Court File No. 2004-2365(IT)I
TAX COURT OF CANADA
IN RE: the Income Tax Act
BETWEEN:
SANTOKH SINGH
Appellant
- and -
HER MAJESTY THE QUEEN
Respondent
HEARD BEFORE MR. JUSTICE MILLER
in the Courts Administration Service, Courtroom Number B,
180 Queen Street West, 6th Floor,
Toronto, Ontario
on Tuesday, January 30, 2007 at 10:15 a.m.
APPEARANCES:
Mr. Howard J. Alpert for the Appellant
Ms. Eleanor H. Thorn for the Respondent
Also Present:
Mr. William O=Brien Court Registrar
Ms. Sheila Finlay Court Reporter
A.S.A.P. Reporting Services Inc. 8 (2007)
200 Elgin Street, Suite 1004 130 King Street, Suite 1800
Ottawa, Ontario K2P 1L5 Toronto, Ontario M5X 1E3
(613) 564-2727 (416) 861-8720
Toronto, Ontario
--- Upon commencing on Tuesday, January 30, 2007
at 10:15 a.m.
…
THE COURT: Ms. Thorn, why wouldn't your department consent to a section 86 order if the RCMP are prepared to release these documents with a court order, rather than taking no position? Why don't you just consent to an order so we can get the documents back?
MS. THORN: Because we have to be here anyway for the other motion, so I thought since we are hearing this --
THE COURT: Do you think there's going to be another motion? All he wants to do is get his documents back. It strikes me if the RCMP gives him the documents ‑‑
MS. THORN: I have stated our position to him in letters already, and he still insists that the CRA has the documents. I don't know any other way to get through to Mr. Albert that there are ways to get those documents.
THE COURT: One of the ways is a court order.
Okay. Before you even address Rule 82, Mr. Alpert, correct me if I'm wrong, but you don't need an order under both of these, do you?
MR. ALPERT: No.
THE COURT: If I give you a court order that you can trot off to the RCMP and they give you all of these boxes of documents so you can properly prepare a list of documents and ultimately prepare your client's trial, you're not, presumably, turning around and seeking full disclosure of documents that you now have anyway, are you?
If I give you a Rule 86 order, are you still looking for a Rule 82 order?
MR. ALPERT: Well, I think the order is that the documents are, I mean, I think we're entitled to both orders.
THE COURT: I don't get it. Practically, you want the documents.
MR. ALPERT: We do want the documents.
THE COURT: So you get the documents, they're your documents. They're not the Crown's documents, they're your documents seized from your client. You get a court order, the RCMP gives you the documents, what now are you seeking full disclosure from the government for?
MR. ALPERT: No, I'm not, that would be quite clear.
I do want to set one matter of the record straight, and obviously I'm quite content to get that order under Rule 86 that the RCMP deliver the documents to the client.
When my friend was making her submission here, my friend stated that certain statements were made by the RCMP to the appellant to the effect that he could come pick up his documents and there was a six‑month period. There's nothing in the record about that. My friend was giving evidence here of her own. There's nothing in the record.
MS. THORN: I already said it's over the phone, and I'm not certain about the six months, anyway.
MR. ALPERT: There's nothing in the record, and there's nothing in the record about the appellant waiving his rights.
THE COURT: As far as I'm concerned, that's water under the bridge. It doesn't impact on what my order should be.
MR. ALPERT: I understand that, but I just wanted to get the matter clear because I think there's an inference here, and it will go to the costs submissions, that the appellant somehow is the author of his own misfortune here, and there's evidence like that in the material. I was never told anything like that.
THE COURT: That's fine. I have your point, Mr. Alpert.
MR. ALPERT: Thank you.
THE COURT: Before I get to Rule 82, my view is I'm quite prepared, and I don't think the Crown has any objection, that I give a Rule 86 order and order the RCMP to return these documents to your client, Mr. Alpert.
Frankly, I'm just going to adjourn the Rule 82 motion, hopefully never to have it see the light of day again.
