Date: 20091214
Docket: A-558-08
Citation: 2009 FCA 370
CORAM: BLAIS
C.J.A.
LÉTOURNEAU
J.A.
TRUDEL J.A.
BETWEEN:
GUY PICARD
Appellant
and
HER MAJESTY THE QUEEN
Respondent
REASONS FOR JUDGMENT OF THE
COURT
(Delivered from the Bench at Québec,
Quebec, on December 14, 2009)
LÉTOURNEAU J.A.
[1]
The
appellant, who is acting on his own behalf, is challenging a decision of
Justice Bédard (judge) of the Tax Court of Canada. In this decision, the judge upheld
the reassessments issued by the Minister of National Revenue (Minister) under
the Income Tax Act, R.S.C. 1985, c. 1 (5th Suppl.) (Act). The
reassessments were for the 1999, 2000 and 2001 taxation years.
[2]
The judge found
that the appellant’s unreported income was property subject to income tax
because it was not property situated on a reserve within the meaning of
paragraph 87(1)(b) of the Indian Act, R.S.C. 1985, c. I-5.
[3]
To reach
this conclusion, the judge applied the teachings of the Supreme Court of Canada
in Williams v. Canada, [1992] 1 S.C.R. 877, and the connecting
factors to the reserve analyzed by our Court in Southwind v. Canada,
[1998] F.C.J. No.15 (QL), to the facts of the case.
[4]
The
judge’s finding is therefore one of mixed fact and law to which the standard of
palpable and overriding error must be applied. In other words, we cannot
intervene to set aside or vary this finding unless it contains such an error: Housen
v. Nikolaisen, [2002] 2 S.C.R. 235.
[5]
We are of
the opinion that the judge was properly instructed as to the law applicable in
this case. We are also of the view that the evidence before the judge supported
his finding that the income added by the Minister was not income earned on the
reserve.
[6]
The
services rendered by the appellant were done so at his customer’s place of
business situated off the reserve, where, according to the evidence, he had his
office and worked at least eight (8) hours a day, every business day. It was
neither erroneous nor unreasonable for the judge to find that the income had
been earned off reserve. We agree with the judge that the fact that the
appellant lived on the reserve and had an office in his home does not obliterate
the two important factors he used in his analysis of this part of the income
added to the appellant’s tax return.
[7]
Another portion
of the income in question was made up of so-called passive income. In one instance,
this was the appropriation by the appellant, as a shareholder, of funds
belonging to the company. In the other, passive income resulted from the
appellant’s failure to reimburse a loan made to him by the company. In both
cases, the company, which was the same, was, as has already been mentioned,
situated off reserve, as were the appellant’s customers.
[8]
The
appellant explained that the appropriation he made as a shareholder was a
payment for services rendered during the initial transaction. Yet he admitted
that he did not provide the company with any services at that time: see the
transcript in the appeal book, at pages 36, 42 and 53.
[9]
At the
hearing he submitted that because he had not rendered any services and did not
receive the amount in issue, the amount could not be added to his income. In
fact, the amount had been taken from the company’s own funds to purchase shares
in the company. The purpose of the invoices for fees issued by the appellant
for services allegedly rendered was to reduce or cancel the debt owed by him to
the company. The judge did not err in finding that the appellant had consequently
received a benefit as a shareholder.
[10]
Although
this point was not made in his notice of appeal, the appellant alleged an
apprehension of bias on the part of the judge on the grounds that the judge had
heard the appellant’s case and that of his partner with whom he was in conflict
within a day of each other.
[11]
More
specifically, his partner, Mr. Gravil, who had been called as a witness by the
respondent, had a young law student in the courtroom taking notes for him, even
though he had been excluded from the hearing because he was a witness. This was
discovered, and Mr. Gravil was released as a witness. He then left the court
room without having testified. There was therefore no prejudice to the
appellant.
[12]
The
appellant nonetheless fears that the judge who reserved judgment on his case was
influenced by the testimonies heard in Mr. Gravil’s case.
[13]
From a
legal point of view, there is no reason why a second hearing that may be interrelated
with a first one should not be held before the same judge. In Arthur v.
Canada (Minister of Employment and Immigration), [1993] 1 F.C. 94, at
page 102, Justice MacGuigan quoted Jackett P. in Nord-Deutsche Versicherungs
Gesellschaft et al. v. The Queen et al., [1968] 1 Ex.C.R. 443, at
pages 457 and 458:
In my view the correct view of the matter is that which, as
I understand it, was adopted by Hyde J. in Barthe v. The Queen [(1964),
41 C.R. 47], when he said that “The ability to judge a case only on the legal
evidence adduced is an essential part of the judicial process”. In my view,
there can be no apprehension of bias on the part of a judge merely because he
has, in the course of his judicial duty, expressed his conclusion as to the
proper findings on the evidence before him. It is his duty, if the same issues
of fact arise for determination in another case, to reach his conclusions with
regard thereto on the evidence adduced in that case after giving full
consideration to the submissions with regard thereto made on behalf of the
parties in that case. It would be quite wrong for a judge in such a case to
have regard to “personal knowledge” derived from “a recollection of the
evidence” taken in the earlier cause. It is not reasonable to apprehend that
there is “a real likelihood” that a judge will be so derelict in his duty as to
decide one case in whole or in part on the evidence heard in an earlier case.
If I may be permitted to say so, it seems to me that the
real apprehension is that the judge who hears a case in which the same issues
of fact arise as have recently been decided in the same court can hardly ignore
the existence of the earlier decision for he cannot be unconscious of the
possibility of apparently conflicting decisions creating an atmosphere of lack
of confidence in the administration of justice. I should have thought, however,
that a judge who participates in both of two such matters is more likely to
appreciate and explain different results flowing from different bodies of
evidence or differences in presentation and argument than a judge who had no
part in the earlier case. I do not say this to indicate that I have a view that
the same judge should always try two such cases, but to indicate that, in my
view, it is not necessarily prejudicial to the party who assumes the burden of
producing a result in the second case that is apparently in conflict with the
earlier decision.
[14]
In
addition, there is nothing in the judgment in this case or in the record that
could lead one to conclude, let alone believe, that the judge used facts
proven, evidence heard or personal knowledge acquired in Mr. Gravil’s case.
[15]
For these
reasons, the appeal will be dismissed with costs.
“Gilles
Létourneau”
Certified
true translation
Johanna
Kratz
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