Tele-Mobile Company Partnership et al. v. Canada Revenue Agency, 2010 FC 839

• Judge: Zinn, J.
• Court: Federal Court (Canada)
• Case Date: May 26, 2010
• Jurisdiction: Canada (Federal)
• Citations: 2010 FC 839;(2010), 373 F.T.R. 206 (FC)

Tele-Mobile Co. v. CRA (2010), 373 F.T.R. 206 (FC)

MLB headnote and full text

Temp. Cite: [2010] F.T.R. TBEd. AU.023

Tele-Mobile Company Partnership, Telus Communications Company Partnership, Telus Communications Inc., 1219723 Alberta Ltd. and MTS Allstream Inc. (applicants) v. Canada Revenue Agency (respondent)

(T-990-09; 2010 FC 839)

Indexed As: Tele-Mobile Company Partnership et al. v. Canada Revenue Agency

Federal Court

Zinn, J.

August 25, 2010.

Summary:

The Canada Revenue Agency (CRA) informed Telus that fees for international telecommunication roaming services were subject to GST. Telus applied for an order of prohibition to prevent the CRA from proceeding with assessments or reassessments regarding international roaming services. In its materials in response, the CRA filed the affidavit of Trattner, a manager. On cross-examination, Trattner was unable to answer a series of questions and, subsequently, refused to inform herself of the answers. Telus moved for an order to compel Trattner to inform herself and to answer the questions, as well as to provide a series of relevant documents. A Prothonotary granted the motion. The CRA appealed the Prothonotary's order and moved to strike Telus' application on the basis that the court could not grant the relief sought.

The Federal Court dismissed the appeal from the Prothonotary's order and denied the motion to strike Telus' application.

Administrative Law - Topic 3357

Judicial review - Practice - Interlocutory proceedings (incl. application to strike) - The Canada Revenue Agency (CRA) informed Telus that fees for international telecommunication roaming services were subject to GST - Telus applied for an order of prohibition to prevent the CRA from proceeding with assessments or reassessments regarding international roaming services - The CRA moved to strike the application on the basis that the court could not grant the relief sought - The Federal Court denied the motion - Telus' application was not clearly bereft of any chance of success - Under s. 306 of the Excise Tax Act (ETA), an assessment or reassessment by the Minister under s. 296(1) of the ETA could be appealed to the Tax Court of Canada - Therefore, under s. 18.5 of the Federal Courts Act, the Minister's decision to assess or reassess could not be subject to judicial review in the Federal Court - However, that did not answer the question as to whether the Minister could be prevented by an order of prohibition from making the decision in the first place - While there were no authorities directly on point, the court located two that might support the availability of remedies such as prohibition in the context of CRA assessments - Simply because a party raised a novel issue did not dictate that it was bereft of any chance of success - Writs of prohibition were available to prevent authorities from acting beyond their jurisdiction or to prevent unfairness - Telus acknowledged that the Minister had the jurisdiction to make the proposed assessments, but asserted that it would be unfair to do so - While Telus would "have a steep hill to climb to convince a Court that the Minister has a duty of fairness in these circumstances and that it was not met", it was not possible to say, at this early stage, that Telus would not succeed - See paragraphs 10 to 30.

Administrative Law - Topic 6402

Judicial review - Prohibition - General principles - Nature of remedy - [See Administrative Law - Topic 3357 ].

Courts - Topic 2583

Registrars and prothonotaries - Appeals from - Scope of review (incl. standard of review) - The Canada Revenue Agency (CRA) informed Telus that fees for international telecommunication roaming services were subject to GST - Telus applied for an order of prohibition to prevent the CRA from proceeding with assessments or reassessments regarding international roaming services - In its materials in response, the CRA filed the affidavit of Trattner, a manager - On cross-examination, Trattner was unable to answer a series of questions and, subsequently, refused to inform herself of the answers - Telus moved for an order, inter alia, to compel Trattner to inform herself and to answer the questions - A Prothonotary granted the motion, concluding that "to allow one lower echelon witness to be the only affiant in a case where several levels of administrative action are engaged and where different directorates are involved is not proper" - The Federal Court dismissed the CRA's appeal - Discretionary orders of a Prothonotary were only to be disturbed on appeal where they were either clearly wrong or where the Prothonotary had improperly exercised his discretion on a question vital to the final issue - The issue here was not related to a question vital to the final issue - Therefore, the court could only exercise its discretion de novo if the Prothonotary's decision was clearly wrong - The Prothonotary's finding that the CRA's affiant was a "lower echelon witness" was not clearly wrong - See paragraphs 31 to 35.

