Date: 20030213
Docket: A-449-01
Neutral citation: 2003 FCA 77
CORAM: STRAYER J.A.
SEXTON J.A.
SHARLOW J.A.
BETWEEN:
CHERYL ANDREA GRANT
Applicant
- and -
HER MAJESTY THE QUEEN
Respondent
- and -
THE ATTORNEY GENERAL OF CANADA
Respondent
Heard at Toronto, Ontario, Wednesday, February 12th, 2003.
Judgment delivered at Toronto, Ontario, on Thursday, February, 13, 2003.
REASONS FOR JUDGMENT: STRAYER J.A.
CONCURRED IN BY:
SEXTON J.A.
SHARLOW J.A.
Date: 20030213
Docket: A-449-01
Neutral citation: 2003 FCA 77
CORAM: STRAYER J.A.
SEXTON J.A.
SHARLOW J.A.
BETWEEN:
CHERYL ANDREA GRANT
Applicant
- and -
HER MAJESTY THE QUEEN
Respondent
- and -
THE ATTORNEY GENERAL OF CANADA
Respondent
REASONS FOR JUDGMENT
STRAYER J.A.
[1] This is an application for a judicial review of a decision of the Tax Court of Canada rendered after a Trial conducted under the Informal Procedure.
[2] The Applicant is the mother of a child, Andrew Floyd Slocum, whose father is her ex-spouse Brian Slocum. Pursuant to a separation agreement and child support order of May, 1994 the Applicant was to receive child support payments from Brian Slocum, in the amount of $350.00 a month.
[3] At that time the support payments were deductible for tax purposes from the income of the payor parent and were taxable in the hands of the recipient parent. In 1997 amendments to the Income Tax Act provided that child support payments under agreements made, or orders issued, after April, 1997 would not be deductible from income by the payor nor included as income of the payee. There was also provision for parties to agreements or orders made before that date to file an election signed by both parties bringing the prior agreement or order under the new regime.
[4] The Applicant takes the position that in 1998 she and her ex-husband signed such an election, Form T1157. Thereafter, in her 1998 and 1999 tax returns she did not include the amount of $4,200.00 per year received by her in child support payments. The Minister reassessed her income for these years by including those amounts. The Applicant appealed these re-assessments to the Tax Court. In an amended reply to the Notice of Appeal the Minister stated in part:
"6. In so reassessing the Appellant, the Minister made the following assumptions of fact:
a. the facts hereinbefore admitted or stated;
b. the Appellant and her ex-spouse signed a separation agreement prior to May 1997;
c. in accordance with the term of the Support Deduction Order of the Ontario Court (General Division) dated May 16, 1994, the Appellant's former spouse was required to pay the Appellant monthly child support in the amount of $350.00 per month beginning May 16, 1994;
d. the Appellant's former spouse paid to the Appellant the Amounts in the 1998 and 1999 taxation years in accordance with the separation agreement."
[5] According to an Affidavit sworn by the Applicant on October 11, 2000, and forming part of the Tax Court record, she was advised in a telephone call in September, 2000 by the Respondent that Brian Slocum was denying that it was his signature on Form T1157, and that this had been confirmed by an expert analysis. She then submitted a letter to the Respondent enclosing other documents bearing Mr. Slocum's signature for purposes of comparison. She says the Respondent declined to examine these documents.
[6] Prior to the hearing of the appeal in the Tax Court of Canada on June 13, 2001 the Applicant was made aware that the Respondent did not intend to call the expert in question and therefore the Respondent declined to produce to her the expert's report. She was also made aware of the witnesses the Respondent intended to call, including her ex-husband, Mr. Slocum.
[7] The Tax Court judge described the evidence as follows concerning Form T1157.
"15. She stated the ex-spouse signed the T1157 and she then reviewed several years of acrimonious relationship between the ex-spouse and herself where she alleged the ex-spouse's behaviour in relation to custody, support and divorce matters should, in her view, lead to a conclusion that the ex-spouse's evidence was less than credible.
16. The ex spouse's evidence was clear that he did not sign the document, that on the date he was alleged to have signed the document he was not at the Appellant's home, and he could by his normal pattern of behaviour, account for his presence being elsewhere.
17. Whether the occasion of the raising of the Christmas tree was the time of the purported signing, October 1, 1998, is not clear. Indeed, from the evidence I conclude the T1157 was not signed by anyone at the time of the Christmas tree raising as the document was received by the C.C.R.A. well before the Christmas season.
18. The Appellant also admitted she altered the T1157 at least to the degree of printing in the name of the ex-spouse on the face of the document well after the alleged signing. The Appellant's recollection of other matters with respect to details or dates was imprecise. The allegations of trickery, deceit and forgery have created an atmosphere of acrimony, clouding all the evidence.
