Citation:
2015 TCC 319
Date: 20151209
Dockets: 2008-2759(IT)G
2008-2779(IT)G
2014-3231(IT)G
BETWEEN:
V.
ROSS MORRISON,
Appellant,
and
HER
MAJESTY THE QUEEN,
Respondent.
REASONS
FOR ORDER
Pizzitelli J.
[1]
As per the Appellant’s Amended Notice of Motion
filed August 20, 2015, the Appellant states:
THE MOTION IS FOR an Order pursuant to
Sections 80, 81, 82, 88, 91 and 146.1 of the Tax Court of Canada Rules (General
Procedure) as follows:
1. Directions
with respect to the designation of the Appellants’ appeals as test cases in the
Canadian Humanitarian Trust (“CHT”) and Canadian Gift Initiative (“CGI”)
appeals;
2. That
the Respondent file and serve a further and better List of Documents (Partial
Disclosure) to include the information and documentation described in paragraph
4 below;
3. In
the alternative, that the Respondent file and serve a List of Documents (Full
Disclosure) to include the information and documentation described in paragraph
4 below;
4. That
the Respondent disclose or produce for inspection the names and municipal
and/or email addresses of all persons who have filed Objections to the
Reassessments in the CHT and CGI Donation Programs and whose Objections have
not been resolved (the “Outstanding Objectors”);
5. That
the Respondent inform all Outstanding Objectors of the Appellant’s status as
the test case Appellant before this Court;
6. In
the alternative, that the Appellant inform all Outstanding Objectors of the
Appellant’s status as the test case Appellant before this Court;
7. That
the Respondent produce to the Appellant copies of the transcripts of the
examination for discovery of the Respondent in the test case appeals (as
described in the Affidavit of V. Ross Morrison filed herewith);
8. That
the examinations for discovery of the Appellant be postponed from a date no
later than September 21, 2015 to a date no later than January 22, 2016 pending
the hearing of the within motion and production of the said transcripts and
List of Documents as described above, and that the Order of the Honourable
Justice B. Paris dated April 2, 2015 be amended accordingly;
9. The
Appellant’s costs of this motion payable in any event of the cause; and
10. Such
further and other relief as to this Court may seem just.
[2]
It should be noted that with respect to the
relief requested pursuant to paragraph 8 above, that a subsequent Order of
Paris J., the case management judge, dated October 13, 2015, already extended
that date to January 22, 2016. The Appellant, however, argues that in light of
the date this motion is being heard that such date be further extended until the
end of March.
[3]
Some factual context is necessary background in
addressing this motion. These appeals involve the denial by the Minister of
National Revenue (the “Minister”) of charitable tax credits pursuant to
subsection 118.1(3) of the Income Tax Act (the “Act”), claimed by
the Appellant for donations of pharmaceuticals under tax shelter programs
described as the CHT and CGI Donation Programs above, for the 2003, 2004 and
2005 taxation years respectively. Paris J. of this Court is the case management
judge for a group of appeals that initially selected the three promotors of the
Donation Program and 12 other appellants as the test cases and held all others,
including the Appellant, in abeyance. After the 12 earlier appellants who had
been so designated had either settled or withdrawn their appeals, leaving only
the appeals of 3 promoters of the Donation Programs in issue, the Appellant was
added to the list of test cases by Order of December 17, 2014 and is in fact
the only non-promoter appellant left in the test cases so designated. It should
also be noted that counsel for the promoters, a large national law firm, has recently
withdrawn as counsel of record for the promoters.
[4]
The relief sought by the Appellant involves
three main issues; (1) the disclosure of the names and addresses of third-party
taxpayers who are only at the objections stage of their process; (2) the
release of transcripts of discovery conducted against the Respondent by other
appellants; and (3) a delay in the date of discovery of the Appellant. I will
address each in the context of the Appellant’s arguments.
1.
Disclosure of Third-Party Objectors
[5]
The Appellant argues that he is entitled to the names
and municipal addresses of all those taxpayers who have participated in the
Donation Programs in issue that have filed objections but are not yet at the
appeal stage for several reasons (the “Outstanding Objectors” or “Objectors”).
