BETWEEN:
and
Hearing held at Ottawa, Ontario on February 13, 2008.
Judgment rendered at Ottawa, Ontario on February 20, 2008.
REASONS FOR JUDGMENT BY: TRUDEL J.A.
CONCURRED IN BY: DESJARDINS J.A.
LÉTOURNEAU J.A.
Docket: A-54-07
Citation: 2008 FCA 63
CORAM: DESJARDINS J.A.
LÉTOURNEAU J.A.
TRUDEL J.A.
BETWEEN:
RAYNALD GRENIER
Appellant
and
HER MAJESTY THE QUEEN
Respondent
REASONS FOR JUDGMENT
[1] A judgment of the Tax Court of Canada on September 26, 2002 (reasons [TRANSLATION] “amended for greater clarity” in December 2002, per Judge Archambault) dismissed Mr. Grenier’s appeal from reassessments by the Minister of National Revenue for the 1993 to 1996 taxation years, inclusive (2002 T.C.J. No. 650 (T.C.C.) (QL) – the 2002 judgment).
[2] The appellant appealed this decision to this Court, which appeal was dismissed on the merits by a judgment of April 1, 2004 (2004 FCA 148; application for leave to the Supreme Court dismissed, No. 30194). Earlier the appellant had twice unsuccessfully sought leave to enter new evidence which he said was [TRANSLATION] “complementary in support of testimony already heard but not accepted” by the trial judge (October 29, 2003, per Létourneau J.A.; application to review denied, December 9, 2003).
[3] This time, the Court has before it an appeal by Mr. Grenier (notice of appeal 2007) from a second judgment of the Tax Court of Canada on December 20, 2006 (Reasons from the bench amended for greater clarity and precision on June 27, 2007 – per Judge Archambault – the judge – 2007 TCC 93 – the 2006 judgment). On appeal, the appellant represented himself.
[4] This judgment dismissed his motion to [TRANSLATION] “set aside or amend the judgment of October 1, 2002, on account of fraud or facts arising or discovered after it was made and to reply to a question on which the Court did not rule”, made pursuant to Rule 172 of the Tax Court of Canada Rules (General Procedure), SOR/90-688a (appellant’s memorandum, p. 16 – motion to amend).
[5] Rule 172 reads as follows:
Tax Court of Canada Rules (General Procedure), SOR/90-688a
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172. (1) A judgment that,
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172. (1) Le jugement qui :
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(a) contains an error arising from an accidental slip or omission, or
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a) comporte une erreur découlant d’un lapsus ou d’une omission;
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(b) requires amendment in any matter on which the Court did not adjudicate,
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b) doit être modifié relativement à une question sur laquelle la Cour n’a pas statué,
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may be amended by the Court on application or of its own motion.
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peut être modifié par la Cour, sur demande ou de son propre chef.
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(2) A party who seeks to,
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(2) Une partie peut demander, par voie de requête dans l’instance, selon le cas :
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(a) have a judgment set aside or varied on the ground of fraud or of facts arising or discovered after it was made,
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a) l’annulation ou la modification d’un jugement en raison d’une fraude ou de faits survenus ou découverts après qu’il a été rendu;
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(b) suspend the operation of a judgment, or
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b) un sursis d’exécution d’un jugement;
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(c) obtain other relief than that originally directed,
may make a motion for the relief claimed.
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c) une mesure de redressement différente de celle qui a déjà été accordée.
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[6] By his motion to amend the appellant put forward several arguments to appeal from the judgment of the Tax Court of Canada. The very title of the motion showed that it concerned both the appeal from a judgment, material correction of that judgment or its withdrawal. Yet there is a procedure provided for each of these applications and the courts have on many occasions set out the principles applicable to each procedure. The most relevant may be summarized as follows:
§ the trial court cannot correct a judgment it has rendered if the judgment has been the subject of a Court of Appeal judgment, and I would add, still less if it is being implemented or has been implemented, and the conclusions sought were included in those considered by the appeal (see Rule 399 of the Federal Courts Rules; Déziel v. Canada, 2005 TCC 70);
§ misunderstanding and misinterpretation by a party of exchanges at the hearing and the resulting decision, or a refusal to accept the disposition therein, are not grounds for amending the judgment;
§ a motion to correct a judgment is intended to correct an error of the judge resulting from an accidental slip or omission: it is not a disguised appeal of the decision (see Benipal v. Canada (Minister of Citizenship and Immigration), 2002 FCTD 1302);
§ subsection 172(1) makes it possible to correct certain errors made by the Court, but is not a basis for correcting an error made by the taxpayer or his counsel who failed to submit a question for the Court’s attention (see Dupont Canada Inc. v. Canada, 2002 FCA 307);
§ withdrawal is an exception to the fundamental rule that judgments are irrevocable, an essential part of the effective administration of justice: a case which has already been decided may be reopened only for persuasive and clearly established reasons. The proceeding and the resulting judgment contribute to protection of the rights of both parties. This is why calling judgments into question remains the exception. An argument dismissed for lack of evidence or after argument and counter-argument in accordance with the settled rules does not meet the requirements for withdrawal. The same is true of an error or omission by a party (see Saywack v. Canada (Minister of Employment and Immigration), [1986] 3 F.C. 189 (C.A.); Rostamian v. Canada (Minister of Employment and Immigration), [1991] F.C.J. No. 525 (F.C.A.) (QL)).
