Cullen,
J.:—Once
again
this
Court
and
counsel
for
the
defendants
are
faced
with
an
unenviable
situation—a
plaintiff
not
represented
by
counsel
although
he
did
indicate
he
had
received
some
direction
and
advice
from
a
lawyer.
The
pace
of
the
trial
was
inhibited
by
the
fact
that
many
explanations
had
to
be
given
to
the
plaintiff
and
comments
made
to
him
so
that
he
would
better
understand
the
process.
Similarly,
the
Court,
on
numerous
occasions,
had
to
draw
to
the
attention
of
the
plaintiff
some
of
the
rules
of
evidence
which,
for
example,
precluded
hearsay
and
the
difference
between
factual
evidence
and
opinion
evidence.
Fortunately
this
plaintiff
is
an
intelligent
and
courteous
human
being
striving
to
understand
and
yet,
as
a
lay
person,
endeavouring
to
make
his
case.
Fortunately
for
the
Court
and
for
the
plaintiff
counsel
for
the
defendant,
Mr.
B.
Logan,
was
most
understanding,
making
the
task
of
the
Court
and
Mr.
Hanson
all
that
much
easier
in
this
situation.
With
this
co-operation
the
plaintiff
was
given
every
consideration
and
a
wide
range
insofar
as
the
Rules
were
concerned
so
that
his
case
might
be
pursued
and
at
the
same
time
understood.
Introduction
This
is
an
action
for
damages
against
the
Crown
and
an
employee
of
Revenue
Canada,
John
Smith
(Smith),
for“
perjory
[sic],
libel,
fraud,
contempt
of
court,
compiracy
[sic]
and
other
misconduct”
allegedly
committed
by
the
defendants
in
the
course
of
reassessment
of
the
plaintiff's
tax
return
for
the
1983
taxation
year.
The
matters
complained
of
have
arisen
as
a
result
of
and
in
the
course
of
another
action
in
the
Federal
Court
challenging
the
merits
of
the
plaintiff's
assessment
for
the
1983
taxation
year
(Court
File
T-202-86).
The
action
on
the
merits
has
followed
a
slow,
tortuous
path
towards
trial,
complicated,
I
believe,
by
the
fact
that
the
plaintiff
is
not
represented
by
counsel
and
it
has
been
difficult
to
determine
what
precisely
is
in
dispute.
Also,
it
is
clear
errors
were
made
by
officials
of
the
Department
of
National
Revenue
and
as
will
appear
later,
interpretations
were
changed.
I
am
satisfied
on
the
evidence,
however,
that
there
was
no
malice
on
the
part
of
Smith
or
others
dealing
with
the
matter.
In
order
to
fully
appreciate
the
causes
of
action
asserted
in
the
statement
of
claim,
I
found
it
necessary
to
review
the
file
of
the
action
on
the
merits
(i.e.
T-202-86).
Some
of
the
causes
of
action
complained
of
in
the
damages
suit
have
already
been
considered
in
the
course
of
the
action
on
the
merits,
while
others
are
not
apparent
in
the
present
case
and
must
be
considered
in
the
context
of
the
other
case.
Despite
its
complexity,
I
believe
it
would
be
valuable
to
review
the
proceedings
in
the
parallel
file
in
order
to
deal
with
the
issues
raised
here
in
this
action.
Background
The
plaintiff,
Jerome
Mitchell
Hanson
(Hanson),
had
been
a
farmer
in
Strathmore,
Alberta,
until
he
emigrated
to
the
United
States
on
March
11,
1983.
The
plaintiff
had
apparently
acquired
U.S.
citizenship
in
November
1981,
but
continued
to
operate
the
Strathmore
farm
until
March
1983
while
investigating
investment
opportunities
in
the
United
States.
Upon
purchasing
land
and
taking
up
residence
in
Washington,
the
plaintiff
sold
a
portion
of
the
Strathmore
farm
(legal
description
NW
1/4
35-23-23-W4)
for
$144,000.
The
plaintiff
subsequently
leased
the
remainder
of
his
farm
for
the
period
of
March
11,1983
to
December
31,
1983,
for
rent
of
$16,800.
Revenue
Canada
considered
these
transactions
to
be
taxable
events.
With
respect
to
the
rent,
15
per
cent
or
$2520
was
withheld
pursuant
to
paragraph
212(1)(d)
of
the
Income
Tax
Act,
R.S.C.
1952,
c.
148
(am.
S.C.
1970-71-72,
c.
63)
(the
"Act").
The
sale
of
the
farmland
was
treated
as
a
capital
gain
of
$112,000,
based
on
the
sale
proceeds
of
$144,000
minus
the
adjusted
cost
base
of
$32,000.
