Federal Court of Appeal Decisions

Date: 20070109

Docket: A-438-06

Citation: 2007 FCA 8

 

Present:          RICHARD C.J.

 

BETWEEN:

Jolly Farmer Products Inc. 2005-1804(IT)G

Rebecca A. Adams 2005-2096(IT)G

Timothy L. Adams 2005-2117(IT)G

Annie E. Best 2005-2097(IT)G

Nathan D. Best 2005-2086(IT)G

Norton D. Best 2005-2087(IT)G

Marion Billmann 2005-2098(IT)G

Michel Billmann 2005-2099(IT)G

David O. Carter 2005-2101(IT)G

Jason L. Carter 2005-2086(IT)G

Madeleine Carter 2005-2118(IT)G

Martha A. Chesher 2005-2076(IT)G

Gregory A. Cox 2005-2088(IT)G

Ann Darrow 2005-1648(IT)G

Freedom Darrow 2005-1649(IT)G

James Darrow 2005-1651(IT)G

John Darrow 2005-1639(IT)G

Mary Elisabeth Darrow 2005-1670(IT)G

Peter Darrow 2005-1641(IT)G

Christopher English 2005-1659(IT)G

Daniel English 2005-1632(IT)G

David English 2005-1638(IT)G

Joel A. English 2005-1660(IT)G

Mary L. English 2005-1652(IT)G

Rebekah English 2005-1633(IT)G

Robert English 2005-1635(IT)G

Ruth English 2005-1661(IT)G

Sarah English 2005-1654(IT)G

Sue Ellen English 2005-1665(IT)G

Susannah G. English 2005-1642(IT)G

Sarah Eversfield 2005-1656(IT)G

Joanne M. Haughn 2005-1666(IT)G

Charity Jacob 2005-1667(IT)G

Hugh R. Jacob 2005-1668(IT)G

Michael S. Jacob 2005-1657(IT)G

Nancy Jacob 2005-1658(IT)G

Shama Jacob 2005-2116(IT)G

Timothy A. Jacob 2005-2089(IT)G

David Keeler 2005-1644(IT)G

Elisabeth Keeler 2005-2057(IT)G

Philip M. Keeler 2005-1646(IT)G

R. Joy Keeler 2005-1645(IT)G

Samuel J. Keeler 2005-1669(IT)G

Shura Keeler 2005-1647(IT)G

Grace Livingstone 2005-2079(IT)G

Kirsten A. Livingstone 2005-2080(IT)G

Stephen Livingstone 2005-2081(IT)G

Timothy J. Livingstone 2005-2084(IT)G

Ellen McDougal 2005-2094(IT)G

Joan Ogden 2005-2077(IT)G

Elisabeth A. Pinter 2005-2069(IT)G

Joseph Pinter 2005-2070(IT)G

Margaret Pinter 2005-2071(IT)G

Oliver Pinter 2005-2072(IT)G

Joyce A. Vandervalk 2005-2073(IT)G

Paul David Vandervalk 2005-2074(IT)G

Barbara Weir 2005-2063(IT)G

Benjamin C. Weir 2005-2063(IT)G

Brian Weir 2005-2064(IT)G

Burton L. Weir 2005-2065(IT)G

Gregory S. Weir 2005-2066(IT)G

Jeffrey J. Weir 2005-2067(IT)G

Joy E. Weir 2005-2068(IT)G

The Estate of Robert C. English 2005-1653(IT)G

The Estate of George Eversfield 2005-1655(IT)G

The Estate of Katherine S. Talcott 2005-2095(IT)G

 

Appellants

and

HER MAJESTY THE QUEEN

Respondent

 

 

 

Heard at Ottawa, Ontario, on January 8, 2007.

Order delivered at Ottawa, Ontario, on January 9, 2007.

 

REASONS FOR ORDER BY:                                                                                   RICHARD C.J.

 

Date: 20070109

Docket: A-438-06

Citation: 2007 FCA 8

 

Present:          RICHARD C.J.

 

BETWEEN:

