INCOME TAX |
Practice |
Harris v. Canada
T-2407-96
Heneghan J.
20/12/00
20 pp.
Motion for directions--Plaintiff member of "Choices", unincorporated organization interested in social justice, fiscal matters--In 1991, M.N.R. issuing advance tax ruling in favour of unidentified taxpayer--Under ruling change of residence for Canadian resident trust would not attract income tax liability--Ruling only becoming public in 1996 when Auditor General issued "strongly worded" report criticizing ruling, apparent secrecy with which made--Plaintiff issuing statement of claim requesting declaration as to legality of 1991 ruling--Motion to strike statement of claim on ground disclosed no reasonable cause of action initially allowed, but dismissed on appeal by Trial Division--Federal Court of Appeal upholding Trial Division's decision--Leave to appeal dismissed by Supreme Court of Canada--Motion herein precipitated by plaintiff's counsel's request for disclosure of identity of taxpayer who is subject of 1991 ruling, all communications, including request for advance tax ruling, between taxpayer, Minister--Issue applicability of Income Tax Act, s. 241--S. 241(3)(b) providing s. 241(1), (2) prohibitions against disclosure of taxpayer information not applicable in respect of any legal proceedings relating to administration, enforcement of Act--Information clearly taxpayer information--Advance tax ruling falling within scope of Act--S.C.C. stating purposes of, policy underlying s. 241 in Slattery (Trustee of) v. Slattery, [1993] 3 S.C.R. 430: s. 241 involving balancing of privacy interest of taxpayer and Minister's interest in being allowed to disclose taxpayer information to extent necessary for effective administration, enforcement of Income Tax Act; only in exceptional situations does privacy interest give way to interest of state--Present case squarely within "exceptional situations" contemplated in Slattery--Raising allegations directly focussed on administration, enforcement of Act--Issues, focussing on general implementation of Act, of such importance to Canadian public that privacy interests of individual must give way to interests of state--Case within exception in s. 241(3)(b)--Majority opinion in Slattery, written by Iacobucci J., calling for wide interpretation when considering whether proposed disclosure in respect of proceedings relating to administration, enforcement of Act, binding--Present action, challenging manner in which Act interpreted by Minister when tax ruling in question made, clearly falling within exception in s. 241(3)(b)--Finally, Minister cannot use s. 241 to avoid allegations of "maladministration" of Act--S. 241 privilege not established in favour of Revenue Canada, but in favour of taxpayer: Diversified Holdings Ltd. v. Canada, [1991] 1 F.C. 595 (C.A.)--Claim for public interest immunity resting on Canada Evidence Act, s. 37--S. 37 providing Minister may object to disclosure by certifying information should not be disclosed on grounds of specified public interest--Certificate of Roy Shultis submitted in support of defendant's claim of public interest immunity--Deputy Minister's opinion as to alleged injury to public interest flowing from disclosure of information not binding--S. 241(3) exception to general bar against disclosure of taxpayer information overriding public interest immunity claimed herein--Public interest lies in determining whether Minister discharged statutory duty in applying Act--Similar reasoning applies to applicability of common law privilege against disclosure of information provided on confidential basis--In M.(A.) v. Ryan, [1997] 1 S.C.R. 157, S.C.C. acknowledged class of information which can be subject to claim of privilege not closed, but Ryan not determinative herein as defendants not seeking to extend privilege to new class of evidence--Defendants already equipped with general protection against disclosure of taxpayer information in s. 241--But that barrier falls if requested information subject to s. 241(3)(b)--Submissions on basis of common law case-by-case privilege not operating to rebuild barrier--Likewise, common law privilege concerning delivery of information in confidence not overriding s. 241(3)(b) exception--Defendants ordered to disclose name of taxpayer, subject to Federal Court Rules, 1998, rr. 151, 152--Income Tax Act, R.S.C., 1985 (5th Supp.), c. 1, s. 241 (as am. by S.C. 1994, c. 7, Sch. VIII, s. 137)--Canada Evidence Act, R.S.C., 1985, c. C-5, s. 37--Federal Court Rules, 1998, SOR/98-106, rr. 151, 152.