Miller v. Canada (National Revenue)

Miller v. Canada (National Revenue)
Court (s) Database
Federal Court of Appeal Decisions
Date
2022-10-31
Neutral citation
2022 FCA 183
File numbers
A-230-21
Notes
A correction was made on November 26, 2024
Reported Decision
Decision Content
Date: 20221031
Docket: A-230-21
Citation: 2022 FCA 183
CORAM:
GLEASON J.A.
MACTAVISH J.A.
ROUSSEL J.A.
BETWEEN:
DAVID RANDALL MILLER
Appellant
and
MINISTER OF NATIONAL REVENUE
Respondent
Heard at Toronto, Ontario, on May 11, 2022.
Judgment delivered at Ottawa, Ontario, on October 31, 2022.
REASONS FOR JUDGMENT BY:
GLEASON J.A.
CONCURRED IN BY:
MACTAVISH J.A.
ROUSSEL J.A.
Date: 20221031
Docket: A-230-21
Citation: 2022 FCA 183
CORAM:
GLEASON J.A.
MACTAVISH J.A.
ROUSSEL J.A.
BETWEEN:
DAVID RANDALL MILLER
Appellant
and
MINISTER OF NATIONAL REVENUE
Respondent
REASONS FOR JUDGMENT
GLEASON J.A.
[1] This appeal concerns the authority afforded under section 231.7 of the Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.) (the ITA), to a court to order taxpayers to provide information and documents previously sought in a Request issued under section 231.1 of the ITA that a taxpayer refuses to provide.
[2] In the Order under appeal, reasons for which are reported as Canada (National Revenue) v. Miller, 2021 FC 851, 2021 D.T.C. 5104, the Federal Court (per Walker, J.) issued an order pursuant to section 231.7 of the ITA, ordering the appellant to provide information, produce documents, and seek information and documents from his accountants, his solicitors, and his bank in Luxembourg. The Order followed a series of Requests the Minister issued to the appellant under section 231.1 of the ITA.
[3] The appellant submits that the Federal Court’s Order should be set aside principally because the decision of this Court in Canada (National Revenue) v. Cameco Corporation, 2019 FCA 67, [2020] 4 F.C.R. 254 [Cameco] establishes that the Federal Court lacked authority to make the Order. The appellant more specifically contends that Cameco stands for the proposition that, where a Request has been issued under section 231.1 of the ITA, a court may only order production of documents in a taxpayer’s possession and may only require a taxpayer to provide information about the provenance, location or maintenance of the taxpayer’s books and records or other documents. Since the Federal Court’s Order in the present case was broader, the appellant submits that it must be set aside. The appellant also contends that the Federal Court’s remedial authority was circumscribed by the terms of the Requests made under section 231.1 of the ITA, and that the Federal Court erred in requiring the appellant to provide documents that had not been sought or that he already provided.
[4] For the reasons that follow, I conclude that the Federal Court did not err in finding that the documents and information in question were the subject of Requests made under section 231.1 of the ITA, with which the appellant did not comply. I also conclude that the Federal Court did not err in holding that Cameco does not limit the jurisdiction of the Federal Court in the way the appellant submits and that the relevant provisions in the ITA afforded the Federal Court jurisdiction to make the Order under appeal. I would therefore dismiss this appeal, with costs fixed in the agreed-upon all-inclusive amount of $2,000.00.
I. Relevant Statutory Provisions [5] It is useful to commence by setting out the relevant statutory provisions.
[6] The ITA establishes a system for the collection of income tax in this country based on self-reporting by taxpayers. As noted by the Supreme Court of Canada in R. v. McKinlay Transport Ltd., [1990] 1 S.C.R. 627 at 637, 90 D.T.C. 6243 [McKinlay Transport], it would be naïve to think that all taxpayers will properly self-report and pay the taxes they owe. In recognition of this reality, the ITA contains a broad suite of enforcement mechanisms.
