http://decision.tcc-cci.gc.ca/tcc-cci/decisions/en/item/180613/index.do
van der Steen v. The Queen (September 19, 2016 – 2016 TCC 205, Sommerfeldt J.).
Précis: This is a decision on two technical procedural points during the course of a trial involving an alleged charitable donation tax scheme. On the first point the Crown was permitted to call an unrelated donor to the same charity to establish the “workings, scope, extent and duration of” the donation arrangement [para. 1]. However the evidence of that donor was not admissible to determine whether the taxpayer had made the disputed donation.
On the second point the Crown, which had concluded the direct examination of a CRA officer, Ms. Leung, prior to the adjournment of the hearing, was not permitted to discuss the case with her before the conclusion of her cross-examination, nor to provide her with a copy of the transcript of her direct examination. The Crown was permitted to have very narrow conversations with Ms. Leung on such mundane matters as travel arrangements, etc. The Court also permitted conversations dealing with appeals of other taxpayers.
No direction was made as to costs of the motions.
Decision: This decision turns on highly technical procedural points. On the issue of whether the Crown could call evidence of Mr. Saran, an unrelated donor to the charity in question, the issue turned on “similar facts”:
[9] The principles set out above have been applied in other decisions of this Court. For instance, most of the above excerpt from paragraph 195 of Kiwan was quoted by Bédard J in Drouin, after stating that Kiwan allows similar fact “evidence of the state of affairs or context, and not only [similar fact] evidence of a scheme.”
[10] Based on the above principles, I confirm my earlier ruling that the evidence of Mr. Saran is admissible, but only for the purpose of providing evidence of the state of affairs or context (including the existence, workings, scope, extent and duration of Scheme II), and not for the purpose of implying or proving that the Appellant made his donation to CLES in circumstances similar to those of Mr. Saran. As I listened to Mr. Saran’s testimony, it seemed to me that the circumstances of Mr. Saran’s donations to CLES were not the same as the circumstances of the Appellant’s donation to CLES. For instance, Mr. Saran learned of CLES by attending a seminar, whereas the Appellant learned of CLES in a casual conversation with a business acquaintance, who referred the Appellant to a representative of CLES. As I review the notes which I made during the hearing and as I read the transcript of Mr. Saran’s testimony, I will determine what weight (if any) should be given to that testimony.
[Footnote omitted]
The extent of communications permitted with Ms. Leung after the completion of her direct evidence and before the conclusion of her cross-examination (including whether she could be provided with a transcript of her direct evidence) was simply a matter of time honoured common law tradition and the rules of professional conduct:
[18] As the hearing of this Appeal is being held in Ontario, and as I am of the view, as was Bowman ACJ in Scavuzzo, that the rule precluding communication between a lawyer and a witness between direct examination and cross-examination or between cross-examination and re-examination is a salutary rule, it is my view that paragraph 5.4-2(a.2) of the LSUC Rules should be followed.
[19] Counsel for the Appellant and counsel for the Respondent have each made concessions which have narrowed the issue to be determined. In the second paragraph of her written submission of March 30, 2016, counsel for the Respondent stated, “… to preclude any suggested negative inference, we confirm that we will not discuss with Ms. Leung our direct examination of her or her evidence given.” In paragraph 5 on page 3 of her submission of July 15, 2016, counsel for the Respondent stated:
The respondent has made representation by way of letter dated March 30, 2016 to not discuss with Ms. Leung her examination-in-chief in order to preclude any suggested negative inference. The respondent will limit communication with Ms. Leung to travel arrangements and the administrative matters regarding the other project appeals currently under case management with the Tax Court of Canada.
Counsel for the Appellant stated in the fourth paragraph of his written submission of April 4, 2016 that “…there is no concern respecting the limited topic of travel arrangements,” and in paragraph 1 under the subheading “Bullet #1” on page 1 of his written submission of July 15, 2016 that, “No one objects to discussions between Counsel for Justice and her own witness respecting identified administrative matters not touching on the appeal.”
[20] Ms. Leung is the auditor in respect of a large number of reassessments issued by the CRA against numerous taxpayers, one of whom is the Appellant. Counsel for the Respondent and Ms. Leung are working together in respect of various appeals filed by many of the reassessed taxpayers. Counsel for the Appellant has objected to counsel for the Respondent communicating with Ms. Leung about the appeals of those other taxpayers. However, counsel for the Appellant has not persuaded me that a communication between counsel for the Respondent and Ms. Leung in respect of an appeal brought by a taxpayer other than the Appellant would have a prejudicial impact on the Appellant’s Appeal. I am of the view that it would seriously impede the ability of the Respondent to deal with the appeals of those other taxpayers if counsel for the Respondent were to be prohibited from communicating with Ms. Leung in respect of those appeals.
[21] In view of the foregoing, it is my order and direction that, between the conclusion of the direct examination of Ms. Leung and the conclusion of her re-examination, counsel for the Respondent shall not communicate with Ms. Leung in respect of the evidence provided by Ms. Leung during her direct examination or the evidence that will be provided by Ms. Leung during her cross-examination or re-examination. I also order and direct that, subject to the provisions set out in the previous sentence, between the conclusion of the direct examination of Ms. Leung and the conclusion of her re-examination, counsel for the Respondent may communicate with Ms. Leung in respect of:
a) travel arrangements pertaining to the continuation of the hearing of this Appeal and other administrative matters that do not touch on the evidence that has been provided or will be provided by Ms. Leung;
b) any settlement offers that might be contemplated or that might arise; and
c) the appeals of taxpayers other than the Appellant.
…
[30] I am of the view that similar principles apply here. Like Hill J, I think that the safer course would be not to provide a transcript to Ms. Leung before the commencement of her cross-examination. During Ms. Leung’s direct examination, she struck me as being well prepared and very familiar with the working papers that she had prepared and the other documents that she had compiled. I am confident that she will be able to refresh her memory of the audit by reference to the documents already in her possession. If it becomes apparent, during her cross-examination, that there is a need for her to refresh her memory of her direct-examination by reference to the transcript of that examination, appropriate steps can be taken at that time.
The Court made no order as to the costs of the motions, presumably reserving that for the conclusion of the trial.