COURT FILE NO.: 2854/16 DATE: 2018-02-01
ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
Lance Howard and Catherine Bradbury Applicants
– and –
Attorney General of Canada Respondent
Counsel: In Person K. Coward, for the Respondent
HEARD: January 24, 2018
BEFORE: Grace J.
A. Introduction
[1] The applicants maintain that various sections of the Income Tax Act (“ITA”)[^1], the Excise Tax Act (“ETA”)[^2] and the Ontario Business Corporations Act (“OBCA”)[^3] are of no force or effect because they infringe the right to life, liberty and security of the person guaranteed by s. 7 of the Canadian Charter of Rights and Freedoms (“Charter”).[^4]
[2] They seek various remedies including the return of all amounts allegedly paid on account of “withholdings” (about $2.919 million), harmonized sales tax (H.S.T.) (approximately $447,000) and accounting fees (just over $485,000). They also ask for an award of “tort damages” equal to one-half of those amounts ($1,925 million).
B. The Procedural History
[3] An abridged summary will suffice. The applicants initially served a notice of constitutional question containing fourteen tabs that was returnable November 22, 2016. The matter did not proceed at that time. The respondent asked that the court invoke the jurisdiction conferred by rule 2.1.01 of the Rules of Civil Procedure (“Rules”) and dismiss the proceeding on the basis it appeared, on its face, to be frivolous, vexatious or otherwise an abuse of the process of the court. I declined the request because, in my view, the voluminous document did not lend itself to a determination “on its face”.
[4] The respondent then moved to strike the notice of constitutional question without leave to amend. By the time the motion was heard on April 10, 2017, the applicants had also issued a notice of application. An endorsement was released on April 13, 2017. I concluded that neither document established any legal basis for the relief sought. At para. 32 I wrote in part:
To be clear, there is no evidentiary foundation for what the applicants seek. Legal principles are recited in a vacuum. Their applicability – let alone force – cannot be determined in the applicants’ favour on the current record. Consequently, both documents…are frivolous.
[5] The notice of constitutional question and notice of application were struck under rule 25.11(b) of the Rules. The applicants were, however, given leave to amend.
[6] The applicants served and filed a Fresh as Amended Notice of Constitutional Question and Fresh as Amended Notice of Application within the time allowed. The respondent renewed its request under rule 2.1.01. It was denied again. However, I noted that the matter was not to be scheduled for hearing without further judicial involvement. The applicants had not filed an affidavit in support of the relief they sought. A timetable was imposed for completion of remaining steps. Once completed, a case conference was to be convened.
[7] Thereafter, the applicants served and filed a joint “affidavit of claim” sworn July 19, 2017. The respondent declined the opportunity to file a responding affidavit. It did not wish to cross-examine the applicants. A case conference was conducted. The hearing of the application was scheduled and has now taken place.
C. The Evidence
[8] The applicants’ affidavit is eighteen pages in length. That created some short-lived optimism that the applicants had taken the opportunity provided to outline to the court the factual context for their constitutional challenge.
[9] Unfortunately they failed to do so. An affidavit is to contain a statement of facts: rule 4.06(2) of the Rules. The applicants’ affidavit contains very few facts. Dates of birth of the applicants are stated at the outset.[^5] Correspondence involving representatives of the federal and/or provincial governments was referenced two pages later.[^6] Copies of the letters appeared in a separate “Book of Exhibits”.
[10] A search for another fact was fruitless until page 17 when the applicants stated the amounts allegedly paid on account of “withholdings”, H.S.T. and accounting fees.[^7] They referred to various appendices said to contain the underlying calculations.[^8] However, they were not contained in the applicants’ exhibit book or in any other volume of material filed by them. The final page of the affidavit contained the names of businesses conducted by the applicants (The Lance Howard Group Inc., 2079410 Ontario Inc. and LHG Advisory Services Inc.).[^9] However, the applicants did not offer another word of explanation concerning themselves, the nature or structure of their businesses, the amounts paid to or collected by the federal government or fees charged by an accountant. Aside from dollar amounts and birth dates, I know nothing more about the applicants and their companies than could be extracted from a telephone book.
D. Discussion
[11] A full understanding of the applicants’ argument would be required before I could confidently say that I have properly summarized it. I readily concede that I continue to scratch my head with frequency and intensity despite having tried to decipher the applicants’ written material several times and having listened carefully to Mr. Howard’s lengthy and exceedingly well-organized but puzzling presentation.
[12] What follows is the best I am able to muster.
[13] The applicants maintain that individuals are guaranteed the right to freely dispose of their natural wealth and resources by the International Covenant on Civil and Political Rights. Canada, they say, has agreed that its domestic law will recognize and respect that right. Canada’s commitment has been fulfilled by section 7 of the Charter which provides that everyone has the right to life, liberty and security of the person and the right not to be deprived thereof except in accordance with the principles of fundamental justice.
