BETWEEN:
and
REASONS FOR ORDER
[1] This is a judicial review of the decision of November 23, 2004 by officials of the Minister of National Revenue as to the manner in which the Minister would disclose confidential information to the Applicant. The decision under review is a reversal of the decision of October 24, 2003 to refuse disclosure, as more fully set out in Scott Slipp Nissan Limited v. Attorney General of Canada 2005 FC 1477. The Applicant claims that the manner in which the Minister is to affect disclosure is contrary to the provisions of s. 295 of the Excise Tax Act ("Act") as it improperly discloses information about the Applicant. The definition of "confidential information" is:
| "confidential information" means information of any kind and in any form that relates to one or more persons and that is
(a) obtained by or on behalf of the Minister for the purposes of this Part, or
(b) prepared from information referred to in paragraph (a),
but does not include information that does not directly or indirectly reveal the identity of the person to whom it relates;
|
« renseignement confidentiel » Renseignement de toute nature et sous toute forme concernant une ou plusieurs personnes et qui, selon le cas :
a) est obtenu par le ministre ou en son nom pour l'application de la présente partie;
b) est tiré d'un renseignement visé à l'alinéa a).
N'est pas un renseignement confidentiel le renseignement qui ne révèle pas, même indirectement, l'identité de la personne en cause. |
BACKGROUND
[2] The basic background of this aspect of the dispute between the Applicant and the Minister of National Revenue is described in Scott Slipp Nissan Limited v. Attorney General of Canada, supra. The point of contention in that decision was the Minister's initial refusal to provide the Applicant with the Canada Revenue Agency's audit file for the purpose of dealing with the Applicant's Notice of Objection to Excise Tax assessment for the Harmonized Sales Tax ("HST"). The audit file contained "confidential information" - information obtained by the Minister from third parties and used in making the assessment.
[3] After the Applicant commenced judicial review proceedings of the refusal to disclose, in which the name of the Applicant and the fact of the tax dispute were disclosed, the Minister decided to disclose the audit file information requested.
[4] Pursuant to this decision (the precise date of which is unknown but first communicated on November 23, 2004), the Minister prepared 40 letters, 31 of which were sent, that gave the respective third party 30 days to block the release of the information. These letters also provided that the third party could consent to the release, and that the absence of a response within 30 days would be taken as consent. Copies of the documents that were to be released were attached to the letter.
[5] The Applicant has objected to the Minister's method of implementing his decision to release this information. The core of the Applicant's complaint is that, without its consent, the Minister disclosed confidential information about the Applicant - the name of the Applicant and the existence of the disputed tax assessment.
[6] A further "twist" to this judicial review is that both parties rely on s. 295(6) of the Act:
| (6) An official may provide confidential information relating to a person
(a) to that person; and
(b) with the consent of that person, to any other person.
|
(6) Un fonctionnaire peut fournir un renseignement confidentiel :
a) à la personne en cause;
b) à toute autre personne, avec le consentement de la personne en cause. |
[7] The Minister relied on s. 295(6) to seek consent from the third party to the release of confidential information; the Applicant submits that the Minister cannot seek third party consent if it discloses confidential information about the Applicant, unless it obtains the consent of the Applicant.
[8] In Scott Slipp Nissan Limited v. Attorney General of Canada, supra, this Court held that the Minister had the authority under s. 295(5)(a) and (b) of the Act to disclose such confidential information to the Applicant as was relevant to the tax assessment. S. 295(5)(a) and (b) read:
| (5) An official may
(a) provide such confidential information to any person as may reasonably be regarded as necessary for the purpose of the administration or enforcement of this Act, solely for that purpose;
(b) provide to a person confidential information that can reasonably be regarded as necessary for the purposes of determining any liability or obligation of the person or any refund, rebate or input tax credit to which the person is or may become entitled under this Act; |
(5) Un fonctionnaire peut :
a) fournir à une personne un renseignement confidentiel qu'il est raisonnable de considérer comme nécessaire à l'application ou à l'exécution de la présente loi, mais uniquement à cette fin;
b) fournir à une personne un renseignement confidentiel qu'il est raisonnable de considérer comme nécessaire à la détermination de tout montant dont la personne est redevable ou du remboursement ou du crédit de taxe sur les intrants auquel elle a droit, ou pourrait avoir droit, en vertu de la présente loi; |
ANALYSIS
[9] The core issue in this case is whether the letters, as sent to the third parties, were necessary for the administration and enforcement of the Act or for the determination of the Applicant's tax liability and if so, was the nature of the offending disclosure justified? There is a further issue as to whether the offending disclosure disclosed confidential information or whether that information was in the public domain.