Jolly Farmer Products Inc. 2005-1804(IT)G

Rebecca A. Adams 2005-2096(IT)G

Timothy L. Adams 2005-2117(IT)G

Annie E. Best 2005-2097(IT)G

Nathan D. Best 2005-2086(IT)G

Norton D. Best 2005-2087(IT)G

Marion Billmann 2005-2098(IT)G

Michel Billmann 2005-2099(IT)G

David O. Carter 2005-2101(IT)G

Jason L. Carter 2005-2086(IT)G

Madeleine Carter 2005-2118(IT)G

Martha A. Chesher 2005-2076(IT)G

Gregory A. Cox 2005-2088(IT)G

Ann Darrow 2005-1648(IT)G

Freedom Darrow 2005-1649(IT)G

James Darrow 2005-1651(IT)G

John Darrow 2005-1639(IT)G

Mary Elisabeth Darrow 2005-1670(IT)G

Peter Darrow 2005-1641(IT)G

Christopher English 2005-1659(IT)G

Daniel English 2005-1632(IT)G

David English 2005-1638(IT)G

Joel A. English 2005-1660(IT)G

Mary L. English 2005-1652(IT)G

Rebekah English 2005-1633(IT)G

Robert English 2005-1635(IT)G

Ruth English 2005-1661(IT)G

Sarah English 2005-1654(IT)G

Sue Ellen English 2005-1665(IT)G

Susannah G. English 2005-1642(IT)G

Sarah Eversfield 2005-1656(IT)G

Joanne M. Haughn 2005-1666(IT)G

Charity Jacob 2005-1667(IT)G

Hugh R. Jacob 2005-1668(IT)G

Michael S. Jacob 2005-1657(IT)G

Nancy Jacob 2005-1658(IT)G

Shama Jacob 2005-2116(IT)G

Timothy A. Jacob 2005-2089(IT)G

David Keeler 2005-1644(IT)G

Elisabeth Keeler 2005-2057(IT)G

Philip M. Keeler 2005-1646(IT)G

R. Joy Keeler 2005-1645(IT)G

Samuel J. Keeler 2005-1669(IT)G

Shura Keeler 2005-1647(IT)G

Grace Livingstone 2005-2079(IT)G

Kirsten A. Livingstone 2005-2080(IT)G

Stephen Livingstone 2005-2081(IT)G

Timothy J. Livingstone 2005-2084(IT)G

Ellen McDougal 2005-2094(IT)G

Joan Ogden 2005-2077(IT)G

Elisabeth A. Pinter 2005-2069(IT)G

Joseph Pinter 2005-2070(IT)G

Margaret Pinter 2005-2071(IT)G

Oliver Pinter 2005-2072(IT)G

Joyce A. Vandervalk 2005-2073(IT)G

Paul David Vandervalk 2005-2074(IT)G

Barbara Weir 2005-2063(IT)G

Benjamin C. Weir 2005-2063(IT)G

Brian Weir 2005-2064(IT)G

Burton L. Weir 2005-2065(IT)G

Gregory S. Weir 2005-2066(IT)G

Jeffrey J. Weir 2005-2067(IT)G

Joy E. Weir 2005-2068(IT)G

The Estate of Robert C. English 2005-1653(IT)G

The Estate of George Eversfield 2005-1655(IT)G

The Estate of Katherine S. Talcott 2005-2095(IT)G

 

Appellants

and

HER MAJESTY THE QUEEN

Respondent

 

 

REASONS FOR ORDER

RICHARD C.J.

[1]               This is a motion brought by the Appellants for a stay of the order of Justice Diane Campbell of the Tax Court of Canada dated September 29, 2006 (2005-1804(IT)G) pursuant to subsection 50(1) of the Federal Courts Act and Rule 398 of the Federal Courts Rules (the “Order”).

 

[2]               Jolly Farmer Products Inc. appealed its reassessments for the 1998, 1999, 2000, 2001, 2002 and 2003 taxation years on May 30, 2005 (“Corporate Appeal”).

 

[3]               Sixty-five (65) shareholders of Jolly Farmer Products Inc. appealed their reassessments for the 2000 and 2001 taxation years between May 17 and June 20, 2005 (“Shareholder Appeals”).

 

[4]               The Respondent filed replies to the various appeals between August 24 and September 2, 2005.

 

[5]               By order of Court dated February 9, 2006, the Tax Court ordered, inter alia, that (a) the parties file and serve the List of Documents by June 30, 2006; and (b) examinations for discovery be completed by October 2, 2006.

 

[6]               The Respondent filed and served her Lists of Documents between June 26 and June 28, 2006.  The Appellants filed and served their Lists of Documents on June 30, 2006.

 

[7]               On August 22, 2006, the Appellants filed a motion for an order, inter alia, that the Shareholder Appeals be stayed until the determination of the Corporate Appeal.

[8]               In her Order of September 29, 2006, Justice Campbell ordered, inter alia, that the Corporate Appeal proceed ahead of the Shareholder Appeals, the hearing of the Shareholder Appeals commence immediately after the hearing of the Corporate Appeal and examination for discoveries be completed by March 30, 2007. It was further ordered that the parties communicate with the Hearings Coordinator in writing on or before May 30, 2007, to advise the Court whether the case will settle, whether a pre-hearing conference would be beneficial, or whether a hearing date should be set.

 

[9]               The Appellants filed an appeal with this Court on October 6, 2006, appealing the Order of Justice Campbell.

 

[10]           On December 22, 2006, the Respondent’s counsel wrote to the Appellants’ counsel requesting the Appellants’ available dates for examination for discovery.

