Date: 20010531
Docket: 2001-893-IT-G
BETWEEN:
WILLIAM SHAWN DAVITT,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Reasons for Order
Bowman, A.C.J.
[1] The respondent seeks an order striking the notice of appeal or alternatively striking paragraphs 1 to 249 of the notice of appeal or any combination thereof. The grounds upon which the motion is brought are the following.
1. The Notice of Appeal or parts of the Notice of Appeal are scandalous, frivolous or vexatious or an abuse of the process of the Court, as set out in Rule 53(b) and (c) of the General Procedure Rules;
2. the Notice of Appeal discloses no reasonable cause of action, as set out in Rule 58(1)(b) of the General Procedure Rules;
3. the Tax Court of Canada does not have the jurisdiction to grant the relief sought by the Appellant;
4. Rule 12 of the General Procedure Rules;
5. section 12 of the Tax Court of Canada Act, R.S.C. 1985, c.T-2, as amended and s. 171(1) of the Income Tax Act, R.S.C. 1985, c.1 (5th Supp.); and
6. such further and other grounds as counsel may advise and this Honourable Court may permit.
[2] Section 53 of the Tax Court of Canada Rules (General Procedure) reads
The Court may strike out or expunge all of part of a pleading or other document, with or without leave to amend, on the ground that the pleading or other document,
(a) may prejudice or delay the fair hearing of the action,
(b) is scandalous, frivolous or vexatious, or
(c) is an abuse of the process of the Court.
[3] Section 58 of the Rules reads
(1) A party may apply to the Court,
(a) for the determination, before hearing, of a question of law raised by a pleading in a proceeding where the determination of the question may dispose of all or part of the proceeding, substantially shorten the hearing or result in a substantial saving of costs, or
(b) to strike out a pleading because it discloses no reasonable grounds for appeal or for opposing the appeal,
and the Court may grant judgment accordingly.
(2) No evidence is admissible on an application,
(a) under paragraph (1)(a), except with leave of the Court or on consent of the parties, or
(b) under paragraph (1)(b).
(3) The respondent may apply to the Court to have an appeal dismissed on the ground that,
(a) the Court has no jurisdiction over the subject matter of an appeal,
(b) a condition precedent to instituting a valid appeal has not been met, or
(c) the appellant is without legal capacity to commence or continue the proceeding,
and the Court may grant judgment accordingly.
[4] The principles upon which a court may strike out a pleading are well settled and have been discussed at length in Hunt v. Carey Canada Inc., [1990] 2 S.C.R. 959, by Wilson J. at page 980 where she said, after reference to numerous authorities, English and Canadian:
Thus, the test in Canada governing the application of provisions like Rule 19(24)(a) of the British Columbia Rules of Court is the same as the one that governs an application under R.S.C. O. 18, r. 19: assuming that the facts as stated in the statement of claim can be proved, is it "plain and obvious" that the plaintiff's statement of claim discloses no reasonable cause of action? As in England, if there is a chance that the plaintiff might succeed, then the plaintiff should not be "driven from the judgment seat". Neither the length and complexity of the issues, the novelty of the cause of action, nor the potential for the defendant to present a strong defence should prevent the plaintiff from proceeding with his or her case. Only if the action is certain to fail because it contains a radical defect ranking with the others listed in Rule 19(24) of the British Columbia Rules of Court should the relevant portions of a plaintiff's statement of claim be struck out under Rule 19(24)(a).
[5] It is the "plain and obvious" rule that I propose to apply in this matter. Moreover, the material facts alleged in the notice of appeal must be taken as true, subject to the limitation stated in Operation Dismantle v. The Queen, [1985] 1 S.C.R. 441 at page 455:
(c) The Rule that Facts in a Statement of Claim Must be Taken as Proven
We are not, in my opinion, required by the principle enunciated in Inuit Tapirisat, supra, to take as true the appellants' allegations concerning the possible consequences of the testing of the cruise missile. The rule that the material facts in a statement of claim must be taken as true for the purpose of determining whether it discloses a reasonable cause of action does not require that allegations based on assumptions and speculations be taken as true. The very nature of such an allegation is that it cannot be proven to be true by the adduction of evidence. It would, therefore, be improper to accept that such an allegation is true. No violence is done to the rule where allegations, incapable of proof, are not taken as proven.
