Fraser Milner Casgrain LLP et al. v. Minister of National Revenue, (2002) 223 F.T.R. 23 (TD)

• Judge: Dawson, J.
• Court: Federal Court (Canada)
• Case Date: August 15, 2002
• Jurisdiction: Canada (Federal)
• Citations: (2002), 223 F.T.R. 23 (TD)

Fraser Milner Casgrain LLP v. MNR (2002), 223 F.T.R. 23 (TD)

MLB headnote and full text

Temp. Cite: [2002] F.T.R. TBEd. SE.026

Fraser Milner Casgrain LLP and Gilbert Schmunk (applicants) v. The Minister of National Revenue (respondent)

(T-510-02; 2002 FCT 912)

Indexed As: Fraser Milner Casgrain LLP et al. v. Minister of National Revenue

Federal Court of Canada

Trial Division

Dawson, J.

August 26, 2002.

Summary:

Three companies were being audited by the Canada Customs and Revenue Agency. The Minister served Schmunk, as a director, officer or agent for the companies, and a law firm with certain Requirements to Provide Information. Schmunk and the law firm applied for judicial review, seeking to quash the Requirements.

The Federal Court of Canada, Trial Division, allowed the application in part.

Income Tax - Topic 9253

Enforcement - Production of information - Information which must be produced - The applicants were served with Requirements to Provide Information requiring production of certain documents relating to tax planning for the reorganization of several companies - The Federal Court of Canada, Trial Division, stated that: "1) determination of a taxpayer's tax liability is a purpose related to the administration and enforcement of the Act; ii) In order for a requirement to produce records to be valid, the Minister need merely show the records requested may be relevant; iii) Relevance is tested by determining whether the particular record requested may be relevant in the determination of a taxpayer's tax liability and not whether the particular record requested is relevant with respect to a particular issue under audit." - See paragraph 27.

Income Tax - Topic 9253

Enforcement - Production of information - Information which must be produced - The applicants were served with Requirements to Provide Information requiring production of certain documents relating to tax planning for the reorganization of several companies - The applicants sought to quash the Requirements, arguing that the sole purpose of the Requirements was to determine whether an avoidance transaction had occurred - Tax planning information was irrelevant to whether any of the transactions were avoidance transactions - The Federal Court of Canada, Trial Division, rejected the argument - Even if the sole purpose of the Requirements was to determine whether there was an avoidance transaction, this did not impair the validity of the Requirements - Relevance to a particular issue was not a prerequisite - It was sufficient that the material could be relevant to the determination of a taxpayers' tax liability - The tax planning documents pertained to the companies' tax liability - See paragraphs 24 to 33.

Cases Noticed:

Richardson (James) & Sons Ltd. v. Minister of National Revenue, [1984] 1 S.C.R. 614; 54 N.R. 241, refd to. [para. 15].

AGT Ltd. v. Canada (Attorney General), [1997] 2 F.C. 878; 211 N.R. 220 (F.C.A.), leave to appeal refused (1997), 224 N.R. 396 (S.C.C.), refd to. [para. 15].

OSFC Holdings Ltd. v. Minister of National Revenue (2001), 275 N.R. 238 (F.C.A.), leave to appeal refused (2002), 294 N.R. 398 (S.C.C.), refd to. [para. 16].

Minister of National Revenue v. Canadian Pacific Ltd. (2001), 284 N.R. 216 (F.C.A.), refd to. [para. 16].

R. v. McKinlay Transport Ltd. and C.T. Transport Inc., [1990] 1 S.C.R. 627; 106 N.R. 385; 39 O.A.C. 385, refd to. [para. 23].

AGT Ltd. v. Canada (Attorney General), [1996] 3 F.C. 505; 115 F.T.R. 1 (T.D.), refd to. [para. 25].

Water's Edge Village Estates (Phase II) Ltd. v. Minister of National Revenue (2002), 292 N.R. 98 (F.C.A.), refd to. [para. 31].

Duncan v. Canada - see Water's Edge Village Estates (Phase II) Ltd. v. Minister of National Revenue.

Counsel:

Gordon Funt and Lori Mathison, for the applicants;

Robert Carvalho, for the respondent.

Solicitors of Record:

Fraser Milner Casgrain, Vancouver, British Columbia, for the applicants;

Morris Rosenberg, Deputy Attorney General of Canada, Ottawa, Ontario, for the respondent.

This application was heard on August 15, 2002, at Vancouver, British Columbia, before Dawson, J., of the Federal Court of Canada, Trial Division, who delivered the following judgment on August 26, 2002.