Tax Court of Canada Judgments

Docket: 2000-1401(IT)I

BETWEEN:

MICHAEL WETZEL,

Appellant,

and

HER MAJESTY THE QUEEN,

Respondent.

____________________________________________________________________

Appeals heard on August 4, 2004 at Gander, Newfoundland and Labrador

Before: The Honourable Justice T. E. Margeson
Appearances:
For the Appellant:	The Appellant himself
Counsel for the Respondent:	Peter Leslie and Cecil Woon

____________________________________________________________________

JUDGMENT

          The appeal from the assessment made under the Income Tax Act ("Act") for the 1988 taxation year is dismissed.

          The appeals from the assessments made under the Act for the 1994 and 1995 taxation years are allowed, and the matter is referred back to the Minister of National Revenue for reconsideration and reassessment on the basis that the assessments against the Appellant for the years 1994 and 1995 be vacated.

          The Appellant is entitled to an accounting showing the total amounts of credits to which he is entitled and a reasonable explanation of the balance that is alleged to be owing and how that balance is determined.

          The Appellant is entitled to his costs which are set at $2000.

          Signed at Ottawa, Canada, this 29^th day of November 2004.

"T. E. Margeson"

Margeson J.

Citation: 2004TCC767

Date: 20041129

Docket: 2000-1401(IT)I

BETWEEN:

MICHAEL WETZEL,

Appellant,

and

HER MAJESTY THE QUEEN,

Respondent.

REASONS FOR JUDGMENT

MargesonJ.

[1]      By Notice of Appeal (Amended) (Informal Procedure) dated August 30, 2001 and received at the Tax Court of Canada on September 4, 2001, the Appellant purported to appeal assessments of the Minister for the taxation years 1988, 1994 and 1995 and asked for an Order vacating assessments for those years.

[2]      He further sought an Order for the return of taxes and interest already paid by the Appellant between 1974 and 1987 should this Honourable Court determine that a Reserve has existed in Conne River since 1870 (but I presume he meant 1984) and that the Appellant was a member of that Band during that period.

[3]      The Minister assessed the Appellant for the 1988 taxation year by including in his income, inter alia, an amount of $42,941 received as employment income. At the Appellant's request and pursuant to the Fairness Legislation, the Minister subsequently reassessed the Appellant by Notice of Reassessment Number 1508043 dated October 12, 1995 allowing the Appellant's claim for the married amount exemption. Prior to issuing the aforementioned reassessment by letter dated September 1, 1995, the Minister advised the Appellant that no Notice of Objection could be filed with respect to the 1988 reassessment. The Minister's position is that that appeal is not properly before the Court.

[4]      With respect to the Appellant's 1994 taxation year, the Minister originally took the position that the Appellant had not filed a valid Notice of Appeal. In so assessing the Appellant for that year, the Minister included in his income, inter alia, an amount of $134,576.34 received from the Miawpukek Band as a retiring allowance.

[5]      With respect to the 1995 taxation year, the Minister assessed the Appellant by Notice of Assessment dated October 7, 1996. In so assessing the Appellant for the 1995 taxation year, the Minister included in the Appellant's income, inter alia, an amount of $23,759.15 received by the Appellant as registered retirement savings plan ("RRSP") income.

Evidence

[6]      Mr. Justice Richard LeBlanc testified that prior to being appointed to the Bench in 1989 he was a lawyer for the Miawpukek Indian Band. He worked with the Appellant, Chief Michael Joe and Marilyn John with respect to various Band issues including the registration of the Conne River Indians as a Reserve and the transfer by the province to the Band of certain functions such as health and education.

[7]      He worked for the Band between 1981 and 1989. He was involved in the dispute between the Federal Government and the Band. The matters were not dealt with when Newfoundland joined Canada in 1949. There was a considerable amount of angst about this matter. It was a testy period of time. Once the Band was registered in 1984 things settled down. The Appellant was the primary individual involved in these matters but this witness, the Appellant, Chief Michael Joe and Marilyn John acted as a team to get the matters resolved. He was instructed by the Appellant who was the Band administrator at the time and who was regarded as the individual who was "shaking things up".

[8]      Exhibits A-1, A-2 and A-3 were admitted through this witness subject to weight and relevance. Justice LeBlanc never saw the Advisory Committee Report but he saw documents which contained excerpts from the original Report[1]. In it the Appellant was recommended to be included on the Band list. This witness said that "as far as he understood" the Appellant was approved by the Minister to be added to the Band list. They were told that they could never see a Cabinet paper but the material that they submitted would be considered in the Cabinet papers. The process was ongoing[2].

[9]      Exhibit A-2, Tab 5 was a letter that he wrote to David Crombie, the Minister of Indian and Northern Affairs at the time, with reference to a meeting that they had held. He also wrote another letter[3]. He was familiar with other documents that he reviewed[4]. These represented the last involvement he had with the matter. This letter dealt with the promised amended criteria for Band membership and the taxation Remission Order from January 1, 1985 to the date of the recognition of the Reserve at Conne River.

[10]     He referred to a memorandum from P. McDowell to D. Goodwin and said that this was provided to him from someone in the Department of Indian and Northern Affairs[5]. This supported his position that at the time everyone had agreed that there would be an amendment to the Order-in-Council which had initially set the membership Band requirements. These requirements would be changed to read "of Indian ancestry" and not "Canadian Mic Mac Ancestry"[6]. This was not done. The wording was changed to "Indian Ancestry" but ultimately that was changed to "Canadian Indian Ancestry". Because of this failure to make the amendment to the legislation which was promised, the Appellant was excluded from the second list of Band members when his name had been included in the original list approved by the Order-in-Council earlier made (together with those who had died).

[11]     Exhibit A-2, Tab 9 contains excerpts of a meeting which was held indicating that qualifications for being a member of the Band would be changed to "Indian Ancestry". It was his understanding that it was changed to "Canadian Indian Ancestry" to keep Mr. Wetzel off of the list.

[12]     Subsequently Mr. Wetzel and Chief Michael Joe lost their positions as the result of a power dispute within the Band. Originally there was no objection to the Appellant being included on the Band list.

