BETWEEN:
ESTATE OF THE LATE DAVID LOUIS NADLER
and
and
CANADA-ISRAEL SECURITIES LTD.
Heard at Ottawa, Ontario, on November 15, 2005.
Judgment delivered from the Bench at Ottawa, Ontario, on November 15, 2005.
REASONS FOR JUDGMENT OF THE COURT BY: NOËL J.A.
Docket: A-324-05
Citation: 2005 FCA 385
CORAM: DÉCARY J.A.
NOËL J.A.
PELLETIER J.A.
BETWEEN:
ESTATE OF THE LATE DAVID LOUIS NADLER
Appellant
and
ATTORNEY GENERAL OF CANADA
and
CANADA-ISRAEL SECURITIES LTD.
Respondents
REASONS FOR JUDGMENT OF THE COURT
(Delivered from the Bench at Ottawa, Ontario, on November 15, 2005)
[1] This is an appeal from the judgment of Gauthier J. dated July 4, 2005, dismissing the appellant's motion for a stay of the execution of a requirement for the production of information and documents set out in a letter dated May 12, 2005, issued by the Canada Revenue Agency and addressed to Canada-Israel Securities Ltd. (the "addressee").
[2] With respect to the first requirement set out in this letter - seeking a copy of all correspondence between the addressee and the late David Nadler (the "tax debtor") - Gauthier J. came to the correct conclusion when she held that no serious issue had been established pursuant to the tripartite test set out in RJR - Macdonald Inc. v. Canada, [1994] 1 SCR 311.
[3] In particular, it cannot be seriously argued that the requirement was not issued for the purpose of collecting David Nadler's outstanding tax debt. Nor can it be seriously argued that information cannot be obtained with respect to a tax debtor pursuant to section 231.2 of the Income Tax Act, merely because that person has left the country and ceased to reside in Canada.
[4] With respect to the second requirement set out in the letter - seeking copy of all correspondence between the addressee and an identified Bahamian corporation - we reiterate that information may be sought with respect to a non-resident person.
[5] As to whether the evidence establishes that the request was issued for an authorized purpose, we respectfully disagree with Gauthier J.'s conclusion that the record was insufficient to establish such a purpose and that accordingly a serious issue arose as to the validity of the requirement. In particular, we note the assignment by the tax debtor of a debt in the amount of $900,000 to the Bahamian corporation for a substantially lower amount some thirty days after filing the tax return which revealed the tax debt, but omitted payment (Appeal Book, pages 44 to 51 and 113 to 129).
[6] In our view, it cannot be seriously argued, when regard is had to this evidence, that this requirement did not have as its purpose the collection of David Nadler's outstanding tax debt.
[7] In the absence of a serious issue, it is not necessary to consider the other aspects of the tripartite test, namely irreparable harm and the balance of inconvenience.
[8] The appeal will be dismissed with costs and the interim stay granted by this Court on September 14, 2005, will cease to have effect in accordance with its own terms.
FEDERAL COURT OF APPEAL
NAMES OF COUNSEL AND SOLICITORS OF RECORD
APPEAL FROM THE ORDER OF THE FEDERAL COURT DATED JULY 4, 2005 (DOCKET NO. T-959-05)
STYLE OF CAUSE: Estate of the late David Louis Nadler v. Attorney General of Canada et al.
PLACE OF HEARING: Ottawa, Ontario
DATE OF HEARING: November 15, 2005
REASONS FOR JUDGMENT OF THE COURT: Décary, Noël, Pelletier, JJA.
DELIVERED FROM THE BENCH BY: Noël, J.A.
APPEARANCES:
Mr. Konstantinos Voggas FOR THE APPELLANT
Mr. Louis Sébastien FOR THE RESPONDENT
(AGC)
No one appearing FOR THE RESPONDENT
(Canada-Israel Securities Ltd.)
SOLICITORS OF RECORD:
Sweibel Novek LLP
Montreal, Quebec FOR THE APPELLANT
Mr. John H. Sim, Q.C. FOR THE RESPONDENT
Deputy Attorney General of Canada (AGC)
Ottawa, Ontario
No one appearing FOR THE RESPONDENT
(Canada-Israel Securities Ltd.)