions
of fact that the Minister relied on to issue his assessments. Just as the
Attorney General has the obligation to faithfully mirror in his pleadings the
facts relied on by the Minister in support of his assessments (since only those
facts benefit from the legal presumption in favour of the Minister), he also
has the option of calling those facts into question if he is not persuaded of
their accuracy (Memorandum of the Crown, paragraph 26).
[8]
According
to counsel for the Crown, the TCC judge erred in law by preventing the Crown
from continuing its examination on the disputed facts.
Decision
[9]
In our
opinion, the TCC judge was entirely correct in
questioning the Attorney General’s approach in this case. It is true that the
Attorney General is not bound by the assumptions relied on by the Minister to
issue his assessments and is entitled to defend an assessment using one or
several alternative bases to those relied on by the Minister.
[10]
However,
as mentioned above, Attorney General did not advance an alternative position in
the case at hand. From the Attorney General’s perspective, the idea of calling
into question the Minister’s assumptions of fact without offering an
alternative position is, if the matter were to end there, nonsensical. It
therefore becomes obvious that the Attorney General’s aim is to continue the
examination for discovery with a view to developing an alternative basis of
assessment that he has not yet defined. That is not the role of an examination
for discovery.
[11]
In the
circumstances, it was open to the TCC judge to exercise her discretion, as she
did, to terminate the examination for discovery.
[12]
The appeal
will be dismissed with costs.
“Marc
Noël”
Certified true
translation
Sarah Burns
FEDERAL COURT OF APPEAL
SOLICITORS OF RECORD
DOCKET: A-487-07
(APPEAL FROM AN ORDER OF LAMARRE J. OF
THE TAX COURT OF CANADA DATED OCTOBER 18, 2007, DOCKET 2003-4034(IT)G)
STYLE OF CAUSE: HER
MAJESTY THE QUEEN v.
AVENTIS PHARMA INC.
PLACE OF HEARING: Montréal, Quebec
DATE OF HEARING: October
21, 2008
REASONS FOR JUDGEMENT OF THE
COURT BY: NOËL J.A
NADON J.A.
TRUDEL
J.A.
DELIVERED FROM THE BENCH BY: NOËL J.A.
APPEARANCES:
|
Josée Tremblay
Daniel
Bourgeois
|
FOR
THE APPELLANT
|
|
Wilfrid Lefebvre
Dominic
C. Belley
|
FOR
THE RESPONDENT
|
SOLICITORS
OF RECORD:
|
John H. Sims, Q.C.
Deputy
Attorney General of Canada
|
FOR THE APPELLANT
|
|
Ogilvy Renault
Montréal, Quebec
|
FOR THE RESPONDENT
|
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