Docket: A-310-20
Citation: 2022 FCA 39
| CORAM:
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RENNIE J.A.
DE MONTIGNY J.A.
LEBLANC J.A.
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| BETWEEN:
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| IRIS TECHNOLOGIES INC.
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| Appellant
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| and
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| MINISTER OF NATIONAL REVENUE
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| Respondent
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REASONS FOR JUDGMENT OF THE COURT
(Delivered from the Bench at Ottawa, Ontario, on March 2, 2022).
RENNIE J.A
[1] Iris Technologies Inc. [Iris] appeals an order of the Federal Court (2020 FC 1133 per Walker J.), dismissing a motion for interim relief. In that motion, Iris sought mandamus to compel the release of $21.85 million in GST/HST tax refunds which it claimed for the January and February 2020 reporting periods pending the conclusion of an on-going audit and assessment. Iris filed an affidavit in support of its motion. That affidavit, in turn, attached an expert report as an exhibit.
[2] The Federal Court judge made two determinations which are in issue before us.
[3] The judge concluded Iris had not established a clear right to the performance of the Minister’s duty under section 229 of the Excise Tax Act, R.S.C. 1985, c. E-15 [ETA] to assess and pay refunds “with all due dispatch”
. The judge reached this conclusion after considering the length of time that the audit was outstanding, the amounts involved, the complexity of the audit and the degree of cooperation of the tax payer, as required by this Court in Iris Technologies Inc. v. Canada (National Revenue), 2020 FCA 117 at paragraph 45. There being no clear right to the performance of the duty to assess, the requirements for mandamus established by this Court in Apotex Inc. v. Canada (Attorney General), [1994] 1 F.C. 742, 69 F.T.R. 152 (CA) were not met. As Iris failed to establish a strong prima facie case on the merits of its request for mandamus, the motion for interim relief was rejected (R. v. Canadian Broadcasting Corp., 2018 SCC 5, [2018] 1 S.C.R. 196).
[4] The appellant also appeals from the order of the judge striking certain paragraphs of the affidavit on the basis that they offended the requirements of the Federal Courts Rules, S.O.R./98-106 for tendering expert reports. The judge found that in tendering an expert report as an exhibit to an otherwise admissible affidavit, the appellant circumvented the requirements of Rule 52.5 of the Federal Courts Rules and effectively shielded the expert from cross-examination.
[5] At the outset of the hearing of this appeal, the Minister moved for an order to dismiss this appeal as moot. In support, the Minister sought leave under Rule 351 to file the affidavit of Vance Smith dated May 10, 2021 as fresh evidence. This affidavit deposes that the Minister has now assessed Iris’ net tax payable for its January 2020 to March 2021 reporting periods and that there is no net tax refund owing.
[6] We admit the Smith affidavit as fresh evidence. The affidavit meets the test for admitting fresh evidence on appeal set out by the Supreme Court in Palmer v. The Queen, [1980] 1 S.C.R. 759, 106 D.L.R. (3d) 212. The evidence could not have been adduced at trial, it is relevant in that it bears on a decisive or potentially decisive issue on appeal, is credible, and could reasonably be expected to have affected the result in the Federal Court.
[7] This appeal is now moot. There is no longer a live controversy. The assessments are determinative of Iris’ net tax liability until the Minister makes a reassessment or the assessment is vacated by the Tax Court (ss. 299(4), 301(1.1), 306 and 309 of the ETA). Section 18.5 of the Federal Courts Act, R.S.C. 1985, c. F-7 provides that this Court does not have jurisdiction over matters where there is a statutory right of appeal to the Tax Court of Canada:
Despite sections 18 and 18.1, if an Act of Parliament expressly provides for an appeal to the … Tax Court of Canada, … that decision or order is not, to the extent that it may be so appealed, subject to review or to be restrained, prohibited, removed, set aside or otherwise dealt with, except in accordance with that Act.
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Par dérogation aux articles 18 et 18.1, lorsqu’une loi fédérale prévoit expressément qu’il peut être interjeté appel, devant […] la Cour canadienne de l’impôt, […] cette décision ou cette ordonnance ne peut, dans la mesure où elle est susceptible d’un tel appel, faire l’objet de contrôle, de restriction, de prohibition, d’évocation, d’annulation ni d’aucune autre intervention, sauf en conformité avec cette loi.
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[8] Iris nevertheless contends that the question of interim relief to compel the payment of the $21.85 million in refunds owing remains outstanding. It contends that the Minister cannot usurp the jurisdiction of this Court simply by issuing an assessment in the course of proceeding before the Court.
[9] This argument cannot succeed. When the true character of the relief sought in this case is considered, the request for payment of the refund is an attempt to short-circuit the recourse mechanisms established by Parliament. There is no credible basis on which it can be argued that this Court can compel the payment of the refunds claimed in the face of an assessment that the refunds are not owing. The request, in effect, asks for an order which is expressly contrary to the legislation. In addition, it is difficult to reconcile this argument with the fact that Iris has now received the very relief – an assessment – that it requested the Federal Court to order in the underlying judicial review application.
[10] The motion to dismiss the appeal is granted and the appeal is dismissed with costs.
“Donald J. Rennie”
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