[13]     In cross-examination he said that between September 1, 1981 and 1989 he did work for the Band. There were two Orders-in-Council with respect to the Conne River Band. One Order-in-Council was completed in 1984 and the other in 1989. He was aware of the fact that the persons with whom he was dealing did not have the final say.

[14]     In the 1984 Order-in-Council, the decision of the Cabinet was to make the requirement "Canadian Mic Mac Ancestry". This was changed in 1989 to "Canadian Indian Ancestry". This was the final Order-in-Council with respect to this matter. He was not aware of how that change was made. It was his position that no one could challenge the authority of Cabinet.

[15]     He was told by someone in Indian and Northern Affairs that the change of the wording to "Canadian Indian Ancestry" was done in an attempt to keep the Appellant off of the list of members of the Conne River Reserve. However, no Minister ever admitted this to him. He was aware of the fact that the Appellant was a person who had made some enemies in the Department of Indian and Northern Affairs.

[16]     Marilyn John testified that she lived in Conne River all of her life. The Conne River Band is also referred to as the Miawpukek Band. She was chief for two years between 1988 and 1990. She was a councillor in 1980. She was involved with the Federation of Newfoundland Indians. She was the organizer of the Federation which was founded in 1973.

[17]     She was involved in negotiations for funding of the Conne River Band. She was familiar with the Conne River Registration Advisory committee established in 1966. This consisted of Chief William Joe, Malvin Jedore, Chief Alex Denny and Les Smith of the Department of Indian and Northern Affairs. The Minister was Warren Almand.

[18]     She did research for the compilation of the list of members for the Band. There were some connections between two families at Conne River and other Bands in Nova Scotia. However, it was very difficult to connect them. These persons left Conne River and went to Nova Scotia before 1949. These included the names Jedore, Benoit and Michael Martin. These people became registered in Bands in Nova Scotia. They were not Canadian citizens.

[19]     The original criteria for registration for the Conne River Band were:

1.        North American Indian ancestry;

2.        Resident in Conne River; or

3.        The spouse of or an adopted child of a person of North American Indian ancestry.

[20]     Some of the residents were not of Mic Mac origin. They wanted all of the residents to be included on the list who were of Indian ancestry. These recommendations were accepted by the Department.

[21]     She referred to the proposed membership list[7] as a final report with respect to the Conne River Advisory Committee. The Appellant's name appeared on this list. They were directed to prepare a list of people who might be included in the initial membership list. Many problems developed with respect to the registration process.

[22]     She was involved in 1984. She was the manager of the Croft Co-op and a Band Councillor as well. She was appointed by Chief Billy Joe to many committees. They had a meeting in St. John's around 1983 or 1984 with respect to the final registration of the Band. A person by the name of Rem Westland was appointed by the Minister to prepare a Cabinet document with respect to the finalization of the Band. He came to St. John's with the Minister. She met with him and he told them that Mr. Goodwin, the Assistant Deputy Minister, was reluctant to push forward on the matter because he did not like the Appellant and he was going to get him. He would ensure that the Appellant's name never appeared on the Band list. She was familiar with the list of Band members to be drawn up based on the criteria set out by the Advisory Committee and the Appellant's name was on it[8]. This list was sent to the Minister and was referred to in a letter to the Governor-in-Council dated December 4, 1980[9] from the Minister.

[23]     The Appellant's name was also included in a list of Band members submitted to Les Smith of the membership branch, Department of Indian and Northern Affairs, by its Council of the Conne River Mic Macs dated September 4, 1984[10].

[24]     She was in Ottawa when the Declaration was released for the Conne River Band. The Department of Indian and Northern Affairs changed the criteria unilaterally to "of Canadian Mic Mac Ancestry".

[25]     This created problems with those who might otherwise have been on the list. Many would have been eliminated. The Band felt that it should decide who its members would be. There was a lot of lobbying about this issue. She went to Geneva to lobby for changes. Only the Appellant was omitted from the list. She was not excluded (even though she should have been using those criteria). There was a second Order-in-Council changing the requirements to "Canadian Indian Ancestry". The problem persisted. No investigation was conducted to see if anyone other than the Appellant should have been excluded from the list of Band members.

[26]     There were many benefits to being a Band member and there were many problems that developed. A Remission Order was granted for Band members. They met with every Minister that was appointed to change the criteria set out in the Order-in-Council. Minister David Crombie said that he would order the bureaucrats to have the original Order-in-Council changed.

[27]     She referred to a memorandum from P. McDowell to D. Goodwin, dated May 27, 1985[11], which was the document relied upon to indicate that the requirements were to be changed to "Indian Ancestry". Minister Crombie was to order it even though this memorandum was from P. McDowell who was an executive assistant in the Minister's office. Minister Crombie made that commitment at the meting but it was never followed through.

[28]     Minister Valcourt made the same commitment. This was not carried out. No one except the Appellant was excluded from the Band list. If the criteria had been applied as found in the Order-in-Council, she would have been excluded from the Band as well.

[29]     She set out the Band's position in a letter to Minister Pierre Cadieux on February 21, 1990[12] and indicated to him that the Appellant met the criteria for Band membership. The criteria was only changed so that his name could be struck by the bureaucracy. This action was directed to the Appellant personally and was against the Band's position.

[30]     She indicated that there are a large number of people who are living in the United States and yet are members of the Band in Canada, although such persons could not be a member of the Conne River Band. It was pointed out to the Minister that if the criteria were applied to everyone, many others besides the Appellant would not qualify to be Band members.

[31]     If a person were not registered as a member of the Conne River Band, they would not be entitled to any of the rights of members. They could not own property or receive services from the Band.

[32]     In cross-examination she said that she did not interview any of the Appellant's people. She was not happy with either of the first or second Orders-in-Council. The Bands can control their membership list as far as she was concerned but she did not know if the Conne River Band has done so. She was not aware of any persons who were not on the Conne River Band list that wanted to be on, other than the Appellant.

[33]     In redirect she said that the lists were drawn up by the Committee. These lists then went to the Chief and the Council and were finally submitted to the Annual Assembly.