[7] The first of these measures relevant to this appeal is set out in subsection 230(1) of the ITA. It requires taxpayers to maintain books and records in Canada containing the information required to determine the amount of taxes payable by them and provides as follows:
230 (1) Every person carrying on business and every person who is required, by or pursuant to this Act, to pay or collect taxes or other amounts shall keep records and books of account (including an annual inventory kept in prescribed manner) at the person’s place of business or residence in Canada or at such other place as may be designated by the Minister, in such form and containing such information as will enable the taxes payable under this Act or the taxes or other amounts that should have been deducted, withheld or collected to be determined.
230 (1) Quiconque exploite une entreprise et quiconque est obligé, par ou selon la présente loi, de payer ou de percevoir des impôts ou autres montants doit tenir des registres et des livres de comptes (y compris un inventaire annuel, selon les modalités réglementaires) à son lieu d’affaires ou de résidence au Canada ou à tout autre lieu que le ministre peut désigner, dans la forme et renfermant les renseignements qui permettent d’établir le montant des impôts payables en vertu de la présente loi, ou des impôts ou autres sommes qui auraient dû être déduites, retenues ou perçues.
[8] Sections 230 to 232 of the ITA set out the authority of the Minister of National Revenue (the Minister) to conduct audits, require production of information and documents, and obtain compliance orders. In general terms, these provisions allow either the Minister (in practice, through a delegate) or those authorized to act on the Minister’s behalf to audit taxpayers, request documents and information from taxpayers or third parties, and, if the information or documents are not forthcoming, allow the Minister to seek a compliance order from a superior court in a province or from the Federal Court. Section 231.6 of the ITA contains specific provisions relating to obtaining documents located outside of Canada, and section 232 of the ITA relates to certain matters concerning documents held by lawyers in respect of which claims for solicitor-client privilege pertain.
[9] The full text of the provisions in the ITA relevant to this appeal is set out in the Appendix to these Reasons. The portions of those provisions of particular relevance are set out below.
Definitions
Définitions
231 In sections 231.1 to 231.8,
231 Les définitions qui suivent s’appliquent aux articles 231.1 à 231.8.
authorized person means a person authorized by the Minister for the purposes of sections 231.1 to 231.5; (personne autorisée)
[…]
document includes money, a security and a record; (document)
document Sont compris parmi les documents les registres. Y sont assimilés les titres et les espèces. (document)
[…]
[…] personne autorisée Personne autorisée par le ministre pour l’application des articles 231.1 à 231.5 (authorized person)
Inspections
Enquêtes
231.1 (1) An authorized person may, at all reasonable times, for any purpose related to the administration or enforcement of this Act,
231.1 (1) Une personne autorisée peut, à tout moment raisonnable, pour l’application et l’exécution de la présente loi, à la fois :
(a) inspect, audit or examine the books and records of a taxpayer and any document of the taxpayer or of any other person that relates or may relate to the information that is or should be in the books or records of the taxpayer or to any amount payable by the taxpayer under this Act, and
a) inspecter, vérifier ou examiner les livres et registres d’un contribuable ainsi que tous documents du contribuable ou d’une autre personne qui se rapportent ou peuvent se rapporter soit aux renseignements qui figurent dans les livres ou registres du contribuable ou qui devraient y figurer, soit à tout montant payable par le contribuable en vertu de la présente loi;
(b) examine property in an inventory of a taxpayer and any property or process of, or matter relating to, the taxpayer or any other person, an examination of which may assist the authorized person in determining the accuracy of the inventory of the taxpayer or in ascertaining the information that is or should be in the books or records of the taxpayer or any amount payable by the taxpayer under this Act,
b) examiner les biens à porter à l’inventaire d’un contribuable, ainsi que tout bien ou tout procédé du contribuable ou d’une autre personne ou toute matière concernant l’un ou l’autre dont l’examen peut aider la personne autorisée à établir l’exactitude de l’inventaire du contribuable ou à contrôler soit les renseignements qui figurent dans les livres ou registres du contribuable ou qui devraient y figurer, soit tout montant payable par le contribuable en vertu de la présente loi;
and for those purposes the authorized person may
à ces fins, la personne autorisée peut :
(c) subject to subsection 231.1(2), enter into any premises or place where any business is carried on, any property is kept, anything is done in connection with any business or any books or records are or should be kept, and
c) sous réserve du paragraphe (2), pénétrer dans un lieu où est exploitée une entreprise, est gardé un bien, est faite une chose en rapport avec une entreprise ou sont tenus ou devraient l’être des livres ou registres;
(d) require the owner or manager of the property or business and any other person on the premises or place to give the authorized person all reasonable assistance and to answer all proper questions relating to the administration or enforcement of this Act and, for that purpose, require the owner or manager to attend at the premises or place with the authorized person.
