Date: 20070216
Docket: T-1166-06
Citation: 2007 FC 183
Vancouver, British Columbia, February 16,
2007
PRESENT: The Honourable Mr. Justice Lemieux
BETWEEN:
MINISTER
OF NATIONAL REVENUE
Applicant
and
ALISTAIR JOHN
CAMPLIN
Respondent
REASONS FOR JUDGMENT AND
JUDGMENT
Introduction
[1] These reasons relate to a contempt
hearing which was held by this court on Monday the 12th of February
2007 pursuant to the show-cause order of Justice Pinard dated January 8, 2007
who directed Alistair John Camplin (the respondent) to appear before a judge of
this Court on February 12, 2007 to hear proof of the following acts,
purportedly committed by him, with which he is charged and be prepared to
present any defence that he may have to the charge that he is guilty of contempt
of having breached the order of Mr. Justice von Finckenstein, dated September
18, 2006.
[2] Justice von Finckenstein’s order
was a Compliance Order issued pursuant to subsection 231.2(1) of the Income
Tax Act (the Compliance Order). It required the respondent to provide the
Minister of National Revenue (the Minister) with certain information and
documents listed therein.
[3] The respondent appeared before me
on February 12, 2007. He is self-represented. The Court explained to him the purpose
of the contempt hearing; the requirement the Minister prove beyond a reasonable
doubt the breach or breaches of the Compliance Order (see Rule 469 of the Federal
Courts Rules, 1998 (the Rules)); the evidence before the Court would be
oral and he had the opportunity to cross-examine witnesses testifying on behalf
of the Minister (Rule 470); that he could not be compelled to testify (Rule
470) and the scope of the penalties which could be issued should contempt be
established, (Rule 472).
The Evidence
[4] I will briefly discuss the
evidence. The respondent elected not to testify but did cross-examine the
Minister’s principal witness Anthony Bockling, a Collections Officer in the
Burnaby-Fraser Tax Services Office of the Canada Revenue Agency (CRA) who had
sworn an affidavit in support of Justice Pinard’s show-cause order. The
Minister’s other witness was Larry Galvin, a process server who identified he
had personally served Mr. Camplin with court documents and, in particular, the
Compliance Order and the show-cause order.
[5] Mr. Bockling’s evidence established the
following facts:
[6] First, Mr. Camplin owes CRA $665,000.00.
[7] On December 12, 2005 he personally
served Mr. Camplin with Exhibit “A-1”, a Request for Information (RFI)
addressed to Alistair Camplin identifying him by his SIN number.
[8] On January 6, 2006, Mr. Camplin
responded to the RFI in his capacity as “the legal representative of the
taxpayer”. He first advised he had no information on bank accounts and safety
deposit boxes “held by me in the capacity as the legal representative of the
taxpayer, for its benefit.” He did advise, however, “while acting in my
capacity as a “natural person” for my own benefit he did have “private information”
regarding bank accounts “that are held by me in my capacity as a natural person
for my own benefit.” He indicated to Mr. Bockling “he would be pleased to
provide all the private details of these accounts on condition that you provide
me with the legislative requirement that obligates me as a natural person to
provide my private information and property that is held for my own benefit, to
you, for the purpose of collecting on the liability of the “tax payer”, or “for
any other reason.” He then listed certain stocks he held in his capacity as
the legal representative of the taxpayer for its benefit.
[9] Throughout his response of January 6,
2006 Mr. Camplin, for each of the several items of information or documents in
the RFI, drew a distinction between himself as a natural person and his acting
as the legal representative of the taxpayer which is himself. In some cases he
says he has no information in one capacity or the other and each time he
identifies he has information as a natural person for his own benefit he
indicated he will be pleased to provide that information on condition CRA
provide him with the legislative requirement that obligates him as a natural
person to provide his private information and properly held for his own benefit
for the purpose of collecting on the tax liability of the taxpayer.
[10] In sum, Mr. Camplin in response to the
RFI was as legal representative of the taxpayer and provided CRA with only one
piece of information which concerned shares held. He later amended his
response on March 6, 2006 to include a 50% interest in premises in Chilliwack which he stated he held
in his capacity as the legal representative of the taxpayer for its benefit and
reiterated that he does not hold any real property as a natural person.
[11] Mr. Bockling testified CRA did not
accept the distinction Mr. Camplin was drawing between himself as legal
representative of the taxpayer and himself as a natural person. CRA was of the
opinion Mr. Camplin was in non-compliance with the RFI and sought a Compliance
Order under subsection 231.2(1) of the Income Tax Act, (the ITA).
[12] The Compliance Order was first issued
by Justice von Finckenstein on August 21, 2006. Mr. Camplin appeared and made
submissions opposing the issuance of the Compliance Order on the basis of the
distinction he drew which has been identified above. He provided Justice von
Finckenstein a draft order which reflected that difference.