[34]     Michael G. Wetzel testified that he lived in Conne River, Newfoundland and was a solicitor. He was originally of Shawnee Ancestry. In 1970 he came to Newfoundland and did post-graduate work at Memorial University. In 1972 he was employed by the Native Council of Canada and his duty was to organize all of the Native committees in Newfoundland and Labrador. Conne River was one of these committees.

[35]     He established an office in Newfoundland. In 1974 he went to work exclusively on the Conne River project. He is married and still resides at Conne River. There were no Bands in Newfoundland at that time and no services because the Federal government decided not to apply the Indian Act to Newfoundland. He and others went to Warren Allmand who was the Minister of Indian and Northern Affairs and he set up the Conne River Advisory Committee.

[36]     In 1979 the report was finalized. Mr. Faulkner was the Minister of Indian and Northern Affairs at that time. He said that he would act. Then the government changed and Jake Epp became the Minister of Indian and Northern Affairs. He said that he would act on the committee's recommendations and proceed with the registration of the Band.

[37]     The Minister of Indian and Northern Affairs committed himself to setting up a Membership Committee at Conne River to establish the membership criteria[13]. His name, his wife's name and his son's name were on the list. Membership criteria was approved[14].

[38]     A consultant was employed to trace the ancestry of the residents. The Appellant was asked for proof of his ancestry and his father produced an Affidavit which was given to the Committee. It was subsequently lost although he asked his father to draw up a new affidavit and he did[15].

[39]     The Committee's recommendations went forward. There was tremendous resistance among senior officials in the Department against having the Band registered.

[40]     In 1980 the committee made recommendations on the registration of Conne River using the criteria agreed upon and listing the proposed members of the Band. It was never acted upon in 1980[16].

[41]     He was told that Mr. Goodman was going to get even with him. Certain cabinet documents[17] indicated that when the Conne River Band was created, one of the criteria required a member to be of "Canadian Mic Mac Ancestry". This meant that he was not qualified. Many other people were upset as well as they would not be qualified. He referred to page 9 of the cabinet document and said that the policy reasons that they were talking about were "him".

[42]     He was not challenging the Income Tax Act or the Indian Act but was only relying upon sections 15 and 7 of the Canadian Charter of Rights and Freedoms ("Charter"). He did not pay his taxes in 1988. In all of the objections that he filed since 1986 a letter was sent with respect to the return for each year similar to his 1994 taxation year[18]. This was sent in before the assessment but he still considered it to be his objection.

[43]     With respect to the year 1987, he received no confirmation and therefore no Notice of Appeal was necessary. He said that he did file a Notice of Appeal for 1994[19] (although there is no such Notice of Appeal in the records). There was also a valid Notice of Appeal in 1995. In 1993 he relied on the Minister's word that he would be reinstated as a Band member and he would not have to file an Appeal. There was no point in filing an Appeal.

[44]     He recalled being at a discovery of one Joe Leask who was the Director General of Reserves and Trusts who said under oath that the term "Canadian Mic Mac Ancestry" could not be applied.

[45]     Mr. Valcourt was to look into why he was not added on to the Band member's list[20]. The briefing notes of the Minister of State indicated that Mr. Crombie undertook to amend the Order-in-Council to read "Indian Ancestry"[21] and this was referred to subsequently in a letter from Tom Sidden on May 11, 1990[22].

[46]     In cross-examination he admitted that he was not of Canadian Indian ancestry. He said that his father passed away this spring. There is a registration system in the United States.

[47]     Mr. LeBlanc filed an objection in 1985 for all of the Band members including himself. (But it was pointed out that the document that he relied on for that position did not refer to an assessment but only to a Remission Order for 1985 and 1986.) A Notice of Appeal (Informal) was filed for 1984, 1985 and 1986 but it did not mention 1994[23]. He said that the years 1985 to 1995 are under appeal.

[48]     The Respondent called the Appeals Officer, Ford Hayden, only for the purpose of allowing the Appellant to cross-examine him. He said that he had been with Canada Customs and Revenue Agency ("CCRA") for 24 years and 11 of those years were in Appeals. He was familiar with the records kept by CCRA. He did not know how long they keep the records. He did not have the Appellant's 1985 and 1986 returns. He said that no objections were filed for 1985 and 1986. He did not check in the Conne River Band file. No other information was available to him. No one asked him to look for the Conne River file. Between 1986 and 1993 there were adjustments made under the Fairness Package. In order for a Notice of Appeal to be valid it must refer to a given Notice of Assessment.

[49]     In answer to a question posed by counsel for the Respondent he said that if there is a group file, it would also be listed under the name of the individual member of the group.

Argument on Behalf of the Appellant

[50]     The Appellant said that the sole question before the Court is whether or not there is an issue under the Charter of Rights and Freedom ("Charter"). He was not challenging the legislation but only the effect of the Order-in-Council. In March 2000 when he paid the $100 filing fee, he told the Court that he was looking for disclosure and wished to raise a section 15 argument with respect to the 1988, 1994 and 1995 assessments and the years 1985 and 1986.

[51]     With respect to the documentary evidence produced by him, he said that these were records made in the ordinary course of business and should be received in evidence without calling the maker.

[52]     The government owes a fiduciary duty to him. He had assurances from several ministers that certain criteria were going to go forward to Cabinet. Certain officials changed this to exclude only him from the Band list. He was excluded and no others were excluded. This was unequal treatment.

[53]     Information was given to the Governor in Council that caused an Order to be made to exclude him from the Band list. He referred to the case of Wewaykum Indian Band Canada, [2003] l C.N.L.R. 341 at p. 363 and argued that the solution to his problem does not lie in rectifying the order in council but in the law concerning the fiduciary duty owed to the Band by the government. He took the position that his exclusion from the Band list was a breach of fiduciary duty to him and to others although it was only applied to him. He was the only one left off of the list. As a result of this breach he had to pay taxes.

[54]     What has happened to him was a breach of his section 15 rights under the Charter. His right to equal treatment was breached when the Governor in Council received improper information to exclude him from the list. He was prevented from enjoying the benefit of the tax exemption.