MS. THORN: Your Honour, we've just heard from Mr. Alpert. He's quite insistent, so we might as well go ahead and I make my argument.
THE COURT: He wasn't insistent.
MS. THORN: He said I still have to ‑‑
THE COURT: Excuse me. I heard him say that if he gets the Rule 86 order that he would be content with that.
I believe that's what I heard you say, Mr. Alpert?
MR. ALPERT: That would be fine.
I like Your Honour's suggestion of adjourning the Rule 82 application until we can see that I do get compliance from the RCMP. So I like that suggestion.
THE COURT: That's the only reason I would adjourn this. I can't imagine that the RCMP wouldn't give him all of the documents. If there are some documents that they believe they have passed on to Canada Revenue and the agency doesn't have them anymore and you still have them, I can't imagine that would be the case.
MR. ALPERT: But it's extra protection, it's just a safeguard here and would leave the material before the Court. On that basis, I think that that's a prudent way to go.
I agree with the line of reasoning that Your Honour has adopted.
THE COURT: But I want to be very clear, Mr. Alpert. If the RCMP releases all the seized documents to you, I do not anticipate hearing a Rule 82 application.
MR. ALPERT: I can assure you that that won't be any problem, in that regard.
THE COURT: Ms. Thorn, if you're not happy with that route, tell me what you would prefer.
MS. THORN: I'm quite happy with that. The only thing is that I'd like to clear up the basis of Mr. Alpert's request on the 82 matter. But since Your Honour is reluctant to hear that --
THE COURT: Ms. Thorn, I don't ever want to be accused of cutting somebody off from telling me something that they want to tell me. If you want to make some representations on that, notwithstanding you heard my preference is that it simply be adjourned, by all means.
MS. THORN: I don't want to unduly take up Your Honour's time.
THE COURT: I have nothing else on today.
MS. THORN: It was also stated by Mr. Alpert that the respondent, in this matter, has possession of the appellant's documents and records seized by the RCMP in the immigration matter. He cited no source or grounds for that information. No evidence of fact or law has been produced or referred to by Mr. Alpert as to the basis of the belief, other than the fact that the respondent is Her Majesty the Queen, sworn by the auditor in Her affidavit.
Other than photocopying, in June, some of the appellant's records held by the RCMP for the purpose of reassessing the appellant's 2000 taxation year, none of the things seized from the appellant by the RCMP was, at any time, past or present, in Her's or anyone else's at CRA's possession, control or power. This is in full compliance with the Income Act and Privacy Act.
THE COURT: Just address, for a moment, Ms. Thorn, now that you've gone down this path, who is the respondent?
MS. THORN: The respondent is Her Majesty the Queen.
THE COURT: Does that not include the RCMP?
MS. THORN: Yes, but the RCMP is not a party to this tax matter.
THE COURT: No, but Her Majesty the Queen is a party. If the Department of Revenue Canada had some documents, or the Department of Finance had some documents, you're telling me that because it's two different departments of the same litigant, Her Majesty the Queen, that Her Majesty the Queen cannot be said to have control over those documents; that's your argument?
MS. THORN: Her Majesty the Queen, in this tax matter, cannot have access to any other documents, any other documents held by anybody else, unless it is legislated and provided for in an act of parliament.
THE COURT: Where do you draw that principle from?
MS. THORN: From the Privacy Act and also the Income Tax Act.
Under the Privacy Act, one of the government departments can have access to information regarding an individual, information that's being held by another department, provided it is authorized under some act of parliament.
In fact, if the respondent had, indeed, went to the RCMP, took all of the appellant's things away, then I would say the appellant would have a legitimate complaint. That is not the case here.
All the auditor did was to act under section 231.1 and go to the RCMP and say, "hey, we need to reassess this person. I understand you have some documents. We need access to the information and we will take copies of documents in order to reassess."
That is exactly what the auditor did. She did not violate the Income Tax Act or the Privacy Act.