Consequently,
25
per
cent
of
the
capital
gain,
or
$28,000,
was
withheld
from
the
sale
proceeds
pursuant
to
section
116
of
the
Act.
The
plaintiff,
through
his
solicitors,
forwarded
the
money
to
Revenue
Canada,
but
did
so
on
the
understanding
that
such
payment
was
made
to
facilitate
the
closing
of
the
land
sale,
and
that
the
plaintiff
made
such
payment
without
prejudice
to
his
right
to
contest
his
liability
at
a
future
date.
The
plaintiff's
position
was
that,
as
a
U.S.
resident,
he
could
claim
the
protection
of
the
Canada-United
States
Income
Tax
Convention
1942,
and
thus
not
be
liable
for
tax
upon
the
sale
of
land.
At
that
time,
however
Revenue
Canada's
interpretation
of
the
Convention
was
that
if
the
plaintiff
had
carried
on
any
business
in
respect
of
the
property
during
the
1983
taxation
year,
the
property
would
constitute
a"
permanent
establishment"
in
Canada
for
the
plaintiff
and
consequently
would
not
qualify
for
protection
under
article
VIII
of
the
Convention.
The
plaintiff
conceded
that
he
had
carried
on
business
as
a
farmer
in
1983
while
still
a
resident
of
Canada
by
disposing
of
his
remaining
cattle
and
grain,
but
did
not
do
so
after
ceasing
to
be
a
Canadian
resident.
The
plaintiff
filed
a
Canadian
tax
return
for
the
period
of
January
1
to
March
11,
1983,
in
which
he
claimed
a
credit
of
$30,250,
representing
the
total
amount
of
tax
withheld
in
respect
of
the
land
sale
and
the
rent.
By
notice
of
assessment
dated
October
26,
1984,
the
Minister
of
National
Revenue
(the
Minister)
disallowed
the
credits,
and
reassessed
the
plaintiff
by
adding
$56,000
in
taxable
capital
gains
from
the
sale
of
the
Strathmore
property
and
$41,409.18
in
farming
income,
resulting
in
a
taxable
income
of
$96,124
after
deductions,
on
the
grounds
that
for
the
period
of
January
to
March
he
had
been
a
resident
of
Alberta
carrying
on
business
as
a
farmer,
and
that
the
farmland
sold
was
a
permanent
establishment.
The
assessment
resulted
in
tax
owing
of
$10,828.52
after
the
$28,000
withheld
had
been
credited
to
his
account.
The
plaintiff
filed
a
notice
of
objection
to
this
assessment
on
December
10,
1984.
A
notice
of
confirmation
was
issued
on
November
21,
1985,
and
an
appeal
made
to
the
Federal
Court
on
January
30,
1986.
In
the
statement
of
claim,
the
plaintiff
restated
his
position
as
to
the
issue
of
capital
gains.
He
also
alleged
that
his
account
had
not
been
credited
for
six
cheques
totalling
$42,010.34
which
had
been
cashed
by
the
defendant.
The
plaintiff
also
alleged
that
auditors
in
Revenue
Canada
operated
under
a
quota
system
in
which
they
had
to
produce
a
certain
amount
of
money
per
hour,
and
that
under
this
system
non-residents
were
harassed
as
they
were
perceived
to
be
more
vulnerable.
The
plaintiff
thus
sought
a
declaration
that
he
was
not
taxable
in
Canada
for
1983,
except
with
respect
to
the
dividends,
interest
and
rent
withheld.
Meanwhile,
Revenue
Canada
had
changed
its
interpretation
of
what
constituted
a
permanent
establishment
in
favour
of
the
interpretation
put
forward
by
the
plaintiff.
Consequently,
after
applying
unsuccessfully
before
Reed,
J.
to
strike
out
the
statement
of
claim
as
an
abuse
of
the
Court's
process
(the
plaintiff
had
filed
a
concurrent
appeal
in
the
Tax
Court
of
Canada
in
respect
of
the
same
assessment,
but
at
the
motion
to
strike
agreed
to
discontinue
the
Tax
Court
proceeding)
the
Minister
filed
a
defence
in
which
it
was
conceded
that
the
taxable
capital
gain
of
$56,000
had
been
wrongly
included
in
the
plaintiff's
income
for
1983,
and
consented
to
judgment
”
to
the
limited
extent
that
the
sum
of
$56,000
be
deleted
from
the
plaintiff's
income
for
the
year"
but
that
the
plaintiff's
action
be
dismissed
in
all
other
respects.
It
was
in
the
course
of
attempting
to
rectify
the
plaintiff's
account
to
reflect
this
change
that
the
matters
complained
of
in
the
present
cause
of
action
arose.
