Citation: 2013 TCC 334
Date: 20131023
Docket: 2013-2108(IT)G
BETWEEN:
JOHN EDWARD KONECNY,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR ORDER
(Edited from the transcript of Reasons for Order delivered orally from the
Bench on September 12, 2013 at Toronto, Ontario)
Campbell J.
[1]
Good afternoon to both of you and
thank you both for coming back. I am going to deliver my oral reasons for your
appeal, sir, which I heard two days ago.
[2]
The reasons that I am
delivering are in respect to the various
motions that were before me, and not the actual appeal.
[3]
The Appellant in this matter filed
a Notice of Appeal pursuant to the Tax Court of Canada Rules (General
Procedure) with this Court on May 1, 2013. The Appellant takes issue with
the assessment of the Minister of National Revenue (the “Minister”) respecting
his 2011 taxation year, whereby he was denied his claim of $2,694 for moving
expenses in computing his income for that year.
[4]
The Appellant is a public school
teacher who teaches in Whitby, Ontario for ten months during the regular school
year and then teaches for one month in Ottawa during the summer recess. At
paragraph 67 of his Notice of Appeal, the Appellant explains the additional
ties that his family has to Ottawa, in addition to the month that he works
there each summer.
[5]
The moving expense claim relates
to his travel for the month he taught in Ottawa in 2011. This pattern of
teaching one month each summer in Ottawa has been ongoing since the 1980s. All
of his prior claims for moving expenses had been allowed until the year 2011.
[6]
Normally, such an issue involving
the amount claimed for moving expenses would proceed under the Tax Court of
Canada Rules (Informal Procedure)(the “Rules”). However, the
Appellant has also introduced a number of Constitutional arguments referencing
various provisions of the Canadian Charter of Rights and Freedoms, Part
1 of the Constitution Act, 1982, (the “Charter”) together with
extensive case law.
[7]
In addition, he has stated his
intention to acquire information through access to information so that he can
prepare questions in respect to the Statistics Canada Social Policy Simulation
Database in order to acquire, for example, comparative statistics of married
couples versus singles who have relocated within Canada. He also would
be requesting information that would allow him to compare his numerous moves
since 1989 in order to establish what comparator group might be advantaged or
disadvantaged in applying the Supreme Court of Canada tests.
[8]
The Appellant, at paragraphs 91
and 92 of the Notice of Appeal, is looking to have the Minister’s assessment,
which denied his claim for moving expenses, vacated, and almost as an
alternative position, although I am not clear on it, suggests that if he is
unsuccessful in having the assessment vacated, he should be compensated for the
alleged negligence of the Canada Revenue Agency (the “CRA”) in allowing former
claims for moving expenses in each of the years 1989 to 2010.
[9]
On August 7, 2013, the Respondent
filed a motion with this Court asking that:
1. those paragraphs contained in the Notice of
Appeal that contain constitutional pleadings be struck as they disclosed no
reasonable grounds for appeal: paragraphs 2(1), 5, 6, 7, 8, 9, 18, 70, 71, 77,
78, 84 and 97;
2. those
paragraphs containing pleadings on consistency of treatment by and conduct of
CRA officials and those paragraphs that request improper relief be struck as
they disclosed no reasonable grounds for appeal: paragraphs 2(3), 5, 6, 8, 12
(subheading only), 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 34, 35, 36, 37,
38, 39, 46, 47, 48, 79, 80, 84 and 92;
3. those
paragraphs that are immaterial to the Notice of Appeal be struck: paragraphs
17, 18, 19, 35, 39, 56, 64, 72, 93 and 98;
4. those
paragraphs containing pleadings of evidence and speculation be struck:
paragraphs 26, 27, 28, 64 and 79;
5. the
Respondent requested time to file and serve a Reply to the Notice of Appeal;
and
6. costs.
[10]
In response to the Respondent's
motion, the Appellant filed an Answer to the Motion to Strike, as well as his
own motion in which he requests an Order for default judgment. He alleges the
Crown has failed to comply with the Rules in not filing a reply within
the appropriate timelines, which the Appellant states is 60 days after the
service of his Notice of Appeal.
