Digests

Dwyer v. Canada

A-424-01

2003 FCA 322, Nadon J.A.

26/8/03

50 pp.

Appeal from Tax Court of Canada judgment dismissing appellant's appeal from reassessments for 1987, 1988, 1989, 1990 and 1991 taxation years--Reassessments for years 1987 to 1990 included interest income from residential mortgages in appellant's income, and assessed interest and penalties for taxpayer's failure to report same--With respect to 1991 taxation years, reassessment includes only interest income from residential mortgages--Appellant submits T.C.J.'s reasons do not meet standard enunciated in R. v. Sheppard, [2002] 1 S.C.R. 869--Specifically, appellant argues reasons deficient because not sufficiently intelligible to permit appellate review of correctness of decision--No merit in appellant's submissions Tax Court Judge (T.C.J.) erred by failing to provide sufficient reasons for decision--T.C.J. reviewed evidence, made key findings of fact to support conclusions and set out legal test relevant to his analysis--Second, whether T.C.J. erred by failing to find issue of whether appellant had required mental state to justify imposition of penalties res judicata by reason of his criminal acquittal (accusation of tax fraud)--T.C.J. concluded issue of estoppel in civil proceeding does not flow from acquittal in criminal case--Issue of mens rea not res judicata between parties as burden of proof not same in both cases--Third, T.C.J. did not err for having failed to place burden of proving taxpayer's assessment on Minister of National Revenue--In case at bar, Minister adduced cogent evidence to support assessments, which appellant then had burden of rebutting--Appellant did not present any such rebuttal evidence--Consequently, no merit in appellant's contention and T.C.J. carefully examined evidence adduced and concluded Minister had, on balance of probabilities, met his burden--Fourth, T.C.J. did not err in failing to find conduct of investigation/audit constituted abuse of process--In Blencoe v. British Columbia (Human Rights Commission), [2000] 2 S.C.R. 307, Supreme Court of Canada explained what proof necessary to justify conclusion of abuse of process--Appellant has not adduced sufficient evidence to meet threshold set by Supreme Court--Considering search team leader not in position to influence outcome of administrative proceedings, his inappropriate personal conduct not such as to justify conclusion of abuse of process-- Although search team leader's conduct reprehensible, it did not result in any unfairness to appellant--Fifth, T.C.J. did not err in finding no breaches of Charter, ss. 7, 8 with respect to manner in which evidence in support of reassessment obtained, or alternatively, in finding evidence admissible under Charter, s. 24(2)--In R. v. Jarvis, [2003] 3 S.C.R. 757, Supreme Court held use of requirement provisions to secure information valid and any evidence obtained admissible in both civil and criminal enforcement proceedings, if predominant purpose of inquiry by Minister not determination of penal liability--Conduct of investigation herein consistent with audit, in that nature of evidence sought relevant to establishing whether or not there was unreported income and went more to appellant's tax liability in general than to specific mens rea of offence--No evidence which could have justified transfer of file to Special Investigation had it originated in Audit Branch of Revenue Canada--When requirement served upon financial institution "adversarial relationship" between state and individual had not been engaged, and predominant purpose of inquiry could not have been determination of penal liability--Thus, requirement served upon financial institution does not constitute unreasonable search and seizure and, therefore, appellant's rights under Charter, ss. 7, 8 not infringed--As to admissibility of evidence under Charter, s. 24(2), factors identified in R. v. Stillman, [1997] 1 S.C.R. 607, relevant to determination of whether evidence illegally obtained should be excluded pursuant thereto--T.C.J. made no error which would allow this Court to intervene-- First, evidence at issue not conscriptive and thus, its admission does not render trial unfair--Secondly, Charter breach not serious because breach committed in good faith and was not deliberate or wilful-- Thirdly, exclusion of evidence could deprive Minister of evidence necessary to enforce significant tax liability-- Consequently, no basis for disturbing T.C.J.'s conclusion admission of evidence would not bring administration of justice into disrepute--Appeal dismissed--Canadian Charter of Rights and Freedoms, being Part I of the Constitution Act, 1982, Schedule B, Canada Act, 1982, 1982, c. 11 (U.K.) [R.S.C., 1985 Appendix II, No. 44] ss. 7, 8, 24(2).