Hawkes v. R., [1997] 2 CTC 2237

Margeson T . C.J.:

The Applicant, Her Majesty the Queen, hereinafter referred to as the “Respondent” applies for an order striking out paragraphs 9, 10 and 11 of the Notice of Appeal.

The grounds for the application as set out in the motion were that the paragraphs “disclosed no reasonable grounds for an appeal within the meaning of Rule 58(1)(a) of the General Procedure Rules” or alternatively, “that the said paragraphs may prejudice or delay the fair hearing of the appeal, are scandalous, frivolous or vexatious or are an abuse of process of the Court within the meaning of Rule 53 of the General Procedure Rules”.

The relevant paragraphs of the Notice of Appeal are as follows: 9, The Appellant and William Hawkes were not the only people expending funds to enable Otstenla to prosecute its lawsuit against the Boeing Company. Dr. Clifford Revell of Edmonton, Alberta entered into an agreement that was substantially similar to the agreement entered into between the Appellant, William Hawkes and Otstenla. The Minister of National Revenue permitted Dr. Revell to deduct the amounts he expended for funding the lawsuit in circumstances identical to that of the Appellant. In doing so, the Minister of National Revenue made the assumption that such amounts were expended to gain or produce income.

10. By letter dated April 22, 1993, representatives of the Minister of National Revenue informed representatives of the Appellant that the Minister of National Revenue accepted the fact that amounts were expended by the Appellant to gain or produce income and, as such, no re-assessment would be issued with respect to the amounts expended as pleaded in paragraph 6 herein.

11. In the circumstances as pleaded herein, the Appellant states that the Respondent is estopped from assuming that amounts expended by the Appellant as pleaded herein were not expended to gain or produce income in determining whether to re-assess the Appellant for his 1990 and 1991 taxation years.

The Applicant, Richard C. Graham, hereinafter referred to as the “Appellant” made a motion for an order that the Respondent:

(a) serve a further and better Affidavit of Documents; and

(b) produce, for inspection, any documents in its possession relating to the tax treatment of Dr. Clifford Revell of Edmonton, Alberta, in respect to the deduction of expenses incurred during the 1989 taxation year upon litigation involving Otstenla Estates (1984) Ltd. and the Boeing Company.

THE GROUNDS FOR THE MOTION ARE:

(a) the said documents are relevant and necessary for the determination of issues raised in this appeal, as framed by the Notice of Appeal;

(b) by virtue of a consent form signed by the said Dr. Revell, Counsel for the Applicant is legally entitled to the said documents and thus entitled to their production pursuant to s.241(4)(c) of the Income Tax Act; and,

(c) the said documents are necessary for the purpose of determining the income tax payable by the Applicant and thus ought to be produced pursuant to s.241(4)(d) of the Income Tax Act.

In the Affidavit of documents filed by the Respondent, under Schedule “B”, paragraph 1, a privilege was claimed under subsection 241(1) of the Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.) in respect to these documents as they contained information pertaining to income tax matters of someone other than the Appellant.

The documents in question in the motions before this Court fall into this category.

At the conclusion of the hearing, counsel for the Respondent indicated to the Court that he was not relying upon this privileged argument since counsel for the Appellant had obtained a consent of the other taxpayer. Counsel relied upon the provisions of Rule 58(1 )(a) of the General Procedure Rules.

Both of the motions before the Court were inextricably intertwined to some extent. Counsel for the Appellant argued that the success of the motion on behalf of the Respondent, did not necessarily preclude a favourable finding on his motion either wholly or partially. Counsel for Her Majesty the Queen took the position that if the Court allowed his motion, then the Appellant’s motion must fail.

The Court will consider both motions together because they both involve the consideration and the application of Rules 58(1 )(£>) and 82 of the General Procedure Rules.

Argument on Behalf of Her Majesty the Queen

Counsel admitted that he had pleaded to the paragraphs of the Notice of Appeal to which he now takes exception but said that he is not precluded from such a position even though the wiser course of action would have been to make the objection to strike before pleading to the paragraphs involved here.