d) requérir le propriétaire, ou la personne ayant la gestion, du bien ou de l’entreprise ainsi que toute autre personne présente sur les lieux de lui fournir toute l’aide raisonnable et de répondre à toutes les questions pertinentes à l’application et l’exécution de la présente loi et, à cette fin, requérir le propriétaire, ou la personne ayant la gestion, de l’accompagner sur les lieux.
[…]
[…]
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 sent or served in accordance with subsection (1.1), 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 ou envoyé conformément au paragraphe (1.1), 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.
Notice
Avis
(1.1) A notice referred to in subsection (1) may be
(1.1) L’avis visé au paragraphe (1) peut être :
(a) served personally;
a) soit signifié à personne;
(b) sent by registered or certified mail; or
b) soit envoyé par courrier recommandé ou certifié;
(c) sent electronically to a bank or credit union that has provided written consent to receive notices under subsection (1) electronically.
c) soit envoyé par voie électronique à une banque ou une caisse de crédit qui a consenti par écrit à recevoir les avis visés au paragraphe (1) par voie électronique.
[…]
[…]
Inquiry
Enquête
231.4 (1) The Minister may, for any purpose related to the administration or enforcement of this Act, authorize any person, whether or not the person is an officer of the Canada Revenue Agency, to make such inquiry as the person may deem necessary with reference to anything relating to the administration or enforcement of this Act.
231.4 (1) Le ministre peut, pour l’application et l’exécution de la présente loi, autoriser une personne, qu’il s’agisse ou non d’un fonctionnaire de l’Agence du revenu du Canada, à faire toute enquête que celle-ci estime nécessaire sur quoi que ce soit qui se rapporte à l’application et l’exécution de la présente loi.
Appointment of hearing officer
Nomination d’un président d’enquête
(2) Where the Minister, pursuant to subsection 231.4(1), authorizes a person to make an inquiry, the Minister shall forthwith apply to the Tax Court of Canada for an order appointing a hearing officer before whom the inquiry will be held.
(2) Le ministre qui, conformément au paragraphe (1), autorise une personne à faire enquête doit immédiatement demander à la Cour canadienne de l’impôt une ordonnance où soit nommé un président d’enquête.
[…]
[…]
Definition of foreign-based information or document
Sens de renseignement ou document étranger
231.6 (1) For the purposes of this section, foreign-based information or document means any information or document that is available or located outside Canada and that may be relevant to the administration or enforcement of this Act, including the collection of any amount payable under this Act by any person.
231.6 (1) Pour l’application du présent article, un renseignement ou document étranger s’entend d’un renseignement accessible, ou d’un document situé, à l’étranger, qui peut être pris en compte 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.
Requirement to provide foreign-based information
Obligation de fournir des renseignements ou documents étrangers
(2) Notwithstanding any other provision of this Act, the Minister may, by notice sent or served in accordance with subsection (3.1), require that a person resident in Canada or a non-resident person carrying on business in Canada provide any foreign-based information or document.
(2) Malgré les autres dispositions de la présente loi, le ministre peut, par avis signifié ou envoyé conformément au paragraphe (3.1), exiger d’une personne résidant au Canada ou d’une personne n’y résidant pas mais y exploitant une entreprise de fournir des renseignements ou documents étrangers.
[…]
[…]
Review of foreign information requirement
Révision par un juge
(4) The person who is sent or served with a notice of a requirement under subsection (2) may, within 90 days after the notice is sent or served, apply to a judge for a review of the requirement.
(4) La personne à qui l’avis est signifié ou envoyé peut, dans les 90 jours suivant la date de signification ou d’envoi, contester, par requête à un juge, la mise en demeure du ministre.