[13] Justice von Finckenstein’s Compliance
Order of August 21, 2006 specifically referred to Mr. Camplins’s argument on
the preamble to his order in the following terms:
“And Upon the submission of
the Applicant which can be summarized as follows:
Section
231(1)(a) only applies to a person, to the extent that a person is the legal
representative of the taxpayer.
And
Upon finding no support whatsoever, in the wording of s.231(1)(a) of the ITA
or in any other section of the ITA for that matter for such an
interpretation;
And
Upon noting that the jurisprudence rejects any distinction drawn between an
individual in their capacity as a person and their capacity as taxpayer (see Kennedy
v. CCRA, [2000] O.J. No. 3313).”
[14] Mr. Camplin wrote to Justice von
Finckenstein on September 13, 2006 to draw to his attention a small matter but
essentially to attempt to persuade him to change his Compliance Order to
reflect that it clearly and unambiguously applied to him as a natural person.
He wanted clarification from the Justice in writing within 7 days and if he did
not receive a reply from him by September 25, 2006 he wrote “I will trust that
due to your lack of response it is safe for me to assume that the order you
granted was intended to impose an obligation upon me but only to the extent I
act in the capacity of “legal representative” of the taxpayer, for its benefit,
to provide information and documents that are held by me in that capacity and
therefore will act accordingly.”
[15] Justice von Finckenstein amended his
Compliance Order on September 18, 2006 to reflect the fact that Mr. Camplin had
appeared before him on August 21, 2006. He made no other changes and did not
respond to Mr. Camplin.
[16] Mr. Camplin wrote again on October 10,
2006 to the Justice. He reiterated his need for clarification.
[17] Justice von Finckenstein responded by
direction dated October 19, 2006 stating “the amended September 18, 2006 order
speaks for itself. Any concerns the respondent may have should be addressed by
means of an appeal to the Federal Court of Appeal.”
[18] On October 26, 2006 Mr. Camplin wrote
to Mr. Bockling in purported compliance with the above referenced amended
Compliance Order.
[19] Mr. Camplin did not appeal Justice von
Finckenstein’s amended Compliance Order to the Federal Court of Appeal.
[20] In his October 26, 2006 response to the
Compliance Order, Mr. Camplin continued to interpret it as not applying to him
as a natural person and was not intended to “compel me to provide my private
information and /or documents held by me in my private capacity as a “natural
person” for my own benefit.” He therefore only provided information while
acting in his capacity of “legal representative” of the taxpayer for its
benefit. In this capacity, he provided Mr. Bockling with bank accounts,
amounts of deposit and account holders. He also provided mortgage information
and rental income from the property in Chilliwack. He repeated the information on shares held
and the property in Chilliwack.
[21] Mr. Bockling testified CRA remained
unsatisfied Mr. Camplin had fully complied with the Compliance Order because he
continued to shield information and documents concerning his assets as a
natural person, in particular, his vehicles, his personal property, all his
bank accounts and his employment income.
[22] He identified two classes of assets
which CRA, through inquiry, discovered belonged to Alistair Camplin: (1).
Several motor vehicles and motorbikes (Exhibit “A-5”), (2). Information from
the Royal Bank about several bank accounts he held jointly with his wife.
(Exhibit “A-6”).
Analysis
[23] Two questions arise for determination:
First, has the Minister, through the evidence, established beyond a reasonable
doubt Mr. Camplin is guilty of contempt of Court by breaching the amended
Compliance Order issued by Justice von Finckenstein on September 18, 2006?
Second, if so, what is the appropriate penalty?
[24] On the first issue, section 466(b) of
the Rules provides a person is guilty of contempt of Court who disobeys
a process or order of the Court.
[25] Section 231.2(1) of the ITA
authorizes the Minister, for the purpose of collecting an outstanding tax debt
by any person, to issue an RFI requiring “any person provide, within such
reasonable time, as stipulated in the notice” information or documents.
[26] Furthermore, section 231.7(1) of the ITA
authorizes a judge of this Court “to order a person” to provide the information
and documents contained in an RFI with section 231.7(4) stipulating that “if a
person fails to comply with such order a judge may find the person in
contempt.”
[27] “Person” is defined in the Interpretation
Act of Canada as a physical or legal person.
[28] I agree entirely with Justice von
Finckenstein the ITA does not carve out a distinction, for the purposes
of an RFI or a Compliance Order, between a natural person and the legal
representative of the taxpayer. It is a distinction which is meaningless and
without a difference. Justice Von Finckenstein said so to Mr. Camplin, who
despite clear words in the Compliance Order, knowingly and deliberately failed
to comply with its clear and unambiguous terms that as a human being Mr.
Camplin was required to provide information and documents on all of his assets
specified in the RFI.
[29] The proof is uncontroverted and beyond
any reasonable doubt Alistair John Camplin breached the Compliance Order by not
complying with its terms. The further investigation of CRA mentioned in paragraph
22 of these reasons is conclusive.
[30] I find Alistair John Camplin is guilty
of contempt of Court by failing to provide CRA with all of the information
required by the Compliance Order namely information and documents on all of his
personal assets.