[55]     He referred to Brant v. Minister of National Revenue, 92 DTC 2274 and Mercier v. Minister of National Revenue, 92 DTC 1681. He took the position that the Tax Court has jurisdiction to deal with the breach of Charter issue. He referred to Operation Dismantle Inc. v. Canada, [1985] 1 S.C.R. 441. That case holds that the Governor-in-Council cannot take action that offends a group or an individual and deprive him of his Charter rights. This is what happened here. The Tax Court of Canada has jurisdiction to strike down the assessment on that basis.

[56]     He also argued "estoppel" and said that there was a commitment made to him that he would be a member of the Band and that the Order-in-Council would be changed to accomplish this. If this had been done he would not have had to pay taxes. He has been detrimentally affected by the actions of the Minister in the passing of the Order-in-Council which prevented his name from being on the list of Band members.

[57]     He referred to Taylor v. Canada, [1995] T.C.J. No. 414 at paragraph 19 on the issue of promissory estoppel and said that these requirements have been satisfied. He also referred to Ross River Dena Council Band v. Canada, [2002] 2 S.C.R. 816 in support of his position that the officials from the Department of Indian and Northern Affairs that he was dealing with had sufficient authority to bind the Crown and they did so when they promised to amend the Order-in-Council changing the requirement to "Indian ancestry". The Governor in Council was bound by the undertakings of Ministers Munroe and Faulkner and others.

[58]     With respect to the assessments themselves there were credits to which he was entitled on his account which are more than enough to make up for what the Minister alleges that he owes.

[59]     The appeal should be allowed with costs and the assessments should be vacated for the years 1988, 1994 and 1995.

[60]     As a result of the breach of fiduciary duty his equality rights were breached. He is entitled to the appropriate remedy. This was a breach of his section 15 rights.

Argument on Behalf of the Respondent

[61]     Counsel said that this is an appeal of an income tax assessment. Only the years 1994 and 1995 are validly under appeal. The remainder of the years are not under appeal and the Affidavit filed covers that issue.

[62]     The appropriate provision of the Income Tax Act is paragraph 81(1)(a) which allows exemption for those who qualify under the Indian Act. Section 87 of the Indian Act exempts Indians from taxation. The simple question is whether or not the Appellant was an Indian under the Indian Act during those years. Paragraph 6 of the Indian Act entitles certain persons to be registered. The Appellant must become a member of the Band under the Orders-in-Council in order for him to qualify for the exemption. He does not qualify under the Order. He is not an Indian and therefore is not entitled to exemption.

[63]     With respect to the argument of fiduciary duty, there was no such duty owed to the Appellant because he was not an Indian. The Tax Court of Canada is not a Court of equity. A fiduciary duty is an equitable duty and any relief is an equitable relief. Any such relief cannot be granted by this Court.

[64]     With respect to the estoppel argument, this also is an equitable claim and any relief sought is an equitable relief. That relief is not available here.

The Equality Argument under Section 15

[65]     Notice must be given under section 57 of the Federal Court Act before this Court is entitled to strike down any statute or any part thereof. Despite the fact that the Appellant says he is not seeking to have any part of the Act struck down, this is in effect what he is doing. The Order-in-Council has to be overlooked in order for the Appellant to be granted the relief he seeks.

[66]     In Mercier, supra, the Appellant was seeking to challenge a section of the Income Tax Act.

[67]     In order to give effect to any claim under section 15, the Court must ignore the Order-in-Council. If it does there would be no Order-in-Council. The Appellant still would not be a member of the Band. He still would not be exempt. This Court is not entitled to "write in" such a remedy. This Court cannot make a change in the legislation. Any remedy, if available, is not for this Court.

[68]     The Appellant relied upon RossRiver, supra, to say that a Minister of the Crown can bind the Governor in Council. This case does not say that. In that case, promises had been made to set the lands aside and the issue was whether the lands had reserve status. The officials that the Appellant dealt with here did not have the authority to bind the Crown. That specific authority had not been given. That final authority rested with the Governor in Council. The Governor in Council could not be bound by these promises. If the Court struck down the Order-in-Council there would be a vacuum and there would be no assistance to the Appellant. The Order-in-Council represents the law of the land. Those arguments are not for this Court. This is an Income Tax case. Even if the Charter arguments were validly before the Court, which they are not, the Court could only ignore the law, that is, the Order-in-Council and still that would not assist the Appellant.

[69]     With respect to the accuracy of the statement of account, it is the Court's right to order an accounting to show what amount was paid and what amount is alleged to be owing. The Crown is prepared to do that. Otherwise the appeal should be dismissed. There should only be costs as a self-represented litigant if the appellant is successful.

[70]     In rebuttal the Appellant said that he was not seeking equitable relief. He was not asking to have any section of the Income Tax Act struck down. He was only asking for a section 15 remedy. There is a remedy under subsection 24(1) as can be seen in Schachterv. Canada, [1992] 2 S.C.R. 679 at paragraph 7. It is important to the Court to fashion the remedy. His equality rights were breached.

[71]     He referred to the book Native Law[24] where it was indicated that an American member of the St. Regis Band, also known as the Mohawks of Akwasasne, a Band that straddles the borders of Canada and the United States, was still an Indian within the meaning of the Indian Act[25].

Analysis and Decision

[72]     The first issue in these appeals is the question of what years are properly before the Court. At the end of the day, the Appellant argued that all of the years between 1985 and 1995 were under appeal and to that end he relied upon various letters that he had written to the Minister throughout that period in which he said that he took issue with all of the assessments since 1985. However, the Court is satisfied that the Appellant cannot be successful in that regard because these letters did not amount to valid Notices of Appeal even though the Appellant may have indicated to the Respondent that he was taking issue with the assessments and with the general idea of paying taxes when he believed that he was exempt. The Court is satisfied that these various letters and the Appellant's affirmation that he was taking issue with paying taxes did not amount to valid Notices of Appeal.

[73]     Initially counsel for the Respondent took the position that only the year 1995 was validly under appeal. However, by the time of argument he was prepared to agree that the years 1994 and 1995 are validly under appeal. He appeared to have been convinced during the trial after viewing certain documentation, that the year 1994 was also validly before the Court.