As
the
action
was
moving
toward
trial,
the
plaintiff
requested
that
defendant
provide
for
discovery
Wendy
Zimmerman,
Don
Cruickshank
and
John
Smith
(the
defendant
in
the
damages
action),
who
were
employed
in
the
Calgary
office
of
Revenue
Canada,
in
order
to
substantiate
the
allegations
of
quotas
in
the
statement
of
claim.
John
Smith
had
acted
on
the
plaintiff's
notice
of
objection
for
1983.
In
the
course
of
confirming
the
assessment,
Smith
agreed
with
the
plaintiff
that
the
$28,000
withheld
had
not
been
properly
credited
to
the
plaintiff's
general
account,
and
determined
that
it
had
been
attributed
to
a
subsidiary
ledger
containing
the
plaintiff's
non-resident
deductions.
The
$28,000
was
then
credited
to
the
plaintiff's
general
account.
(I
mention
this
as
the
plaintiff
has
asserted
in
the
present
cause
of
action
that
Smith
lied"
about
the
whereabouts
of
the
$28,000
in
the
Winnipeg
Tax
Centre.)
Cruickshank
and
Zimmerman,
however,
had
participated
in
audits
of
the
plaintiff
for
the
1979
and
1980
tax
years.
The
plaintiff
had
made
an
application
to
the
Tax
Court
on
September
24,
1984
for
an
extension
of
time
to
file
notices
of
objection
for
1979
and
1980,
but
the
application
was
dismissed
by
Rip,
T.C.J.
on
March
28,
1985.
The
defendants
thus
took
the
position
that
Cruickshank
and
Zimmerman
and
the
allegations
of
quotas
were
not
relevant
to
the
proceedings
in
respect
of
the
1983
tax
year,
and
nominated
only
John
Smith
for
the
discovery.
Throughout
this
matter,
the
issues
have
been
muddled
by
the
plaintiff's
claims
that
his
account
had
not
been
properly
credited
for
payments
he
has
made,
whereas
the
defendants'
position
is
that
the
amounts
he
claims
were
not
credited
were
applied
towards
outstanding
tax
liabilities
from
the
1979,
1980,
1981
and
1982
tax
years.
The
defendants
suspect
that
the
plaintiff
is
effectively
trying
to
re-open
assessments
which
have
now
become
final
due
to
the
expiration
of
the
appeal
period.
As
noted
above,
the
plaintiff
was
refused
permission
to
file
objections
for
the
1979
and
1980
tax
years.
A
notice
of
reassessment
for
1981
was
issued
on
March
29,
1984,
to
which
no
notice
of
objection
was
filed.
With
respect
to
1982,
reassessments
were
issued
on
October
9,
1984
and
June
24,
1985.
No
notices
of
objection
were
filed
in
response.
Thus
any
appeal
of
assessments
from
other
tax
years
is
statute-barred,
and
the
only
recourse
on
the
merits
of
the
assessment
is
in
respect
of
1983.
The
only
issue
appears
to
be
whether
the
payments
and
interest
had
been
calculated
properly.
Motions
Motion
before
Muldoon,
J.:
The
plaintiff
applied
for
summary
judgment,
or
in
the
alternative
for
a
place
and
time
of
trial,
which
was
heard
on
September
18,
1986.
Muldoon,
J.
ordered,
inter
alia,
that
judgment
be
entered
for
the
plaintiff
in
respect
of
the
$28,000
in
capital
gains
tax
paid,
and
that
the
assessment
be
referred
back
for
reassessment
plus
interest.
It
was
also
ordered
that
only
Smith,
and
not
Cruickshank
and
Zimmerman,
need
be
produced
at
discovery.
In
response
to
this
order,
the
defendant
Crown
sent
to
the
plaintiff
a
reconciliation
of
the
account
prepared
by
John
Smith
for
the
period
June
24,
1980
to
December
23,
1986,
a
cheque
for
$18,801.80,
and,
although
it
was
not
ordered,
job
descriptions
of
auditors.
According
to
Smith’s
affidavit
of
July
30,
1987,
the
reconciliation
of
the
account
was
prepared
from
historical
computer
printouts
obtained
in
the
Winnipeg
Tax
Centre.
Motion
before
Martin,
J.:
The
plaintiff
was
dissatisfied,
however,
with
what
he
saw
as
incomplete
compliance
with
Muldoon,
J.'s
order,
and
made
an
application
for
production
of
certain
documents
and
that
Zimmerman,
Cruickshank
and
Scott
be
made
available
for
discovery,
and
that
the
defendant
Crown
provide
him
with
a
transcript
of
the
Tax
Court
proceedings
free
of
charge.
The
Crown
took
the
position
that
it
had
already
complied
with
the
order,
and
had
no
obligation
to
provide
a
transcript.
