Ghermezian v. Canada (Attorney General)

Ghermezian v. Canada (Attorney General)
Court (s) Database
Federal Court Decisions
Date
2020-12-09
Neutral citation
2020 FC 1137
File numbers
T-1439-18, T-1440-18, T-1451-18, T-1452-18, T-1501-18
Notes
Digest
Decision Content
Date: 20201209
Docket: T-1439-18
T-1440-18
T-1451-18
T-1452-18
T-1501-18
Citation: 2020 FC 1137
Ottawa, Ontario, December 9, 2020
PRESENT: The Honourable Mr. Justice Southcott
BETWEEN:
T-1439-18
NADER GHERMEZIAN
Applicant
and
ATTORNEY GENERAL OF CANADA
Respondent
AND BETWEEN:
T-1440-18
MARC VATURI
and
ATTORNEY GENERAL OF CANADA
AND BETWEEN:
T-1451-18
NADER GHERMEZIAN
and
ATTORNEY GENERAL OF CANADA
AND BETWEEN:
T-1452-18
MARC VATURI
and
ATTORNEY GENERAL OF CANADA
AND BETWEEN:
T-1501-18
GHERFAM EQUITIES INC
and
ATTORNEY GENERAL OF CANADA
JUDGMENT AND REASONS
I. Overview
[1] This decision relates to five applications for judicial review of Requirements for Information [RFIs] issued by John Harasymchuk, a delegate of the Minister of National Revenue [the Minister] under s 231.2(1) of the Income Tax Act, RSC 1985, c 1 (5th Supp) [ITA].
[2] The Applicants are two individuals, Nader Ghermezian and Marc Vaturi, and a corporation, Gherfam Equities Inc. [Gherfam]. Mr. Ghermezian is the Applicant in two of these matters (Court file numbers T-1439-18 and T-1451-18), Mr. Vaturi is the Applicant in two of these matters (Court file numbers T-1440-18 and T-1452-18), and Gherfam is the Applicant in the fifth matter (Court file number T-1501-18). Each of the five RFIs under review required the applicable Applicant to produce certain information for purposes described as related to the administration and enforcement of the ITA.
[3] These five applications for judicial review were heard together, by videoconference employing the Zoom platform, on November 12 and 13, 2020. As they raise common issues, these Reasons addresses all five applications.
[4] As explained in greater detail below, the applications in Court file numbers T-1439-18, T-1440-18, T-1451-18 and T-1452-18 are dismissed, because I find the decisions to issue the RFIs under review in those applications to be reasonable. The application in Court file number T-1501-18 is allowed, and the RFI under review in that application is quashed, because I find that RFI unreasonable, in that a particular paragraph of that RFI is not sufficiently precise for the Applicant to understand what information and documentation it is required to provide in response.
II. Background
[5] The RFIs under review in T-1439-18 and T-1440-18, both dated June 27, 2018, are the same, other than the persons to whom they are addressed, as the RFI in T-1439-18 was issued to Mr. Ghermezian and the RFI in T-1440-18 was issued to Mr. Vaturi. As explained in the Respondent’s Memorandum of Fact and Law, these RFIs request production of information and documents relating to certain corporations listed in the RFIs (which the Respondent refers to as the Triple Five Corporations), in particular banking information and documents relating to those corporations including a list of bank accounts, bank statements, and details concerning incoming and outgoing funds transfers. In these Reasons, I will refer to these two RFIs as the “Triple Five RFIs.”
[6] The RFIs under review in Court file numbers T-1451-18 and T-1452-18, both dated June 28, 2018, are also the same, other than the persons to whom they are addressed, as the RFI in T-1451-18 was issued to Mr. Ghermezian and the RFI in T-1452-18 was issued to Mr. Vaturi. These RFIs request production of information and documents relating to certain foreign corporations that are listed in the RFIs, subsidiaries of such corporations and any other entities owned by the Ghermezian Family Trust. In particular, the RFIs request particular corporate records and bank statements related to these corporations. The corporations listed in the RFIs are described as managed by Mr. Ghermezian and Mr. Vaturi and registered in Gibraltar. In these Reasons, I will refer to these two RFIs as the “Gibraltar RFIs.”