[7] With these principles as a background, I turn to analyzing Mr. Grenier’s grounds of objection, beginning with the last one concerning the constitutionality of section 31 of the Income Tax Act, R.S.C. 1985 (5th Supp.), c. 1 (the ITA), (appellant’s memorandum, p. 115). I will then consider his contentions regarding the filing of new evidence and alleged fraud by the officers of the Department of National Revenue who dealt with his case.
Point not considered by Tax Court of Canada
[8] Among his grounds of appeal, the appellant mentioned that subsection 31(1) of the ITA contravened his rights under the Canadian Charter of Rights and Freedoms (the Charter). He summarized his argument as follows:
[TRANSLATION]
I challenge the application of the rules on limited agricultural losses to my forestry operation income. I feel that these rules are an infringement of my rights and freedoms by limiting the right to manage my businesses properly. I also feel the rules discriminate against me as this tax treatment results directly from the exercise of my occupation (appeal book, page 38).
[9] The appellant derives his income from different sources, inter alia medicine and forestry. It is the income from these professional and agricultural activities which are the focus of the dispute.
[10] In 2002, the judge concluded that the appellant had not been able to show that the [TRANSLATION] “chief source of income was farming or a combination of farming and another source of income” (paragraph 18 of 2002 reasons for judgment), hence the disputed decision of the Minister under subsection 31(2) of the ITA.
[11] This factual background is the basis for the notice of a constitutional question served by the appellant pursuant to section 57 of the Federal Courts Act. It should be noted that this question, which was raised in the notice of objection, was not repeated in the notice of appeal to the Tax Court of Canada (appeal book, vol. 1, page 38).
[12] It is thus not surprising that in its judgment of March 30, 2004 this Court refused to rule on this allegation, finding that “the constitutional question was not, however, raised before the Tax Court Judge. There is thus no evidence at all on the point, even assuming that section 15 of the Charter were applicable”. (See also paragraph 26 of 2006 reasons for judgment.)
[13] It was not until 2006, a few days before the hearing of the motion to amend before the judge, that the section 57 notice was served. That notice was served by the appellant again a few days before the appeal in this Court. In the conclusions of his memorandum, the appellant cited the Canadian and Quebec Charters (appeal book, page 26). At the hearing, he discussed only the former.
[14] The appellant conceded that the Charter had not been expressly relied on in his notice of appeal to the Tax Court of Canada. However, he maintained that paragraph 11 of the notice, as worded, [TRANSLATION] “cautiously” opened the door to his constitutional argument in that the judge had to [TRANSLATION] “determine whether the appellant was entitled to deduct all the agricultural losses claimed for each of the said taxation years” (appellant’s emphasis in his argument, appeal book, p. 38).
[15] In the appellant’s submission, the [TRANSLATION] “right to deduct” and to make the deductible agricultural losses subject to the limitations of subsection 31(1) of the ITA required constitutional analysis of [TRANSLATION] “the application” of that provision, an analysis which his counsel urged the judge to make, but in vain (in the appeal book, the appellant referred to the hearing transcript, pages 60, 61 and 63).
[16] I cannot accept the appellant’s argument when he seeks a new conclusion on an argument that was not before the trial judge and of which he also did not serve the required notice. In this respect, this Court wrote in Bekker v. R., 2004 FCA 186:
This Court will not entertain a constitutional challenge in the absence of a Notice being served on the Attorney General of Canada and on each Attorney General of the Provinces: see Gitxsan Treaty Society v. Hospital Employees Union et al. (1999), 238 N.R. 73 (F.C.A.); Giagnocavo v. M.N.R. (1995), 95 D.T.C. 5618, where this Court said that it was without jurisdiction to hear the issue. Such Notice is not a mere formality or technicality that can be ignored or that the Court can relieve a party of the obligation to comply with: see The Queen v. Fisher (1996), 96 D.T.C. 6291, where this Court ruled that the Notice must be given in every case in which the constitutional validity or applicability of a law is brought in question in the manner described in section 57, including proceedings before the Tax Court governed by the Informal Procedure. Indeed, a judge cannot, proprio motu, raise a constitutional issue without giving a notice to the Attorney General: see Reference re Remuneration of Judges of Provincial Courts, [1997] 3 S.C.R. 3. (Supra, at paragraph 8).