At
the
hearing
of
the
motion
on
January
29,
1987,
Martin,
J.
agreed,
dismissing
the
motion
on
the
ground
that
"the
Crown
has
substantially
complied
with
the
order
of
Muldoon,
J.”
The
issue
of
the
transcript
was
not
to
die
so
easily.
It
was
finally
resolved
by
a
decision
of
Muldoon,
J.
reported
at
[1987]
2
C.T.C.
165;
87
D.T.C.
5380,
denying
that
the
plaintiff
had
a
right
to
be
provided
with
a
transcript.
Discoveries
were
held
on
March
10,
1987.
In
examining
John
Smith,
the
plaintiff
requested
a
historical
printout
of
his
account
for
1983
and
1984.
Smith
provided
copies
to
the
plaintiff.
The
plaintiff
also
asked
Smith
questions
about
the
reconciliation
of
the
plaintiff's
account
prepared
by
Smith.
On
the
instruction
of
Gordon
Borguard,
counsel
to
the
defendants,
Smith
did
not
answer
questions
put
by
the
plaintiff
as
to
the
existence
of
auditors’
quotas
on
the
ground
of
irrelevance.
Smith
was
further
counselled
not
to
answer
questions
concerning
audits
from
other
tax
years
except
insofar
as
the
questions
related
to
whether
the
payments
had
been
attributed
to
the
plaintiff's
account.
Motion
before
Strayer,
J.:
Undeterred,
the
plaintiff
filed
another
motion
on
June
11,
1987,
seeking
an
order
striking
the
defence,
or
in
the
alternative,
that
discovery
be
rescheduled
and
Smith
be
directed
to
answer
all
questions
concerning
reassessment,
especially
on
the
issue
of
quotas.
He
also
sought
production
of
"genuine"
documents
in
place
of
the
"fraudulent"
documents
produced
by
the
defendants,
in
particular
the
computer
printout
for
1983
and
1984
and
the
plaintiff's
1983
tax
return,
which
he
alleged
had
been
tampered
with
by
John
Smith.
He
further
sought
"an
indictment
against
.
.
.
Smith
for
perjury
and
evidence
tampering".
The
plaintiff
also
stated
that
his
account
had
once
again
been
improperly
credited,
particularly
with
respect
to
the
issue
of
interest
owing
on
the
$28,000
refunded
to
him.
The
defendants
filed
their
own
motion
in
response,
seeking,
inter
alia,
an
order
pursuant
to
Federal
Court
Rule
319(4)
to
call
witnesses
in
open
court
with
respect
to
the
defendants'
compliance
with
the
order
of
Muldoon,
J.
and
the
alleged
production
of
"fraudulent"
documents,
and
also
an
order
pursuant
to
Federal
Court
Rule
415(1)(a)
for
particulars
of
the
alleged
fraud
on
which
the
plaintiff
intended
to
rely.
Strayer,
J.
heard
the
motions
on
June
25,
1987,
and
ordered
that
the
plaintiff's
request
that
an
indictment
be
found
for
perjury
be
dismissed.
His
Lordship
further
ordered
that
the
rest
of
the
motions
be
dealt
with
on
the
basis
of
affidavit
evidence
at
a
subsequent
hearing.
Motion
before
Cullen,
J.:
The
final
motion
to-date
in
this
matter
was
heard
by
myself
on
September
21,
1987
(reasons
are
reported
at
87
D.T.C.
5420).
At
this
hearing
most
of
the
extraneous
matters
were
disposed
of.
In
affidavit
evidence,
the
defendants
conceded
that
the
plaintiff's
account
had
not
been
credited
for
payments
made
through
his
solicitors
in
the
amount
of
$890.49,
as
there
had
been
no
indication
on
the
trust
account
cheques
that
the
money
was
paid
on
account
of
the
plaintiff.
There
were
also
affidavits
filed
as
to
the
genuine
nature
of
the
documents
alleged
to
be
forgeries
by
the
plaintiff.
At
the
hearing
I
denied
the
plaintiff's
motion
to
strike
out
the
defence.
I
also
denied
the
plaintiff's
request
to
re-schedule
the
discovery,
as
the
plaintiff
indicated
at
the
hearing
that
he
had
all
that
he
needed
to
go
to
trial.
It
was
also
ordered
that
no
more
documents
need
be
produced,
as
the
plaintiff
stated
he
was
prepared
to
go
to
trial.
With
respect
to
the
claim
of
“fraudulent
documents",
I
issued
an
order
that
the
plaintiff
must
file
before
October
31,
1987,
evidence
which
gives
particulars
of
any
fraud
or
misrepresentation
upon
which
the
plaintiff
intended
to
rely,
and
that
failure
to
do
so
would
be
taken
to
indicate
that
no
such
particulars
existed.