[7] The RFIs under review in Court file number T-1501-18 was issued to Gherfam on July 10, 2018 [the Gherfam RFI]. It requests production of information and documents relating to a restructuring and refinancing transaction related to the Mall of America that occurred in 2014, as well as information and documents relating a company named Triple Five of Minnesota, Inc. [T5MN], including the historical asset holdings of that company and related entities and that company’s financial statements.
[8] The parties to these applications have not filed affidavit evidence in support of their respective positions. Rather, the evidentiary record before the Court consists of the Certified Tribunal Record [CTR] that has been filed in each matter. The original CTR applicable to Court file numbers T-1439-18, T-1440-18, T-1451-18 and T-1452-18 was filed August 16, 2018 and consists of: (a) the RFIs under review in those four matters; (b) a document entitled “Information Sheet for a Requirement to Provide Information” applicable to those four RFIs [the Ghermezian and Vaturi Information Sheet]; and (c) drafts of the four RFIs. The Ghermezian and Vaturi Information Sheet contains a number of redactions, described as being made pursuant to ss 37 and 38 of the Canada Evidence Act. The record also includes a revised version of the CTR, filed November 23, 2018, which includes the Ghermezian and Vaturi Information Sheet with fewer redactions.
[9] The CTR applicable to Court file number T-1501-18 was filed August 27, 2018 and consists of: (a) the RFI under review in that matter; (b) a document entitled “Information Sheet for a Requirement to Provide Information” applicable to that RFI and to an RFI under s 231.6(2) of the ITA [the Gherfam Information Sheet]; (c) drafts of those RFIs; and (d) an Audit Information Request that had previously been issued to Gherfam.
III. Issues
[10] The Applicant in each of the five applications for judicial review raises the following three issues:
Whether the RFI is invalid because the Minister failed to obtain the judicial authorization required under s 231.2(2) of the ITA for an unnamed persons requirement; and
Whether the RFI is invalid because the Minister failed to comply with the criteria in s 231.6 of the ITA for foreign-based information; and
Whether the RFI is invalid because it was not issued for purposes related to the administration or enforcement of the ITA.
[11] The Respondent raises the following additional issues:
The applicable standard of review;
Which party bears the applicable burden of proof; and
Whether the relief sought by the Applicants is appropriate in the circumstances.
[12] I consider the combination of issues raised by the parties, starting with the standard of review and then the burden of proof, to represent a suitable framework for the adjudication of the parties’ arguments in these applications.
IV. Analysis
A. The applicable standard of review
[13] The parties agree that the reasonableness standard of review applies to the issues under consideration in these applications. It is useful to canvass some of the principles explained by the Supreme Court of Canada in Canada (Minister of Citizenship and Immigration) v Vavilov, 2019 SCC 65 [Vavilov] as governing the conduct of reasonableness review of administrative decisions.
[14] As a starting point, Vavilov explains that the reasonableness standard of review contemplates deference to administrative decision-makers (at paras 75 and 83):
75 Our colleagues emphasize that reviewing courts should respect administrative decision makers and their specialized expertise, should not ask how they themselves would have resolved an issue and should focus on whether the applicant has demonstrated that the decision is unreasonable: paras. 288, 289 and 291. We agree. As we have stated above, at para. 13, reasonableness review finds its starting point in judicial restraint and respects the distinct role of administrative decision makers. Moreover, as explained below, reasonableness review considers all relevant circumstances in order to determine whether the applicant has met their onus.
….
83 It follows that the focus of reasonableness review must be on the decision actually made by the decision maker, including both the decision maker’s reasoning process and the outcome. The role of courts in these circumstances is to review, and they are, at least as a general rule, to refrain from deciding the issue themselves. Accordingly, a court applying the reasonableness standard does not ask what decision it would have made in place of that of the administrative decision maker, attempt to ascertain the “range” of possible conclusions that would have been open to the decision maker, conduct a de novo analysis or seek to determine the “correct” solution to the problem. The Federal Court of Appeal noted in Delios v. Canada (Attorney General), 2015 FCA 117, 472 N.R. 171 (F.C.A.) , that, “as reviewing judges, we do not make our own yardstick and then use that yardstick to measure what the administrator did”: at para. 28; see also Ryan, at paras. 50-51. Instead, the reviewing court must consider only whether the decision made by the administrative decision maker — including both the rationale for the decision and the outcome to which it led — was unreasonable.