[…]
[…]
Compliance order
Ordonnance
231.7 (1) On summary application by the Minister, a judge may, notwithstanding subsection 238(2), order a person to provide any access, assistance, information or document sought by the Minister under section 231.1 or 231.2 if the judge is satisfied that
231.7 (1) Sur demande sommaire du ministre, un juge peut, malgré le paragraphe 238(2), ordonner à une personne de fournir l’accès, l’aide, les renseignements ou les documents que le ministre cherche à obtenir en vertu des articles 231.1 ou 231.2 s’il est convaincu de ce qui suit :
(a) the person was required under section 231.1 or 231.2 to provide the access, assistance, information or document and did not do so; and
a) la personne n’a pas fourni l’accès, l’aide, les renseignements ou les documents bien qu’elle en soit tenue par les articles 231.1 ou 231.2;
(b) in the case of information or a document, the information or document is not protected from disclosure by solicitor-client privilege (within the meaning of subsection 232(1)).
b) s’agissant de renseignements ou de documents, le privilège des communications entre client et avocat, au sens du paragraphe 232(1), ne peut être invoqué à leur égard.
[…]
[…]
Judge may impose conditions
Conditions
(3) A judge making an order under subsection (1) may impose any conditions in respect of the order that the judge considers appropriate.
(3) Le juge peut imposer, à l’égard de l’ordonnance, les conditions qu’il estime indiquées.
[…]
[…]
Definitions
Définitions
232 (1) In this section,
232 (1) Les définitions qui suivent s’appliquent au présent article.
[…] lawyer means, in the province of Quebec, an advocate or notary and, in any other province, a barrister or solicitor; (avocat) […]
avocat Dans la province de Québec, un avocat ou notaire et, dans toute autre province, un barrister ou un solicitor. (lawyer) […]
solicitor-client privilege means the right, if any, that a person has in a superior court in the province where the matter arises to refuse to disclose an oral or documentary communication on the ground that the communication is one passing between the person and the person’s lawyer in professional confidence, except that for the purposes of this section an accounting record of a lawyer, including any supporting voucher or cheque, shall be deemed not to be such a communication. (privilège des communications entre client et avocat)
privilège des communications entre client et avocat Droit qu’une personne peut posséder, devant une cour supérieure de la province où la question a pris naissance, de refuser de divulguer une communication orale ou documentaire pour le motif que celle-ci est une communication entre elle et son avocat en confidence professionnelle sauf que, pour l’application du présent article, un relevé comptable d’un avocat, y compris toute pièce justificative ou tout chèque, ne peut être considéré comme une communication de cette nature. (solicitor-client privilege)
[…]
[…]
Examination of certain documents where privilege claimed
Secret professionnel invoqué lors de l’examen de documents
(3.1) Where, pursuant to section 231.1, an officer is about to inspect or examine a document in the possession of a lawyer or where, pursuant to section 231.2, the Minister has required provision of a document by a lawyer, and the lawyer claims that a named client or former client of the lawyer has a solicitor-client privilege in respect of the document, no officer shall inspect or examine the document and the lawyer shall
(3.1) Lorsque, conformément à l’article 231.1, un fonctionnaire est sur le point d’inspecter ou d’examiner un document en la possession d’un avocat ou que, conformément à l’article 231.2, le ministre exige la fourniture ou la production d’un document, et que l’avocat invoque le privilège des communications entre client et avocat en ce qui concerne le document au nom d’un de ses client ou anciens clients nommément désigné, aucun fonctionnaire ne peut inspecter ou examiner le document et l’avocat doit :
(a) place the document, together with any other document in respect of which the lawyer at the same time makes the same claim on behalf of the same client, in a package and suitably seal and identify the package or, if the officer and the lawyer agree, allow the pages of the document to be initialed and numbered or otherwise suitably identified; and
a) d’une part, faire un colis du document ainsi que de tout autre document pour lequel il invoque, en même temps, le même privilège au nom du même client, bien sceller ce colis et bien le marquer, ou, si le fonctionnaire et l’avocat en conviennent, faire en sorte que les pages du document soient paraphées et numérotées ou autrement bien marquées;
(b) retain it and ensure that it is preserved until it is produced to a judge as required under this section and an order is issued under this section in respect of the document.
b) d’autre part, retenir le document et s’assurer de sa conservation jusqu’à ce que, conformément au présent article, le document soit produit devant un juge et une ordonnance rendue concernant le document.