 

[11]           On January 3, 2007, the Appellants filed a motion with this Court for an order staying the Order of Justice Campbell dated September 29, 2006 and, in particular, that part of the Order requiring that all examinations for discoveries be completed no later than March 30, 2007.

 

[12]           The Order which is the subject of the stay application and which is under appeal before this Court is an interlocutory order on procedural matters that is not determinative of the Corporate Appeal and the 65 Shareholder Appeals before the Tax Court of Canada.

 

[13]           The relevant test to be applied to an application for a stay is set out in RJR-MacDonald Inc. v. Canada (A.G.), [1994] 1 S.C.R. 311. The onus lies with the Appellants to show that there is a serious issue to be tried, that they will suffer irreparable harm and that the balance of convenience favours the granting of a stay.

 

Serious Issue

[14]           The Appellants raised 3 grounds of appeal in their Notice of Appeal.  They are that Justice Campbell erred in law by failing to (a) apply the correct legal test in determining the Motion before the Tax Court, pursuant to Rule 26 of the Tax Court of Canada Rules (General Procedure); (b) apply Rule 4(1) of the Tax Court of Canada Rules (General Procedure); and, (c) exercise her discretion judicially in determining the Motion before the Tax Court.

 

[15]           For the purposes of this motion, I will proceed on the basis that the Appellant has established a serious question to be tried.

 

Irreparable Harm

[16]           In RJR-MacDonald, it was held that “‘[i]rreparable’ refers to the nature of the harm suffered rather than its magnitude.  It is harm which either cannot be quantified in monetary terms or which cannot be cured, usually because one party cannot collect damages from the other” (paragraph 59).

 

[17]           Here, the Appellants argue that, if the stay of proceeding is not granted, they will suffer irreparable harm in that the Appellants would have to schedule and conduct 65 discoveries, thereby essentially loosing any advantage they seek to gain by appealing the Order of the Tax Court of Canada and rendering the appeal to this Court academic.

 

[18]           The determination of the Corporate Appeal will not dispose of the Shareholder Appeals.  If the Appellants’ appeal to this Court is successful, the discoveries of the 65 shareholders would be not made nugatory. The discoveries of the 65 shareholders would still be required for the subsequent hearing of the Shareholder Appeals.

 

[19]           There is no evidence that the completion of discoveries of the 65 shareholders before the Appellants’ appeal to this Court is heard will cause irreparable harm to the Appellants or a monetary loss that cannot be compensated for in costs.

 

[20]           Accordingly, the Appellants have not shown that they will suffer irreparable harm if the stay is not granted.

 

Balance of Convenience

[21]           The balance of convenience is a determination of which of the two parties will suffer the greater harm from the granting or refusal of the stay, pending a decision on the appeal.

 

[22]           The Appellants submit that compliance with the Order will result in scheduling and completing 66 examinations for discovery whereas granting a stay will simply delay proceeding with the 65 Shareholder Appeals until the appeal of the Order is heard.

 

[23]           The Reassessments for the Corporate Appellant relate to 1998, 1999, 2000, 2001, 2002 and 2003 taxation years, the Reassessments for the Shareholder Appellants relate to 2000 and 2001 taxation years, and the Corporate and Shareholder Appeals were commenced in 2005. The Respondent is entitled to conduct an examination for discovery of all parties to the Shareholder Appeals prior to the hearing of these appeals. These discoveries would have to be completed regardless of the outcome of the Corporate Appeal. In these circumstances, the balance of convenience favours that these proceedings be completed in a reasonable period of time.

 

[24]           There is also a public interest that judicial proceedings be completed within a reasonable period of time.

 

[25]           Accordingly, the Appellants’ motion for a stay of the Order will be dismissed with costs.

 

 

 

 

 

 "J. Richard"

FEDERAL COURT OF APPEAL

 

NAMES OF COUNSEL AND SOLICITORS OF RECORD

 

 

 

DOCKET:                                                                              A-438-06

 

 

STYLE OF CAUSE:                                                              JOLLY FARMER PRODUCTS INC. ET AL

                                                                                                v.

                                                                                                HER MAJESTY THE QUEEN           

 

PLACE OF HEARING:                                                        Ottawa

 

DATE OF HEARING:                                                          January 8, 2007

 

REASONS FOR ORDER BY:                                             Richard C.J.

 

DATED:                                                                                 January 9, 2007

 

 

APPEARANCES:

 

Mr. John Townsend	FOR THE APPELLANT
Mr. Cecil Woon	FOR THE RESPONDENT

 

SOLICITORS OF RECORD:

 

Cox & Palmer, Fredericton, N.B.	FOR THE APPELLANT
John Sims, Deputy Attorney General of Canada, Halifax, N.S.	FOR THE RESPONDENT