[15] Where the administrative decision-maker has produced written reasons for the decision under review, the Court should begin its review with focus upon those reasons (see Vavilov at para 84). This focus considers not only the outcome of the decision but also whether that outcome is justified by the reasoning process employed by the decision-maker (see Vavilov at paras 86-87).
[16] For circumstances where the nature of the decision or decision-making process does not involve the production of formal reasons, Vavilov provides the following guidance (at paras 137-138):
137 Admittedly, applying an approach to judicial review that prioritizes the decision maker’s justification for its decisions can be challenging in cases in which formal reasons have not been provided. This will often occur where the decision-making process does not easily lend itself to producing a single set of reasons, for example, where a municipality passes a bylaw or a law society renders a decision by holding a vote: see, e.g., Catalyst; Green; Trinity Western University. However, even in such circumstances, the reasoning process that underlies the decision will not usually be opaque. It is important to recall that a reviewing court must look to the record as a whole to understand the decision, and that in doing so, the court will often uncover a clear rationale for the decision: Baker, at para. 44. For example, as McLachlin C.J. noted in Catalyst, “[t]he reasons for a municipal bylaw are traditionally deduced from the debate, deliberations, and the statements of policy that give rise to the bylaw”: para. 29. In that case, not only were “the reasons [in the sense of rationale] for the bylaw . . . clear to everyone”, they had also been laid out in a five-year plan: para. 33. Conversely, even without reasons, it is possible for the record and the context to reveal that a decision was made on the basis of an improper motive or for another impermissible reason, as, for example, in Roncarelli.
138 There will nonetheless be situations in which no reasons have been provided and neither the record nor the larger context sheds light on the basis for the decision. In such a case, the reviewing court must still examine the decision in light of the relevant constraints on the decision maker in order to determine whether the decision is reasonable. But it is perhaps inevitable that without reasons, the analysis will then focus on the outcome rather than on the decision maker’s reasoning process. This does not mean that reasonableness review is less robust in such circumstances, only that it takes a different shape.
[17] The issues in the present applications raise, at least in part, disputes between the parties surrounding interpretation of certain provisions of the ITA. Vavilov emphasizes the application of the reasonableness standard of review to matters of statutory interpretation and how that standard should be applied (at paras 115-116).
115 Matters of statutory interpretation are not treated uniquely and, as with other questions of law, may be evaluated on a reasonableness standard. Although the general approach to reasonableness review described above applies in such cases, we recognize that it is necessary to provide additional guidance to reviewing courts on this point. This is because reviewing courts are accustomed to resolving questions of statutory interpretation in a context in which the issue is before them at first instance or on appeal, and where they are expected to perform their own independent analysis and come to their own conclusions.
116 Reasonableness review functions differently. Where reasonableness is the applicable standard on a question of statutory interpretation, the reviewing court does not undertake a de novo analysis of the question or “ask itself what the correct decision would have been”: Ryan, at para. 50. Instead, just as it does when applying the reasonableness standard in reviewing questions of fact, discretion or policy, the court must examine the administrative decision as a whole, including the reasons provided by the decision maker and the outcome that was reached.
[18] The administrative decision maker’s task is to interpret the statutory provision in a manner consistent with the text, context and purpose, applying its particular insight into the statutory scheme at issue (see Vavilov at para 121). However, as with other aspects of administrative decision-making, there may be cases in which the administrative decision maker has not explicitly considered the meaning of a relevant provision in its reasons. The reviewing court should then consider whether it is able to discern the interpretation adopted by the decision-maker from the record and determine whether that interpretation is reasonable (see Vavilov at para 123).
[19] I will return to these principles later in these Reasons.
B. Which party bears the applicable burden of proof
[20] The Applicants take the position that the Minister bears the burden of proving compliance with s 231.2 of the ITA. They note that the Minister has not filed any affidavit evidence in these applications for judicial review and argue that the Court should draw an adverse inference on that basis, as the facts surrounding the decisions to issue the RFIs are exclusively within the knowledge of the Minister.