[6] Mr. Davitt is a student-at-law and he appeared on his own behalf. The notice of appeal consists of 41 unnumbered pages and 249 paragraphs.
[7] The first issue has to do with $1.00 interest income in respect of which the appellant claims a $1.00 deduction.
[8] The grounds for the opposition to the inclusion of this amount are that the Income Tax Act discriminates between residents and non-residents. The latter are taxed differently from residents in that withholding tax is imposed under paragraph 212(1)(b) subject to a large number of exemptions. This, contends Mr. Davitt, is discrimination on the basis of national origin. The same exemptions are not necessarily available to residents.
[9] He wants the court pursuant to subsection 24(1) of the Charter to delete the $1.00 interest from his income, declare paragraph 212(1)(b) contrary to section 15 of the Charter and award punitive damages.
[10] I observe that he is not taxed on the $1.00 under paragraph 212(1)(b). The court therefore would have no basis for declaring paragraph 212(1)(b) to be of no force and effect even if it were inclined or empowered to do so. Even if it did it would still leave the assessment of tax on the $1.00 interest income untouched.
[11] He has not given notice of a constitutional question to the attorneys-general under section 58 of the Federal Court Act. This is of course irrelevant on a preliminary motion to strike. One hardly need wait for notice to be given to the attorneys-general to recognize a wholly unmeritorious and frivolous argument that has no possible chance of success. The fact that non-residents are not taxed on certain interest income whereas residents are is not discrimination on the basis of national origin.
[12] Paragraphs 5 to 22 are struck out.
[13] Paragraphs 23 to 72 are put forward in support of the proposition that government debt contracts associated with debts of the Government of Canada and Nova Scotia incurred or related to the period before the appellant reached the age of majority are void against the appellant. The grounds are that section 117 of the Income Tax Act discriminates on him on the basis of age. He asks for a declaration that individuals under the age of 18 are exempt from paying tax on Government of Canada and Nova Scotia liabilities that accrued prior to and during 1998. There are other arguments that the long-term debt financing is a breach of fiduciary duties to young Canadians, are a form of child exploitation contrary to Canada's international obligations under the United Nations Declaration of the Rights of the Child, and that the debts are "odious" in accordance with some Doctrine of Odious debts.
[14] He wants his taxes adjusted accordingly and punitive damages.
[15] Although he asks for punitive damages in several parts of the notice of appeal, I will say it only once in these reasons: this court cannot award punitive damages.
[16] Whether or not the relief sought is beyond the jurisdiction of the court it is certainly not relief that there is any remote chance of this or any other court awarding. This court is not a forum for the propagation of political, social and economic theories.
[17] Paragraphs 23 to 72 are struck.
[18] Paragraphs 73 to 113 speak of "unreported liabilities" of the Government of Canada and the alleged deficiencies in the accounting policies and financial disclosure of the Governments of Canada and Nova Scotia. Specifically reference is made to unreported liabilities associated with the Old Age Security Plan, Spousal Allowance and the Guaranteed Income Supplement and the Canada Pension Plan.
[19] The position of the appellant is crystallized in four paragraphs in the notice of appeal.
91. The taxpayer submits that the financial statements published by the Government of Canada and the Province of Nova Scotia, also known as the Public Accounts, for the years ending March 31, 1998 and 1999 are a biased, incomplete, misleading, fraudulent, incomprehensible and untrue representation of the financial position of these governments.
92. The taxpayer further submits the Government of Canada and the Province of Nova Scotia have significant unreported liabilities related to, among other things, government pensions (such as the Canada Pension Plan, Old Age Security Plan and Guaranteed Income Supplement), government health insurance and environmental clean-up costs.
93. The taxpayer submits that as a young Canadian, he is only responsible to pay taxes related to the cost of the package of government benefits received by his age group over their lifetimes.
94. The taxpayer submits that he is exempt from paying taxes associated with the unreported liabilities of the Government of Canada and the Province of Nova Scotia that were accrued during and prior to 1998, except for those liabilities which can be matched with benefits already received or which will be received by the taxpayer's age group over their lifetimes.
[20] Paragraphs 97, 98, 99 and 100 read
97. Canada and Nova Scotia are democracies. Section 3 of the Charter states that every citizen of Canada has the right to vote in an election of members of the House of Commons or of a legislative assembly.