He argued that Rule 58(1)(Z>) is similar to the Federal Court Rule 419 which was the basis for the decision in Pierre P. Montreuil v. The Queen, [1976] 1 F.C. at page 528 (F.C.T.D.) where the Court allowed a motion to strike out under Rule 419(1 )(a) even where the applicant had pleaded to the form or content of the pleading without objecting to it. The Court held that in an application under Rule 419(1 )(a), such a motion goes to the very nature of the action or defence and its fundamental and essential right to be heard by the Court. Accordingly, when such a motion is allowed by the Court, the pleading or part thereof objected to is rendered legally void.

Counsel likewise cited Nabisco Brands Ltd. v. Procter & Gamble Co. et al., (1985) 5 C.P.R. (3d) 417, 62 N.R. 364 (F.C.A.) at page 418, and differentiated that case from the one at bar because the Appellant in that case had a preliminary problem of convincing the Federal Court of Appeal that the trial judge had erred in exercising her discretion in refusing to grant the application to strike and further that the Appellant gave no basis for “enabling the motion’s judge to determine if the alleged want of jurisdiction really negated the cause of action.” See also Canadian Olympic Association v. Olympic Life Publishing Ltd., (1986) 1 F.T.R. 291, 8 C.P.R. (3d) 405 (F.C.T.D.) at page 293, where the allegation was abuse of process and not want of jurisdiction. Similarly, in the case of Ricafort v. Canada (Treasury Board), (1989) 24 F.T.R. 200 (F.C.T.D.), the Court allowed a motion to strike out parts of the statement of claim where the defendant had pleaded to the statement of claim, made the same objections in the statement of de- fence as in the motion, there was no delay in making the application to strike and part of the application was based upon lack of jurisdiction.

The Respondent took the position that the paragraphs sought to be struck here disclosed no justiciable issue as in Ludmer v. R., [1996] 3 C.T.C. 74, 95 D.T.C. 5311 (F.C.A.) at page 5316. There, the Federal Court of Appeal granted a motion to strike where the taxpayer sought to introduce evidence that other taxpayers had been allowed interest deductions under identical circumstances and the Minister was discriminating against them. Likewise, in Ludco Enterprises Ltd. v. R., (sub nom. Ludco Enterprises Ltd. v. Minister of National Revenue) [1994] 1 C.T.C. 368, 94 D.T.C. 6221 (F.C.T.D.) at page 6227, it was stated:

... the case law has clearly established that the Minister is not bound by his earlier assessments, or by his earlier policies, or by his representations or the representations of his agents, or by the treatment he gives or has given to other taxpayers.

Likewise, in Hokhold v. R., (sub nom. Hokhold v. Canada) [1993] 2 C.T.C. 99, 93 D.T.C. 5339 (F.C.T.D.) at page 5344, it was held that:

... The activities of other automotive manufacturers and the defendant’s treatment of those manufacturers is of no relevance to the plaintiff’s action. No matter how similar the activities of two businesses, if one company can frame its dispute in such a way as to make another company’s affairs relevant, the result would be chaos. In each individual case the plaintiff must prove that it meets the requirements of the legislation.

The motion to strike out certain paragraphs in the Notice of Appeal was granted where the allegation was in reference to discriminatory treatment given to provincially-appointed judges. See Ouellet v. R., (sub nom. Ouellet v. Canada) [1994] 1 C.T.C. 2645, 94 D.T.C. 1315 (T.C.C.) (Court file No. 91-1562(IT)G.).

With respect to paragraph 10 of the Notice of Appeal, the Respondent considered that this fell into the category of ministerial error. He took the position on appeal that the Court is interested in the validity of the assessment and not the validity of the reasons given for the assessment. In Minister of National Revenue v. Minden, [1992] C.T.C. 79, 62 D.T.C. 1044, page 1050, the Court held that:

... An assessment may be valid although the reason assigned by the Minister for making it may be erroneous.

See also Vineland Quarries and Crushed Stone Ltd. v. Minister of National Revenue, [1970] C.T.C. 12, 70 D.T.C. 6043 (Ex. Ct.) at page 6045.