[21] While the Applicants raise this argument principally in connection with the third issue raised in these applications (i.e., whether the RFIs were issued for purposes related to the administration or enforcement of the ITA), the point is also relevant to the other issues, in which the Applicants also submit that the Respondent has not advanced a sufficient evidentiary foundation to support the issuance of the RFIs under s 231.2(1) of the ITA.
[22] The Respondent disagrees with the Applicants’ position on the applicable burden of proof. The Respondent submits that, as in all judicial review applications, the burden of proof is borne by the party challenging the decision under review, and it notes that the Applicants have also declined to file affidavit evidence in support of their applications.
[23] On this issue, I agree with the Respondent. The Supreme Court confirmed in Vavilov that the burden is on the party challenging an administrative decision to show that it is unreasonable (at para 100).
[24] In support of their position on the burden of proof, the Applicants rely on the Federal Court’s decision in Capital Vision Inc v Minister of National Revenue, 2002 FCT 1317 [Capital Vision], in which Justice Heneghan stated as follows at paragraphs 79 and 92:
79 I note, as well, that there is no statutory basis in the Act for the Minister to rely on an “inference” that may or may not be drawn by a third party to whom a requirement is served. The Minister, not the taxpayer, bears the burden of complying with section 231.2.
….
92 As noted by the Court in Montreal Aluminum Processing, supra, the appropriate test for assessing the Minister’s purpose in relation to section 231.2 is an objective one. In my opinion, the Minister here has failed to objectively establish that he had fairly stated his purpose in issuing the new requirements.
[25] The Respondent submits that the statements in Capital Vision should not be interpreted as suggesting that the burden of proof, in an application for judicial review of a decision made under s 231.2 of the Act, shifts to the Minister. Rather, these statements identify that the Minister must comply with the Act, which the Minister does not dispute.
[26] I agree with the Respondent’s analysis of Capital Vision. The outcome of that case turned on whether requirements served on the applicant were in support of an audit of the applicant or an audit of unnamed clients of the applicant. The Court found that the evidence supported the latter interpretation (at para 72) and that, inconsistent with his obligations under the ITA, the Minister had been less than forthright in stating the purpose for those requirements (at para 77). Justice Heneghan’s comment about the “burden” does not represent a conclusion on the applicable burden of proof.
[27] I also find no basis for an adverse inference arising from the absence of an affidavit filed by the Minister. Subject to certain exceptions that have no application to the issues raised in the present matters, the general rule is that only the evidentiary record that was before the administrative decision-maker is admissible before the reviewing court (see, e.g., Tseil-Waututh Nation v Canada (Attorney General), 2017 FCA 128 at paras 97-98). The CTR fulfils the role of placing the material in the evidentiary record before the reviewing court (see, e.g., Canadian Copyright Licensing Agency (Access Copyright) v Alberta, 2015 FCA 268 at para 17).
C. Whether the RFI is invalid because the Minister failed to obtain the judicial authorization required under s 231.2(2) of the ITA for an unnamed persons requirement
(1) Statutory Provisions Relevant to Unnamed Persons
[28] To understand this first substantive issue raised by the Applicants, it is useful to review certain provisions of ss 231 to 231.8 of the ITA. The complete text of the sections referenced in these Reasons is set out in Appendix “A” hereto.
[29] Section 231.2(1), under which the RFIs were issued, entitles the Minister, for any purpose related to the administration or enforcement of the Act, to serve on any person a notice requiring that person to provide any information or document:
Requirement to provide documents or information
Production de documents ou fourniture de renseignements
231.2 (1) Notwithstanding any other provision of this Act, the Minister may, subject to subsection (2), for any purpose related to the administration or enforcement of this Act (including the collection of any amount payable under this Act by any person), of a listed international agreement or, for greater certainty, of a tax treaty with another country, by notice served personally or by registered or certified mail, require that any person provide, within such reasonable time as is stipulated in the notice,
231.2 (1) Malgré les autres dispositions de la présente loi, le ministre peut, sous réserve du paragraphe (2) et, pour l’application ou l’exécution de la présente loi (y compris la perception d’un montant payable par une personne en vertu de la présente loi), d’un accord international désigné ou d’un traité fiscal conclu avec un autre pays, par avis signifié à personne ou envoyé par courrier recommandé ou certifié, exiger d’une personne, dans le délai raisonnable que précise l’avis :
(a) any information or additional information, including a return of income or a supplementary return; or
a) qu’elle fournisse tout renseignement ou tout renseignement supplémentaire, y compris une déclaration de revenu ou une déclaration supplémentaire;
(b) any document.
b) qu’elle produise des documents.
