Date:
20080220
Docket: A-54-07
Citation: 2008 FCA 63
CORAM: DESJARDINS
J.A.
LÉTOURNEAU
J.A.
TRUDEL J.A.
BETWEEN:
RAYNALD GRENIER
Appellant
and
HER MAJESTY THE QUEEN
Respondent
REASONS FOR JUDGMENT
TRUDEL J.A.
[1]
A judgment
of the Tax Court of Canada on September 26, 2002 (reasons
[TRANSLATION] “amended for greater clarity” in December 2002, per Judge
Archambault) dismissed Mr. Grenier’s appeal from reassessments by the
Minister of National Revenue for the 1993 to 1996 taxation years, inclusive
(2002 T.C.J. No. 650 (T.C.C.) (QL) – the 2002 judgment).
[2]
The
appellant appealed this decision to this Court, which appeal was dismissed on
the merits by a judgment of April 1, 2004 (2004 FCA 148;
application for leave to the Supreme Court dismissed, No. 30194). Earlier
the appellant had twice unsuccessfully sought leave to enter new evidence which
he said was [TRANSLATION] “complementary in support of testimony already heard
but not accepted” by the trial judge (October 29, 2003, per
Létourneau J.A.; application to review denied, December 9, 2003).
[3]
This time,
the Court has before it an appeal by Mr. Grenier (notice of appeal 2007) from
a second judgment of the Tax Court of Canada on December 20, 2006 (Reasons
from the bench amended for greater clarity and precision on June 27, 2007
– per Judge Archambault – the judge – 2007 TCC 93 – the
2006 judgment). On appeal, the appellant represented himself.
[4]
This
judgment dismissed his motion to [TRANSLATION] “set aside or amend the judgment
of October 1, 2002, on account of fraud or facts arising or
discovered after it was made and to reply to a question on which the Court did
not rule”, made pursuant to Rule 172 of the Tax Court of Canada Rules
(General Procedure), SOR/90-688a (appellant’s memorandum, p. 16 –
motion to amend).
[5]
Rule 172
reads as follows:
Tax
Court of Canada Rules (General Procedure), SOR/90-688a
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172. (1) A
judgment that,
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172.
(1) Le jugement qui :
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(a) contains an error
arising from an accidental slip or omission, or
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a) comporte une erreur découlant d’un
lapsus ou d’une omission;
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(b) requires amendment in
any matter on which the Court did not adjudicate,
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b) doit être modifié relativement à une
question sur laquelle la Cour n’a pas statué,
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may be amended by the Court on application or of its own motion.
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peut être modifié par la
Cour, sur demande ou de son propre chef.
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(2) A party who seeks to,
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(2) Une partie peut
demander, par voie de requête dans l’instance, selon le cas :
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(a) have a judgment set
aside or varied on the ground of fraud or of facts arising or discovered
after it was made,
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a) l’annulation ou la modification d’un
jugement en raison d’une fraude ou de faits survenus ou découverts après
qu’il a été rendu;
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(b) suspend the operation
of a judgment, or
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b) un sursis d’exécution d’un jugement;
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(c) obtain other relief
than that originally directed,
may make a motion for the relief claimed.
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c) une mesure de redressement différente
de celle qui a déjà été accordée.
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[6]
By his
motion to amend the appellant put forward several arguments to appeal from the
judgment of the Tax Court of Canada. The very title of the motion showed that
it concerned both the appeal from a judgment, material correction of that
judgment or its withdrawal. Yet there is a procedure provided for each of these
applications and the courts have on many occasions set out the principles applicable
to each procedure. The most relevant may be summarized as follows:
§
the trial court
cannot correct a judgment it has rendered if the judgment has been the subject
of a Court of Appeal judgment, and I would add, still less if it is being
implemented or has been implemented, and the conclusions sought were included
in those considered by the appeal (see Rule 399 of the Federal Courts
Rules; Déziel v. Canada, 2005 TCC 70);
§
misunderstanding
and misinterpretation by a party of exchanges at the hearing and the resulting
decision, or a refusal to accept the disposition therein, are not grounds for
amending the judgment;
§
a motion
to correct a judgment is intended to correct an error of the judge resulting
from an accidental slip or omission: it is not a disguised appeal of the
decision (see Benipal v. Canada (Minister of Citizenship and Immigration),
2002 FCTD 1302);
§
subsection
172(1) makes it possible to correct certain errors made by the Court, but is
not a basis for correcting an error made by the taxpayer or his counsel who
failed to submit a question for the Court’s attention (see Dupont Canada
Inc. v. Canada, 2002 FCA 307);
§
withdrawal
is an exception to the fundamental rule that judgments are irrevocable, an
essential part of the effective administration of justice: a case which has
already been decided may be reopened only for persuasive and clearly
established reasons. The proceeding and the resulting judgment contribute to
protection of the rights of both parties. This is why calling judgments into
question remains the exception. An argument dismissed for lack of evidence or
after argument and counter-argument in accordance with the settled rules does
not meet the requirements for withdrawal. The same is true of an error or
omission by a party (see Saywack v. Canada (Minister of Employment and
Immigration), [1986] 3 F.C. 189 (C.A.); Rostamian v. Canada (Minister
of Employment and Immigration), [1991] F.C.J. No. 525
(F.C.A.) (QL)).