[11]
The principal test governing a
motion to strike is well established within the case law. A claim should not be
struck from the pleadings unless it is plain and obvious to the motions Judge
that the claim discloses no reasonable cause of action and would have little
chance of succeeding if permitted to proceed through the various preliminary
steps to a hearing. Only when it passes this plain and obvious test may a Court
invoke the power to strike, as a measure of uncluttering the proceedings, to
use the phrase from the reasons in The Queen v Imperial Tobacco Canada, 2011
SCC 42. This will enable a claim to proceed with litigation efficiency and with
a focus on the true merits of the claim.
[12]
After reviewing all of the
material and case law and hearing more than three hours of submissions from the
parties, I have concluded that it is plain and obvious that the pleadings that
relate to the Constitutional arguments should be struck and that those portions
of the Appellant’s pleadings that either disclose no reasonable grounds for
appeal or are immaterial or improper should also be struck.
[13]
Although the Appellant, in his
submissions, suggested that he was dismayed and devastated by the Respondent’s
submissions respecting the content of his Notice of Appeal, in that his
material was at times unintelligible, vexatious and frivolous, I must agree
with the Respondent’s observations. This is particularly so when viewed against
the backdrop of the core of what this appeal is all about: one taxation year,
an amount in issue which would normally place it within the informal
procedure and the contents of the Notice of Appeal, which illustrate the
Appellant’s knowledge of the applicable legislation, the abundant jurisprudence
and the burden of proof that he must meet in this appeal.
[14]
In addition to the Constitutional
arguments, he is seeking a wide range of information, including statements from
some seventeen Ministers at CRA, who were in that position between 1984 to
2011, to case decisions of certain CRA officials, so that he can make
comparisons to the National Social Policy Database information.
[15]
It is apparent that many of the
Appellant's allegations are irrelevant and that his requests for information
respecting prior taxation years as far as back as the 1980s have incorrectly
diverted the Appellant's attention to areas that will not assist him with the
eventual resolution of the issue of the deductibility of moving expenses in the
year 2011.
[16]
Section 7 of the Charter
states, in part, that everyone has the right to life, liberty and freedom of
the person and the right not to be deprived thereof.
[17]
After reviewing all of the
Appellant's submissions on section 7 contained in his various documents, it is
still not clear to me exactly what his argument is. But essentially, he has
suggested that, due to statements made by CRA officials, the Appellant believes
that a distinction has been made on the basis of his marital status and that he
has therefore received different treatment based on that personal
characteristic. It also appears that he has included his spouse and family in
this argument. If, by that, he means that their section 7 rights have been
infringed, that argument can have no hope of succeeding because the spouse and
other family members have not been assessed; only the Appellant has been
assessed and only his assessment will be before this Court.
[18]
I see no breach of section 7. Justice
Sharlow in the case of Gratl v The Queen, 2012 FCA 88, at
paragraph 8, states that, and I quote:
…
an income tax assessment is a civil matter involving only economic interests. It
does not deprive the assessed person of life, liberty or security of the person
within the meaning of section 7 of the Charter …
[19]
Consequently, any paragraphs in the
Notice of Appeal referencing and relying on a section 7 Charter argument
will be struck, as they have no chance of succeeding.
[20]
The Appellant also raises a
section 6 Charter argument, which has to do with mobility protection and
inter-provincial mobility. If I understand his argument correctly, he has
interpreted certain statements, again from the CRA, as preventing his claim for
moving expenses because his family did not move with him to Ottawa in the
summer of 2011. He has interpreted this as meaning that the CRA has imposed an
unconstitutional economic sanction upon the family members by infringing on
their individual freedom of movement.
[21]
Section 6(2) guarantees that the
Appellant can move and obtain employment in any province if he so wishes. Jurisprudence
makes it clear, however, that this right respecting mobility in no way gives
the Appellant an automatic right to be subsidized for his move from Whitby to Ontario to work for one month. He can obtain a deduction for such moving
expenses only if he meets the requirements set out in section 62 of the Income
Tax Act (the “Act”).
[22]
There is no section 6 Charter
argument to be made in this appeal. His move was made within the Province of Ontario, not between provinces. He has not been prevented from seeking this
employment in another location and, finally, his family members will have no
better right than he does in respect to the protection afforded pursuant to
section 6.