[30] The Minister’s entitlement under 231.2(1) is subject to subsection (2). Subsections (2) and (3), which relate to “unnamed persons,” provide as follows:
Unnamed persons
Personnes non désignées nommément
(2) The Minister shall not impose on any person (in this section referred to as a “third party”) a requirement under subsection 231.2(1) to provide information or any document relating to one or more unnamed persons unless the Minister first obtains the authorization of a judge under subsection 231.2(3).
(2) Le ministre ne peut exiger de quiconque — appelé « tiers » au présent article — la fourniture de renseignements ou production de documents prévue au paragraphe (1) concernant une ou plusieurs personnes non désignées nommément, sans y être au préalable autorisé par un juge en vertu du paragraphe (3).
Judicial authorization
Autorisation judiciaire
(3) A judge of the Federal Court may, on application by the Minister and subject to any conditions that the judge considers appropriate, authorize the Minister to impose on a third party a requirement under subsection (1) relating to an unnamed person or more than one unnamed person (in this section referred to as the “group”) if the judge is satisfied by information on oath that
(3) Sur requête du ministre, un juge de la Cour fédérale peut, aux conditions qu’il estime indiquées, autoriser le ministre à exiger d’un tiers la fourniture de renseignements ou la production de documents prévues au paragraphe (1) concernant une personne non désignée nommément ou plus d’une personne non désignée nommément — appelée « groupe » au présent article —, s’il est convaincu, sur dénonciation sous serment, de ce qui suit :
(a) the person or group is ascertainable; and
a) cette personne ou ce groupe est identifiable;
(b) the requirement is made to verify compliance by the person or persons in the group with any duty or obligation under this Act.
b) la fourniture ou la production est exigée pour vérifier si cette personne ou les personnes de ce groupe ont respecté quelque devoir ou obligation prévu par la présente loi;
(c) and (d) [Repealed, 1996, c. 21, s. 58(1)]
c) et d) [Abrogés, 1996, ch. 21, art. 58(1)]
[31] When the unnamed persons provisions are engaged, the Minister must, before issuing a requirement under s 231.2(1), apply for judicial authorization from the Federal Court under s 231.2(3), which prescribes the test to be employed by the Court when considering such an application. In Canada (National Revenue) v Hydro-Québec, 2018 FC 622 [Hydro-Québec], a decision upon which the Applicants rely, Justice Roy explained the purpose of the unnamed persons provisions as follows (at para 68):
68 It is obvious upon examination of the context in which subsections 231.2 (2) and (3) are found that Parliament wanted to limit the scope of the Minister’s powers, extensive as they are. The purpose of the provision is to limit the scope of requests for information that can be issued. Thus, the fear of abuse that could be generated by the case law of Canadian Bank of Commerce, Richardson, McKinlay and Jarvis is seen in the obligation of judicial intervention in the case where the targeted individuals cannot be identified by name. Parliament wants to protect unnamed persons ex ante, so as to avoid undue invasions and not to remedy them later. The protection that Parliament wants to grant is based on a request made to administer or enforce the Act, which case law had interpreted as requiring a genuine and serious inquiry in the case of previously identified individuals, but especially, in the case of people who cannot even be named, that they be identifiable and that we want to verify whether this unnamed but identifiable person has respected duties and obligations outlined in the ITA. It is clear that Parliament is seeking a certain specificity if a request related to people who are unnamed may be targets. In this case, we are searching in vain for a criterion connected to the ITA that would turn the group into an ascertainable group for the purpose of administering or enforcing the Act and for which it would be permissible to seek information to thereupon verify compliance with the Act.
[32] The issue in dispute between the parties in the present applications is whether the unnamed persons provisions are engaged by the RFIs under review. The Information Sheets that were before the decision-maker identify the particular parties that the Minister was investigating in issuing each of the RFIs. However, the Applicants argue that the Minister did not name these parties in the RFIs themselves and was therefore required to seek judicial authorization under s 231.2(3) before issuing the RFIs.