[14] Things then become hazier. However, the emphasis of the applicants was on sections of the OBCA that deal with officers and directors of companies to which that statute applies, to provisions of the ITA that require certain persons to withhold and remit to the Receiver General amounts otherwise due to others[^10] and which impose liability on directors of companies for any failure to do so and on a provision in the ETA which incorporates the ITA’s definition of “office”.
[15] It seems that the applicants object to the fact each of them is regarded as an “officer” and/or “director” of a company because they claim that those three statutes “arbitrarily designate us a prescribed class of person in violation of our s. 7 right to choose.”[^11] That was an oft-repeated proposition Mr. Howard advanced during the hearing of the application.
[16] The argument founders immediately and at a fundamental level. It has no factual basis. As noted earlier, the affidavit filed by the applicants does not provide even the most basic information beyond their names and birthdates, the names of three companies and the amounts allegedly paid on account of “withholdings”, H.S.T. and accounting fees. The role any of the challenged statutory provisions played is unknown. So too is the date on which the companies were incorporated, how they were organized, what business they conducted, how and when any amount came to be due under the ITA or ETA, how and when those amounts were remitted, by whom and why.
[17] In their factum, the applicants make clear that the proceeding was commenced because “it is our own rights that are being limited and abridged and which we are seeking to have restored.”[^12] They do not allege a violation of the rights of others.[^13]
[18] The applicants also observed that their “claim is likely difficult for the government to respond to”.[^14] That was an accurate statement. Despite the allegation that individual rights have been violated the applicants’ personal circumstances are shrouded in mystery. No story was told. That is likely why the respondent did not file any factual material. There was nothing it needed to respond to.
[19] From the court’s perspective, the applicants ask for the performance of an impossible task. Determinations cannot be made in a vacuum. What choices were the applicants deprived of making? Why do the applicants say they were “arbitrarily designated a class of person” by the challenged statutory provisions?[^15] I do not know.
[20] The applicants’ extensive material draws from an impressive number of statutes and cases. Undoubtedly, the applicants have expended an immense amount of time. Their commitment to and passion for their cause is commendable.
[21] However, the end-product is of unsatisfying quality. Principles and passages are recited without context. Their contribution to the record assembled is a confusing and eventually frustrating patchwork of unconnected thoughts. The applicants’ argument seems unnecessarily mysterious and abstract. At virtually every turn I wondered what point the applicants were trying to make. Uncertainty continues.
[22] The respondent thought the applicants were challenging the ITA at its very core. Its factum referred to a long line of cases which has upheld the right of the federal government to require the payment of income tax.[^16] While the applicants assert that their application is about their classification as a person and “not about taxes”, the accuracy of that statement is questionable.[^17]
[23] Further, the respondent notes that the applicants rely on a provision of the Charter that does not apply to financial interests.[^18] In Siemens v. Manitoba (Attorney General), 2003 SCC 3, [2003] 1 S.C.R. 6, the appellants challenged provincial legislation which led to the termination of an agreement which allowed them to operate video lottery terminals (“VLT’s”) at their place of business. Violation of section 7 of the Charter was one of the grounds of appeal they advanced.
[24] The argument was rejected. Writing on behalf of a unanimous court, Major J. wrote in part at para. 45:
The right to life, liberty and security of the person encompasses fundamental life choices, not pure economic interests.
[25] Applying that principle to the case under consideration, Major J. added at para. 46:
In the present case, the appellants’ alleged right to operate VLT’s at their place of business cannot be characterized as a fundamental life choice. It is purely an economic interest. The ability to generate business revenue by one’s chosen means is not a right that is protected under s. 7 of the Charter.
[26] That conclusion may very well apply to this case if, as appears, the applicants ultimate complaint is that they were deprived of some of their wealth by virtue of an obligation arising under the ITA and the ETA.
[27] The suggestion that the payment of taxes is a matter of choice or that income tax legislation is arbitrary has been considered and rejected by this court. In Kennedy v. Canada (Customs and Revenue Agency), 2000 CanLII 22837 (ON SC), [2000] O.J. No. 3313 (S.C.J.) Sedgwick J. said at para. 23:
In my view, there is no support in “the common law, a.k.a. the rule of law” for the extremely broad proposition that all taxes are voluntary…The Income Tax Act is a law of general application enacted by an elected legislature. It does not represent an exercise of arbitrary power.
[28] What I have said so far is sufficient to dispose of the application. There is no factual or legal basis for any of the remedies sought by the applicants under the Charter. The applicants also asserted a claim in tort in the fresh as amended notice of application. They seem to have overlooked the court’s April 10, 2017 endorsement which told them that such a cause of action had to be asserted in an action (statement of claim). It could not be pursued by application.
