Date: 20030626
BETWEEN:
PAUL S. BINING
Applicant
and
HER MAJESTY THE QUEEN
Respondent
Dealt with in writing without appearance of parties.
Order delivered at Ottawa, Ontario, on June 26, 2003.
REASONS FOR ORDER BY: NOËL J.A.
Date: 20030626
BETWEEN:
PAUL S. BINING
Applicant
and
HER MAJESTY THE QUEEN
Respondent
REASONS FOR ORDER
[1] The appellant moves pursuant to Rule 369 for an interim stay of a requirement to provide information (the requirement) compelling the production of information pertaining to his affairs pursuant to subsection 231.2(1) of the Income Tax Act and 289(1) of the Excise Tax Act pending the determination of his appeal from a decision of the Trial Division denying a stay.
Background
[2] The appellant filed an application in the Trial Division challenging the validity of the requirement, on the basis that:
i) the requirement is an abuse of process and/or constitutes an infringement of sections 7 and 8 the Charter and should be set aside pursuant to subsection 24(1) of the Charter;
ii) and is otherwise invalid and unlawful and should be set aside in accordance with paragraph 18(1)(a) and paragraph 18.1(3)(b) of the Federal Court Act.
[3] In conjunction with this application, the appellant moved for a stay of the thirty day period to comply with the requirement, until the Trial Division has determined its validity. By Order dated May 30, 2003, the Trial Division denied the stay.
[4] The appellant appealed this Order and now seeks an interim stay of the requirement pending the disposition of his appeal.
[5] The requirement was issued in the course of an audit during which certain bank deposits in accounts belonging to the appellant were identified. The Minister is unable to reconcile these deposits with known sources of income, and the requirement is intended to eliminate non-taxable sources as possible explanations for these deposits.
[6] As the respondent is presently in a position to issue an assessment on the basis of these unexplained bank deposits, the appellant contends that the predominant purpose of the requirement is to obtain evidence for the purpose of instituting a criminal prosecution (R. v. Jarvis, 2002 S.C.C. 73, R. v. Ling, 2002 S.C.C. 74).
[7] The appellant also contends that if he does not obtain the requested stay and the information contemplated by the requirement is provided to the respondent, his appeal will become moot (Bisaillon v. Canada, [1999] F.C.J. No. 898 at paragraphs 29 and 33). Consequently, he maintains that the three part test for the issuance of a stay has been met (R.J.R. Macdonald Inc. v. Canada, [1994] 1 S.C.R. 311 at 334).
Disposition
[8] In my view, the appellant has raised a serious issue. The Trial Division appeared to have difficulty with the suggestion that negative answers to the questions posed by the requirement could be incriminating (reasons, paragraphs 20 and 21). However, it seems fairly arguable that the elimination of non-taxable sources by way of compelled admissions will provide information which could be used in a criminal prosecution.
[9] In the same vein, as the Minister is presently in a position to issue an assessment by simply assuming that the unexplained bank deposits constitute income, it is arguable that the requirement has, as its main purpose, the gathering of incriminating evidence rather than the establishment of a tax liability through the assessment process.
[10] It is also apparent that irreparable harm will likely be suffered in the absence of an interim stay since the appeal from the decision of the Trial Division would become moot and the appellant would effectively be denied his right of appeal.
[11] The balance of convenience also operates in favour of the grant of a stay. It is true that the respondent is faced with a delay in obtaining the requested information. But, as noted, nothing prevents the Minister from using assumptions in assessing the appellant, particularly since the bank deposits are known to him and remain unexplained.
[12] For these reasons, an interim stay of the execution of the requirement will be issued pending the judgment of this Court in appeal A-250-03.
"Marc Noël"
J.A.
FEDERAL COURT OF APPEAL
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET:A-250-03
STYLE OF CAUSE:Paul S. Bining and Her Majesty the Queen
MOTION DEALT WITH IN WRITING WITHOUT THE APPEARANCE OF PARTIES
REASONS FOR ORDER: NOËL J.A.
DATED:June 26, 2003
WRITTEN REPRESENTATIONS BY:
Thomas M. BoddezFOR THE APPELLANT
Robert CarvalhoFOR THE RESPONDENT
SOLICITORS OF RECORD:
Thorsteinssons
Vancouver, B.C.FOR THE APPELLANT
Morris RosenbergFOR THE RESPONDENT
Deputy Attorney General of Canada