Shell Canada Ltd. v. R., [1997] 2 CTC 2352, 97 DTC 257

Christie A.C.J.T.C.:

On December 9, 1996 the parties were informed that this application would be dismissed and that reasons for that decision would follow.

By Notice of Motion dated November 25, 1996 counsel for Shell Canada Limited (“Shell”) sought the production or inspection of certain documents. It reads:

TAKE NOTICE that an application will be made by teleconference at a date and time to be determined by the Court for an Order pursuant to paragraph 108(1 XJ) [1] of the Tax Court of Canada Rules - General Procedure (‘Rules’) for the following relief:

THE MOTION IS FOR:

(a) an order pursuant to section 88(c) of the Rules requiring the production of documents described as ‘21(l)(b) documents’ in the attached affidavit which the Respondent has improperly claimed to be privileged and documents described as ‘ 13(1)(Z?) [2] documents’ in the attached affidavit, which the Respondent has improperly refused to produce on the grounds of relevance;

(b) alternatively, an order that the Court may inspect the document for the purpose of determining the validity of the Respondent’s claim of privilege and position regarding relevance; and

(c) such further and other relief as this Honourable Court considers just.

The Notice goes on to state:

THE GROUNDS OF THE MOTION ARE that the Appellant has reasonable grounds to believe that the ‘21(l)(b) documents’ are not subject to solicitor and client privilege and the T3(l)(a) [3] documents’ are relevant to the issues between the parties in the within matter and which the Appellant has requested the Respondent to produce, and which the Respondent has not produced.

Mr. Steven J. Robertson of the firm of Bennett, Jones, Verchere, Calgary, swore an affidavit in support of the Notice of Motion.

The Notice was filed in the Registry on November 25, 1996 and served on counsel for the Respondent on November 28. The hearing of the appeals to which the Notice relates was scheduled to commence on December 9, 1996. By letter dated November 28, 1996 counsel for the respondent objected to the Motion being brought at such a late stage. Subsection 67(6) of the Tax Court of Canada Rules (General Procedure) (“the Rules”) provides:

67. (6) Where a motion is made on notice, the notice of motion together with the affidavits or other documentary material to be used at the hearing of the motion shall be filed and served at least seven days before the date on which the motion is to be heard.

Subsection 27(1) of the Interpretation Act which applies to the Rules states: 27. (1) Where there is a reference to a number of clear days or ‘at least’ a number of days between two events, in calculating that number of days the days on which the events happen are excluded.

A telephone conference call concerning the Notice of Motion was held on November 29, 1996. It was presided over by me and counsel for both parties participated. It was agreed that the Notice of Motion would be heard on December 9, 1996 prior to the commencement of the trial.

It will have been noted that paragraph (a) of the Notice of Motion relies on paragraph 88(c) of the Rules. It reads:

88. Where the Court is satisfied by any evidence that a relevant document in a party’s possession, control or power may have been omitted from the party’s affidavit of documents, or that a claim of privilege may have been improperly made, the Court may,

(c) order the disclosure or production for inspection of the document or a part of the document, if it is not privileged, and

In response to an inquiry from the Bench about the affidavit referred to in the opening words of section 88 counsel for Shell replied that there was none. It soon became apparent why. Each party had filed and served a list of documents under section 81 of the Rules. It relates to the partial disclosure of documents in contrast with full disclosure of documents that is dealt with under section 82 of the Rules. There are extensive and important differences between sections 81 and 82 which have significant ramifications in respect of other rules, including section 88.

Under section 81 the list to be filed and served on other parties consists of documents of which the party filing and serving has knowledge at that time that might be used in evidence to establish or assist in establishing any allegation of fact in any pleading filed by that party, or to rebut or to assist in rebutting any allegation of fact in any pleading filed by any other party. That is to say the list consists of those documents selected by the party filing and serving which that party may use in evidence for the purposes just stated. The partial list is required to be in Form 81 of the Rules. It reads:

List of Documents (Partial Disclosure)

The following is a list of the documents of which the appellant (or respondent) has knowledge that might be used in evidence:

(a) to establish or to assist in establishing any allegation of fact in any pleading filed herein by the said party, or

(b) to rebut or assist in rebutting any allegation of fact in any pleading filed herein by any other party,

and which is filed and served in compliance with section 81.

Appendix A

Documents in the possession, control or power of the party. (Number each document consecutively. Set out the nature and date of the document and other particulars sufficient to identify it.)

Appendix B

Documents of which the party has knowledge but which are not in the party’s possession, control or power. (Number each document consecutively. Set out the nature and date of the document and other particulars sufficient to identify it. Give the present location of each document.)

Date:

(Signature)

(of party, or of an officer, director or employee of the party, or of the counsel of record of the party)

TAKE NOTICE that the documents referred to in Schedule A above may be inspected and copies taken at (place) on (date) between the hours of (time).

It will be seen that no affidavit is required. Nor is there provision anticipating the possibility of an objection to the production of documents. The remaining provisions of section 81 simply deal with the late filing and serving of a partial list.