98. The taxpayer submits that the democratic rights of citizens can only be meaningful if the citizens of Canada and Nova Scotia are provided financial statements that present fairly, in all material respects, the financial position, results of operation and cash flows and fairly represent the financial position of the Government of Canada and the Province of Nova Scotia.
99. The taxpayer further submits that the current provisions of Auditor General's Act (Canada) and the Auditor General Act (Nova Scotia) are inconsistent and contrary to s. 3 of the Charter as they do not require the financial statements of the Government of Canada and Province of Nova Scotia to present fairly the financial position of these governments.
100. The taxpayer hereby requests the Court to restore democracy in Canada and Nova Scotia by requiring these governments to create and publish financial statements with[1] fairly present the financial position of the Government of Canada and the Province of Nova Scotia.
[21] I have quoted these paragraphs simply to illustrate the sort of political statements contained in the notice of appeal.
[22] Paragraphs 101 to 113 ask that the court order amendments to the Auditor General Act of Canada and the Auditor General Act of Nova Scotia essentially to ensure the standard of financial reporting that the appellant says is not currently achieved. He also wants a declaration that individuals under the age of 18 on December 31, 1998 be exempted from paying taxes associated with unreported liabilities of Canada and Nova Scotia that accrued prior to and during 1998 except those that can be matched to benefits that will be received by the appellant's age group during their lifetimes.
[23] He also wants this court to order a reference to determine how this matching can be achieved. He also wants the court to amend section 117 and other sections of the Income Tax Act to achieve the foregoing. Again he asks for punitive damages.
[24] This court is not empowered to do any of the things asked for. Our function is to hear appeals from assessments made under certain federal statutes. Generally, we can allow or dismiss appeals, and vacate or vary assessments or refer the matter back to the Minister of National Revenue for reconsideration and reassessment. Like all courts this court has certain powers under the Canadian Charter of Rights and Freedoms where a person's rights and freedoms under the Charter have been infringed but those powers must be exercised within the jurisdiction that Parliament has conferred on the court, as for example in O'Neill Motors Limited v. The Queen, 96 DTC 1486 aff'd 98 DTC 6424 (F.C.A.).
[25] What the appellant seeks here is not within those powers or that jurisdiction. The amendment of an act of Parliament is within the competence of the legislative, not the judicial, branch of government.
[26] Paragraphs 73 to 113 are struck.
[27] Paragraphs 114 to 134 deal with the Canada Pension Plan ("CPP"). The argument is that the CPP discriminates on the basis of age, sex and marital status contrary to subsection 15(1) of the Charter. The basis of this contention is set out in paragraphs 124, 127 and 129, which read:
124. Subsections 11.1(1) of the CPP Act operate to discriminate against younger Canadians by requiring younger Canadians to make contributions to the CPP at substantial higher rates than older Canadians even though younger Canadians are not entitled to receive higher CPP benefits.
127. The taxpayer submits that section 11.1 of CPP Act discriminates on the basis of sex contrary to subsection 15(1) of the Charter as the CPP Act requires Canadian men to contribute to the CPP at the same rates as Canadian women even though Canadian men, because of a shorter life expectancy, will receive benefits for a period that is substantially shorter than that for Canadian women.
129. Canadians who are single are required to contribute to the CPP at the same rates as married Canadians even though Canadians who are married receive more CPP benefits; spouses of deceased CPP contributors they are entitled to survivor's benefits.
[28] He asks for the following relief.
133. - the court declare that sections 11.1 of the Canada Pension Plan Act are contrary to section 15 of the Charter insofar as they require young, single men to make CPP contributions that are not proportional to the CPP benefits this group can expect to receive during their lifetimes.
134. - the court amend section 11.1 of the CPP Act so the CPP contributions of young, single men are proportional to the CPP benefits this group can expect to receive during their lifetime.
[29] There are procedures for appealing to this court from determinations or assessments under the CPP. They have not been followed. There are limitations to the type of relief that this court can give in such appeals. The relief sought here is not the type of relief that this court can give. Moreover, the amendment of legislation is not something that is available as a remedy that courts can give under the Charter.
[30] Paragraphs 114 to 134 are struck.