This position was more succinctly put in Consumers' Gas Company v. R., (sub nom. Consumers’ Gas Co. v. Minister of National Revenue) [1987] 1 C.T.C. 79, 87 D.T.C. 5008, where the Federal Court of Appeal said at page 5012:

I cannot agree with this submission. What is put in issue on appeal to the courts under the Income Tax Act is the Minister’s assessment. While the word “assessment” can bear two constructions, as being either the process by which tax is assessed or the product of that assessment, it seems to me clear, from a reading of sections 152 to 177 of the Income Tax Act, that the word is there employed in the second sense only. This conclusion flows in particular from subsection 165(1) and from the well established principle that a taxpayer can neither object to nor appeal from a nil assessment.

The Respondent took the position that the appeal is from the amount of tax, the Minister has assessed and the Minister can change his mind. Paragraph 10 should be struck out since it does not disclose a justiciable issue.

Paragraph 11 of the Notice of Appeal raises the issue of estoppel. This issue was dealt with in the case of Woon v. Minister of National Revenue, [1950] C.T.C. 263, 50 D.T.C. 871 (Ex.Ct.). The Court stated that estoppel “in pais” against the Crown was held to apply in Queen Victoria Niagara Falls Park Commissioners v. International Railway Co., (1928-1929) 63 O.L.R. 49. That case also pointed out that it was held to apply against the Crown in Attorney-General to His Royal Highness the Prince of Wales v. Collom, [1916] 2 K.B. 193 at page 204 as well as in other cases.

The opposite position was taken in Western Vinegars Limited v. Minister of National Revenue, [1935-37] C.T.C. 325, 1 D.T.C. 390, The Bank of Montreal v. The King, (1907) 38 S.C.R. 258; The Attorney-General of Canada v. C.C. Fields & Company [1943] O.R. 120 at page 129 and the cases referred to therein.

However, in Ludmer, supra, the Court held that the assessment in question was made pursuant to the terms of a Statute and it was not open to the Appellant to set up an estoppel to prevent its operation.

In Phipson On Evidence, 8th Edition, 667, it is stated that:

Estoppels of all kinds, however, are subject to one general rule: they cannot override the law of the land. Thus, where a particular formality is required by statute, no estoppel will cure the defect.

The Court, in Woon, supra, did not allow estoppel to be raised because to do so would be to nullify the requirement of the Statute itself.

In Gibbon v. The Queen, [1977] C.T.C. 334, 77 D.T.C. 5193 (F.C.T.D.) at page 5197, the Court held that:

… If, but for the previous errors, Plaintiff might have acted otherwise and claimed certain deductions which he is now not able to claim, thereby reducing his tax liability for the years in question, this is regrettable but cannot affect the validity of the reassessment. Plaintiffs only action would be against the Crown in tort if he could establish that he had suffered damages as a result of negligence by servants of the Crown, and I am not suggesting that such an action is available to him, but am merely holding that he certainly cannot dispute the validity of the reassessments before the Court on the basis that he allegedly was induced into a course of conduct causing him a financial loss as the result of the earlier erroneous assessments.

Appellant’s Argument with respect to the motion of the Respondent

With respect to the Respondent’s motion, counsel for the Appellant took the position that the Court at this stage of the proceedings has a discretionary power to allow or disallow the motion to strike, citing Nabisco Brands Ltd., supra, the Court need not decide whether there is a justiciable issue or not. Counsel took the position that the Appellant was not arguing discrimination when he set out his position in paragraph 9 of the Notice of Appeal. The question to be asked is how did the Minister view the litigation that was in progress in relation to the Appellant’s claim? The factual issue was set out in paragraph 9 of the Reply and it is that factual situation that the Court must rely upon.

Counsel referred to Gibbon, supra, as supporting his proposition that there is still an issue as to whether the Minister may be bound by “factual estoppel”. He was not suggesting that the Minister is bound by the acts or undertakings of its agents. If the Edmonton office found as a fact that the Otstenla Estates (1984) Ltd. Group existed for the purposes of commencing the litigation that gave rise to the claim for expenses and that these expenses were allowed by them, the Minister cannot now deny such facts. It is too early to strike out the paragraphs in the Notice of Appeal that are in issue. It should be left to the trial judge to decide what is relevant. There is a line of authority supporting this argument and “factual estoppel” is available against the Minister.