[10] Dealing with this secondary issue, the Respondent submits that all of that information is in the public domain because it is contained in the materials filed in respect of Scott Slipp Nissan Limited v. Attorney General of Canada, supra. The Respondent argues that the information has lost the quality of confidentiality due to the actions of the Applicant.
[11] There is no doubt that this information about the Applicant is now in the public domain. However, the fact of its disclosure does not deprive it of the classification of "confidential information". Pursuant to s. 295(1), this information is confidential because it is supplied to or obtained by the Minister. Its confidentiality character is based upon the method of its obtaining, not on some intrinsic value or nature.
[12] The decision in Diversified Holdings Inc. v. Canada 1990 Carswell Nat 512; [1991] 1 C.T.C. 118; 91 D.T.C. 5029; 34 C.P.R. (3d) 187; [1991] 1 F.C. 595; 121 N.R. 555; 41 F.T.R. 239 is readily distinguishable. The Federal Court of Appeal held that the information was not confidential under the Income Tax Act, s. 241 because the information was not obtained for the purposes of the Income Tax Act. In the present case, the information was obtained or supplied for purposes of the Act. The disclosure clearly discloses the identity of the person to whom it relates.
[13] While in hindsight a sealing order in the first judicial review application might have been appropriate, the Applicant was, in respect of these issues, sailing in somewhat uncharted waters. The information remains confidential and there is no point in compounding the problem with further repetition of confidential information, even where there is so little practical utility in non-disclosure.
[14] The letters sent to the third parties were not really seeking consent; consent was offered only as an alternative. The Minister had already determined that the disclosure of the confidential information was necessary otherwise he would not have imposed a 30-day time limit to bring court action to block disclosure. Consent was not necessary.
[15] It was appropriate for the Minister to give notice to third parties and to provide them respectively with their confidential information that was to be released. The principles of fairness generally would require this procedure as these third parties may have rights or interests affected by the Minister's decision to disclose.
[16] The Minister has provided no justification for disclosing the Applicant's name and the existence of the tax dispute. A notice of intended release could simply state that the Minister has concluded that it was reasonably necessary for purposes of the Act to make the disclosure and provide the third party with copies of the intended disclosure.
[17] It is not the Court's intention to set out how the Minister should exercise his discretion to disclose or to lay down a set procedure for disclosure. Considerable deference is owed to the Minister in carrying out this obligation but there has been no basis laid for the reasonable necessity of disclosure of this information about the Applicant.
[18] The Minister, having decided to disclose the information requested by the Applicant, should be given a reasonable but brief period to carry out that decision, including time to amend, in accordance with these Reasons, and to send out the notice letters to third parties.
CONCLUSION
[19] I have concluded that the Minister erred in his method of carrying out his decision to disclose. Therefore, an order will issue quashing the part of his decision to release information that disclosed information about the Applicant, prohibiting the sending of any remaining letters in the form of the letter of November 23, 2004 and remitting the matter to the Minister for reconsideration of the form of notice to the third parties of the intended disclosure which are to be sent within 30 days of the date of these Reasons.
[20] The Applicant will be entitled to its usual scale of costs. There was a suggestion that the Minister's actions were contrived, concocted and arbitrary as well as a deliberate violation of the Applicant's rights. I see no basis for this allegation as it is evident that the responsible officials were guided by legal advice from respected legal counsel. No additional cost award would be justified.
JUDGE
FEDERAL COURT
NAME OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: T-2108-04
STYLE OF CAUSE: SCOTT SLIPP NISSAN LIMITED
and
ATTORNEY GENERAL OF CANADA
PLACE OF HEARING: Halifax, Nova Scotia
DATE OF HEARING: June 24, 2005
REASONS FOR ORDER: The Honourable Mr. Justice Phelan
APPEARANCES:
| Bruce S. Russell, Q.C.
|
|
| John Ashley
|
SOLICITORS OF RECORD:
| McINNES COOPER Barristers & Solicitors Halifax, Nova Scotia
|
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| JOHN H. SIMS QC, Deputy Attorney General of Canada Halifax, Nova Scotia
|