[74]     The Court is satisfied that the years 1994 and 1995 are validly before the Court by way of appeal. However, the Court is satisfied that the year 1988 is not validly before the Court nor are the other years referred to above. It was made clear to the Appellant when he was reassessed, at his request, pursuant to the Fairness legislation, that when he was allowed the exemption for the married amount, prior to issuing the reassessment on September 1, 1995, that no Notice of Objection could be filed with respect to the 1988 reassessment. The Minister took the position that that appeal is not properly before the Court and the Court is satisfied that this position is correct.

[75]     Therefore, the appeals with respect to the years 1988 and the other years other than 1994 and 1995 are dismissed and the Minister's assessments with respect thereto are confirmed.

[76]     The secondary issue which arose was the Appellant's contention that irrespective of the result in this decision he does not owe the Minister any money because he has remitted sufficient funds to cover any deficit which might arise even if this decision goes against him. At the end of argument counsel for the Respondent was not adverse to this Court ordering an accounting of the Appellant and this Court thinks that that would be a proper course of action.

[77]     The Court orders that the Respondent make an accounting of the Appellant for the years in issue, showing the amounts that the Minister has calculated that the Appellant owes, showing all credits to which the Appellant was entitled during the period in issue and giving unto the Appellant sufficient information to allow the taxpayer to reasonably be able to conclude what amounts were allegedly owing, what amounts of interest were being charged, what amounts the Appellant paid to the Minister by way of credit and consequently enable him to conclude the amount still owing and the basis for it.

[78]     That leaves for consideration the validity of the assessments for the years 1994 and 1995. The Court cannot grant to the Appellant all of the relief that he seeks because it does not have the jurisdiction to do so. However, the Court is satisfied that it has jurisdiction to deal with the validity of the assessments for the years 1994 and 1995. The only relief that the Court could give would be to vacate the assessments for those years and grant costs to the Appellant. In essence, the Appellant asked the Court to vacate the assessments for the years 1994 and 1995 on the basis of a violation of his rights under the Charter.

[79]     The Appellant made it clear that he was not challenging the legislation, i.e. the Income Tax Act or any other legislation but only the effect of the Order-in-Council which had the result of excluding him from being a member of the Conne River Band which in turn excluded him from enjoying the benefits of being on that list of Band members. Had he been on that list of Band members, he would have been exempt from paying taxes on money earned on the Reserve under the Indian Act[26]. He raises an argument under section 15 of the Charter. He asks for the appropriate remedy under this section which would be whatever the Court considers appropriate and just in the circumstances.

[80]     The Appellant admits that he did not comply with the provisions of section 57 of the Federal Court Act. He says that he did not have to comply with this section because he is not asking to have any statute struck down or any law declared to be invalid. He is merely saying that his Charter rights have been violated and he is seeking the appropriate remedy.

[81]     Counsel for the Respondent, on the other hand, takes the position that the Appellant is in the wrong court. He is seeking a remedy from the Tax Court of Canada which it does not have the authority to give. In so far as he was concerned the simple question before the Court was whether or not the Appellant was an Indian under the Indian Act during the years in question. Paragraph 6 of the Indian Act entitles certain persons to be registered but the Appellant was not a member of the Band on the basis of the Orders-in-Council in issue and he was not entitled to the exemption. Simply put, he was not an Indian and therefore he was not entitled to the exemption.

[82]     He referred to the Appellant's argument of fiduciary duty and said that this did not apply to the Appellant because he was not an Indian (under the Indian Act). The Tax Court of Canada is not a court of equity. A fiduciary duty is an equitable duty and any relief to be granted is an equitable relief. Any such relief cannot be granted by this Court.

[83]     With respect to the estoppel argument, this too is an equitable relief and this Court is not entitled to grant it. The relief is not available here.

[84]     The Appellant was required to give notice under section 57 of the Federal Court Act before this Court is entitled to strike down any statute or any part thereof. It was his position that in effect the Appellant was asking for the statute to be struck down (i.e. the Order-in-Council). At the very minimum he was asking that the Order-in-Council be overlooked in order for him to be granted the relief he seeks. However, even if the Court ruled to overlook the Order-in-Council it would not be of benefit to the Appellant because the Appellant still would not be a member of the Band and he would not be entitled to the relief he seeks. This would require a change in the legislation and this Court cannot make the change in the legislation. Any remedy, if available, is not for this Court.

[85]     With these arguments, the Court cannot agree. The Court is satisfied in accordance with the argument of the Appellant that he was not bound by the provisions of section 57 of the Federal Court Act. The Court is satisfied that he is not seeking to have the Income Tax Act or any part thereof struck down, nor is he seeking to have any part of the Indian Act struck down, nor is he seeking to have any of the Orders-in-Council declared to be invalid. Since he is not seeking to have a statute declared to be invalid, or of no consequence or to have some other section written in which would have the effect of varying the statute in question, then he is not bound by the requirements of section 57 of the Federal Court Act.

[86]     In essence, the Appellant is seeking relief under the Charter. The sole question before the Court is whether or not the Appellant has laid out the factual groundwork to enable the Court to grant the so-called "Charter relief".

[87]     This case proceeded under the Informal Procedure and the Court must take into account the provisions of the Tax Court of Canada Act, Revised Statutes of Canada, 1985, chapter T-2, subsection 18(4). In hearing an appeal under this provision, the Court is not bound by any legal or technical rules of evidence in conducting a hearing for the purposes of the Act, and can deal with it as informally and expeditiously as the circumstances and the consideration of fairness permit. This provision was cited by counsel for the Appellant and was not seriously contested by counsel for the Respondent who was prepared to allow the various pieces of evidence, including the exhibit evidence, to be admitted, subject to weight and relevance. The Court in interpreting the viva voce evidence and the documentary evidence has borne this in mind.

[88]     It was obvious from the manner in which counsel for the Respondent replied to this appeal that he was satisfied that there was probably an injustice done to the Appellant in this case. If the Court is correct in reading between the lines of his submissions, the Appellant should be entitled to some remedy but his position was that such a remedy cannot be obtained before the Tax Court of Canada.

