Slattery (Bankrupt) v. Slattery, (1993) 139 N.B.R.(2d) 246 (SCC)

• Judge: Lamer, C.J.C., La Forest, L'Heureux-Dubé, Sopinka, Gonthier, Cory, McLachlin, Iacobucci and Major, JJ.
• Court: Supreme Court (Canada)
• Case Date: March 29, 1993
• Jurisdiction: Canada (Federal)
• Citations: (1993), 139 N.B.R.(2d) 246 (SCC);1993 CanLII 73 (SCC);106 DLR (4th) 212;21 CBR (3d) 161;47 DTC 5443;[1993] 3 SCR 430;139 NBR (2d) 246;[1993] SCJ No 100 (QL);[1993] 2 CTC 243;158 NR 341

Slattery v. Slattery (1993), 139 N.B.R.(2d) 246 (SCC);

    139 R.N.-B.(2e) 246; 357 A.P.R. 246

MLB headnote and full text

[French language version follows English language version]

[La version française vient à la suite de la version anglaise]

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Marguerite Slattery (appellant) v. Doane Raymond Limited, Trustee of the Estate of Raymond P. Slattery, a bankrupt (respondent)

(22618)

Indexed As: Slattery (Bankrupt) v. Slattery

Supreme Court of Canada

Lamer, C.J.C., La Forest, L'Heureux-Dubé, Sopinka, Gonthier, Cory, McLachlin, Iacobucci and Major, JJ.

September 30, 1993.

Summary:

Slattery fell into arrears paying income taxes. Revenue Canada petitioned him into bankruptcy. The trustee brought an action against Slattery's wife, seeking a declaration that certain assets registered in her name were the property of the bankrupt. An issue arose concerning the admissibility of testi­mony by Revenue Canada auditors. Slattery's wife submitted that the evidence was barred from disclosure under s. 241 of the Income Tax Act.

The New Brunswick Court of Queen's Bench ruled that the testimony fell within the exception in s. 241(3) of the Act and was not barred. The court allowed the trust­ee's claim in part. The wife appealed.

The New Brunswick Court of Appeal, in a decision reported 120 N.B.R.(2d) 4; 302 A.P.R. 4; 83 D.L.R.(4th) 360; 7 C.B.R.(3d) 157, dismissed the appeal. The wife appealed.

The Supreme Court of Canada, McLachlin, L'Heureux-Dubé and Sopinka, dissenting, dismissed the appeal.

Income Tax - Topic 8966

Administration - Communication of infor­mation - Prohibition - Exemption - En­forcement - Slattery fell into arrears pay­ing income taxes - Following a lengthy investigation into Slattery's affairs, Rev­enue Canada petitioned Slattery into bank­ruptcy - The trustee in bankruptcy com­menced an action against Slattery's wife to collect the assets of the estate - Two Revenue Canada auditors disclosed infor­mation that they had obtained in the course of their income tax investigation - The New Brunswick Court of Appeal held that the evidence was admissible, because the case was a proceeding relating to the enforcement of the Act and within the exception contained in s. 241(3) of the Income Tax Act - The Supreme Court of Canada affirmed the decision.

Income Tax - Topic 8966

Administration - Communication of infor­mation - Prohibition - Exemption - En­forcement - The Supreme Court of Canada stated that s. 241 of the Income Tax Act reflects the importance of the confi­dentiality of information about taxpayers - Only in exceptional circumstances does the taxpayer's privacy interest give way to the interest of the state - Disclosure may be necessary to assist in tax collection, in­cluding tax collection by way of judicial enforcement - Section 241(3) authorizes disclosure in criminal proceedings and other proceedings relating to the adminis­tration and enforcement of the Act - Sec­tion 241(4) specifies other situations of an administrative nature - See paragraphs 16 to 19.

Income Tax - Topic 9226

Enforcement - Collection - General - The Supreme Court of Canada stated that s. 222 of the Income Tax Act is a clear statement that, in addition to the pro­cedures specified in the Income Tax Act, the Minister may resort generally to the courts to institute civil proceedings to collect taxes as debts - The Minister must be able to disclose in court otherwise confidential information - See paragraphs 26 to 27.

Words and Phrases

In respect of - The Supreme Court of Canada stated that the phrase "in respect of" as found in s. 241(3) of the Income Tax Act, S.C. 1970-71-72, c. 63, should be given a wide interpre­tation - See paragraphs 21 to 24.

Words and Phrases

Relating to - The Supreme Court of Canada stated that the phrase "relating to" as found in s. 241(3) of the Income Tax Act, S.C. 1970-71-72, c. 63, should be given a wide interpretation - See paragraphs 21 to 24.