First, the Appellant argues that by reason of his status as a test case he is
entitled to know that information which is in the possession of the Minister
who is otherwise dealing with them. Secondly, he argues they may effectively
assist him in an evidentiary manner in his case by testifying as witnesses or
allowing his firm to represent them. Thirdly, he argues, that the Minister has put
them in issue by referring to taxpayers who participated in the programs in its
Amended Replies and hence, has put in issue the numbers and status of the Objectors
and so makes such information relevant. Moreover, argues the Appellant , the
names and addresses of the Objectors is not information that is covered under
the confidentiality provisions of section 241 of the Act relied upon by
the Minister in refusing his requests for that information. Finally, the Appellant
argues that the Objectors are entitled to know he is a test case and that
counsel for the promoters has withdrawn all of which he argues is a significant
change in circumstances that should be communicated to the Objectors.
[6]
I do not agree with any of the Appellant’s
arguments. The Appellant has neither provided nor argued any legal precedent
that supports his position on any of these issues. There is ample precedent
against.
[7]
The Appellant relies, inter alia, on rules
80, 81, 82 and 88 of the Tax Court of Canada Rules (General Procedure) (the
“Rules”) in support of his Motion. Rule 80 allows a party to require the other
party to produce a document or allow inspection and copying of a document that
is referred to in a pleading or affidavit of the other party. There is no
evidence in the pleadings or any affidavit on record that refers to any list of
the names and addresses of the Objectors so no such document exists or was put
onto any list of Partial Disclosure by the Respondent. Merely making reference
to large numbers of taxpayers who participated in the Donation Programs in
issue in the Respondent’s Amended Replies does not magically transform mention
of such taxpayers in general into a list of Objectors’ names and addresses. Moreover,
it is trite law that a party is not required to compile an analyses or document
of information that does not already exist for the other party as set out in Rezek
v The Queen, [2000] TCJ No. 101, 2000 DTC 1966.
[8]
It should also be noted that these matters have
proceeded under the Partial Disclosure rule of Rule 81 as ordered by Paris J.
There had never been a motion for full disclosure by the Appellant under Rule
82 and although he asks that the Court order the Respondent to deliver a list
of the names and addresses of the Objectors either under Rule 81 or Rule 82, he
has made no motion for a Rule 82 disclosure nor argued why it should be given
or addressed any of the tests applicable thereto, nor has he gone through the
discovery process to determine whether such disclosure is even necessary.
Moreover, Rule 82 also refers to the disclosure of documents that are or have
been in the party’s control, possession or power and as above stated, there is
no evidence any document exists listing the name of all Objectors and their
addresses.
[9]
The Appellant of course relies on Rule 88 that
allows a court to order the disclosure of a relevant document in the party’s
possession, control or power that was omitted from the party’s affidavit of
documents [either under Rule 81 or 82] or for which a claim of privilege is
improperly made.
[10]
While there is no evidence of any such document
as indicated or claim for privilege before me, I must state that the primary
condition for the release of any such document would in any event be that it be
relevant to the Appellant’s matters before the Court. It is trite law that the
manner in which other taxpayers are treated by the Minister is not relevant to
another taxpayer as stated by the Federal Court of Appeal in Ford Motor Co.
of Canada, Limited v MNR, [1997] 3 FCR 103, at paragraphs 48-49 where
Linden J.A. concluded that “… as a matter of principle, a taxpayer must prove
that it meets the requirements of the legislation on its own terms.”
[11]
As the Respondent has pointed out, the names and
addresses of the Objectors, let alone any other taxpayers, are not relevant as
to the issues in the Appellant’s appeal; namely whether the Appellant is
entitled to the charitable tax credit in regards to his alleged pharmaceutical
donations; whether the tax receipts he relies on comply with the requirements
of the Act and Regulations; what the fair market value of such donations
were or what the capital gain calculation relating to them might be.
[12]
The only explanation that makes such names and
addresses relevant appear to be found in the Appellant’s affidavit in support
of this Motion that such Objectors may wish to retain the services of the
Appellant’s law firm. Frankly, such suggestion is a totally inappropriate
reason for bringing this application.
[13]
The Appellant actually admitted in argument that
while he could get by without this requested information he felt entitled to
them as a consequence of his status as a test case. Firstly, there is no
support in law for such alleged entitlement and secondly he has in fact
admitted such information is not really necessary for his case. I might also
add that the Appellant has argued he understands that there are in fact more
than 200 taxpayers who have filed Notices of Appeal and so such information
with respect to such taxpayers are a matter of public record. He appears to
have ample access to hundreds of taxpayers who might be able to assist him as
witnesses if he chooses to contact them. I fail to see how in these
circumstances he can possibly argue the Minister should release confidential
third-party information as a matter of necessity. He should make his own
efforts to compile third-party taxpayer information for his purposes, either by
reviewing information that is a matter of public information as it pertains to
the taxpayers who have filed appeals above or advertising for assistance from
those who have not. The Appellant appears to feel he has the right to ask the
Respondent or even this Court to do his leg work for him without making any
real effort to do so himself.