The Appellant should be entitled to inquire into whether or not the factual situation that existed in the Revell case was the same as the factual situation in the Appellant’s case and if those same facts were relied upon by the Minister in making the assessment against the Appellant. There may have been facts that were considered by the Minister in the Revell case which could offer assistance to the Appellant here.

Counsel referred to Hunt v. Carey Can. Inc., 49 B.C.L.R. (2d) 273 (S.C.C.) at page 289 where the Supreme Court of Canada said:

Thus, the test in Canada governing the application of provisions like R. 19(24)(a) of the British Columbia Rules of Court is the same as the one that governs an application under R.S.C., O. 18, r. 19: assuming that the facts as stated in the statement of claim can be proved, is it “plain and obvious” that the plaintiff’s statement of claim discloses no reasonable cause of action? As in England, if there is a chance that the plaintiff might succeed, then the plaintiff should not be “driven from the judgment seat”.

The Appellant equivalates the above referred to Rule 58(l)(a) under consideration in the case at bar.

The Appellant contends that there was a factual finding in the Edmonton office with respect to the “fund” and the Minister may have been correct in deciding as he did in that case that the expenses were deductible. There may have been a train of facts disclosed in the Edmonton case that would assist the Appellant in the case at bar. It is not so obvious that the Appellant’s case should not proceed from these facts that he should be prevented from obtaining all evidence of such facts. On the basis of the facts pleaded in paragraph 10 of the Notice of Appeal, there may be other facts that would be disclosed by the revelation of the facts in the Edmonton case that would assist the Appellant here.

With respect to paragraph 11 of the Notice of Appeal, the Appellant should be able to plead “factual estoppel”. The Minister is bound by the finding of facts in the Edmonton case unless he can show that he relied upon other facts not relied upon in the Edmonton case.

In any event, the Appellant should not be prevented from raising such a plea at this stage before trial.

With respect to the Respondent’s application to strike paragraphs 9, 10 and 11 of the Notice of Appeal, counsel argued that the motion was not made until more than one year after the reply was filed and the Respondent did not take issue with the pleading. He joined issue with those paragraphs.

The Court has discretion to allow the motion in spite of this delay. Counsel referred to Nabisco Brands Ltd., supra, Canadian Olympic Association v. Olympic Life Publishing Ltd., supra, and Ricafort et al., v. Canada, supra, in support of his position and said that here the application is made too late, after all pre-trial procedures have been completed and after much discussion about documents. The Respondent is too late.

The real test for striking out is whether or not it is beyond any doubt that the paragraphs disclosed no cause of action. He does admit that it is a matter of discretion for the Court. If the Court allows the application to strike, then the Appellant should receive its costs.

Appellants’ argument on the Appellant’s motion

The Minister created certain documents in the Edmonton case in concluding that Dr. Revell could claim the deduction. Representatives of the Minister reviewed and considered the documents in determining whether to permit the Appellant to make the same deduction in respect to the same litigation. The Appellants have made repeated requests for the production of these documents and they have not been forthcoming on the argument that they were not relevant.

The taxpayer is entitled to production of any document which may be reasonably regarded as necessary for the purpose of determining any tax payable by him under the Act, see paragraphe 241(4)(d). The Courts have recognized that in respect to the production of documents, the threshold for relevancy is a low one. See Everest & Jennings Canadian Ltd. v. Invacare Corporation, [1984] 1 F.C. 856, 79 C.P.R. (2d) 138 (F.C.A.) at page 857:

It seems to me that the clear right of the plaintiffs to have access to documents which may fairly lead them to a train of inquiry which may directly or indirectly advance their case or damage the defendant’s case particularly on the crucial question of one party’s version of the agreement being more probably correct than the other, entitles the plaintiffs to succeed on some parts of this application.

Counsel here contended that when the documents in the file are produced, they may assist the Appellant or may not. They may be totally irrelevant but the issue may be more readily resolved at trial where relevance and weight are for the trial judge. Counsel argued that the Minister relied upon documents in Dr. Revell’s file in assessing the Appellant here. These documents should be disclosed. See In re Huron Steel Fabricators (London) Limited et al. v. Minister of National Revenue, [1972] C.T.C. 506, 72 D.T.C. 6426 (F.C.T.D.) and Amp of Canada, Ltd. v. R., [1987] 1 C.T.C. 256, 87 D.T.C. 5157 (F.C.T.D.).

