Docket: A-527-14
Citation:
2016 FCA 68
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CORAM:
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DAWSON J.A.
RYER J.A.
DEMONTIGNY
J.A.
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BETWEEN:
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BUHLER
VERSATILE INC.
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Appellant
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and
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HER MAJESTY THE
QUEEN
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Respondent
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REASONS
FOR JUDGMENT OF THE COURT
(Delivered from the Bench at Winnipeg, Manitoba, on March 1, 2016)
RYER J.A.
[1]
This is an appeal from a decision of Justice
Steven D’Arcy of the Tax Court of Canada (the “Judge”), dated November 18,
2014, in Docket 2012-4373(IT)G. The Judge granted a motion brought by Her
Majesty the Queen (the “Crown”), pursuant to Rules 95 and 110 of the Tax
Court of Canada Rules (General Procedure), S.O.R./90-688a (the “Tax
Court Rules”), for an order compelling Buhler Versatile Inc. (the
“Taxpayer”) to produce five binders of documents (the “Five Binders”).
[2]
The dispute arose in the context of the
Taxpayer’s appeal from an assessment, pursuant to the Income Tax Act,
R.S.C. 1985, c. 1 (5th Supp.), dated December 2, 2008 (the
“Assessment”), which disallowed the Taxpayer’s claim for certain scientific
research and experimental development expenditures and investment tax credits
in respect of the Taxpayer’s 2005 taxation year.
[3]
In an attempt to persuade the Canada Revenue
Agency Appeals Division (the “Appeals Division”) to vary or vacate the
Assessment, the Taxpayer made a lengthy submission to it by correspondence
dated October 21, 2011. That submission consisted of a letter signed by the Chief
Financial Officer of the Taxpayer (the “CFO Letter”) and “relevant supporting documentation” that the Taxpayer
provided in the Five Binders. The CFO Letter makes references to the materials
in the Five Binders (Appeal Book at pages 68-70).
[4]
The Appeals Division considered the CFO Letter and
the Five Binders, but nonetheless confirmed the Assessment. The Five Binders
were returned to the Taxpayer.
[5]
In pursuing its appeal to the Tax Court of
Canada, the Taxpayer prepared a List of Documents, as required by Rule 81 of
the Tax Court Rules. In it, the Taxpayer included the CFO Letter as
document number 262 (“Document Number 262”) but did not specifically mention
the Five Binders.
[6]
In the examination for discovery of Mr. Allan
Earl Minaker, a representative of the Taxpayer, counsel for the Crown requested
production of the Five Binders. On the advice of the Taxpayer’s counsel, Mr.
Minaker took the request under advisement. Mr. Minaker subsequently provided
the following written response: “As this case is not a
judicial review, all relevant documents have been provided”.
[7]
The Judge granted the motion on the basis that Rules
85(3) and 105(1)(a) of the Tax Court Rules required the Taxpayer
to produce the Five Binders. In so concluding, the Judge determined that Document
Number 262 included both the CFO Letter and the Five Binders.
[8]
In an appeal from a decision of the Tax Court of
Canada on a question of the production of documents, this Court has held that
the determination is largely a fact-based inquiry that will be reviewed as a
question of mixed fact and law. As such, we will intervene only if a palpable
and overriding error is established (see Canada v. Lehigh Cement Limited,
2011 FCA 120 at paragraph 25, 417 N.R. 342).
[9]
Rule 85(3) of the Tax Court Rules
requires production at the examination for discovery of a party of any document
listed in that party’s list of documents under either Rule 81 or 82 of the Tax
Court Rules, unless that document is privileged.
[10]
The issue in this appeal is whether the Judge
committed a palpable and overriding error when he concluded that Document
Number 262 constituted a single document comprised of both the CFO Letter and
the Five Binders.
[11]
In our view, this conclusion was open to the
Judge and he made no palpable and overriding error in reaching it. It is
apparent that the CFO Letter itself makes reference to the materials in the
Five Binders in a number of instances and that the CFO Letter would not have constituted
a complete submission without those materials.
[12]
In our view, this is sufficient to deal with the
appeal. However, we wish to observe that the Taxpayer’s assertion that the
Judge committed an error of law by considering hearsay evidence is without
merit. While counsel for the Taxpayer asserts that he made “strenuous objections” to the alleged admission of
hearsay evidence, the transcript in the record reveals that no such objection
was expressly made to the Judge. Moreover, as Justice Webb observed in an
application made to him to determine the contents of the Appeal Book, the
Taxpayer’s notice of appeal to this Court similarly makes no mention of an
objection to the admission of hearsay evidence. In the Crown’s motion, the
affidavit of Mr. Keith Chrystall was the only evidence tendered to the Judge.
It was admissible by virtue of Rule 72 of the Tax Court Rules, which
provides that affidavits on motions may be based upon information and belief
provided that the basis thereof is stipulated. In any event, the evidence that
the Taxpayer’s counsel hoped to adduce if the Appeals Officer had been
produced, would have had no bearing on the decision of the Judge that Document Number
262 consisted of both the CFO Letter and the Five Binders.
[13]
For these reasons, the appeal will be dismissed
with costs.
"C. Michael Ryer"
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