Application to judge
Requête présentée par l’avocat ou son client
(4) Where a document has been seized and placed in custody under subsection 232(3) or is being retained under subsection 232(3.1), the client, or the lawyer on behalf of the client, may
(4) En cas de saisie et mise sous garde d’un document en vertu du paragraphe (3) ou de rétention d’un document en vertu du paragraphe (3.1), le client ou l’avocat au nom de celui-ci peut :
(a) within 14 days after the day the document was so placed in custody or commenced to be so retained apply, on three clear days notice of motion to the Deputy Attorney General of Canada, to a judge for an order
a) dans les 14 jours suivant la date où le document a ainsi été mis sous garde ou a ainsi commencé à être retenu, après avis au sous-procureur général du Canada au moins trois jours francs avant qu’il soit procédé à cette requête, demander à un juge de rendre une ordonnance qui :
(i) fixing a day, not later than 21 days after the date of the order, and place for the determination of the question whether the client has a solicitor-client privilege in respect of the document, and
(i) d’une part, fixe la date — tombant au plus 21 jours après la date de l’ordonnance — et le lieu où il sera statué sur la question de savoir si le client bénéficie du privilège des communications entre client et avocat en ce qui concerne le document,
[…]
[…]
II. Order and Reasons of the Federal Court [10] I turn next to discuss the Order and Reasons of the Federal Court in the instant case.
[11] The Federal Court had before it an application from the Minister under section 231.7 of the ITA for a compliance order, requiring the appellant to comply with Requests the Minister asserted were previously made under section 231.1 of the ITA. The Minister sought orders in respect of several items, and the Federal Court granted an order in respect of seven of them, dismissing the application in respect of several other items. More specifically, the Federal Court ordered the appellant, who carried on a consulting business and was being audited in respect of several taxation years, to provide:
a response to the request for invoices issued by the appellant to one of his clients, Casala Limited (Casala), during the years that were under audit, outlining the services provided (Order, paragraph 1(a)(i));
information regarding the terms and conditions of the appellant’s oral contract(s) with Casala and the invoices submitted to Casala for the audit period (Order, paragraph 1(a)(ii));
a detailed schedule outlining the compensation received from Casala for the audit period (Order, paragraph 1(a)(iii));
information and documents from the appellant’s bank accounts in Luxembourg, listed in the Requests issued to the appellant, unless the bank were to provide a statement that the requested items were not available or could only be made available if the appellant were to go to Luxembourg, in which event the appellant was ordered to provide an explanation and supporting documentation regarding the bank’s response (Order, paragraph 1(b)(i));
an accounting of all funds deposited to the appellant’s Luxembourg accounts and the source(s) of the deposited funds (Order, paragraph 1(b)(ii));
a copy of the trust ledgers for the appellant, maintained by the appellant’s solicitors in Canada, evidencing the information sought in the Minister’s Requests regarding payments received by the law firms, unless the law firm(s) in question refused to release the documents to the appellant, in which event the appellant was ordered to provide the written correspondence in this regard from the law firm(s) (Order, paragraph 1(c)); and
details of the appellant’s gross professional income reported on line 164 of his 2016 tax return as set out in the Minister’s Request made May 1, 2019 (Order, paragraph 1(d)).
[12] Before the Federal Court, the appellant made much the same arguments as he made before us, namely, that he could not be required to provide under section 231.1 of the ITA:
(a)any information beyond information relating to the provenance, location or maintenance of his books and records or other documents;
(b)documents that were outside of his possession and that were in the hands of third parties, who acted on the appellant’s behalf; and
(c)documents and information that the appellant alleges were not sought in the demands made under section 231.1 of the ITA.
[13] In certain instances, he also claimed that he had complied with the Requests.
[14] The Minister, on the other hand, argued that subsection 231.1(1) of the ITA afforded the Court the requisite authority to issue the compliance order and relied on the entirety of the subsection in support of her position.