With
respect
to
the
issue
of
auditors
on
quota,
this
allegation
was
ordered
struck
from
the
statement
of
claim.
Reference
to
the
years
1979
to
1982
was
also
ordered
to
be
struck
out.
It
was
also
ordered
that
the
defendant
had
complied
with
the
order
of
Muldoon,
J.
The
motion
of
the
plaintiff
that
the
issue
of
incorrect
interest
and
refund
in
his
1983
return
be
dealt
with
by
me
at
the
hearing
of
the
motion
was
left
for
the
trial
of
this
action
(Court
no.
T-202-86)
or
a
pre-trial
conference.
Regarding
the
allegation
of
perjury
made
against
John
Smith,
I
made
the
following
comment
at
D.T.C.
page
5420:
Also,
the
plaintiff
made
the
point
that
he
was
not
satisfied
that
the
indictment
for
perjury
against
J.C.E.
Smith
had
been
dealt
with
by
Strayer
J.
I
had
the
Order
of
Strayer
J.
and
am
satisfied
it
has
been
dealt
with.
The
plaintiff
stated
that
he
was
still
not
satisfied
and
might
go
further
on
to
another
forum
or
court.
The
plaintiff
filed
a
notice
of
appeal
of
my
orders
on
October
1,1987
(i.e.,
three
years
ago)
in
the
Federal
Court
of
Appeal.
There
is
nothing
to
indicate
that
any
progress
has
been
made
on
the
appeal.
There
is
also
no
indication
that
there
has
been
a
trial
of
the
action
on
the
merits
to
date.
However,
the
plaintiff
has
filed
an
action
for
damages
as
he
indicated
he
might
in
my
decision.
Now
to
the
case
at
bar.
Plaintiff's
Position
In
his
action
for
damages
the
plaintiff
alleges
that
Smith:
(a)
lied
during
discovery
about
“$28,000
being
lost
in
the
Winnipeg
Tax
Centre".
He
also
states
that
Smith
forged
computer
printouts
and
the
reconciliation
of
account
that
was
provided
to
the
plaintiff
in
fulfilment
of
the
order
of
Muldoon,
J.;
(b)
committed
libel
by
putting
allegations
of
"unreported
income"
in
the
reconciliation,
and
repeating
them
during
discovery
examinations;
(c)
altered
the
plaintiff's
tax
records
and
computer
accounts;
(d)
failed
to
account
for
payments
made
by
the
plaintiff;
(e)
committed
contempt
of
court
by
"disobeying
rulings
(oral)
of
Hon.
Judge
Rip
by
continuing
to
refer
to
unreported
income";
(f)
conspired
with
other
Crown
servants
to
falsify
or
alter
documents;
and
(g)
took
advantage
of
"arrangement
between
Revenue
Canada
and
Court
Reporters
which
enable
Revenue
Canada
to
edit
Court
Proceedings".
The
plaintiff
states
that
the
alleged
acts
of
the
defendants
have
wrongfully
deprived
him
of
tens
of
thousands
of
dollars
and
that
the
stress
of
the
affair
has
affected
his
health,
leading
to
the
loss
of
thousands
of
dollars
in
lost
time
as
well
as
hospital
and
medical
care.
He
pleads
that
he
is
entitled
under
common
law
to
these
damages,
in
the
amount
of
$750,000,
to
be
ordered
against
Her
Majesty
who
should
seek
contribution
from
the
co-defendant
Smith.
Defendant's
Position
The
defendant
filed
a
motion
to
strike
the
statement
of
claim
on
the
ground
that
the
Federal
Court
had
no
jurisdiction
over
the
defendant
Smith,
as
the
actions
in
tort
against
him
are
not
based
on
a
law
of
Canada.
An
order
was
also
sought
striking
out
the
statement
of
claim
against
Her
Majesty
on
the
ground
that
action
is
mere
re-litigation
of
an
action
presently
before
the
court.
The
application
was
dismissed
by
Jerome,
A.C.J.,
without
prejudice
to
the
defend
ant's
right
to
bring
an
application
to
stay
these
proceedings
pending
the
outcome
of
action
T-202-86.
(This
was
not
done.)
In
its
defence
filed
December
13,
1989,
the
defendants
stated
that
the
Court
has
no
jurisdiction
to
hear
the
claim
against
the
defendant
Smith.
The
defendants
stated
further
that
the
statement
of
claim
discloses
no
cause
of
action,
and
if
it
does,
the
allegations
are
denied.
Issues
I.
Does
the
statement
of
claim
disclose
reasonable
causes
of
action?
II.