[89]     Both parties were aware of the fact that the Appellant was entitled to make a protest to the Registrar pursuant to section 14.2 of the Indian Act regarding the omission of his name from the Indian Register or the omission or deletion of his name from the Band list as maintained under the Indian Act. However, it would be trite to say that from the time that the formation of the Band was contemplated there were many changes on the Reserve itself with respect to the governing body on the Reserve; many personalities changed; the Appellant himself may very well have created some opposition among the Band members in attempting to have his name added to the list and it may not have been practical for him to make the protest to the Registrar as provided in that section. Further, as a power struggle ensued on the Reserve for a number of years and the leadership changed it may very well be that many persons who might have otherwise supported the Appellant's position may have changed their allegiance and may very well have been satisfied that since their name was on the list they were not going to "rock the boat".

[90]     The Court has no doubt that it has no jurisdiction to determine the Appellant's status as an "Indian" under the Indian Act and it will not attempt to do so. There is no doubt in the Court's mind that during the relevant period of time the Appellant was not registered as a Indian within the meaning of section 2 of the Indian Act. However, the issue of whether or not he was entitled to be registered is the subject matter of the Appellant's argument that his Charter rights were violated in the end by having his name left off of the list of members of the Band.

[91]     The Court was most impressed with the evidence of the Appellant himself as well as the other witnesses who were called to testify by him. They had intimate historical knowledge of the Band at Conne River, its personalities, the attempts to have the Reserve created and the various changes which took place in the criteria for Band membership which were ultimately described in the Order-in-Council which was passed on November 2, 1989 and which is at the centre of this appeal.

[92]     Further, the Appellant was in the forefront of the attempt to organize the Band, have the Band registered and have the Reserve created and was in close, sometimes personal contact with several Ministers of the Crown acting in their capacity as Minister of Indian and Northern Affairs and with many people in the bureaucracy. It is obvious from the viva voce evidence, from perusal of the evidence introduced by way of documentation and from any reasonable inference that the Court is entitled to draw from both sources of evidence that the Appellant encountered stiff opposition from the beginning in his attempt to organize the Bands in Newfoundland and Labrador, in his attempt to have the Band created at Conne River and the establishment of the list of persons to be included in the Band list.

[93]     The opposition did not appear to come from the Ministers but there is an undeniable conclusion to be drawn that persons high up in the bureaucracy made a conscious decision to keep the Appellant's name and the names of his family off of the Band list. The sole reason for this appeared to be nothing more than their attempt to punish him for his confrontation with the bureaucracy and from the forceful manner in which he proceeded when he attempted to have the Band created. He obviously "tramped on a lot of toes and stirred up a lot of dust" in the process. It was obvious that several members of the bureaucracy took offence to this and they made it clear that they were going to get back at him. No less than three witnesses testified to this effect.

[94]     Marilyn John made a startling revelation that even though she was on the list, she would be excluded if the criteria had been applied to her. The Court concludes from her evidence that if the criteria for Band membership included either "of Canadian Mic Mac Ancestry" or "of Canadian Indian Ancestry", many persons would have been effected and many should not have been on the list. Yet the Appellant was the only one who was excluded from the list based upon the latter criteria.

[95]     There was no doubt in the mind of Marilyn John that Minister David Crombie said that he would order the bureaucrats to have the original Order-in-Council changed to read "of Indian Ancestry" She said that Minister David Crombie and Minister Valcourt made the same commitment in spite of the opposition from the bureaucracy. This commitment was not carried out.

[96]     Mr. Justice Richard LeBlanc was also a very knowledgeable witness of the events leading up to the passing of the Order-in-Council with respect to the Conne River Band as he was a lawyer for the Miawpukek Indian Band. He worked with the Appellant, Chief Michael Joe and Marilyn John with respect to various issues including the registration of the Conne River Indians as a Reserve. As far as this witness was concerned the Appellant was recommended to be included on the Band list, and his name was approved by the Minister to be added to the Band list. He concluded that the decision to keep the term "of Canadian Indian Ancestry" was made just to keep the Appellant off of the list.

[97]     In cross-examination he confirmed that he was told by someone in the Department of Indian and Northern Affairs that the change of the wording to "Canadian Indian Ancestry" was done in an attempt to keep the Appellant off of the list of members of the Conne River Reserve. He was aware of the fact that the Appellant was a person who had made some enemies in the Department of Indian and Northern Affairs.

[98]     Michael Wetzel echoed the testimony of the two previous witnesses. To him it was obvious that after the Committee's recommendations went forward there was a tremendous resistance among senior officials in the Department against having the Band registered. He was told that Mr. Goodman was going to get even with him and this, according to him, was accomplished by changing the criteria to read "Canadian Mic Mac Ancestry".

[99]     Counsel for the Respondent did not take any great issue with the allegations put forward by the Appellant, Mr. Justice Richard LeBlanc or Marilyn John. All of this evidence was corroborative of the Appellant's position with respect to the manner in which he was treated by the bureaucracy of the Department of Indian and Northern Affairs. Counsel for the Respondent was prepared to admit that something appeared to be wrong with the way that the Appellant was treated but it was his position that the Appellant had come to the wrong court and that in essence what he was seeking was to have the legislation struck down. He was asking for equitable relief which this Court does not have the jurisdiction to give.

[100] In essence the Appellant made three different arguments in support of his claim to have the assessments vacated. These arguments were:

1.        Fiduciary duty;

2.        Estoppel;

3.        Violation of his Charter of Rights under section 15 and his right to have an appropriate remedy for such a violation under section 24.

[101] With respect to the argument on the fiduciary duty the Court does not believe that this is applicable to the facts in this case. The Court is satisfied that the argument of counsel for the Respondent on this point is valid. In order for that principle to apply the Appellant would have to be a member of the Band and he was not. Indeed the essence of his argument is that because he was not a member of the Band he has suffered losses which are attributable to breach of his Charter rights. Therefore it is difficult for the Court to see how fiduciary duty argument is available to him.

[102] With respect to the argument of "estoppel", the Court is satisfied that this doctrine does not apply in the circumstances of the present case. In any event "estoppel" cannot override the law of the land. The Court is satisfied that the essential factors giving rise to an estoppel were not present here. In effect, the Appellant is asking that the Court estop the Minister from relying upon the legislation that came about as a result of Order-in-Council setting out the criteria for a person being listed as a member of the Band. This, the Court cannot do.