Such reliance is shown by the documents at Tab K of the Appellant’s material filed in support of his motion. These were certain documents that were written by representatives of Revenue Canada between offices indicating that there should be consistency between district offices and admitting that the Edmonton office had “screwed up”.

Those documents, as well as those referred to in Tabs L, M, N and R relate to the matters specifically pleaded in paragraphs 9, 10 and 11 of the Notice of Appeal and show that the Minister relied upon them. The Appellant is entitled to find out what facts are different that enabled the Minister to reach different conclusions and the Minister is bound by the facts that he relied on in the other cases.

Counsel argued that the Minister relied upon documents used in Dr. Revell’s assessment in deciding to reassess the Appellant here. Whatever documents are relevant should be disclosed. The material sought are relevant to the issues here. The threshold for relevancy is a low one.

How can the Respondent say that these documents are irrelevant if they were considered by the Respondent and may have changed his mind? They are relevant because they permit the Appellants to question the Minister’s assumptions. The Respondent has made what was not relevant, relevant.

Respondent’s rebuttal on Motion to strike

Counsel for the Respondent said that he had earlier considered making an application to strike but it was a cost saving measure which caused him not to make the application. He believed that the issue would not be pursued but it has been in light of the Appellant’s application which is no more timely than his. The Court has the discretion to allow the motion to strike.

If the paragraphs are not struck the trial Court will be faced with an issue of another taxpayer. To what end? It is not relevant.

Because the Minister made assumptions in Dr. Revell’s case does not mean that he made the same assumptions in the Appellant’s case. The Minister changed his mind. He is entitled to do so.

The Appellant is arguing that because the Minister made inconsistent presumptions that he cannot now make other presumptions. This is contrary to jurisprudence.

It is not open to the Appellant to set up estoppel to prevent an assessment made in accordance with the Act. Counsel indicated that Gibbon v. The Queen, supra, was not a case involving an application to strike, but estoppel was not allowed in that case.

He argued that it was not relevant that the Edmonton office “screwed up” and the other references in the Minister’s notes regarding Dr. Revell were not relevant.

It is immaterial that the Respondent admitted paragraphs 9 and 10 of the Notice of Appeal and that does not make those allegations a justiciable issue. These facts relate to another taxpayer.

He admitted that timeliness is a factor but not a bar to the Respondent’s motion. Greater harm would be done by not granting the motion to strike.

The application to strike was brought in response to the application to disclose and costs should follow the cause.

Respondent’s argument on Appellant’s motion

In response to the Appellant’s motion, the Respondent argued that if the paragraphs in question are struck out, there are no grounds for the motion because there is nothing in the Notice of Appeal to bring these documents into issue.

He took the position that the words “relating” to any matter in question in Rule 82(1) does not mean something different from “relative” as used in Rule 448(1) of the Federal Court Rules and that any suggestion to the contrary in A.G. of Canada v. Basserman (1994), 114 D.L.R. (4th) 104, 169 N.R. 109, 94 C.L.L.C., 14,027 (F.C.A.) is mere “obiter”. The real test is broad relevancy. See Oro Del Norte, S.A. v. R., (sub nom. Oro Del Norte v. Canada) [1990] 2 C.T.C. 67, 90 D.T.C. 6373 (F.C.T.D.) at page 6375 and the other cases referred to therein. Jerome, A.C.J. said at page 6375:

A taxpayer must therefore be permitted access to all documents which are relevant to or relied upon by the Minister of National Revenue in reassessing a return.

The documents sought here do not lead to a train of reasoning that may damage the Respondent’s case or aid the case of the Appellant. There was no evidence presented showing that the Minister considered the Revell documents, relied upon them and thereafter may have changed his mind based upon those documents. There is only an admission that Dr. Revell’s claim was allowed. Therefore, In re Huron Steel Fabricators (London) Ltd., and Herman Fratschko v. Minister of National Revenue, [1972] C.T.C. 506, 72 D.T.C. 6246 (F.C.T.D.) does not apply and the case at bar is within the scope of Oro Del Norte S.A., supra.

