Rip T.C.J.:
1 Her Majesty the Queen, the respondent, has moved for an order pursuant to Rule 172(2)(b) of the Tax Court Rules (General Procedure) that the operation of my order dated June 27, 1996 be suspended insofar as I ordered (a), the deposit with the Court in an envelope copies of all documents numbered 198, 199, 203 and 206 in the appellant Owen Holdings Ltd.'s List of Documents for my consideration whether the documents are to be included in the respondent's List and (b), the respondent file and serve on the appellant a List of Documents containing a description of any Advance Rulings or Technical Interpretations issued to any other taxpayer concerning the application of good antiavoidance rules in the Income Tax Act in the context of a transfer of property with an inherent loss to a related party.
2 My order of June 27, 1996 has been appealed by the appellant, and cross-appealed by the respondent, to the Federal Court of Appeal. The respondent states the ground for her motion is that her compliance with the order would require the commitment of considerable human resources which, if the cross-appeal of the order is successful, would have been expended without any benefit to the litigation between the parties.
3 A sealed envelope containing copies of documents numbered 198, 199, 203 and 206 was sent to me. The solicitor sending the envelope advised counsel for the respondent would file written representations giving reasons why the sealed documents should or should not be revealed to the appellant. However, counsel for the appellant would not be in position to dispute such representations since he has never seen the documents. Thus, while I read the letter from counsel containing the representations I did not place any weight on them. In his affidavit in support of the respondent's application, Mr. Jay Humphrey, a counsel with the Department of Justice, deposed, amongst other things, that:
In order to make such representations, an analysis would have to be undertaken of each document in the said envelope, and a review of such representations may have to be made by officials at Revenue Canada, Taxation.
4 With respect to the second portion of the Order with which the respondent was to comply, Mr. Humphrey stated:
I am informed by Mr. M. Hiltz of Revenue Canada, Taxation's Rulings Directorate, and do verily believe that a screening of the departmental computer indicates that approximately 100 documents might have to be added to the Respondent's List of Documents in order to comply with the said order. Prior to including any documents on the List, counsel on the file would have to review each document and perhaps seek assistance from appropriate an officials within Revenue Canada, Taxation.
5 In written submissions that I reject the application, the appellant stated that the respondent has applied for the stay of proceedings before the wrong forum. Counsel for the respondent argued that Rule 172(2)(b) grants me the authority to suspend my order. Rule 172(2)(b) provides that a party who seeks to suspend the operation of a judgment may make a motion for the relief claimed. A“ judgment” includes an order: section 2 of the Rules.
6 Counsel for the appellant agreed that there is no doubt a judge of the Tax Court of Canada has jurisdiction to stay a judgment of the Court but submitted that it would be preferable that the matter be dealt with by the Federal Court of Appeal.
7 Rule 172(2)(b) grants me the jurisdiction to suspend an order. It may well be that section 50 of the Federal Court Act grants that Court a similar jurisdiction. There is no reason for me to refuse to consider the respondent's application. Indeed, the Rules of the Tax Court authorize me to rule on an application to suspend an order and I shall do so in this case: See Ault Foods Ltd./Aliments Ault Ltee v. Canada (Registrar of Trade Marks) (1992), 44 C.P.R. (3d) 507 (Fed. T.D.), at pp. 51 and 511 and Carew v. R. (1995), [1996] 1 C.T.C. 2205 (T.C.C.). The application before me is not similar to that in Carew; I am not being asked to set aside an order on the basis of errors committed by me in permitting certain evidence to be adduced and in assessing the evidence.
8 The respondent's motion for an order to suspend my earlier order ought to be dismissed.
9 It may well be that it would be more convenient and more cost effective if I grant the stay until the Federal Court of Appeal rules on the appeals. However, this cannot be a factor in arriving at a decision. In Beloit Canada Ltée/Ltd. v. Valmet OY (1987), 17 C.P.C. (2d) 262 (Fed. T.D.), at pp. 26 to 266, Dubé J. set out fourteen criteria to consider when deciding whether or not it is in the interest of justice to grant a stay. Counsel for the appellant referred to criteria numbered 3, 4, 5, 6, 7, 9, 10 and 12 in support of his client's position that a stay not be granted. These are:
3. The Trial Division has the power to stay, pending review by the Federal Court of Appeal under s. 28 of the Federal Court Act (and pending appeal from a decision of this Court) but the power is discretionary and should only be ordered in the clearest cases (Communications Wkrs. of Can. v. Bell Can., [1976] 1 F.C. 282, 64 D.L.R. (3d) 171 (Fed. T.D.)).