[103] That leaves for consideration the more substantial and difficult question of whether or not the Appellant's Charter rights have been violated and whether or not there is an appropriate remedy, if such a violation is found.

[104] Respondent's counsel argued that the central question before the Court is whether or not the Appellant was an Indian under the Indian Act during the years in question. The Court does not accept this argument. It is obvious that he was not a member of the Band because he was not listed on the final list of the Band members and according to the enumerated criteria he did not qualify as a member of that Band. However, that does not end the Court's inquiry because it does not answer the question as to whether or not there was a violation of the Appellant's Charter rights and whether or not there is an appropriate remedy for it.

[105] The Court is satisfied that the Appellant is not seeking to have any federal statute struck down and he need not have given notice pursuant to section 57 of the Federal Court Act before the Court can consider his Charter argument. Further, the Court is satisfied that if the Appellant is seeking to have the Court overlook this statute it cannot do so and the Court agrees with the submission of counsel for the Respondent that the overlooking of the statute cannot provide any remedy for the Appellant. However, the Court does not agree that in order to give any effect to the Appellant's claim under section 15 of the Charter, the Court must ignore the Order-in-Council. Section 15 of the Charter does not require the Court to overlook any statute in order to make that section applicable. That section states as follows:

15.(1)    Every individual is equal before and under the law and has the right to the equal protection and equal benefit of the law without discrimination and, in particular, without discrimination based on race, national or ethnic origin, colour, religion, sex, age or mental or physical disability.

[106] In seeking to apply the Charter to the Appellant's factual situation the Court has to read that section in conjunction with section 24(1) which reads as follows:

24.(1)    Anyone whose rights or freedoms, as guaranteed by this Charter, have been infringed or denied may apply to a court of competent jurisdiction to obtain such remedy as the court considers appropriate and just in the circumstances.

[107] This does not require the Court to strike down any legislation. This Court has jurisdiction over the Income Tax Act and assessments made under the Income Tax Act. It is trite to say that on the facts of this case, what the Court is dealing with are assessments against the Appellant in the years in question under the Income Tax Act. The whole question is the validity of those assessments. This is precisely the jurisdiction of the Tax Court of Canada.

[108] This very issue arose in the case of O'Neill Motors Limited v. Her Majesty the Queen[27]. This case was brought to the attention of both counsel by the Court and both were given the opportunity to comment upon its relevance here. Counsel for the Appellant argued that this case is applicable in that it provided the remedy that the Court believed was appropriate under the circumstances. Counsel for the Respondent argued that this case does not help the Appellant because he has not specified the various elements required to be proven in order to establish a successful claim, i.e.: he has not specified the basis of the alleged breach and the Respondent cannot reply to the allegations.

[109] In O'Neill Motors Limited, supra, the taxpayer's counsel stated the following question of law for determination:

Is it appropriate and just in the circumstances for the assessments of tax relevant to this reference to be vacated by virtue of subsection 24(1) of the Canadian Charter of Rights and Freedoms (the 'Charter')?

That is the same question that is before this Court.

[110] It is true that in that case the question involved an illegal search and seizure under section 231.3 of the Act and whether or not this amounted to a violation of the taxpayer's rights under section 8 of the Charter. However, the principles remain the same and are applicable in the case at bar.

[111] In O'Neill, supra, at page 1491 Justice Bowman referred to the case of The Queen et al. v. Lagiorgia[28] where Hugessen J. said:

Subsection 24(1) mandates the Court to grant a remedy for the breach of any Charter right. While there can be no doubt that there is a vast discretion in the words.

... such remedy as the court considers appropriate and just in the circumstances,

we think that it is a discretion to fashion a remedy, not to deny it altogether.

Bowman J., said,

I have come to the conclusion that the appropriate and just remedy in the circumstances is that the assessments based upon the illegally obtained evidence should be vacated. My reasons are as follows:

(1)         Subsection 24(1) of the Charter gives to a court of competent jurisdiction a "vast discretion", as stated in The Queen et al. v. Lagiorgia, (supra). Similarly, in Mills v. The Queen, [1986] 1 S.C.R. 863 McIntyre, J. said at p. 965:

What remedies are available when an application under s. 24(1) of the Charter succeeds? Section 24(1) again is silent on the question. It merely provides that the appellant may obtain such remedy as the court considers "appropriate and just in the circumstances". It is difficult to imagine language which could give the court a wider and less fettered discretion. It is impossible to reduce this wide discretion to some sort of binding formula for general application in all cases, and it is not for appellate court to pre-empt or cut down this wide discretion.

[112] Further, Bowman J. said:

Here, too, I must fashion a remedy that is appropriate and just. There is no question that this court is a court of competent jurisdiction. (Mills v. The Queen, (supra)).

At the end of the day the Court vacated the assessments referred to under section 24(1) of the Charter.

[113] The case of Schachterv. Canada[29] is applicable here. That case indicates that subsection 24(1) provides for an individual remedy to a person whose rights have been infringed when the statute or provision in question is not in and of itself unconstitutional but some action taken under it infringes Charter rights. This is the situation in the present case.

[114] Counsel for the Respondent took the position that Ross River Dena Council Band v. Canada[30], did not assist the Appellant here because the authorities with whom the Appellant dealt did not have authority to bind the Crown. However, the Court is satisfied that that does not answer the question that is posed. There can be no doubt that authorities could not impose upon the government the duty to pass legislation in accordance with undertakings they had given to the Appellant or anyone else but that is not what the Appellant's argument rests upon. The Appellant's argument here rests upon the fact that he was treated differently than other people who lived on the Reserve and that the same rules that determined that other people were entitled to be on the list of members of the Reserve did not apply to him. More stringent requirements were applied by the Minister in the determination that he and his family were not entitled to be on the list of Band members. This is where the discrimination occurred and it is for that Charter breach that the Appellant seeks the appropriate remedy.

[115] The Court does not accept the arguments of Counsel for the Respondent that the Appellant has not specified the basis of the alleged breach of his Charter rights and that the Respondent cannot reply to the allegations in a meaningful way.