[31] Paragraphs 135 to 160 deal with Employment Insurance premiums. The essence of the argument put forward in these paragraphs is set out in paragraphs 144 and 145 which read
144. The taxpayer submits that the Employment Insurance Act (hereinafter "EI Act") discriminates on the basis of age contrary to s. 15 of the Charter as it requires the taxpayer to pay premiums even though, as a full-time university student, he is ineligible to collect Employment Insurance benefits.
145. The taxpayer submits that the EI Act discriminates on the basis of age contrary to s. 15 of the Charter as surplus EI contributions are a 'tax' that is primarily targeted at younger Canadians.
[32] The relief sought is the following.
155. - provisions of the EI Act be declared contrary to section 15 of the Charter insofar as it requires young Canadians who are full-time university students to contribute to the EI plan at standard rates but disqualifies them from receiving the associated benefits;
156. - the EI Act be declared contrary to section 15 of the Charter insofar as the EI premiums collected are excessive and are being used to fund other Government of Canada programs;
157. - section 5(2) of EI Act be amended so that the class of 'excluded employment', as that term is used in the Act, be expanded to include the employment earnings of full-time students; and
158. - the EI Act be amended so the EI contributions do not exceed the amount required to provide EI benefits and are not used to fund other government programs;
159. - the taxpayer receive a full refund of the Employment Insurance premiums paid by him and the related employer EI contributions, totalling $1,200;
160. - the court order such other remedies as the court considers appropriate and just in the circumstances.
[33] The relief sought is not relief that this court is empowered to give. This court is not able to amend legislation. Moreover, the arguments under section 15 of the Charter have no hope of success. They are wholly without merit.
[34] Paragraphs 135 to 160 are struck.
[35] Paragraphs 161 to 171 argue essentially that certain provisions of Part I.2 of the Income Tax Act which "claw-back" Old Age Security benefits in accordance with a formula one component of which is $53,215 discriminate against younger Canadians on the basis of age because the partial indexing of the amount of $53,215 under subsection 117.1(1) of the Income Tax Act erodes the Old Age Security benefits paid to Canadians.
[36] The relief sought is the following.
169. - Part I.2 of the ITA as it was in 1998 be declared contrary to section 15(1) of the Charter insofar as the income threshold under Part I.2 of $53,215 was only partially indexed thereby operated to erode the taxpayer's after-tax Old Age Security benefits;
170. - the ITA be amended so the income taxes levied on younger Canadians are proportional to the government benefits their generation will receive over their lifetime.
[37] There is no more merit in the positions advanced with respect to the so-called "claw-back" of Old Age Security benefits than there was with respect to employment insurance and the CPP. Section 15 of the Charter cannot be invoked every time someone dislikes a provision of the Income Tax Act. The fact that social benefits are unequally distributed does not of itself justify a remedy under the Charter. The amendment of fiscal or any other legislation to correct some perceived or imagined inequity is not something that the Charter empowers the court to do. Indeed the arguments here are even more devoid of merit than with respect to the Employment Insurance Act and the CPP. The appellant is not of an age where he might receive Old Age Security benefits. The fact that they might be "clawed-back" some thirty years hence (assuming the legislation remains unchanged — a rather fanciful conjecture) is no basis upon which any action of this court could be based. This is clear from the judgment of Dickson J. in Operation Dismantle (supra) at pages 456-457.
[38] Paragraphs 161 to 171 are struck.
[39] Paragraphs 172 to 186 talk about a reduction of spending on education by the province of Nova Scotia. Somehow this becomes in the appellant's view a constitutional issue based on age discrimination that can be litigated in a federally constituted court with jurisdiction in federal fiscal legislation. Paragraphs 179 to 186 read
179. The taxpayer submits that the Province of Nova Scotia has reduced education spending during this period, so that it would have funds available to pay the interest costs associated its debt.
180. Because of the dramatic reduction in education spending by the Province of Nova Scotia, students in Nova Scotia are required to pay a substantial amount of the cost of their post-secondary education.
181. In determining liability for income tax, the ITA does not distinguish between older Canadians who have received a subsidized education and younger Canadians who did not.
