CITATION: Derakhshan v. Narula, 2017 ONSC 1415
COURT FILE NO.: FC-13-709-0
DATE: 2017/03/01
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
FARHAD DERAKHSHAN
Applicant
Mr. Derakhshan , Self-Represented
– and –
SEEMA NARULA
Respondent
THE ATTORNEY GENERAL OF CANADA
Non-Party
Ian C. Vallance, for the Defendant
Mathew Johnson, for the Attorney General of Canada
HEARD: December 8, 2016
REASONS FOR DECISION ON MOTION TO SET ASIDE SUMMONS TO WITNESS: LYNN ATKINSON
SHEARD J.
[1] This motion was brought by the Attorney General of Canada (the “A.G.”) to set aside a Summons to Witness served by the Applicant, Farhad Derakhshan, (“Derakhshan”) addressed to Lynn Attkins but intended for Lynn Atkinson, an Area Director at Canada Revenue Agency (“CRA”). The motion was granted on December 8, 2016, with written reasons to follow. These are the Reasons.
[2] The motion is brought on the basis that section 241 the Income Tax Act, RSC 1985, c. I (5th Supp) (the “ITA”) is a complete bar to the Summons to Witness: pursuant to section 241 of the ITA, Ms. Atkinson is prohibited from disclosing taxpayer information.
Background
[3] This motion was brought in the middle of the family law trial in an application brought by Derakhshan against Seema Narula (“Narula”). Based on his emails to Ms. Atkinson and to her counsel, Mathew Johnson, (“Johnson”) it would appear that Derakhshan seeks to have a CRA auditor at this family law hearing in order to confirm that: (i) the copies of the tax filings given by Narula to Derakhshan match what Narula submitted to the CRA; and (ii) to give expert evidence on whether Narula’s tax filings were properly done.
[4] Derakhshan did not file any sworn evidence on the motion but did file a brief that contained copies of some of his emails. The materials filed by the A.G. contained the complete email exchange between Derakhshan and Ms. Atkinson and Johnson.
Statutory Prohibition from Disclosing Taxpayer information
[5] The ITA restricts the disclosure of taxpayer information except when authorized under subsections 241 (1) and (2), which provide:
241 (1) Except as authorized by this section, no official or other representative of a government entity shall
(a) knowingly provide, or knowingly allow to be provided, to any person any taxpayer information;
(b) knowingly allow any person to have access to any taxpayer information; or
(c) knowingly use any taxpayer information otherwise than in the course of the administration or enforcement of this Act, the Canada Pension Plan, the Unemployment Insurance Act or the Employment Insurance Act or for the purpose for which it was provided under this section.
(2) Notwithstanding any other Act of Parliament or other law, no official or other representative of a government entity shall be required, in connection with any legal proceedings, to give or produce evidence relating to any taxpayer information.
[6] The definition of “taxpayer information” as set out in s. 241(10) of the ITA would apply to the information being sought by Derakhshan. In his email to Johnson dated November 30, 2016 (more fully referenced below), Derakhshan confirmed that one of his reasons for seeking to have Ms. Atkinson as a witness at his trial was to have her verify the information provided to the CRA by Narula.
Application of Section 241 of the ITA
[7] Courts have held that the provisions of section 241 of the ITA are to be strictly enforced and that disclosure of taxpayer information may only be disclosed in accordance with that section. (Slattery (Trustee of) v. Slattery, 1993 73 (SCC), [1993] 3 SCR 430 at 443-444).
[8] The court does not have jurisdiction to order disclosure of taxpayer information in the civil context unless the disclosure is authorized by section 241. Section 241 “prohibits the communication of ‘any’ information received for the purposes of the Income Tax Act.” (Glover v. Minister of National Revenue (1980), 1980 63 (ON CA), 113 D.L.R. (3d) 161 (ONCA); Glover v. Minister of National Revenue, 1981 64 (SCC), [1981] 2 SCR 561.
[9] Section 239 (2.2) of the ITA provides that any person who contravenes s. 241 (1) is guilty of a summary conviction offence (ITA, s. 241(10)).