[33] The Respondent disputes this interpretation of how the unnamed persons provisions operate. The Respondent argues that, because the parties under investigation are known to the Minister, the unnamed persons provisions do not apply.
[34] Reduced to its simplest articulation, the dispute surrounds the meaning of the term “unnamed persons.” In effect, the Applicants submit that it means unnamed in the RFI, and the Respondent submits that it means unknown to the Minister. Before considering the merits of the parties’ arguments on this issue, and the reasonableness of the RFIs against the backdrop of those arguments, it is useful to review some of the authorities that have considered the unnamed persons provisions.
(2) Jurisprudence
[35] The Respondent submits that the leading authorities are the decisions of the Federal Court of Appeal in Canada (Customs and Revenue Agency) v Artistic Ideas Inc., 2005 FCA 68 [Artistic Ideas] and the subsequent decision of the Supreme Court of Canada in Redeemer Foundation v Minister of National Revenue, 2008 SCC 46 [Redeemer].
[36] In Artistic Ideas, the Minister began an audit of Artistic Ideas Inc. [Artistic], a company that arranged the sale of artwork to individual Canadian taxpayers who in turn donated the artwork to registered charities. In the course of the audit, the Minister served upon Artistic a requirement under s 231.2(1) of the ITA, which required it to provide information including the names of the donors and the charities. Artistic sought to strike that portion of the requirement. Justice Snider had concluded in the decision below that the Minister was entitled to the names of the charities but not to the names of the donors. The Minister appealed that decision.
[37] Writing for the Federal Court of Appeal, Justice Rothstein explained the operation of the unnamed persons provisions as follows (at para 8):
8 As I understand the scheme of section 231.2, the Minister may require a third party to provide information and documents pertaining to the third party's compliance with the Act. However, the Minister may not impose a requirement on the third party to provide information or documents relating to unnamed persons whom he wishes to investigate, unless he first obtains the authorization of a judge. The judge may authorize the Minister to require such information only if the unnamed persons are ascertainable and only if satisfied that information or documents relating to them is required to verify compliance by them with the Act.
[38] In upholding Justice Snider’s decision, Justice Rothstein provided the following analysis (at paras 10-13):
10 According to the evidence in the present case, the donors are intended to be the subject of investigations by the Minister. They are precisely the persons to whom subsections 231.2(2) and (3) apply. If the Minister wants to obtain the names of the donors from Artistic, he must obtain an authorization from a judge to do so. The Minister has not obtained such authorization and therefore he cannot require Artistic to provide information about the donors.
11 However, where unnamed persons are not themselves under investigation, subsections 231.2(2) and (3) do not apply. Presumably, in such cases the names of unnamed persons are necessary solely for the Minister's investigation of the third party. In such cases a third party served with a requirement to provide information and documents under subsection 231.2(1) must provide all the relevant information and documents including the names of unnamed persons. That is because subsection 231.2(2) only pertains to those unnamed persons in respect of whom the Minister may obtain an authorization of a judge under subsection 231.2(3).
12 There is no evidence that the Minister wishes to have the names of the charities to verify their compliance with the Act. He is therefore entitled to the names of the charities under subsection 231.2(1) because subsections 231.2(2) and (3) do not apply to the charities.
13 The result is that Snider J. was correct in finding that Artistic had to disclose the names of the charities but did not have to disclose the names of the donors.
[39] The effect of Artistic Ideas was to clarify that the unnamed persons provisions are not engaged if the Minister serves a requirement seeking to identify unnamed persons who are not themselves being investigated as to their compliance with the ITA. Although not relying on Artistic Ideas, the Supreme Court subsequently confirmed this interpretation in Redeemer (see Chief Justice McLachlin and Justice LeBel for the majority at para 22 and Justice Rothstein in dissent, although not on this issue, at para 48).