19. On a balance of probabilities there is no conclusive evidence for the Court to conclude that the election for child support payments Form T1157 (Exhibit R-10) can be relied upon. The Appellant has not discharged the onus of proof to show the assessment was wrong."
[8] The Tax Court judge also noted that the Applicant had testified that she had been informed by the Canadian Customs and Revenue Agency that they did not believe that the signature on the form was that of her ex-spouse and they had refused to consider the documents she submitted for purposes of comparison. However, the Applicant could not show us anything in the transcript indicating that she had testified that she had demanded and been refused access to the original T1157 form allegedly signed by her ex-spouse, thus preventing her from obtaining an expert opinion of her own.
[9] The Tax Court judge dismissed her appeals.
[10] She then brought the present application in this Court for judicial review of the decision of the Tax Court judge on the basis that he denied her natural justice or procedural fairness by not ordering that the Respondent provide her the original T1157 form prior to the hearing of the appeal, or by not adjourning the appeal to allow her to retain an expert witness to analyse that form which was put in by the Respondent as evidence before the Tax Court. In support of her application, she has filed another Affidavit sworn subsequent to the hearing of the Appeal in the Tax Court in which she reiterates some of the evidence put before the Tax Court and deals with some matters apparently not put before the Tax Court. Even this Affidavit does not provide any detail as to the alleged refusal of the Respondent to give her access to the original of form T1157 for purposes of examination by an expert.
[11] In response to this Affidavit, the Respondent has filed a new Affidavit sworn by the Respondent's Trial Counsel responding to various of the statements in the Applicant's new Affidavit.
[12] While neither party objected to the other's Affidavit (both prepared after the Tax Court hearing) being received in this judicial review, it is apparent that to some extent each represents new evidence for whose admission there has been no basis established. I will therefore not consider either Affidavit in so far as they concern matters which occurred before the hearing of the Appeal which could have been or should have been put before the Tax Court judge.
ANALYSIS
[13] I have concluded that the application for judicial review should be dismissed. The Applicant has not demonstrated any reviewable error committed by the Tax Court judge. She could not demonstrate in the record of the Tax Court hearing that she had ever asked the Tax Court judge to order the disclosure of the original form T1157 in some way which would permit her to have it examined by an expert, nor that she had asked for any adjournment for the purpose of calling such an expert witness. I accept that, as she now says, she did not appreciate that she could or should have taken such steps. However, it is not possible to have a second hearing of an appeal just to enable the losing party to improve on the presentation of her case. We cannot set aside a decision for denial of fairness or natural justice if the judge or tribunal whose decision is under review gave each party reasonable opportunity to state their case and did not deny any proper request for the production of documents or for an adjournment to present evidence. That is the situation of the Trial judge in this case.
[14] Having said that, it is appropriate I believe to remark on the conduct of the Respondent in the present case. It is apparent from the record that the Minister's counsel has on several occasions refused production or disclosure to the Applicant of documents that could have been pertinent to her appeal. The grounds for these refusals have been stated in broad terms: that no disclosure is required in an Informal Proceeding; and that the production of such documents is prohibited by subsection 241 (1) of the Income Tax Act because they amount to taxpayer information of another taxpayer.
[15] The absence of discovery as an available procedure in informal proceedings does not provide an excuse for the denial of fairness to a party bringing an appeal under that procedure. As the authenticity of Brian Slocum's signature on Form T1157 was the issue which the taxpayer had to address before the Tax Court, fairness required that the taxpayer be allowed to have an expert examine that document prior to the hearing. The Applicant feels that she was denied that opportunity. While the record properly before us does not clearly demonstrate that to be the case, neither does it disclose any evidence of a clear expression of willingness by the Respondent to give such access. As the matter was not raised before the Tax Court judge it is too late for us to consider it now, but I would not want to leave the impression that the taxpayer was not entitled to have such access had she clearly demanded it, notwithstanding the absence of discovery procedures.
[16] Further, the Respondent's frequent assertion of the absolute privilege of "taxpayer information" appears to me disingenuous. Firstly, with respect to Form T1157 this was a document which the Applicant herself had signed and submitted to the Minister, and in fact the Respondent had provided her with a photocopy prior to the hearing. The strictures of subsection 241(1) could hardly be applicable to this document. Further, as the Applicant herself has ably pointed out, there is an exception in 241(3) which specifically permits the communication of such documents where there are, among other things, "any legal proceedings relating to the administration or enforcement of this Act...". Therefore even if subsection 241(1) applied to the original of Form T1157 this was no excuse for refusing access to it for inspection by a taxpayer in an appeal to the Tax Court of her reassessment where the success of that appeal depended on the authenticity of the document. The exception in subsection 241(3) would have also covered some of the other documents which the Applicant had requested and for which the Respondent claimed the blanket exemption from production under subsection 241(1), although refusal of their disclosure is not part of her present complaint. Also the Respondent was entitled to refuse disclosure of her expert's report once it was determined that such report would not be put in evidence by the Respondent.