[15] The Federal Court commenced its legal analysis by noting that, in order to succeed in the application for a compliance order, the Minister was required to establish that: (1) the items had been sought under section 231.1 of the ITA, and the appellant was required to provide them under that provision; (2) the appellant had not done so within a reasonable period of time; and (3) the requested items were not protected by solicitor-client privilege.
[16] The final condition was not in issue before the Federal Court and is not in issue before us.
[17] As concerns the first of the foregoing conditions, the Federal Court accepted that all the items it ordered the appellant to provide had been requested under section 231.1 of the ITA. The Federal Court further determined that such items were matters that a taxpayer could be required to provide under section 231.1 and thus could be the subject of a compliance order under section 231.7 of the ITA.
[18] More specifically, the Federal Court rejected the appellant’s reading of the decision of this Court in Cameco, finding that the ruling in that case was limited to a finding that a taxpayer cannot be compelled to submit to an oral interview and answer questions posed during the interview.
[19] After reviewing the relevant statutory provisions, the Federal Court concluded that the broad wording used in subsection 231.1(1) of the ITA and, in particular, the reference to information that ought to have been in a taxpayer’s books and records in that subsection afforded the Court the authority to make the Order it made because the items in question were properly the subject of a Request under subsection 231.1(1) of the ITA. In this regard, the Federal Court determined that subsection 231.1(1) of the ITA affords the Minister the authority to require production of information of the sort the Court ordered the appellant to provide, which went beyond the provenance, location or maintenance of the appellant’s books and records or other documents. The Federal Court also determined that, for the same reasons, subsection 231.1(1) of the ITA afforded the Minister the authority to require the appellant to attempt to obtain the requested documents and information from his bank in Luxembourg, his accountant, and his solicitors.
[20] As concerns the requirement to make such efforts, the Federal Court noted that “[…] a taxpayer is required to make reasonable efforts to accurately respond to requests for documents and information that are within the scope of subsection 231.1(1)” (at paragraph 50).
[21] The Federal Court determined that the second of the above-listed conditions was also met in respect of each of the items covered by its Order. In each instance, the Federal Court reviewed the evidence and, where it made an Order, determined that the appellant had not complied with Requests that had been issued under section 231.1 of the ITA.
III. Analysis [22] I turn next to review the appellant’s arguments. In discussing them, it is useful to commence by detailing the points that are not in dispute.
A. Matters Not in Dispute
[23] The first of the points not in dispute concerns the standard of review to be applied by this Court. As this is an appeal from the Federal Court, the appellate standard of review applies. Accordingly, errors of law are reviewable for correctness, whereas errors of fact or of mixed fact and law from which a legal issue cannot be extricated are reviewable for palpable and overriding error (Housen v. Nikolaisen, 2002 SCC 33 at paras. 8, 37, [2002] 2 S.C.R. 235; BP Canada Energy Company v. Canada (National Revenue), 2017 FCA 61 at para. 56, [2017] 4 F.C.R. 310).
[24] The second matter that is not in dispute concerns the appellant’s failure to maintain books and records as required by subsection 230(1) of the ITA. The respondent asserts that the various items that the Federal Court ordered the appellant to provide should have been recorded in his books and records in Canada in conformity with subsection 230(1) of the ITA. This is not contested by the appellant. Thus, had the appellant complied with his record-keeping obligations, there is no dispute that the Minister would have been entitled to obtain an order for production of the books and records in which such information was contained if the Minister had issued a Request for them and the appellant had not produced them voluntarily.
