Ottawa, Ontario, April 5, 2007
PRESENT: The Honourable Mr. Justice Phelan
BETWEEN:
and
THE MINISTER OF NATIONAL REVENUE
REASONS FOR ORDER AND ORDER
RE: CONFIDENTIALITY
[1] The Applicants appeal Prothonotary Lafrenière’s decision to deny a claim for confidential treatment of (a) the Respondent’s affidavits to date and any future affidavits, (b) any cross-examination on affidavits, (c) further affidavits of the Applicants, (d) any tribunal records, (e) the Applicants’ and the Respondent’s Records, and (f) the respective parties’ Written Representations on Memorandums of Fact and Law.
[2] The Applicants argue that the decision on this matter is vital to the case and that the Learned Prothonatory erred in fact and law.
[3] It was agreed that the legal test on this type of appeal to permit a judge to exercise discretion de novo is that the question raised in the motion is vital to the final issue in the case, or, the order must be clearly wrong in that the prothonotary’s discretion was based on a wrong principle or on a misapprehension of the facts.
Vital to the Final Issue
[4] There is no doubt that the Respondent is intending to disclose a considerable amount of taxpayer information, which it claims is necessary to substantiate its defence and is consistent with the confidentiality regime in the Income Tax Act.
[5] It is difficult to see how the T-1 filings of the individuals are relevant to the issues in this case although it is possible to see the potential relevancy of some of the information contained or lifted from the tax filings. The Respondent has indicated that it does not need the T-1 forms and these could be removed from the public version of the documents on the grounds of relevancy. It would be redundant to require a separate motion to deal with this matter given the Respondent’s position even though this was not strictly a matter on which the Prothonotary ruled.
[6] The parties are cautioned that litigation is not to be a tool to embarrass a party – that may be a consequence but it cannot be a purpose. Future pleadings should be prepared with this caution in mind.
[7] The decision under appeal cannot be considered vital to the final issues in this matter as it does not in any way determine or prejudice the determination of whether the letters of requirement for information (RFIs) are being utilized to advance an investigation of the Appellants (Applicants) where the predominant purpose is not related to the administration and enforcement of the Income Tax Act.
[8] The information disclosed in the pleadings to date is not the same information as that being sought. The failure to obtain a confidentiality order does not adversely affect the Applicants’ ability to succeed on the main matter. Confidentiality orders have repeatedly been found not to be vital to the final issues (Bristol-Myers Squibb Co. v. Apotex Inc., 2002 FCT 278, aff’d 2003 FCA 59).
Incorrect Legal Test
[9] The Applicants contend that the Learned Prothonotary erred because he applied the legal test in R. v. Mentuck, [2001] 3 S.C.R. 442 rather than that contained in Sierra Club of Canada v. Canada (Minister of Finance), [2002] 2 S.C.R. 522.
[10] Reading the decision as a whole, I cannot conclude that the Learned Prothonotary misapplied the law. He was mindful of the test in Sierra when he dealt with the specifics of this case.
[11] Even if the Applicants were correct that the Learned Prothonotary confused the two cases, I would have reached the same conclusion he did. It must be remembered that Sierra was a case of disclosing information covered under contractual relations – not covered under a statute.
[12] The confidential regime under the Income Tax Act gives way when the matter is “any legal proceeding relating to the administration and enforcement of this Act” (s. 242(3)(b)). Justice Sharlow in Harris v. Canada, [2001] 2 C.T.C. 148 (FCA) specifically covered the situation of an improper administration of the Income Tax Act and held the proceeding to be related to the administration and enforcement of the Act. The term “related to” is to be given a broad meaning.
[13] The Applicants’ attack on the RFIs is in part an attack on the proper use of the Income Tax Act and its administration. The Applicants rely, in their motion, on the provisions of the Income Tax Act and not on some free standing right of confidentiality.
[14] The Applicants’ claim for confidentiality is grounded in the Income Tax Act and the exception to the confidentiality provisions applies to this litigation. The Learned Prothonotary did not clearly err in law or principle.
Misapprehension of the Facts
[15] The Applicants challenge the finding that the Applicants “failed to adduce any affidavit evidence in support of their motion”. At best this finding is obiter dicta.
[16] The Applicants relied on the previously filed affidavits although these were not part of their motion record. It is not for the Court to guess which affidavits and what parts are relied upon on a motion. More importantly, the evidence relied upon in this regard seems to consist of allegations that officials have breached their confidentiality obligations in speaking to an author of a book about the Hell’s Angels. The thrust of the Applicants’ concern in regard to disclosure of affidavit evidence cannot be based on a confidentiality that ceases to exist under s. 241(3)(b).
[17] The Applicants did not adduce any compelling evidence in support of its motion. The public exposure of the information in the affidavits does not, however, represent authority to disclose any more than that which is relevant to the legal proceeding.
Conclusion
[18] The Applicants sought an order which covered all future filings, evidence and argument. This is a somewhat open-ended request and is premature in regards to other filings. It is best to deal with claims of confidentiality on a case by case basis bearing in mind, the Income Tax Act exclusion from confidentiality, relevance and other issues pertinent to pleadings.
[19] Since the cost award is a separate decision and does not seem to address the fact that the Court raised the issue of any motions for a confidentiality order, the costs which are payable by the Applicants need not be paid forthwith.
[20] This appeal will be dismissed with costs to be paid at the time of settlement of cost issues.
ORDER
IT IS ORDERED THAT:
1. The appeal is dismissed.
2. The materials currently under seal may be public except for the inclusion of T-1 forms. The Respondent is to file within seven (7) days revised materials making the necessary amendments to reflect the removal of the T-1 filings.
3. The costs are awarded to the Respondent and shall be paid at the time of settlement of cost issues.
FEDERAL COURT
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: T-1188-06
STYLE OF CAUSE: BRIAN AIRTH et al
and
THE MINISTER OF NATIONAL REVENUE
PLACE OF HEARING: Held by videoconference
DATE OF HEARING: March 29, 2007
AND ORDER RE:
APPEARANCES:
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Mr. Martin Peters
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Ms. Donnaree Nygard
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SOLICITORS OF RECORD:
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ARVAY FINLAY Barristers & Solicitors Vancouver, British Columbia
J. MARTIN PETERS Barrister Vancouver, British Columbia
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MR. JOHN H. SIMS, Q.C. Deputy Attorney General of Canada Vancouver, British Columbia |