182. Subsection 15(1) of the Charter expressly prohibits discrimination on the basis of age.
183. The taxpayer submits that provisions of the ITA which levy taxes on younger Canadians at standard rates even though young Canadians are not receiving or have not received a government subsidized post-secondary education, discriminates against young Canadians on the basis of age contrary to subsection 15 of the Charter.
184. The taxpayer submits that s. 15(1) of the Charter requires that the taxes levied on a particular age group must match the package of government benefits to be received by that age group over that age group's lifetime.
Remedy
185. The taxpayer requests that section 117 of the ITA be amended so the taxes levied on younger Canadians are proportional to the package of government benefits this age group will receive over their lifetimes.
186. The taxpayer requests the court order such other remedies as the court considers appropriate and just in the circumstances.
[40] I have reproduced these paragraphs because they are the simplest way of demonstrating their utter hopelessness in an appeal to this court against an assessment of tax under a federal statute. To complain about provincial education spending in this court, that has jurisdiction in income tax appeals, is frivolous.
[41] Paragraphs 172 to 186 are struck.
[42] Paragraphs 187 to 215 argue that the personal tax credit under section 118 of the Income Tax Act is too low in that it discriminates "on the basis of age, marital status and against the poor" [sic] contrary to subsection 15(1) of the Charter. Also, it is argued that the personal tax credit is so unreasonably low that it is contrary to section 7 in that it threatens life, liberty and the security of the person. The appellant wants the personal tax credit raised to $10,920.
[43] This is not something this court can do. The appellant might wish to consider speaking to his Member of Parliament.
[44] Paragraphs 187 to 215 are struck.
[45] Paragraphs 216 to 243 are a complaint about the liquor taxes imposed by Nova Scotia. The appellant says that the liquor taxes (including HST) are not constitutionally authorized and are contrary to the Charter based on national or ethnic origin. The appellant states that he drinks whereas people of other national or ethnic origins do not; therefore, says the appellant, this is discriminatory. It is not clear whether it is drinkers or teetotalers against whom the appellant says there is discrimination.
[46] Moreover, he says that the liquor taxes discriminate on the basis of religious belief.
[47] He wants a refund of the liquor taxes he paid, and a declaration that the taxation of liquor by Nova Scotia is contrary to section 15 of the Charter.
[48] There is no appeal to this court against provincial liquor taxes. Even if there were the arguments advanced are frivolous and patently devoid of merit.
[49] In paragraph 244 he also wants punitive damages of $7,812,000 against Canada and Nova Scotia for the "blatant violations of the taxpayer's human and democratic rights".
[50] Whether this claim is related solely to the $43.00 in liquor taxes he says he paid to the Nova Scotia Liquor Commission, or is related also to all of the other wrongs he claims he has suffered is not clear.
[51] Paragraphs 216 to 244 are struck.
[52] Paragraphs 245 to 248 argue that the court should ignore procedural errors or omissions since to strike out on such grounds would be contrary to the Charter. To say that adherence to procedural requirements constitutes a violation of a litigant's rights under the Charter is a proposition that is so demonstrably nonsensical that it is sufficient merely to state it for it to be defeated by its own manifest absurdity.
[53] I am in any event not striking out this appeal on procedural grounds. I am striking it out because it is frivolous, vexatious and scandalous and discloses no reasonable cause of action. I have not for some time seen such an array of singularly unmeritorious propositions. There can be no objection to law students debating imaginative and indeed far-fetched notions in a college common room. It is no doubt a salutary and necessary part of their education. It is however a waste of public funds and of the court's time to advance such matters before the courts.
[54] It has sometimes happened that a court has struck out everything except the words "notice of appeal", thereby leaving the appeal extant so that the appellant can amend. As an alternative I considered leaving paragraphs 1 to 4, which are purely formal and introductory so that the appellant could amend. I see no reason however to preserve any portion of the notice of appeal.
[55] Paragraph 249 of the notice of appeal reads as follows.
249. The taxpayer requests that this appeal be dealt with expeditiously so that he can make an assessment as to whether it is in his best interest to continue to reside in Canada.
[56] I hope that I have dealt with this motion with sufficient expeditiousness to comply with this rather presumptuous demand.
[57] The appeal is struck out. The respondent is entitled to her costs.
Signed at Ottawa, Canada, this 31st day of May 2001.
"D.G.H. Bowman"
A.C.J.