[40] There are decisions predating Artistic Ideas and Redeemer, which appear inconsistent with these cases, because they interpret the unnamed persons provisions as applying whenever the Minister sought information about an unnamed person, regardless of whether that person was the subject of an investigation (see Canadian Forest Products Ltd v Minister of National Revenue (1996), 119 FTR 152 (FCTD) [Canadian Forest Products] and Canada (Minister of National Revenue) v Toronto Dominion Bank, 2004 FCA 359 [TD Bank] at para 8). However, in a number of subsequent decisions, this Court has addressed the apparent inconsistency between Artistic Ideas and TD Bank and has followed Artistic Ideas (see Canada (National Revenue) v Morton, 2007 FC 503 at para 11; Canada (National Revenue) v Advantage Credit Union, 2008 FC 853 at paras 16-17; Canada (National Revenue) v Amex Bank of Canada, 2008 FC 972 at para 54; London Life v Canada (Attorney General), 2009 FC 956 [London Life] at paras 21-24). The Federal Court of Appeal has also adopted the interpretation of s 231.2(2) consistent with Artistic Ideals in eBay Canada Ltd v Canada, 2008 FCA 348 [eBay] at paragraph 23.
[41] I pause to note that the particular issue that was addressed differently in Artistic Ideas and TD Bank is not itself in dispute between the parties in the present applications. The Applicants’ counsel confirmed during the hearing that the Applicants are not asserting that s 231.2(2) is engaged in relation to unnamed persons who are not themselves under investigation. Regardless, that point has been settled by the jurisprudence canvassed above. However, it is important to assess the particular issue that is in dispute against the backdrop of this jurisprudence. As previously noted, that issue is whether s 231.2(2) is engaged when the Minister issues a requirement seeking information about a party, whose compliance with the ITA is under investigation, in circumstances where the identity of the party is known to the Minister but the party is not named in the requirement.
[42] It is useful at this stage of the analysis to refer to the particular facts, relevant to the individual RFIs under review, which give rise to this issue in these applications.
(3) Triple Five RFIs - T-1439-18 and T-1440-18
[43] Each of the two Triple Five RFIs lists in its subject line the names of seven corporations (Triple Five World Group Properties Limited, Triple Five Amusement World Enterprises Limited, Triple Five World Investments Limited, Triple Five World Malls Limited, Triple Five World Properties Limited, Triple Five World Ventures Limited, and World Alliance Consulting Limited). As previously noted, the RFIs request production of information and documents relating to these corporations, in particular banking information and documents including a list of bank accounts, bank statements, and details concerning incoming and outgoing funds transfers.
[44] The principal document in the record that was before the decision-maker, before issuing the Triple Five RFIs to Mr. Ghermezian and Mr. Vaturi, is the Ghermezian and Vaturi Information Sheet. That document provides information about the background to the issuance of the RFIs, including identifying which entities are the subject of the Minister’s investigation. The Information Sheet states, “Information is requested about these Canadian taxpayers:” and then references the Ghermezian Family Trust dated February 15, 1997 [97GFT] and Triple Five Worldwide Limited [T5WW] and its subsidiaries and sister companies. The Information Sheet then refers to “Tax years under consideration:” and identifies particular tax years for 97GFT, for T5WW and its subsidiaries, and for Mr. Ghermezian and Mr. Vaturi. The reference to the particular tax years for Mr. Ghermezian and Mr. Vaturi is prefaced by the words “For any consequential adjustments”.
[45] The Applicants and the Respondent interpret the Information Sheet slightly differently. The Applicants’ position is that it demonstrates that 97GFT and T5WW are the parties under investigation. The Respondent’s position is that it identifies those parties as well as Mr. Ghermezian and Mr. Vaturi as under investigation. The Applicants dispute that the Information Sheet identifies Mr. Ghermezian and Mr. Vaturi as under investigation, because it refers only to the possibility of consequential adjustments to their tax returns, presumably depending upon the outcome of the investigations of 97GFT and T5WW.
[46] In my view, little turns on this particular area of disagreement, given the nature of the Applicants’ unnamed persons argument. Specifically, they submit that 97GFT and T5WW are the parties under investigation and that, as those parties are not named in the Triple Five RFIs, the Minister was obliged to comply with ss 231.2(2) and (3) and seek judicial authorization before issuing the RFIs. The Respondent argues the Minister was under no such obligation, because, as demonstrated by the Information Sheet, the identities of 97GFT and T5WW were known to the Minister. While the Respondent argues that Mr. Ghermezian and Mr. Vaturi, to whom the Triple Five RFIs were directed, were also under investigation, this point is not particularly responsive to the Applicants’ argument, which turns on whether the unnamed persons provisions were engaged by the lack of a reference to 97GFT and T5WW in the RFIs.
