Date: 20060602
Docket: T-2015-05
Citation: 2006 FC 683
Ottawa, Ontario, June 2, 2006
Present: Mr. Justice Blais
BETWEEN:
THE MINISTER OF NATIONAL REVENUE
Applicant
and
9093-4134 QUÉBEC INC./OP.
CONSTRUCTION SPARCO
ATT.: MR. JOHN VATHIS
ADMINISTRATOR
HAVING A PLACE OF BUSINESS AT
324 LORRAINE STREET
ROSEMÈRE, QUEBEC J7A 4K1
Respondent
REASONS FOR ORDER AND ORDER
[1] This is a motion for contempt of court in view of the failure of Mr. John Vathis to turn over some documents to the Department of National Revenue, as he had been ordered to do by Mr. Justice Yvon Pinard by his order dated December 5, 2005.
RELEVANT FACTS
[2] Mr. John Vathis, the respondent’s administrator, was served with the following order of Pinard J., dated December 5, 2005:
THIS COURT ORDERS to the Administrator of the Respondent, Mr. John Vathis, to answer to the request for information and documents dated September 26th, 2005, issued under paragraph 231.2(2) of the ITA, in providing all the requested documents and information:
[translation]
· The record of wages, from January 2002 to December 2002;
· The record of wages, from January 2003 to December 2003;
· The record of wages, from January 2004 to December 2004;
· The record of wages, from January 2005 to the date of receipt of the letter of requirement;
· The names, social insurance numbers, addresses and telephone numbers of all the subcontractors who worked for your company during the years 2002 to 2005;
· The bank statements and cancelled cheques covering the years 2002, 2003, 2004 and 2005 (for the same periods cited in paragraphs (1) to (4) above);
· The minutes book of the corporation; and
· The most recent financial statements as of the end of the company’s fiscal year;
AND, if the Respondent is not able to provide some of the requested documents and information, the Administrator of the Respondent, Mr. Vathis, must provide a sworn affidavit stating the reasons why the Respondent is not in possession of the said documents and information;
These documents and information as well as the sworn affidavit should be sent to Ms. Mirlène Videau, Collection Section, Canada Customs and Revenue Agency, 305 René-Lévesque West, 1st Floor, Montréal, no later than Monday, December 12th, 2005.
[3] On February 6, 2006, Mr. Richard Morneau, a prothonotary, found that Mr. John Vathis, the respondent’s administrator, had not complied with the order issued by Pinard J. and that the documents had not been turned over, as ordered by Pinard J.
[4] Prothonotary Morneau issued an order dated February 6, 2006, whereby Mr. John Vathis was to appear in Court on February 27, 2006 to hear proof of his alleged failure to comply with the order of Pinard J. dated December 5, 2005.
[5] The order also stipulated that Mr. John Vathis, the respondent’s administrator, had to be prepared at that date to present any defence he might have to the omission with which he was charged, namely, of having failed to comply with the order of December 5, 2005.
[6] On February 27, 2006, Mr. John Vathis appeared before me and the Court began to hear the evidence in relation to this matter.
[7] The hearing of the motion also continued on May 2, 2006, in Montréal, to hear new witnesses in regard to this matter.
EVIDENCE
[8] The Court heard three witnesses on behalf of the Department of National Revenue in support of the motion for contempt of court and heard one person, that is, the accused Mr. Vathis, as a witness in answer to the contempt charges.
[9] The first witness heard in February 2006, was Ms. Mirlène Videau. She recently became responsible for the file and she simply testified that Mr. Vathis had refused to comply with the order to provide the documents demanded, claiming he had already given them to the Department, namely, to Ms. Normandin, at a previous date.
[10] The Court heard Ms. Caroline Normandin, who had been ordered to conduct an audit in Mr. Vathis’s file. She said she had met with him only once, she filed the content of her agenda and some notes that appear in the file and she confirmed that she had met him only on July 17, 2003 and since Mr. Vathis had appeared without the documents she had simply closed her file being more or less convinced that he would not supply the documents mentioned although he had vaguely said that he might find them after some searching. She had noted in her file that Mr. Vathis was delinquent vis-à-vis the Department of Revenue and that he had a considerable debt, which increased the likelihood, she thought, that nothing would be received from Mr. Vathis. She also said she had gone to Mr. Vathis’s company on July 3, 2003.
[11] The third witness was Mr. Richard Beli-Binda. He testified that Mr. Vathis had appeared at the office to reclaim some documents he had supposedly filed with Ms. Normandin. He replied to Mr. Vathis that he would contact Ms. Normandin to check. He checked in the file and found that there was nothing there attesting that any documents had been filed by Mr. Vathis. He then stated that his review of the register showed that no other documents had been filed.
[12] Ms. Normandin returned to testify pursuant to the filing of two documents by the Department of National Revenue in relation to the transactions in Mr. Vathis’s file and she repeated that, contrary to Mr. Vathis’s statements, she had never received any documents, including on September 11, 2003, since her agenda, a copy of which was filed, attests that she was reviewing a file in Longueuil and did not report to the office on September 11, 2003, the date when Mr. Vathis claims he gave her the documents.
[13] In his defence, Mr. Vathis testified by filing a copy of a page from his agenda, to the effect that on September 11, 2003, he had gone to the Department of National Revenue and that he had a reference in his agenda that he had filed the documents.
[14] It should be noted as well that, on the same date, the same day, in his agenda, there was a meeting with an employee of the Ministère du Revenu of Quebec, the offices of which are in the same building.