[25] Third, it is uncontested that subsection 231.7(1) of the ITA sets out the items the Minister must establish to be entitled to a compliance order. Prior to listing these items, it is helpful to set out the subsection again. Subsection 231.7(1) of the ITA provides:
231.7 (1) On summary application by the Minister, a judge may, notwithstanding subsection 238(2), order a person to provide any access, assistance, information or document sought by the Minister under section 231.1 or 231.2 if the judge is satisfied that
231.7 (1) Sur demande sommaire du ministre, un juge peut, malgré le paragraphe 238(2), ordonner à une personne de fournir l’accès, l’aide, les renseignements ou les documents que le ministre cherche à obtenir en vertu des articles 231.1 ou 231.2 s’il est convaincu de ce qui suit :
(a) the person was required under section 231.1 or 231.2 to provide the access, assistance, information or document and did not do so; and
a) la personne n’a pas fourni l’accès, l’aide, les renseignements ou les documents bien qu’elle en soit tenue par les articles 231.1 ou 231.2;
(b) in the case of information or a document, the information or document is not protected from disclosure by solicitor-client privilege (within the meaning of subsection 232(1)).
b) s’agissant de renseignements ou de documents, le privilège des communications entre client et avocat, au sens du paragraphe 232(1), ne peut être invoqué à leur égard.
[26] As is apparent from this provision, the conditions precedent for the issuance of a compliance order by the Federal Court are that:
the person against whom the order is made must have been required under section 231.1 or 231.2 of the ITA to provide the access, assistance, information or document that is the subject of the order;
that person must have failed to provide the access, assistance, information or document in question; and
in the case of information or a document, it must not be subject to solicitor-client privilege.
B. Points in Issue
[27] Where the parties part company is on whether the appellant was entitled to refuse to comply with the Canada Revenue Agency (the CRA)’s Requests in issue in this appeal, which is determinative of whether the Federal Court possessed authority under the ITA to order compliance in the manner it did. As noted, the appellant’s arguments rest primarily on the decision of this Court in Cameco. The appellant more specifically submits that Cameco establishes that the Federal Court lacked authority to make all parts of the Order under appeal, with the exception of paragraph 1(a)(i). With regard to that paragraph of the Federal Court’s Order, as is more fully discussed below, the appellant primarily contends that he has complied and there are no documents responsive to the Requests issued to him. The appellant also makes subsidiary arguments premised on sections 231.6 and 232 of the ITA.
[28] The appellant’s arguments premised on Cameco and on sections 231.6 and 232 of the ITA raise issues of law, whereas his other arguments raise matters of fact. Given the centrality of this Court’s decision in Cameco to the appellant’s arguments, it is useful to commence the discussion by considering precisely what was decided in that case.
(1) What Does Cameco Decide? [29] In Cameco, where Woods J.A. issued concurring reasons, Rennie J.A. wrote for the majority. In paragraph 1 of the majority reasons, Rennie J.A. set out the issues before the Court as follows:
The issue in this appeal is whether the Minister of National Revenue can require employees of a corporation to attend for interviews and compel oral answers to questions posed by auditors of the Canada Revenue Agency (CRA). The Minister says that paragraph 231.1(1)(a) of the Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.) (Act) provides her the authority to do so.
[30] In terms of the facts that were before the Court in Cameco, the CRA had requested 25 employees of Cameco and its subsidiaries to attend interviews and answer orally various categories of questions that the CRA believed were relevant to its audit into Cameco’s compliance with the transfer pricing rules set out in the ITA. This followed a lengthy audit process during which Cameco had already provided extensive information to the CRA. Cameco indicated to the CRA that it was willing to answer the questions in writing but declined to have the employees attend the interviews and answer orally.
[31] The Federal Court dismissed the request for an order requiring their attendance at the interviews under section 231.7 of the ITA, finding both that section 231.7 of the ITA did not afford the Court authority to compel oral interviews and that certain discretionary considerations militated in any event against issuing the compliance order.
[32] This Court dismissed the appeal. Woods J.A. would have dismissed the appeal on the basis of the discretionary authority of the Federal Court. The majority, on the other hand, determined that the Federal Court lacked the authority to order the employees to attend the interviews. The Minister in that case, unlike the present one, relied only on paragraph 231.1(1)(a) of the ITA in support of the Request. In the case at bar, as noted, the Minister relies on the entirety of subsection 231.1(1) in support of her authority to issue the Requests at issue in this appeal.
[33] A central component of the majority’s reasons in Cameco involved the amendments to the ITA in 1986, which removed from section 231.1 the reference to the right of the Minister to require oral answers under oath to questions and added to what is now section 231.4 to the ITA. Under section 231.4 of the ITA, the Minister may seek an order from the Tax Court for an inquiry before a hearing officer, during which evidence may be obtained under oath from any person.