[10] There are additional reasons to set aside the Summons to Witness:
(a) the Summons to Witness was not properly addressed and was not personally served. In addition, it was accompanied by payment of the attendance money or witness fee as required;
(b) Ms. Atkinson has no evidence that is material or relevant to the issues in dispute in the action; and
(c) Derakhshan also seeks to call Ms. Atkinson to act as an expert auditor: In his email to Johnson, dated November 30, 2016, Derakhshan advised: “I need and (sic) auditor from CRA to be present at the courthouse while the questioning Ms. Narula and accountant is in progress just to make sure the information they are providing matches what they have already submitted to CRA. At the same time the auditor could be present to make sure the taxes are done correctly as we have found many discrepancies in the tax forms provide to me...The auditor will have enough time to prepare all documents that will be presented as evidence/exhibits then… I have gone through the motion material and I should have my documents ready for your review by early next week. (sic)
Derakhshan has Onus to Show that Summonsed Witness has Relevant and Material Evidence
[11] In addition to the provisions of the ITA, the A.G. argues that Derakhshan failed to meet his onus to show that it is likely that Ms. Atkinson can give relevant and material evidence in regard to the issues in dispute in the trial. (See Dunphy v. Peel Housing Corporation, 2009 21760 (ONSC)).
[12] Although the provisions of section 241 of the ITA provided a sufficient ground to strike out the Summons to Witness, the motion could also have been decided on the ground that Ms. Atkinson does not have any knowledge that is relevant to the issues in this family law litigation. There is no evidence that Ms. Atkinson has any knowledge of Narula’s tax returns or has any information that may in any way be relevant to the issues in the trial.
[13] As mentioned above, it is improper for Derakhshan to have attempted to call Ms. Atkinson to give expert evidence at the trial as an auditor or a CRA auditor, and to be present in court to give her opinion that “the taxes are done correctly.”
[14] Finally, in his email of November 27, 2016 to Johnson, Derakhshan suggests that he would be satisfied with an alternate auditor from CRA. He notes that although Ms. Atkinson was summonsed “[S]he won’t show up but she will assign an auditor to come the trial on her behalf with all the companies and personal tax documents.” (sic)
[15] The Summons to Witness is required to identify the person whose presence at trial is requested. It cannot be used as a generic request for a representative from the CRA audit department to attend at the trial.
Jurisdiction to set aside the Summons to Witness
[16] This Court has authority to set aside a Summons to Witness pursuant to Rule 23(9) of the Family Law Rules, O. Reg. 114/99 which provides that a court may, on motion, order that a summons to witness be set aside.
[17] I accept the evidence, arguments, and law that are contained in the Factum filed by the A.G. For all the reasons set out above, I set aside the Summons to Witness to Lynn Atkinson.
[18] These Reasons and the legal argument set out in the Factum of the A.G. should be read carefully by Derakhshan with respect to the enforceability of any future Summons to Witness that he might choose to serve on any CRA representative.
Costs
[19] As per my oral reasons, costs of this motion are awarded to the A.G. and payable forthwith by Derakhshan. Narula is also entitled to her costs of this motion for the trial time consumed by this motion.
[20] Unless the parties can otherwise agree on an amount for the costs, written costs submissions from the A.G. and from Narula, not to exceed three pages together with a Bill of Costs and any offer to settle, may be served and filed no later than 14 days after the release of these Reasons. Subject to the same directions on length, Derakhshan’s responding written costs submissions shall be served and filed within 14 days after the service upon him of the A.G.’s and Narula’s costs submissions.
The Honourable Madam Justice Liza Sheard
Released: March 1, 2017
CITATION: Derakhshan v. Narula, 2017 ONSC 1415
COURT FILE NO.: FC-13-709-0
DATE: 2016/03/01
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
FARHAD DERAKHSHAN
Applicant
– and –
SEEMA NARULA
Respondent
REASONS FOR DECISION ON MOTION TO SET ASIDE SUMMONS TO WITNESS: LYNN ATKINSON
Sheard J.
Released: March 1, 2017