[47] I will return to the Applicants’ argument on this point later in this analysis.
(4) Gibraltar RFIs - T-1451-18 and T-1452-18
[48] Each of the two Gibraltar RFIs refers in its subject line to “Gibraltar entities managed and controlled by Nader Ghermezian and Marc Vaturi.” As previously noted, the RFIs request production of corporate records and bank statements related to certain foreign corporations. The RFIs refer to seven corporations, subsidiaries of such corporations, and any other entities owned by the Ghermezian Family Trust. One of the seven corporations listed in the RFI is T5WW.
[49] As with the Triple Five RFIs, the principal document in the record that was before the decision-maker, before issuing the Gibraltar RFIs to Mr. Ghermezian and Mr. Vaturi, is the Ghermezian and Vaturi Information Sheet. As previous noted, the Applicants’ position is that the Information Sheet demonstrates that 97GFT and T5WW are the parties under investigation. Unlike the Triple Five RFIs, the Gibraltar RFIs do contain express references to 97GFT and T5WW as parties in relation to which information and documentation is sought. However, the Applicants note that the Gibraltar RFIs do not expressly state that 97GFT and T5WW are the parties under investigation. The Applicants therefore argue that the Minister was obliged to comply with ss 231.2(2) and (3) and seek judicial authorization before issuing the RFIs. The Respondent again responds that the Minister was under no such obligation, because, as demonstrated by the Information Sheet, the identities of 97GFT and T5WW were known to the Minister.
(5) Gherfam RFI – T-1501-18
[50] The Gherfam RFI is structured somewhat differently than the other RFIs under review in these applications. The Gherfam RFI consists of a letter, addressed to Gherfam and referring to Gherfam in its subject line, which states that Gherfam is required to provide all information and documents requested in the attached Audit Information Requests No. GEI-27 and GEI-29.
[51] Audit Information Request No. GEI-27 [GEI-27] is also addressed to Gherfam and refers in its subject line to “2014 Restructuring and Refinancing of the Mall of America.” It requests production of particular documents and categories of documents relating to a restructuring and refinancing transaction related to the Mall of America that occurred in 2014.
[52] Audit Information Request No. GEI-29 [GEI-29] is again addressed to Gherfam and refers in its subject line to “$15 Million Loan from First Security Bank N.A.” It requests production of information and documents relating to T5MN, including the historical asset holdings of T5MN and related entities and financial statements of T5MN.
[53] In referring to information requested in connection with entities related to T5MN, GEI-29 states, “This information is only requested in respect of entities that were not acquired or held at any time, directly or indirectly, by any of the Ghermezian Family Trusts settled on September 1, 2002 and August 15, 2002 (commonly referred to as the Royce and Regent Trusts).” GEI-29 also includes a request framed as follows: “Provide any additional information or explanations that are relevant to determining whether or not the rules of former section 94 of the Act (for taxation years before 2007) applies to the Royce and Regent Trusts in respect of the transaction described in the background of this query.”
[54] The principal document in the record that was before the decision-maker, before issuing the Gherfam RFI, is the Gherfam Information Sheet. That document provides information about the background to the issuance of the RFI, including identifying which entities are the subject of the Minister’s investigation. The Information Sheet refers to “Tax years under consideration:” and identifies particular tax years for “the U.S. Family Trusts (Mall of America)” and for “the American Dream Trust(s).” In submissions at the hearing, the Respondent’s counsel explained that the Gherfam Information Sheet relates not only to the Gherfam RFI but also to another RFI that is not under review in the present applications. Counsel explained that the reference in the Information Sheet to the American Dream Trust(s) relates to that other RFI and is therefore irrelevant to the Gherfam RFI presently under review.
[55] The Respondent’s Memorandum of Fact and Law states that the transactional documents sought from Gherfam through the Gherfam RFI are for purposes of auditing Gherfam. However, the Respondent’s counsel has confirmed that this statement was an error in the Memorandum and that the transactional documents are sought for purposes of auditing the residency of eight Ghermezian U.S. Family Trusts (Mall of America) settled on August 15, 2002 and September 1, 2002, described as commonly referred to as the Royce and Regent Trusts. The Applicant does not dispute the Respondent’s representation as to the targets of