[34] Prior to its amendment in 1986, subsection 231.1(1) (then subsection 231(1)) of the ITA provided:
231. (1) Any person thereunto authorized by the Minister, for any purpose related to the administration or enforcement of this Act, may, at all reasonable times, enter into any premises or place where any business is carried on or any property is kept or anything is done in connection with any business or any books or records are or should be kept, and
231. (1) Toute personne qui y est autorisée par le Ministre, pour toute fin relative à l'application ou à l'exécution de la présente loi, peut, en tout temps raisonnable, pénétrer dans tous lieux ou endroits dans lesquels l'entreprise est exploitée ou des biens sont gardés, ou dans lesquels il se fait quelque chose se rapportant à des affaires quelconques, ou dans lesquels sont ou devraient être tenus des livres ou registres, et
(a) audit or examine the books and records and any account, voucher, letter, telegram or other document which relates or may relate to the information that is or should be in the books or records or the amount of tax payable under this Act,
a) vérifier ou examiner les livres et registres, et tout compte, pièce justificative, lettre, télégramme ou autre document qui se rapporte ou qui peut se rapporter aux renseignements qui se trouvent ou devraient se trouver dans les livres ou registres, ou le montant de l'impôt exigible en vertu de la présente loi,
(b) examine property described by an inventory or any property, process or matter an examination of which may, in his opinion, assist him in determining the accuracy of an inventory or in ascertaining the information that is or should be in the books or records or the amount of any tax payable under this Act,
b) examiner les biens décrits dans un inventaire ou tous biens, procédures ou matière dont l'examen peut, à son avis, lui aider à déterminer l'exactitude d'un inventaire ou à contrôler les renseignements qui se trouvent ou devraient se trouver dans les livres ou registres, ou le montant de tout impôt exigible en vertu de la présente loi,
(c) require the owner or manager of the property or business and any other person on the premises or place to give him all reasonable assistance with his audit or examination and to answer all proper questions relating to the audit or examination either orally or, if he so requires, in writing, on oath or by statutory declaration and, for that purpose, require the owner or manager to attend at the premises or place with him, and
c) obliger le propriétaire ou le gérant des biens ou de l'entreprise et toute autre personne présente sur les lieux de lui prêter toute aide raisonnable dans sa vérification ou son examen, et de répondre à toutes questions appropriées se rapportant à la vérification ou à l'examen, soit oralement, soit, si cette personne l'exige, par écrit, sous serment ou par déclaration exigée par la loi et, à cette fin, obliger le propriétaire ou le gérant de l'accompagner sur les lieux, et
(d) if, during the course of an audit or examination, it appears to him that there has been a violation of this Act or a regulation, seize and take away any of the documents, books, records, papers or things that may be required as evidence as to the violation of any provision of this Act or a regulation.
d) si, au cours d'une vérification ou d'un examen, il lui semble qu'une infraction à la présente loi ou à un règlement a été commise, cette personne autorisée peut saisir et emporter tous documents, registres, livres, pièces ou choses qui peuvent être requis comme preuves de l'infraction à toute disposition de la présente loi ou d'un règlement.
[Emphasis from Cameco.]
[Soulignements de Cameco.]
[35] In large part due to the disappearance of the previous requirement to answer questions under oath from what is now section 231.1 of the ITA, the majority in Cameco determined that, subsequent to the amendments, the Minister could not require that individuals attend the oral interviews under paragraph 231.1(1)(a) of the ITA. The Court’s determination that paragraph 231.1(1)(a) of the ITA did not authorize the issuance of the Request at issue in Cameco, in turn, meant that the Federal Court was correct in declining to issue an order under section 231.7 of the ITA, which would have required the employees’ attendance at oral interviews.
[36] As is apparent from the foregoing, the issue before the Court in Cameco concerned only the Minister’s right to compel attendance at oral interviews to answer questions under paragraph 231.1(1)(a) of the ITA. The broader statements made in Cameco (for example, at paragraphs 18 to 23, upon which the appellant relies) have to be understood in the context of and are limited to the issue that was before the Court in that cas