[7]
With these
principles as a background, I turn to analyzing Mr. Grenier’s grounds of
objection, beginning with the last one concerning the constitutionality of
section 31 of the Income Tax Act, R.S.C. 1985 (5th Supp.),
c. 1 (the ITA), (appellant’s memorandum, p. 115). I will then
consider his contentions regarding the filing of new evidence and alleged fraud
by the officers of the Department of National Revenue who dealt with his case.
Point not considered by Tax Court of
Canada
[8]
Among his
grounds of appeal, the appellant mentioned that subsection 31(1) of the
ITA contravened his rights under the Canadian Charter of Rights and Freedoms
(the Charter). He summarized his argument as follows:
[TRANSLATION]
I challenge
the application of the rules on limited agricultural losses to my forestry
operation income. I feel that these rules are an infringement of my rights and
freedoms by limiting the right to manage my businesses properly. I also feel
the rules discriminate against me as this tax treatment results directly from
the exercise of my occupation (appeal book, page 38).
[9]
The
appellant derives his income from different sources, inter alia medicine
and forestry. It is the income from these professional and agricultural
activities which are the focus of the dispute.
[10]
In 2002,
the judge concluded that the appellant had not been able to show that the
[TRANSLATION] “chief source of income was farming or a combination of farming and
another source of income” (paragraph 18 of 2002 reasons for judgment),
hence the disputed decision of the Minister under subsection 31(2) of the
ITA.
[11]
This
factual background is the basis for the notice of a constitutional question
served by the appellant pursuant to section 57 of the Federal Courts
Act. It should be noted that this question, which was raised in the notice
of objection, was not repeated in the notice of appeal to the Tax Court of
Canada (appeal book, vol. 1, page 38).
[12]
It is thus
not surprising that in its judgment of March 30, 2004 this Court refused
to rule on this allegation, finding that “the constitutional question was not,
however, raised before the Tax Court Judge. There is thus no evidence at all on
the point, even assuming that section 15 of the Charter were applicable”.
(See also paragraph 26 of 2006 reasons for judgment.)
[13]
It was not
until 2006, a few days before the hearing
of the motion to amend before the judge, that the section 57 notice was
served. That notice was served by the appellant again a few days before the
appeal in this Court. In the conclusions of his memorandum, the appellant cited
the Canadian and Quebec Charters (appeal book, page 26). At the hearing,
he discussed only the former.
[14]
The
appellant conceded that the Charter had not been expressly relied on in his
notice of appeal to the Tax Court of Canada. However, he maintained that
paragraph 11 of the notice, as worded, [TRANSLATION] “cautiously” opened
the door to his constitutional argument in that the judge had to [TRANSLATION]
“determine whether the appellant was entitled to deduct all the
agricultural losses claimed for each of the said taxation years” (appellant’s emphasis
in his argument, appeal book, p. 38).
[15]
In the
appellant’s submission, the [TRANSLATION] “right to deduct” and to make the
deductible agricultural losses subject to the limitations of subsection 31(1)
of the ITA required constitutional analysis of [TRANSLATION] “the application”
of that provision, an analysis which his counsel urged the judge to make, but
in vain (in the appeal book, the appellant referred to the hearing transcript,
pages 60, 61 and 63).
[16]
I cannot
accept the appellant’s argument when he seeks a new conclusion on an argument
that was not before the trial judge and of which he also did not serve the
required notice. In this respect, this Court wrote in Bekker v. R.,
2004 FCA 186:
This Court
will not entertain a constitutional challenge in the absence of a Notice being
served on the Attorney General of Canada and on each Attorney General of the
Provinces: see Gitxsan Treaty Society v. Hospital Employees Union et al.
(1999), 238 N.R. 73 (F.C.A.); Giagnocavo v. M.N.R. (1995), 95 D.T.C.
5618, where this Court said that it was without jurisdiction to hear the issue.