Does
the
Federal
Court
have
jurisdiction
over
the
defendant
Smith?
Although
not
pursued
very
vigorously
by
the
defendants,
I
felt
I
also
had
to
deal
with
this
issue.
I.
Reasonable
Cause
of
Action
I
propose
to
examine
briefly
each
of
the
many
causes
of
action
asserted
by
the
plaintiff.
1.
Perjury
The
plaintiff
alleges
that
Smith
committed
perjury
during
discovery
when
he
"lied"
about
the
$28,000
being
in
a
subsidiary
ledger.
The
issue
of
indictment
for
perjury
has
been
settled
through
the
order
of
Strayer,
J.
and
my
own
decision.
As
no
criminal
proceedings
have
been
instituted,
the
plaintiff
is
left
with
a
civil
action,
but
there
is
no
civil
action
for
perjury
known
to
the
common
law.
As
is
stated
in
Clerk,
Clerk
and
Lindsell
on
Torts
(16th
ed.,
Agincourt,
Ont.:
Carswell,
1989),
at
page
1068:
No
civil
action
for
perjury.
It
is
said
that
"neither
party,
witness,
counsel,
jury
or
judge
can
be
put
to
answer
civilly
or
criminally
for
words
spoken
in
office.”
Thus
there
is
absolute
privilege
in
an
action
for
defamation
and
no
civil
action
lies
against
a
witness
for
perjury
at
the
suit
of
the
person
damnified
by
the
false
evidence.
The
immunity
is
immunity
from
any
form
of
civil
action,
e.g.
conspiracy
to
defame.
Also,
Fleming,
The
Law
on
Torts,
(6th
ed,
Agincourt,
Ont.:
Carswell,
1983),at
page
580:
But
no
civil
action
whatever
lies
for
bearing
false
witness,
as
distinct
from
maliciously
maintaining
proceedings;
the
advance
of
public
justice
is
thought
to
be
best
served
by
not
fettering
testimony,
aside
from
the
criminal
sanction
for
perjury.
2.
Libel
The
plaintiff
alleges
that
he
was
libelled
during
the
discovery
and
in
the
document
containing
the
reconciliation
of
his
account
by
references
to
"unreported
income”.
With
respect
to
the
references
during
examination
for
discovery,
it
appears
clear
that
absolute
privilege
extends
to
remarks
made
on
discovery.
In
Razzell
v.
Edmonton
Mint
Ltd.,
[1981]
4
W.W.R.
5;
29
A.R.
285
(Alta.
Q.B.)
Dea,
J.
struck
out
references
in
a
statement
of
claim
to
allegedly
defamatory
comments
spoken
during
an
examination
for
discovery
as
having
been
made
on
an
occasion
of
absolute
privilege
and
therefore
disclosing
no
cause
of
action.
As
for
the
statements
about
unreported
income,
even
if
they
could
be
considered
defamatory,
there
is
a
qualified
privilege
attached
to
information
conveyed
under
a
legal,
social
or
moral
duty
to
report
it:
Williams,
The
Law
of
Libel
and
Slander
in
Canada
(2d
ed.,
Toronto:
Butterworths,
1988),
page
73.
It
could
clearly
be
argued
that
an
auditor
such
as
Smith
has
a
duty
to
report
allegations
of
unreported
income.
The
qualified
privilege
may
be
defeated
by
malice
on
the
part
of
Smith,
but
evidence
on
this
point
has
to
be
led
by
the
plaintiff
and
none
was
really
forthcoming.
Certainly
the
plaintiff
alleged
malice
but
the
evidence
fell
far
short
of
any
support
for
that
proposition.
3.
Fraud,
Conspiracy,
etc.
With
respect
to
fraud,
I
made
an
order
in
the
other
case
(T-202-86)
that
the
plaintiff
would
have
to
produce
particulars
of
any
fraud
or
misrepresentation
by
October
31,
1987,
or
none
would
be
taken
to
exist.
No
action
was
taken.
It
must
be
taken
then
that
no
such
fraudulent
documents
exist.
In
addition
there
is
the
affidavit
evidence
in
the
T-202-86
case
of
Bradley
Harrison,
John
Smith,
and
other
officers
of
Revenue
Canada
attesting
to
the
authenticity
of
the
documents
and
detailing
the
procedures
used
to
obtain
them.
The
plaintiff
presents
no
real
evidence
in
support
of
his
position.
4.”
Other
Misconduct”
It
may
be
that
under
this
heading
the
plaintiff
is
asserting
a
cause
of
action
for
unlawful
administrative
action.
In
MacBride,
Damages
as
a
Remedy
for
Unlawful
Administrative
Action,
(1979),
38
Camb.
L.J.
