Date:
20070912
Dockets: A-50-06
A-174-06
Citation: 2007 FCA 280
CORAM: RICHARD C.J.
SHARLOW J.A.
TRUDEL J.A.
A-50-06
BETWEEN:
BARRY JOHN WALSH, PAUL WALSH,
FRANCIS WALSH,
1327827 ONTARIO LTD. and 1297190 ONTARIO
LTD.
Appellants
and
THE MINISTER OF NATIONAL
REVENUE,
HER MAJESTY THE QUEEN
Respondents
A-174-06
BETWEEN:
BARRY JOHN WALSH,
1327827 ONTARIO LTD. and 1297190 ONTARIO
LTD.
Appellants
and
THE MINISTER OF NATIONAL REVENUE,
HER MAJESTY THE QUEEN
Respondents
Heard at Toronto, Ontario, on September
12, 2007.
Judgment
delivered from the Bench at Toronto, Ontario, on September
12, 2007.
REASONS
FOR JUDGMENT OF THE COURT BY: SHARLOW J.A.
Date: 20070912
Dockets: A-50-06
A-174-06
Citation: 2007 FCA 280
CORAM: RICHARD
C.J.
SHARLOW
J.A.
TRUDEL
J.A.
A-50-06
BETWEEN:
BARRY JOHN WALSH, PAUL WALSH, FRANCIS
WALSH,
1327827 ONTARIO LTD. and 1297190 ONTARIO
LTD.
Appellants
and
THE MINISTER OF NATIONAL REVENUE,
HER MAJESTY THE QUEEN
Respondents
A-174-06
BETWEEN:
BARRY JOHN WALSH,
1327827 ONTARIO LTD. and 1297190 ONTARIO
LTD.
Appellants
and
THE MINISTER OF NATIONAL REVENUE,
HER MAJESTY THE QUEEN
Respondents
REASONS FOR JUDGMENT OF THE
COURT
(Delivered from the Bench at Toronto, Ontario,
on September 12, 2007)
SHARLOW J.A.
[1]
These
two appeals are from orders of Justice Hugessen. The first order, dated January
19, 2006, allowed the motion of the respondents (who I will refer to collectively
as the “Crown”) to strike the application of the appellants Barry John Walsh,
Paul Walsh, Francis Walsh, 1327827 Ontario Ltd. and 1297190 Ontario Ltd.
(T-990-05) for judicial review of the decision of the Minister of National
Revenue to reassess those parties under the Income Tax Act (2006 FC 56).
The second order, dated April 12, 2006, dismissed the motion of the appellants Barry
John Walsh, 1327827 Ontario Ltd. and 1297190 Ontario Ltd. to convert to an
action their earlier application (T-733-04) to quash certain “requirements for
information” issued by the Minister in reliance on section 231.2 of the Income
Tax Act (2006 FC 489).
Facts
[2]
The
Minister issued the requirements for information on March 10, 2004. The stated
purpose of the requirements was to obtain books and records in respect of the
tax affairs of the appellants Barry John Walsh, 1327827 Ontario Ltd. and
1297190 Ontario Ltd. (who will be referred to collectively as the “First Three
Parties”).
[3]
The
First Three Parties filed an application for judicial review (T-733-04) on
April 8, 2004 to challenge the requirements on constitutional and other
grounds. That proceeding is pending and is under case management.
[4]
In
April and May of 2005, the Minister reassessed the First Three Parties, and
also Paul Walsh and Francis Walsh (who will be referred to collectively as the
“Other Parties”), for their 2001 and 2002 taxation years. That prompted a
second judicial review application filed June 7, 2005 by the First Three
Parties and the Other Parties seeking to quash the reassessments on the basis
that they were issued in reliance on information obtained pursuant to the challenged
requirements. Notices of objection were filed in relation to those
reassessments, which means that they can be put before the Tax Court of Canada
in due course.
[5]
In
August of 2005, the Crown filed a notice of motion for an order to strike the
second application for judicial review on the basis that the Federal Court
lacked the jurisdiction to grant the relief sought.