On the other hand section 82 (full disclosure) only comes into operation if the parties agree or, in the absence of agreement, the Court on application directs that each party shall file and serve on each other party a list of all documents which are or have been in that party’s possession, control or power relating to any matter in question between or among them in the ap- peal. This is dealt with in subsection 82(1). Subsections 2 to 6 of section 82 provide:

82. (2) Where a list of documents is produced in compliance with this section, the list shall describe, in separate schedules, all documents relating to any matter in issue in the appeal,

(a) that are in the party’s possession, control or power and that the party does not object to producing,

(b) that are or were in the party’s possession, control or power and for which the party claims privilege, and the grounds for the claim, and

(c) that were formerly in the party’s possession, control or power, but are no longer in the party’s possession, control or power, whether or not privilege is claimed for them, together with a statement of when and how the party lost possession or control of, or power over them and their present location.

(3) A list of documents filed and served under this section shall be in Form 82(3).

(4) A list of documents made in compliance with this section shall be verified by affidavit (Forms 82(4)A and 82(4)B),

(a) if the party is an individual, by the party unless that person is under disability in which case the affidavit shall be made by that person’s tutor, curator, litigation guardian or committee,

(b) if the party is a corporation or any body or group of persons empowered by law to sue or to be sued, either in its own name or in the name of any officer or other person, by any member or officer of such corporation, body or group, and

(c) if the party is the Crown, by any departmental or other officer of the Crown nominated by the Deputy Attorney General of Canada.

(5) The affidavit shall contain a statement that the party has never had possession, control or power of any document relating to any matter in issue in the proceeding other than those included in the list.

(6) The Court may direct a party to attend and be cross-examined on an affidavit delivered under this section.

Form 82(3) reads:

List of Documents (Full Disclosure)

The following is a list of all the documents which are or have been in the appellant’s (or respondent’s) possession, control or power relating to any matter in question between or among them in the appeal and which is filed and served in compliance with section 82.

Appendix A

Documents in the possession, control or power of the party that the party does not object to producing for inspection. (Number each document consecutively. Set out the nature and date of the document and other particulars sufficient to identify it.)

Appendix B

Documents that are or were in the possession, control or power of the party that the party objects to producing on the grounds that

(State ground of objection. Number each document consecutively. Set out the nature and date of the document and other particulars sufficient to identify it.)

Appendix C

Documents that were formerly in the possession, control or power of the party, but are no longer in the party’s possession, control or power. (Number each document consecutively. Set out the nature and date of the document and other particulars sufficient to identify it. State when and how possession or control of Or power over each document was lost, and give the present location of each document.)

Date:

(Signature)

(of party, or of an officer, director or employee of the party, or of the counsel of record of the party)

TAKE NOTICE that the documents referred to in Schedule A above may be inspected and copies taken at (place) on (date) between the hours of (time).

Unlike Form 81 pertaining to partial disclosure, Form 82(3) expressly provides in Schedule B for a party objecting to produce documents that are or were in that party’s control or power. This is consistent with paragraph 82(2)(b) of the Rules.

Form 82(4)A is the affidavit to be sworn by an individual. Paragraph 4 reads:

Form 82(4)B is the affidavit to be sworn on behalf of a corporation or the Department of National Revenue. Paragraph 5 reads:

5. I have listed in Schedule B those documents that are or were in the possession, control or power of the corporation (or Department of National Revenue) and that it (or the Minister) objects to producing because they are privileged, and I have stated in Schedule B the grounds for each such claim.

Finally, subsection 85(3) of the Rules is referred to. It reads:

85. (3) All documents listed in a party’s list of documents under section 81 or under section 82 and that are not privileged, and all documents previously produced for inspection by the party shall, without notice, subpoena or direction, be taken to and produced at,

(a) the examination for discovery of the party or a person on behalf of, in place of, or in addition to the party, and

(b) the hearing of the appeal,

unless the parties otherwise agree.

In my opinion the words “and that are not privileged” in this subsection relate only to the reference to section 82 because section 81 simply does not envisage the listing of documents by the person producing the list in respect of which that person will seek to make a claim of privilege.

The foregoing leads me to the conclusion that Shell cannot invoke paragraph 88(c) in support of its motion. Nor am I aware of any other rule that it could have resorted to in seeking the relief asked for in the Notice of Motion. Mr. Meghji did, however, place reliance on section 4 of the Rules. It provides:

4. (1) These rules shall be liberally construed to secure the just, most expeditious and least expensive determination of every proceeding on its merits.

(2) Where matters are not provided for in these rules, the practice shall be determined by the Court, either on a motion for directions or after the event if no such motion has been made.

Subsection 4(1) is nothing other than a rule of interpretation. It does not of itself create substantive rights. It is somewhat akin to section 12 of the Interpretation Act. It states:

12. Every enactment is deemed remedial, and shall be given such fair, large and liberal construction and interpretation as best ensures the attainment of its objects.

As for subsection 4(2), I cannot construe it as authorizing the Court to make determinations about practice that are not in harmony with the existing Rules and that, to my mind, is what would be involved in attempting to conjure up procedure that would enable Shell to pursue the remedy it seeks.

The motion is dismissed. It having been brought without the benefit of a proper legal foundation the respondent is entitled to party and party costs of the motion in any event of the cause.

Motion dismissed.