[14]
As for the Appellant’s contention that section
241 of the Act does not prohibit the Respondent from releasing the names
and addresses of the Objectors, I simply cannot agree either.
[15]
Section 241 reads as follows:
241(1)
Provision of Information. Except as authorized by
this section, no official or other representative of a government entity shall
(a) knowingly provide, or knowingly allow
to be provided, to any person any taxpayer information;
(b) knowingly allow any person to have
access to any taxpayer information; or
(c) knowingly use any taxpayer information
otherwise than in the course of the administration or enforcement of this Act,
the Canada Pension Plan, the Unemployment Insurance Act or the Employment
Insurance Act or for the purpose for which it was provided under this
section.
(2) Evidence
relating to taxpayer information. Notwithstanding
any other Act of Parliament or other law, no official or other representative
of a government entity shall be required, in connection with any legal
proceedings, to give or produce evidence relating to any taxpayer information.
(3)
Communication where proceedings have been commenced. Subsections (1) and (2) do not apply in respect of
(a) criminal proceedings, either by indictment
or on summary conviction, that have been commenced by the laying of an
information or the preferring of an indictment, under an Act of Parliament; or
(b) any legal proceedings relating to the
administration or enforcement of this Act, the Canada Pension Plan, the Unemployment
Insurance Act or the Employment Insurance Act or any other Act of
Parliament or law of a province that provides for the imposition or collection
of a tax or duty.
… [3.1 to 3.3 omitted as not specific to
these reasons]
(4) Where
taxpayer information may be disclosed. An official
may
(a) provide to
any person taxpayer information that can reasonably be regarded as necessary
for the purposes of the administration or enforcement of this Act, the Canada
Pension Plan, the Unemployment Insurance Act or the Employment
Insurance Act, solely for that purpose;
…
[16]
It is clear that subsections 241(1) and (2)
contain the restrictions against any government official which includes the
Minister releasing any taxpayer information or giving evidence with respect to
same. The Appellant however argues that the names and addresses of the Objectors
is not “taxpayer information” and that subsection 241(3) would in any event
exclude the application of subsections (1) and (2).
[17]
Subsection 241(10) of the Act defines
“taxpayer information” as follows:
(10)
Definitions. In this section,
…
“taxpayer
information” means information of any kind and in any form relating to one or
more taxpayers that is
(a) obtained by or on behalf of the
Minister for the purposes of this Act, or
(b) prepared from information referred to
in paragraph (a),
but does not
include information that does not directly or indirectly reveal the identity of
the taxpayer to whom it relates.
[18]
It is absolutely clear that not only is taxpayer
information very broadly defined to include “information of any kind and in any
form” which would clearly include names and addresses, but the fact it excludes
information that would not “directly or indirectly reveal the identity of the
taxpayer” emphasizes that the names and addresses of taxpayers are the focus of
such identity protection.
[19]
As for the Appellant’s argument that paragraph 241(3)(b)
is an exception to the release of taxpayer information since his appeal is a
legal proceeding relating to the administration of the Act, the
Appellant has unfortunately failed to grasp that subsection (4) also applies
and clearly only allows the release of information that is “necessary” for the
purposes of such administration or enforcement and “solely” for that purpose.
As indicated above, the Appellant has admitted such information is not
necessary and I have found it is neither relevant nor necessary for the
Appellant to have in respect of this proceeding of enforcement of the Act
against him.
[20]
In Rezek above Bowman J. held that the
names of other taxpayers who engaged in the same transactions could not be
disclosed and in Penn West Petroleum Ltd. v The Queen, 2006 TCC 82, 2006
DTC 2338, Beaubier J. found that whether other taxpayers had been reassessed is
information that is expressly forbidden by statute. Both are consistent with
the Federal Court of Appeal’s decision in Ford above that the taxpayer
must prove the requirements of compliance with the Act on its own terms
and that those of others are irrelevant.