323,
the
author
states
that
tortious
liability
can
be
imposed
for
the
malicious
and
deliberate
misuse
of
power.
An
example
of
this
form
of
liability
can
be
found
in
my
decision
in
Chhabra
v.
Canada,
[1989]
2
C.T.C.
13;
89
D.T.C.
5310.
However,
the
evidence
in
this
case
would
not
support
such
a
cause
of
action.
ll.
Jurisdiction
of
the
Court
The
defendant
has
contended
that
the
Federal
Court
cannot
entertain
a
claim
for
damages
against
John
Smith
as
an
individual
defendant.
This
proposition
is
firmly
established
by
the
jurisprudence.
In
order
to
be
within
the
jurisdiction
of
the
Federal
Court
the
requirements
of
the
test
set
out
in
ITO
Ltd.
v.
Miida
Electronics
Inc.,
[1986]
1
S.C.R.
752;
68
N.R.
241
must
be
fulfilled.
They
are
(at
766
S.C.R.;
256-57
N.R.):
1.
There
must
be
a
statutory
grant
of
jurisdiction
by
the
Federal
Parliament;
2.
There
must
be
an
existing
body
of
federal
law
which
is
essential
to
the
disposition
of
the
case
and
which
nourishes
the
statutory
grant
of
jurisdiction;
3.
The
law
on
which
the
case
is
based
must
be
a
"
law
of
Canada"
as
the
phrase
is
used
in
section
101
of
the
Constitution
Act,
1867.
The
first
requirement
is
met
by
paragraph
17(4)(b)
of
the
Federal
Court
Act,
R.S.C.
1985,
c.
F-7,
granting
the
Trial
Division
jurisdiction
in
action
against
Crown
servants.
However,
the
second
and
third
branches
of
the
test
are
not
met.
There
is
no
“law
of
Canada"
governing
or
establishing
the
liability
of
the
individual
defendant.
As
the
causes
of
action
are
in
tort,
they
are
founded
on
provincial
and
not
federal
law.
LeDain,
J.
in
Stephens
Estate
v.
The
Queen,
[1982]
C.T.C.
138;
82
D.T.C.
6132;
26
C.P.C.
1
(F.C.A.),
a
case
concerning
the
jurisdiction
of
the
Trial
Division
to
hear
claims
for
trespass
and
wrongful
seizure
in
respect
of
unpaid
income
tax
stated
at
page
142-43
(D.T.C.
6136;
C.P.C.
9):
In
the
present
case
it
is
contended
that
the
income
tax
assessments
were
invalid
and
the
defendants
other
than
the
Crown
acted
without
legal
authority
in
seeking
to
recover
the
unpaid
arrears.
The
contention
that
they
acted
without
legal
justification
would
appear
to
be
a
necessary
basis
of
their
liability
in
tort,
if
any.
Thus
the
claims
against
the
defendants
other
than
the
Crown
would
necessarily
involve
the
construction
and
application
of
provisions
of
the
Income
Tax
Act.
Is
this
sufficient
to
give
the
Court
jurisdiction
to
entertain
the
claims
against
them.
.
.?
.
.
.I
have
come
to
the
conclusion
that
it
is
not
sufficient
for
jurisdiction.
What
I
infer
from
Rhine
and
Prytula
is
that
a
cause
of
action
in
contract
(or
tort)
may
be
held
to
be
one
sufficiently
supported
by
federal
law
to
give
the
Federal
Court
jurisdiction
if
the
contractual
or
tortious
liability
can
be
said
to
be
one
that
is
provided
for
by
federal
law.
The
Supreme
Court
appears
to
have
concluded
in
Rhine
and
Prytula
that
the
rights
asserted
there
found
their
source
essentially
or
substantially
in
federal
law
because
of
the
extent
to
which
they
were
provided
for
and
governed
by
the
applicable
federal
statutes.
In
the
present
case,
despite
the
necessary
application
of
the
provisions
of
the
Income
Tax
Act
to
the
question
of
validity
or
legal
justification,
the
right
to
damages
cannot
be
said
to
be
provided
for
by
federal
law.
If
it
exists
at
all,
it
is
created
by
provincial
law.
The
applicable
federal
law
does
not
purport
to
create
or
provide
for
this
right.
See
also
Pacific
Western
Airlines
Ltd.
v.
R.,
[1980]
1
F.C.
86;
105
D.L.R.
(3d)
44
(C.A.).
Thus,
it
is
clear
that
the
Federal
Court
has
no
jurisdiction
against
Smith
as
an
individual
defendant.
The
action
against
the
Crown
for
vicarious
liability
for
the
acts
of
Smith,
however,
is
created
by
the
Crown
Liability
Act,
R.S.C.