THE COURT: Doesn't that strike you, though, because the expression is "a party having possession, control or power". Now, if Revenue Canada has the right to go to the RCMP and say, "I want to see these documents", and the RCMP shows them those documents and Revenue Canada can copy whatever documents it wants, isn't there some argument that it's within Revenue Canada's power to access those documents and therefore they are available for full discovery?
MS. THORN: Yes, to the photocopied documents.
THE COURT: But she could photocopy the whole works.
MS. THORN: No, we did not.
THE COURT: I know you didn't, but the Act talks in terms of the power. If she had the power to copy some documents, why wouldn't she have the power to copy all the documents?
MS. THORN: Because under the Act it says only for the purpose of reassessment.
For example, if there's a document with respect to the appellant's personal life, et cetera, the auditor would not have the power to photocopy those.
THE COURT: But this is a tax matter dealing with alleged income from immigration clients, and the seized documents dealt with immigration fraud with immigration clients. I think there would be a pretty strong argument that every one of those documents might well bear on the tax matter. Whose call would it be?
MS. THORN: Maybe it has to do with his medical condition, et cetera, and it is not related to the particular reassessment, then the auditor would be wrong to have photocopied those documents.
The authorities referred to by my friend are with respect to identified documents within the opposing party's control and power. That's not the case here. The respondent has no control or power over any of the other things.
As far as the copies made from the appellant's documents are concerned, everything has been produced on demand by the appellant.
Of course, I still have argument with respect to 82, but this is what I want to clarify at the outset.
THE COURT: Thank you very much.
MS. THORN: Thank you, Your Honour.
THE COURT: Two things: Firstly, if I am making a Rule 86 order ordering the RCMP to release documents, Mr. Alpert, how should I describe that, documents seized from Mr. Singh on such and such a date, or can you give me some help in making it absolutely clear as to what it is we're seeking from the RCMP?
MR. ALPERT: The documents that were seized by the RCMP, it was a Criminal Code procedure, I believe, under section 367 of the Criminal Code, that the appellant had acted contrary to paragraph 94(1)(i) of the Immigration Act of Canada. I think that's set out in paragraph F. At paragraph R and S, actually, of the reply of the respondent, it says Exhibit B of the proceeding.
I had put up a book that has page numbers. It's actually at page 24, these two paragraphs at page 24. They're at the top of page 6 of the reply. These are the admissions by the respondent of what actually happened, that in January of 2006 the Royal Canadian Mounted Police conducted a legal search and seize of the ‑‑
MS. THORN: 2001.
MR. ALPERT: 2001. I'm sorry, January 2001, I apologize. That the RCMP conducted a legal search and seizure at the appellant's premises pursuant to a properly obtained search warrant.
Then at paragraph S, that the arrest was on indictment of 13 counts under section 367 of the Criminal Code. I believe that the documents were seized pursuant to the provisions of the Immigration Act of Canada.
THE COURT: I think I have enough information to properly describe what it is we're looking to get back.
MR. ALPERT: The materials there, they're in the possession of, the care, custody and control of, the RCMP.
THE COURT: Did you want to make any submissions on costs, Mr. Alpert?
MR. ALPERT: Yes. I would submit, and I think Your Honour has tuned to the argument that I have submitted, that these were two different departments of the same respondent. The CRA has, at all times, had access to the information held by the RCMP. They could have photocopied all of these documents, all of them, at any time, and has the power to consent to this order.
The appellant has been put to unnecessary costs and expense as a result of the respondent's conduct. I would ask for costs on a solicitor‑client basis in this case because the respondent was given ample opportunity to return the materials. There were numerous letters that were written to the respondent's counsel asking for the respondent's consent to cooperate with the police. It's evidenced, from the position taken today, that that consent was not forthcoming.
THE COURT: Did you ever actually put it directly to Ms. Thorn: "Look, if you help me get this Rule 86 order, if you consent to that, I'll go to the RCMP and get the seized documents and there will be no need to seek full disclosure from the Crown?" Was that ever put in front of the Crown?