In sur rebuttal counsel reiterated that the portions of the discovery quoted did not show any reliance by the Minister on their contents. Counsel chose not to ask the appropriate question. It is necessary to show that the Minister relied upon these facts and not that he merely considered them.

The application of the Respondent should be dismissed with costs. Appellant’s reply

In reply, counsel for the Respondent asked: “What threshold does the Appellant have to meet?”

The Minister’s own affidavit claimed privilege over documents in Dr. Revell’s assessments. That shows that the Ministry relied upon them.

We are still at the pre-trial stage of proceedings and the threshold that has to be met by the Appellant should be a low one.

The transcript of discovery evidence at pages 39, 41, 42, 75, 81, 87, 88, 92 and page 128 indicate that the Minister relied upon some of the facts that he relied upon in making the Revell assessment.

Counsel further argued here that there need only be evidence that the Minister consider the documents. He need not have relied upon them.

Analysis and Decision

The Court is satisfied that the Respondent is entitled to make the motion to strike even though he has already pleaded to the paragraphs in question. It would have been preferable if the Respondent had made the objection before pleading but in failing to do so he has not precluded his right to do SO now.

There is sufficient authority for doing so. The cases referred to which rejected the motion to strike can be distinguished, the length of time that the Respondent took to make the motion was not inordinately long in light of the fact that the matter has not been set for trial and that the Appellant at this time also makes a motion for a better affidavit of documents.

The Court will deal firstly with paragraph 11 of the Notice of Appeal. This paragraph raises the issue of “estoppel in pais” or “factual estoppel”. Whatever that defence amounts to it is not available to the Appellant here. What the Appellant is seeking by the inclusion of paragraph 11 in the Notice of Appeal is to prevent the Minister from making an assessment based upon the Statute. If the Court allowed this defence, it would in essence be dictating that the expenses could be deducted without ever hearing the evidence upon which such a finding could be made or refused.

The Appellant does not indicate what facts the Minister should be stopped from denying, be they the facts that the Minister relied upon in making the first assessment of the Appellant or the facts relied upon in making the assessment in the case of Dr. Revell. The Appellant is seeking to estop the Minister from making the assessment, not from denying the existence of certain facts.

There can be no question here, that as in Woon, supra, the assessment was made pursuant to the terms of the Statute and therefore the Appellant cannot set up an estoppel to prevent the operation of the Statute.

Paragraph 11 will be struck from the Notice of Appeal.

In considering the motion of the Respondent to strike paragraphs 9 and 10 of the Notice of Appeal, the motion of the Appellant to require the Respondent to file and serve a better affidavit documents and to produce other documents relating to Dr. Revell, the same issues arise. The Respondent can only be successful in his application to strike out paragraphs 9 and 10 if the Court is satisfied that the paragraphs “may prejudice or delay the fair hearing of the action under Rule 53(a) or that the references disclosed no reasonable grounds for an appeal under Rule 58(1)(b).

The Court is satisfied that Rule 53(a) has no application here.

The only reasonable basis for the Respondent’s position under Rule 58(b) is that the facts, documents and statements referred to therein are not such as are “relating to any matter in question between or among them in the appeal” under Rule 82(11) of the Tax Court Rules. This burden is on the Respondent.

On the other hand, the Appellant can only be successful in his motion if he can show that these facts, documents and statements are “relating to any matter in question between or among them in the appeal”. That burden is upon the Appellant.

If the Respondent is successful in his motion then the Appellant cannot be successful in his motion because no other paragraphs of the Notice of Appeal bring into issue the matters raised in those paragraphs nor in the motions before the Court.

However, if the Minister fails in his burden, then the paragraphs sought to be struck would remain in the Notice of Appeal and it would be left to the Trial Court to decide on the admissibility of any evidence relating to those allegations.

The Court at this stage of the proceeding has the discretion to grant or reject the motion of the Respondent to strike but it should not do so lightly.