[21]
Consistent with the above principles, there is
also no need for the Objectors to be told the Appellant is a test case or that
previous counsel for the promoters have withdrawn. Since this information is a
matter of public record, all other taxpayers have access to same. Each taxpayer
of course has the right to pursue his objections and appeals as he or she or it
may determine including deciding whether to file an appeal where the Minister
had not confirmed an objection within 90 days pursuant to paragraph 169(1)(b)
of the Act and whether they wish to be represented by counsel and who
that might be. This Court has no jurisdiction to involve itself in the affairs
of taxpayers who have not filed an appeal unless specifically provided for in the
Act or other applicable legislation nor to dictate to the Minister what
information it must make available to such parties as part of its duties or
acts in dealing with taxpayers in pre-appeal stages. That is for the Minister
to decide and for such other taxpayers to deal with if they so choose. The
Appellant has no standing to speak for any such other taxpayers or advocate for
them and in fact would be acting improperly by attempting to do so without
their consent, notwithstanding any altruistic concerns he may have for them. Moreover,
the fact the Minister interacts with taxpayers involved in similar transactions
before the appellate stage does not mean such interaction is, in and of itself,
proof their information is relevant to other appellants as the Appellant seems
to contend.
2.
Release of Transcripts for Discovery of
Respondents
[22]
I cannot agree with the Appellant’s request to
order the Respondent to release the transcripts for discovery of the Respondent
conducted by other appellants without the consent of such other parties or
without making a motion for the release of such third-party information on
notice to such other appellants. In my opinion, both the Minister’s obligations
under the confidentiality provisions of section 241 above discussed and the
well-entrenched “implied undertaking” rule operate to prohibit such disclosure.
[23]
The rationale for the implied undertaking rule
is discussed in the Supreme Court of Canada’s decision in Juman v Doucette,
[2008] 1 S.C.R. 157, 2008 SCC 8, at paragraphs 23 - 27; namely to protect privacy
and ensure complete and candid discovery in the process. At paragraphs 27 and
30 Binnie J. summarized:
[27] For good reason, therefore, the
law imposes on the parties to civil litigation an undertaking to the court
not to use the documents or answers for any purpose other than securing justice
in the civil proceedings in which the answers were compelled…
…
[30] The undertaking is imposed in
recognition of the examinee’s privacy interest, and the public interest in the
efficient conduct of civil litigation, but those values are not, of course,
absolute. They may, in turn, be trumped by a more compelling public interest.
Thus, where the party being discovered does not consent, a party bound by the
undertaking may apply to the court for leave to use the information or
documents otherwise than in the action, as described in Lac d’Amiante,
at para. 7:
Before using information, however,
the party in question will have to apply for leave, specifying the purposes of
using the information and the reasons why it is justified, and both sides will
have to be heard on the application.
In such an
application, the judge would have access to the documents or transcripts at
issue.
[24]
While I note that the Respondent has indicated
it does not object to the release of such short transcripts, which it says
exist with respect to only two other appellants, provided this Court so orders
or the other appellants consent, such discovery was conducted by such other
appellants at their cost and as part of their appeal pursuant to an action
between the Minister and such other appellants and should not be disclosed to
any other party without their consent or court order issued pursuant to a
proper motion in which they have been given the opportunity to participate in
to protect whatever privacy interest or public interest they may choose. It is
not for the one party to simply violate such implied undertaking without the
consent of the other party. Moreover, since it is not the Respondent here who
seeks to have the implied undertaking set aside, the confidentiality rules of
the Act place an obligation on the Respondent not to release such
information that no doubt may contain some taxpayer information, without a
court order permitting it to do so as a matter of necessity. While I appreciate
the release of such information may be a convenience to the Appellant, I
frankly fail to see why it would be a necessity, especially having regard to my
comments earlier and the fact that he may and has yet to conduct his own
discovery of the Respondent and so appears to me that such request may be
premature if not redundant. However, he is free to pursue such motion if he so
chooses on proper application to the Court and on notice to the other appellants
who conducted the discovery and to the Respondent.
3.
Delay in Discovery of Appellant
[25]
In light of the above, as I am not in agreement
with the Appellant’s position on any of the other reliefs requested in this
motion, I see no reason to interfere with the Order of Paris J. who extended
the time for discovery of the Appellant until January 22, 2016.
Conclusion
[26]
The Appellant’s motion is dismissed in its
entirety with costs to the Respondent regardless of the result.
Signed at Ottawa, Canada, this 9th day of December
2015.
“F.J. Pizzitelli”
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