[29] The respondent would have the court go further and characterize the applicants as Organized Pseudolegal Commercial Argument (“OPCA”) litigants following the lead of the Alberta Court of Queen’s Bench in Meads v. Meads, 2012 ABQB 571, [2013] 3 W.W.R. 419 (“Meads”). In Meads, Rooke, A.C.J. said that such persons were a category of vexatious litigant who:
…employ a collection of techniques and arguments…to disrupt court operations and to attempt to frustrate the legal rights of governments, corporations and individuals.[^19]
[30] Serious consequences may result from the characterization. In Jarvis v. Merlog, [2016] O.J. No. 3662 (S.C.J.), an action commenced by an OPCA litigant was dismissed pursuant to rule 2.1.01(1) of the Rules on the basis it was an abuse of process. At para. 3, Myers J. wrote in part:
All litigants are entitled to be treated with respect and with simple human decency before the court. The OPCA positions that they adopt are not. In my view, it is more respectful to OPCA plaintiffs to truthfully tell them that they are engaged in a despicable enterprise that cannot be tolerated than to pretend there is some merit which deserves academic debate and response. In my view, precious judicial time should be spent on resolving real matters…In my view, not another moment of judicial resources or party expense should be invested on OPCA claims. They should be summarily nipped in the bud with reference to Meads v. Meads and no more…
[31] I do not think it necessary to go that far in this case. However, I now know that the applicants first engaged in a determined and wholly unsuccessful letter writing campaign. The nature of their arguments then were no more clearly expressed than now despite the length of their dizzying and meandering prose. As here, the letters authored by the applicants withheld factual context.
[32] I do not, of course, fault the applicants for seeking a remedy from the court. That is their right. They have been polite and respectful throughout. However, in my view at least, the applicants have used their voice. It has been heard with open ears, eyes and mind. It has been answered. Life should move on.
E. Conclusion and Costs
[33] For the reasons given the application is dismissed.
[34] The respondent provided a costs outline at the conclusion of the hearing. It may supplement same with written submissions not exceeding five pages in length to be served and then provided to me through the trial coordinator by the close of business on February 16, 2018. The applicants’ response is not to exceed the same five page limit. It is to be served and provided to me in the same manner by the close of business on March 2, 2018.
”Justice A. D. Grace”
Justice A.D. Grace
Released: February 1, 2018
COURT FILE NO.: 2854/16
ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
Lance Howard and Catherine Bradbury Applicants
– and –
Attorney General of Canada Respondent
REASONS FOR DECISION
Grace J.
Released: February 1, 2018
[^1]: The sections listed were ss. 2(1), 153.1, 227.1(1), 237.1 and 248(1) (seemingly the definition of “office”). [^2]: The sections listed were ss. 4.3, 122, 123(1) (seemingly the definition of “office”). [^3]: The sections listed were ss. 1(1) (seemingly the definition of “officer”), 1 (2), 6, 115.2, 133 and 167. It should be noted that the Attorney General of Ontario was not named in the fresh as amended notice of constitutional question. When served with the initial notice, the Attorney General of Ontario advised the court that it would not make submissions. [^4]: They rely on s. 52(1) of the Constitution Act, 1982. [^5]: In para. 1. [^6]: In paras. 3a and 3b. Copies of those letters were included in a book of exhibits at tabs 7, 8 and 9. [^7]: In paras. 5 B, C and D. [^8]: Once again, in paras. 5 B, C and D. [^9]: In para. 5 G. [^10]: For example, employees of the payor. [^11]: The quoted passage is drawn from para. 5 of the applicants’ factum. [^12]: The quoted words are drawn from para. 2 of the applicants’ factum. [^13]: The balance of para. 2 of the applicants’ factum makes that point. [^14]: The quoted words are drawn from para. 4. [^15]: The quoted words are drawn from para. 33 of the applicants’ factum. Similar language appears elsewhere. See, for example, paras. 44, 45 and 48. [^16]: The cases cited include Reference re: Income War Tax Act, 1917 (Can.), 1924 CanLII 461 (UK JCPC), [1924] 4 D.L.R. 105 (P.C.); Kennedy v. Canada, 2000 CanLII 22837 (ON SC), [2000] O.J. No. 3313 (S.C.J.); Bruno v. Canada (Customs and Revenue Agency), 2002 BCCA 47 and Meads v. Meads, 2012 ABQB 571, [2013] 3 W.W.R. 419 (Alta. Q.B.) [^17]: See para. 5 of their factum. [^18]: In Godbout v. Longueuil (City), 1997 CanLII 335 (SCC), [1997] 3 S.C.R. 844 at para. 66, La Forest J. said that s. 7 of the Charter “protects…a narrow sphere of personal autonomy wherein individuals may make inherently private choices free from state interference.” “Liberty” was said to encompass “only those matters that can properly be characterized as fundamentally or inherently personal such that by their very nature, they implicate basic choices going to the core of what it means to enjoy individual dignity and independence.” The right to choose where to establish a home was held to be within the scope of the s. 7 guarantee. [^19]: At para. 1.