[23]
Again, any paragraphs in the
Notice of Appeal referencing and relying on section 6 of the Charter are
to be struck, as they would have no hope of succeeding.
[24]
The Appellant also invoked a
section 15 Charter argument. This section affords protection to
individuals against discrimination based on race, national or ethnic origin,
colour, religion, sex, age and mental or physical disability. The Appellant has
involved his spouse and children again, in claiming discrimination. It is his
position that the Appellant and the family members have been subjected to
discriminatory impact because of the Appellant’s marital status, resulting from
the process employed by the CRA.
[25]
It would appear that the Appellant
has incorrectly assumed that his deduction for moving expenses was disallowed
because of his spouse’s sex. The Appellant has created, to borrow Respondent Counsel's
term, a “fictional confrontation” between his right to move and his spouse’s
right to stay behind and not move with the Appellant.
[26]
Justice Webb, in the case of Astley
v The Queen, 2012 TCC 155, relied on the Supreme Court decision in Withler
v Canada (Attorney General), 2011 SCC 12, in which that Court summarized
the two-part test established in the jurisprudence for assessing a section 15
argument: (1) does the law create a distinction that is based on an enumerated
or analogous ground; and (2) does the distinction create a disadvantage by
perpetuating prejudice or stereotyping.
[27]
The Appellant’s argument is that
he is discriminated against because he is married and because of his spouse’s
sex. However, there is no such distinction within the provisions of the Act.
The deduction for moving expenses applies equally to every taxpayer, regardless
of whether they are or are not married and regardless of the sex of their
spouse or partner. The jurisprudence has established a list of non-exhaustive
factors to be considered in establishing the validity of a claim for deduction
for moving expenses. This means that the success in claiming this deduction is
dependent upon each taxpayer’s individual factual circumstances. Although this
can lead to different conclusions based on various facts specific to a
taxpayer, I do not believe it can produce the type of discrimination that the
Appellant is suggesting.
[28]
To the extent that one of many
factors that this Court can review in assessing deductibility for moving
expenses is whether the family unit relocated with the Appellant, it remains
just one of the many factual considerations that this Court will review in
determining the validity of that assessment. This cannot perpetuate the type of
discrimination and prejudice that the Appellant alleges. I see no basis for the
Appellant to claim that he can successfully rely on such a Charter
argument, as there is no discrimination based on the distinction he intends to
rely upon.
[29]
Therefore, all paragraphs in the
Notice of Appeal referencing or relying on section 15 shall be struck.
[30]
Although the Respondent devoted
some time to addressing section 24(1), which deals with remedies of breaches of
the Charter and also section 52(1) of the Constitution Act, 1982,
since I have concluded that there are no Charter breaches in this
appeal, I do not intend to address those sections other than to state that the
CRA correspondence of November 6, 2012, used by the Appellant as a basis for
many of his Charter arguments, was, in fact, issued prior to the
assessment.
[31]
It is the validity of the actual
assessment that will be before this Court, and the Appellant will have full
disclosure of the basis of that assessment through the assumptions of fact
which will be contained in the Reply to the Notice of Appeal.
[32]
The Appellant, throughout his
pleadings, refers to the similar forty-odd moves that he made to teach in the
summers between 1989 and 2010, for which he claimed moving expenses and which the
CRA allowed. I believe the Appellant is attempting to argue that the Minister’s
approach to the Appellant’s many moves prior to 2011 is not only an admission
that binds the Minister for subsequent taxation years but also that, in the
alternative, if this Court dismisses the Appellant's appeal for the 2011
taxation year, then this makes all of the prior deductions, allowed in the
previous years, incorrect. By implication, the Appellant is attempting to place
all of these taxation years before this Court.
[33]
There is abundant jurisprudence
that supports the right of the Minister pursuant to the Act to assess
and reassess a taxpayer at any time for any taxation year, independently of
other years, subject, of course, to time limits contained in the Act. In
other words, the Minister is not precluded from taking a different approach in
a subsequent year or years and this Court is not bound by how similar claims in
the Appellant’s prior taxation years were treated by the Minister.
[34]
The Appellant is also attempting
to place the conduct of the Minister and CRA officials, together with the
resulting treatment he alleges he received, as an issue before this Court. It
is well established, however, that such matters as they relate to the process of
establishing the assessment are not within the jurisdiction of this Court.