Such Notice is not a mere formality or technicality that can be ignored or that
the Court can relieve a party of the obligation to comply with: see The
Queen v. Fisher (1996), 96 D.T.C. 6291, where this Court ruled that the
Notice must be given in every case in which the constitutional validity or
applicability of a law is brought in question in the manner described in
section 57, including proceedings before the Tax Court governed by the Informal
Procedure. Indeed, a judge cannot, proprio motu, raise a constitutional
issue without giving a notice to the Attorney General: see Reference re
Remuneration of Judges of Provincial Courts, [1997] 3 S.C.R. 3. (Supra,
at paragraph 8).
[17]
Therefore,
I conclude that the appellant’s constitutional argument cannot succeed and that
his application does not fall within the scope of a motion to amend a judgment:
it is not a [TRANSLATION] “question on which the Court did not rule”. Rather,
it is a question that was not drawn to the Court’s attention as the result of a
choice or a mistake by the party.
Allegation
of fraud and documents discovered after judgment
[18]
On appeal,
these two grounds of challenge are closely related. Fraud by the respondent’s
employees was not raised in 2002. This argument appears in the motion to amend.
A. Summary tables
[19]
In
particular, the appellant challenged the summary tables entered in argument by
the respondent (appeal book, vol. 1, pages 34 and 35), dealing with
only some of his sources of income. He maintained that the failure to
include information on his financial situation as a whole, including his income
and expenses, was a fabrication by the respondent and his counsel. He concluded
that he had been a victim of tax fraud. In his submission, the judge was
accordingly misled.
[20]
The Tax
Court of Canada dismissed this argument at paragraphs 7 to 13 of its 2006
judgment. The judge added that his own calculations “allowed me to note that
the lack of this data in the summary tables was due to the fact that they were
not submitted into evidence” (at paragraph 9 of the reasons).
[21]
On appeal,
the appellant tried a new demonstration. Referring to Exhibit I-11 (supplementary
appeal book, A-2, pages 51 et seq.), he sought to show that the
summary tables were incomplete (appeal book, pages 82 and 83), in that
they did not exhaustively cover all the figures contained in Exhibit I-11.
[22]
Referring
to the “Declaration of Taxpayer’s Rights” (a publication of the Canada Revenue
Agency), the appellant pointed out he was presumed to be [TRANSLATION] “honest”
until the contrary was shown. Though he did not say so precisely, I understand
from his argument that based on this presumption he is reversing the burden of
proof. In his submission, the Minister of National Revenue had a duty to submit
all the evidence to the Tax Court of Canada. The appellant is wrong. He had the
burden of refuting the facts on which the reassessments he was challenging are
based. Further, as the judge noted at paragraph 21 of the 2006 judgment:
“It was open to Mr. Grenier to present his own tables, to interpret them
differently and to show [his arguments]”.
[23]
A review of
the documentary evidence leads the Court to make the following observations:
§
the
summary tables were filed by the respondent during his argument at the judge’s
request (see supplementary appeal book A-2, page 37). Their purpose
was to establish [TRANSLATION] “the evolution of the appellant’s principal
activities, namely those relating to his profession, his other businesses and
his agricultural activities” (respondent’s memorandum, at paragraph 41);
§
these
tables summarized the documentary evidence submitted to the Court;
§
the
information for 1980 to 1992 came from Exhibit I-11;
§
this
information was obtained from the Revenue Canada “rapid tax system” where data
on returns that are not otherwise available are kept (supplementary appeal book A-2,
page 34);
§
the
information for 1993 to 2000 was summarized in another table based on tax
returns filed by the appellant for those periods (see Exhibits I-2 and I-4
to I-10);
§
the
witness who prepared Exhibit I-11 was examined at the hearing; neither the
appellant nor his counsel offered any evidence to rebut the content of
Exhibit I-11; Mr. Bergeron was not cross-examined (see examination of
F. Bergeron, supplementary appeal book A-2, page 41).
[24]
In
submitting the summary tables, the appellant asked the Court to note the many
question marks to be seen by the line reserved for [TRANSLATION] “gross
business income”. In his submission, these were fraudulent omissions made to
mislead the judge. I have reviewed these tables in relation to Exhibit I-11.
For the years in question, the appellant did not report any gross business
income, hence the question raised by the person preparing the tables.
Documents discovered after
2002 judgment
[25]
To support
his argument that his income was not accurate, the appellant suggested the
filing of documents [TRANSLATION] “discovered after the judgment” was made.
[26]
The first
document originated from the Quebec Association des Dermatologistes, and dealt
with the remuneration ceiling in effect during the period relating to the
assessments at issue. The difference in the information can be explained by the
fact that the Association document covers the period from April 1 of one
year to March 31 of the next year, while the fiscal year is from
January 1 to December 31 of the same year (see appeal book, page 91b).