[15] It is obvious, from the evidence that was heard and from the review of the written evidence submitted, which comprised various documents, that there appears to be some confusion concerning the filing of documents by Mr. Vathis.
[16] I have no reason to doubt the sincerity of the three employees of the Department of National Revenue who testified to show that Mr. Vathis had not in the past complied with the requirements of the law and that, notwithstanding repeated requests for documents, he had not filed anything other than a printed bank statement listing the transactions made without ever filing the famous cheques that had been demanded from him for inspection purposes.
[17] During the hearing I voiced my concerns about the fact that it was curious that Mr. Vathis had gone to the office of the Department of Revenue to demand the return of documents, given the testimony of the Department’s representatives that he had not filed anything at all. Although troubling, this fact does not, however, lead me to conclude that Mr. Vathis’s allegations are true.
[18] Mr. Vathis also told the Court in the course of his testimony that he was asked for $42 for each of the photocopies of cheques at the bank and that he did not have the resources to provide these photocopies of several hundred cheques, which would amount to several thousands if not tens of thousands of dollars.
[19] I must say that Mr. Vathis did not offer any evidence that these sums had been demanded of him and I told both parties that it no doubt would have been easy to summons a representative of the bank to appear before the Court with the said photocopies, which would have put an end to the dispute at least in respect to the production of the documents demanded.
[20] However, faced with those conflicting testimonies, I was bound to make findings about the credibility of the witnesses.
[21] I have no hesitation in finding that the witnesses representing the Department of National Revenue spoke freely, without constraint, with great sincerity, and that they have convinced the Court that, if the documents had been filed by Mr. Vathis, even if there were the remotest possibility that the documents might have gone astray, these documents would nevertheless have been mentioned in one or another of the registers that exist and that are filled out by the employees of the Department whenever documents are filed. Not only did Ms. Normandin state under oath that she had never received Mr. Vathis’s cheques, but the registers and the written notes she produced in support of her testimony confirm her testimony unequivocally.
[22] As to Mr. Vathis, the only support I have for his testimony that he filed these documents is a written notation on one page of his agenda, which, to say the least, is vague and which is contradicted by the testimony of Ms. Normandin who was not present in her office at that date, as her own agenda shows.
[23] Moreover, I have serious doubts about the credibility of Mr. Vathis who, it cannot be denied, has an obvious interest in not cooperating with the authorities of the Department of National Revenue, as attested to by the notations that appear in his file, which were produced by memoranda from employees of the Department.
CONCLUSION
[24] I have no choice but to conclude that the Department of National Revenue has clearly demonstrated that Mr. John Vathis did not take the necessary steps to comply with the order of Pinard J. dated December 5, 2005, and that there is contempt of court, and I so hold.
ORDER
WHEREAS the record discloses beyond a reasonable doubt that Mr. John Vathis, the administrator of the respondent, has disobeyed the order of Mr. Justice Pinard dated December 5, 2005, by refusing to respond and to provide all of the information requested in the applicant’s letter of requirement dated September 26, 2005;
CONSIDERING the penalties provided in rule 472 of the Federal Courts Rules;
AND WHEREAS this is a first offence for contempt of court in this case and that a fine would be appropriate and reasonable in the circumstances;
THE COURT ORDERS THAT:
1. Mr. John Vathis, the administrator of the respondent, be found in contempt of the order of Mr. Justice Pinard, dated December 5, 2005;
2. Mr. John Vathis, the administrator of the respondent, be fined $1,000, payable within ten days following the service of this order, said payment to be made to the order of the Receiver General of Canada;
3. Mr. John Vathis, the administrator of the respondent, send the documents and information requested in the Minister’s letter of requirement and which are still missing, namely: the bank statements and cancelled cheques for the periods from January to December 2002, from January to December 2003, from January to August 2004 and from July to December 2005, by registered mail, to the attention of Ms. Mirlène Videau, Trust Account Examiner, Collections Division, Canada Revenue Agency, 305 René-Lévesque Boulevard West, Montréal, Quebec;
4. Mr. John Vathis, the administrator of the respondent, pay the applicant costs in the amount of $500, payable within ten days following the service of this order, which payment shall be made to the order of the Receiver General of Canada.
Certified true translation
François Brunet, LLB, BCL
FEDERAL COURT
SOLICITORS OF RECORD
DOCKET: T-2015-05
STYLE OF CAUSE: MINISTER OF NATIONAL REVENUE
v.
9093-4134 QUÉBEC INC./OP. CONSTRUCTION SPARCO, ATT.: MR. JOHN VATHIS,
ADMINISTRATOR,
324 LORRAINE STREET
ROSEMÈRE, QUEBEC
J7A 4K1
PLACE OF HEARING: Montréal, Quebec
DATE OF HEARING: May 2, 2006
REASONS FOR JUDGMENT
AND JUDGMENT: The Honourable Mr. Justice Blais
DATE OF REASONS: June 2, 2006
APPEARANCES:
|
Marie-Claude Landry
|
FOR THE APPLICANT |
|
John Vathis, on his own behalf
|
FOR THE RESPONDENT |
SOLICITORS OF RECORD:
|
John H. Sims, Q.C. Deputy Attorney General of Canada
|
FOR THE APPLICANT |
|
John Vathis 950 Ogilvy Montréal, Quebec H2Z 1X4
|
FOR THE RESPONDENT |