[17] Therefore, I conclude that the appellant’s constitutional argument cannot succeed and that his application does not fall within the scope of a motion to amend a judgment: it is not a [TRANSLATION] “question on which the Court did not rule”. Rather, it is a question that was not drawn to the Court’s attention as the result of a choice or a mistake by the party.
Allegation of fraud and documents discovered after judgment
[18] On appeal, these two grounds of challenge are closely related. Fraud by the respondent’s employees was not raised in 2002. This argument appears in the motion to amend.
A. Summary tables
[19] In particular, the appellant challenged the summary tables entered in argument by the respondent (appeal book, vol. 1, pages 34 and 35), dealing with only some of his sources of income. He maintained that the failure to include information on his financial situation as a whole, including his income and expenses, was a fabrication by the respondent and his counsel. He concluded that he had been a victim of tax fraud. In his submission, the judge was accordingly misled.
[20] The Tax Court of Canada dismissed this argument at paragraphs 7 to 13 of its 2006 judgment. The judge added that his own calculations “allowed me to note that the lack of this data in the summary tables was due to the fact that they were not submitted into evidence” (at paragraph 9 of the reasons).
[21] On appeal, the appellant tried a new demonstration. Referring to Exhibit I-11 (supplementary appeal book, A-2, pages 51 et seq.), he sought to show that the summary tables were incomplete (appeal book, pages 82 and 83), in that they did not exhaustively cover all the figures contained in Exhibit I-11.
[22] Referring to the “Declaration of Taxpayer’s Rights” (a publication of the Canada Revenue Agency), the appellant pointed out he was presumed to be [TRANSLATION] “honest” until the contrary was shown. Though he did not say so precisely, I understand from his argument that based on this presumption he is reversing the burden of proof. In his submission, the Minister of National Revenue had a duty to submit all the evidence to the Tax Court of Canada. The appellant is wrong. He had the burden of refuting the facts on which the reassessments he was challenging are based. Further, as the judge noted at paragraph 21 of the 2006 judgment: “It was open to Mr. Grenier to present his own tables, to interpret them differently and to show [his arguments]”.
[23] A review of the documentary evidence leads the Court to make the following observations:
§ the summary tables were filed by the respondent during his argument at the judge’s request (see supplementary appeal book A-2, page 37). Their purpose was to establish [TRANSLATION] “the evolution of the appellant’s principal activities, namely those relating to his profession, his other businesses and his agricultural activities” (respondent’s memorandum, at paragraph 41);
§ these tables summarized the documentary evidence submitted to the Court;
§ the information for 1980 to 1992 came from Exhibit I-11;
§ this information was obtained from the Revenue Canada “rapid tax system” where data on returns that are not otherwise available are kept (supplementary appeal book A-2, page 34);
§ the information for 1993 to 2000 was summarized in another table based on tax returns filed by the appellant for those periods (see Exhibits I-2 and I-4 to I-10);
§ the witness who prepared Exhibit I-11 was examined at the hearing; neither the appellant nor his counsel offered any evidence to rebut the content of Exhibit I-11; Mr. Bergeron was not cross-examined (see examination of F. Bergeron, supplementary appeal book A-2, page 41).
[24] In submitting the summary tables, the appellant asked the Court to note the many question marks to be seen by the line reserved for [TRANSLATION] “gross business income”. In his submission, these were fraudulent omissions made to mislead the judge. I have reviewed these tables in relation to Exhibit I-11. For the years in question, the appellant did not report any gross business income, hence the question raised by the person preparing the tables.
Documents discovered after 2002 judgment
[25] To support his argument that his income was not accurate, the appellant suggested the filing of documents [TRANSLATION] “discovered after the judgment” was made.
[26] The first document originated from the Quebec Association des Dermatologistes, and dealt with the remuneration ceiling in effect during the period relating to the assessments at issue. The difference in the information can be explained by the fact that the Association document covers the period from April 1 of one year to March 31 of the next year, while the fiscal year is from January 1 to December 31 of the same year (see appeal book, page 91b).
[27] Further documents concerned the income reported by the appellant for the years prior to 1980, that is prior to the years covered in Exhibit I-11 (see supplementary appeal book A-2, page 93c, Exhibit R-2, and supplementary appeal book A-3, page 186, Exhibit R-5).
[28] On this evidence as a whole, the judge noted that “facts presented by Mr. Grenier do not establish the existence of such a fraud. In regard to the new facts, the evidence did not establish that these were facts that Mr. Grenier did not have knowledge of at the time of the hearing held in September 2002” (at paragraph 20). I agree.