[35]
For these reasons, I conclude that
those paragraphs referencing the prior taxation years and the treatment and
conduct of CRA officials be struck from the Notice of Appeal.
[36]
Lastly, I will address the
Appellant's motion which he brought in response to the Respondent's motion to
strike. His motion requests default judgment for the Appellant and dismissal of
the Crown's assessment for delay in filing a Reply to the Notice of Appeal.
[37]
The Appellant’s Notice of Appeal
was filed with the Court on May 1, 2013. It was served, according to the
Appellant's motion, on the Crown by mail, via the Minister and Deputy Minister
of the Crown in Ottawa. The Crown was served, according to the Respondent's
submissions, on June 10, 2013.
[38]
Due to the content of the Notice
of Appeal, the Respondent made the decision to bring a motion to strike prior
to filing its Reply. The Appellant was advised of the Respondent's intention to
bring such a motion, according to the Respondent’s submissions. The motion was
filed on August 7, 2013, one month prior to the date set for the hearing of the
motion and well in advance of the required seven days provided for in the Rules.
[39]
This was an advantage to the
Appellant, in that it gave him additional time to prepare for the motion. Contrary
to what the Appellant is alleging, there is no evidence to suggest that the
Respondent procedurally delayed this matter or that he has been prejudiced in
any way. It was reasonable and prudent that the Respondent chose to bring its
motion as a streamlining and cost-effective measure in these circumstances,
rather than file an immediate Reply to the Notice of Appeal.
[40]
The actions taken support that the
Respondent took every effort to address the Appellant's Notice of Appeal in a
timely fashion. Consequently, the Respondent will be granted an extension of
time to file a Reply to the Notice of Appeal.
[41]
In summary:
1. The
Respondent’s motion to strike parts of the Notice of Appeal is allowed and,
specifically, those paragraphs containing Constitutional pleadings, that is,
paragraphs 2(1), 5, 6, 7, 8, 9, 18, 70, 71, 77, 78, 84 and 97 will be struck,
as they disclose no reasonable grounds of appeal.
2. References
to section 6, 7, 15 and 24 of the Canadian Charter of Rights and Freedoms,
Part I of the Constitution Act, 1982, SC 1982 c. 11 (UK), Schedule B, will
be struck, as they have no application to the appeal.
3. Those
paragraphs containing pleadings on consistency of treatment by and conduct of
the CRA and the Minister, that is, paragraphs 2(3), 12 (subheading only), 19,
20, 21, 22, 23, 24, 25, 26, 27, 28, 34, 35, 36, 37, 38, 39, 46, 47, 48, 79, 80
and 92 of the Notice of Appeal will be struck as they disclose no reasonable
grounds for appeal. There is some overlapping of paragraphs in respect to the
reasons for striking. Therefore, in addition to the foregoing paragraphs which
I have just cited, paragraphs 5, 6, 8, 18 and 34 struck in item number 1 of
this summary due to Constitutional references are also struck pursuant to the
within item number 3, as they also contain pleadings on consistency of
treatment and conduct of the CRA and the Minister.
4. Paragraphs
that are immaterial to the pleadings, that is, 17, 18, 19, 35, 39, 56, 64, 72,
93 and 98 will be struck. Paragraphs 18, 19, 35 and 39 are also struck pursuant
to items number 1 and number 3 of the within summary.
5. Paragraphs
containing pleadings of evidence and speculation, that is, 26, 27, 28, 64 and
79 of the Notice of Appeal will be struck. All of these paragraphs are also
struck for the reasons cited either in items number 1, 3 or 4 of the within
summary.
6. The
Respondent is granted an extension of time in which to file and serve a Reply
to the Notice of Appeal. The reply shall be filed and served on or before
October 15, 2013.
7. The
Appellant's motion for default judgment is dismissed.
8. Costs
are awarded to the Respondent in the amount of $1,500, payable on or before
September 30, 2013.
[42]
That concludes the Reasons in the
motions, and Court is recessed until two o’clock. Thank you for coming back in.
Signed
at Ottawa, Canada this 23rd day of October 2013.
“Diane Campbell”
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