4. The onus is on the applicant for a stay to show that the continuance of the proceedings would work an injustice upon him because it would be oppressive or vexatious (Weight Watchers Int. Inc. v. Weight Watchers of Ont. Ltd. (1972), 5 C.P.R. (2d) 122, 25 D.L.R. (3d) 419 (Fed. T.D.)[appeal allowed by consent without costs10 C.P.R. (2d) 96n, (sub nom. Weight Watchers of Ont. Ltd. v. Weight Watchers Int. Inc.) 42 D.L.R. (3d) 320n (Fed. C.A.)]).
5. The applicant also bears the onus to prove that the stay will not cause an injustice to the other party (Weight Watchers of Ont., supra).
6. A mere balance of convenience is not sufficient for the granting of a stay (Weight Watchers Int. v. Weight Watchers of Ont., supra).
7. There is a genuine onus on the party seeking a stay of proceedings. It is incumbent on the party seeking the stay to satisfy the Court that it is in the“ interest of justice” that the action be stayed, that its continuation would be an abuse of the judicial process and the defendant will be somehow prejudiced, not merely inconvenienced (Dom. Mail Order Products Corp. v. Weider, [1977]1 F.C. 141, 28 C.P.R. (2d) 27 (Fed.T.D.)).
9. Where the plaintiff is suffering increased potential damages as a result of the defendant's activity; and where the case can proceed to discovery pending the disposition of the matter respecting which a stay is sought, a stay ought not to be granted (Cercast v. Shellcast (No. 4), supra).
10 I note that appellant's counsel has offered to proceed to discovery before the appeal and cross-appeal of my order is heard but this has been refused by respondent's counsel.
10. An allegation that a possible decision of the Federal Court of Appeal may make the whole action useless is not a sufficient basis to award a stay. The burden is on the applicant to establish that the continuance of an action would work an injustice on them or be an abuse of the process of the Court (Usarco Ltd. v. Canada (A.G.),[1980] C.T. 484, 80 D.T.C. 6381 (Fed. T.D.)).
12. The prospect of a proceeding being rendered abortive in the event the Appeal Court reverses the decision of the trial Judge has been held not to be a special circumstance in the absence of other factors (Cercast v. Shellcast (No. 4), supra).
11 The respondent has not satisfied me that the inclusion of the documents numbered 198, 199, 203 and 206 in the appellant's List of Documents to her List of Documents will work an injustice or have irreparable harm upon her or will be oppressive or vexatious. The time and effort necessary, and the expense involved, in analysing the documents in the sealed envelope and for the officials of the Minister of National Revenue and respondent's to consult each other are not sufficient reasons to stay the order.
12 The Crown may incur expense in complying with the order and may be inconvenienced. But, as Dubé J. stated at p. 268 of Beloit, supra, “[t]he inconvenience and expense involved are not sufficient reasons” to order a stay. Dubé J., also declared that a possible favourable decision from the Court of Appeal affecting the liability of the respondent is not a reason to grant a stay.
13 In Ault Foods Ltd./Aliments Ault Ltee, supra, Collier J., at pp. 510-511 referred to the leading case in respect of stay of proceedings: Metropolitan Stores (MTS) Ltd. v. Manitoba Food & Commercial Workers, Local 832 (1987), 38 D.L.R.(4th) 321,[1987] 1 S.C.R. 110, 87 C.L.L.C. 14,015 (S.C.C.) sub nom. Manitoba (Attorney General) v. Metropolitan Stores (M.T.S.) Ltd. In that case, Collier J. said, the Supreme Court of Canada applied principles governing interlocutory injunctions to state a three-pronged test. He quoted from the headnote [[1987] 1 S.C.R. at p. 111]:
The first test is a preliminary and tentative assessment of the merits of the case. The traditional way consists in asking whether the litigant who seeks the interlocutory injunction can make out a prima facie case. A more recent formulation holds that all that is necessary is to satisfy the court that there is a serious question to be tried as opposed to a frivolous or vexatious claim. The “serious question” test is sufficient in a case involving the constitutional challenge of a law where the public interest must be taken into consideration in the balance of convenience. The second test addresses the question of irreparable harm. The third test, called the balance of convenience, is a determination of which of the two parties will suffer the greater harm from the grant or refusal of an interlocutory injunction, pending a decision on the merits.
14 The issue before me is a procedural question, not so serious a question affecting public interest as, for example, that considered in Metropolitan Stores. There is not, in the instant application, a conflict between two judges of the Court, as in Ault Foods. There will be no irreparable harm to the respondent in the event there is no stay and she is successful in her cross-appeal. Mr. Humphrey, in his affidavit, does not pretend the respondent will suffer a harm that may be irreparable. On a balance of convenience it will serve the interests of justice not to suspend my order.
15 The motion is denied with costs.
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