Likewise, when considering the Appellant’s motion, the Court should be careful at this stage not to place too high a burden or threshhold upon the Appellant so that the ultimate effect would be that the Appellant would be deprived of information that might entitle him to attack the Respondent’s case or establish his own.

The Respondent argued that the term “relating to any matter in question” as used in Rule 82(1) of the Tax Court Rules means the same as “relevant to any matter in issue” as used in the Federal Court Rules after 1990. His position was that any suggestion to the contrary in A.G. of Canada y. Basserman, supra, was mere obiter.

The Court does not accept that argument. The Court finds, as in Basserman, supra, that, “it is not necessary that they (the documents) be relevant to any issue in the litigation, only that they relate to a matter in question”. The Court finds that their relevance at this stage of the proceeding is not the question before the Court.

Counsel for the Respondent agreed that the test adopted in Oro Del Norte, supra, was “broad relevancy”. That would appear to be helpful here.

The Court is satisfied that the best test is a combination of the test used in the case of Oro Del Norte, S.A., supra, and the test expounded by Mc- Crachen, C.J. in Boxer & Boxer Holdings Ltd. v. Reesor et al., (1983) 43 B.C.L.R., 351 (B.C. Sup. Ct.) and adopted by Urie, J. in Everett and Jennings Canadian Limited v. Invacure Corporation, supra, after one takes into account Tax Court Rule 82(1). That test requires the Court to permit the taxpayer access to all documents which are relevant to any matter in question between the taxpayer and the Minister, which are related to any matter in question between the taxpayer and the Minister or which were relied upon by the Minister in making his assessment of the Appellant.

The case law establishes that “the Minister is not bound by his earlier assessments, or by his earlier policies, or by his representations or by the representations of his agents, or by the treatment he gives or has given to other taxpayers.” See Ludmer et al, supra, and Les Entreprises Ludco Ltée et al., supra.

Paragraphs 9 and 10 of the Notice of Appeal deal specifically with those issues. There was no argument made otherwise nor was there any evidence to the contrary. Therefore, the Respondent is entitled to succeed on its motion under Rule 58(1)(b) because such paragraphs do not disclose a reasonable ground for appeal.

The Appellant could argue against such a conclusion if he could show that the Minister made relevant, or related, that which was not relevant or related by relying upon certain presumptions in Dr. Revell’s file in making his assessment of the Appellant. Likewise, by establishing that the Minister relied upon such facts or documents the Appellant might bring himself within the test as set out in Oro Del Norte S.A., supra, which would permit him access to the documents which he is now seeking. This was the result

in Huron Steel Fabrications (London) Ltd. et al, v. Minister of National Revenue, supra, at page 6428, where the Court concluded that “it is clear from the answers to these questions, that for the purposes of the allegations of fact in paragraph 3(a) of the statement of defence, the defendant is relying in whole or in part on the Pilon income tax returns which he again refused to produce after being requested to do so by plaintiff’s counsel”.

In the case at bar no such facts are apparent from the Reply and no evidence was presented to the Court that the Minister made such reliance upon any facts or documents in Dr. Revell’s assessment.

The excerpts from the discovery evidence do not disclose anything to the contrary.

It would have been a simple matter for the Appellant’s counsel at the time of discovery to ask a specific question: Did you rely upon any facts, information or documents from the assessment of Dr. Revell when assessing the Appellant here? Neither was this question nor anything similar to it asked.

It is true that many objections were made by counsel for the Respondent at discovery to questions put by the Appellant’s counsel. That, to a certain extent, may have led counsel astray from asking the pertinent questions and we do not know what the answer would have been. If the witness had refused to answer the question then the Appellant could have taken further steps to have an answer supplied.

The questions from discovery that were put in evidence before the Court on these motions fall far short of providing the material necessary to support the Appellant’s application here even when the Court considers in toto all the evidence before it including the allegations contained in the Notice of Appeal and the Reply. The Appellant has failed to satisfy the test set out above that would permit the Court to order that the facts, information or documents that he seeks be produced.

In the end result, the Court grants the motion of the Respondent to strike paragraph 9, 10 and 11 of the Notice of Appeal.

The motion of the Appellant is dismissed.

Costs will follow the cause.

Motion dismissed.