MR. ALPERT: Yes, it was. It was in my materials. I have letters that I wrote. They are in the materials here. That, repeatedly, was the gist of it. I was asking for cooperation.
THE COURT: I don't want just the "gist" of it, I want it clear that the government would not give you a consent under Rule 86 on the understanding that there would be no need for Rule 82.
MR. ALPERT: This is at Exhibit K.
THE COURT: Yes.
MR. ALPERT: If we come to my letter of October the 3rd, I set out the things here.
The original motion was adjourned on consent sine die to permit the parties to attempt to cooperate. I said to her in that letter there, to the Department of Justice there, that I confirm that I was served with the respondent's motion materials herein setting out the position that they took. I confirm that on October the 3rd I telephoned you again regarding this motion. I pointed out to you that the RCMP is the Canada national police service and an agency of the Ministry of Public Safety and Emergency Preparedness Canada:
"Accordingly, I advised you that the Respondent herein is Her Majesty the Queen and that both the CRA and RCMP are agencies of the Respondent, Her Majesty the Queen. Therefore, I suggested to you that the Respondent, Her Majesty the Queen, is in fact in possession of the documents being requested for production --"
Then I state at the second paragraph on the second page of the letter:
"As a result, both of us are hoping to resolve this matter amicably. The proposed adjournment will permit me additional time to attempt to obtain production of the requested documents voluntarily from the RCMP. You have indicated to me you will provide me with your cooperation in obtaining the requested documents voluntarily from the RCMP."
THE COURT: Just slow down a little bit, Mr. Alpert.
MR. ALPERT: Sorry?
THE COURT: Just slow down, it's difficult to catch it all.
MR. ALPERT: I'm sorry. I'll just go back:
"As a result, both of us are hoping to resolve this matter amicably. The proposed adjournment will permit me additional time to attempt to obtain production of the requested documents voluntarily from the RCMP. You have indicated to me you will provide me with your cooperation in obtaining the requested documents voluntarily from the RCMP."
It says:
"In the event that I am
successful in obtaining the
production of the requested
documents voluntarily from
the RCMP, I shall withdraw
my Motion on consent without
costs. However, in the
event that I am not
successful in obtaining
production of the requested
documents voluntarily from
the RCMP, I shall be forced
to serve and file amended
Motion materials under Rules
82 and 86 of Tax Court of
Canada Rules of Practice in
order to seek Orders
compelling the production of
the requested documents from
the Respondent and the
RCMP."
"As discussed, we are both
of the view that the
above‑mentioned Motion, if
required, should be dealt
with prior to the Status
Hearing, which is now to be
scheduled on December 7th."
The status hearing has now been adjourned sine die awaiting the outcome of this motion. I say:
"Accordingly, I confirm that
I have advised you in
our telephone conversation
that in the event that my
request for an adjournment
of the Motion is not
granted, the Examination of
the Appellant previously
scheduled by you to take
place --will have to be
adjourned to a new date."
I was served with a notice they wanted to cross‑examine the appellant. That did not take place, it was withdrawn.
" --will have to be
adjourned to a new date that
is mutually convenient to
both parties in order to
permit the Appellant to file
and serve amended Motion
materials under Rules 82 and
86 of the Tax Court of
Canada Rules and Practice in
order to seek Orders
compelling the production of
the requested documents from
the Respondent and/or the
RCMP. Please advise me that
you are willing to accept
service of the amended
Motion materials, if
required, on behalf of the
RCMP since it and the CRA
are both agencies of the
Respondent."
Again, this is the same letter there. The response I got is that they wouldn't cooperate and that I had to bring the motion.
That's the response I got from Ms. Thorn ultimately at Exhibit O to her letter of October 12th. It's at the last page of Tab 2:
"This is further to your
telephone calls last week
requesting assistance in
obtaining the Things seized
from the Appellant by the
RCMP in the criminal
immigration fraud matter.
The Respondent in this tax
matter has no right to any
of the Appellant's Things
other than is provided under
the Income Tax Act Audit
only, obtained from those
Things copies of documents
that are necessary to
support the tax assessment;
and copies thereof were
already provided to you.