[27]
Further
documents concerned the income reported by the appellant for the years prior
to 1980, that is prior to the years covered in Exhibit I-11 (see supplementary
appeal book A-2, page 93c, Exhibit R-2, and supplementary appeal
book A-3, page 186, Exhibit R-5).
[28]
On this
evidence as a whole, the judge noted that “facts presented by Mr. Grenier
do not establish the existence of such a fraud. In regard to the new facts, the
evidence did not establish that these were facts that Mr. Grenier did not have
knowledge of at the time of the hearing held in September 2002” (at
paragraph 20). I agree.
[29]
In his
memorandum, the appellant drew the Court’s attention to [TRANSLATION] “all
exhibits in the record at various stages of 2002 to date, including Exhibit A-7
the incorrect interpretation of which was discovered after the judgment
[of the Tax Court of Canada]” (see appellant’s memorandum, page 13 –
emphasis added). The Court is not sitting in appeal from its 2004 decision
in which it upheld the conclusions of the Tax Court of Canada judge.
[30]
After
hearing the appellant, I note that the facts raised were known to him or could
have been known at the relevant time. Accordingly, the judge made no error in
dismissing these arguments raised by the appellant in his motion to amend.
[31]
These
reasons are sufficient to dismiss the appeal. However, before concluding, I
think it is important for the appellant that I deal with an incidental matter.
Reassessment for statute-barred year
[32]
At the
first hearing before the judge, evidence was presented that the appellant had
failed to include in his professional income two sums received from the Régie
de l’assurance-maladie du Québec (the RAMQ) for 1993 and 1994, the amount of
which was not questioned (see paragraph 2 of 2002 judgment and supplementary
appeal book A-3, page 203).
[33]
This led
to the judge upholding the Minister’s decision to issue a reassessment for
those two years, including 1993 which was ordinarily statute-barred under
section 152(4) of the ITA.
[34]
Throughout
his pleading, the appellant expressed his anger at being [TRANSLATION]
“condemned under section 152(4) of the ITA” and his distress at being
forever [TRANSLATION] “branded as fraudulent”. I would invite Dr. Grenier
to carefully reread the 2002 judgment and section 152(4).
[35]
In the
case at bar, subparagraph 152(4)(a)(i) is relevant. It reads:
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152 …
(4) The Minister may at any time make an assessment,
reassessment or additional assessment of tax for a taxation year, interest or
penalties, if any, payable under this Part by a taxpayer or notify in writing
any person by whom a return of income for a taxation year has been filed that
no tax is payable for the year, except that an assessment, reassessment or
additional assessment may be made after the taxpayer's normal reassessment
period in respect of the year only if
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152 […]
(4) Le ministre peut établir
une cotisation, une nouvelle cotisation ou une cotisation supplémentaire
concernant l’impôt pour une année d’imposition, ainsi que les intérêts ou les
pénalités, qui sont payables par un contribuable en vertu de la présente
partie ou donner avis par écrit qu’aucun impôt n’est payable pour l’année à
toute personne qui a produit une déclaration de revenu pour une année d’imposition.
Pareille cotisation ne peut être établie après l’expiration de la période
normale de nouvelle cotisation applicable au contribuable pour l’année que
dans les cas suivants :
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(a)
the taxpayer or person filing the return
(i) has
made any misrepresentation that is attributable to neglect, carelessness or
wilful default or has committed any fraud in filing the return or in
supplying any information under this Act, or
[Emphasis
added]
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a) le contribuable ou la personne
produisant la déclaration :
(i) soit
a fait une présentation erronée des faits, par négligence, inattention ou
omission volontaire, ou a commis quelque fraude en produisant la
déclaration ou en fournissant quelque renseignement sous le régime de la
présente loi
[Je souligne]
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[36]
Nowhere in
the 2002 judgment is there any implication of a fraud committed by the
appellant: on the contrary. As mentioned earlier, it is the appellant who used the
word [TRANSLATION] “fraud” for the first time in his motion to amend. Up to
that time, neither he nor the respondent had made any reference to it.
[37]
In the
2002 judgment, the judge mentioned that for ethical reasons the appellant chose
not to retain the services of an accountant to reconcile the amounts which he
was claiming from the RAMQ and the statements provided by it. He went on to
say:
In my view,
the Minister discharged the burden of showing that the taxpayer made a
misrepresentation attributable to neglect or carelessness. I am not convinced
that Dr. Grenier did so by wilful default, and the Minister rightly cancelled
the penalty (at paragraph 44).
[38]
That said,
I would dismiss the appeal with costs.
“Johanne
Trudel”
I
concur.
Alice Desjardins J.A.
I agree.
Gilles Létourneau J.A.
Certified
true translation
Brian
McCordick, Translator
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