[17] One further point should be noted. In the Minister's Reply to the Notice of Appeal as quoted above, the stated assumptions make no mention of Form T1157, as filed by the Applicant, being considered invalid because her ex-husband's signature was not genuine. It is clear from the Affidavit signed by the Applicant on October 11, 2000 and filed in the appeal in the Tax Court that at least by the time the Minister confirmed the re-assessment by letter of September 14, 2000, the Respondent was of the opinion that Mr. Slocum had not signed the Form T1157 as submitted by the Applicant. Indeed this position was conveyed by the Respondent to the Applicant by telephone on September 13, 2000, said to be based on Mr. Slocum's statement that he had not signed the form and on an expert's analysis of the signature. However, in the Minister's Amended Notice of Reply filed on May 30, 2001 as quoted above, no mention is made of an assumption that the election filed by the Applicant was not in fact properly signed. The Tax Court has criticised the Ministerial practice of pleading, as assumptions, facts that were not assumed when the assessment was made. Commenting on this practice, Bowman ACJ inHome et al v. HM [2002] T.C.J. 641 par. 19 said
"The practice is reprehensible wherever it occurs but it is particularly pernicious in informal procedure cases where the taxpayer is often self-represented. Such persons do not have the benefit of counsel, have not held discoveries and probably know nothing of the substantial jurisprudential lore about assumptions that has been built up over the past half century. They are dependent upon the integrity of Crown counsel and the accuracy and completeness of the assumptions pleaded.
[18] While in this case we have the converse situation, where a fact that was taken into account in the reassessment is not pleaded, the effect is to fail to give the tax payer in an informal proceeding a complete set of the allegations to be relied on by the Minister, whoever may have the onus of proving or disproving them. In this case there has been no particular unfairness in the result as the Applicant was fully aware that this was the position being taken by the Minister, was fully aware that her ex-husband would be called as a witness, and she already had the burden of providing that an election had been made. Nevertheless as a general practice the pleadings should be complete so as not to confuse and entrap the unwary as pointed out by Bowman ACJ in the above passage. The blanket denial of all allegations "in the Notice of Appeal and...in the documents attached to the Notice of Appeal", as asserted by the Respondent here, left obscure what was the central issue of the appeal.
[19] The Applicant invoked the Canadian Charter of Rights and Freedoms to support a claim for wider disclosure by the Respondent. Were we to have considered these arguments to be pertinent to the determination of this case, we would have had to insist on a new set of Notices to Attorneys General pursuant to section 57 of the Federal Court Act. (Notices were served for the Tax Court hearing). However we do not consider that section 11 of the Charter as invoked by the Applicant applies to the appeal of an Income Tax assessment and it is therefore not necessary to treat our decision as any kind of adjudication on constitutionality. As noted earlier, however, this is not to say that ordinary common law doctrines of fairness and natural justice should not apply to such an appeal, and had objections along these lines been raised in a timely and effective manner before the Tax Court they could well have affected the outcome.
[20] The application for judicial review should therefore be dismissed. In the circumstances no costs will be awarded to the Respondent.
"B. L. Strayer"
J.A.
FEDERAL COURT OF CANADA
Names of Counsel and Solicitors of Record
DOCKET: A-449-01
STYLE OF CAUSE: CHERYL ANDREA GRANT
Applicant
- and -
HER MAJESTY THE QUEEN ET AL
Respondents
DATE OF HEARING: WEDNESDAY, FEBRUARY 12, 2003
PLACE OF HEARING: TORONTO, ONTARIO
REASONS FOR JUDGMENT BY: STRAYER J.A.
DATED: THURSDAY, FEBRUARY 13, 2003
APPEARANCES BY: Ms. Cheryl Andrea Grant
For the Applicant
Ms. Elizabeth Chasson
For the Respondents
SOLICITORS OF RECORD: Cheryl Andrea Grant
Georgetown, Ontario
For the Applicant
Morris Rosenberg
Deputy Attorney General of Canada
For the Respondents
FEDERAL COURT OF CANADA
Date: 20030213
Docket: A-449-01
BETWEEN:
CHERYL ANDREA GRANT
Applicant
- and -
HER MAJESTY THE QUEEN ET AL
Respondents
REASONS FOR ORDER
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