[29] In his memorandum, the appellant drew the Court’s attention to [TRANSLATION] “all exhibits in the record at various stages of 2002 to date, including Exhibit A-7 the incorrect interpretation of which was discovered after the judgment [of the Tax Court of Canada]” (see appellant’s memorandum, page 13 – emphasis added). The Court is not sitting in appeal from its 2004 decision in which it upheld the conclusions of the Tax Court of Canada judge.
[30] After hearing the appellant, I note that the facts raised were known to him or could have been known at the relevant time. Accordingly, the judge made no error in dismissing these arguments raised by the appellant in his motion to amend.
[31] These reasons are sufficient to dismiss the appeal. However, before concluding, I think it is important for the appellant that I deal with an incidental matter.
Reassessment for statute-barred year
[32] At the first hearing before the judge, evidence was presented that the appellant had failed to include in his professional income two sums received from the Régie de l’assurance-maladie du Québec (the RAMQ) for 1993 and 1994, the amount of which was not questioned (see paragraph 2 of 2002 judgment and supplementary appeal book A-3, page 203).
[33] This led to the judge upholding the Minister’s decision to issue a reassessment for those two years, including 1993 which was ordinarily statute-barred under section 152(4) of the ITA.
[34] Throughout his pleading, the appellant expressed his anger at being [TRANSLATION] “condemned under section 152(4) of the ITA” and his distress at being forever [TRANSLATION] “branded as fraudulent”. I would invite Dr. Grenier to carefully reread the 2002 judgment and section 152(4).
[35] In the case at bar, subparagraph 152(4)(a)(i) is relevant. It reads:
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152 …
(4) The Minister may at any time make an assessment, reassessment or additional assessment of tax for a taxation year, interest or penalties, if any, payable under this Part by a taxpayer or notify in writing any person by whom a return of income for a taxation year has been filed that no tax is payable for the year, except that an assessment, reassessment or additional assessment may be made after the taxpayer's normal reassessment period in respect of the year only if
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152 […]
(4) Le ministre peut établir une cotisation, une nouvelle cotisation ou une cotisation supplémentaire concernant l’impôt pour une année d’imposition, ainsi que les intérêts ou les pénalités, qui sont payables par un contribuable en vertu de la présente partie ou donner avis par écrit qu’aucun impôt n’est payable pour l’année à toute personne qui a produit une déclaration de revenu pour une année d’imposition. Pareille cotisation ne peut être établie après l’expiration de la période normale de nouvelle cotisation applicable au contribuable pour l’année que dans les cas suivants :
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(a) the taxpayer or person filing the return
(i) has made any misrepresentation that is attributable to neglect, carelessness or wilful default or has committed any fraud in filing the return or in supplying any information under this Act, or
[Emphasis added] |
a) le contribuable ou la personne produisant la déclaration :
(i) soit a fait une présentation erronée des faits, par négligence, inattention ou omission volontaire, ou a commis quelque fraude en produisant la déclaration ou en fournissant quelque renseignement sous le régime de la présente loi
[Je souligne] |
[36] Nowhere in the 2002 judgment is there any implication of a fraud committed by the appellant: on the contrary. As mentioned earlier, it is the appellant who used the word [TRANSLATION] “fraud” for the first time in his motion to amend. Up to that time, neither he nor the respondent had made any reference to it.
[37] In the 2002 judgment, the judge mentioned that for ethical reasons the appellant chose not to retain the services of an accountant to reconcile the amounts which he was claiming from the RAMQ and the statements provided by it. He went on to say:
In my view, the Minister discharged the burden of showing that the taxpayer made a misrepresentation attributable to neglect or carelessness. I am not convinced that Dr. Grenier did so by wilful default, and the Minister rightly cancelled the penalty (at paragraph 44).
[38] That said, I would dismiss the appeal with costs.
“Johanne Trudel”
I concur.
Alice Desjardins J.A.
I agree.
Gilles Létourneau J.A.
Certified true translation
Brian McCordick, Translator
FEDERAL COURT OF APPEAL
SOLICITORS OF RECORD
DOCKET: A-54-07
STYLE OF CAUSE: RAYNALD GRENIER
v.
HER MAJESTY THE QUEEN
PLACE OF HEARING: Ottawa, Ontario
DATE OF HEARING: February 13, 2008
REASONS FOR JUDGMENT BY: TRUDEL J.A.
CONCURRED IN BY: DESJARDINS J.A.
APPEARANCES:
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FOR THE APPELLANT, FOR HIMSELF
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FOR THE RESPONDENT
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SOLICITORS OF RECORD:
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Québec, Quebec |
FOR THE APPELLANT, FOR HIMSELF
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Ottawa, Ontario |
FOR THE RESPONDENT
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