1985,
c.
C-50,
sections
3(1)(a)
and
4(2).
The
lack
of
jurisdiction
over
Smith
does
not
foreclose
a
vicarious
liability
claim
against
the
Crown.
As
LeDain,
J.
stated
in
Stephens,
supra,
at
143-44
(D.T.C.
6137;
C.P.C.
11):
.
.
.
Anomalous
as
it
may
seem
that
the
Court
should
have
jurisdiction
to
entertain
an
action
against
the
Crown
servants
for
whose
acts
the
Crown
is
to
be
held
liable,
I
cannot
see
how
that
anomaly
is
to
be
avoided.
The
vicarious
liability
of
the
Crown
and
the
right
of
action
against
it
are
created
by
paragraph
3(1)(a)
of
the
Crown
Liability
Act
and
would
not
exist
apart
from
it.
Thus
it
appears
to
be
undeniable
that
the
claim
is
founded
on
federal
law.
Whether
the
acts
of
the
defendants
other
than
the
Crown
would
give
rise
to
a
cause
of
action
in
tort,
for
purposes
of
subsection
4(2)
of
the
Act,
must
be
determined
by
what,
in
an
action
against
them,
would
have
to
be
considered
provincial
law,
but
that
cannot,
in
my
respectful
opinion,
make
the
vicarious
liability
of
the
Crown
for
those
acts
any
less
a
cause
of
action
founded
on
federal
law
when
it
is
so
clearly
provided
for
by
the
Crown
Liability
Act.
I
am
not
prevented
by
res
judicata
from
striking
Smith
as
a
defendant
at
the
trial.
In
Waste
Not
Wanted
v.
Canada,
[1988]
1
F.C.
239;
11
ET.R.
253,
Collier,
J.
held,
at
page
260:
Res
judicata
can
only
apply
where
there
has
been
a
final
decision
in
earlier
litigation
between
the
same
parties.
It
cannot,
as
I
see
it,
apply
to
an
interlocutory
decision
given
earlier
in
the
same
action.
Thus
I
would
have
been
free
in
any
event
to
dismiss
the
action
against
Smith.
Conclusion
and
Recommendations
The
causes
of
action
are
not
supported
by
the
evidence
in
this
case
or
as
revealed
in
the
T-202-86
file.
While
it
appears
that
the
plaintiff
was
not
credited
for
certain
payments
made
through
his
solicitor,
there
is
no
evidence
that
it
was
done
maliciously
or
that
documents
were
forged.
The
explanations
provided
in
the
affidavits
of
the
Revenue
Canada
officials
ring
true.
Many
of
the
issues
asserted
have
been
resolved
in
the
other
case
and
are
simply
being
relitigated
in
this
case.
The
case
against
the
Crown
is
dismissed
for
reasons
cited
above.
The
case
against
the
defendant
Smith
is
dismissed
on
jurisdictional
grounds.
Costs
Counsel
for
the
defendants
argued
that
costs
should
be
assessed
on
a
solicitor-and-client
basis
because
the
plaintiff
has
essentially
tried
to
re-litigate
certain
issues,
assert
other
causes
of
action
which
do
not
exist
and
has
unnecessarily
prolongued
this
matter
in
every
way.
Weighing
in
against
that
proposition,
however,
is
the
fact
that
moneys,
for
whatever
reason,
were
misdirected
by
the
Department
of
National
Revenue,
it
took
time
and
much
effort
by
the
plaintiff
to
have
these
moneys
located,
and
it
required
an
earlier
motion
before
the
defendants
conceded
that
errors
had
been
made.
I
would
be
hard
pressed
to
fault
the
plaintiff
for
all
of
the
delays
that
have
occurred
but
certainly
an
examination
of
his
many
and
varied
actions
indicates
that
the
plaintiff
is
not
totally
free
of
fault
for
these
delays
either.
Accordingly,
I
have
decided
not
to
award
costs
on
a
solicitor-and-client
basis
but
do
award
costs
to
the
defendant
on
a
party-and-party
basis.
Much
of
the
difficulty
has
also
arisen
because
the
plaintiff
was
not
prepared
to
pay
the
costs
of
retaining
counsel
(one
counsel
apparently
advised
him
that
even
if
he
were
successful
legal
fees
and
disbursements
would
offset
any
benefit).
The
number
of
actions
and
motions
brought
by
the
plaintiff
has
resulted
in
significant
additional
costs
to
the
Court
and
to
the
defendants.
For
these
reasons
I
am
ordering
that
the
defendants
tax
their
costs
immediately
and
these
must
be
paid
by
the
plaintiff
forthwith.
Action
against
Smith
dismissed.
Action
against
the
Crown
dismissed.
Email this Content