I suggest that you
consulting the legislation/s
and regulation/s under which
the Appellant's Things were
seized. There would be
provisions setting out to
whom, and how, such Things
may be returned. Please
follow the procedures set
out therein."
That's why we're here today.
I spent at least ten hours on this matter preparing the materials and the legal research and the hearing today. My hourly rate is 480, I'm asking for $4,800.00 costs to be fixed on a solicitor‑client basis. Those are my submissions.
THE COURT: Thank you.
Ms. Thorn?
MS. THORN: Well, Your Honour, they asked for costs on a solicitor and client basis and that cannot be taken lightly. Nowhere, and to answer your question directly, nowhere and at no time did Mr. Alpert indicate that if we consented to the section 86 motion then the 82 motion would be withdrawn. The letter he referred you to is prior to amending his Notice of Motion.
THE COURT: Certainly the tenor of the correspondence is we want to get these documents from the RCMP, can you help. He acknowledges that you have been cooperative.
I would have thought that someone would have suggested, "let's get a Rule 86 order by consent" and away you go.
MS. THORN: All through he's insisted on this 82 matter. Since we're coming here, what's the purpose of consenting to that and ultimately have to do a very costly Affidavit of Documents? There's really no ground for the 82 request, anyway.
Presumably the whole tenor of the thing, and also as stated in the appellant's affidavit, is that we refuse to provide any assistance. Well, as opposing counsel, and I've told Mr. Alpert that I will help within limits, and that's exactly what I did.
Mr. Alpert was told all along that once our list of documents was prepared, he may inspect and take copies in accordance with the Rules. If he can identify and produce a list of documents not listed on our list, we would provide him with a copy if that document is relevant to the issue.
To help things along, Mr. Alpert was provided with the respondent's audit report and the appeals report as well.
You can also tell from Tab 2, Nancy Pasterelli's affidavit, Exhibit I, that it was only after my suggestion on September 28, 2006 when Mr. Alpert called me to assist him, I said: "Why don't you ask the RCMP directly for the return of the things?" I even provided him with the RCMP's number.
I also said: "Why don't you contact the criminal lawyer in this matter, he might have documents?" And, also, "contact the financial institutions that the appellant worked with." Of course, he could also have contacted the appellant's accountant where the auditor obtained leads to prepare those demands for information from the bank.
Well, on the same day Mr. Alpert called me back and said, "I've spoken with the RCMP" and he wants to adjourn the motion. There's been many telephone calls from Mr. Alpert along the same line insisting that we have the appellant's things, which resulted in my October 12th letter that was previously referred to you. I said, "look, there are legislations and provisions that provide for the return of the seized things." I don't know what Mr. Alpert did with that.
Based on the foregoing, I said that "as opposing counsel I've done all I could". I can't very well do Mr. Alpert's job for him representing the appellant.
I would ask that the third party motion application, if allowed, I would rely on the Bawolin case under Tab 8 of the appellant's book of authorities, to similarly ask for costs from the appellant. In that particular case, it was $300.00.
THE COURT: Thank you.
Anything further, Mr. Alpert?
MR. ALPERT: No.
THE COURT: Solicitor‑client costs are quite an exception, and my handling of them is, I would only order them in some very egregious circumstances where I am satisfied that one side or the other has acted outrageously that would justify solicitor‑client costs. I don't see that type of behaviour in this case, Mr. Alpert.
You are successful on your application with respect to Rule 86. I do make an order that the RCMP are to return the seized documents seized in January 2001 from Mr. Singh. On that motion I will also order costs at $500.00.
The motion with respect to Rule 82 is adjourned sine die.
Thank you all very much.
--- Whereupon proceedings adjourned at 11:20 a.m.
I HEREBY CERTIFY THAT I have, to the best
of my skill and ability, accurately recorded
by Stenograph and transcribed therefrom, the
foregoing proceeding.
Sheila M. Finlay, Certified Shorthand Reporter