Courts - Topic 2583

Registrars and prothonotaries - Appeals from - Scope of review (incl. standard of review) - The Canada Revenue Agency (CRA) informed Telus that fees for international telecommunication roaming services were subject to GST - Telus applied for an order of prohibition to prevent the CRA from proceeding with assessments or reassessments regarding international roaming services - In its materials in response, the CRA filed the affidavit of Trattner, a manager - On cross-examination, Trattner was unable to answer a series of questions and, subsequently, refused to inform herself of the answers - Telus moved for an order to compel Trattner, inter alia, to provide a series of relevant documents - A Prothonotary granted the motion - The CRA appealed, asserting, inter alia, that rule 91 of the Federal Courts Rules was not complied with in that Telus' request for documents was not given with sufficient notice as it was only made during cross-examination - Therefore, the CRA submitted, the Prothonotary erred in ordering production - The Federal Court dismissed the appeal - While the CRA was technically correct, Prothonotaries were to be given some flexibility to apply the rules in a manner that was efficient, practical and just - If the Prothonotary felt that production of documents was warranted, then a technical reading of rule 91 would not invalidate the order - See paragraphs 36 to 40.

Courts - Topic 4021.1

Federal Court of Canada - Jurisdiction - Federal Court - Decisions of federal boards, commissions or tribunals (incl. ministers) - [See Administrative Law - Topic 3357 ].

Courts - Topic 4046

Federal Court of Canada - Jurisdiction - Federal Court - Requirement of lack of other appeals - [See Administrative Law - Topic 3357 ].

Crown - Topic 685

Authority of Ministers - Exercise of - Administrative decisions - Appeals or judicial review - [See Administrative Law - Topic 3357 ].

Evidence - Topic 4714

Witnesses - Examination - Cross-examination - Of affiants - [See first Courts - Topic 2583 ].

Practice - Topic 3687

Evidence - Affidavits - Use of - Cross-examination (incl. transcripts) - [See both Courts - Topic 2583 ].

Cases Noticed:

Stanfield et al. v. Minister of National Revenue (2004), 255 F.T.R. 240; 2004 FC 584, refd to. [para. 6].

Merck & Co. v. Apotex Inc. (1996), 110 F.T.R. 155 (T.D.), refd to. [para. 6].

Inuit Tapirisat of Canada and National Anti-Poverty Organization v. Canada (Attorney General), [1980] 2 S.C.R. 735; 33 N.R. 304, refd to. [para. 10].

Sweet et al. v. Canada (1999), 249 N.R. 17 (F.C.A.), refd to. [para. 10].

Bull (David) Laboratories (Canada) Inc. v. Pharmacia Inc. et al., [1995] 1 F.C. 588; 176 N.R. 48 (F.C.A.), refd to. [para. 10].

Coca-Cola Ltd. et al. v. Pardhan et al. (1999), 240 N.R. 211 (F.C.A.), refd to. [para. 12].

Webster v. Canada (Attorney General) (2003), 312 N.R. 235; 2003 FCA 388, dist. [para. 18].

McCaffrey v. Minister of National Revenue, [1993] 1 C.T.C. 15; 59 F.T.R. 12 (T.D.), refd to. [para. 22].

Cambridge Leasing Ltd. v. Minister of National Revenue (2003), 230 F.T.R. 222; 2003 FCT 112, refd to. [para. 23].

Walsh et al. v. Minister of National Revenue et al., [2006] F.T.R. Uned. 18; 2006 FC 56, refd to. [para. 24].

Addison & Leyen Ltd. et al. v. Canada Customs and Revenue Agency, [2007] 2 S.C.R. 793; 365 N.R. 62; 2007 SCC 33, refd to. [para. 26].

RCI Trust v. Minister of National Revenue (2009), 403 N.R. 106; 2009 FCA 373, refd to. [para. 26].

Morris v. Canada (Minister of National Revenue) - see RCI Trust v. Minister of National Revenue.

Simpson Strong-Tie Co. v. Peak Innovations Inc. (2009), 397 N.R. 201; 2009 FCA 266, refd to. [para. 31].

Merck & Co. et al. v. Apotex Inc. (2003), 315 N.R. 175; 2003 FCA 488, refd to. [para. 32].

Counsel:

William I. Innes, Chia-Yi Chua and Matthew Fleming, for the applicants;

Wendy Burnham and Deborah Horowitz, for the respondent.

Solicitors of Record:

Fraser Milner Casgrain, Toronto, Ontario, for the applicants;

Myles J. Kirvan, Deputy Attorney General of Canada, Toronto, Ontario, for the respondent.

This motion and appeal were heard at Toronto, Ontario, on May 26, 2010, by Zinn, J., of the Federal Court, who delivered the following reasons for judgment on August 25, 2010.