BRIGITTE GRATL Appellant v. HER MAJESTY THE QUEEN, 2012 FCA 88

Federal Court of Appeal Cour d'appel fédérale Date: 20120314 Docket: A-405-10 Citation: 2012 FCA 88 CORAM: BLAIS C.J. SHARLOW J.A. MAINVILLE J.A. BETWEEN: BRIGITTE GRATL Appellant and HER MAJESTY THE QUEEN Respondent Heard at Toronto, Ontario , on March 14, 2012. Judgment delivered from the Bench at Toronto , Ontario , on March 14, 2012. REASONS FOR JUDGMENT OF THE COURT BY: SHARLOW J.A. Federal Court of Appeal Cour d'appel fédérale Date: 20120314 Docket: A-405-10 Citation: 2012 FCA 88 CORAM: BLAIS C.J. SHARLOW J.A. MAINVILLE J.A.

BETWEEN: BRIGITTE GRATL Appellant and HER MAJESTY THE QUEEN Respondent REASONS FOR JUDGMENT OF THE COURT (Delivered from the Bench at Toronto, Ontario , on March 14, 2012) SHARLOW J.A. [ 1 ] The appellant was assessed under the Income Tax Act , R.S.C. 1985, c. 1 (5 th Supp.) for 2001 and 2002. She appealed those assessments to the Tax Court of Canada. The Crown filed a notice of motion in the Tax Court to strike out certain parts of the third amended notice of appeal. In an order dated October 6, 2010, Justice Bowie granted the Crown’s motion in part ( 2010 TCC 491 ).

The appellant now appeals to this Court. [ 2 ] The appeal relates primarily to paragraph 5 of the third amended notice of appeal, which reads as follows: 5. The Appellant contends that her constitutional rights have been infringed on the following basis: a. The Appellant contends that she is being discriminated against vis-à- vis other lawyers by the department's insistence that she receive clients at her satellite office in the middle of the night contrary to the provisions of s. 7 and s. 15 of the Charter.

The taxpayer has offered her daily dockets and given sufficient explanations to demonstrate that nightly work at the home office is a necessary part of the law practice.

The taxpayer spends her daytime hours at court, and her evening hours seeing clients at the regular office, so that the only time during which necessary Notices of Application, Notices of Appeal, Notices of Motion to vary final Orders, Affidavits, Case Conference Briefs and many other documents which require a quiet environment can be prepared is available after the taxpayer returns home and uses the midnight and early morning hours for such preparations. b.

The taxpayer respectfully submits that the imposition of penalties is unjustified given the taxpayer's inexperience as a lawyer, and as such amounts to cruel and unusual punishment contrary to s. 12 of the Canadian Charter of Rights and Freedoms , should some of the expenses charged against income be adjudged as inappropriate. c. The taxpayer further respectfully submits that the failure of the tax department to disclose the interest charged violates her entitlement to full disclosure contrary to s. 7 of the Charter .

Without such disclosure, the taxpayer is in no position to ascertain whether the interest charged has been properly calculated. d. Interest accrual on a daily basis amounts to cruel and unusual punishment contrary to s. 12 of the Charter , specifically in the light of the fact that the tax department benefits from the delay for which it alone is responsible in reviewing the taxpayer's tax returns. e.

Insofar as the delay represents unfair treatment of the taxpayer, the provisions of s. 7 of the Charter are also engaged. [ 3 ] Justice Bowie’s order strikes out paragraph 5 (with leave to amend to contest the disallowance of expenses, the imposition of penalties and the computation of assessed interest without reference to the Charter ), and also strikes out consequential Charter references elsewhere in the third amended notice of appeal. [ 4 ] The appellant takes the position that Justice Bowie erred in striking out paragraph 5 and the consequential references to sections 7

and 12 of the Charter (she concedes that the reference to subsection 15(1) of the Charter was properly struck out). The Appellant wishesto be able to argue in the Tax Court, based on

section 7 and 12 of the Charter, that: (1) she should be entitled to deduct what she hasclaimed for office and other expenses, (2) she should be relieved of administrative penalties, and (3) she should be relieved in part of theobligation to pay interest. [5] Sections 7 and 12 of the Charter read as follows: 7. Everyone has the right to life, libertyand security of the person and the rightnot to be deprived thereof except inaccordance with the principles offundamental justice. 7.

Chacun a droit à la vie, à la liberté et àla sécurité de sa personne; il ne peut êtreporté atteinte à ce droit qu'en conformitéavec les principes de justicefondamentale.[…] […]12. Everyone has the right not to besubjected to any cruel and unusualtreatment or punishment. 12. Chacun a droit à la protection contretous traitements ou peines cruels etinusités. [6] The appellant argues that the Tax Court has the jurisdiction to grant remedies based on the Charter. We agree that the Tax Court hasthe legal authority to grant a Charter remedy.

However, we also agree with Justice Bowie’s conclusion that it is plain and obvious thatan order vacating or varying an assessment of tax, administrative penalties and interest cannot be justified by

section 7 or 12 of theCharter. In other words, even if it is assumed that the facts alleged in paragraph 5 of the third amended notice of appeal are true, theydisclose no breach of

section 7 or 12 of the Charter. [7] There is ample jurisprudence in support of Justice Bowie’s conclusion. We need not cite all of the cases, but we refer in particular tothe decisions of the Federal Court of Appeal in Main Rehabilitation Co. v. Canada, 2004 FCA 403, and Kaulius v. Canada, 2003 FCA371 (affirmed 2005 SCC 55, [2005] 2 S.C.R. 643), and the decision of the Supreme Court of Canada in Rodriguez v.

British Columbia(Attorney General), (SCC), [1993] 3 S.C.R. 519. [8] Under the Income Tax Act as it now reads, and as it read in 2001 and 2002, an income tax assessment is a civil matter involving onlyeconomic interests. It does not deprive the assessed person of life, liberty or security of the person within the meaning of

section 7 of theCharter, and it does not place the assessed person under state control in a manner that could possibly be considered treatment orpunishment within the meaning of

section 12 of the Charter. [9] For these reasons, the appeal will be dismissed with costs. “K. Sharlow” J.A. FEDERAL COURT OF APPEAL NAMES OF COUNSEL AND SOLICITORS OF RECORD

DOCKET: A-405-10 (APPEAL FROM AN ORDER OF THE HON. MR. JUSTICE BOWIE, DATED OCTOBER 6, 2010, IN THE TAX COURT OF CANADA, IN TAX COURT FILE NO.: 2009-3311 (IT) G. STYLE OF CAUSE: BRIGITTE GRATL v. HMQ PLACE OF HEARING: TORONTO, ONTARIO DATE OF HEARING: MARCH 14, 2012 REASONS FOR JUDGMENT OF THE COURT BY: BLAIS, SHARLOW, MAINVILLE JJ.A.) DELIVERED FROM THE BENCH BY: SHARLOW J.A. APPEARANCES : Brigitte Gratl FOR THE APPELLANT Arnold H. Bornstein FOR THE RESPONDENT SOLICITORS OF RECORD : Brigitte Gratl, J.D. Waterloo , Ontario FOR THE APPELLANT Myles J. Kirvan Deputy Attorney General of Canada FOR THE RESPONDENT