Federal Court of Appeal Decisions

Date: 20010403

Docket: A-615-98

Neutral citation: 2001 FCA 101

CORAM:        ISAAC J.A.

SEXTON J.A.

SHARLOW J.A.

BETWEEN:

                        MITCHELL VERIFICATION SERVICES GROUP INC.

                                                                                                                                  Appellant

                                                                   - and -

                                                                       

                                                                                                                                               

THE ATTORNEY GENERAL OF CANADA

                                                                                                                              Respondent

Heard at Toronto, Ontario, Tuesday, April 3, 2001

Judgment delivered from the Bench at Toronto, Ontario,

on Tuesday, April 3, 2001

REASONS FOR JUDGMENT OF THE COURT BY:                                      SEXTON J.A.

Date: 20010403

Docket: A-615-98

Neutral citation: 2001 FCA 101

CORAM:        ISAAC J.A.

SEXTON J.A.

SHARLOW J.A.

BETWEEN:

                        MITCHELL VERIFICATION SERVICES GROUP INC.

                                                                                                                                  Appellant

                                                                   - and -

                                                                       

                                                                                                                                               

THE ATTORNEY GENERAL OF CANADA

                                                                                                                              Respondent

                                                                                                                                               

                               REASONS FOR JUDGMENT OF THE COURT

                                     (Delivered from the Bench at Toronto, Ontario

                                                    on Tuesday, April 3, 2001)

SEXTON J.A.

This is an appeal from the Tax Court which held that the Appellant was not exempt from collecting the Goods and Services Tax ("GST") for services provided by the Appellant to clients in the insurance industry between 1990 and 1994. The Appellant, in order to qualify for the exemption, invoked subsection 123(1) of the Excise Tax Act ("Act"), arguing that the services which it provided fell within the definition of "financial service" in paragraph 123(1)(j) of the Act, R.S.C. 1985, c. E-15, as amended by S.C. 1990, c. 45, subsection 12(1):

Financial service means: (j) the service of investigating and recommending the compensation in satisfaction of a claim under an insurance policy where the service is supplied by an insurer or by another person who, except in the case of a claim under a marine insurance policy, is licensed under the laws of a province to provide such service,		Service financier signifie: j) le service consistant à faire des enquêtes et des recommandations concernant l'indemnité accordée en règlement d'une réclamation faite aux termes d'une police d'assurance ou par une autre personne qui, sauf s'il s'agit d'une réclamation faite aux termes d'une police d'assurance maritime, est autorisée par permis obtenu en application de la législation provinciale à rendre un tel service;

To qualify as a "financial service" within the definition, the supplier of such service must both investigate and recommend the compensation in settlement of an insurance claim and be licensed under the law of a province to provide both the investigatory and recommendatory functions.

While there is evidence that the Appellant from time to time did make such recommendations to its clients, there was no evidence that the Appellant was licensed to provide such service.

Counsel for the Appellant argued that because the Appellant was licensed under the Private Investigators and Security Guards Act, R.S.O., 1990, c. P. 25, it must be said that the Appellant was licensed to make recommendations. The Act provides:

1. In this Act, ... "private investigator" means a person who investigates and furnishes information for hire or reward, including a person who, (a) searches for and furnishes information as to the personal character or actions of a person, or the character or kind of business or occupation of a person, (b) searches for offenders against the law, or (c) searches for missing persons or property;		1. Les définitions qui suivent s'appliquent à la présente loi. ... "enquêteur privé" Personne qui enquête et fournit des renseignements contre salaire ou rétribution. S'entend notamment de quiconque: a) recherche et fournit des renseignements sur la moralité ou les actions d'une personne, ou sur la nature de l'entreprise ou de la profession d'une personne, b) recherche des contrevenants c) recherche des personnes disparues ou des biens perdus.

Counsel for the Appellant argued that a person who investigates and furnishes information necessarily makes recommendations. We disagree. In the context of this case, the provision of recommendations involves the exercise of judgment with respect to a certain set of facts surrounding an insurance claim. The mere provision of information does not.

We are in complete agreement with the very carefully written reasons of Bowie J.T.C.C. and, therefore, this appeal will be dismissed with costs.

                                                                                                                           "J. E. Sexton"                  

                                                                                                                                          J.A.