Canada (Minister of National Revenue) v. Toronto Dominion Bank

Canada (Minister of National Revenue) v. Toronto Dominion Bank Court (s) Database Federal Court of Appeal Decisions Date 2004-10-25 Neutral citation 2004 FCA 359 File numbers A-71-04 Notes Digest Decision Content Date: 20041025 Docket: A-71-04 Citation: 2004 FCA 359 CORAM: DÉCARY J.A. LÉTOURNEAU J.A. NADON J.A. BETWEEN: THE MINISTER OF NATIONAL REVENUE Appellant and TORONTO DOMINION BANK HAVING A PLACE OF BUSINESS AT 3590 ST-LAURENT MONTRÉAL, QUEBEC H2X 2V3 Respondent Hearing held at Montréal, Quebec, on October 20, 2004. Judgment delivered at Ottawa, Ontario, on October 25, 2004. REASONS FOR JUDGMENT: DÉCARY J.A. CONCURRED IN BY: LÉTOURNEAU J.A. NADON J.A. Date: 20041025 Docket: A-71-04 Citation: 2004 FCA 359 CORAM: DÉCARY J.A. LÉTOURNEAU J.A. NADON J.A. BETWEEN: THE MINISTER OF NATIONAL REVENUE Appellant and TORONTO DOMINION BANK HAVING A PLACE OF BUSINESS AT 3590 ST-LAURENT MONTRÉAL, QUEBEC H2X 2V3 Respondent REASONS FOR JUDGMENT DÉCARY J.A. [1] The question in this appeal is as to the scope of the power of the Minister of National Revenue (the Minister) to ask a third party, by a requirement and without the need for judicial authorization, to provide information relating to an unnamed person (section 231.2 of the Income Tax Act). [2] In an investigation concerning the tax debtor Jonathan Myette, the Minister learned that the latter had received a cheque for $10,000 made out to him which he endorsed and deposited in an account at the Toronto Dominion Bank (the Bank) having No. 4152-291062. The Minister sent the Bank a requirement for information. Of the three types of information sought by this request, which were met with a categorical refusal by the Bank, only the first is still at issue. It has to do with the following information: [TRANSLATION] (a) the name of the holder of account No. 4152-291062, his or her address and telephone number and the name of his or her representative, and any other information by which he or she may be identified and contacted. [3] Pursuant to section 237.1 of the Canada Income Tax Act the Minister asked the Federal Court to direct the Bank to provide the said information. Tremblay-Lamer J. dismissed the Minister's application (2004 FC 169). I concur essentially in the reasons she gave. I will simply make a few additional comments in response to the arguments made on appeal. [4] The relevant provision of the Income Tax Act is the following: 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, 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, (a) any information or additional information, including a return of income or a supplementary return; or (b) any document. 231.2 (1) Malgré les autres dispositions de la présente loi, le ministre peut, sous réserve du paragraphe (2) et, pour l'application et l'exécution de la présente loi, y compris la perception d'un montant payable par une personne en vertu de la présente loi, 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) qu'elle fournisse tout renseignement ou tout renseignement supplémentaire, y compris une déclaration de revenu ou une déclaration supplémentaire; b) qu'elle produise des documents. (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). (3) On ex parte application by the Minister, a judge may, subject to such conditions as the judge considers appropriate, authorize the Minister to impose on a third party a requirement under subsection 231.2(1) relating to an unnamed person or more than one unnamed person (in this section referred to as the "group") where the judge is satisfied by information on oath that (a) the person or group is ascertainable; and (b) the requirement is made to verify compliance by the person or persons in the group with any duty or obligation under this Act. (3) Sur requête ex parte du ministre, un juge peut, aux conditions qu'il estime indiquées, autoriser le ministre à exiger d'un tiers la fourniture de renseignements ou production de documents prévue 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) cette personne ou ce groupe est identifiable; 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. [5] Prima facie, it is subsection (2) which applies here, as the Bank is the "third party" required to provide information and the holder of the account is the "unnamed person" concerned by the information. Accordingly, it would seem to go without saying that prior judicial authorization is required. [6] The Minister says it is not. As he does not know the holder of the account, the Minister clearly could not say on oath that he was certain the requirement of information was made to verify compliance by that individual with any duty or obligation under the Act, and if he appeared before a judge it would be impossible for him to meet the requirements of paragraph 231.2(3)(b). Accordingly, as I understand the argument, subsection 231.2(2) could not be relied on by the Minister and so reference must be made to the general principle set out in subsection 231.2(1), allowing him to act without judicial authorization; otherwise, the Minister said, his power of making a requirement would be seriously compromised. [7] That argument does not stand up to analysis. The purpose of subsection 231.2(2) is to protect both the third party with the information and the person concerned. The third party naturally wants to be sure, before it gives information to the Minister (which moreover here is confidential under paragraph 244(d) of the Bank Act) that it has a legal duty to do so. The person concerned is entitled to have his or her privacy respected to the extent provided by law. It is specifically to achieve this twofold objective that Parliament has limited the Minister's power and required him to obtain prior judicial authorization, once the conditions mentioned in paragraphs 231.2(3)(a) and (b) are met. [8] The Minister is seeking to do this here although subsection 231.2(2) does not intend him to do so. Additionally, the effect of accepting his interpretation of section 231.2 would be to invalidate subsections 231.2(2) and (3) and the protection they provide, since the Minister would be obtaining under subsection 231.2(1), without prior judicial consent, information concerning unidentified persons once he is not investigating or says he is not investigating those persons. The very purpose of subsections 231.2(2) and (3) is to protect unidentified persons who are not being investigated while making it possible in the interests of justice, and subject to judicial review, for information to be obtained on persons who are in fact under investigation. [9] The appeal should be dismissed with costs. "Robert Décary" J.A. "I concur. Gilles Létourneau J.A." "I concur. M. Nadon J.A." Certified true translation Jacques Deschênes, LLB FEDERAL COURT OF APPEAL SOLICITORS OF RECORD DOCKET: A-71-04 STYLE OF CAUSE: THE MINISTER OF NATIONAL REVENUE v. TORONTO DOMINION BANK, HAVING A PLACE OF BUSINESS AT 3590 ST-LAURENT, MONTRÉAL, QUEBEC H2X 2V3 PLACE OF HEARING: Montréal, Quebec DATE OF HEARING: October 20, 2004 REASONS FOR JUDGMENT: Décary J.A. CONCURRED IN BY: Létourneau J.A. Nadon J.A. DATED: October 25, 2005 APPEARANCES: Maria Bittichesu FOR THE APPELLANT Marie-Claude Landry Frédéric Pérodeau FOR THE RESPONDENT Philippe H. Bélanger SOLICITORS OF RECORD: Morris Rosenberg FOR THE APPELLANT Deputy Attorney General of Canada Montréal, Quebec McCarthy, Tétrault s.e.n.c.r.l. FOR THE RESPONDENT Montréal, Quebec