[6]
In
November of 2005, before that motion was dealt with, the First Three Parties
and the Other Parties filed a notice of motion for an order joining the two
applications and converting the combined proceeding into an action, and in the
alternative for an order for the production of certain records that were not
produced by the Minister under Rule 317 but which were alleged to have been before
the Minister when the decision was made to issue the requirements.
[7]
Justice
Hugessen dealt first with the Crown’s motion to strike. He granted it. That is
the subject of the first appeal (A-50-06).
[8]
Justice
Hugessen then dealt with the motion to convert the remaining application into an
action and the motion for the production of documents. He dismissed those
motions. That is the subject of the second appeal (A-174-06).
The first appeal (A-50-06) – order striking
the second application for judicial review
[9]
The
relief sought in the second application for judicial review was a declaration
that the reassessments are unlawful or improper in a number of respects. Justice
Hugessen concluded that the only purpose of such a declaration would be to
serve as the foundation for the substantive relief, which is to set aside the
reassessments, a remedy that is outside the jurisdiction of the Federal Court.
He said, at paragraph 5 of his reasons (2006 FC 56), that such relief would be
“a meaningless exercise when divorced, as it must be, from the substantial
question as to the validity of the assessment itself”. We agree with those conclusions,
and with the decision of Justice Hugessen to strike the second application for
want of jurisdiction.
The second appeal (A-174-06) – refusing
to convert the first application into an action
[10]
The
second appeal is from the decision of Justice Hugessen to dismiss the motion to
convert the first application into an action. That is a discretionary decision.
We find nothing in the record that warrants the intervention of this Court.
[11]
Justice
Hugessen also refused the request for further production and expansion of the
certified tribunal record on the basis that he was not persuaded that the
requested documents were part of the record upon which the Minister made the
impugned decision. That is a factual conclusion that was open to Justice
Hugessen on the record.
Conclusion
[12]
For
these reasons, both appeals will be dismissed with costs. A copy of these
reasons will be filed in A-50-06 and A-174-06.
“K.
Sharlow”
FEDERAL COURT OF APPEAL
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: A-50-06
(APPEAL FROM A DECISION OF JUSTICE HUGESSEN, FEDERAL COURT
DATED
JANUARY 19, 2006 IN FILE T-990-05
DOCKET: A-174-06
(APPEAL FROM A DECISION OF JUSTICE HUGESSEN, FEDERAL COURT
DATED APRIL 12, 2006 IN FILE T-733-04
STYLE OF CAUSE: A-50-06
BETWEEN:
BARRY
JOHN WALSH, PAUL WALSH, FRANCIS WALSH,
1327827
ONTARIO LTD. and 1297190 ONTARIO LTD.
Appellants
and
THE MINISTER OF NATIONAL
REVENUE,
HER MAJESTY
THE QUEEN
Respondents
A-174-06
AND BETWEEN:
BARRY JOHN
WALSH,
1327827
ONTARIO LTD. and 1297190 ONTARIO LTD.
Appellants
and
THE MINISTER
OF NATIONAL REVENUE,
HER
MAJESTY THE QUEEN
Respondents
PLACE OF
HEARING: TORONTO, ONTARIO
DATE OF
HEARING: SEPTEMBER 12, 2007
REASONS FOR
JUDGMENT
OF THE COURT
BY: (RICHARD C.J., SHARLOW
J.A. & TRUDEL
J.A.)
DELIVERED
FROM
THE BENCH BY: SHARLOW J.A
APPEARANCES: (Cont’d)
|
Rocco Galati
|
FOR
THE APPELLANTS
|
|
Pierre Trottier
|
FOR
THE RESPONDENTS
|
SOLICITORS OF RECORD:
|
Galati Law Firm
Toronto, Ontario
|
FOR THE APPELLANTS
|
|
John H. Sims, Q.C.
Deputy
Attorney General of Canada
|
FOR THE RESPONDENTS
|
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