[116] The Appellant from the beginning has argued that he has received marginal treatment from the Minister vis a vis other residents of the Conne River Reserve and as a result of that he has suffered gross disadvantages. The Appellant testified in Court and was cross-examined by the Respondent and no questions were put to him in this regard. The Appellant has produced sufficient evidence before the Court for it to conclude that he was arguing that this discrimination was based upon his race, natural or ethnic origin.

[117] In Law v. Canada, [1999] 1 S.C.R. 497 at p. 507, Iacobucci J., said:

Section 15 of the Charter guarantees to every individual the right to equal treatment by the state without discrimination.

[118] In reference to Andrews v. Law Society of British Columbia, [1989] 1 S.C.R. 143 on the issue of the proper approach to section 15(1) he repeated the statements of McIntyre J. who indicated that it would be inappropriate to attempt to confine analysis under section 15(1) to a "fixed and limited formula". At p. 509 he said,

In accordance with McIntyre J's caution in Andrews, supra, I think it is sensible to articulate the basic principles under s. 15(1) as guidelines for analysis, and not as a rigid test which might risk being mechanically applied: Equality under the Charter must be purposive and contextual. The guidelines which I review below are just that - points of reference which are designed to assist the Court in identifying the relevant contextual factors in a particular discrimination claim, and in evaluating the affect of those factors in light of the purpose of s. 15(1).

[119] Bearing that in mind, the Court is satisfied on the basis of the evidence presented and any reasonable inferences that it is entitled to draw from the evidence presented, that the Appellant's rights under sections 15 and 24 of the Charter have been violated. It is clear from the evidence that other persons whose names appear on the list of Band members do not satisfy the criteria as set out by the Order-in-Council. Therefore, it is obvious that the Appellant was treated differently from those members and the evidence makes it clear that he was treated differently because he had offended officials who were in positions of authority within the Ministry. The Court is further satisfied that the Appellant was given assurance from persons in high authority, including Ministers, that the criteria for Band membership would be changed to "of Indian Ancestry" and that the Appellant would have qualified to be on the final list of Band members as he was on the initial list.

[120] It is clear that the Appellant in attempting to organize the various bands in Newfoundland and Labrador and in dealing with persons who occupied high positions in the bureaucracy of the Department of Indian and Northern Affairs fermented their consternation against him and they intended to get even with him by fashioning some method for keeping his name off of the Band list. From all that the Court can conclude from the evidence he was entitled to be on that Band list, he was initially on the Band list and the final wording of the Order-in-Council was fashioned so as to prevent him from being treated as an equal with all the other residents of Conne River Reserve "of Indian Ancestry". This was a clear violation of his Charter rights and he is entitled to an appropriate remedy.

[121] The Court is satisfied that the appropriate remedy here is to vacate the assessments for the years 1994 and 1995.

[122] The appeals are allowed in that regard and the matter is remitted to the Minister of National Revenue for reconsideration and reassessment based upon this finding that assessments against the Appellant for the years 1994 and 1995 be vacated. This, of course, is in addition to the Court's order that the Appellant is entitled to an accounting as earlier indicated.

[123] It is obvious that this decision will not bring an end to the unsatisfactory position that the Appellant finds himself in because this Court cannot order that his name be added to the list of Band members. There is a provision under the Indian Act for rectifying that error by having the Registrar add the Appellant's name to that list but the Court is satisfied that that may not be a practical action for the Appellant at this time, as earlier indicated in these Reasons for Judgment. It would appear obvious that in future years the same problem will arise where the Appellant could be assessed, he could file an objection, then an appeal to the assessment and the assessments against him could be vacated. The Appellant should not be put through that process each year. To force him into such a situation would be a further violation of his Charter rights.

[124] The Court would recommend that the Minister make a Remission Order in favour of the Appellant for all of the years that he should have been considered to be a member of the Band and during which time he should have been given the same rights as all other members of the Band.

[125] It is interesting to note that the Minister had initially agreed to make a Remission Order but subsequently decided against this. It would be safe to assume that the reason for such action is founded in those facts which have already been elicited before this Court and which the Court has accepted.

[126] The Court realizes that it does not have the authority to order the Minister to take this course of action but under the circumstances it would appear to this Court to be the only reasonable course of action to follow.

[127] With respect to costs the Court would normally agree with the argument of counsel for the Respondent but the pendulum seems to have swung against that position in light of the decision of the Federal Court of Appeal in David Sherman v The Minister of National Revenue, docket A-387-02, 2004 FCA 29 where the Court refused the Appellant's claim for costs based upon his customary hourly rate charges or as being in excess of the allocation rate contemplated by the tariff and awarded costs on a "moderate allowance basis".

[128] The Court appeared to endorse the position enunciated by Registrar Roland of the Supreme Court of Canada in Metzser v Metzser, [2000] S.C.C.A. No 527, that the:

reasonably competent solicitor approach [referred to in Bradshaw Construction Ltd. v. Bank of Nova Scotia (1991), 54 B.C.L.R. (2d) 309 (S.C.)] was unworkable when assessing special costs awarded to a lay litigant", and that the only reasonable approach was" to make the award on a quantum meruit basis.

[129] The Court is of the opinion that the Appellant, who is a solicitor, expended time and effort on the pursuit of his claim. He is entitled to some compensation in accordance with the principles set out in Sherman, supra. It would not be appropriate to send the matter back for taxation. This is an appropriate case for the exercise of the Court's discretion by awarding a lump sum for costs. The Appellant shall have costs in the amount of $2,000.

          Signed at Ottawa, Canada, this 29^th day of November 2004.

"T. E. Margeson"

Margeson J.

CITATION:

2004TCC767

COURT FILE NO.:

2000-1401(IT)I

STYLE OF CAUSE:

Michael Wetzel v. The Queen

PLACE OF HEARING:

Gander, Newfoundland and Labrador

DATE OF HEARING:

August 4, 2004

REASONS FOR JUDGMENT BY:

The Honourable Justice T. E. Margeson

DATE OF JUDGMENT:

November 29, 2004

APPEARANCES:

For the Appellant:

The Appellant himself

Counsel for the Respondent:

Peter Leslie and Cecil Woon

COUNSEL OF RECORD:

For the Appellant:

Name:

Firm:

For the Respondent:

Morris Rosenberg Deputy Attorney General of Canada Ottawa, Canada

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