Cases Noticed:

Glover v. Minister of National Revenue, [1981] 2 S.C.R. 561; 43 N.R. 273, refd to. [paras. 7, 53].

Canadian Pacific Tobacco Co. v. Stapleton (1952), 86 C.L.R. 1 (Aust. H.C.), refd to. [para. 7].

Glover v. Glover (No. 1) (1980), 29 O.R.(2d) 392 (C.A.), refd to. [paras. 15, 54].

Nowegijick v. Minister of National Rev­enue, [1983] 1 S.C.R. 29; 46 N.R. 41; 144 D.L.R.(3d) 193, refd to. [paras. 22, 52].

Diversified Holdings Ltd. v. Minister of National Revenue, [1991] 1 F.C. 595; 121 N.R. 155 (C.A.), refd to. [para. 27].

R. v. McKinlay Transport Ltd. and C.T. Transport Inc., [1990] 1 S.C.R. 627; 106 N.R. 385, refd to. [para. 53].

Statutes Noticed:

Bankruptcy Act, R.S.C. 1985, c. B-3, sect. 16(3), sect. 16(4), sect. 17(1), sect. 19(1), sect. 19(2) [para. 59]; sect. 38(1) [para. 38]; sect. 69 [paras. 40, 59]; sect. 136 [para. 37]; sect. 160(1)(a), sect. 160(1)(e) [para. 41].

Income Tax Act, R.S.C. 1948, c. 52, sect. 121 [para. 14].

Income Tax Act, R.S.C. 1952, c. 148, sect. 133 [para. 14].

Income Tax Act, S.C. 1970-71-72, c. 63, sect. 160 [para. 41]; sect. 222 [paras. 26, 58]; sect. 223(3), sect. 223(5), sect. 224(1), sect. 224(1.2), sect. 224.1, sect. 225(1), sect. 238, sect. 239 [para. 56]; sect. 241 [para. 6]; sect. 241(3) [para. 20]; sect. 241(4)(c) [paras. 11, 61].

Income Tax Amendment Act, S.C. 1966-67, c. 47, sect. 17 [para. 15].

Income Tax Amendment Act, S.C. 1966-67, c. 91, sect. 22 [para. 15].

Income Tax Amendment Act, S.C. 1987, c. 46, sect. 66 [para. 56].

Income War Tax Act, S.C. 1917, c. 28, sect. 11 [para. 14].

Income War Tax Act, R.S.C. 1927, c. 97, sect. 81 [para. 14].

Indian Act, R.S.C. 1970, c. I-6, sect. 87 [para. 53].

Authors and Works Noticed:

Bohémier, Albert, Faillite et Insolvabilité (1992), vol. 1, pp. 48-56 [para. 34].

Brown, D. Scott, Bankruptcy and Income Tax: A Revenue Canada Perspective, in 1990 Conference Report: Report of the Proceedings of the Forty-Second Tax Conference, pp. 18.11 [para. 40]; 18:13 [para. 42].

Chabot, Marc, Faillite et Insolvabilité (1987), p. 8 [para. 34].

Harris, Edwin C., Canadian Income Tax­ation (4th Ed. 1986), pp. 26-27 [para. 18].

Houlden and Morawetz, Bankruptcy and Insolvency Law of Canada (3rd Ed. 1993), pp. 1-3, 1-4 [para. 34].

Larousse, Dictionnaire de la langue fran­çaise (1988) [para. 24].

Le Robert Méthodique (1988) [para. 15].

Pocket Oxford Dictionary (1984) [para. 22].

Toope, Stephen J., and Alison L. Young, The Confidentiality of Tax Returns Under Canadian Law (1982), 27 McGill L.J. 479, pp. 487 [para. 54]; 489 [para. 15].

Counsel:

B.A. Crane, Q.C., and Randall J. Hofley, for the appellant;

John R. Power, Q.C., and Michael Donovan, for the respondent.

Solicitors of Record:

Mockler, Allen and Dixon, Fredericton, New Brunswick, for the appellant;

Palmer, O'Connell, Leger, Roderick and Glennie, Saint John, New Brunswick, for the respondent.

This appeal was heard on March 29, 1993, before Lamer, C.J.C., La Forest, L'Heureux-Dubé, Sopinka, Gonthier, Cory, McLachlin, Iacobucci and Major, JJ., of the Supreme Court of Canada. The decision of the court was delivered in both official languages on September 30, 1993, and the following opinions were filed:

Iacobucci, J. (Lamer, C.J.C., La Forest, Gonthier, Cory and Major, JJ., concur­ring) - see paragraphs 1 to 45;

McLachlin, J. (L'Heureux-Dubé and Sopinka, JJ., concurring), dissenting - see paragraphs 46 to 62.