Penalty
[31] In Lyons Partnership, L.P. v. MacGregor
(1999), 5 C.P.R.(4th) 158 this Court had an opportunity to consider
some first principles relating to the appropriate penalty for contempt of court
by breach of a court order. Those principles are:
[21] In Cutter (Canada) Ltd., supra, Urie J.A.
said in assessing the amount of the fine what was relevant was "the
gravity of the contempt in the context of the particular circumstances of the
case as they pertain to the administration of justice" (page 562). The
Federal Court of Appeal endorsed the reasons of the trial judge that the amount
of the fine should reflect "the severity of the law and yet sufficiently
moderate to show the temperance of justice" (p. 563). The level
of the fine, Urie J.A. indicated, could not be a token fine because this would
"be inconsistent with the gravity of the contraventions and might serve to
encourage others to flout the law if it is to their financial advantage to do
so" (pp. 567-68).
[22] This last statement by Urie J.A. echoes the
words of Justice Rouleau of this Court in Montres Rolex S.A. v. Herson (1987), 15 C.P.R. (3d)
368 (F.C.T.D.), "that the primary purpose of imposing sanctions is to
ensure compliance with orders of the court" (p. 371). Pinard J. of this
Court in Louis Vuitton S.A. v. Tokyo-Do Enterprises Inc. (1991), 37 C.P.R. (3d) 8
(F.C.T.D.), also stressed the importance of deterrence as the principal factor
in ensuring that those orders will not be breached again because "if those
who get caught were to get away unscathed that would encourage such activities
and consequently destroy the intended effect of the laws that have been
passed" (page 13, line b). Pinard J., in assessing a fine, took into
account the value of the counterfeit goods sold. He also ordered
solicitor-client costs capped to a maximum.
[23] To close off on the issue of first
principles, other relevant factors to be taken into account are whether the
contempt offence is a first offence (R. v. de L'Isle (1994), 56 C.P.R. (3d)
371 (F.C.A.)), and the presence of any mitigating factors such as good
faith or apology (Baxter Travenol Laboratories, supra).
[32] These principles were neatly summarized
by Justice Kelen in Canada (Minister of National
Revenue)
v. Marshall 2006 FC 788 at
paragraph 16.
“To
summarize, the factors relevant to determining a sentence in contempt
proceedings are:
i.
The primary purpose of imposing sanctions is to ensure compliance with orders
of the court. Specific and general deterrence are important to ensure continued
public confidence in the administration of justice;
ii.
Proportionality of sentencing requires striking a balance between enforcing the
law and what the Court has called "temperance of justice";
iii.
Aggravating factors include the objective gravity of the contemptuous conduct,
the subjective gravity of the conduct (i.e. whether the conduct was a technical
breach or a flagrant act with full knowledge of its unlawfulness), and whether
the offender has repeatedly breached orders of the Court; and
iv.
Mitigating factors might include good faith attempts to comply (even after the
breach), apologize or accept responsibility, or whether the breach is a first
offence.”
[33] Moreover, I have also considered recent
penalty assessments made by colleagues in the context of breaches of Compliance
Orders under the ITA including: Justice Noël in Crischuck (2004
05 13, docket T-1424-03); Justice Pinard in Robertson (2005 FC 242);
Justice Snider in Dwyer (docket T-1479-02, 2003 09 30) and most recent
Justice Kelen in Marshall (2006 FC 788).
JUDGMENT
As a result, THIS COURT ADJUDGES AND ORDERS
THAT:
- The respondent, Alistair John Camplin, is
found to be in contempt of the amended Compliance Order of Mr. Justice von
Finckenstein dated September 18, 2006.
- The respondent, Alistair John Camplin,
shall pay a fine of $3,000.00 within 30 days from the date of the service
of this judgment.
- The respondent, Alistair John Camplin,
shall pay costs of this motion to the CRA fixed in the amount of $2,000.00
payable within 30 days from the date of this judgment.
- If the Minister informs the Court by
affidavit Alistair John Camplin has not paid either the amount of the fine
or the amount of the costs stipulated in this judgment then the Court
imposes against Alistair John Camplin a sentence of 15 days imprisonment
for default of the payment of the fine with an additional 15 days of
imprisonment if the costs are not paid. Such sentence to run
consecutively.
- Alistair John Camplin shall, without
distinction being drawn by him being a natural person or a legal
representative of the taxpayer Alistair John Camplin, fully comply with
Justice von Finckenstein’s amended September 18, 2006 Compliance Order by
providing the Minister with all of the information and documents specified
therein and this within 30 days from the date of the service of this
judgment.
- If the Minister informs the Court by
affidavit Alistair John Camplin has breached paragraph 5 of this judgment
and he has not satisfactorily explained to the Court his failure to comply
in an affidavit sworn by Alistair John Camplin which shall be served upon
the Minister and filed within 30 days from the service of the Minister’s
affidavit informing of the breach (both affidavits which may be
cross-examined upon), the Court imposes a further sentence of 60 days
imprisonment.
“Francois
Lemieux”
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